WORLDSCAPE, INC. v. SAILS CAPITAL MANAGEMENT et al
Filing
84
OPINION. Signed by Judge Robert B. Kugler on 4/4/2014. (dmr)
NOT FOR PUBLICATION
(Doc. No. 62)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
:
:
WORLDSCAPE, INC.,
:
Plaintiff,
:
:
v.
:
:
SAILS CAPITAL MANAGEMENT, S.A.R.L., :
et al.,
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Defendants.
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:
Civil No. 10-4207 (RBK/KMW)
OPINION
KUGLER, United States District Judge
This matter comes before the Court by way of Defendant VT Wealth Management’s
(“VTWM”) letter requesting that the Court revisit its earlier decision denying VTWM’s motion
to dismiss Plaintiff WorldScape, Inc.’s (“WorldScape”) Amended Complaint for lack of personal
jurisdiction under Fed. R. Civ. P. 12(b)(2), and ordering the parties to conduct limited
jurisdictional discovery. WorldScape and VTWM have concluded discovery and submitted
supplemental briefing to Court. (Doc. Nos. 54, 56.) Based on the record before the Court, and
for the reasons stated herein, VTWM’s request will be GRANTED.
I.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The factual background of this case is set forth in the Court’s Opinion dated August 5,
2011, which is incorporated by reference as though fully set forth herein. See WorldScape, Inc.
v. Sails Capital Mgmt., No. 10-4207, 2011 WL 3444218, at *1-2 (D.N.J. Aug. 5, 2011). As
1
Court presumes that the parties have familiarity with its earlier Opinion, it will only recite those
facts necessary to resolve the instant matter.
On December 6, 2010, VTWM moved to dismiss WorldScape’s Amended Complaint.
(Doc. No. 19.) On August 5, 2011, the Court issued an Opinion and Order denying the motion to
dismiss, and granting WorldScape leave to conduct jurisdictional discovery. WorldScape, 2011
WL 3444218, at *7-8 (stating that “although the plaintiff bears the burden of establishing
personal jurisdiction, a court should assist the plaintiff by allowing jurisdictional discovery
unless the claim of jurisdiction is ‘clearly frivolous.’”).
Subsequent to the Court’s August 5, 2011, Opinion and Order, WorldScape and VTWM
conducted jurisdictional discovery over a period of several months. WorldScape then moved to
amend its Amended Complaint on November 7, 2011, to add VT Wealth Management and Bank
Vontobel A.G. as parties and to correct the name of Vontobel Group.1 (Doc. No. 46.)
WorldScape’s motion for leave to file a Second Amended Complaint was granted in an Order
dated March 13, 2012. (Doc. No. 57.) WorldScape then filed its Second Amended Complaint
on March 16, 2012. (Doc. No. 58.) In the interim, WorldScape and VTWM submitted
supplemental briefing on the issue of personal jurisdiction. (Doc. Nos. 54, 56.)
Although supplemental briefing on the issue of personal jurisdiction was filed before
WorldScape filed its Second Amended Complaint, WorldScape acknowledged that its Second
Amended Complaint had not changed “in any material way from the facts alleged in [its] initial
complaint.” (WorldScape Mot. to Amend 3, Doc. No. 46.) Indeed, as VTWM pointed out in its
opposition to WorldScape’s motion for leave to amend, the proposed Second Amended
1
WorldScape originally filed suit against Vontobel Group, an entity that VTWM claimed did not exist. (See
Compl., Doc. No. 1.) When WorldScape amended its Complaint for the first time on September 3, 2010, it kept
Vontobel Group as the named defendant. However, WorldScape’s counsel subsequently agreed to substitute VT
Wealth Management as the “Vontobel” Defendant entity. (See VTWM Mot. to Dismiss 2 n.2, Doc. No. 19.)
2
Complaint did not even add any new jurisdictional allegations. (VTWM Opp’n to Mot. to
Amend 4, Doc. No. 49.)
