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American Paper Recycling, Inc. v. Renew Bahamas, Ltd.

Superior Court of Massachusetts, Bristol

September 23, 2016

American Paper Recycling, Inc.
v.
Renew Bahamas, Ltd. et al. [1] No. 135031

          MEMORANDUM OF DECISION AND ORDER ON DEFENDANT RENEW BAHAMAS, LTD.'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND FORUM NON CONVENIENS

          Merita A. Hopkins, Justice

         Plaintiff American Paper Recycling, Inc. (" American") filed this action alleging that Renew Bahamas, Ltd. (" Renew") breached a contract to provide American with certain quantities of cardboard, mixed paper, plastic bottles, and used beverage cans. This matter is before the court on Renew's Motion to Dismiss for Lack of Personal Jurisdiction and Forum Non Conveniens. For the reasons discussed below, that motion is DENIED .

         BACKGROUND

         American is a Massachusetts corporation with a principal place of business in Mansfield, Massachusetts. Renew is a corporation in the Bahamas with a principal place of business in Nassau, New Providence, Bahamas. On June 4, 2014, American and Renew signed a written letter of intent whereby Renew agreed to provide American with all of its baled fibre and polymer products prior to the installation and commissioning of permanent baler machines. Thereafter, Renew would provide American with the greater of 45, 000 tons or 50% of the total annual tonnage of cardboard, mixed paper, mixed plastic bottles, and used beverage cans produced at the site, which American would then market and sell to other sources. The parties formalized and finalized their agreement on December 27, 2014 with a written Marketing and Services Agreement (" the Agreement"). The Agreement provides that Renew will sell American 50% of the total output of cardboard, mix paper, and plastic polymer grades and 100% of the aluminum can grades. For any tons not shipped through American, Renew will pay a buyback commission of $6.00 per ton for any shortfall weight.

         In a complaint filed on November 12, 2015, American alleges that Renew failed to ship the required tonnage from its plant in the Bahamas and failed to pay any buyback commission. Renew knew that American had committed to resell the materials and that certain mills were waiting for shipments of recyclate from Renew through American, including America Chung Nam Holdings, Inc. in City of Industry, California; International Forest Products, LLC in Foxboro, Massachusetts; and Coastal Recycling, Inc. in Miami, Florida. Instead of shipping recyclate to American or on its behalf, Renew shipped the materials directly to these mills. On October 20, 2015, counsel for American sent Renew a demand letter pursuant to General Laws Chapter 93A. Renew, which owes American at least $90, 000, failed to respond with a reasonable settlement offer. Count I of American's complaint alleges breach of contract and Count II alleges violation of Chapter 93A. Count III asserts the statutory remedy of reach and apply pursuant to G.L.c. 214, § 3 against America Chung Nam Holdings, Inc., while Count IV asserts the common-law remedy of reach and apply. Count V asserts the G.L.c. 214, § 3 reach and apply remedy against International Forest Products, LLC, while Count VI asserts the common-law remedy of reach and apply. Count VII asserts the G.L.c. 214, § 3 reach and apply remedy against Coastal Recycling, Inc., while Count VIII asserts the common-law remedy of reach and apply.

         In support of its motion to dismiss, Renew has filed the affidavit of Michael Cox (" Cox"), its Chief Operating Officer. Cox avers that Renew is incorporated in the Bahamas and has its principal place of business there. Renew focuses on sustainable waste management for the Islands of the Bahamas. Its goal is to minimize the amount of waste in landfills by converting waste into valuable resources. Renew does not have and has never had an office or any employees in Massachusetts. Renew does not own, rent, or use property in Massachusetts. Renew does not advertise in Massachusetts, nor has it ever shipped any goods or materials to Massachusetts for any reason. Renew's representatives have never traveled to Massachusetts.

         Cox avers that in early June of 2014, American drafted a Letter of Intent (" LOI") and emailed it to Renew in the Bahamas for review. American and Renew exchanged changes to the LOI before finalizing it. Renew then signed the LOI in the Bahamas. Pursuant to the LOI, American agreed to make available, ship, install and commission horizontal and vertical balers at Renew's principal place of business in the Bahamas. Renew was authorized to operate these balers in the Bahamas to produce a certain amount of recycled product. Renew was obligated to provide all general plant, equipment and personnel needed to load, operate and unload the balers in the Bahamas. Renew also agreed to sell various recyclate products to American or to third parties on American's behalf. However, the LOI did not obligate Renew to supply any goods in Massachusetts. American sent a staff member to the Bahamas to train Renew to use the balers, oversee and manage the baler operations, confirm quality assurance, and provide advice on other issues.

