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InSite Platform Partners, Inc. v. Orbcomm, Inc.

United States District Court, W.D. Missouri, Western Division

October 26, 2017




         Plaintiffs InSite Platform Partners, Inc., (“InSite”), and North American Satellite Corp., (“NASCorp”), have sued Orbcomm SENS, LLC, (“Orbcomm”), and Comtech Mobile Datacom Corporation, (“Comtech”). The Third Amended Complaint, (Doc. 51), added Comtech as a defendant and asserts Comtech is liable for breach of contract, fraud, and conversion. Comtech has filed a Motion to Dismiss, arguing that it should be dismissed because it is not subject to personal jurisdiction in Missouri.[1]

         The Court held a hearing on Comtech's motion on May 12, 2017. Thereafter, the parties engaged in additional discovery, and then filed supplemental briefs that included affidavits and deposition testimony. The Court then directed the parties to further supplement the Record, which they did on October 5, 2017. (Doc. 100.) Having reviewed the parties' arguments and the evidence submitted, the Court concludes that Comtech is not subject to personal jurisdiction for the claims asserted. Therefore, Comtech's motion, (Doc. 56), is GRANTED and the claims against Comtech are DISMISSED WITHOUT PREJUDICE.

         I. BACKGROUND

         NASCorp developed a system called “SkyTracker, ” which allows customers to monitor the levels in propane and other gas storage tanks. A SkyTracker unit is a piece of hardware supplied by NASCorp that is affixed to a customer's storage tank. SkyTracker monitors the levels in the tank to which it is attached and sends the information to a satellite, which then transmits the data to a station on the ground. From there, the data is sent to NASCorp's servers and eventually made available to the customer. NASCorp purports to retain ownership of “all of the hardware, software, equipment, and other components of each SkyTracker unit, [as well as] the data and transmissions sent and received by the SkyTracker units.” (Doc. 51, ¶ 15.)

         In December 2009, NASCorp - a Tennessee corporation with its headquarters in that state - contracted with Comtech - a Maryland corporation with its principal place of business in that state - for the hardware necessary to “manufacture . . . SkyTracker units as well as activation, messaging, monitoring and other services needed to operate the SkyTracker system.” (Doc. 51, ¶ 20.) Comtech is not registered to conduct business in Missouri, and it did not manufacture the SkyTracker units in Missouri. (Doc. 57-1, p. 2, ¶¶ 8-9.)[2] It shipped the SkyTracker units and related engineering materials to NASCorp's facility in Tennessee. (E.g., Doc. 57-1, p. 2, ¶ 12; Doc. 60-1, ¶ 4.) Comtech also sent invoices to NASCorp's offices in Tennessee. (Doc. 60-1, ¶ 5.)

         Comtech was also responsible for providing the satellite services necessary for the system to function, and it arranged for those satellite services to be supplied by Global Star (which is not a party in this case). The individual SkyTracker units transmitted data to Global Star's satellites via radio waves, and from there the data was transmitted to Global Star's ground station. At the ground station, equipment owned by Global Star converted the data to a digital format so that it could be conveyed over the internet, and then sent the data over the internet to Comtech's servers. Neither Global Star's ground station nor Comtech's servers were located in Missouri. (Doc. 88, pp. 38-55 (Johnson Deposition, pp. 13-30).)

         Upon receipt of the data, Comtech transmitted it over the internet to NASCorp's servers; these transmissions to NASCorp occurred daily. From 2009 until January 31, 2011, NASCorp's servers were located in St. Louis, Missouri. (Doc. 59-1, ¶ 8; Doc. 94, p. 8; Doc. 100-1, ¶¶ 1-2; Plaintiffs' Response to Interrogatory No. 3 and No. 4.) After January 31, 2011, Plaintiff's servers were in Dallas, Texas. (Doc. 100, p. 4.)

         At some point disputes arose between NASCorp and Comtech; the nature of these disputes is not fully explained in the Record, but the details are not relevant to the issues before the Court. In June 2013, NASCorp and Comtech entered a “Contract Settlement Modification, ” (Doc. 57-1, pp. 6-8), which is the contract that Plaintiffs allege has been breached. (Doc. 51, ¶¶ 21-24, 40.) The June 2013 Agreement, inter alia, set the terms for NASCorp's purchase of a specified number of additional SkyTracker units, required NASCorp to purchase satellite services from Comtech, required NASCorp to “pay a negotiated settlement amount of $54, 186.93 to settle all outstanding Comtech invoices, ” and required Comtech to “release all SkyTracker III engineering drawings and related information to NASCorp.” The June 2013 Agreement further provided that the parties “mutually release, acquit, satisfy, and forever discharge each other . . . from any and all existing past, present or potential claims, ” thereby settling all claims that existed at that point in time. The 2013 agreement was negotiated in Tennessee, and consistent with the parties' prior relations all of the items were to be delivered to NASCorp in Tennessee. (Doc. 57-1, p. 4, ¶ 20.) And, given that NASCorp's servers were in Texas, the satellite services contemplated by the agreement contemplated that the data would be sent to Texas.