On June 19, 2012, VTWM filed a letter requesting that the Court dismiss the Second
Amended Complaint against VTWM, noting that the Second Amended Complaint contained no
new allegations against VTWM, but only included allegations against Bank Vontobel AG. (Doc.
No. 62.) The Court now turns to the parties’ relevant filings.
II.
LEGAL STANDARD
Generally, “once the defendant raises the question of personal jurisdiction, the plaintiff
bears the burden to prove, by a preponderance of the evidence, facts sufficient to establish
personal jurisdiction.” Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992).
The plaintiff may not “rely on the bare pleadings alone in order to withstand the defendant’s . . .
motion . . . .” Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir.
1984). Instead, “the plaintiff must sustain its burden of proof in establishing jurisdictional facts
through sworn affidavits or other competent evidence.” Id.
To exercise personal jurisdiction over a defendant, a federal court sitting in diversity must
undertake a two-step inquiry. IMO Indus., Inc. v. Kierkert, AG, 155 F.3d 254, 259 (3d Cir.
1998). First, the court must apply the relevant state’s long-arm statute to see if it permits the
exercise of personal jurisdiction. Id.; see Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007)
(“[A] federal district court may assert jurisdiction over a non-resident of the state in which the
court sits to the extent authorized by the law of the state.”) (quoting Fed. R. Civ. P. 4(k)).
Second, the court must apply the principles of due process. IMO Indus., Inc., 155 F.3d at 259.
In New Jersey, this inquiry is conflated into a single step because “[t]he New Jersey long-arm
rule extends to the limits of the Fourteenth Amendment Due Process protection.” Carteret Sav.
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Bank, FA, 954 F.2d at 145 (citing N.J. Court R. 4:4–4(c)).
Due process permits the exercise of personal jurisdiction over a non-resident defendant
where the defendant has “certain minimum contacts with [the forum] such that the maintenance
of the suit does not offend traditional notions of fair play and substantial justice.” Provident
Nat’l Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434, 437 (3d Cir. 1987) (internal quotation
marks and citations omitted). A plaintiff may establish personal jurisdiction by proving the
existence of either general or specific jurisdiction. Id. To establish general jurisdiction, the
plaintiff must show that the defendant’s forum contacts are “continuous and substantial,” which
requires “significantly more than mere minimum contacts.” Id. (citing Gehling v. St. George’s
Sch. Of Med., Ltd., 773 F.2d 539, 541 (3d Cir. 1985); Compagnie des Bauxites de Guinea v. Ins.
Co. of N. Am., 651 F.2d 877 (3d Cir. 1981)).
On the other hand, establishing traditional specific jurisdiction through “minimum
contacts” involves a three-part inquiry. Marten, 499 F.3d at 296. First, “the defendant must
have purposefully directed his activities at the forum.” Id. (internal quotation marks omitted).
Second, the plaintiff’s claim must “‘arise out of or relate to’ at least one of those specific
activities.” Id. (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414
(1984)). Third, courts may consider “additional factors to ensure that the assertion of jurisdiction
otherwise comports with fair play and substantial justice.” Id. (internal quotation marks and
modifications omitted). These fairness factors include:
the burden on the defendant, the forum State’s interest in adjudicating the dispute, the
plaintiff’s interest in obtaining convenient and effective relief, the interstate judicial
system’s interest in obtaining the most efficient resolution of controversies, and the
shared interest of the several States in furthering fundamental substantive social policies.
Pennzoil Prods. Co. v. Colelli & Assocs., 149 F.3d 197, 205-06 (3d Cir. 1998) (quoting Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)) (internal quotation marks omitted).
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Although “[a]ctivities of a party’s agent may count toward the minimum contacts necessary to
support jurisdiction,” Grand Entm’t Grp. v. Star Media Sales, Inc., 988 F.2d 476, 483 (3d Cir.
