[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 08-14782 ELEVENTH CIRCUIT
JANUARY 13, 2010
________________________
JOHN LEY
ACTING CLERK
D. C. Docket No. 07-00042-CV-WTM-4
DIAMOND CRYSTAL BRANDS, INC.,
DIAMOND CRYSTAL SALES, LLC.,
Plaintiffs-Counter-
Defendants-Appellees,
versus
FOOD MOVERS INTERNATIONAL, INC.,
Defendant-Counter-
Claimant-Appellant,
HORMEL FOODS CORPORATION,
Counter-Defendant.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
_________________________
(January 13, 2010)
Before TJOFLAT, ANDERSON and STAPLETON,* Circuit Judges.
TJOFLAT, Circuit Judge:
This challenge to the district court’s exercise of personal jurisdiction over a
nonresident defendant gives us occasion to revisit our jurisprudence regarding the
Georgia Long-Arm Statute, O.C.G.A. § 9-10-91 (the “long-arm statute”), in light
of recent pronouncements by the Georgia Supreme Court. Whereas we have
previously understood the Georgia long-arm jurisdictional analysis to merge into a
single, coextensive procedural due process analysis, the Georgia Supreme Court
has since made clear the independent importance of the statute. In Innovative
Clinical & Consulting Servs., LLC v. First Nat’l Bank of Ames, Iowa, 620 S.E.2d
352, 355–56 (Ga. 2005), the Georgia Supreme Court held that a trial court must
engage in a separate, literal application of the Georgia long-arm statute in addition
to a due process inquiry in deciding whether personal jurisdiction exists over a
nonresident defendant. We now conform the rule in this circuit to the state law as
announced by the Georgia Supreme Court. Additionally, we conclude that
although the district court may have erred in its analysis under this newly clarified
standard, jurisdiction is proper under both the long-arm statute and the Due Process
Clause of the Fourteenth Amendment. We affirm.
*
Honorable Walter K. Stapleton, United States Circuit Judge for the Third Circuit, sitting
by designation.
I.
This action was brought by Diamond Crystal Brands, Inc. and Diamond
Crystal Sales, LLC (collectively “Diamond Crystal”) against Food Movers
International, Inc. (“Food Movers”) alleging nonpayment for two shipments of
Splenda Brand sweetener (“Splenda”). Diamond Crystal Brands, Inc., an
international seller of sugar and other sweetening products, is a Delaware
corporation that maintains a facility in Savannah, Georgia. Diamond Crystal Sales,
LLC is a Delaware limited liability sales company qualified to do business in
Georgia and is under common ownership with Diamond Crystal Brands. Food
Movers is a food distribution company that purchases bulk food products from
manufacturers for immediate resale to retail and other distributor customers. It is a
California corporation with its sole place of business in Benicia, California. Food
Movers has no offices, distribution centers, or personnel outside the state of
California, and its employees do not travel outside of California to conduct
business.1
1
Diamond Crystal alleged in its complaint that Food Movers “maintains an ongoing
business presence in Georgia through a regional distribution center in Georgia.” Food Movers
specifically denied this assertion in an affidavit, filed with its motion to dismiss, from its
president, Anthony LaMonica. Diamond Crystal attempted to bolster its allegation with an
affidavit, filed with its opposition to Food Movers’s motion to dismiss, from Scott Seibel, a
region sales manager for Diamond Crystal Brands, in which Seibel testified that “Thomas
LaMonica, Food Movers International’s general manager, gave me a map of the United States
that was broken down into geographic regions. . . . Mr. LaMonica told me that the distribution
centers shown on the map were distribution centers with which he had done business in the
3
Food Movers’s business model is to purchase products from manufacturers,
with the purchases sometimes being facilitated by outside food brokers, and then to
quickly resell the products, usually before even taking delivery from the
manufacturer, to its customers. Its customers then arrange for and accept delivery
from the manufacturer and resell the products to their own customers or to the
public.
In this case, Diamond Crystal’s sales to Food Movers were facilitated by
Nasser Company, Inc. (“Nasser”), a California-based food broker that markets
Diamond Crystal’s products. Nasser first solicited the sales to Food Movers, and
Nasser and Diamond Crystal Brands’s California-based region sales manager,
Scott Seibel, traveled to Food Movers’s office in California to negotiate the terms
of the sales. All of the negotiations took place either in person at Food Movers’s
office in California or through telephone conversations between Food Movers and
past.” The map attached to the Seibel affidavit indicated one such distribution center in Atlanta,
Georgia. With its reply in support of its motion to dismiss, Food Movers submitted the affidavit
of its vice president of sales, Thomas LaMonica, which stated that Food Movers does not have a
distribution center in Georgia, has never done business with any distribution center in Georgia,
and has no distributor agreements in Georgia. Regardless of whether the district court properly
received this latter evidence for consideration, Diamond Crystal’s allegation and evidence do not
establish that Food Movers itself maintained a distribution center in Georgia, but only that it may
have done business in the past with a distributor in Georgia. Nor does this evidence indicate the
volume of business Food Movers may have done with a Georgia distribution center or when it
conducted such business. Moreover, Diamond Crystal has not shown how any such prior
relationship between Food Movers and a distribution center in Atlanta has anything to do with
the transactions at issue in this case.
4
Nasser or Seibel, all of whom were in California.
As a result of these discussions, Food Movers submitted purchase orders to
Nasser in California for the purchase of Diamond Crystal products. In all, from
August 2005 to January 2006, Food Movers ordered bulk Splenda from Diamond
Crystal, through Nasser, in fourteen transactions totaling more than $1.9 million.
Diamond Crystal alleges that Food Movers failed to pay for two of these
shipments, relating to purchases made on January 13 and 18, 2006, and therefore
owes Diamond Crystal $288,111.60 plus prejudgment interest.
The terms and mechanics of the purchases included the following. Food
Movers submitted its purchase orders to Nasser in California. Immediately
thereafter, Food Movers resold the product to its own third-party customers.
Diamond Crystal and Food Movers agreed that Diamond Crystal would tender the
product F.O.B. Savannah,2 at its plant.3 Diamond Crystal also invoiced Food
2
Georgia’s enactment of the Uniform Commercial Code provides,
Unless otherwise agreed the term F.O.B. (which means “free on board”) at a
named place, even though used only in connection with the stated price, is a
delivery term under which:
(a) When the term is F.O.B. the place of shipment, the seller must
at that place ship the goods in the manner provided in this article
(Code Section 11-2-504) and bear the expense and risk of putting
them into the possession of the carrier; or
(b) When the term is F.O.B. the place of destination, the seller must at his
own expense and risk transport the goods to that place and there tender
delivery of them in the manner provided in this article (Code Section
5
Movers from its Savannah facility. Although the purchase orders specified
“[c]ustomer pickup” and the bills of lading recorded delivery as having been taken
“buy buyers [sic] truck,” Food Movers offered affidavit evidence that its personnel
did not actually take delivery of the product from Diamond Crystal.4 Instead, as
the product had been resold to third-party customers of Food Movers by the time
of tender by Diamond Crystal, those third-party customers took delivery of the
product directly from Diamond Crystal. Accordingly, Food Movers never picked
up the Splenda in Georgia. It did, however, send payments (for the shipments for
which it paid), drawn on its California bank, by mail or wire transfer to Diamond
Crystal in Georgia.
On February 28, 2007, Diamond Crystal filed this lawsuit, seeking the
11-2-503) . . . ;
O.C.G.A. § 11-2-319(1). In other words, the use of the term “F.O.B. Savannah” in this case
means that Diamond Crystal had the obligation to tender the product at its plant in Savannah and
bore the risk of loss for the product until it was tendered.
3
The parties sharply contest how the F.O.B. Savannah term came into being. Diamond
Crystal asserts that it initially offered the product F.O.B. Visalia, California and claims that Food
Movers requested that the terms be changed to F.O.B. Savannah (presumably to avoid the time
and expense of shipping product ultimately destined for later distribution in the Southeast across
the country twice). In contrast, Food Movers maintains that Seibel, the Diamond Crystal
representative, insisted that delivery would be required at the Savannah plant due to the volume
of product involved and that Diamond Crystal never offered an F.O.B. California option.
4
Food Movers maintains that these references are to its third-party customers, who were
the “customer[s]” and “buyers” responsible for hiring carriers and picking up the product from
Diamond Crystal for their own purposes.
6
$288,111.60 Food Movers failed to pay, in the Superior Court of Chatham County,
Georgia. Food Movers removed the action, on the basis of diversity jurisdiction, to
the United States District Court for the Southern District of Georgia on March 22,
2007. On April 6, 2007, Food Movers moved to dismiss Diamond Crystal’s
complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal
jurisdiction and submitted affidavit evidence in support of its challenge to the
court’s jurisdiction. After full briefing, including the submission of counter-
affidavits by Diamond Crystal, the district court denied the motion on August 3,
2007.