         On October 1, 2013, Orbcomm purchased Comtech's operations and assumed Comtech's obligation to provide satellite services and data transmission services. (Doc. 51, ¶¶ 25-26; Doc. 60-1, ¶¶ 2, 5.) Comtech nonetheless continued transmitting data to NASCorp's servers in Dallas until May 30, 2014. (Doc. 100, p. 2.) Comtech had no further involvement with SkyTracker after that date.

         In September 2014 InSite - a Missouri corporation with its headquarters in Missouri - called a Note issued to it by NASCorp and foreclosed on NASCorp's assets. Thereafter, InSite continued operating NASCorp's business under the name “NASCorp.” (Doc. 51, ¶¶ 8-11.) However, as this occurred more than three months after Comtech stopped all involvement with SkyTracker, Comtech and InSite did not interact.

         Plaintiffs provided two Declarations from R.L. (Rick) Humphrey, (Doc. 59-1; Doc. 100-1), who identifies himself as the Chairman of the Board and CEO of InSite, “the successor to” NASCorp. (Doc. 59-1, ¶¶ 3-4; Doc. 100-1, ¶¶ 3-4.) His first Declaration states that “when conducting business with Defendant, Plaintiff operated and maintained an office in Cape Girardeau, Missouri” and that “Plaintiff's employees communicated with Defendant from Plaintiff's office or locations in Missouri and vice versa related to . . . Skytracker.” (Doc. 59-1, ¶¶ 9-10.) However, this Declaration does not establish that Comtech had any contacts with Missouri (much less the nature, quantity, or quality of those contacts) because it does not specify whether the “Plaintiff” with “offices or locations in Missouri” is NASCorp or InSite, and does not specify whether the “Defendant” communicating with people in Cape Girardeau is Comtech or Orbcomm.[3]

         The second declaration avers that Comtech mailed SkyTracker units to NASCorp for testing in Cape Girardeau and that Comtech's engineers were in “consistent and regular” contact with NASCorp's engineers in Cape Girardeau until September 2010. (Doc. 100-1, ¶¶ 8-9.) However, Humphrey was the Chairman and CEO of InSite, not NASCorp, and his Declaration provides no basis for his knowledge of interactions between NASCorp and Comtech that occurred years before InSite acquired NASCorp. More importantly, other evidence - including Plaintiffs' responses to discovery - demonstrates that NASCorp did not have any facilities in Cape Girardeau at the time Comtech was performing its contractual duties. For instance, Interrogatory No. 3 asked Plaintiffs to identify “the address of each of the [p]remises that NASCorp has leased or owned in its own name since 2009, and describe specifically.” (Doc. 88, p. 16.) Plaintiffs' response lists only two locations in Missouri: the location where NASCorp maintained its servers in St. Louis from July 2005 through January 2011, and InSite's headquarters in St. Charles, Missouri, which were leased in October 2014 and, therefore, after Comtech was no longer involved with SkyTracker. (Doc. 88, p. 17.) Plaintiffs' answer to Interrogatory No. 3 lists no locations for NASCorp in Cape Girardeau, so Humphrey's reference to communications directed to Cape Girardeau cannot have been communications directed by Comtech to NASCorp in Missouri. The only other information about offices in Cape Girardeau is Plaintiffs' answer to Interrogatory No. 7, which states in part that “[t]he Cape Girardeau office provided data monitoring, information technology services, and other technical support for Plaintiffs' business operations, ” but nothing demonstrates these were NASCorp's (as opposed to InSite's) offices.

         Plaintiffs identify no evidence of NASCorp having offices or facilities in Missouri other than its servers in St. Louis, but as stated above Comtech stopped transmitting to the servers in St. Louis when NASCorp moved the servers to Dallas. Plaintiffs' answer to Interrogatory No. 3 also states that NASCorp had no employees with its servers in St. Louis, and Plaintiffs identify no other evidence that NASCorp had employees in Missouri. InSite may have moved the servers back to Missouri when it took over NASCorp in September 2014 - but this was after Comtech was no longer involved with SkyTracker in any capacity. Finally, while Comtech was originally retained to create the SkyTracker units from NASCorp's design, (Doc. ...

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