FURNITURE MATTRESSES & MORE LLC v. TEXAS RUSTIC INC

UNITED STATES DISTRICT COURT

DISTRICT OF MAINE

FURNITURE, MATTRESSES & )

MORE LLC, )

)

Plaintiff, )

)

v. ) Docket No. 1:19-cv-00154-NT

)

TEXAS RUSTIC, INC., )

)

Defendant. )

ORDER ON DEFENDANT’S MOTION TO DISMISS AND MOTION TO

TRANSFER VENUE

Before me is the Defendant’s motion to dismiss the Plaintiff’s Complaint

pursuant to Federal Rule of Civil Procedure 12(b)(2) or, alternatively, to transfer the

action to the United States District Court for the Southern District of Texas, Houston

Division, pursuant to 28 U.S.C. § 1404(a). (“Def.’s Mot.”) (ECF No. 6). For the reasons

stated below, the motion to dismiss is DENIED, and the motion to transfer is

DENIED.

BACKGROUND

Plaintiff, Furniture, Mattresses & More LLC (“FMM” or the “Plaintiff”), is a

retail furniture store organized and operated in Bangor, Maine. Compl. ¶¶ 1, 5 (ECF

No. 1). FMM’s sole member is Kathy Harvey. Id. ¶ 7. Defendant, Texas Rustic, Inc.

(“Texas Rustic” or the “Defendant”), is a wholesale furniture seller incorporated

and with its principal place of business in Madisonville, Texas. Id. ¶¶ 2, 6. Texas

Rustic has two shareholders: Carolyn Davis, who also serves as president, and her

husband. Carolyn Davis Decl. ¶ 2, Def.’s Mot. Ex. 1 (ECF No. 6-1). Shane Davis serves

as a sales representative for Texas Rustic. Shane Davis Decl. 1, Def.’s Reply Pl.’s

Opp’n Mot. Dismiss Ex. 1 (“Def.’s Reply”) (ECF Nos. 9 & 9-1).

At an April 2018 furniture show in North Carolina, Ms. Harvey was introduced

to Shane Davis through Michael Butter, allegedly Texas Rustic’s independent sales

representative. Compl. ¶¶ 7, 8. At that initial meeting, Ms. Harvey viewed samples

of the furniture that Texas Rustic was offering for sale. Id. ¶ 8. Mr. Davis allegedly

made several representations to Ms. Harvey, including that there had been no

customer complaints about the furniture and that the furniture carried a 1-year

warranty against defects. Id. ¶¶ 10–12. Shortly thereafter, FMM placed its first order

for Texas Rustic’s furniture, which was shipped to Maine on April 20, 2018. Id. ¶ 13,

Ex. 1 at 2 (ECF No. 1-1). Between April and December of 2018, Texas Rustic supplied

furniture to FMM with a total product cost of $437,594.50 and a shipping cost of

$157,835.00.1 Compl. ¶ 14; Def.’s Mot. 1.

In October of 2018, FMM began receiving complaints from customers that the

wooden furniture supplied by Texas Rustic was cracking and splitting at normal room

temperatures. Compl. ¶ 16. FMM notified Texas Rustic of the problem on November

5, 2018, stating that the furniture did not conform to the samples provided at the

North Carolina show. Id. ¶¶ 17–19. FMM subsequently informed Texas Rustic on

1 The “Invoices Breakdown” sheet provided by the Plaintiff appears to show that the total value

of the shipped furniture was $423,202.50 and the total cost of shipping was $157,835.50. Compl. Ex. 1

(ECF Nos. 1 & 1-1). However, the sheet also reflects over $14,000 in credit paid by Texas Rustic, and

both parties state that the total product cost was over $437,000. Compl. ¶ 14; Def.’s Mot. Dismiss 1

(“Def.’s Mot”) (ECF No. 6). Thus, I use that latter figure here.

December 4, 2018, not to manufacture any additional furniture for FMM. Id. ¶ 20.

Later in December of 2018, Mr. Davis and another Texas Rustic employee traveled to

Bangor to inspect the furniture. Id. ¶ 21. Mr. Davis allegedly assured Ms. Harvey

that Texas Rustic would cure the nonconforming furniture in FMM’s warehouse and

authorized a nominal credit to FMM for the nonconforming models he observed. Id.

¶¶ 21–25. Texas Rustic later informed FMM that it would change the terms of

payment to a “factor of 30 days” to allow necessary time to cure. Id. ¶ 27. Based on

these assurances, FMM received three shipments of furniture from Texas Rustic in

December of 2018. Id. ¶¶ 28–30. FMM ultimately canceled all orders on December

24. Id. ¶ 29. On December 28, within thirty days of the alteration of the payment

agreement, a collection agency contacted FMM and stated that its account with Texas

Rustic was delinquent, a characterization that FMM says was false. Id. ¶¶ 31, 34.