Food Movers subsequently answered the complaint, preserving its objection
to personal jurisdiction and asserting counterclaims against Diamond Crystal for
breach of contract, tortious and bad faith breach of contract, unfair trade practices,
and deceptive trade practices in connection with Diamond Crystal and related
companies’ decisions to stop selling Splenda and other products to Food Movers.5
5
We reject, with minimal discussion, Diamond Crystal’s argument that Food Movers
waived its defense of lack of personal jurisdiction by asserting its counterclaims. Food Movers
filed its answer, which preserved its personal jurisdiction defense, and counterclaims only after
the district court denied the motion to dismiss for lack of personal jurisdiction. See Fulghum
Indus., Inc. v. Walterboro Forest Prods., Inc., 345 F. Supp. 296, 299 (S.D. Ga. 1972) (rejecting
the argument that defendant waived jurisdiction as a result of filing defenses and a counterclaim
because “[g]enerally, a waiver results only when a defendant pleads to the merits without
excepting to the jurisdiction of the court”), aff’d, 477 F.2d 910, 911 (5th Cir. 1973). In Bonner
v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this court adopted as
binding precedent all decisions of the former Fifth Circuit handed down prior to October 1,
1981.
7
Food Movers later filed an amended answer and counterclaims asserting claims
against Diamond Crystal for breach of contract and against Diamond Crystal and
its corporate parent for “Unfair, Unlawful, Discriminatory, and Anti-Competitive
Business Practices” in violation of California unfair competition and antitrust law
and federal antitrust law. Food Movers admitted that it withheld payment on two
of the Splenda purchase orders but denied that it owed Diamond Crystal any
money due to Diamond Crystal’s alleged conduct implicated in the counterclaims.
On June 20, 2008, the district court granted Diamond Crystal judgment on
the pleadings for its complaint and entered judgment on that order the same day. It
stayed enforcement of its judgment, however, pursuant to Federal Rule of Civil
Procedure 62(h), pending the resolution of Food Movers’s counterclaims. On July
21, 2008, the district court granted Diamond Crystal’s motion for summary
judgment on Food Movers’s counterclaims and lifted the stay of its June 20, 2008,
judgment. The court entered final judgment pursuant to its July 21 summary
judgment order on September 10, 2008. Food Movers now appeals the district
court’s denial of its motion to dismiss for lack of personal jurisdiction.6
6
Food Movers filed its notice of appeal, which also purported to include all subsequent
orders of the district court through the entry of final judgment directed in the court’s July 21,
2008, summary judgment order, on August 20, 2008. We treat the notice of appeal as if it were
filed on September 10, 2008—the date the district court actually entered final judgment—by
operation of Fed. R. App. P. 4(a)(2). As the parties have only briefed and argued the issue of
personal jurisdiction, that is the only issue we address.
8
II.
“We have consistently held that the issue of whether personal jurisdiction is
present is a question of law and subject to de novo review.” Oldfield v. Pueblo De
Bahia Lora, S.A., 558 F.3d 1210, 1217 (11th Cir. 2009).
“A plaintiff seeking the exercise of personal jurisdiction over a nonresident
defendant bears the initial burden of alleging in the complaint sufficient facts to
make out a prima facie case of jurisdiction.” United Techs. Corp. v. Mazer, 556
F.3d 1260, 1274 (11th Cir. 2009). “Where, as here, the defendant challenges
jurisdiction by submitting affidavit evidence in support of its position, ‘the burden
traditionally shifts back to the plaintiff to produce evidence supporting
jurisdiction.’” Id. (quoting Meier ex rel. Meier v. Sun Int’l Hotels, Ltd., 288 F.3d
1264, 1269 (11th Cir. 2002)); see also Polskie Linie Oceaniczne v. Seasafe
Transport A/S, 795 F.2d 968, 972 (11th Cir. 1986) (noting that, if the defendant
makes a showing of the inapplicability of the long-arm statute, “the plaintiff is
required to substantiate the jurisdictional allegations in the complaint by affidavits
or other competent proof, and not merely reiterate the factual allegations in the
complaint”). “Where the plaintiff’s complaint and supporting evidence conflict
with the defendant’s affidavits, the court must construe all reasonable inferences in
9
favor of the plaintiff.” Meier, 288 F.3d at 1269.
III.
A.
“A federal court sitting in diversity undertakes a two-step inquiry in
determining whether personal jurisdiction exists: the exercise of jurisdiction must
(1) be appropriate under the state long-arm statute and (2) not violate the Due
Process Clause of the Fourteenth Amendment to the United States Constitution.”
United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). “When a
federal court uses a state long-arm statute, because the extent of the statute is
governed by state law, the federal court is required to construe it as would the
state’s supreme court.” Lockard v. Equifax, Inc., 163 F.3d 1259, 1265 (11th Cir.
1998). Therefore, we must interpret and apply Georgia’s long-arm statute in the
same way as would the Georgia Supreme Court.
As pertinent to this case, the Georgia long-arm statute provides:
A court of this state may exercise personal jurisdiction over any
nonresident or his executor or administrator, as to a cause of action
arising from any of the acts, omissions, ownership, use, or possession
enumerated in this Code section, in the same manner as if he were a
resident of the state, if in person or through an agent, he:
(1) Transacts any business within this state;
O.C.G.A. § 9-10-91(1). For many years, our court has followed the interpretation
10
that “Georgia’s long arm statute confers in personam jurisdiction to the maximum
extent allowed by the due process clause of the federal Constitution.” Francosteel
Corp. v. M/V Charm, 19 F.3d 624, 627 (11th Cir. 1994).7 Under this rule, courts in
this circuit have even gone so far as to pass over the long-arm analysis entirely and
conflate it with, or collapse it into, the due process inquiry.8
7
See also, e.g., McGow v. McCurry, 412 F.3d 1207, 1214 (11th Cir. 2005); Club Car,
Inc. v. Club Car (Quebec) Import, Inc., 362 F.3d 775, 784 (11th Cir. 2004); Nippon Credit Bank,
Ltd. v. Matthews, 291 F.3d 738, 746 (11th Cir. 2002) (per curiam); Complete Concepts, Ltd. v.
Gen. Handbag Corp., 880 F.2d 382, 388 (11th Cir. 1989) (per curiam) (“Both the former Fifth
Circuit Court of Appeals and this circuit have observed that this section is coterminous with due
process.”); Southwire Co. v. Trans-World Metals & Co. Ltd., 735 F.2d 440, 445 (11th Cir.
1984); cf. Gold Kist, Inc. v. Baskin-Robbins Ice Cream Co., 623 F.2d 375, 378–79 (5th Cir.
1980) (noting statements of Georgia courts suggesting that the long-arm statute is coextensive
with due process, but holding that the facts of the case did not require a finding that the long-arm
statute reached the limits of due process).
8
See, e.g., Vermeulen v. Renault, U.S.A. Inc., 965 F.2d 1014, 1021 (11th Cir. 1992)
(“When the courts of the forum State have interpreted the forum’s long-arm statute to confer
jurisdiction to the limits allowed by federal due process, state law need not be applied: we need
only ask whether the exercise of jurisdiction over the nonresident defendant comports with due
process.”), amended and superseded on other grounds, 975 F.2d 746 (11th Cir. 1992), modified
and superseded on other grounds, 985 F.2d 1534 (11th Cir. 1993); Complete Concepts, 880 F.2d
at 388 (“[O]nce we are satisfied that the courts of the forum state have construed their long arm
statute into lock-step conformity with the Constitution, the problem reduces to whether the
defendant purposefully established ‘minimum contacts’ in the forum ‘such that the maintenance
of the suit does not offend “traditional notions of fair play and substantial justice.”’” (quoting
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)); Peridyne Tech.
Solutions, LLC v. Matheson Fast Freight, Inc., 117 F. Supp. 2d 1366, 1369 (N.D. Ga. 2000)
(“Where a state’s long-arm statute confers personal jurisdiction to the limits of Due Process, the
court may pass over analysis of the statute and exercise jurisdiction where the constitutional
requirements are satisfied.”); Horsley v. Feldt, 128 F. Supp. 2d 1374, 1377 (N.D. Ga. 2000) (“If,
however, a state's long arm statute confers personal jurisdiction to the limits of the Due Process
Clause, the Court may pass over analysis of the statute and exercise jurisdiction where the
constitutional requirements are satisfied.”); Maxwell Chase Techs., L.L.C. v. KMB Produce,
Inc., 79 F. Supp. 2d 1364, 1367 (N.D. Ga. 1999) (“Where a state's long arm statute confers
personal jurisdiction to the limits of Due Process, the Court may pass over analysis of the statute
and exercise jurisdiction where the constitutional requirements are satisfied.”); Railcar, Ltd. v. S.
11
In 2005, however, the Georgia Supreme Court clarified the status of the
state’s long-arm statute, at once broadening the statute’s reach and injecting
renewed vitality into its restrictions. Innovative Clinical & Consulting Servs., LLC
v. First Nat’l Bank of Ames, Iowa, 620 S.E.2d 352 (Ga. 2005). Most significantly,
the supreme court made clear that a trial court must undertake two inquiries, one
under the Georgia long-arm statute and another under due process. It explained
that “‘[t]he rule that controls is our statute, which requires that an out-of-state
defendant must do certain acts within the State of Georgia before he can be
subjected to personal jurisdiction.’” Id. at 353 (emphasis added) (quoting Gust v.
