author: NORGLE, District Judge.

text:
    John THOMAS, Joseph Molepske, Robert Gibson, Terrence Smith, Maxwell Riff-kind and Grant Petersen, Trustees of the Dairy Employees’-Milk Dealers Pension Plan, Plaintiffs, v. The SOUTHLAND CORPORATION, Defendant.
    No. 84 C 5330.
    United States District Court, N.D. Illinois, E.D.
    March 4, 1985.
    Asher, Pavalon, Gittler & Greenfield, Robert B. Greenberg, Chicago, 111., for plaintiffs.
    Rothschild, Barry & Myers, Christopher G. Walsh, Chicago, 111., for defendant.
   ORDER

NORGLE, District Judge.

This matter is before the court on the Defendant’s, the Southland Corporation (“SOUTHLAND”), Rule 12(b)(6) motion to dismiss. The issue presented by South-land’s motion is whether the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1381, et seq. (“MPPAA”), entitles the Plaintiffs, Trustees of the Dairy Employee’s-Milk Dealer’s Pension Plan (“PLAN”), to payments for Southland’s withdrawal liability pending the arbitrator’s determination of Southland’s withdrawal liability. Southland contends that internal ambiguities and inconsistencies within MPPAA, as well as several constitutional considerations, preclude a construction of the statute which would entitle the Plan to interim payments. Because the court finds the statutory scheme established by MPPAA consistent and without constitutional defect, Southland’s motion to dismiss must be denied. A brief outline of the MPPAA precedes a discussion of the issues raised by the motion to dismiss.

The MPPAA provides a comprehensive statutory scheme which regulates employer withdrawals from multiemployer plans. An employer, therefore, is subject to “withdrawal liability” from the date of withdrawal for a plan’s “unfunded vested liability.” 29 U.S.C. § 1381. Section 1382 directs the plan’s trustees to compute the employer’s withdrawal liability. After performing the computation and preparing a schedule of payments, the trustees are rquired by § 1399(b)(1) to notify the withdrawing employer of its liability and demand payment in accord with the established schedule. If a withdrawing employer fails to make payments as demanded by the trustees, then § 1399(c)(3) provides that interest shall accrue on the delinquent payments. After a delinquency period of 60 days the trustees may declare the entire amount of an employer’s withdrawal liability due. § 1399(c)(5). A delinquent employer is also subject to interest and penalty on the lump sum payment. Id. Section 1401(a) and (b) provide arbitration procedures in the event of a dispute between the plan and the employer regarding an employer’s liability or the plan’s calculations. In this case, Southland has made a timely request for arbitration, but the parties have yet to appear before an arbitrator.

During its deliberation of the MPPAA, Congress was preoccupied with shoring up the security of funding for multiemployer plans. House of Representatives Education and Labor Committee Report, H.R.REP. No. 96-869, Part I, 96th Cong., 2d Sess. 54-55, reprinted in 1980 U.S.Code Cong. & Ad.News 2918, 2919, 2925, 2928, 2931, 2952 (hereinafter cited as “House Report’’). The MPPAA was generally regarded as a remedy for problems inherent in ERISA as it was enacted in 1974. Id. at 2919, 2925, 2928, 2020. Under ERISA, employers actually received a benefit by withdrawing from existing plans. Id. at 2928. The MPPAA was designed to remove that benefit by imposing liability on withdrawing employers for “vested but unpaid benefits.” See Peick v. Pension Benefit Guaranty Corp., 724 F.2d 1247, 1254-55 (7th Cir.1983). The MPPAA also contains several presumptions which favor determinations and calculations made by plan sponsors. E.g., § 1401(a)(3)(A) and (c). Finally, the MPPAA provides incentives for employers and plans to resolve disputes through arbitration. E.g., § 1401(a)(1). Thus, in keeping with the statutory scheme of MPPAA, as well as the Congressional intent behind the statute, plans are provided with the security of continuous funding upon employer withdrawal and withdrawing employers are provided with explicit administrative procedure for resolution of any disputed calculations. On its face the MPPAA appears to greatly favor plan sponsors over employers. However, it must be kept in mind that an employer’s liability to a plan is rooted in the employer’s contractual obligations. The House Committee Report on the MPPAA specifically noted the close relationship between the MPPAA and an employer’s contractual obligations under a collective bargaining agreement.

