John Gallup & Associates, LLC v. Conlow
Filing
12
ORDER granting Defendant's 7 Motion to Dismiss. The Clerk is directed to enter judgment in favor of Defendant and to close the case. Signed by Judge Richard W. Story on 6/21/2013. (cem)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
JOHN GALLUP &
ASSOCIATES, LLC,
Plaintiff,
v.
ANNIE CONLOW,
Defendant.
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CIVIL ACTION NO.
1:12-CV-03779-RWS
ORDER
This case comes before the Court on Defendant Annie Conlow’s
(“Defendant”) Motion to Dismiss [7]. After reviewing the record, the Court
enters the following Order.
Background
Plaintiff John Gallup & Associates, LLC (“Plaintiff”) brings this suit
against Defendant, raising claims for breach of fiduciary duty, breach of
contract, and violation of the Georgia Computer Systems Protection Act,
O.C.G.A. § 16-9-92 et seq., arising out of Defendant’s employment with
Plaintiff. (See generally Pl.’s First Am. Compl. (“Am. Compl.”), Dkt. [6].)
Defendant was a long time employee of Plaintiff, a limited liability company
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“engaged in consulting work for the United States Department of Defense and
related entities and businesses.” (Id. ¶ 4; Pl.’s Br. in Opp’n of Mot. to Dismiss
(“Pl.’s Opp’n Br.”), Dkt. [8] at 2 of 21.) Defendant began working for Plaintiff
in 2007 at Plaintiff’s office in San Diego, California and remained Plaintiff’s
employee until August 2012, when “[Defendant] unexpectedly resigned
immediately.” (Conlow Aff., Dkt. [7-2] ¶ 7; Am. Compl., Dkt. [6] ¶ 39.)
Defendant now moves to dismiss the Amended Complaint for lack of personal
jurisdiction.
I.
Factual Allegations of the First Amended Complaint
The following factual allegations, taken from the First Amended
Complaint, form the basis of Plaintiff’s claims against Defendant. First,
Plaintiff alleges that while employed by Plaintiff, Defendant made a number of
unauthorized purchases with Plaintiff’s money. (See generally Am. Compl.,
Dkt. [6].) Defendant “had the ability to make certain purchases charged to
[Plaintiff’s] company account from staples.com.” (Id. ¶ 4.) From 2009 to 2011,
Defendant “made $5,887.51 in unauthorized purchases charged on [Plaintiff’s]
staples.com account.” (Id. ¶ 5.) Defendant “also made $4,303.97 in
unauthorized purchases charged on [Plaintiff’s] staples.com account in the
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calendar year 2012.” (Id. ¶ 6.) In addition to the purchases from staples.com,
Defendant “made [ ] unauthorized purchase[s] of $158.98 from amazon.com . . .
and $74.68 from Microsoft Windows 7 anytime upgrade.” (Id. ¶ 7.) Defendant
“also made other unauthorized charges which total $112.99.” (Id. ¶ 8.) Finally,
Defendant made unauthorized purchases on an American Express card
belonging to Rick D’Arienzo (“D’Arienzo”)—the individual who subsequently
purchased the “sole membership interests in [Plaintiff]” in December 2011. (Id.
¶¶ 11, 13, 23.)
Second, Plaintiff alleges that while employed by Plaintiff, Defendant
gave herself a number of unauthorized reimbursements. (See generally Am.
Compl., Dkt. [6].) After January 2012, Defendant “gave herself unauthorized
reimbursements from [Plaintiff’s] payroll account for alleged expenses of
$20,384.50.” (Id. ¶ 9.) Defendant “also gave herself an unauthorized raise
resulting in $1,470.00 in additional unauthorized compensation to her from
[Plaintiff’s] payroll account.” (Id. ¶ 10.) These “improper payments . . .
occurred through the internet via Paychex, an online payroll service company.”
(Id. ¶ 20.) Defendant entered the “unauthorized reimbursements . . . online into
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Paychex and then Paychex processed through [Plaintiff’s] bank accounts for
funding in direct deposit checking accounts.” (Id.)
As stated above, D’Arienzo, an employee of Plaintiff, purchased the sole
membership interests in Plaintiff in December 2011. (Id. ¶ 11-13.) Effective
January 1, 2012, D’Arienzo “moved the main office of [Plaintiff] to Marietta,
Georgia.” (Id. ¶ 13.) At that time, Plaintiff maintained offices in a number of
cities including Marietta, Georgia and San Diego, California. (Id. ¶ 14.) “In
May 2012, [Plaintiff] moved its main computer server to the Marietta, Georgia
principal office.” (Id. ¶ 15.) Prior to May 2012, Plaintiff had three computer
servers, all of which replicated information in real time. (Id. ¶ 16.) These
servers were located in San Diego, California; Marietta, Georgia; and
Huntsville, Alabama. (Id.) Defendant acted as “the administrator of that main
server even after [Plaintiff] moved it to Marietta, Georgia, and she had
administrative access to all three servers during her employment.” (Id. ¶ 18.)