Flint, 356 S.E.2d 513, 514 (Ga. 1987)). We have not yet had the opportunity to
address Innovative Clinical and its impact on our jurisprudence regarding
Georgia’s long-arm statute. Thus, we begin with a thorough examination of
Innovative Clinical. We conclude that, through Innovative Clinical, the Georgia
Supreme Court has demonstrated that our previous approach is an incorrect
Ill. Railcar Co., 42 F. Supp. 2d 1369, 1372 (N.D. Ga. 1999) (“[T]he Georgia long arm statute
does confer personal jurisdiction to the full extent permitted by the Due Process Clause of the
United States Constitution . . . . Accordingly, the Court will move directly to consideration of
whether the exercise of personal jurisdiction over SIRC is consistent with the Due Process
Clause.”); Urspruch v. Greenblum, 968 F. Supp. 707, 710 (S.D. Ga. 1996) (“‘When the courts of
the forum State have interpreted the forum’s long-arm statute to confer jurisdiction to the limits
allowed by federal due process, state law need not be applied: [the Court] need only ask whether
the exercise of jurisdiction over the nonresident defendant comports with due process.’”)
(alteration in original) (quoting Francosteel Corp. v. M/V Charm, 825 F. Supp. 1074, 1077 (S.D.
Ga. 1993)).
12
statement of Georgia law: the Georgia long-arm statute does not grant courts in
Georgia personal jurisdiction that is coextensive with procedural due process.9
Instead, the long-arm statute must be read literally. It imposes independent
obligations that a plaintiff must establish for the exercise of personal jurisdiction
that are distinct from the demands of procedural due process.10
It is beyond cavil that the exercise of personal jurisdiction in Georgia
requires a court to find that at least one prong of the long-arm statute is satisfied.
See Rudo v. Stubbs, 472 S.E.2d 515, 516 (Ga. Ct. App. 1996). Innovative Clinical
9
Indeed, the Georgia Supreme Court specifically noted our court’s “erroneous”
interpretation of the state’s long-arm statute:
Although the Federal courts persist in reiterating the language from First United
Bank of Mississippi [v. First National Bank of Atlanta, 340 S.E.2d 597 (Ga.
1986)], that Georgia’s long-arm statute confers in personam jurisdiction to the
maximum extent allowed by the due process clause of the U.S. Constitution, e.g.,
Francosteel Corp. v. M/V Charm, 19 F.3d 624 (IV) (11th Cir. 1994), the First
United holding was superseded by Gust [v. Flint, 356 S.E.2d 513 (Ga. 1987)].
The Eleventh Circuit’s interpretation of OCGA § 9-10-91 is not binding on this
Court and it is not necessary for this Court to correct erroneous Federal
interpretations of our State’s statutes for the precedential value of our opinions to
remain the controlling authority on the proper interpretation of those statutes.
Innovative Clinical & Consulting Servs., LLC v. First Nat’l Bank of Ames, Iowa, 620 S.E.2d
352, 354 n.2. (Ga. 2005).
10
The Georgia long-arm statute enumerates five separate bases for the exercise of
personal jurisdiction, encompassing various types of “acts, omissions, ownership, use, or
possession” that can subject a defendant to the statute’s reach. O.C.G.A. § 9-10-91. We
understand the basic rule of Innovative Clinical to apply to all subsections of the statute, see
Innovative Clinical, 620 S.E.2d at 354–55 (discussing O.C.G.A. § 9-10-91(2) and (3)), and we
generally adopt the rule requiring courts to apply each provision of the statute literally and
independently. Since subsection (1) of the statute—requiring that a defendant “[t]ransact[] any
business within this state”—is the only basis for long-arm jurisdiction asserted in this case,
however, the balance of our discussion focuses on O.C.G.A. § 9-10-91(1).
13
clarified that to satisfy the long-arm statute, a nonresident defendant must “do
certain acts within the state of Georgia.” 620 S.E.2d at 353. Under subsection (1),
the certain act is “[t]ransact[ing] any business within this state.” O.C.G.A. §
9-10-91(1). Since Innovative Clinical, the Georgia Court of Appeals has
reaffirmed, as part of “the traditional three-part test used in determining whether
long arm jurisdiction exists based on the transaction of business,” that such
jurisdiction only exists “‘if (1) the nonresident defendant has purposefully done
some act or consummated some transaction in this state . . . .’”11 Aero Toy Store,
LLC v. Grieves, 631 S.E.2d 734, 736–37 (Ga. Ct. App. 2006) (emphasis added)
(quoting Robertson v. CRI, Inc., 601 S.E.2d 163, 166 (Ga. Ct. App. 2004)).
11
The full three-part test set forth in Aero Toy Store is as follows:
Jurisdiction exists on the basis of transacting business in this state if (1) the
nonresident defendant has purposefully done some act or consummated some
transaction in this state, (2) if the cause of action arises from or is connected with
such act or transaction, and (3) if the exercise of jurisdiction by the courts of this
state does not offend traditional fairness and substantial justice.
Aero Toy Store, LLC v. Grieves, 631 S.E.2d 734, 737 (Ga. Ct. App. 2006) (quoting Robertson v.
CRI, Inc., 601 S.E.2d 163, 166 (Ga. Ct. App. 2004)). The Georgia Court of Appeals then
explained that “[t]he initial two prongs of the jurisdictional test are used to determine whether
defendant has established the minimum contacts necessary for the exercise of jurisdiction.” Id.
(quoting Robertson, 601 S.E.2d at 167–68). This interpretation, however, which appears to
continue to collapse the long-arm test into the “minimum contacts” due process analysis and
which relied on quoted language from a Georgia Court of Appeals decision issued prior to
Innovative Clinical, is inconsistent with the independent and literal long-arm inquiry mandated
by the Georgia Supreme Court in Innovative Clinical. Therefore, to remain faithful to
Innovative Clinical, we interpret the first prong of this test as reflecting the requirement of
subsection (1) of the long-arm statute and the second and third prongs as comprising the
traditional due process inquiry. The significance of the three-prong approach is that, under
Georgia law, there must be a long-arm assessment that is separate and apart from the due process
analysis.
14
Accordingly, subsection (1) long-arm jurisdiction in Georgia expressly depends on
the actual transaction of business—the doing of some act or consummation of
some transaction—by the defendant in the state.
It is clear that the Innovative Clinical court intended to broaden the reach of
the long-arm statute by stripping away certain limitations, not expressly contained
in the statute, that various courts had injected into the statute over time.12 For
example, courts had limited the application of subsection (1) to contract cases and
construed it to require the nonresident defendant’s physical presence in Georgia
(thereby minimizing the import of the nonresident’s intangible contacts with the
state), even though neither requirement appears on the face of the statute.
Innovative Clinical, 620 S.E.2d at 355. In adopting a literal construction of
subsection (1), the supreme court appropriately discarded such artificial limitations
on the statutory jurisdiction of courts in Georgia. We recognize the importance of
the supreme court’s abandonment of these extraneous limitations on the statute,
and in our effort to follow the supreme court’s instruction to “give the same literal
construction to subsection (1) of O.C.G.A. § 9-10-91 that we give to the other
subsections,” we adopt the court’s approach. Id.
12
Innovative Clinical, 620 S.E.2d at 355 (“We hereby overrule all prior cases that fail to
accord the appropriate breadth to the construction of the ‘transacting any business’ language of
OCGA 9-10-91(1).”)
15
The Georgia Supreme Court did not, however, jettison the lone and
unequivocal requirement that subsection (1) plainly does impose: “under that
literal construction, O.C.G.A. § 9-10-91(1) grants Georgia courts the unlimited
authority to exercise personal jurisdiction over any nonresident who transacts any
business in this State.” Id. (emphasis added). Thus, literally transacting business
within Georgia remains a precondition to long-arm jurisdiction that is independent
from the dictates of due process.
After emphasizing this point, the supreme court immediately recognized that
even this literal construction of subsection (1) would “expand the personal
jurisdiction of Georgia courts beyond that permitted by constitutional due process,”
by, for example permitting jurisdiction over a defendant who literally transacts any
business in Georgia but over whom, in the circumstances of a particular case, the
exercise of jurisdiction would violate due process. Id. To address this concern, the
court reasonably qualified its holding by adding the proviso that “we accordingly
construe subsection (1) as reaching only ‘to the maximum extent permitted by
procedural due process.’” Id. (emphasis added) (quoting Coe & Payne, Co. v.
Wood-Mosaic Corp., 195 S.E.2d 399, 401 (Ga. 1973)).
Lest there be any misunderstanding, this language does not mean that
subsection (1)—or any provision of the long-arm statute—is coextensive with
16
constitutional due process. Rather, this language makes clear that due process
concerns may limit the full extent of the “transacts any business” prong. But this
certainly does not mean that the two inquiries are one and the same.
Indeed, the Georgia Supreme Court explained that the long-arm statute is not
coextensive with due process when it stated that the statute’s various “limiting
conditions may preclude a Georgia court from exercising personal jurisdiction over
the nonresident to the fullest extent permitted by constitutional due process.” Id. at
354 (construing O.C.G.A. § 9-10-91(3)) (emphasis added). The supreme court
also noted the Georgia General Assembly’s retention of statutory limitations on
jurisdiction, despite pleas from the state judiciary to expand personal jurisdiction to
the outer limits of due process, and directed that courts must abide by the plain and
unambiguous restrictions provided by the legislature, even if those literal limits
deprive allegedly damaged Georgians of a forum in the state.13 Id. at 355 (same).