Multiemployer plans are creatures of collective bargaining. The committee believes that the integrity of the collective bargaining process must be preserved to the utmost extent consistent with assuring the financial soundness of multiemployer plans to meet benefit commitments. The bill as reported out by the committee represents an effort to strike an appropriate balance among conflicting interest and needs. The legislation is designed to improve the financial condition of multiemployer plans and eliminate existing incentives to plan termination, while maintaining an adequate level of protection for plan participants through financial assistance to insolvent plans.

House Report, supra, at 2931.

With this background in mind, we turn to the task of construing §§ 1399 and 1401. Section 1399(c)(2) provides:

(2) Withdrawal liability shall be payable in accordance with the schedule set forth by the plan sponsor under subsection (b)(1) of this section being no later than 60 days after the date of the demand notwithstanding any request for review or appeal of determinations of the amount of such liability or of the schedule.

Section 1401(d) provides:

(d) Payments by employer prior and subsequent to determination by arbitrator; adjustment; failure of employer to make payments
Payments shall be made by an employer in accordance with the determinations made under this part until the arbitrator issues a final decision with respect to the determination submitted for arbitration, with any necessary adjustments in subsequent payments for overpayments or underpayments arising out of the decision of the arbitrator with respect to the determination. If the employer fails to make timely payment in accordance with such final decision, the employer shall be treated as being delinquent in the making of a contribution required under the plan (within the meaning of section 1145 of this title), (emphasis added).

Southland concedes that both sections create a duty on behalf of withdrawing employers to make interim payments to plans pending an arbitrator’s decision. See Defendants Brief in Support of Motion to Dismiss at 12, 13. Nevertheless, citing Republic Industries v. Teamster Joint Counsel, 718 F.2d 628 (4th Cir.1983), Southland contends that § 1401(b)(1) implicity contradicts §§ 1399(c)(2) and 1402(d). Southland argues that this conflict prevents liability for interim withdrawal payments to the Plan. This court disagrees.

In Republic, an employer attacked the constitutionality of the MPPAA. One argument raised by the employer was that provisions of the Act requiring payments pending arbitration violated the due process clause. After upholding the MPPAA against the employer’s constitutional attack, the Republic court specifically declined to decide whether the MPPAA required an employer to make interim payments. Republic, supra, at 642. In a footnote, however, the court discussed what it perceived to be an ambiguity in the MPPAA regarding interim payments. Id. at 641 & nn 15, 16. Although the court agreed that § 1399(c)(2) and the first sentence of § 1401(d) clearly require employers to make payments pending arbitration, the court thought the second sentence of § 1401(d) and § 1401(b)(1) were to the contrary. Id.

Southland has seized the ambiguity identified in Republic and reads § 1401(a)(1), (b)(1) as treating amounts demanded by a plan under § 1399(b)(1) as “ “due and owing ...” only “[i]f no arbitration proceeding has been initiated pursuant to subsection (a).” ” Defendant’s Brief in Support of Motion to Dismiss at 12-13. This reading, however, represents a rather myopic view of § 1401(b)(1).

The full text of § 1401(b)(1) provides:

(b) Alternative collection proceedings; civil action subsequent to arbitration award; conduct of arbitration proceedings
(1) If no arbitration proceeding has been initiated pursuant to subsection (a) of this section, the amounts demanded by the plan sponsor under section 1399(b)(1) of this title shall be due and owing on the schedule set forth by the plan sponsor. The plan sponsor may bring an action in a State or Federal court of competent jurisdiction for collection.

The subsection, therefore, plainly requires that “amounts demanded by the plan sponsor under section 1399(b)(1)” become “due and owing” under section 1401(b)(1) in the absence of a request for arbitration under § 1401(a). In other words, § 1401(b)(1) has no application to cases in which an employer has requested arbitration. Section 1401(d), on the other hand, does have application in cases where an employer requests arbitration. Subsection (d) contemplates payments “by an employer in accordance with the determinations made under this part until the arbitrator issues a final decision.” (emphasis added).