On January 24, 2019, FMM sent Texas Rustic a Notice of Rejection of Defective

Goods and a Notice of Revocation of Acceptance of Defective Goods. Id. ¶ 38. In the

following weeks, attorneys for both parties communicated via email and telephone

regarding a possible out-of-court resolution of the dispute. Aff. of Gregory P. Dorr

¶¶ 5–10, Exs. C–F, Pl.’s Ex. 2 (ECF No. 8-2). In the course of these communications,

the Plaintiff’s attorney provided the Defendant with a draft of the Complaint. Id. ¶ 8.

On April 11, 2019,2 the Plaintiff filed this action, which contains nine claims:

(1) breach of contract, (2) breach of sales contract, (3) breach of express warranty, (4)

2 The Defendant notes that it did not receive service of this case until after it filed the action in

Texas. But the “Federal Rules of Civil Procedure provide that a civil action is commenced upon the

filing of a complaint with the court.” Novello v. Randall, 930 F. Supp. 693, 697–98 n. 5 (D.N.H. 1996).

Thus, “[f]or purposes of determining first-filed status as between two federal suits, the general rule is

breach of implied warranties, (5) rejection of goods, (6) revocation of acceptance of

goods, (7) unjust enrichment, (8) defamation, and (9) punitive damages. Compl.

¶¶ 44–84.

On May 9, 2019, the Defendant filed suit against the Plaintiff in Texas State

Court for declaratory judgment and breach of contract. The Plaintiff removed that

case to the United States District Court for the Southern District of Texas, where it

is currently pending.

LEGAL STANDARD

On a motion to dismiss under 12(b)(2), the plaintiff bears the burden of

establishing that personal jurisdiction exists over the defendant. PREP Tours, Inc. v.

Am. Youth Soccer Org., 913 F.3d 11, 16 (1st Cir. 2019). Absent an evidentiary

hearing,3 I apply the “prima facie standard” to determine if the plaintiff has met this

burden. Id. Under this “least taxing” standard, the plaintiff must “proffer[] evidence

that, if credited, is enough to support findings of all facts essential to personal

jurisdiction.” Id. (quoting Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir.

1992)); Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st Cir. 2008). The plaintiff

that jurisdiction relates back to the time of the filing of the complaint,” not the time of service. Id.

Further, correspondence submitted by the Plaintiff reveals that Plaintiff’s counsel repeatedly sought

confirmation that Defendant’s predecessor counsel would accept service. Aff. of Gregory P. Dorr, Exs.

D–I, Pl.’s Ex. 2 (ECF Nos. 8-2). The Plaintiff should not be penalized for any delay in service.

3 A district court can apply several methods to determine whether the plaintiff has established

the existence of personal jurisdiction. The “most conventional of these methods” is the prima facie

method, which does not require an evidentiary hearing. Daynard v. Ness, Motley, Loadholt,

Richardson & Poole, P.A., 290 F.3d 42, 50–51 (1st Cir. 2002). As neither party has requested an

evidentiary hearing or has objected to the application of the prima facie method, I apply that method

here.

“ordinarily cannot rest upon the pleadings, but is obliged to adduce evidence of

specific facts.” PREP Tours, 913 F.3d at 16 (internal quotations omitted). However, I

must “accept the plaintiff’s (properly documented) evidentiary proffers as true . . .

and construe them in the light most congenial to the plaintiff’s jurisdictional claim.”

Prairie Eye Ctr., 530 F.3d at 26 (internal quotations omitted); see also Baskin-Robbins

Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016).

On a motion to transfer venue, the burden of proof falls upon the party seeking

the transfer. Coady v. Ashcraft & Gerel, 223 F.3d 1, 11 (1st Cir. 2000). Venue is

appropriate in a district in which “a substantial part of the events or omissions giving

rise to the claim occurred,” or “if there is no district in which an action may otherwise

be brought as provided in this section, any judicial district in which any defendant is

subject to the court’s personal jurisdiction with respect to such action.” 28 U.S.C.

§ 1391(b)(2)–(3). “[A] district court may transfer any civil action to any other district

or division where it might have been brought or to any district or division to which

all parties have consented.” 28 U.S.C. § 1404(a). In doing so, the district court may

consider “the convenience of parties and witnesses,” as well as “the interest of justice.”

28 U.S.C. § 1404(a). However, there is a strong presumption in favor of the plaintiff's

choice of forum, and, if “identical actions are proceeding concurrently in two federal

courts, . . . the first filed action is generally preferred.” Coady, 223 F.3d at 11 (citing

Cianbro Corp. v. Curran-Lavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987)).

DISCUSSION

The Defendant raises two arguments as part of these pending motions: (1) that

this Court lacks personal jurisdiction over it and (2) that this case should be

transferred to the United States District Court for the Southern District of Texas

where a related action is pending. The Plaintiff counters that personal jurisdiction is

present here and that transfer is improper because this action preceded the Texas

case.