Furthermore, Defendant “worked off the main server and she had access to that
main server’s files on a daily basis.” (Id. ¶ 19.)
Plaintiff alleges that, after January 1, 2012, “and for much of her prior
employment history, [Defendant’s] daily duties involved emails and telephone
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conversations with [Plaintiff’s] office personnel in all locations including the
principal office in Marietta, Georgia.” (Id. ¶ 26; Henry D’Arienzo Aff., Dkt.
[8-1] ¶ 18.) Defendant was “directly involved in obtaining the necessary
corporate registration through the Georgia Secretary of State’s Corporations
Division for [Plaintiff] to move its principal place of business to Marietta,
Georgia.” (Am. Compl., Dkt. [6] ¶ 28; Henry D’Arienzo Aff., Dkt. [8-1] ¶ 18.)
These interactions “included extensive communications between [Defendant]
and the Georgia Secretary of State’s office.” (Am. Compl., Dkt. [6] ¶ 28; Henry
D’Arienzo Aff., Dkt. [8-1] ¶ 18.) Defendant also “established car insurance for
[Plaintiff’s] leased vehicle . . . through [an] agent in Marietta, Georgia” and
“setup autodrafting for a Nissan Lease of a [Plaintiff] leased vehicle . . . in
Kennesaw, Georgia.” (Am. Compl., Dkt. [6] ¶ 29-30; Henry D’Arienzo Aff.,
Dkt. [8-1] ¶¶ 21-22.) Defendant also “repeatedly sent packages to, and received
packages from, the Marietta, Georgia office of [Plaintiff].” (Am. Compl., Dkt.
[6] ¶ 31; Henry D’Arienzo Aff., Dkt. [8-1] ¶ 23.) Additionally, Defendant’s
“final paycheck came from [one of Plaintiff’s] account[s] at SunTrust Bank, in
Georgia.” (Am. Compl., Dkt. [6] ¶ 22.) Finally, as recently as August 2012,
Defendant “did work on two projects in Georgia while employed by [Plaintiff].”
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(Id. ¶ 32; Henry D’Arienzo Aff., Dkt. [8-1] ¶ 24.) These projects were the
“Atlanta Metroplex Plan and the Atlanta Metropolitan Metroplex Update Plan.”
(Am. Compl., Dkt. [6] ¶ 32; Lisa D’Arienzo Aff., Dkt. [8-2] ¶ 3.) “Her
involvement in this work included writing text and background information
about the area and other related duties.” (Am. Compl., Dkt. [6] ¶ 32.)
Plaintiff further alleges that, while still employed by Plaintiff,
“[Defendant] downloaded project files to work on through her laptop and an
external hard drive, as did most [of Plaintiff’s] employees. [Plaintiff’s]
employees are then required to send the files back to [Plaintiff’s] servers,
including the main server in Marietta, Georgia.” (Id. ¶ 35; Henry D’Arienzo
Aff., Dkt. [8-2] ¶ 27.) Despite the latter requirement, Defendant never returned
certain files to Plaintiff’s server. (Am. Compl., Dkt. [6] ¶ 36; Henry D’Arienzo
Aff., Dkt. [8-2] ¶ 28.) “The files she downloaded from the server to her laptop
and to the external drive were never located.” (Am. Compl., Dkt. [6] ¶ 33.)
Shortly before Defendant resigned, she “also deleted most of the information
contained in her personnel files on [Plaintiff’s] main server, which was located
in Marietta, Georgia.” (Id. ¶ 38; Henry D’Arienzo Aff., Dkt. [8-2] ¶ 30.)
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Finally, Plaintiff alleges that when Defendant resigned, she “did not leave
all of the equipment in the San Diego office.” (Am. Compl., Dkt. [6] ¶ 33.)
Defendant’s “unauthorized personal purchases, most of which were delivered to
[Defendant’s] home address, were not left at the [Plaintiff’s] office in San
Diego, California.” (Id. ¶ 34; Lisa D’Arienzo Aff., Dkt. [8-2] ¶ 4.) Defendant
“also did not leave an external drive at the office upon resignation.” (Am.