13
Because the Georgia Supreme Court’s frank statement on this point is both thorough
and emphatic, we are moved to include it at length:
For over 17 years the justices of this Court and the judges of the Court of Appeals
have urged the Legislature to amend Georgia’s long-arm statute so as to provide
the maximum protection for Georgia residents damaged by the out-of-state acts or
omissions committed by nonresident tortfeasors. See Gust, supra, 257 Ga. at 130,
356 S.E.2d 513 (Gregory, J., concurring); Phears v. Doyne, 220 Ga. App. 550,
552, 470 S.E.2d 236 (1996) (Beasley, C.J., concurring specially). Despite the
eloquence of these pleas, the Legislature has chosen to retain the statutory
limitations on in personam jurisdiction set forth in OCGA § 9-10-91(3). In our
system of checks and balances, it is as inappropriate for the judicial branch to
encroach upon the powers of the legislative or executive branches as it would be
for either of those branches to encroach upon the powers of the judicial branch.
Thus, . . . the fact that Georgians damaged by nonresidents are deprived of a
17
The Innovative Clinical court further explained the importance of giving
independent meaning to the provisions of the long-arm statute when discussing
subsections (2) and (3). First, it made clear that subsection (3) of the long-arm
statute contains independent limits on the exercise of jurisdiction. Id. at 355.
Second, it reaffirmed Gust v. Flint, which rejected cases that had “held that
subsection (2) was constrained only by, and thus was coextensive with, the
Fourteenth Amendment of the U.S. Constitution.” Id. at 354. It did so because
reading subsection (2) to the limits of due process rendered subsection (3)
superfluous, thereby eviscerating legislative intent. Id. at 354. Likewise, reading
subsection (1) to be coextensive with due process would render subsection (3)
superfluous. It would defy common sense to suggest that the Innovative Clinical
court intended to turn the “transacts any business within Georgia” prong into the
new stepping stone around subsection (3).
forum in this State to the fullest extent permitted by due process is not the result
of court decisions interpreting OCGA § 9-10-91(3) but the result of the plain and
unambiguous language of OCGA § 9-10-91. The courts cannot reject the plain
language of a statute unless it will lead to unreasonable consequences or absurd
results not contemplated by the Legislature. See generally Haugen v. Henry
County, 277 Ga. 743(2), 594 S.E.2d 324 (2004); Hollowell v. Jove, 247 Ga. 678,
681, 279 S.E.2d 430 (1981). Accordingly, under these circumstances, the courts
may not interpret OCGA § 9-10-91 to provide what the Legislature chose to omit.
Innovative Clinical, 620 S.E.2d at 355. Although in this particular passage the supreme court
was directly addressing O.C.G.A. § 9-10-91(3), which provides for jurisdiction in specified
circumstances over nonresidents committing tortious conduct outside of the state that causes
injury within Georgia, the mandate of deference to the choices of the legislature, as expressed in
plain statutory language, applies with equal force to the particular limitations contained in each
and every subsection of the long-arm statute.
18
Georgia courts have yet to fully explain the scope of the “[t]ransacts any
business within this state” language. O.C.G.A. § 9-10-91(1). The unavoidable
conclusion, as explained by the Georgia Supreme Court and also supported by
traditional canons of statutory construction, is that this literal language,
intentionally included by the Georgia General Assembly, must have some
independent meaning. To equate any prong of the long-arm statute with the federal
due process inquiry would render the language of the statute meaningless. See
Chatman v. Findley, 548 S.E.2d 5, 7 (Ga. 2001) (“Because the General Assembly
is presumed to intend something by passage of the act, we must construe its
provisions so as not to render it meaningless.”). The statutory requirement that a
nonresident defendant transact any business in Georgia must mean something more
than, and cannot simply equate to, mere minimum contacts in a due process sense.
Were the two truly meant to be coextensive, the General Assembly simply
would have adopted statutory language expressly incorporating constitutional due
process as the sole limitation on jurisdiction, as several other states have done.14
14
See, e.g., Ala. R. Civ. P. 4.2(b) (“An appropriate basis exists for service of process . . .
when the person or entity has such contacts with this state that the prosecution of the action . . .
is not inconsistent with the constitution of this state or the Constitution of the United States.”);
Ariz. R. Civ. P. 4.2(a) (“A court of this state may exercise personal jurisdiction over parties,
whether found within or outside the state, to the maximum extent permitted by the Constitution
of this state and the Constitution of the United States.”); La. Rev. Stat. Ann. § 13:3201(B) (“In
addition to the provisions of Subsection A, a court of this state may exercise personal
jurisdiction over a nonresident on any basis consistent with the constitution of this state and of
the Constitution of the United States.”); Or. R. Civ. P. 4(L) (providing personal jurisdiction,
19
Moreover, equating the two inquiries would transform the ordinary search for the
legislative meaning of the Georgia Assembly into a search for what the Supreme
Court of the United States would allow under the evolving due process standard.
Ultimately, unless and until the Georgia courts provide further authoritative
guidance, courts in this circuit construing the statute literally will have to delineate
the precise contours of the “[t]ransacts any business within this state” requirement
of O.C.G.A. § 9-10-91(1) according to the facts of each case.15
In sum, we adopt the guidance of the Georgia Supreme Court. We can no
longer construe the Georgia long-arm statute as coextensive with constitutional due
process. Instead, in assessing the propriety of the exercise of personal jurisdiction,
“[n]otwithstanding a failure to satisfy the requirement of sections B through K of this rule, in any
action where prosecution of the action against a defendant in this state is not inconsistent with
the Constitution of this state or the Constitution of the United States”).
15
We do, however, caution the federal courts of this circuit to resist any temptation to
define “[t]ransacts any business” solely or primarily in terms of the “foreseeability” of an impact
on the Georgia forum, a concept frequently featured in the due process “minimum contacts”
analysis. To do so would once again improperly conflate the long-arm and due process
inquiries. Unlike the due process analysis, O.C.G.A. § 9-10-91(1), on its face, includes no
element of “foreseeability.” Although we do not go so far as to say that the “foreseeability” of
an impact on the forum can never be a relevant consideration, there may be many instances in
which such notions of “foreseeability” have absolutely no bearing on whether particular conduct
can fairly and plausibly constitute the transaction of business in the state. Accordingly,
engrafting a “foreseeability” component, which the Georgia General Assembly has not seen fit
to include, onto the subsection (1) long-arm requirement would amount to just the sort of
extension of the long-arm statute beyond its literal terms that the Georgia Supreme Court
rejected in Innovative Clinical. See Innovative Clinical, 620 S.E.2d at 354, 355. Instead,
regardless of their preferences or attempts to resort to analytical shortcuts, our courts must be
limited to the bare language of the statute. Under subsection (1), analyzing whether the
nonresident defendant “[t]ransacts any business within this state” is the sole touchstone of long-
arm jurisdiction.
20
courts must apply the specific limitations and requirements of O.C.G.A. § 9-10-91
literally and must engage in a statutory examination that is independent of, and
distinct from, the constitutional analysis to ensure that both, separate prongs of the
jurisdictional inquiry are satisfied.
B.
We now turn to the district court’s personal jurisdiction analysis in this case.
We conclude that, although it is unclear whether the district court properly and
independently applied the long-arm statute pursuant to the standard we set forth
today, our own analysis persuades us to affirm the district court’s conclusion.16
In its August 3, 2007, order denying the motion to dismiss for lack of
personal jurisdiction, the district court properly cited O.C.G.A. § 9-10-91(1) as the
controlling provision of the long-arm statute. The district court cited Innovative
Clinical and the traditional three-part test for whether a nonresident transacted
business within Georgia. Diamond Crystal Brands, Inc. v. Food Movers Int’l Inc.,
No. CV407-42, 2007 WL 2258715, at *2 (S.D. Ga. Aug. 3, 2007) (citing Aero
Toy Store, LLC v. Grieves, 631 S.E.2d 734, 737 (Ga. Ct. App. 2006)).
Nevertheless, it appears to us that the district court conducted an analysis chiefly
16
See Cuddeback v. Fla. Bd. of Educ., 381 F.3d 1230, 1235 (11th Cir. 2004) (“This
court may affirm a judgment on any legal ground, regardless of the grounds addressed and relied
upon by the district court.”).
21
focused on minimum contacts for due process purposes, without sufficient
independent consideration of the statutorily required element of transacting
business in the state.17 One result of the conjoined analysis was that the district
court considered facts that were not relevant to the narrower question of whether
Food Movers transacted any business in Georgia in a matter that gave rise to
Diamond Crystal’s cause of action.
Although we cannot say that the district court’s approach was entirely
unreasonable—after all, it relied on language from a decision of the Georgia Court
of Appeals—we have already explained why we believe that this view of the
personal jurisdiction test is fundamentally incompatible, as a matter of Georgia
law, with the controlling pronouncement of the standard by the Georgia Supreme
Court in Innovative Clinical. See supra part III & n.11. Nevertheless, we conclude
that a remand is unnecessary: the breadth of the Georgia long-arm statute and the
17
For example, the court explained that the first two prongs of the three-part Aero Toy
Store test go to “whether the defendant has sufficient minimum contacts with the forum.”
Diamond Crystal, 2007 WL 2258715, at *2. This interpretation effectively read the independent
long-arm inquiry mandated by Innovative Clinical out of the test and erroneously made the
whole analysis about constitutional due process.