I. Personal Jurisdiction

A court may have two types of personal jurisdiction over a defendant: general

or specific. See Cossaboon v. Maine Med. Ctr., 600 F.3d 25, 31 (1st Cir. 2010). Specific

jurisdiction “may only be relied upon where the cause of action arises directly out of,

or relates to, the defendant’s forum-based contacts.” Id. (internal quotations omitted).

General jurisdiction is broader and encompasses actions unrelated to such contacts.

Id. The Plaintiff asserts that both general and specific jurisdiction are present here.

Each type of jurisdiction must comport with the forum state’s long-arm statute

and with the Due Process Clause of the Fourteenth Amendment. See LP Solutions

LLC v. Duchossois, 907 F.3d 95, 102 (1st Cir. 2018); Cossaboon, 600 F.3d at 32.

Maine’s long-arm statute specifically identifies the “transaction of any business

within this State” as conduct conferring personal jurisdiction. 14 M.R.S.A. § 704-A(2).

Maine’s statute also provides that,

to insure maximum protection to citizens of this State, [this section]

shall be applied so as to assert jurisdiction over nonresident defendants

to the fullest extent permitted by the due process clause of the United

States Constitution, 14th amendment.

Id. § 704-A(1); see also LP Solutions, 907 F.3d at 102. Under the Due Process Clause,

a court may “exercise jurisdiction over an out-of-forum defendant only if, with respect

to the claims at issue, the defendant has certain minimum contacts with the forum

such that the maintenance of the suit does not offend traditional notions of fair play

and substantial justice.” PREP Tours, 913 F.3d at 17 (quoting Int’l Shoe Co. v.

Washington, 326 U.S. 310, 316 (1945)) (internal alterations and quotations omitted).

A. General Jurisdiction

A court may exercise general jurisdiction over a foreign corporation “only when

the corporation’s affiliations with the State in which suit is brought are so constant

and pervasive as to render it essentially at home in the forum State.” Daimler AG v.

Bauman, 571 U.S. 117, 122 (2014) (internal quotations omitted); see also Copia

Commc’ns, LLC v. AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016). This test is

“considerably more stringent than that applied to specific jurisdiction questions.”

United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 619 (1st Cir. 2001) (citing

Noonan v. Winston Co., 135 F.3d 85, 93 (1st Cir. 1998)). Because I find below that

specific jurisdiction over the Defendant exists, it is unnecessary for me to decide

whether general jurisdiction also exists.

B. Specific Jurisdiction

A finding of specific jurisdiction “depends on an affiliation between the forum

and the controversy underlying the plaintiff’s claims.” PREP Tours, 913 F.3d at 17

(quoting Goodyear Dunlop Tire Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011))

(internal alterations and quotations omitted). The First Circuit applies a three-part

test to determine whether this “minimum contacts” requirement is met. Id. First, the

plaintiff’s claim must be sufficiently related to the defendant’s in-forum activities;

second, the defendant must have purposefully availed itself of the privilege of doing

business in the forum state; and third, assertion of jurisdiction over the defendant

must be reasonable. Scottsdale Capital Advisors Corp. v. The Deal, LLC, 887 F.3d 17,

20 (1st Cir. 2018).

The First Circuit has made clear that the mere existence of a contract is

insufficient to establish minimum contacts. See Swiss Am. Bank, 274 F.3d at 621.

Rather, the court must apply a “contract-plus” analysis. See Phillips Exeter Acad. v.

Howard Phillips Fund, Inc., 196 F.3d 284, 289 (1st Cir. 1999). Under this approach,

I focus on “the parties’ prior negotiations and contemplated future consequences,

along with the terms of the contract and the parties’ actual course of dealing.”

Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 52 (1st

Cir. 2002) (internal quotations omitted); see also C.W. Downer & Co. v. Bioriginal

Food & Science Corp., 771 F.3d 59, 66 (1st Cir. 2014).

1. Relatedness

The relatedness prong of the personal jurisdiction test “ensures fundamental

fairness by protecting a defendant from being hauled into an out-of-state forum based

on a single contact with that forum that is wholly unrelated to the suit at issue.”

Swiss Am. Bank, 274 F.3d at 623. “[T]he claim underlying the litigation must directly

arise out of, or relate to, the defendant’s forum-state activities.” United Elec., Radio

& Mach. Workers of Am. v. 163 Pleasant St. Corp., 960 F.2d 1080, 1089 (1st Cir. 1992).

“In this inquiry, foreseeability is critical.” Id. However, this is a “flexible, relaxed

standard,” requiring only a “demonstrable nexus between the complaint’s claims and

the activities in the forum that properly may be attributed to the defendants.” PREP

Tours, 913 F.3d at 18 (internal quotations omitted).

As an initial step, I must identify the Plaintiff’s claims and the Defendant’s

alleged contacts with Maine. See Swiss Am. Bank, 274 F.3d at 621. Here, the Plaintiff

asserts nine causes of action. Seven of these are based in contract and arise out of the

Defendant’s shipment of allegedly nonconforming goods. Compl. ¶¶ 44–72. The

Plaintiff identifies several activities by the Defendant that relate to these contract

claims:

• Between April and December of 2018, the Defendant sent nineteen

shipments of furniture to the Plaintiff’s retail store in Bangor. These

shipments contained thousands of items and cost over $437,000. Compl.

