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Furniture, Mattresses & More LLC v. Texas Rustic Inc.

United States District Court, D. Maine

September 25, 2019

TEXAS RUSTIC, INC., Defendant.



         Before me is the Defendant’s motion to dismiss the Plaintiff’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) or, alternatively, to transfer the action to the United States District Court for the Southern District of Texas, Houston Division, pursuant to 28 U.S.C. § 1404(a). (“Def.’s Mot.”) (ECF No. 6). For the reasons stated below, the motion to dismiss is DENIED, and the motion to transfer is DENIED.


         Plaintiff, Furniture, Mattresses & More LLC (“FMM” or the “Plaintiff”), is a retail furniture store organized and operated in Bangor, Maine. Compl. ¶¶ 1, 5 (ECF No. 1). FMM’s sole member is Kathy Harvey. Id. ¶ 7. Defendant, Texas Rustic, Inc. (“Texas Rustic” or the “Defendant”), is a wholesale furniture seller incorporated and with its principal place of business in Madisonville, Texas. Id. ¶¶ 2, 6. Texas Rustic has two shareholders: Carolyn Davis, who also serves as president, and her husband. Carolyn Davis Decl. ¶ 2, Def.’s Mot. Ex. 1 (ECF No. 6-1). Shane Davis serves as a sales representative for Texas Rustic. Shane Davis Decl. 1, Def.’s Reply Pl.’s Opp’n Mot. Dismiss Ex. 1 (“Def.’s Reply”) (ECF Nos. 9 & 9-1).

         At an April 2018 furniture show in North Carolina, Ms. Harvey was introduced to Shane Davis through Michael Butter, allegedly Texas Rustic’s independent sales representative. Compl. ¶¶ 7, 8. At that initial meeting, Ms. Harvey viewed samples of the furniture that Texas Rustic was offering for sale. Id. ¶ 8. Mr. Davis allegedly made several representations to Ms. Harvey, including that there had been no customer complaints about the furniture and that the furniture carried a 1-year warranty against defects. Id. ¶¶ 10–12. Shortly thereafter, FMM placed its first order for Texas Rustic’s furniture, which was shipped to Maine on April 20, 2018. Id. ¶ 13, Ex. 1 at 2 (ECF No. 1-1). Between April and December of 2018, Texas Rustic supplied furniture to FMM with a total product cost of $437, 594.50 and a shipping cost of $157, 835.00.[1] Compl. ¶ 14; Def.’s Mot. 1.

         In October of 2018, FMM began receiving complaints from customers that the wooden furniture supplied by Texas Rustic was cracking and splitting at normal room temperatures. Compl. ¶ 16. FMM notified Texas Rustic of the problem on November 5, 2018, stating that the furniture did not conform to the samples provided at the North Carolina show. Id. ¶¶ 17–19. FMM subsequently informed Texas Rustic on December 4, 2018, not to manufacture any additional furniture for FMM. Id. ¶ 20. Later in December of 2018, Mr. Davis and another Texas Rustic employee traveled to Bangor to inspect the furniture. Id. ¶ 21. Mr. Davis allegedly assured Ms. Harvey that Texas Rustic would cure the nonconforming furniture in FMM’s warehouse and authorized a nominal credit to FMM for the nonconforming models he observed. Id. ¶¶ 21–25. Texas Rustic later informed FMM that it would change the terms of payment to a “factor of 30 days” to allow necessary time to cure. Id. ¶ 27. Based on these assurances, FMM received three shipments of furniture from Texas Rustic in December of 2018. Id. ¶¶ 28–30. FMM ultimately canceled all orders on December 24. Id. ¶ 29. On December 28, within thirty days of the alteration of the payment agreement, a collection agency contacted FMM and stated that its account with Texas Rustic was delinquent, a characterization that FMM says was false. Id. ¶¶ 31, 34.

         On January 24, 2019, FMM sent Texas Rustic a Notice of Rejection of Defective Goods and a Notice of Revocation of Acceptance of Defective Goods. Id. ¶ 38. In the following weeks, attorneys for both parties communicated via email and telephone regarding a possible out-of-court resolution of the dispute. Aff. of Gregory P. Dorr ¶¶ 5–10, Exs. C–F, Pl.’s Ex. 2 (ECF No. 8-2). In the course of these communications, the Plaintiff’s attorney provided the Defendant with a draft of the Complaint. Id. ¶ 8.

         On April 11, 2019, [2] the Plaintiff filed this action, which contains nine claims: (1) breach of contract, (2) breach of sales contract, (3) breach of express warranty, (4) breach of implied warranties, (5) rejection of goods, (6) revocation of acceptance of goods, (7) unjust enrichment, (8) defamation, and (9) punitive damages. Compl. ¶¶ 44–84.

         On May 9, 2019, the Defendant filed suit against the Plaintiff in Texas State Court for declaratory judgment and breach of contract. The Plaintiff removed that case to the United States District Court for the Southern District of Texas, where it is currently pending.