The application of either subsection clearly depends on whether arbitration has been requested: If arbitration has not been requested, then § 1401(b)(1) applies: If arbitration has been requested, then § 1401(d) applies. Thus, as we read them, the subsections are not inconsistent because each applies under different circumstances. Moreover, it would be anomalous for a Congress so concerned with the continued vitality of multiemployer plans to intend the result suggested by Southland (viz. the suspension of payments by withdrawing employers who have initiated arbitration). This court’s reading of § 1401 is consistent with the congressional policy behind MPPAA and the interim regulations promulgated by the PBGC. See 29 C.F.R. § 2644.2(c)(2). As previously mentioned, the MPPAA provides an employer with significant incentives to honor its contractual obligations to a pension fund. This Court declines to disturb the rational decisions made by Congress to protect the security of pension plans. Board of Trustees v. Ceazan, 559 F.Supp. 1210 (N.D.Cal.1983); Retirement Fund v. Lazar-Wisotzky, 550 F.Supp. 35, 36 (S.D.N.Y.1982) affd 738 F.2d 419 (2d Cir.1984).

Southland further argues that the Plan is required to exhaust its administrative or arbital remedies under MPAA before proceeding under §§ 1401 and 1451 for payments pending arbitration. This argument is without merit. If the application of the exhaustion doctrine suggested by Southland is accepted, then the requirements for payment pending arbitration contained in § 1401(d) are rendered inoperative. Congress is unlikely to have intended such a result.

Further, in seeking to compel Southland to make interim payments, the Plan is not attempting to make an end run around the arbitration procedures provided by § 1401(a). The Plan seeks construction and enforcement of a separate statutory right provided by §§ 1399(c)(2) and 1401(d). Therefore, because we read these sections as clearly requiring interim payments by a withdrawing employer pending an arbitrator’s decision, there can be no exhaustion issue in this case. See I.A.M. National Pension Fund v. Stockton Tri Industries, 727 F.2d 1204, 1209-11 (D.C.Cir.1984).

The constitutional arguments raised by Southland are not persuasive. The MPPAA has survived attack under the due process clause and the seventh amendment. E.g., Republic supra, at 642; Peick, supra, at 1277. See also Ceazan, supra, at 1216-18; Lazar-Witsotzky, supra, at 37. The motion to dismiss is therefore denied.

IT IS SO ORDERED.

      . Representative Thompson pointed out the necessity for providing plan sponsors with an efficient procedure to insure continued funding upon an employer’s withdrawal.
      Pending the resolution of the dispute [involving a plan’s determination of withdrawal liability], the employer is required to pay withdrawal liability as originally determined by the plan ... Senate Labor and Human Resources Committee and Finance Committee, Joint Explanation of S.1076: Multiemployer Pension Plan Amendments Act of 1980, 126 Cong.Rec. S. 10120 (Daily ed. July 29, 1980). Recourse available under current law [ERI-SA] for collecting delinquent contributions is sufficient and unnecessarily cumbersome and costly. Some simple collection actions brought by plan trustees have been converted into lengthly, costly and complex litigation concerning claims and defenses unrelated to the employer’s promise and the plans’ entitlement to the contributions. This should not be the case. Federal pension law must permit trustees of plans to recover delinquent contributions efficaciously, and without regard to issues which might arise under labor-management relations law — other than 29 U.S.C. 186. Sound national pension policy demands that employers who enter into agreements providing for pension contributions not be permitted to repudiate their pension promises.
      ... These same principles apply to a plan’s claim for employer withdrawal liability assessed in accordance with this legislature [sic].
      The public policy of this legislation to foster the preservation of the private multiemployer pension plan system necessitates that provision be made discourage delinquencies and simplify delinquency collection.
      ... Under the provision of the bill, in addition to any other consequences that follow from a default in paying withdrawal liability payments within the time prescribed i? to be treated in the same manner as a delinquent contribution to the plan. Thus, the court must award the plan not only the liability that is in default, plus interest but also liquidated damages and attorneys’ fees ...
      (Rep. Frank Thompson, Jr., Cong.Rec. August 26, 1980, H7899).