¶ 14, Ex. 1.

• The Defendant sent invoices and credit memoranda to the Plaintiff in

Maine. Pl.’s Opp’n Def.’s Mot. Dismiss 7 (“Pl.’s Opp’n”) (ECF No. 8).

• Shane Davis communicated via phone with the Plaintiff’s managing

member, who was located in Maine, about “the formation and performance

of the contract or series of contracts and the supply of furniture.” Pl.’s Opp’n

9; Shane Davis Decl. 1.

• Mr. Davis and another employee traveled to Plaintiff’s Bangor store to

inspect the furniture and, while there, made several representations

regarding the condition of the furniture, plans to cure, and changes in the

credit arrangement between the entities. Pl.’s Opp’n 9–10; Compl. ¶¶ 21–

27.4

4 In addition, the Plaintiff alleges that Mr. Butter was a sales representative of Texas Rustic

and regularly communicated with the Plaintiff, both in person in Maine and electronically to the

Plaintiff in Maine, about additional furniture orders from the Defendant. Pl.’s Opp’n Def.’s Mot.

Dismiss 7–9 (“Pl.’s Opp’n”) (ECF No. 8). The Defendant contends that Mr. Butter “was not Texas

Rustic’s agent,” and states that Mr. Butter issued his own purchase orders to Texas Rustic for the

initial shipments to FMM. Def.’s Reply Pl.’s Opp’n Mot. Dismiss 3–4 (“Def.’s Reply”) (ECF No. 9). These

orders, according to the Defendant, show that Mr. Butter’s company was Texas Rustic’s customer,

rather than FMM. Id. However, the Plaintiff has supported its statements about Mr. Butter with an

affidavit from Ms. Harvey. Aff. of Kathy Harvey ¶¶ 4, 6, Pl.’s Ex. 1 (ECF No. 8-1). Because I “take the

facts from the pleadings and whatever supplemental filings (such as affidavits) are contained in the

record” and give “credence to the plaintiff’s version of genuinely contested facts,” I accept the Plaintiff’s

Despite acknowledging that these activities occurred, the Defendant asserts

that it “has conducted no activities whatsoever in the State of Maine.” Def.’s Mot. 7.

Rather, its “sole connection” to the State “is that it received orders in the State of

Texas from FMM, a Maine-based company.” Id. at 8. As such, the Defendant contends

that the Plaintiff’s claims cannot arise out of these non-existent contacts. Id. In

addition, according to the Defendant, any alleged travel to Maine by Defendant’s

personnel occurred “after the furniture cracked” and thus “after the claims arose.”

Def.’s Reply 5–6. Therefore, the claims cannot possibly “arise out of” those activities.

Id.

The Defendant’s argument is disingenuous and misunderstands the

relatedness requirement. The Plaintiff can satisfy this prong by showing that the

Defendant’s activities in Maine were “instrumental” in the breach of the contract. See

Phillips Exeter Acad., 196 F.3d at 289. Texas Rustic’s activities in Maine include the

alleged breach itself: the repeated shipment of nonconforming furniture into the

state.5 Thus, it is not merely that the Defendant was linked to Maine through some

abstract contractual relationship. Rather, the Defendant’s direct shipment of

characterization here. Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st

Cir. 2016). In any event, the Plaintiff has also provided nineteen invoices and credit memos that show

direct sales between FMM and Texas Rustic. Thus, even disregarding Mr. Butter’s role in the

relationship, I find sufficient contacts to meet due process requirements.

5 The Defendant asserts that it is “undisputed that the furniture in question was delivered to

FMM’s motor carrier in Texas and the sale was completed at that point.” Def.’s Reply 5. However, the

First Circuit “has long found this argument irrelevant to the jurisdictional analysis.” Knox v.

MetalForming, Inc., 914 F.3d 685, 694 (1st Cir. 2019); see also Benitez-Allende v. Alcan Aluminio do

Brasil, SA., 857 F.2d 26, 30 (1st Cir. 1988) (Breyer, J.) (“The fact that title to the [products] passed in

[a foreign country] is beside the point, for ‘[i]f International Shoe stands for anything . . . it is that a

truly interstate business may not shield itself from suit by a careful but formalistic structuring of its

business dealings.’”).

furniture is the entire basis of the Plaintiff’s contract-based causes of action. Those

claims are thus “related to” the Defendant’s contacts with Maine.