1993) (citations omitted), “[j]urisdiction is proper . . . [only] where the contacts proximately
result from actions by the defendant himself that create a ‘substantial connection’ with the forum
State.” Burger King Corp., 471 U.S. at 475 (emphasis in original) (citations omitted). “The
unilateral activity of those who claim some relationship with a non-resident defendant cannot
satisfy the requirement of contact with the forum State.” Hanson v. Denckla, 357 U.S. 235, 253
(1958).
The “effects test,” an alternative means of establishing specific jurisdiction, involves a
three-part inquiry. Marten, 499 F.3d at 297 (“The effects test and traditional specific jurisdiction
analysis are different, but they are cut from the same cloth.”). First, “[t]he defendant [must have]
committed an intentional tort.” IMO Indus., Inc., 155 F.3d at 265. Second, “[t]he plaintiff [must
have] felt the brunt of the harm in the forum such that the forum can be said to be the focal point
of the harm suffered by the plaintiff as a result of that tort.” Id. Third, “[t]he defendant [must
have] expressly aimed [their] tortious conduct at the forum such that the forum can be said to be
the focal point of the tortious activity.” Id. at 266 (emphasis added). Notably, “[a] plaintiff must
satisfy the expressly aimed element first before a court needs to consider the other two factors.”
Trico Equip., Inc. v. Manor, No. 08-5561, 2010 WL 1644285, at *3 (D.N.J. Apr. 23, 2010)
(citing IMO Indus., 155 F.3d at 259). To satisfy the third prong of the effects test, a plaintiff
must: (1) “show that the defendant knew that the plaintiff would suffer the brunt of the harm
caused by the tortious conduct in the forum;” and (2) “point to specific activity indicating that
the defendant expressly aimed its tortious conduct at the forum.” IMO Indus., 155 F.3d at 266.
“The unique relations among the defendant, the forum, the intentional tort, and the plaintiff may
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under certain circumstances render the defendant's contacts with the forum—which otherwise
would not satisfy the requirements of due process—sufficient.” Id. at 265. However, “[a]
plaintiff’s mere assertion that the defendant knew that the plaintiff's principal place of business
was located in the forum is insufficient to satisfy the third prong of the test.” Lawn Doctor, Inc.
v. Branon, No. 07–4735, 2008 WL 2064477, at *6 (D.N.J. May 14, 2008) (citing IMO Indus.,
155 F.3d at 265) (internal quotation marks and modification omitted).
III.
DISCUSSION
In its supplemental memorandum in opposition to VTWM’s motion to dismiss,
WorldScape argues that this Court may exercise personal jurisdiction over VTWM because it has
alleged sufficient facts such that the effects test is satisfied.2 These new “sufficient facts” stem
from WorldScape’s discovery that VTWM had concerns about Sails and its allegedly fraudulent
activity beginning in late March and early April 2009, but failed to disclose these concerns to
WorldScape. Specifically, WorldScape relies on e-mails and other communications produced
during discovery that demonstrate VTWM’s concern about the legitimacy of the financial
instruments used by Sails to open an account.3 (See generally WorldScape Supp. Mem. Opp’n,
Doc. No. 54.) Accordingly, because Retro Marti,4 and thus VTWM, made allegedly fraudulent
communications to WorldScape concerning Sails’ ability to perform its contractual obligations
under the Subscription Agreement, and knew when they made these communications that
WorldScape was located in New Jersey and thus the brunt of any harm stemming from their
allegedly fraudulent actions would be felt by WorldScape in New Jersey, VTWM has engaged in
2
WorldScape does not argue that VTWM’s forum contacts are “continuous and substantial” such that there is
general personal jurisdiction, nor does it argue that there is specific personal jurisdiction based on sufficient
minimum contacts; as such, the Court will only focus on whether WorldScape has established specific personal
jurisdiction over VTWM under the effects test.
3
Although VTWM did not share its concerns, it appears that WorldScape had its own concerns about Sails ability to
perform. (See generally Second Am. Compl. ¶¶ 42-50.)
4
Retro Martri was a former client manager for Vontobel. WorldScape, 2011 WL 3444218, at *1 & n.4.