Additionally, the court’s recitation of facts—replete with references to “contacts” and
“purposeful activity directed at the forum state,” id. at *3—is virtually indistinguishable from a
constitutional due process discussion. Thus, although the district court found that “Food
Movers’ conduct and knowledge shows that it purposefully conducted business within the forum
state,” id. at *4, which at first blush sounds like a finding of “transacting any business” within
Georgia, it is unclear whether the district court was sufficiently mindful of the independent
requirements imposed by the Georgia long-arm statute.
22
facts that the district court did properly consider support a finding of jurisdiction
under O.C.G.A. § 9-10-91(1).
IV.
As discussed in part III, supra, Georgia’s long-arm statute permits
jurisdiction where a plaintiff’s cause of action “arises out of” a nonresident
defendant’s “transact[ion] of any business within [Georgia].” O.C.G.A. § 9-10-
91(1). In light of Innovative Clinical & Consulting Servs., LLC v. First Nat’l Bank
of Ames, Iowa, we must interpret this statute literally and give full effect to the
breadth of its language. 620 S.E.2d 352, 353, 355 (Ga. 2005).
Interpreted literally, “transacts any business” requires that the “‘nonresident
defendant has purposefully done some act or consummated some transaction in
[Georgia] . . . .’” Aero Toy Store, LLC v. Grieves, 631 S.E.2d 734, 737 (Ga. Ct.
App. 2006) (quoting Robertson v. CRI, Inc., 601 S.E.2d 163, 166 (Ga. Ct. App.
2004)). That said, a defendant need not physically enter the state. As a result, a
nonresident’s mail, telephone calls, and other “intangible” acts, though occurring
while the defendant is physically outside of Georgia, must be considered.
Innovative Clinical, 620 S.E.2d at 355–56. Therefore, we examine all of a
nonresident’s tangible and intangible conduct and ask whether it can fairly be said
23
that the nonresident has transacted any business within Georgia.18 Here, because
Food Movers sent purchase orders to a specific Georgia manufacturer, required
delivery by customer pickup, arranged for third parties to pick up Splenda that it
purchased in Georgia, and promised to pay money into Georgia, we conclude that
it did.
In both transactions at issue, Food Movers sent purchase orders to Nasser,
Diamond Crystal’s California agent.19 Each purchase order explicitly required (1)
that it be “ship[ed] to: Diamond Crystal, 3000 Tremont Road . . . , Savannah, GA,”
(2) specified the price and quantity of Splenda, and (3) required delivery by
“[c]ustomer picku[p].” One of the purchase orders even more explicitly required
“p/u in Savannah, Ga on 12/28/05.” Thus, although Food Movers routed the
purchase orders through Nasser and never physically brought the orders to
Georgia, Food Movers sent the orders to a specific Georgia manufacturing facility
18
In conducting this mixed law and fact inquiry, we find instructive the literal definition
of the words in the statute. “Transact” means “to prosecute negotiations,” to “carry on
business,” “to carry out,” or “to carry on.” Webster’s Third New Int’l Dictionary 2425 (1993).
“Any” means “to any extent” or “in any degree.” Id. at 97. “Business” means “activity directed
toward some end,” or “a usually commercial or mercantile activity customarily engaged in as a
means of livelihood,” or “transactions, dealings, or intercourse of any nature.” Id. at 302.
Hewing closely to the plain meaning of the statute serves the twin goals of giving effect to
legislative intent and not engrafting requirements that do not appear on the face of the “plain and
unambiguous statutory language,” Innovative Clinical, 620 S.E.2d at 355.
19
Ultimately, we conclude that Food Movers transacted business in Georgia on the basis
of the two transactions at issue in the breach of contract complaint; therefore, we do not rely on
Food Movers’s completed transactions for the purposes of the long-arm analysis.
24
and required delivery of the product in Georgia. After Innovative Clinical, Food
Movers’s routing of the purchase orders through a California intermediary—much
like routing them through the postal service—does not prevent us from considering
the purchase orders in the “transacts any business” equation.20
Significantly, Food Movers admits that Diamond Crystal tendered the two
shipments at its Savannah plant and that the shipments were picked up. Food
Movers claims that this is irrelevant because it was Food Movers’s third-party
customers who for their own account actually picked up the Splenda. We reject this
argument.
First, we have held that “designat[ing] certain parties within the State of
Georgia for receipt of the goods purchased under the contract” helps support a
finding that a nonresident transacted business in Georgia. Gold Kist, Inc. v.
Baskin-Robbins Ice Cream Co., 623 F.2d 375, 380 (5th Cir. 1980). In Gold Kist,
Baskin-Robbins contracted with a Georgia cooperative for the sale of pecans. Id.
at 376. It is unclear whether Baskin-Robbins ever personally accepted delivery of
the pecans in Georgia. It did, however, designate a company located in Georgia to
20
We do not decide, however, that O.C.G.A. § 9-10-91(1) encompasses every transaction
where a citizen from one state contracts with a Georgia manufacturer. We hold only that, in light
of the Georgia Supreme Court’s clarification that a party’s intangible actions can amount to the
transaction of business, Food Movers’s sending purchase orders to a specific Georgia
manufacturer and requiring delivery by customer pickup cannot be ignored in the long-arm
inquiry.
25
receive delivery, thus “part performance under the contract was to be effected in
Georgia, by Baskin Robbins’ own choosing.” Id at 380. Likewise, in the purchase
orders at issue here, Food Movers specified delivery by customer pickup in
Savannah. Although Food Movers never took physical possession of the Splenda,
it did allow third parties to accept delivery of its Splenda in Georgia. Additionally,
because manufacturers ordinarily do not release truckloads of product to random
carriers, we can infer that Food Movers sent some communication to Diamond
Crystal informing it of which carrier would pickup the Splenda in Savannah. See,
e.g., O.C.G.A. § 11-2-319(3) (“Unless otherwise agreed in any case [when the term
is F.O.B. the place of shipment] . . . the buyer must seasonably give any needed
instructions for making delivery. . . .”). Thus, Food Movers also must have sent
“evidence” to Georgia, either directly or by way of a third-party.
Second, under Georgia’s enactment of the Uniform Commercial Code
(“U.C.C.”), Food Movers took title to the Splenda upon Diamond Crystal’s tender,
regardless of who actually hired the common carrier. “Unless otherwise explicitly
agreed title passes to the buyer at the time and place at which the seller completes
his performance with reference to the physical delivery of the goods . . . .”
O.C.G.A. § 11-2-401(2).21 The parties observed an F.O.B. Savannah delivery22
21
Food Movers never claimed that it merely assigned its right to the Splenda under the
contract with Diamond Crystal. Rather, Food Movers has always maintained that it resold the
26
term by customer pickup; as a result, when Diamond Crystal tendered the goods at
its Georgia plant and issued a bill of lading listing Food Movers as the consignee,
Food Movers took legal title to the Splenda. See Wells Dairy, Inc. v. Food Movers
Int’l, Inc., 566 F. Supp. 2d 933, 943 (N.D. Ia. 2008). After Innovative Clinical,
taking physical possession of the Splenda in Georgia is not necessary; Food
Movers took legal title to goods located in Georgia, and that can be considered for
the purposes of O.C.G.A. § 9-10-91(1). 620 S.E.2d at 355; but see O.N. Jonas Co.
v. B & P Sales Corp., 206 S.E.2d 437, 439 (Ga. 1974) (“The goods were shipped
[F.O.B. Georgia] . . . and, as we read this record, that is the only contact that
appellees had with this state . . . . We hold that this is an insufficient ‘contact’ with
the State of Georgia to comply with the requirement of [O.C.G.A. § 9-10-91(1)] . .
. .”).23
Splenda. The bills of lading bear this out; each lists Food Movers as the “Consignee,” which
means the entity “to whom or to whose order the bill promises delivery.” O.C.G.A. 11-7-102(b).
That Food Movers resold the Splenda rather than assigned its rights to it is significant because a
present assignment of a contractual right immediately vests title in the assignee. Gamble v.
Mathias, 61 F.2d 911, 911 (5th Cir. 1932) (concluding that an assignment of an insurance
contract vested title to proceeds on the contract immediately even though the insurance company
had not yet paid the claim); Id. (“[A] present assignment of an interest passes the title to it as of
the date of the assignment.”).
22
Whether the F.O.B. Savannah term, in light of any other pertinent factors, constitutes
sufficient “transact[ion of] any business” in Georgia by Food Movers to support the exercise of
personal jurisdiction under Georgia’s long-arm statute does not depend on who proposed the
term.
23
Innovative Clinical likely overruled O.N. Jonas because O.N. Jonas did not give
sufficient breadth to the “transacts any business” language of the long-arm statute. Regardless,
27
Finally, the course of dealing between the parties makes clear that Food
Movers was to pay for the Splenda by transferring funds to Georgia. In each of the
twelve transactions in which Food Movers did pay for the Splenda, it sent
payments to Diamond Crystal in Georgia. The implied promise to send payments
to Georgia is relevant to whether Food Movers transacted any business there.