The Defendant’s point about the timing of Mr. Davis’s Maine visit also misses

the mark. It is true that the First Circuit has stated that “contacts coming into

existence after the cause of action arose will not be relevant.” Harlow v. Children’s

Hosp., 432 F.3d 50, 62 (1st Cir. 2005); see also Unicomp, Inc. v. Harcros Pigments,

Inc., 994 F. Supp. 24, 26 n.3 (D. Me. 1998). However, the First Circuit has

subsequently noted that this statement was made in the specific context of the

“discrete-in-time tort” of medical malpractice. See Plixer Int’l, Inc. v. Scrutinizer

GmbH, 905 F.3d 1, 11 (1st Cir. 2018). In this case, Texas Rustic’s alleged breaches

continued after Mr. Davis’s visit to Maine. FMM states that it accepted three

additional shipments of nonconforming furniture in December of 2018 in reliance on

Mr. Davis’s representations made during and after his visit. Compl. ¶¶ 21–30.

Furthermore, even if Mr. Davis’s trip to Maine is disregarded, there were

earlier, virtual communications. Mr. Davis concedes that he communicated via phone

with the Plaintiff’s managing member, who was located in Maine, “concerning the

purchase and sale of the furniture in question.” Shane Davis Decl. 1. Although the

Defendant made or received those calls from Texas, “mail or telephone contacts” can

serve as relevant contacts “[w]hen physical presence is lacking.” Swiss Am. Bank, 274

F.3d at 622. In summary, the Defendant had several contacts with Maine that are

directly related to the Plaintiff’s contractual claims.

The remaining two causes of action are based in tort. In a tort case, the court

“must probe the causal nexus between the defendant’s contacts and the plaintiff’s

cause of action.” Phillips Exeter Acad., 196 F.3d at 289. This inquiry “focuses on

whether the defendant’s in-forum conduct caused the injury or gave rise to the cause

of action.” Swiss Am. Bank, 274 F.3d at 622. Here, the Plaintiff claims that the

Defendant published a defamatory delinquency report about the Plaintiff and that

the Plaintiff is entitled to punitive damages. Compl. ¶¶ 73–84. These claims stem

from a debt collection letter mailed to FMM in Maine. Compl. Ex. 2 (ECF No. 1-2).

The letter appears attributable to Texas Rustic, as it states that the collection agency

has been authorized to collect Texas Rustic’s outstanding balance. Id. As such, these

causes of action have a “demonstrable nexus” with the Defendant’s activities in Maine

and satisfy the relatedness criteria. See PREP Tours, 913 F.3d at 18.

2. Purposeful Availment

The second prong—the purposeful availment inquiry—focuses on the

defendant’s “intentionality.” Swiss Am. Bank, 274 F.3d at 623. The plaintiff must

point to “some act by which the defendant purposefully avail[ed] itself of the privilege

of conducting activities within the forum State, thus invoking the benefits and

protections of its laws.” Burger King v. Rudzewicz, 471 U.S. 462, 474 (1985); see also

PREP Tours, 913 F.3d at 19. Due to the nature of this inquiry, “the two cornerstones

of purposeful availment are voluntariness and foreseeability.” PREP Tours, 913 F.3d

at 19–20 (internal quotations omitted). Voluntariness requires that the defendant’s

contacts with the forum “proximately result” from the defendant’s own actions, rather

than the unilateral action of another. Id. at 20. Foreseeability requires a showing that

the defendant’s connections with the forum “are such that he should reasonably

anticipate being haled into court there.” Id. (quoting Burger King, 471 U.S. at 474)

(internal quotations omitted). Thus, “random, fortuitous, or attenuated contacts” are

insufficient. Knox v. MetalForming, Inc., 914 F.3d 685, 691 (1st Cir. 2019). In

contracts cases, jurisdiction can be “reasonably foreseeable when the defendant

deliberately directed its efforts toward the forum state” or “entered a contractual

relationship that envisioned continuing and wide-reaching contacts in the forum

State.” LP Solutions, 907 F.3d at 104 (internal alterations and quotations omitted).

In this case, the Defendant voluntarily entered into sales contracts with a

Maine retailer. It is true that the initial order stems from activities in North Carolina

and that the Defendant’s “awareness of the location of the plaintiff is not, on its own,

enough to create personal jurisdiction over a defendant.” Prairie Eye Ctr., 530 F.3d

at 28. But Texas Rustic was not merely aware that FMM operated in Maine when it

accepted the orders, nor was that first order the only contact. Rather, Texas Rustic

“voluntarily and directly” shipped hundreds of thousands of dollars worth of furniture

to FMM in Maine. See Jackson v. Sunset Ladder Co., 2015 WL 7451179, at *6 (D. Me.

Nov. 23, 2015) (finding the purposeful availment prong satisfied where the defendant

repeatedly and directly shipped products into Maine over four years despite not

maintaining a physical presence in the State). FMM has provided documentation of

nineteen purchase invoices and two credit memos spanning eight months and

containing thousands of items worth over $400,000. Compl. Ex. 1. These shipments

were part of Texas Rustic’s “regular flow or regular course of sale” and thus can “make

jurisdiction foreseeable.” Knox, 914 F.3d at 691 (internal quotations omitted).