      . In its discussion of the changes resulting in ERISA after the enactment of the MPPA our court of appeals noted that "[u]nder MPPA an employer who withdraws must immediately begin to pay a fixed and certain debt owed to the plan.” Peick, supra, at 1255

      . The internal scheme of subsection (b) supports this conclusion. The subsection is titled "alternative collection proceedings”. Subsection (b)(1) applies where "no arbitration proceeding has been initiated.” Subsection (b)(2) presents an alternative "[u]pon the completion of arbitration proceedings.”


source: Caselaw Access Project

author: PEREZ-GIMENEZ, Chief Judge.

license: Public Domain

text:
    SWANK, INC., Plaintiff, v. Armando CARMONA and Elite Belt Corporation, Defendants, Third Party Plaintiffs, v. F. RONCI CO., INC., and Pierre Cardin, Third Party Defendants.
    Civ. No. 83-1464(PG).
    United States District Court, D. Puerto Rico.
    March 4, 1985.

      Eugenio C. Romero, Goldman & Antonetti, Santurce, P.R., for plaintiff.
    Harry Anduze Montano, Santurce, P.R., for defendants, third party plaintiffs.
    Nancy Pujáis, Hato Rey, P.R., for F. Ronci and Pierre Cardin.
   OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

Present before us is a Motion for Reconsideration of our Order of August 21, 1984, dismissing the third party complaint as to F. Ronci Co., Inc., and Pierre Cardin. The motion, filed by defendants-third party plaintiffs Armando Carmona and Elite Belt Corporation, has now been opposed by F. Ronci Co., Inc. The parties have filed memoranda in support of their positions.

A brief history of the relevant facts of the case is in order.

This is an action whereby plaintiff, Swank, Inc., has sought injunctive relief, damages and confiscation for acts of trademark infringement and unfair competition. Jurisdiction has been invoked under 15 U.S.C. § 1121; 28 U.S.C. §§ 1332 and 1338.

In essence, plaintiff, Swank, Inc., alleges that it is Pierre Cardin’s exclusive licensee throughout the Continental United States and in Puerto Rico and that defendants, in detriment of the market, have offered belts, bearing unauthorized, the Pierre Cardin logo and PC symbol. It is alleged that defendants are offering these inferior quality items at considerably lower prices. Plaintiff claims that such unauthorized use of Pierre Cardin’s marks and symbols by defendants constitutes a false designation of origin, of description and representation that wrongly designates the product distributed by defendants as originating or connected with Pierre Cardin.

On February 16, 1984, defendants-third party plaintiffs Armando Carmona and Elite Belt Corporation filed a third party complaint against F. Ronci Co., Inc., and Pierre Cardin. F. Ronci Co., Inc., is the licensed manufacturer of Pierre Cardin belt buckles.

It is alleged that F. Ronci Co., Inc., through its officials, offered to defendants-third party plaintiffs belt buckels which F. Ronci Co., Inc., claimed were genuine Pierre Cardin discontinued or closed-out models.

It is alleged that F. Ronci Co., Inc., made the representation that Elite Belt Corporation could validly market said products if they were to be distributed in Puerto Rico. It is further alleged that based in these representations defendants-third party plaintiffs placed orders for buckels from F. Ronci Co., Inc., that were attached to belts manufactured by Elite, which were distributed in Puerto Rico by Elite Belt Corporation and Armando Carmona.

On June 29, 1984, the third party co-defendant F. Ronci, Co., Inc., filed a Motion to Dismiss for failure to allege jurisdiction and for lack of in personam jurisdiction over third party defendant F. Ronci Co., Inc.

On August 3, 1984, the U.S. Magistrate rendered a Report and Recommendation which states that third party co-defendant’s motion had remained unopposed. Dismissal of the same was recommended therein in “view of the readily apparent merit of Ron-d’s motion”.

On August 21, 1984, this Court approved said report and recommendation and ordered the dismissal of the complaint.

On October 4,1984, defendants-third party plaintiffs filed the Motion for Reconsideration which third party defendant F. Ronci Co., Inc., opposed on October 25, 1984, and which now stands before us.