         Cox avers that in December of 2014, American representatives traveled to the Bahamas to discuss its business relationship with Renew and to see Renew's headquarters. During this visit, American and Renew negotiated business terms for moving forward and executed the Agreement. The Agreement states that it is to be governed by the laws of Massachusetts. Pursuant to the Agreement, Renew was required to sell American a certain percentage of its cardboard, mix paper, plastic polymer grades, and aluminum can grade. Renew sold two shipments of recyclate to American at the Nassau, Bahamas port. Cox believes that the vessel carrying the recyclate departed Nassau and traveled to its destination in India. Renew sent American two invoices for these shipments via email and American sent payment to Renew in the Bahamas. Renew never issued any payment to American in Massachusetts. Renew has never shipped any recyclate to American or to any other company in Massachusetts.

         American has filed the affidavit of its President, Ken Golden (" Golden"), who avers that in May of 2014, Cox called him seeking baler machines for use in his recycling company in the Bahamas. Cox told Golden that he had conducted a Google search for a company who might provide the equipment and found American located in Mansfield, Massachusetts. Golden avers that the Agreement, which is printed on American letterhead, originated in Massachusetts. In an email dated May 19, 2014, Cox stated that he wanted the balers sent from American's Mansfield office to the Bahamas. In emails dated May 27, 2014, June 4, 2014 and November 24, 2014, Cox asked Katie Partridge (" Partridge"), American's Director of Export in Mansfield, to send an employee from Mansfield to the Bahamas to install the balers and train Renew's employees. American shipped the balers, which were stored in Mansfield, to the Bahamas from Boston. Cox sent a crew from Mansfield to the Bahamas to install the balers and train Renew's employees.

         Golden avers that Renew agreed to export recyclate to Mansfield and discussed this with Partridge via email. Golden further avers that Renew made two or three shipments of corrugated material from Nassau to Boston. American sent a number of invoices to Renew from Mansfield for payment. Finally, Golden avers that Renew has transacted business with and sent materials to International Forest Products, LLC, a Foxboro, Massachusetts company.

         DISCUSSION

          For the court to exercise personal jurisdiction over a nonresident defendant, the long-arm statute must authorize jurisdiction and the exercise of jurisdiction must be consistent with basic due process requirements. Bulldog Investors Gen. P'ship v. Secretary of the Commonwealth, 457 Mass. 210, 215, 929 N.E.2d 293 (2010); Fletcher Fixed Income Alpha Fund Ltd. v. Grant Thornton LLP, 89 Mass.App.Ct. 718, 720, 54 N.E.3d 570 (2016). Once jurisdiction is challenged, the plaintiff bears the burden of production as to jurisdictional facts. Bulldog Investors Gen. P'ship v. Secretary of the Commonwealth, 457 Mass. at 219; Roberts v. Legendary Marine Sales, 447 Mass. 860, 863, 857 N.E.2d 1089 (2006). Where the court does not hold an evidentiary hearing but decides the motion to dismiss solely on the basis of affidavits and other documentary evidence, it applies a prima facie standard requiring the plaintiff to proffer enough evidence which, if credited, supports a finding of personal jurisdiction. Cannonball Fund Ltd. v. Dutchess Capital Mgmt., LLC, 84 Mass.App.Ct. 75, 97, 993 N.E.2d 350, rev. den., 466 Mass. 1106, 996 N.E.2d 473 (2013); Cepeda v. Kass, 62 Mass.App.Ct. 732, 737, 819 N.E.2d 979 (2004).[2] The court views the relevant facts in the light most favorable to the plaintiff. Tatro v. Manor Care, Inc., 416 Mass. 763, 765, 625 N.E.2d 549 (1994); Cepeda v. Kass, 62 Mass.App.Ct. at 738.

         The parties dispute whether this Court has specific jurisdiction over Renew.[3] The Massachusetts longarm statute provides, in relevant part:

A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transacting any business in this commonwealth; (b) contracting to supply services or things in this commonwealth; (c) causing tortious injury by an act or omission in this commonwealth; [or] (d) causing tortious injury in this commonwealth by an act or omission outside this commonwealth if he regularly does or solicits business, or engages in any other ...

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