Manufacturer Can Pursue Local Lawsuit for Out-of-State Project

Venue clauses requiring lawsuits to be brought in a particular locale are common, and routinely enforced. From a federal court in Western Pennsylvania, though, comes a reminder that analysis of venue (when not governed by a contract clause) can favor the party who pulls the trigger in its home state.

TAKTL, located in Pennsylvania, made concrete panels for a project in Missouri, under contract with a subcontractor based in Missouri. (Another defendant is based in Illinois, but it isn’t clear from the decision if TAKTL had a contract with the Illinois company.) The architect had specified TAKTL as an approved vendor. The sub made trips to TAKTL’s plant to check out the products, to negotiate the purchase order, and to periodically monitor progress of the manufactured panels. The panels were shipped FOB Pennsylvania, meaning that they were officially handed off to the sub in Pennsylvania.

TAKTL sued in Pennsylvania court for money due, and the Missouri and Illinois defendants moved to dismiss the lawsuit for lack of personal jurisdiction. The federal judge has denied that motion, finding that the dispute should be resolved in Pennsylvania.

The court considered “(1) the character of the pre-contract negotiations; (2) the location of those negotiations; (3) the terms of the sales agreement; and (4) the type of goods sold.” It found that these factors weighed in favor of TAKTL. The court also referred to other cases that had evaluated whether “(1) the defendant initiated the contract with the resident seller; (2) the defendant visited the forum state; (3) the contract was or will be substantially performed in the forum; and (4) the goods at issue are more sophisticated commercial goods and not mail-order consumer goods.” Finding that these factors also weighed in favor of TAKTL, the court denied the defendants’ requests to either dismiss the lawsuit or to transfer venue of the lawsuit to Missouri.

This decision is a good example of the analysis undertaken in the absence of a venue clause. The case is TAKTL, LLC v. IWR, North America, LLC, 2019 U.S. Dist. LEXIS 136535 (W.D. Pa., August 12, 2019).

About Stan Martin

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Stan Martin holds a law degree and an undergraduate degree in architecture. He has been involved with the construction industry for more than 45 years, working in construction prior to law school and beginning his construction law practice. Over the course of his career, he has served on boards and committees for organizations including the Associated General Contractors of Massachusetts, the Boston Society of Architects, and the Massachusetts Building Congress.

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