Ronci first opposes said motion on procedural grounds alleging that this Court lacks jurisdiction because said motion is one under Rule 59(e) of the Federal Rules of Civil Procedure and the same is time barred.

Rule 59(e), F.R.Civ.P., provides: “A motion to alter or amend judgment shall be served not later than 10 days after entry of judgment.”

It has been consistently held that this ten-day limitation period fixed by Rule 59(e) is one of the few limitary periods which the court has no power to enlarge, Scola v. Boat Francis R., Inc., 618 F.2d 147, 154 (1st Cir.1980), and that accordingly, a motion which has been filed outside the required statutory term must be denied. Elias v. Ford Motor Co., 734 F.2d 463, 466 (1st Cir.1984); O’Toole v. Arlington Trust Co., 681 F.2d 94, 98 (1st Cir. 1982); Morgan Guaranty Trust Co., etc. v. Third Nat. Bank, 545 F.2d 758, 760 (1st Cir.1977). However, the rule expressly states that the motion must be served within ten days after the entry of judgment. 11 Wright and Miller § 2817 at 109.

The record of the instant case discloses that no judgment has been entered by the Clerk of the Court. Therefore, the ten-day period is of no application to the present case. Thus, the Court will treat the motion as one for reconsideration of an order. We proceed to reconsider the order of dismissal.

F. Ronci Co., Inc., has also alleged that the third party complaint does not aver grounds for jurisdiction. Third party plaintiffs contend that jurisdictional averments in the original answer and counterclaim including jurisdictional averments were incorporated into the third party complaint. Paragraph 7 of the third party complaint reads:

The defendants answered the complaint and filed a counter-claim against Swan, Inc. All the allegations contained in the aforementioned pleadings are adopted by reference at this time as grounds for relief against third party defendants. The answer and counterclaim is attached as Exhibit II to this third party complaint.

We find that, although this is not the most desirable practice, at the very least it may be corrected by an amended pleading.

Turning now to the substantive grounds, F. Ronci Co., Inc., alleges that no minimum contacts can reasonably be established between itself and this jurisdiction.

In ruling on a dismissal for lack of personal jurisdiction, allegations on the complaint are to be taken as true. Black v. Acme Markets, Inc., 564 F.2d 681, 683, f.n. 3 (5th Cir.1977). However, in the instant case, affidavits have been filed by both parties concerning the issue.

It is well established that to determine whether exercising personal jurisdiction is proper, a court may receive and weigh affidavits prior to trial on the merits. O’Hare International Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir.1971). The purpose is clear for affidavits will compel the plaintiff to go beyond the allegations of the complaint, Edwards v. Associated Press, 512 F.2d 258, 262, n. 8 (5th Cir.1975), and produce evidence of the existence in fact of jurisdiction. Replas, Inc. v. Wall, 516 F.Supp. 59, 62 (S.D.In.1980).

This is not a case where one side of the conflict has been supported by affidavits. Accordingly, the Court’s task is not simplified, Taylor v. Portland Paramount Corp., 383 F.2d 634, 639 (9th Cir.1967), inasmuch as the affidavits submitted by the parties conflict as to material facts.

Since the pleadings, as well as the affidavits submitted, have raised issues on disputed questions of fact with regards to the jurisdiction of this district court, a hearing on the jurisdictional issue was held before us on January 25, 1985. 5 Wright and Miller, Federal Practice and Procedure, § 1373 at 714-75.

Having considered the affidavits, the exhibits annexed to defendants’ Motion for Reconsideration, as well as the oral expositions during the hearing on the jurisdictional issue, held on January 25,1985, we reach the following findings of fact:

1. F. Ronci Co., Inc., is a corporation organized pursuant to the laws of the State of Rhode Island;

2. R. Ronci Co., Inc., has for several years sold some of its products to Elite Corporation, thus, there being a relationship between the two corporations;

3. There have been transactions between both corporations;

4. F. Ronci Co., Inc., has sent price lists of its merchandise to Elite Belt;

5. F. Ronci Co., Inc., has shipped some of its merchandise to Puerto Rico;

In order to exercise personal jurisdiction over a non-resident defendant two independent factors must be considered by a district court.

