UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JOSE R. PACAS; WILLIAM GOLDSTON;
GWENDA MOORE; MARIA ELENA
ORELLANA; BETTY JO CUMMING, all
of the foregoing for themselves and
all other persons similarly situated,
Plaintiffs-Appellants,
                                                          No. 95-1811
v.

SHOWELL FARMS, INCORPORATED,
d/b/a Mid-State Farms,
Incorporated,
Defendant-Appellee.

JOSE R. PACAS; WILLIAM GOLDSTON;
GWENDA MOORE; MARIA ELENA
ORELLANA; BETTY JO CUMMING, all
of the foregoing for themselves and
all other persons similarly situated,
Plaintiffs-Appellants,
                                                          No. 95-2784
v.

SHOWELL FARMS, INCORPORATED,
d/b/a Mid-State Farms,
Incorporated,
Defendant-Appellee.

Appeals from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
Terrence W. Boyle, District Judge.
(CA-93-546-5-BO)

Argued: March 5, 1996
Decided: April 22, 1996

Before WILKINSON, Chief Judge, and LUTTIG and MICHAEL,
Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion. Judge Michael wrote a
dissenting opinion.

_________________________________________________________________

COUNSEL

ARGUED: Robert James Willis, Raleigh, North Carolina, for Appel-
lants. Arthur Mortimer Brewer, SHAWE & ROSENTHAL, Balti-
more, Maryland, for Appellee. ON BRIEF: Carlene McNulty,
NORTH STATE LEGAL SERVICES, Hillsborough, North Carolina,
for Appellants Goldston, Moore & Cumming. Patrick M. Pila-
chowski, SHAWE & ROSENTHAL, Baltimore, Maryland; John H.
Culver, III, KENNEDY, COVINGTON, LOBDELL & HICKMAN,
L.L.P., Charlotte, North Carolina, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Appellants, Jose R. Pacas, William Goldston, Gwenda Moore,
Maria Elena Orellana, Betty Jo Cumming, and other similarly situated
persons, filed the instant action in the United States District Court for
the Eastern District of North Carolina against their employer, Showell
Farms, Inc. ("Showell"), alleging that Showell violated the Fair Labor
Standards Act and parallel state statutes by using a"master card sys-
tem" to determine the number of hours appellants worked at Sho-

                     2
well's Siler City plant located within the Middle District of North
Carolina. Showell filed a motion to dismiss for improper venue, argu-
ing that it did not have sufficient minimum contacts with the Eastern
District to establish venue. Appellants responded that venue was
proper in the Eastern District, but also requested a transfer to the Mid-
dle District if the court determined that venue did not lie in the East-
ern District. The district court dismissed the case on the grounds that
venue was improper, and rejected appellants' Rule 59(e) motion to
alter or amend judgment and Rule 60(b) motion for relief from judg-
ment. Additionally, the district court awarded Showell costs in the
amount of $ 5,692.85 pursuant to Federal Rule of Civil Procedure
54(d)(1), which provides in relevant part that,"costs other than attor-
neys' fees shall be allowed as of course to the prevailing party unless
the court otherwise directs."

Appellants appeal the decision to award Showell costs, arguing that
the district court erred in determining that venue did not lie in the
Eastern District, abused its discretion in refusing to transfer the case
to the Middle District if venue was improper in the Eastern District,
and abused its discretion in awarding costs to Showell as the prevail-
ing party. Finding no error, we now affirm.

I.

Appellants first argue that the district court erred in dismissing the
case for improper venue. Under 28 U.S.C. § 1391(b), a plaintiff can
bring a civil action in any judicial district where the defendant resides.
Section 1391(c) provides that, for venue purposes, a corporation
resides "in any judicial district in which it is subject to personal juris-
diction at the time the action is commenced," and that if a state has
more than one district, then a corporation resides within any district
in which the contacts were sufficient to establish personal jurisdiction
if that district were a separate state. Since the events giving rise to the
instant action took place at Showell's Siler City plant which is located
within the Middle District of North Carolina, the appropriate inquiry
in this case is whether Showell has sufficient contacts to establish
general personal jurisdiction in the Eastern District of North Carolina.