Compl., Dkt. [6] ¶ 36.) Defendant “returned two empty external hard drives to
[Plaintiff] and a laptop hard drive, all of which were completely erased,” even
though “[Defendant] knew that those hard drives were not to be deleted.” (Id.
¶¶ 40-41.) She eventually “mailed back two thumbdrives, but . . . those
thumbdrives were blank.” (Id. ¶ 37.)
II.
Plaintiff’s Claims
Plaintiff’s first claim against Defendant is for breach of fiduciary duty.
(Id. ¶¶ 46-51.) In support of this claim, Plaintiff alleges that Defendant owed a
fiduciary duty to Plaintiff because “[Defendant] had access to [Plaintiff’s]
charge accounts and to the Company payroll system.” (Id. ¶ 47.) Plaintiff
further alleges that Defendant breached this duty “on numerous occasions by
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making unauthorized purchases and unauthorized reimbursements to herself, as
well as giving herself an unauthorized raise.” (Id. ¶ 48.)
Plaintiff’s second claim is for breach of contract. In support of this
claim, Plaintiff alleges that Defendant “was an employee of [Plaintiff] and, as
such, had a duty to [Plaintiff] to perform her duties in a reasonable way.” (Id. ¶
53.) Plaintiff further alleges that Defendant breached this duty “by embezzling
the money as alleged above, and failing to deliver the hard drives with all the
work product on them.” (Id. ¶ 54.)
Plaintiff’s final claim is that Defendant violated the Georgia Computer
Systems Protection Act, O.C.G.A. § 16-9-92 et seq. In support of this claim,
Plaintiff alleges that Defendant “deleted data from the two external hard drives
and the laptop with the hard drive she used on behalf of [Plaintiff],” and that
“[Defendant] was not authorized to delete this information.” (Id. ¶¶ 57, 59.)
Plaintiff further alleges that Defendant violated the Act by “deleting and
removing computer programs and data from a computer and the main server
when the main server was located in Marietta, Georgia.” (Id. ¶ 60.)
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III.
Defendant’s Motion to Dismiss
Defendant now moves to dismiss the Complaint for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(2).
(Def.’s Mot. to Dismiss, Dkt. [7] at 1 of 2.) Defendant argues that the Court
lacks personal jurisdiction over Defendant both under the Georgia long arm
statute, O.C.G.A. § 9-10-91, as well as the Due Process Clause of the
Fourteenth Amendment. (Def.’s Br. in Supp. of Mot. to Dismiss (“Def.’s Br.”),
Dkt. [7-1] at 2-3 of 23.)
Specifically, Defendant argues that the Court lacks personal jurisdiction
because “[Defendant] is a California resident. She has never lived in Georgia,
and she has never worked in Georgia.” (Id. at 3 of 23.) Furthermore,
Defendant contends that “[she] has never traveled to Georgia for any personal
or business purposes except that she has occasionally had layovers at the
Atlanta-Hartsfield Airport in order to transfer to connecting flights on the way
to other destinations.” (Id. at 3-4 of 23.) In fact, Defendant claims that “[she]
has never been outside of the Atlanta-Hartsfield Airport while in the State of
Georgia.” (Id. at 4 of 23.) Furthermore, Defendant contends that “[i]n her
capacity as [Plaintiff’s] employee, [Defendant] “did not perform work related to
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any project management contracts being fulfilled by [Plaintiff] in Georgia.”
(Id. at 6 of 23.) Finally, Defendant contends that “[a]ny hard drives and
[Defendant’s] laptop were located in California at [Plaintiff’s] San Diego
offices at all relevant times.” (Id. at 8 of 23.)
Discussion
I.
Defendant’s Motion to Dismiss
A.
Legal Standard: 12(b)(2) Motion to Dismiss
“A plaintiff seeking the exercise of personal jurisdiction over a
nonresident defendant bears the initial burden of alleging in the complaint
sufficient facts to make out a prima facie case of jurisdiction.” United Techs.
Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). “Where, as here, the
defendant challenges jurisdiction by submitting affidavit evidence in support of
its position, ‘the burden traditionally shifts back to the plaintiff to produce
evidence supporting jurisdiction.’” Id. (quoting Meier ex rel. Meier v. Sun Int’l
Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002)). “Where the plaintiff’s
complaint and supporting evidence conflict with the defendant’s affidavits, the
court must construe all reasonable inferences in favor of the plaintiff.” Meier,
288 F.3d at 1269.
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B.