In the first place, it must be determined whether an applicable state rule or statute potentially confers personal jurisdiction over the defendant, and second, whether assertion of such jurisdiction accords with constitutional principles of due process. Commonwealth of Puerto Rico v. S.S. Zoe Colocotroni, 628 F.2d 652, 667 (1st Cir. 1980), cert. denied, 450 U.S. 912, 101 S.Ct. 1350, 67 L.Ed.2d 336 (1981).

Turning on the first inquiry, a federal court will have jurisdiction in a diversity action if the court in the state in which the federal court is sitting would have jurisdiction. F.R.Civ.P. 4(e) and 4(d)(7); Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 597 F.2d 596, 598 (7th Cir.1979).

This in turn leads us to examine Puerto Rico's long arm statute which is contained in Rule 4.7 of the Puerto Rico Rules of Civil Procedure (32 L.P.R.A.App. III, R. 4.7). The statute provides:

(a) Whenever the person to be served is not domiciled in Puerto Rico, the General Court of Justice shall take jurisdiction over said person if the action or claim arises because said person:
(1) Transacted business in Puerto Rico personally or through an agent; or
(2) Participated in tortious acts within Puerto Rico personally or through his agent; or
(3) Was involved in an automobile accident while driving a motor vehicle in Puerto Rico personally or through his agent; or
(4) Was involved in an accident in Puerto Rico while operating, personally or through his agent, a freight or passenger transportation business in Puerto Rico, between Puerto Rico and the United States or between Puerto Rico and a foreign country, or if in the operation of said business, an accident occurs outside Puerto Rico and the contract had been executed in Puerto Rico; or
(5) Owns, uses or possesses, personally or through his agent, real property in Puerto Rico.
(b) In said cases, service shall be made pursuant to Rule 4.5.

It has been held that in Puerto Rico’s case the long arm statute has as its object to extend the effectiveness of its jurisdiction to the maximum ambit of constitutional authority. Mangual v. General Battery Corp., 710 F.2d 15, 19 (1st Cir.1983), limited only by due process analysis, Vencedor Manufacturing Co., Inc. v. Gaugler Industries, Inc., 557 F.2d 886, 889 (1st Cir. 1977). Thus, in Puerto Rico’s case Rule 4.7 goes just as far as the Federal Constitution will permit. Integrated Ind., Inc. v. Continental Mill Co. (N.A.) N.V., 385 F.Supp. 883, 885 (D.P.R.1974).

While applying the Rules of Civil Procedure of Puerto Rico the district court should carefully consider the opinions rendered by the highest local court. Ramon Vela, Inc. v. Sogner, Inc., 382 F.Supp. 478, 480 (D.P.R.1974).

Under the facts of this case we find that third party defendant is subject to in personam jurisdiction under Rule 4.7. Puerto Rico’s long arm statute has been interpreted to permit the exercise of jurisdiction to the full extent of constitutional authority in cases falling within circumstances described in the Commonwealth’s long arm statute. Industrial Siderúrgica, Inc. v. Thysser Steel Caribean, Inc., 83 JTS 78, n. 5.

The Supreme Court of Puerto Rico has established that the transaction constituting minimum contacts need not be performed physically within the forum, and that a transaction by mail may suffice. A.H. Thomas Co. v. Superior Court, 98 P.R.R. 864, 871 (1970).

At this point, having determined that third party defendant’s conduct falls within the purview of Rule 4.7, we may move to the second inquiry to determine whether the exercise of jurisdiction over defendant confronts with constitutional due process.

In the leading case of International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), the test for “minimum contacts” was required to establish the “presence” of a non-resident defendant in order to obtain and exercise jurisdiction. The decision makes clear that due to considerations arising from the due process clause of the Fourteenth Amendment jurisdiction over a non-resident defendant may be exercised only if said defendant has certain “minimum contacts” with the forum state such that the “traditional motions of fair play and substantial justice” are not offended.

Later on, in the case of Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 1283 (1958) the Supreme Court clarified that the requirements for personal jurisdiction over non-residents have evolved from a rigid rule towards a more flexible standard. Subsequent cases have held that the minimum contacts test is not susceptible of mechanical applications, Kulko v. California Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978), and that the facts of each case must be weighed to determine whether these are met. Thus, a fact question is at the core of the inquiry in each case. Buckley v. New York Times Co., 338 F.2d 470, 473 (5th Cir.1964).