Before a court can exercise in personam jurisdiction over a defen-
dant, that defendant must have "certain minimum contacts with [the

                     3
district] such that the maintenance of the suit does not offend tradi-
tional notions of fair play and substantial justice." International Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation
marks omitted). To exercise general jurisdiction and satisfy the due
process clause, a defendant's contacts with the district must be "con-
tinuous and systematic." Helicopteros Nacionales de Colombia, S.A.
v. Hall, 466 U.S. 408, 416 (1984). However,"[e]ven `continuous
activity of some sorts [by a corporation] within a state is not enough
to support [general jurisdiction].'" Nichols v. G.D. Searle & Co., 991
F.2d 1195, 1199 (4th Cir. 1993) (quoting International Shoe, 326 U.S.
at 318).

Appellants have failed to make out a prima facie case that venue
was proper in the Eastern District of North Carolina, as Showell does
not have the requisite minimum contacts with the Eastern District.
The Showell plant at which the appellants worked, and where the con-
duct occurred that forms the basis for their complaint, is located
within the Middle District of North Carolina. Showell's main (and
possibly only) contact with the Eastern District is the sale of some
chicken processed in the Middle District to Hardee's Corporation,
which generally took possession of the chicken in the Middle District
and used its own trucks to transport the chicken to its two warehouses
in the Eastern District. Cf. Helicopteros Nacionales, 466 U.S. at 417-
18 (holding that mere purchases, even if at regular intervals, are insuf-
ficient to establish general jurisdiction and that sending personnel into
the state for training related to those purchases was of no added sig-
nificance). While there is some dispute as to the exact percentage of
chicken sold to Hardee's, it represented an insignificant portion of
Showell's overall sales. Moreover, sales to other customers within the
Eastern District were minimal, if there were any, at the time this suit
was filed. In the absence of any sort of distribution network, sales
force, or other substantial presence within the Eastern District, sales
to a single customer who generally transports the product into the
Eastern District on its own trucks, along with occasional use of inter-
state highways within the Eastern District, does not constitute the req-
uisite minimum contacts necessary to satisfy "fair play and substantial
justice" and to establish general jurisdiction for a suit not related to
the sale of that product. See, e.g., L.H. Carbide Corp. v. Piece Maker
Co., 852 F. Supp. 1425 (N.D.Ind. 1994) (finding venue improper

                    4
despite regular visits to the forum by a representative and sales total-
ing 8% of revenue the previous year).

Perhaps recognizing their error, appellants contend that even if
venue is improper in the Eastern District, the district court abused its
discretion in refusing to transfer this action to the Middle District. See
28 U.S.C. § 1406(a) (allowing a court to transfer a case filed in the
wrong district "if it be in the interest of justice"). As appellants' coun-
sel candidly conceded at oral argument, this action was filed in the
Eastern District because counsel has an office near the headquarters
of the Eastern District. Given that at the time this suit was filed,
appellants knew that venue was most assuredly proper in the Middle
District but at best questionable in the Eastern District, it cannot be
said that the district court abused its discretion in refusing to transfer
the case to the Middle District. See Nichols, 991 F.2d at 1200-02
(holding that it is not an abuse of discretion to deny a motion to trans-
fer under section 1406(a) when the plaintiff's attorney could reason-
ably foresee that the forum in which the suit was originally filed was
improper).

II.

Finally, appellants argue that even if Showell properly prevailed on
the motion to dismiss for improper venue, the district court abused its
discretion in awarding fees to Showell under Rule 54(d)(1). Appel-
lants' primary contention is that the district court failed to consider
the settlement of a related action in the Middle District of North Caro-
lina which encompassed the plaintiffs in the Eastern District litigation
as well as the plaintiffs in the Middle District action.

Prior to the district court's ruling that Showell was entitled to
$ 5,692.85 in costs pursuant to Rule 54(d)(1) (but after the court had
granted Showell's motion to dismiss), 16 of the 53 appellants in the
instant action filed, and "full[y] and final[ly] settled," a similar (if not
identical) action against Showell in the Middle District of North Caro-
lina. Under the Middle District settlement, plaintiffs in both the Mid-
dle and Eastern District actions obtained some recovery, with the

                     5
parties agreeing to negotiate about attorneys' fees and costs. See
Appellee's Br. at 1; J.A. at 76-78.*

The district court did not abuse its discretion in failing to consider
the Middle District settlement agreement in its determination of pre-
vailing party status and in its calculation of costs in the case sub
judice. Unlike in the cases cited by appellants in which courts have
jointly considered two separate actions in determining prevailing
 2502 28 1 party status and in calculating fees and costs, s
                      ee, e.g., Plyer v. Evatt,

