Water West, Inc., a Nevada Corporation v. Entek Corporation, a Texas Corporation, and James Edward Turner

788 F.2d 627 WATER WEST, INC., a Nevada Corporation, Plaintiff-Appellee, v. ENTEK CORPORATION, A Texas Corporation, and James Edward Turner, Defendants-Appellants. No. 84-5513. United States Court of Appeals, Ninth Circuit. Argued and Submitted Sept. 4, 1984. Decided April 29, 1986. Gray, Cary, Ames & Frye, Robert W. Ayling, San Diego, Cal., for plaintiff-appellee. Jenkens & Gilchrist, John C. Eichman, Dallas, Tex., for defendants-appellants. Appeal from the United States District Court For the Southern District of California. Before HUG and POOLE, Circuit Judges, and SOLOMON, * District Judge. HUG, Circuit Judge: 1 James Turner and Entek Corporation (collectively "Entek") appeal from an order of the district court granting Water West, Inc. ("Water West") summary judgment in its action to enforce a Nevada state court judgment for breach of an exclusive distribution agreement against Entek. Entek challenges the propriety of venue in the Southern District of California. The district court ruled that there were sufficient contacts between Water West's claim and the Southern District to justify venue. We disagree and reverse. FACTS 2 Appellant James Turner is president and…

dissenting:

I respectfully dissent, believing that sufficient contact existed to justify venue in the Southern District of California.

Water West relies upon the April 1983 sale of approximately 1,000 feet of Leaky Pipe to Joseph Fleming, an Imperial Valley farmer, for a price of $300.00. The Imperial Valley is located in the Southern District. Fleming read about Leaky Pipe in a full page advertisement in “Drip/Trickle Irrigation” magazine. To obtain additional information, Fleming contacted Entek, which was identified in the ad as the manufacturer of the pipe, at its Texas address. After several communications with the Entek office in Texas, Fleming, in the Imperial Valley, was contacted by Bridges, who later made the sale.

Entek argues that this sale does not suffice for venue because Bridges was acting as an independent contractor pursuant to his contract with Entek, 1 and therefore Bridges’ conduct cannot be imputed to En-tek. The district court disagreed. In its order of December 9, 1983, the court found that a consignment relationship in fact existed between Bridges and Entek.

On appeal, we do not disturb findings of fact made by a district court unless those findings…

James Turner and Entek Corporation (collectively “Entek”) appeal from an order of the district court granting Water West, Inc. (“Water West”) summary judgment in its action to enforce a Nevada state court judgment for breach of an exclusive distribution agreement against Entek. Entek challenges the propriety of venue in the Southern District of California. The district court ruled that there were sufficient contacts between Water West’s claim and the Southern District to justify venue. We disagree and reverse.

FACTS

Appellant James Turner is president and owner of appellant Entek Corporation. Turner invented, and Entek manufactures, a porous irrigation tubing known as “Leaky Pipe.” In February 1982, Entek entered into an agreement with Water West, granting Water West exclusive distribution rights for “Leaky Pipe” in 11 western States. 1

In March 1983, Water West sued Entek in Nevada state court, alleging that Entek had breached the distribution agreement by selling to persons in its territory, and by entering into a distributorship agreement with John R. “Chip” Bridges in California. Entek failed to appear, and on May 11, 1983, a default judgment was entered. En-tek's motion to…