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intentional and tortious conduct expressly aimed at New Jersey sufficient to establish personal
jurisdiction under the effects test. (WorldScape Supp. Mem. Opp’n 10, 14-15, Doc. No. 54.)
WorldScape’s arguments are unavailing.
Although WorldScape presents evidence representing “newly discovered knowledge”
about when VTWM discovered Sails’ mischief, what VTWM knew about Sails and when it
knew it does not provide any clarification as to whether “VTWM, through Marti, knew that
WorldScape would suffer the brunt of the harm in New Jersey, and that VTWM specifically
intended to aim its conduct at New Jersey.” WorldScape, 2011 WL 3444218, at *7.
As an initial matter, although WorldScape argues to the contrary, VTWM’s knowledge
that WorldScape was a New Jersey corporation, with significant business opportunities and
relationships with other New Jersey corporations, sheds no light on whether VTWM expressly
aimed its conduct at the forum. See Lawn Doctor, Inc. v. Branon, No. 07–4735, 2008 WL
2064477, at *6 (D.N.J. May 14, 2008) (“[a] plaintiff’s mere assertion that the defendant knew
that the plaintiff’s principal place of business was located in the forum is insufficient to satisfy
the third prong of the [effects] test,” i.e., that the defendant expressly aimed its tortious conduct
at the forum such that the forum can be said to be the focal point of the tortious activity).
Further, no one from WorldScape or VTWM ever met face-to-face in New Jersey, VTWM did
not solicit or mail anything to WorldScape in New Jersey, and neither VTWM or its agents
initiated any phone calls to WorldScape; indeed, now, as was the case prior to jurisdictional
discovery, the record reveals that WorldScape was solely responsible for initiating all phone calls
between the parties.
Based on the foregoing, WorldScape has failed to establish that VTWM’s conduct was
expressly aimed at New Jersey such that the Court’s exercise of jurisdiction over VTWM would
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be proper. See IMO Industries, 155 F.3d at 266-67 (stating that defendant’s knowledge that
plaintiff was located in the forum was irrelevant to whether defendant expressly aimed its
conduct at the forum, and holding that where the parties had no face-to-face meetings at the
forum, defendant sent no letters to the forum, and plaintiff initiated all phone calls between the
parties, defendant did not expressly aim its conduct at New Jersey such that plaintiff could rely
on the effects test to confer specific jurisdiction).
After affording WorldScape a limited period in which to conduct jurisdictional discovery,
it has not presented the Court with any newly discovered evidence to alter the Court’s prior
conclusion set forth in its August 5, 2011, Opinion. Absent new evidence demonstrating that
VTWM had a specific intent to target WorldScape in New Jersey, the Court does not have
personal jurisdiction over VTWM and thus WorldScape’s Second Amended Complaint will be
dismissed as to this defendant.5
IV.
CONCLUSION
For the foregoing reasons, this Court will GRANT VTWM’s motion to dismiss. An
appropriate Order shall follow.
Dated: 4/4/2014
s/ Robert B. Kugler
_
ROBERT B. KUGLER
United States District Judge
5
To the extent that WorldScape still seeks an order requiring Thomas Fedier, VTWM’s CEO, to sit for a deposition
in the United States, (WorldScape Supp. Mem. Opp’n 17, Doc. No. 54), the Court declines to grant its request.
WorldScape argues that Mr. Fedier’s deposition is necessary because his affidavit in support of VTWM’s motion to
dismiss is riddled with errors and inconsistencies, and because VTWM produced documents indicating the Mr.
Fedier, among others at VTWM, were aware that Sails accounts were fraudulently set up and accounts were
overdrawn. However, WorldScape does not demonstrate how Mr. Fedier’s testimony would alter the Court’s
conclusion that it does not have personal jurisdiction over VTWM. Without more, ordering VTWM to make Mr.
Fedier available for a deposition would be nothing more than an exercise in futility.
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