902 F.2d 273, 280-81 (4th Cir. 1990), the results of the instant litiga-
tion -- dismissal for improper venue -- did not advance the plain-
tiffs' ultimate goal (obtaining back wages) and this action did not, nor
could it, in any way seek "to preserve [the] fruits" of a prior judgment,
id. at 281, as it was dismissed prior to initiation of the Middle District
litigation. See Arvinger v. Mayor & City Council of Balt., 31 F.3d
196, 202 (4th Cir. 1994). To our knowledge, no court has ever held
that prevailing party status in a subsequent action can relate back to
a prior lawsuit dismissed on procedural grounds. Showell prevailed in
the instant litigation because it successfully obtained a favorable dis-
position of this case; any claim the appellants may have for recovery
of costs and/or fees in the Middle District action can be adequately
dealt with by the district court for the Middle District of North Caro-
lina.

CONCLUSION

For the reasons stated herein, we affirm the judgment of the district
court.

AFFIRMED.

MICHAEL, Circuit Judge, dissenting:

The system has broken down in this case. Through court-approved
mediation, defendant Showell Farms, Inc. and the named and consent-
_________________________________________________________________
*Pursuant to the Middle District settlement, the parties submitted a fee
petition to the district court for the Middle District of North Carolina.
That court stayed action on the fee petition pending the resolution of this
appeal.

                     6
ing party plaintiffs reached a settlement of actions in the Eastern and
Middle Districts of North Carolina. Thirty-four consenting party
plaintiffs who were parties only to the Eastern District action recov-
ered damages as a result of that settlement; they are, therefore, the
"prevailing party" in the Eastern District action, entitled to reasonable
attorneys' fees and costs. Yet, despite the settlement, costs were
assessed against the Eastern District plaintiffs, even though the East-
ern District action was still pending as a result of a Rule 59(e) motion
to alter or amend an order of dismissal for lack of venue. Because the
settlement transformed the Eastern District plaintiffs from potential
losers to prevailing parties and because this court should be in the
business of encouraging and giving effect to mediated settlements, I
respectfully dissent.

I.

The Eastern District action was still pending at the time of the
global settlement on February 8, 1995. It was still pending because
the plaintiffs had filed a timely (and still undecided) Rule 59(e)
motion to alter or amend the order dismissing the action for improper
venue. See Fed. R. App. P. 4(a)(4)(C).

After the Middle District action was filed, the district court there
entered a pretrial order which allowed the parties to agree to early
mediation.1 The parties then agreed to mediate, and on February 8,
1995, a settlement was reached on all claims in both the Middle Dis-
trict action and the Eastern District action. As the settlement agree-
ment provides:

          Defendant will pay to the named Plaintiffs the total gross
          sum of $8,500.00. The Defendant will pay to all consenting
          party Plaintiffs in the Middle District Action (Molina et al.
          v. Showell Farms, Inc.) and the Eastern District Action
          (Pacas et al. v. Showell Farms, Inc.) the total gross sum of
          $33,000.00. . . .
_________________________________________________________________
1 Middle District of North Carolina Local Rule 205 provides that the
parties shall conduct a mediated settlement conference some time during
discovery. Pursuant to subsection (a), the parties may agree to early
mediation near the beginning of discovery.

                     7
***

          Plaintiffs' counsel will provide detailed time records and a
          summary of their claim for costs and attorneys' fees. The
          parties will then negotiate in good faith regarding reasonable
          attorneys' fees and costs. If the parties are unable to agree,
          Plaintiffs' counsel may seek an award of attorneys' fees in
          the appropriate forum.

***

          Dismissal with prejudice in the Eastern District case and in
          the Middle District case will be filed after the attorneys' fees
          issue is resolved by the court or by stipulation of the parties.

By February 15, 1995, the district court in the Eastern District had
been notified of the settlement. The district court there, however,
ignored the settlement and on March 8, 1995, held that Showell
Farms prevailed in the action before it, and awarded costs to Showell
Farms. The court also denied the plaintiffs' Rule 59(e) motion.