Texas Rustic’s shipments to FMM enabled it to reach Maine consumers and

take advantage of the Maine market. See Lulu, Inc. v. Chesapeake Boats, Inc., 2009

WL 1448464, at *8 (D. Me. May 21, 2009) (“[I]t does not offend due process if a court

located in Maine exercises jurisdiction over an out-of-state defendant who knowingly

and voluntarily directed its products at a Maine consumer.”). Through those

shipments, the Defendant received substantial income and could have “reasonably

anticipated” being haled into court in Maine. See Plixer, 905 F.3d at 10 (purposeful

availment prong was satisfied, in part, because defendant’s contacts had yielded over

$200,000 in business over three-and-a-half years).

Although the volume of sales is not dispositive, see Knox, 914 F.3d at 692, there

are additional factors here. As noted above, Mr. Davis regularly communicated with

Ms. Harvey, who was located in Maine, about Texas Rustic’s performance under and

modification of the contract. Aff. of Kathy Harvey ¶ 7, Pl.’s Ex. 1 (ECF No. 8-1); Shane

Davis Decl. 1. Texas Rustic directed where its products went and maintained

channels of communication with the Plaintiff. Compare Knox, 914 F.3d at 693–94

(noting that defendant manufacturer had the power to direct where its products were

sent by distributor and communicated directly with consumers in the forum), with J.

McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 878, 886 (2011) (plurality opinion)

(noting that defendant manufacturer had no control over end location of its products

and had no other relationship with consumers in the forum).

This is not a typical stream-of-commerce case, where a defendant “cannot

necessarily predict or control where downstream [its] products will land.” Plixer, 905

F.3d at 8. Texas Rustic is a distributor that voluntarily and intentionally chose to

contract with a Maine retailer and ship its products into Maine. As such, it should

have reasonably anticipated that it might be subject to the jurisdiction of Maine

courts for a cause of action arising from those sales and shipments. Jackson, 2015

WL 7451179, at *6. “By repeatedly contracting to sell and ship products” to Maine,

Texas Rustic “purposefully availed itself of the privilege of conducting business in

Maine and derived the benefits and protections that Maine law afforded to it.” Id.

3. Reasonableness

The third prong considers the reasonableness of exercising jurisdiction over a

defendant. Courts apply the five “gestalt factors,” which “put into sharper perspective

the reasonableness and fundamental fairness of exercising jurisdiction in particular

situations.” Pritzker v. Yari, 42 F.3d 53, 64 (1st Cir. 1994). These factors are:

(1) the defendant’s burden of appearing, (2) the forum state’s interest in

adjudicating the dispute, (3) the plaintiff’s interest in obtaining

convenient and effective relief, (4) the judicial system’s interest in

obtaining the most effective resolution of the controversy, and (5) the

common interests of all sovereigns in promoting substantive social

policies.

Adelson v. Hananel, 510 F.3d 43, 51 (1st Cir. 2007). The defendant bears the burden

of establishing that the exercise of jurisdiction would be unreasonable. Plixer, 905

F.3d at 122.

The Defendant first argues that its burden “of being haled into court in Maine

is certainly no less than the burden imposed on FMM in being required to litigate its

claim” in Texas. Def.’s Mot. at 8. But this argument misses the crux of the burden

factor, which is “only meaningful where a party can demonstrate some kind of special

or unusual burden.” Baskin-Robbins, 825 F.3d at 40 (adding that the inquiry is not

about “relative convenience”). The Defendant identifies no special burden that this

Court’s jurisdiction would impose.

The Defendant next states that “Maine has no particular interest in hearing

claims against a party who has no real contacts with the state.” Def.’s Mot. at 8. This,

of course, disregards all of the contacts identified above. It also ignores that Maine

has a substantial interest in a dispute involving nonconforming furniture sent to a

resident retailer and ultimately purchased by consumers in Maine. See BlueTarp

Financial, Inc. v. Matrix Const. Co., 709 F.3d 72, 83 (1st Cir. 2013) (“Maine has an

interest in redressing harms committed against its companies by out-of-state

companies.”).

Finally, the Defendant argues that the “Plaintiff’s interest in obtaining

convenient and effective relief does not outweigh Texas Rustic’s interest in having its

claims adjudicated in the forum where the contract was performed.” Def.’s Mot. at 8–

9. However, “[c]ourts regularly cede some deference to the plaintiff’s choice of forum.”

Baskin-Robbins, 825 F.3d at 41. And, even if the State of Texas has an interest in

this dispute, the Defendant “has not demonstrated how [that interest] might possibly

render jurisdiction in [Maine] unconstitutional.” See Burger King, 471 U.S. at 483.

For the reasons discussed above, I conclude that this Court’s exercise of

personal jurisdiction over Texas Rustic is consistent with due process. The

relatedness and purposeful availment requirements are satisfied, and the gestalt

factors do not counsel otherwise.

