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That a Defendant Leased a Truck in Maryland and Transported Goods from a Maryland Farm were Insufficient for Personal Jurisdiction

Paul v. Delaware Landscape Construction, LLC
No. 12-cv-2024-JKB (D. Md. Dec. 7, 2012)
by Kevin M. Cox, Associate
Semmes, Bowen & Semmes (www.semmes.com)

James M. Paul, Patricia G. Paul, and Melva W. Martin (“Plaintiffs”) filed suit against Delaware Landscape Construction, LLC (“DLC”) and Hertz Equipment Rental Corp. collectively “Defendants”) alleging state law claims for negligence, strict liability and loss of consortium. Pending before the court were DLC’s motions to dismiss the complaint and Hertz’s crossclaims for lack of personal jurisdiction.

Plaintiffs were involved in an accident with a truck driven by a DLC employee, while Plaintiffs were traveling in the State of Delaware. At the time of the accident, the DLC employee was using the truck—which DLC leased from Defendant Hertz—to transport sod from a sod farm that straddles the border between Maryland and Delaware.

A federal court sitting in diversity has personal jurisdiction over a non-resident defendant if: (1) an applicable state long-arm statute confers jurisdiction; and (2) the assertion of that jurisdiction is consistent with constitutional due process. Maryland courts have consistently held that Maryland’s long arm statute is coextensive with the limits of personal jurisdiction set by the due process clause of the Federal Constitution.

Plaintiffs did not argue that DLC’s contacts with Maryland were sufficiently continuous and systematic to support general jurisdiction in Maryland. Indeed, DLC had negligible contacts with Maryland. Instead, Plaintiffs asserted that the court had specific personal jurisdiction over DLC.

The Fourth Circuit has set down a three-part test for evaluating whether the assertion of specific jurisdiction is consistent with constitutional due process: the court must consider (1) the extent to which the defendant purposely availed itself of the privilege of conducting activities in the State; (2) whether the plaintiff’s claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable. The first prong of this test articulates the minimum contacts requirement of constitutional due process that the defendant purposely avail itself of the privilege of conducting business under the laws of the forum state.

Plaintiffs offered two (2) facts in support of their argument that DLC purposely availed itself of the protection of the laws and courts of Maryland: (1) the sod fields of the farm from which DLC purchased its sod were located in Maryland; and (2) DLC leased the truck from Defendant Hertz at a site in Maryland. The court held that these facts were insufficient to support personal jurisdiction in Maryland.

Plaintiffs offered no facts suggesting that DLC knew that the farm’s fields were in Maryland. More importantly, the farm’s business address was in Delaware, and DLC usually placed its orders with the farm by calling its telephone number, which had a Delaware area code. According to the court, these facts created serious doubt that DLC had “fair warning” that its purchases from the farm would subject it to the jurisdiction of Maryland courts, or even that DLC “purposely directed” its activities at a resident of Maryland.

Additionally, DLC did not travel into Maryland to procure the truck; instead, Hertz -which is not incorporated in Maryland and does not keep its principal place of business in Maryland - delivered the truck to DLC at its office in Delaware. Finally, DLC’s lease agreement with Hertz for the truck in question was governed by New Jersey law.

Accordingly, DLC’s incidental contacts with Maryland did not demonstrate that DLC created a substantial connection with Maryland or purposely availed itself of the benefits and protections of Maryland law. Therefore, the court lacked personal jurisdiction over DLC. The case was, therefore, transferred to the United States District Court for the District of Delaware pursuant to 28 U.S.C. § 1406(a). DLC’s motion to dismiss for lack of personal jurisdiction was then granted, as well as its motion to dismiss Hertz’s cross-claims for lack of personal jurisdiction, to the extent that the case was transferred.