The existence or non-existence of the necessary minimum contacts to justify the upholding of personal jurisdiction over foreign corporations must be worked out with reference to the particular facts of a given case rather than in a statement of dogmatic rules of all inclusive principles. Vishay Intertechnology, Inc. v. Delta Intern. Corp., 696 F.2d 1062, 1065-1066 (4th Cir.1982). Thus, what is fair and reasonable must be weighed in the circumstances of a particular situation, Hutter Northern Trust v. Door County Chambers of Commerce, 403 F.2d 481, 484 (7th Cir.1968).

The state does not violate due process when it asserts jurisdiction over corporations that deliver products into the stream of commerce with expectations that they will be purchased by consumers in forum state. Hendrickson v. Reg O. Co., 657 F.2d 9, 15 (3rd Cir.1981).

The facts alleged and documents submitted along with third party plaintiffs’ allegations in the complaint and memorandum in support thereof establish that Ronci’s contact with Elite Belt and Armando Carmona necessarily imply that Ronci knew or should have known that the product, independent of the fact of the place where the transactions occurred, should enter the stream of commerce and will reach in the forum state, Hendrich v. Daiko Shoji Co., 715 F.2d 1355, 1358 (9th Cir.1983).

It has been held that due process does not preclude assertions of jurisdiction over a new defendant based on a single transaction if the transaction gives rise to cause of action asserted by plaintiff. Brown v. American Broadcasting Co., 704 F.2d 1296, 1302 (4th Cir.1983). Although the instant one is not a product liability case, the language in Volkswagen is pertinent here as it speaks of the importance of foreseeability. World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) states:

The forum state does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce until the expectation that they will be purchased by consumers in the forum state.

At 297, 100 S.Ct. at 567.

In World Wide Volkswagen, supra, the scope of the foreseeable market served by those defendants and of the benefits those defendants derived from the sale of the product was narrow. In contrast, the relevant scope is generally broader with respect to manufacturers.

In the instant case, F. Ronci Co., Inc., is the manufacturer of the belt buckles subject of the present controversy. Though somewhat narrow, the relationships of this manufacturer with Armando Carmona and Elite Belt Co. gave notice and evince that Ronci did know its product was reaching the Puerto Rican market. There is a letter in which Ronci thanks Elite for the sponsoring in buying its products.

The manufacturer is at the start of the distribution system and thereby serves directly (or indirectly) and derives economic benefit from an under market. Courts have established distinctions between a manufacturer and a secondary distributor. Nelson v. Park Industries, Inc., 717 F.2d 1120, 1125-1126 (7th 1983). In this respect, a manufacturer or primary distributor may be subject to a particular forum jurisdiction when a second distributor and a retailer are not. Such difference has been explained in view of the fact that the manufacturer and primary distributor have intended to serve a broader market and derive direct benefits from serving that market. See, Hendrickson v. Reg O. Co., supra, at 14; DeJames v. Magnificense Carriers, Inc., 654 F.2d 280, 285-286 (3rd Cir.), cert. denied, 454 U.S. 1085, 102 S.Ct. 642, 70 L.Ed.2d 620 (1981); Poymer v. Erma Werke GMBH, 618 F.2d 1186, 1191-1192 (6th Cir.), cert. denied, 449 U.S. 841, 101 S.Ct. 121, 66 L.Ed.2d 49 (1980); Oswalt v. Saripto, Inc., 616 F.2d 191, 202 (5th Cir.1980); Samuels v. BMW of North America, Inc., 554 F.Supp. 1191, 1194 (E.D.Texas 1983).

In the instant case, F. Ronci’s activities as manufacturer places it at the start of the system. Accordingly, the case is distinguishable from World-Wide Volkswagen, supra, because Ronci is evidently an early actor in the distribution system which places and moves the product in the “stream of commerce”.

Furthermore, the forum state does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state. World-Wide Volkswagen Corp. v. Woodson, supra; Industrial Siderúrgica, Inc. v. Thyssen Steel Caribbean, Inc., et al., 83 JTS 78 (1983).