Analysis
Federal courts “use a two-step inquiry in determining whether the
exercise of personal jurisdiction of a non-resident defendant is proper. First
[courts] examine whether the exercise of jurisdiction would be appropriate
under that state’s long arm statute. Second, [courts] examine whether the
exercise of personal jurisdiction over the defendant would violate the Due
Process Clause of the Fourteenth Amendment to the United States
Constitution.” Internet Solutions Corp. v. Marshall, 557 F.3d 1293, 1295 (11th
Cir. 2009). “When a federal court uses a state long arm statute, because the
extent of the statute is governed by state law, the federal court is required to
construe it as would the state’s supreme court.” Lockard v. Equifax, Inc., 163
F.3d 1259, 1265 (11th Cir. 1998).
1.
Georgia Long Arm Statute
Under the Georgia long arm statute, “[a] court of [Georgia] may exercise
personal jurisdiction over any nonresident . . . as to a cause of action arising
from any of the acts . . . enumerated in this Code section, in the same manner as
if he or she were a resident of this state, if in person or through an agent, he or
she”:
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(1) Transacts any business within this state;
(2) Commits a tortious act or omission within this state, except as
to a cause of action for defamation of character arising from the
act; [or]
(3) Commits a tortious injury in this state caused by an act or
omission outside this state if the tort-feasor regularly does or
solicits business, or engages in any other persistent course of
conduct, or derives substantial revenue from goods used or
consumed or services rendered in this state . . . . 1
O.C.G.A. § 9-10-91. Plaintiff alleges that the Court has personal jurisdiction
over Defendant pursuant to subsections (1) and (3).2 The Court will consider
Plaintiff’s arguments under the Georgia long arm statute before considering
whether the exercise of personal jurisdiction over Defendant would comport
with the Due Process Clause of the Fourteenth Amendment.
1
The other provisions of this code section, §§ 9-10-91(4)-(6), are not relevant
to this action as they pertain to ownership of real property (subsection (4)) and to
domestic relations (subsections (5) and (6)).
2
Although Plaintiff appears to raise an argument under subsection (2) of the
long arm statute (while, at the same time, mistakenly referencing subsection (3)) (Pl.’s
Opp’n Br., Dkt. [8] at 11), Plaintiff only alleges personal jurisdiction in the Amended
Complaint under subsections (1) and (3) of the long arm statute. (Dkt. [6] ¶ 2.)
Moroever, in its brief, Plaintiff plainly states that “[t]he affidavits presented by
Plaintiff establish that Conlow is subject to long arm jurisdiction under [subsections
(1) and (3)].” (Pl.’s Opp’n Br., Dkt. [8] at 9.) Accordingly, the Court will not
consider subsection (2) of the long arm statute.
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i.
“Transacts any business within this state”
As Defendant correctly states, personal jurisdiction exists under
subsection (1)—the “transacting business” prong of the Georgia long arm
statute—if “(1) the nonresident defendant has purposefully done some act or
consummated some transaction in [Georgia], (2) the cause of action arises from
or is connected with such act or transaction, and (3) the exercise of jurisdiction .
. . does not offend traditional fairness and substantial justice.”3 Aero Toy Store,
LLC v. Grieves, 631 S.E.2d 734, 737 (Ga. Ct. App. 2006) (emphasis added).
The Supreme Court of Georgia has made it clear that “nothing in subsection (1)
requires the physical presence of the nonresident in Georgia or minimizes the
import of a nonresident’s intangible contacts with the state.” Innovative
Clinical & Consulting Services, LLC v. First Nat. Bank of Ames, 620 S.E.2d
352, 355 (Ga. 2005). “The defendant, however, must ‘fairly be said’ to have
3
Although Plaintiff states in perfunctory fashion that “[Defendant]’s minimum
contacts may give rise to both general and specific jurisdiction” (Pl.’s Opp’n Br., Dkt.
[8] at 13), the argument in favor of personal jurisdiction in Plaintiff’s brief is limited
to specific jurisdiction (id. at 9-18). Moreover, to the extent general jurisdiction is
permitted under the Georgia long arm statute, it would not exist here. See Mitsubishi
Motors Corp. v. Colemon, 658 S.E.2d 843, 846-47 (Ga. Ct. App. 2008) (noting
“factors relevant to the existence of [general] jurisdiction include regularly doing
business in the state [and] deriving substantial revenue from goods or services in the
state”). As discussed infra, Defendant’s contacts with the state of Georgia do not rise
to this level.
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literally ‘transacted’ business in Georgia.” Cold Smoke Capital, LLC v. Gross,
No. 1:11-CV-3558-WSD, 2012 WL 3612626, at *4 (N.D. Ga. Aug. 21, 2012)
(quoting Diamond Crystal Brands, Inc. v. Food Movers Intl., Inc., 593 F.3d
1249, 1264 (11th Cir. 2010)).