         On a motion to dismiss under 12(b)(2), the plaintiff bears the burden of establishing that personal jurisdiction exists over the defendant. PREP Tours, Inc. v. Am. Youth Soccer Org., 913 F.3d 11, 16 (1st Cir. 2019). Absent an evidentiary hearing, [3] I apply the “prima facie standard” to determine if the plaintiff has met this burden. Id. Under this “least taxing” standard, the plaintiff must “proffer[] evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction.” Id. (quoting Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992)); Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st Cir. 2008). The plaintiff “ordinarily cannot rest upon the pleadings, but is obliged to adduce evidence of specific facts.” PREP Tours, 913 F.3d at 16 (internal quotations omitted). However, I must “accept the plaintiff’s (properly documented) evidentiary proffers as true . . . and construe them in the light most congenial to the plaintiff’s jurisdictional claim.” Prairie Eye Ctr., 530 F.3d at 26 (internal quotations omitted); see also Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016).

         On a motion to transfer venue, the burden of proof falls upon the party seeking the transfer. Coady v. Ashcraft & Gerel, 223 F.3d 1, 11 (1st Cir. 2000). Venue is appropriate in a district in which “a substantial part of the events or omissions giving rise to the claim occurred, ” or “if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.” 28 U.S.C. § 1391(b)(2)–(3). “[A] district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). In doing so, the district court may consider “the convenience of parties and witnesses, ” as well as “the interest of justice.” 28 U.S.C. § 1404(a). However, there is a strong presumption in favor of the plaintiff's choice of forum, and, if “identical actions are proceeding concurrently in two federal courts, . . . the first filed action is generally preferred.” Coady, 223 F.3d at 11 (citing Cianbro Corp. v. Curran-Lavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987)).


         The Defendant raises two arguments as part of these pending motions: (1) that this Court lacks personal jurisdiction over it and (2) that this case should be transferred to the United States District Court for the Southern District of Texas where a related action is pending. The Plaintiff counters that personal jurisdiction is present here and that transfer is improper because this action preceded the Texas case.

         I. Personal Jurisdiction

         A court may have two types of personal jurisdiction over a defendant: general or specific. See Cossaboon v. Maine Med. Ctr., 600 F.3d 25, 31 (1st Cir. 2010). Specific jurisdiction “may only be relied upon where the cause of action arises directly out of, or relates to, the defendant’s forum-based contacts.” Id. (internal quotations omitted). General jurisdiction is broader and encompasses actions unrelated to such contacts. Id. The Plaintiff asserts that both general and specific jurisdiction are present here.

         Each type of jurisdiction must comport with the forum state’s long-arm statute and with the Due Process Clause of the Fourteenth Amendment. See LP Solutions LLC v. Duchossois, 907 F.3d 95, 102 (1st Cir. 2018); Cossaboon, 600 F.3d at 32. Maine’s long-arm statute specifically identifies the “transaction of any business within this State” as conduct conferring personal jurisdiction. 14 M.R.S.A. § 704-A(2). Maine’s statute also provides that,

to insure maximum protection to citizens of this State, [this section] shall be applied so as to assert jurisdiction over nonresident defendants to the fullest extent permitted by the due process clause of the United States Constitution, 14th amendment.

Id. § 704-A(1); see also LP Solutions, 907 F.3d at 102. Under the Due Process Clause, a court may “exercise jurisdiction over an out-of-forum defendant only if, with respect to the claims at issue, the defendant has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” PREP Tours, 913 F.3d at 17 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)) (internal alterations and quotations omitted).

         A. General Jurisdiction

         A court may exercise general jurisdiction over a foreign corporation “only when the corporation’s affiliations with the State in which suit is brought are so constant and pervasive as to render it essentially at home in the forum State.” Daimler AG v. Bauman, 571 U.S. 117, 122 (2014) (internal quotations omitted); see also Copia Commc’ns, LLC v. AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016). This test is “considerably more stringent than that applied to specific jurisdiction questions.” United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 619 (1st Cir. 2001) (citing Noonan v. Winston Co., 135 F.3d 85, 93 (1st Cir. 1998)). Because I find below that specific jurisdiction over the Defendant exists, it is unnecessary for me to decide whether general jurisdiction also exists.

         B. Specific Jurisdiction

         A finding of specific jurisdiction “depends on an affiliation between the forum and the controversy underlying the plaintiff’s claims.” PREP Tours, 913 F.3d at 17 (quoting Goodyear Dunlop Tire Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)) (internal alterations and quotations omitted). The First Circuit applies a three-part test to determine whether this “minimum contacts” requirement is met. Id. First, the plaintiff’s claim must be sufficiently related to the defendant’s in-forum activities; second, the defendant must have purposefully availed itself of the privilege of doing business in the forum state; and third, assertion of jurisdiction over the defendant must be reasonable. Scottsdale Capital Advisors Corp. v. The Deal, LLC, 887 F.3d 17, 20 (1st Cir. 2018).

         The First Circuit has made clear that the mere existence of a contract is insufficient to establish minimum contacts. See Swiss Am. Bank, 274 F.3d at 621. Rather, the court must apply a “contract-plus” analysis. See Phillips Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d 284, 289 (1st Cir. 1999). Under this approach, I focus on “the parties’ prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing.” Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, ...

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