On April 3, 1995, the Eastern District plaintiffs filed a motion
under Rule 60(b) seeking relief from the March 8 order. The plaintiffs
argued that in light of the settlement agreement they were the "pre-
vailing party" and sought to have the award of costs vacated. The dis-
trict court disagreed and held that the plaintiffs were not the
prevailing party in the Eastern District action because the action had
been dismissed for improper venue. The district court also held that
the plaintiffs had yet to achieve prevailing party status in the Middle
District action because the proposed settlement was not yet final and
because "the proposed settlement, which leaves open the question of
fees and costs associated with [the Middle District action], does not
mandate a finding that plaintiffs are the `prevailing party' in [the Mid-
dle District action]."

The record establishes that the settlement agreement was not "pro-
posed" when it was entered into on February 8, 1995, while the East-
ern District action was still on the docket. Instead, the agreement was
binding from its inception, and it has been fully executed, except for
the issue of attorneys' fees and costs.

                     8
II.

With all respect to the majority, it is clear that the district court in
Eastern District abused its discretion in refusing to give effect to the
parties' settlement agreement. The express terms of the agreement
settled both the Middle District action and the Eastern District action.
The agreement gave substantial monetary relief to plaintiffs who were
parties only to the Eastern District action. As a matter of law, the
plaintiffs are therefore the "prevailing party" in the Eastern District
action and are entitled to both reasonable attorneys' fees and costs.
Farrar v. Hobby, 113 S. Ct. 566, 573 (1992) (to qualify as a prevail-
ing party, "[t]he plaintiff must obtain an enforceable judgment from
whom fees are sought, or comparable relief through a consent decree
or settlement") (emphasis added; citations omitted).

Moreover, the majority fails to offer any good reason for upholding
the district court's decision. Instead, it focuses on the irrelevant fact
that the dismissal order was entered in the Eastern District prior to the
time the settlement was reached and states that"no court has ever
held that prevailing party status in a subsequent action can relate back
to a prior law suit dismissed on procedural grounds." Ante at 6. What,
of course, the majority ignores is the fact that the parties entered into
the settlement agreement while the Eastern District action was still
pending by virtue of the plaintiffs' Rule 59(e) motion. Thus, even
though the district court had entered an order dismissing the action for
improper venue, the settlement does not "relate back to a prior law
suit"--rather, it disposes of a pending law suit. 2
_________________________________________________________________

2 In addition, the majority is incorrect in saying that the Eastern District
action "did not advance the plaintiffs' ultimate goal (obtaining back
wages) . . . ." Id. For one thing, the Eastern District action did in fact
advance the ultimate goal of the plaintiffs who were parties to that
action. Pursuant to the settlement, they obtained back wages as consider-
ation for dismissal of the Eastern District action with prejudice. Also,
discovery obtained in the Eastern District action was used by plaintiffs
in the Middle District action. The discovery obtained in the Eastern Dis-
trict therefore helped to achieve the mediated settlement, thus advancing
the ultimate goal of all the plaintiffs.

                     9
Furthermore, the parties themselves acknowledged that the Eastern
District action had not yet concluded. The settlement agreement spe-
cifically states that it would put an end to the actions in both the Mid-
dle District and the Eastern District "after the attorneys' fees issue is
resolved by the court or by stipulation of the parties." Accordingly,
while I do not dispute that in the absence of the settlement agreement
Showell Farms would be the prevailing party in the Eastern District
action, Showell Farms gave away its prevailing party status when it
agreed to settle both the Middle District and the Eastern District
actions. It gave away its "win" so to speak. That was Showell Farm's
decision and, if it made a bad one, it is not for us to correct.

Finally, the Middle District of North Carolina has a commendable
mediation program designed to provide "an informal process con-
ducted by a mediator with the objective of helping the parties reach
a mutually acceptable settlement of their dispute." M.D.N.C. Loc. R.
601.3 This program should be encouraged. Indeed, global settlements,
through mediation, of all actions involving the parties should be
encouraged. This is exactly what the mediator was able to achieve
here. Yet, the majority has chosen to override a good bit of what the
mediator accomplished. I do not see any basis for that result.

III.

In sum, I would reverse the judgment of the district court to the
extent that it recognizes Showell Farms as the prevailing party, and
I would hold that the plaintiffs achieved prevailing party status in the
Eastern District action as a result of the mediated settlement. Accord-
ingly, I would also vacate the district court's award of costs to Sho-
well Farms and remand the action to the district court for a
determination of reasonable attorneys' fees and costs to be awarded
to the plaintiffs.
_________________________________________________________________
3 Practicing lawyers and law school faculty members agree to serve on
the panel of mediators. Id. at 603(a).

                     10