In total, we find that Food Movers transacted business within Georgia. Food
Movers sent purchase orders to Diamond Crystal in Georgia, Food Movers
requested delivery by “customer pickup” at Diamond Crystal’s plant in Savannah,
Food Movers directed third parties to accept delivery of the goods in Savannah,
Food Movers took legal title to the goods in Georgia, and Food Movers promised
to pay money into Georgia on the two transactions in question. Thus, personal
jurisdiction is appropriate under O.C.G.A. § 9-10-91(1).
V.
Having found that Georgia’s long-arm statute permits jurisdiction, we reach
the jurisdictional analysis under the Due Process Clause of the Fourteenth
Amendment. Food Movers casts itself as a passive buyer of goods whose sole
contacts with Georgia involved indirectly sending purchase orders and directly
sending payments. Appellant’s Br. at 13–14. Food Movers contends that such a
that Food Movers took title to the goods is but one fact that supports the conclusion that it
transacted business in Georgia.
28
limited connection with the forum cannot satisfy the due process requirement of
minimum contacts. We conclude that the Due Process Clause permits jurisdiction.
Food Movers established sufficient minimum contacts when it purposefully carried
on a substantial and ongoing relationship with a Georgia manufacturer, specified
delivery by “customer pickup” in Savannah, took and transferred legal title to
product in Savannah, and sent payments to Savannah on twelve of the fourteen
transactions.
The Due Process Clause protects an individual’s liberty interest in not being
subject to binding judgments imposed by foreign sovereigns. Burger King Co. v.
Rudzewicz, 471 U.S. 462, 471–72, 105 S. Ct. 2174, 2182 (1985). The heart of this
protection is fair warning—the Due Process Clause requires “‘that the defendant’s
conduct and connection with the forum State [be] such that he should reasonably
anticipate being haled into court there.’” Burger King, 471 U.S. at 474, 105 S. Ct.
at 2183 (quoting World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 297,
100 S. Ct. 559, 567 (1980)). Therefore, states may exercise jurisdiction over only
those who have established “‘certain minimum contacts with [the forum] such that
the maintenance of the suit does not offend “traditional notions of fair play and
substantial justice.”’” Helicopteros Nacionales de Columbia S.A. v. Hall, 466 U.S.
408, 414, 104 S. Ct. 1868, 1872 (1984) (alteration in original) (quoting Int’l Shoe
29
Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)).
It is undisputed that if Food Movers is subject to jurisdiction at all, it is
subject to specific jurisdiction. In specific jurisdiction cases, the “fair warning
requirement is satisfied if the defendant has purposefully directed his activities at
residents of the forum . . . and the litigation results from alleged injuries that arise
out of or relate to those activities.” Burger King, 471 U.S. at 472–73, 105 S. Ct. at
2182 (internal quotations omitted). Put differently, the defendant must have
“purposefully availed” itself of the privilege of conducting activities—that is,
purposefully establishing contacts—in the forum state and there must be a
sufficient nexus between those contacts and the litigation. Once this showing is
made, a defendant must make a “compelling case” that the exercise of jurisdiction
would violate traditional notions of fair play and substantial justice. Id. at 477, 105
S. Ct. at 2185; Cable/Home Commc’n Corp. v. Network Prods., Inc., 902 F.2d 829,
858–59 (11th Cir. 1990).
A.
We conclude that Diamond Crystal’s cause of action grew out of Food
Movers’s purposeful contact with Georgia such that Food Movers reasonably
should have anticipated defending suit there. At the outset, we underscore that the
minimum contacts analysis is “‘immune to solution by checklist.’” Sloss Indus.
30
Corp. v. Eurisol, 488 F.3d 922, 925 (11th Cir. 2007) (quoting Prod. Promotions,
Inc. v. Cousteau, 495 F.2d 483, 499 (5th Cir. 1974). Thus, it is settled that
entering a contract with a citizen of another state, standing alone, does not
automatically satisfy the minimum contacts test. Burger King, 471 U.S. at 478,
105 S. Ct. at 2185.
Rather, when inspecting a contractual relationship for minimum contacts, we
follow a “highly realistic approach” that focuses on the substance of the
transaction: prior negotiations, contemplated future consequences, the terms of the
contract, and the actual course of dealing. Id. at 479, 105 S. Ct. at 2185 (internal
quotation omitted). The focus must always be on the nonresident defendant’s
conduct, that is, whether the defendant deliberately engaged in significant activities
within a state or created continuing obligations with residents of the forum. Id. at
480, 105 S. Ct. at 2186–87. This focus ensures that a defendant will not be subject
to jurisdiction based solely on “‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.”
Id. at 475, 105 S. Ct. at 2183 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S.
770, 774, 104 S. Ct. at 1473, 1478 (1984)).
This case involves a forum seller’s effort to sue a nonresident buyer in the
seller’s home forum for breach of contract. In this context, we have rejected
jurisdiction when the buyer’s sole contact with the forum is contracting with a
31
resident seller who performs there. See Borg-Warner Acceptance Corp. v. Lovett
& Tharpe, Inc., 786 F.2d 1055, 1063 (11th Cir. 1986) (refusing to exercise
jurisdiction where the primary contact involved an isolated purchase of goods
manufactured in the forum under a contract negotiated outside of the forum). This
follows from the two well-established propositions that neither merely contracting
with a forum resident nor the forum resident’s unilateral acts can establish
sufficient minimum contacts.
But nonresident purchasers can still be subject to jurisdiction in the seller’s
forum. Jurisdiction is often found where further contacts or plus factors connect
the defendant to the jurisdiction. See, e.g., Sloss Indus., 488 F.3d at 931–33.
Courts have considered a defendant’s initiating the contractual relationship,24
visiting the plaintiff’s factory to assess or improve quality,25 sending materials to
24
E.g., Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 933 (11th Cir. 2007); Sw. Offset, Inc.
v. Hudco Publ’g Co., 622 F.2d 149, 150–52 (5th Cir. 1980) (per curiam) (finding minimum
contacts where, inter alia, defendant sent multiple purchase orders to plaintiff after initial
solicitation); Madison Consulting Group v. South Carolina, 752 F.2d 1193, 1202–04 (7th Cir.
1985) (finding minimum contacts where, inter alia, the South Carolina defendant “actively
reach[ed] out to solicit the services of a Wisconsin partnership” by flying a principal to the initial
negotiations in Washington D.C., but cautioning that some solicitations will be too minor); cf.
Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 152 & n.5 (3d Cir.
1996) (refusing to find minimum contacts where the defendant was a “passive buyer,” that is,
one which has been “solicited as a customer of the plaintiff.”).
25
E.g., Sloss Indus., 488 F.3d at 931; Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d
816, 820 (8th Cir. 1994) (finding minimum contacts where, inter alia, defendant’s representative
visited the plant to assure the initial run of custom products was satisfactory).
32
the plaintiff for inspection or use in shipping,26 participating in the manufacturing
process,27 establishing a relationship by placing multiple orders,28 requiring
performance in the forum,29 negotiating the contract via telefaxes or calls with the
plaintiff;30 the list goes on. Thus, in Sloss, we found sufficient minimum contacts
with Alabama because the nonresident buyer placed ten unsolicited orders in just a
few months with an Alabama company, sent a sample to Alabama, sent containers
26
Sloss Indus., 488 F.3d at 933.
27
E.g., Sw. Offset, 622 F.2d at 150–52 (finding minimum contacts where, inter alia,
defendant publisher sent camera ready copies of its telephone directories and corrected proofs to
the publisher in the forum); Whittaker Corp. v. United Aircraft Corp., 482 F.2d 1079, 1084 (1st
Cir. 1973) (finding minimum contacts where, inter alia, the nonresident buyer “actively
supervised or actually participated in” the development of the product); U.S. Kids, 22 F.3d at
820 (finding minimum contacts where, inter alia, the defendant transmitted “camera-ready
artwork necessary for the production of the portfolios and envelopes” to the forum).
28
E.g., Air Prods. & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 551–52 (6th Cir.
2007) (“[T]he parties did not engage in a one-time transaction, but in a continuing business
relationship that lasted many years. . . . Such contacts are not ‘random,’ ‘fortuitous,’ or
‘attenuated,’ but are the result of deliberate conduct that amounts to purposeful availment.”).
29
E.g., Biltmoor Moving & Storage Co. v. Shell Oil Co., 606 F.2d 202, 207 (7th Cir.
1979) (finding minimum contacts where, inter alia, “the moving contract absolutely required
substantial and lengthy performance within Illinois” by all parties to the contract); see N. Penn
Gas v. Corning Natural Gas, 897 F.2d 687, 690–91 (3d Cir. 1990) (per curiam) (finding
minimum contacts with Pennsylvania where, inter alia, the contract required a Pennsylvania gas
company to reserve storage space in its fields for a New York gas company, even though the
New York company never actually stored gas there).
30
E.g., Sloss Indus., 488 F.3d at 933; Air Products & Controls, Inc., 503 F.3d at 551–52
(finding minimum contacts in part based on several hundred telephone, email, facsimile, and
ordinary mail correspondences for the purpose of discussing contracts and ordering goods);
Cent. Freight Lines Inc. v. APA Transp. Corp., 322 F.3d 376, 382 (5th Cir. 2003) (“APA
specifically and deliberately ‘reached out’ to a Texas corporation by telephone and mail with the
deliberate aim of entering into a long-standing contractual relationship with a Texas
corporation.”).