Plaintiff argues that Defendant may be said to have transacted business in
Georgia based on a number of contacts with the state. Specifically, as stated in
the Background section, Plaintiff alleges that “[Defendant’s] daily duties
involved emails and telephone conversations with [Plaintiff’s] office personnel
in all locations including the principal office in Marietta, Georgia.” (Am.
Compl., Dkt. [6] ¶ 26.) Plaintiff also alleges that “[Defendant] was directly
involved in obtaining the necessary corporate registration through the Georgia
Secretary of State’s Corporations Division for [Defendant] to move its principal
place of business to Marietta, Georgia and included extensive communications
between [Defendant] and the Georgia Secretary of State’s office.” (Id. ¶ 28.)
Furthermore, Plaintiff alleges that Defendant “deleted most of the information
contained in her personnel files on [Defendant’s] main server, which was
located in Marietta, Georgia.” (Id. ¶ 38.) Finally, Plaintiff alleges that
Defendant “established car insurance for [Defendant’s] leased vehicle” with an
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agent in Georgia; “setup autodrafting for a Nissan Lease of [Defendant’s]
leased vehicle” in Georgia; “repeatedly sent packages to, and received packages
from, the Marietta, Georgia office”; and “did work on two projects in Georgia
while employed by [Plaintiff] . . . includ[ing] writing text and background
information about the area and other related duties.” (Id. ¶¶ 29-32.)
Defendant argues that she did not transact any business in Georgia
because “[she] never traveled to Georgia, except for the occasions on which
[she] was required to transfer to connecting flights at the Atlanta . . . Airport
while traveling to other destinations.” (Conlow Aff., Dkt. [7-2] ¶ 8.)
Furthermore, “[Defendant did] not perform work on contracts that were
performed in Georgia” and “[her] job duties did not include seeking out new
business or contracts in Georgia.” (Id. ¶ 9; Def.’s Reply in Supp. of Mot. to
Dismiss (“Def.’s Reply”), Dkt. [10] at 4 of 16.) Defendant also disputes the
allegation that she worked on Plaintiff’s Atlanta Metroplex Plan or Atlanta
Metropolitan Metroplex Update Plan. (Conlow Aff., Dkt. [7-2] ¶ 11.)
Defendant also claims that “the ‘payroll’ account that [she is] alleged to
have mishandled was maintained in California” and “the credit card used for
[Plaintiff’s] online purchases was billed to . . . California.” (Id. ¶ 10.) Finally,
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Defendant contends that “[Defendant’s] perfunctory email and telephone
contact with [Plaintiff’s] employees in Georgia pursuant to her ‘daily duties’
and her assistance with obtaining the [Plaintiff’s] registration to do business in
Georgia cannot form the basis for this Court to exercise jurisdiction under the
Georgia long arm statute.” (Def.’s Br., Dkt. [7-1] at 14 of 23.)
The Court agrees with Defendant and holds that it cannot assert personal
jurisdiction over Defendant pursuant to subsection (1) of the Georgia long arm
statute. First, as explained below, Plaintiff’s claims for breach of fiduciary duty
and breach of contract fail the requirement of the Georgia long arm statute that
“the cause of action arise[ ] from or is connected with” Defendant’s transaction
of business in Georgia. Aero Toy Store, 631 S.E.2d at 737.
Plaintiff’s claim for breach of fiduciary duty arises out of Defendant
allegedly making unauthorized purchases from staples.com and amazon.com
and on D’Arienzo’s American Express credit card, and from Defendant giving
herself an unauthorized raise from Plaintiff’s payroll account. (Am. Compl.,
Dkt. [6] ¶¶ 10, 23, 48.) The claim, therefore, does not arise out of any of
Defendant’s contacts with the state of Georgia, which contacts Plaintiff claims
constitute “transacting business” in the state. In particular, the claim does not
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arise out of Defendant’s (1) email and telephone correspondence with
Plaintiff’s office personnel in Georgia; (2) involvement in obtaining Plaintiff’s
corporate registration with the Georgia Secretary of State; (3) deletion of
information contained on Plaintiff’s computer server in Georgia; (4)
establishment of car insurance and autodrafting for Plaintiff-leased vehicles in
Georgia; (5) mailing of packages to Plaintiff’s Georgia office and receipt of
packages from that office; or (6) alleged work on Plaintiff’s two Georgia
projects. Accordingly, even if the foregoing contacts with the state of Georgia
constitute the transaction of business in the state, Plaintiff’s claim for breach of
fiduciary duty does not “arise out of” and is not “connected with” those
contacts. The Court, therefore, may not exercise personal jurisdiction over
Defendant under subsection (1) of the Georgia long arm statute with respect to
this claim.