II. Transfer of Venue

The Defendant also moves to transfer this case to the United States District

Court for the Southern District of Texas pursuant to 28 U.S.C. § 1404(a). “Section

1404(a) is intended to place discretion in the district court to adjudicate motions for

transfer according to an individualized, case-by-case consideration of convenience

and fairness. A motion to transfer under § 1404(a) thus calls on the district court to

weigh in the balance a number of case-specific factors.” Stewart Org., Inc. v. Ricoh

Corp., 487 U.S. 22, 29 (1988) (internal quotations omitted).

One of the key factors is whether the current case preceded an identical case

in the transferee district. In a choice-of-venue decision, the so-called “first-filed rule”

favors the action that was filed first in order to “further sound judicial

administration” and avoid “duplicative efforts by courts and parties.” Galley v.

Kreutzig, 2015 WL 2349373, at *6 (D. Me. May 15, 2015); see also Cianbro, 814 F.2d

at 11. However, this rule is “not to be applied in a mechanical way.” EMC Corp. v.

Parallel Iron, LLC, 914 F. Supp. 2d 125, 127 (D. Mass. 2012). “There are at least two

widely-recognized exceptions to the first-filed rule: where (1) there are ‘special

circumstances’ justifying a transfer, such as where a party engages in misleading

conduct to win a ‘race to the courthouse’; or (2) the balance of convenience

substantially favors the second-filed action.” Id.

Neither party has disputed that this action was filed four weeks before the

Texas action or that both actions substantially overlap.6 I will therefore consider

whether the Texas action should be given priority based on either of the above

exceptions.

A. Special Circumstances

The first-filed presumption may be overcome when “special circumstances” are

found. See Getty Petroleum Mktg., Inc. v. 2211 Realty, LLC, 2011 WL 2489988, at *4

(D. Mass. June 17, 2011). Special circumstances may exist when a plaintiff “(1)

misleads the defendant into [forgoing] litigation in order to negotiate a settlement

and then files suit or (2) reacts to a defendant’s notice of imminent filing by ‘literally

sprinting to the courthouse the same day.’ ” Holmes Grp., Inc. v. Hamilton

Beach/Proctor Silex, Inc., 249 F. Supp. 2d 12, 16 (D. Mass 2002) (quoting Veryfine

Prods., Inc., v. Phlo Corp., 124 F. Supp. 2d 16, 22–25 (D. Mass. 2000)).

The Defendant argues that the second circumstance is present here. It asserts

that the Plaintiff’s initiation of this suit was an “anticipatory filing” because the

collection agency letter had put FMM on notice that Texas Rustic intended to file suit.

Def.’s Mot. 10.

6 The Texas action involves the same contracts and shipments of furniture. In that case, the

Defendant seeks “declaratory judgment that the goods in question conformed to the description

contained in the contract between the parties” and that the goods were sold “without warranty.” See

Def.’s Mot. Ex. 2 ¶¶ 10, 11 (ECF No. 6-2). Alternatively, the Defendant claims that FMM breached the

parties’ contract by failing to pay for the furniture. Id. ¶¶ 12–16. As such, the existence of both actions

“raise[s] the specter of ‘conflicting judgments.’” Bath Iron Works Corp. v. Congoleum Corp., 2019 WL

2110499, at *3 (D. Me. May 14, 2019) (quoting TPM Holdings, Inc. v. Intra-Gold Indus., Inc., 91 F.3d

1, 4 (1st Cir. 1996)).

The record shows otherwise. Although Texas Rustic did send two notices

regarding the unpaid account and possible future legal action—one through the

collection agency on December 28, 2018, and one through its own attorney on

February 14, 2019—both were sent after FMM had contacted Texas Rustic about the

nonconformities. See Redzone Wireless, LLC v. Netgear, Inc., 2017 WL 1379320, at *2

(D. Me. Apr. 14, 2017) (holding that filing a lawsuit days after receiving demand letter

was not an anticipatory filing because letter capped a two-month period during which

the parties’ relationship had already deteriorated).

In addition, neither communication drove FMM immediately to the

courthouse. Rather, the parties continued to negotiate settlement options for over a

month. See Aff. of Gregory P. Dorr, Exs. C–F. During that time, FMM expressed a

willingness to settle, forewarned of legal action, and sent a draft of its complaint. See

id. These facts indicate that the negotiations were “ongoing” and that both parties

were “aware that litigation could occur at any time, brought by either side.” Veryfine

Prods., 124 F. Supp. 2d at 23 (“When the negotiations are long-term and ongoing and

there is no false implication that a party will refrain from litigation during those

negotiations, the first-filed presumption may remain intact.”); see also Galley, 2015

WL 2349373, at *6 (finding that, because defendant waited two months to sue for

breach of contract, “his complaint [did] not reveal a ‘race to the courthouse’ that would

justify abrogation of the first-filed rule”) (internal quotations omitted).

As a result, I conclude that this action was not an anticipatory filing by the

Plaintiff and the “special circumstances” exception to the first-filed rule is

inapplicable.