33
to Alabama for use in shipping, proposed an exclusive contractual relationship, and
sent representatives to Alabama with the goal of improving the manufacturing
process and furthering the relationship. 488 F.3d at 933.
A crucial, but often overlooked issue, is why these factors are important to
the minimum contact analysis. The “plus” factors and further contacts are not
talismans. Rather, as the Supreme Court suggested in Burger King, the plus factors
indicate that the defendant “deliberate[ly] affiliat[ed]” with the forum, 471 U.S. at
482, 105 S. Ct. at 2187 and thus should reasonably anticipate defending a suit
there.
This case is close. In some ways, Food Movers had little to do with
Georgia: Food Movers never communicated directly with Diamond Crystal in
Georgia, Diamond Crystal’s California agent initiated the overall relationship, and
Food Movers never took an active role in the manufacturing process.
Nevertheless, we conclude that Food Movers purposefully established minimum
contacts with Georgia. As we explain, each individual transaction involved
meaningful contact with Georgia and, by purposefully engaging in fourteen such
transactions in just six months, Food Movers established a substantial and ongoing
relationship with a Georgia manufacturer.
The terms of the contracts and the course of performance reveal that the
34
transactions involved contact with Georgia. A contract calling for payment and
delivery in a forum requires “contact” with the forum. S & Davis Int’l, Inc. v.
Yemen, 218 F.3d 1292, 1305 (11th Cir. 2000) (“Performance logically required
contact and interaction with the United States, as discussed in the contract (such as
designating a U.S. bank for payment and a point of departure for shipping).”).
Here, Food Movers submitted purchase orders to Diamond Crystal’s
California agent with instructions that the orders be “ship[ed] to: Diamond Crystal,
3000 Tremont Road . . . , Savannah, GA.” Additionally, each purchase order
specified that delivery would be by “[c]ustomer picku[p]” and, in most cases,
further specified “please have ready to pick up in Savannah, GA” or “pick up in
Savannah, GA.” And in each transaction, Food Movers redelivered the product to
its third-party customers by allowing its customers to take delivery in Savannah.
Food Movers admits that it sent money to Georgia on twelve of the fourteen
transactions—that is, every time it paid. Thus, each transaction involved payment,
delivery, and Food Movers’s redelivery of the product in Savannah.
Taking all of the transactions together, these purposeful contacts put Food
Movers on notice that it could be haled into a Georgia court. Burger King requires
a realistic examination of the entire course of dealing. In just six months, Food
Movers purchased more than $1.9 million dollars worth of Splenda in fourteen
35
transactions, each of which involved purposeful and meaningful contact by Food
Movers with Georgia. Fourteen of these transactions in six months amounts to a
substantial relationship in which Food Movers deliberately associated with
Georgia. See Burger King, 471 U.S. at 473, 105 S. Ct. at 2182 (“[W]e have
emphasized that parties who ‘reach out beyond one state and create continuing
relationships and obligations with citizens of another state,’ are subject to
regulation and sanctions in the other State for the consequences of their
activities.”) (quoting Travelers Health Ass’n v. Va. ex rel. State Corp. Comm’n,
339 U.S. 643, 647, 70 S. Ct. 927, 929 (1950)). Thus, the “‘quality and nature’” of
Food Movers’s interstate transaction with Diamond Crystal and Georgia is not so
random or fortuitous that it “cannot fairly be said that [Food Movers] ‘should
reasonably anticipate being haled into court’ [there].” Burger King, 471 U.S. at
486, 105 S. Ct. at 2189 (quoting World-Wide Volkswagon, 444 U.S. at 297, 100 S.
Ct. at 567).
Food Movers contends that our precedent forecloses this result.
Specifically, it reads Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 786
F.2d 1055 (11th Cir. 1986), and Sloss Industries Co. v. Eurisol, 488 F.3d 922 (11th
Cir. 2007), for the rule that only nonresident buyers who are actively “involved in
the production process in the forum” can have sufficient minimum contacts.
36
Appellant’s Br. at 26. Neither case requires such a broad rule, and, in any event,
Food Movers’s conduct went beyond that of a mere “passive purchaser.”
Borg-Warner, for its part, involved an isolated purchase of goods produced
in a forum. 786 F.2d at 1059. In this context, the court held that minimum contacts
cannot be based merely on the manufacturing of the goods in the forum and a
postdelivery forum visit to return defective merchandise. Id. at 1063. On its facts,
Borg-Warner is thus distinguishable because it involved a lone transaction,
whereas, here, Food Movers engaged in an ongoing course of dealing with
Diamond Crystal.
Sloss involved a nonresident defendant who placed ten purchase orders for
goods produced in and shipped from Alabama. 488 F.3d at 931. The Sloss court
properly distinguished the one-time transaction in Borg-Warner on this ground. Id.
The court concluded, however, that the number of transactions, standing alone,
could not give rise to minimum contacts because of our holding in Banton
Industries v. Dimatic Die & Tool Co., 801 F.2d 1283 (11th Cir. 1986). Id. Banton
held that a Nebraska firm lacked minimum contacts with Alabama when it filled an
unsolicited order for goods shipped F.O.B. Omaha to an Alabama corporation,
notwithstanding that the parties had engaged in similar transactions in previous
years. 801 F.2d at 1284. The Sloss court distinguished Banton and found
37
minimum contacts because, in addition to the number of transactions, the
nonresident defendant placed unsolicited orders, had its agent send containers to
Alabama for use in shipping, visited the forum for the purpose of improving
quality, and proposed an exclusive relationship with the manufacturer in the forum.
488 F.3d at 933.
Sloss does not decide this case in Food Movers’s favor for two reasons.
First, as in Sloss, we think that Banton is distinguishable. Second, like the
defendant in Sloss, Food Movers’s purposeful contact with the forum went beyond
that of a completely passive purchaser.
First, Banton is distinguishable. Other than merely accepting the order from
the Alabama plaintiff, the transaction in Banton involved literally no contact with
the proposed Alabama forum. See 801 F.2d at 1284 (characterizing the issue as
“whether the due process clause prohibits the exercise of personal jurisdiction over
a defendant whose sole contact with the forum state was an out-of-state sale of
goods to a resident of the forum state.”). Therefore, Banton held only that when
the defendant’s sole contact with the forum is contracting with a forum resident,
even a history of such transactions does not provide sufficient minimum contacts.
Here, by contrast, in each individual transaction, Food Movers sent payment to
Georgia and accepted delivery and redelivered the Splenda in Georgia.
38
Second, although Diamond Crystal initially approached Food Movers in
California about the possibility of selling sweetener to it, Food Movers was far
from a passive purchaser. Diamond Crystal’s solicitation resulted only in an
unenforceable general agreement about price and delivery terms. Diamond Crystal
Brands Inc. v. Food Movers Int’l, Inc., No. 407-42, 2008 WL 2811940, at *5–6
(S.D. Ga. July 21, 2008) (finding that Food Movers presented “no evidence” that
an overarching distributorship contract governed the relationship). Thus, no
enforceable, overarching supply agreement governed the transactions, and Food
Movers had no obligation to purchase Splenda from Diamond Crystal. Rather,
seemingly without further solicitation,31 Food Movers voluntarily submitted
fourteen purchase orders to Diamond Crystal’s California agent. That a plaintiff
first solicited a nonresident defendant does not nullify the significance of a
31
See Aff. of Anthony LaMonica, ¶¶ 15–16, Mar. 30, 2007 (“Nasser Company and
Diamond Crystal Brands, Inc. sent their representatives to Food Movers’ offices . . . . After that
meeting at Food Movers’ office, Nasser Company took several orders from Food Movers . . . .”);
Aff. of Thomas Samuel LaMonica, ¶ 17, Mar. 5, 2008 (“I subsequently negotiated with Mr.
Seibel and we agreed upon contract for Splenda sales at a case price of $31.40 with a minium
quantity of 11,000 cases per month.”); Id. at ¶ 19 (“Once our credit application was accepted by
Diamond Crystal Brands, Inc. . . . we submitted our first purchase order to the broker, Nasser . . .
.”); Id. at ¶ 27 (“All of the purchase order submitted to Nasser were processed without further
discussion . . . .”); see also Appellant’s Reply Br. at 4 (“Following the telephone contacts by
Nasser and Seibel in California and the meetings at Food Movers’ offices in California, for
several months between August 2005 and January 2006 Food Movers submitted purchase orders
to Nasser in California for bulk quantities of Splenda.”) (emphasis added). It does appear that
after the initial five purchase orders, Diamond Crystal approached Food Movers to renegotiate
the minimum quantities per month and price terms. Aff. of Thomas Samuel LaMonica, ¶ 23,
Mar. 5, 2008.