The same is true with respect to Plaintiff’s claim for breach of contract.
This claim is based on the allegations that Defendant embezzled money from
Plaintiff (through the unauthorized purchases and raise discussed above) and
failed to return hard drives to Plaintiff. (Id. ¶ 54.) Thus, for the reasons stated
above, the claim does not arise out of Plaintiff’s alleged transaction of business
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in Georgia (assuming, arguendo, that Defendant’s alleged contacts with the
state constitute transacting business). Additionally, with regard to the hard
drives, Defendant contends, and Plaintiff does not dispute, that “[t]he external
drives and laptop computer . . . were kept in California.” (Conlow Aff., Dkt. [72] ¶ 4.) As such, any alleged misconduct relating to that equipment would have
taken place in California and is not connected to Defendant’s contacts with
Georgia. Because Plaintiff’s breach of contract claim does not “arise out of”
and is not “connected with” Defendant’s contacts with Georgia, which Plaintiff
contends constitute transacting business, the Court may not exercise personal
jurisdiction over Defendant under subsection (1) of the Georgia long arm statute
with respect to Plaintiff’s breach of contract claim.
Nor is the exercise of personal jurisdiction proper under subsection (1) of
the Georgia long arm statute with respect to Plaintiff’s claim under the Georgia
Computer Systems Protection Act. As stated in the Background section, supra,
this claim stems from two allegations: First, Defendant “deleted data from the
two external hard drives and the laptop with the hard drive she used on behalf
of [Plaintiff],” and second, Defendant “delet[ed] and remov[ed] computer
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programs and data from a computer and the main server when the main server
was located in Marietta, Georgia.”
With respect to the first allegation, as stated above, the alleged
misconduct relating to the external hard drives took place in California.
Therefore, to the extent Plaintiff’s claim is based on this alleged misconduct,
the claim does not “arise out of” and is not “connected with” Defendant’s
contacts with Georgia.
To the extent Plaintiff’s claim under the Georgia Computer Systems
Protection Act is based on the second allegation, the claim does “arise out of”
or is “connected with” one of Defendant’s alleged contacts with the state of
Georgia—namely, the deletion of information contained on Plaintiff’s main
computer server, located in Georgia. This contact, however, does not constitute
“transacting business” in Georgia and therefore cannot give rise to personal
jurisdiction under subsection (1) of the Georgia long arm statute.
Whether Defendant’s deletion of information off of Plaintiff’s Georgia
computer server constitutes “transacting business” in Georgia is best analyzed
under the test set out in Zippo Manufacturing Company v. Zippo Dot Com, 952
F.Supp. 1119 (W. D. Pa. 1997). “[To determine] whether a nonresident has
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submitted to a state’s long arm jurisdiction by establishing the requisite
minimum contacts through Internet-based activity,” Georgia courts have
adopted the Western District of Pennsylvania’s analysis in Zippo. Aero Toy
Store, 631 S.E.2d at 740. The Zippo court created the following sliding scale to
analyze Internet-based contacts:
At one end of the spectrum are situations where a defendant clearly
does business over the Internet. If the defendant enters into
contracts with residents of a foreign jurisdiction that involve the
knowing and repeated transmission of computer files over the
Internet, personal jurisdiction is proper. At the opposite end are
situations where a defendant has simply posted information on an
Internet Web site which is accessible to users in foreign
jurisdictions. A passive Web site that does little more than make
information available to those who are interested in it is not
grounds for the exercise [of] personal jurisdiction. The middle
ground is occupied by interactive Web sites where a user can
exchange information with the host computer. In these cases, the
exercise of jurisdiction is determined by examining the level of
interactivity and commercial nature of the exchange of information
that occurs on the Web site.
Zippo, 952 F. Supp. at 1124 (emphasis added) (citations omitted).
The Court’s finding that Defendant did not transact business in Georgia
when she deleted information from Plaintiff’s Georgia server warrants little
discussion. Although Plaintiff’s computer server is not an Internet Web site,
the principle articulated in Zippo gives the Court guidance—“the exercise of
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jurisdiction is determined by examining the level of interactivity and
commercial nature of the exchange of information that occurs.” Id. Defendant,
by deleting information from Plaintiff’s server, did not enter into contracts with
residents of Georgia (Conlow Aff., Dkt. [7-2] ¶ 14) or reach out to Georgia
residents in any way. Nor was Defendant’s deletion of information from the
server a commercial transaction. Accordingly, the Court may not exercise
personal jurisdiction over Defendant under subsection (1) of the Georgia long
arm statute with respect to Plaintiff’s claim under the Georgia Computer
Systems Protection Act.
ii.