B. Balance of Convenience

The first-filed rule can also be overcome when the defendant shows “that its

choice of forum is substantially more convenient than that chosen by the plaintiff.”

Holmes Grp., 249 F. Supp. 2d at 17. Such a determination is made “on an

individualized, case-by-case basis, in the sound discretion of the court.” TransCanada

Pwr. Mktg., Ltd. v. Narragansett Elec. Co., 402 F. Supp. 2d 343, 351 (D. Mass. 2005)

(citing Stewart Org., Inc., 487 U.S. at 29).

The Defendant makes three arguments as to why Texas is a preferable forum:

(1) the “convenience of the witnesses and parties would be better served in Texas;”

(2) the contract was substantially performed in Texas; and (3) the furniture

manufacturer, which is a Mexican company, would be amenable to jurisdiction in

Texas but not Maine and might be a necessary party under Fed. R. Civ. P. 19. Def.’s

Mot. 10.

The Defendant fails to carry its burden in asserting the first two arguments.

In support of its convenience argument, the Defendant notes that all of its employees

are located in Texas and that the owners and employees of the manufacturer are

located nearby in Mexico. Def.’s Mot. 10. However, transfer of venue is inappropriate

“where its effect merely shifts the inconvenience from one party to another.” Access

Now, Inc. v. Otter Prods., LLC, 280 F. Supp. 3d 287, 295 (D. Mass. 2017). As the

Plaintiff points out, both its customers and the allegedly nonconforming furniture

they received are located in Maine. Pl.’s Opp’n 15. Transferring the case to Texas

would merely shift the burden of inconvenience onto the Plaintiff. On the second

argument, the Defendant fails to identify any facts establishing that the contract was

more substantially performed in Texas than in Maine. More importantly, the

Defendant’s argument does not overcome the “strong presumption” in favor of the

Plaintiff’s chosen forum. See Coady, 223 F.3d at 11; Redzone, 2017 WL 1379320, at

*2.

The Defendant’s third argument fails as well. The Defendant briefly noted in

its initial motion that the furniture manufacturer might be a necessary party not

subject to personal jurisdiction in Maine, and it argued that this tipped the balance

of convenience in the favor of transferring the action to Texas. Def.’s Mot. 10. But the

Defendant fails to develop this argument, providing no facts to support a finding that

the manufacturer is a necessary party nor even affirmatively stating that it is.7 With

such “limited and conclusory assertions,” the Defendant “has failed to satisfy [its]

burden of establishing that the absent individuals must be joined pursuant to Rule

19.” United States v. Belanger, 799 F. Supp. 2d 98, 101 (D. Me. 2011); see also United

States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (“It is not enough merely to mention

7 The Defendant also appears to mischaracterize the Plaintiff’s action. According to the

Defendant, the Plaintiff “alleges that the furniture was defectively manufactured” and that its “entire

case is predicated . . . on the claim that the furniture was defectively manufactured.” Def.’s Reply 2.

However, the Plaintiff’s Complaint nowhere asserts a claim for any manufacturing defect. Rather, the

Plaintiff has asserted breach-of-contract claims, alleging that the furniture supplied by the Defendant

was nonconforming and breached express and implied warranties. See Compl. at ¶¶ 44–84. Neither

party has asserted that the manufacturer was party to those contracts, and thus it is unclear, at this

time, how the manufacturer’s participation is necessary to resolve this dispute.

a possible argument in the most skeletal way, leaving the court to do counsel’s work,

create the ossature for the argument, and put flesh on its bones.”).8

Furthermore, a determination that the manufacturer is an indispensable party

not subject to personal jurisdiction in Maine requires a highly fact-specific inquiry. It

is premature to dismiss or transfer the action on these grounds at this early stage,

particularly when there is no indication that the manufacturer intends to challenge

personal jurisdiction. See Blacksmith Investments, LLC v. Cives Steel Co., 228 F.R.D.

66, 73–74 (D. Mass. 2005) (finding it “premature” to rule on the need to join a third

party when the terms of that party’s involvement were not presently before the court).

As the above analysis demonstrates, the Defendant has failed to establish the

existence of either exception to the first-filed rule. As a result, I hold that the rule

applies and the Plaintiff’s choice of forum prevails.

CONCLUSION

For the reasons stated above, the Court DENIES the Defendant’s motion to

dismiss and DENIES the Defendant’s motion to transfer venue.

SO ORDERED.

8 In its reply brief, the Defendant—for the first time—asserts that Rule 19 “mandates dismissal”

because the manufacturer is a “Required Party.” Def.’s Reply 1–2. But this is a different argument

than the one raised in Defendant’s initial brief, which only suggested the possibility that the

manufacturer was a required party and only in the context of the convenience factors for transfer.

Further, like the initial motion, the reply brief provides no basis for the assertion that the

manufacturer is not subject to personal jurisdiction in Maine.

/s/ Nancy Torresen

United States District Judge

Dated this 25th day of September, 2019.