On the other hand, in actions based on tort, the inquiry required by due process also requires an examination of the expected consequences of defendants’ conduct. This determination, in turn, resolves into an inquiry as to whether the defendant could reasonably foresee that his product, when injected into the stream of commerce, would come to rest in the forum. Church of Scientology of California v. Adams, 584 F.2d 893, 897 (9th Cir.1978).

Therefore, if a defendant delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state, then that state may, consistent with due process, assert jurisdiction over the defendant on a course of action relating to those products. World-Wide Volkswagen Corp. v. Wood-son, supra, 444 U.S. at 297, 100 S.Ct. at 567.

The Supreme Court of Puerto Rico has expressed that the course of conduct which establishes jurisdiction is what is really important and that the criteria under Rule 4.7 to ascertain whether a corporation does business transactions within the forum is a practical matter and not a technical one. Industrial Siderúrgica, Inc. v. Thyssen, supra, at 3278.

There can be no doubt that in the instant case F. Ronci Co., Inc., irrespective of where it was bought, in fact delivered the product in question into the stream of commerce with the expectation that it would be purchased by consumers in Puerto Rico. As asserted in the listings, third party defendant was sending its product into Puerto Rico. If payment would not have been made on items purchased, Ronci would have procured payment in courts in Puerto Rico.

Since F. Ronci Co., Inc.,’s conduct and connection with Puerto Rico have been such that Ronci should have reasonably anticipated being haled into court there, the forum may properly assert, consistent with due process, in personam jurisdiction over F. Ronci Co., Inc. Mangual v. General Battery Corp., 710 F.2d 15, 19 (1st Cir. 1983).

The realities of modern commercial transactions have helped the manner in which courts have evolved in their appreciation of the requirements for personal jurisdiction over non-residents. Commodities World Intern. Corp. v. Royal Mill, 440 F.Supp. 1373, 1377-1378 (D.P.R.1977). In this respect constructive knowledge as to the destination of the products is sufficient. It has been held that “[f]oreseeability that a shipped product may eventually reach a state satisfies the requirement that the defendant purposefully avails itself of conducting activities within the forum state.” Commodities, supra, at 1378, Escudé Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902, 904-905 (1st Cir.1980); Vencedor Mfg. Co., Inc. v. Gougler Industries, 557 F.2d 886, 892 (1st Cir.1977).

Furthermore, it has been held that even if defendant performs no physical act within the State, activities outside the state can provide adequate contacts if they have reasonably foreseeable consequences within the state.

As disclosed by the findings of fact, F. Ronci Co., Inc., knew that the articles it manufactures were to be shipped to Puerto Rico; there are also bills and list of prices of items manufactured by F. Ronci. We find from all this that F. Ronci Co., Inc., did engage in the kind of purposeful deliberate activity contemplated by due process considerations. Austin v. North American Forest, 656 F.2d 1076, 1089-1091 (5th Cir. 1981); Industrial Siderúrgica, Inc. v. Thyssen Steel Caribbean, Inc., et al., supra.

Accordingly, defendants, third party plaintiffs’ Motion to reconsider is hereby GRANTED, and third party defendant is hereby ORDERED to answer the third party complaint.

IT IS SO ORDERED.

      . In a letter dated April 23, 1980, (marked as exhibit 3) Mr. Frank Ronci addressed a letter to Elite notifying that Edward Forti has taken over the management of the belt buckle division and hoping that they will share in the friendly and profitable relationships they have shared in the past.

      . A letter from F. Ronci Co., Inc., dated March 14, 1980, (marked as exhibit 2) states that Ronci has received an order from Elite Belt Corp. and that as soon as the check in the amount of $235.00 is received the order will be placed into production. There is also evidence that Elite Belt Corp. has been billed by F. Ronci Co., Inc. A cancelled check from Elite to Ronci has also been annexed as an exhibit.

      . There are packing lists as well as letters notifying increase in the products.

      . Documents have been submitted which disclose that merchandise has been shipped (exhibits 3 and 5) from F. Ronci Co., Inc., to Elite.