“Commits a tortious injury in this state”
Plaintiff also contends that the Court may exercise personal jurisdiction
over Defendant under subsection (3) of the Georgia long arm statute. As stated
above, under this provision, “[a] court of [Georgia] may exercise personal
jurisdiction over any nonresident . . . as to a cause of action arising from any of
the acts . . . enumerated in this Code section, in the same manner as if he or she
were a resident of this state, if in person or through an agent, he or she”:
(3) Commits a tortious injury in this state caused by an act or
omission outside this state if the tort-feasor regularly does or
solicits business, or engages in any other persistent course of
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conduct, or derives substantial revenue from goods used or
consumed or services rendered in this state . . . .
O.C.G.A. § 9-10-91. For the Court to assert personal jurisdiction over
Defendant pursuant to subsection (3), Defendant must meet the “limiting
conditions” of the statute. Innovative Clinical, 620 S.E.2d at 354. In other
words, under the plain language of the statute, the Court can only exercise
personal jurisdiction over Defendant if she “regularly does or solicits business,”
“engages in any other persistent course of conduct,” or “derives substantial
revenue from goods used or consumed or services rendered in [Georgia].”
O.C.G.A. § 9-10-91(3). Plaintiff has failed to allege sufficient facts to satisfy
any of these limiting conditions.
Plaintiff first alleges that Defendant derived substantial revenue from the
services she rendered to Plaintiff in Georgia because “[her] final paycheck came
from [Plaintiff’s] account . . . in Georgia.” (Am. Compl., Dkt. [6] ¶ 22.)
Plaintiff also alleges that Defendant regularly solicited business in Georgia and
performed services regularly in Georgia based on her alleged contacts with the
state laid out in Part I.B.1.i., supra (where the Court discusses the “transacts any
business” prong of the Georgia long arm statute).
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Defendant argues that she does not meet the limiting conditions of
subsection (3) because “[w]hen a Georgia company pays its nonresident
employee for doing his job, the employee’s wages do not constitute ‘substantial
revenue’ derived from ‘services rendered in this state’ for the purposes of
personal jurisdiction.” (Def.’s Reply, Dkt. [10] at 6 of 16.) Defendant contends
that “[her] sole connection to Georgia is that [Plaintiff], [Defendant’s] former
employer, opened an office in Georgia several months before [she] resigned.”
(Conlow Aff., Dkt. [7-2] ¶ 9.)
The Court agrees with Defendant that Plaintiff cannot assert personal
jurisdiction over her pursuant to subsection (3). First, Defendant’s salary does
not indicate that Defendant “derive[d] substantial revenue from goods used or
consumed or services rendered in this state.” In Bradlee Management Services,
Inc. v. Cassells, the Supreme Court of Georgia held that it did not have personal
jurisdiction under subsection (3) of the Georgia long arm statute over a
Washington D.C. news reporter, even though he was an employee of a news
agency with its principal place of business in Georgia, and even though he sent
footage to his agency’s Atlanta station, expecting it to be aired in Georgia. 292
S.E.2d 717, 720 (1982). The Court reasoned that “[the reporter], as opposed to
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[the news agency], does not derive substantial revenue from goods used or
consumed or services rendered in this state.” Id. Like the defendant in
Cassells, Defendant is an out of state employee of Plaintiff, a company
registered in Georgia. The fact that Defendant receives a paycheck from a
Georgia company, even if that paycheck comes from an account held in
Georgia, does not mean that Defendant “derives substantial revenue from . . .
services rendered in this state.”
The Court also holds that Defendant does not “regularly . . . solicit
business, or engage[ ] in any other persistent course of conduct” in Georgia. In
Gee v. Reingold, the Georgia Court of Appeals held that it could not assert
personal jurisdiction under subsection (3) of the Georgia long arm statute over a
Tennessee lawyer even though he was “operating from his offices only a few
miles from the Georgia state line,” had been involved in up to ten cases in
Georgia, and had even “appeared personally on a client’s behalf . . . in Dalton,
Georgia.” 578 S.E.2d 575, 579 (Ga. Ct. App. 2003). The Court reasoned that
personal jurisdiction did not exist because “[the lawyer] did not maintain an
office in Georgia, advertise in Georgia, derive a substantial income from
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services rendered in Georgia, or engage in a persistent course of conduct with
Georgia.” Id.
Here, for example, Plaintiff alleges that “[Defendant’s] daily duties
involved emails and telephone conversations with [Plaintiff’s] office personnel
in all locations including the principal office in Marietta, Georgia.” (Am.