39
defendant’s initiation of subsequent transactions. See Sw. Offset, Inc. v. Hudco
Publ’g Co., 622 F.2d 149, 150, 151–52 (5th Cir. 1980) (per curiam) (holding that
when “Southwest, a Texas corporation, solicited Hudco's business through
Southwest's sales representative in Alabama,” and when, “[a]fter the initial order
was placed with the sales representative, Hudco placed subsequent orders,
approximately eight,” Hudco “was no mere passive customer of a Texas
corporation” in part because “Hudco repeatedly placed orders with the Texas
corporation.”). Therefore, Food Movers deliberately reached out to Diamond
Crystal by voluntarily and purposefully initiating subsequent transactions.32
Moreover, the delivery terms and course of delivery underscore the
connection between Food Movers and Georgia. The parties agreed that the
Splenda would be delivered F.O.B. Savannah, Georgia, but cannot agree on who
proposed the term. Accepting, arguendo, Food Movers’s version of the facts,
Diamond Crystal required the F.O.B. Savannah term because of the “volume of
32
Nor does Food Movers’s routing of the purchase orders through Diamond Crystal’s
California agent negate Food Movers’s reaching out to Georgia. In Burger King, the Supreme
Court rejected the argument that because the Michigan defendant primarily interacted with the
Florida plaintiff’s Michigan office, the defendant had no reason to anticipate suit in Florida. 471
U.S. at 480, 105 S. Ct. at 2186. Such a holding would ignore substantial record evidence that the
defendant “knew that he was affiliating himself with an enterprise based primarily in Florida.”
Id. Here, similarly, the record shows that Food Movers knew that it was contracting with a
Georgia manufacturer: each Food Movers purchase order specified Diamond Crystal’s
Savannah, Georgia plant; Food Movers requested delivery by customer pickup in Savannah; and
Food Movers paid money into Savannah.
40
sweetener” involved. Under Georgia’s enactment of the U.C.C., the term required
Diamond Crystal to, at its plant, “ship the goods in the manner provided in this
article . . . and bear the expense and risk of putting them into the possession of the
carrier.” O.C.G.A. § 11-2-319(1)(a).
Significantly, Food Movers never argued that Diamond Crystal required
delivery by customer pickup.33 Food Movers’s contention that Diamond Crystal
required delivery “at the plant” is not to the contrary. Regardless of who paid for
shipping, who bore the risk of loss, and when title shifted, the Splenda would be
delivered at the plant. Food Movers thus could have paid to have the Splenda
shipped outside of Georgia. Instead, Food Movers specified delivery by customer
pickup for its own benefit and purposes.
Taking delivery by customer pickup distinguishes this case from ordinary
F.O.B. forum cases. Although we have never explicitly reached this holding, we
have cited cases that have rejected the argument that an F.O.B. forum delivery term
provided sufficient minimum contacts. E.g. Borg-Warner, 786 F.2d at 1059–60
(citing Scullin Steel Co. v. Nat’l Ry. Utilization Corp., 676 F.2d 309 (8th Cir.
33
Food Movers does argue in its reply brief that Diamond Crystal “required delivery or
customer pickup at its manufacturing plant in Georgia.” Appellant’s Reply Br. at 5. But Food
Movers’s affidavit evidence supports only that Diamond Crystal required delivery “at the plant.”
Aff. of Thomas Samuel LaMonica, ¶¶ 10–11, May 24, 2007 (“Because of the volume of
sweeteners [involved] Mr. Seibel advised me that delivery would be required at the plant.”).
41
1982) and Lakeside Bridge & Steel Co. v. Mountain State Constr. Co., 597 F.2d
596 (7th Cir. 1979)). An F.O.B. forum delivery term does not necessarily create
minimum contacts because it is a formal term relating to title and who bears the
risk of loss. Particularly when the goods are shipped outside of the forum, an
F.O.B. delivery term may not be a sufficient indicator of the defendant’s
purposeful availment of the forum’s laws. But here, Food Movers sought delivery
by customer pickup; that is, the Splenda would not be shipped to Food Movers
outside of Georgia at all. The “customer pickup” term indicated that Food Movers
intended to affiliate with Georgia and invoke the benefits and protections of its
laws.
Food Movers argues that we should ignore this contact because it never took
physical delivery of the product in Georgia; its third-party customers did on and for
their own account. It is well established, however, that physical contacts with a
forum are not required. Burger King, 471 U.S. at 476. Although it never took
physical delivery, Food Movers did take and transfer legal title to the Splenda in
Georgia. See supra part IV. Casting formalism aside, Food Movers saved
shipping costs and thus derived an economic benefit by middling the product off of
Diamond Crystal’s Savannah loading dock. Thus, Food Movers’s simultaneous
acceptance of delivery and redelivery at Diamond Crystal’s Savannah plant
42
underscores its connection with Georgia.
Alternatively, Food Movers contends that we should disregard its
redeliveries because they did not “arise out of or relate to” the transactions at issue.
This circuit has not adopted a rigid approach to determining when contacts “arise
out of or relate to” a cause of action. See Oldfield v. Pueblo De Bahia Lora, S.A.,
558 F.3d 1210, 1222 & n.32 (11th Cir. 2009) (collecting the approaches of other
circuits). In a recent torts case, however, we held that the contact must be a “but-
for” cause of the alleged tort and that the purposeful contact must be such that the
out-of-state resident will have “‘fair warning that a particular activity will subject
[it] to the jurisdiction of a foreign sovereign . . . .” Id. at 1223 (alteration in
original) (quoting Burger King, 471 U.S. at 472, 105 S. Ct. at 2182).
Even if Food Movers’s customers had never picked up the Splenda,
Diamond Crystal still would have had a claim for breach of contract. Strictly
speaking, therefore, the customer pickup of the Splenda was not a “but-for” cause
of Diamond Crystal’s claim. Nevertheless, in a breach of contract action, the
course of performance is clearly relevant to the “relationship among the defendant,
the forum, and the litigation.” Helicopteros, 466 U.S. at 414, 104 S. Ct. at 1872
(quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569, 2579 (1977)). As a
result, we have considered a nonresident defendant’s contacts with a forum during
43
the course of delivery. Sloss Indus., 488 F.3d at 933 (considering it relevant that
the nonresident defendant sent containers into the forum for use in shipping); S &
Davis Int’l, 218 F.3d at 1304 (considering the delivery term as a relevant contact);
see also Papachristou v. Turbines Inc., 902 F.2d 685, 686–87 (8th Cir. 1990) (en
banc) (considering the nonresident defendant’s physical entrance into the forum
during the course of delivery in the minimum contacts analysis). Likewise, it is
appropriate to consider Food Movers’s legal, although not physical, acceptance of
delivery in Georgia. And because Food Movers’s redelivery of the Splenda
coincided with its taking delivery, it can fairly be said that the redelivery also
“related to” Diamond Crystal’s breach of contract claim.
In sum, we conclude that Food Movers purposefully established sufficient
minimum contacts with Georgia. Food Movers established a substantial and
ongoing relationship with a Georgia manufacturer by engaging in fourteen
transactions in six months, each of which involved contacts with Georgia. Food
Movers spurred that relationship by sending unsolicited purchase orders to the
Georgia manufacturer via the manufacturer’s California agent. Each purchase
order specified that delivery would be by customer pickup, and Food Movers did
in fact allow its third party customers to take delivery of the Splenda in Georgia.
Because Food Movers never paid for two of the shipments its customers picked up,
44
it caused foreseeable injury to the plaintiff in the forum. See Burger King, 471
U.S. at 480, 105 S. Ct. at 2186. For these reasons, Food Movers purposefully
established minimum contacts with Georgia and reasonably should have
anticipated defending a suit there.
B.
In addition to minimum contacts, the exercise of jurisdiction must also
comport with traditional notions of fair play and substantial justice. Burger King,
471 U.S. at 476, 105 S. Ct. at 2184. In this analysis, we look to “‘the burden on
the defendant,’ ‘the forum State’s interest in adjudicating the dispute,’ ‘the
plaintiff’s interest in obtaining convenient and effective relief,’ ‘the interstate
judicial system’s interest in obtaining the most efficient resolution of
controversies,’ and the ‘shared interest of the several states in furthering
fundamental substantive social policies.’” Id. at 477, 105 S. Ct. at 2184 (quoting
World-Wide Volkswagon Corp., 444 U.S. at 292, 100 S. Ct. at 564). We conclude
that Food Movers has not presented the requisite “compelling case” that exercising
jurisdiction would be unconstitutionally unfair. Id. at 477, 105 S. Ct. at 2185.
In fact, Food Movers does not even attempt to explain why litigating in
Georgia would be especially onerous, much less how any such inconvenience
achieves a “constitutional magnitude.” Id. at 484, 105 S. Ct. at 2188. Instead,
45
Food Movers argues only that in light of Diamond Crystal’s connection with
California, it would not be “unreasonable” to require suit there. Appellant’s Br. at
29. But even if it would be reasonable to require suit in California, Georgia has a
“manifest interest in providing effective means of redress for its residents.”
McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223, 78 S. Ct. 199, 201 (1957).
Georgia’s interest in exercising jurisdiction would often justify “serious burdens”
on a nonresident defendant. S & Davis, 218 F.3d at 1305 (quoting Asahi Metal
Indus. Co. v. Superior Court, 480 U.S. 102, 114, 107 S. Ct. 1026, 1033 (1987)).
Plainly, it justifies jurisdiction here.
VI.
In sum, we conform this circuit’s interpretation of Georgia’s long-arm
statute to state law as announced by the Georgia Supreme Court. We find that
although the district court did not clearly apply the newly-elucidated standard, the
exercise of jurisdiction comports with the independent dictates of both the Georgia
long-arm statute and the Due Process Clause of the Fourteenth Amendment.
Accordingly, the judgement of the district court is AFFIRMED.
SO ORDERED.
46