Compl., Dkt. [6] ¶ 26.) Plaintiff also alleges that Defendant was involved in
obtaining Plaintiff’s corporate registration with the Georgia Secretary of State.
(Id. ¶ 28.) Under Gee, these contacts are not sufficient to satisfy the limiting
conditions of subsection (3). Defendant has never visited Georgia and has
never entered into any contracts in Georgia. Her “daily . . . emails and
telephone conversations with [Plaintiff’s] office personnel” were limited to
fellow employees, and her contact with the Georgia Secretary of State’s
Corporations Division, as alleged, was not significant enough to constitute a
“persistent course of conduct” or “the solicitation of business” under the
Georgia long arm statute. (Id. ¶ 26.) Thus, the Court holds that it cannot
exercise personal jurisdiction over Defendant pursuant to subsection (3).
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2.
Due Process
Even if the Court could assert personal jurisdiction over Defendant under
the Georgia long arm statute, Defendant’s contacts with Georgia are insufficient
to satisfy the Due Process Clause of the Fourteenth Amendment. Under the
Due Process Clause, the Court can only assert personal jurisdiction over
defendants who establish “certain minimum contacts with [the forum state] such
that the maintenance of the suit does not offend ‘traditional notions of fair play
and substantial justice.’” Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 414 (1984) (quoting International Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)).
“The ‘minimum contacts’ required to confer personal jurisdiction over a
nonresident may not be merely ‘random,’ ‘fortuitous,’ or ‘attenuated.’” Home
Depot Supply, Inc. v. Hunter Mgmt. LLC, 656 S.E.2d 898, 901 (Ga. Ct. App.
2008) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)).
On the contrary, “it is essential in each case that there be some act by which the
defendant purposefully avails itself of the privileges of conducting activities
within the forum state, thus invoking the benefits and protections of its laws.”
Hanson v. Denckla, 357 U.S. 235, 253 (1958). “[W]here the defendant
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deliberately has engaged in significant activities within a state, or has created
continuing obligations between himself and residents of the forum, he
manifestly has availed himself of the privilege of conducting business there.”
Burger King, 471 U.S. at 475-6 (internal citations and quotations omitted).
Here, Defendant has not established the requisite minimum contacts with
the state of Georgia to permit the exercise of personal jurisdiction as a federal
Due Process matter. The Court recognizes that “[Defendant’s] sole connection
to Georgia is that [Plaintiff], [Defendant’s] former employer, opened an office
in Georgia several months before [Defendant] resigned.” (Conlow Aff., Dkt.
[7-2] ¶ 9.) Defendant has never lived in Georgia, worked in Georgia, or even
traveled to Georgia except to transfer to connecting flights at the Atlanta
airport. (Id. ¶¶ 4, 8.) Furthermore, Defendant has never “negotiated, entered
into, or performed . . . a contract in the State of Georgia.” (Id. ¶ 14.) As a
result, Defendant has not “purposefully avail[ed] [herself] of the privileges of
conducting activities within [Georgia]” and would not reasonably anticipate
being haled into court here. Hanson, 357 U.S. at 253.
Thus, the Court holds that personal jurisdiction over Defendant does not
exist either under the Georgia long arm statute or the Due Process Clause of the
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Fourteenth Amendment. Defendant’s Motion to Dismiss [7] therefore is
GRANTED.
II.
Plaintiff’s Request for Jurisdictional Discovery or to Transfer
In Plaintiff’s Brief in Opposition to Defendant’s Motion to Dismiss the
First Amended Complaint, Plaintiff asks the Court—in the event the Court is
inclined to grant Defendant’s Motion to Dismiss—to order limited jurisdictional
discovery or to transfer the case to the United States District Court for the
Southern District of California, in the alternative to dismissing the Complaint.
The Court declines to grant either request.
First, the Court finds that jurisdictional discovery is not needed to resolve
the issue of personal jurisdiction presented by Defendant’s Motion to Dismiss.
The Court also finds that Plaintiff has failed to show that transfer to the United
States District Court for the Southern District of California would be proper.
Indeed, the request was not presented by proper motion and is not supported by
any legal citation or argument. Accordingly, the Court finds dismissal for lack
of personal jurisdiction appropriate.
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Conclusion
In accordance with the foregoing, Defendant’s Motion to Dismiss [7] is
GRANTED. The Clerk is directed to enter judgment in favor of Defendant and
to close the case.
SO ORDERED, this 21st day of June, 2013.
________________________________
RICHARD W. STORY
United States District Judge
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