RAGNER TECHNOLOGY CORPORATION et al v. BERARDI et al
OPINION. Signed by Judge Noel L. Hillman on 2/7/2018. (tf, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
RAGNER TECHNOLOGY CORP. and
TRISTAR PRODUCTS INC.,
No. 1:15-cv-7752 (NLH/AMD)
MICHAEL BERARDI, CHERYL
BERARDI, GREG JANSON,
NATIONAL EXPRESS, INC., and
ESTATE OF EDWARD KELLEY,
EDWARD P. BAKOS
NOAM J. KRITZER
BAKOS & KRITZER
147 COLUMBIA TURNPIKE, SUITE 102
FLORHAM PARK, NEW JERSEY 07932
On behalf of Plaintiffs
THOMAS R. CURTIN
GEORGE C. JONES
4 HEADQUARTERS PLAZA
P.O. BOX 1991
MORRISTOWN, NEW JERSEY 07962-1991
On behalf of Defendants
HILLMAN, District Judge
This Opinion addresses two separate but partially
overlapping motions: Defendant National Express, Inc.’s Motion
to Dismiss for Failure to State a Claim and Defendants Michael
Berardi and Cheryl Berardi’s Motion to Dismiss for Lack of
Personal Jurisdiction, Improper Venue, and Failure to State a
For the reasons that follow, this Court finds Plaintiffs’
Second Amended Complaint has not sufficiently pleaded that this
Court has personal jurisdiction over Defendant Cheryl Berardi.
The Court is inclined to dismiss Mrs. Berardi as a party
defendant and allow this case to otherwise proceed in the
District of New Jersey.
The Court will allow supplemental
briefing from the parties regarding how this case should proceed
before issuing its final decision.
The following facts come from Plaintiffs’ April 29, 2016
Second Amended Complaint. 1
On September 25, 2005, U.S. Patent
No. 6,948,527 (“the ‘527 patent”) entitled “Pressure-Actuated
Linearly Retractable and Extendible Hose” was issued to Gary
Dean Ragner and Robert Daniel deRochemont, Jr.
On June 23,
2009, U.S. Patent No. 7,549,448 (“the ‘448 patent”) entitled
“Linearly Retractable Pressure Hose” was issued to Ragner.
Ragner Technology is the owner and assignee of all rights to the
‘527 and ‘448 patents, subject only to exclusive licenses
granted to Tristar Products.
In May 2011, Ragner Technology was introduced to Greg
This Court has subject matter jurisdiction pursuant to 28
U.S.C. § 1337 and 28 U.S.C. § 1331.
Janson, who appeared to be interested in investing in Ragner
Technology or bringing Ragner Technology to the attention of
Janson was hired as a broker to recruit
investors for Ragner Technology’s patented products.
Janson informed Defendants that Ragner Technology was
seeking to meet with investors.
Janson scheduled a meeting
between Ragner Technology and Defendants for August 23, 2011.
On August 23, 2011, Ragner, deRochemont, and Margaret Combs, CEO
of Ragner Technology, arrived in Jupiter, Florida for the
At that time, they learned they were at the
home of the Berardi Defendants.
Also at the meeting was Edward
Kelly, CEO of Defendant National Express.
Janson and Vince
Simonelli, a business broker, were also present at the meeting.
The Berardi Defendants were introduced as Kelly’s producers for
his television commercials. 2
At the start of the meeting, Ragner Technology made clear
it was seeking investors and not licensing opportunities.
to disclosing any confidential information, Combs informed the
Berardi Defendants and Kelly that non-disclosure agreements had
not been prepared because they had been unaware of whom they
were meeting with.
Nonetheless, Combs insisted on a non-
The Second Amended Complaint states the Berardi Defendants
own Berardi Productions, a video production company. Berardi
Productions has an exclusive agreement to produce television and
online advertisements for National Express’s Xhose product.
disclosure agreement before commencing the meeting.
Defendants and Kelly verbally agreed to terms of confidentiality
and non-disclosure for the meeting.
They also agreed to execute
written non-disclosure agreements to be sent by Combs following
After the oral agreement, Ragner Technology “disclosed
information relating to Ragner Technology, the scope of its
patents, product specifications, and target market of the
They further disclosed
specific engineering diagrams, ideas, materials of
manufacture, including but not limited to, prior
iterations of prototype hoses and prototype hoses
constructed of more than one layer, more than one
material, at least one fabric layer, various materials
of manufacture including but not limited to, vinyl,
nylon, rubber, polyester, and/or polypropylene, at least
one layer with cord reinforcement including a hose
wherein the biasing was performed by elastic material
such as polymers made of thermoplastic polyurethane to
concepts, etc. related to its prototypes of the
Ragner Technology also demonstrated one of the patented
prototypes of the Microhose product.
Mr. Berardi was able to
use one of the patented prototypes and saw it expand and
During the meeting, National Express articulated its
interest in licensing the patented technology and an intent for
the product to be manufactured in Taiwan.
reiterated its request was solely for investors, but also
conveyed its hesitancy to use a foreign manufacturer.
reassuring Ragner Technology of the capabilities of its foreign
manufacturing contact, Kelly requested permission to contact the
foreign manufacturer to address its ability to manufacture the
product using the patented technology, subject to the terms of
the non-disclosure agreement.
Ragner Technology agreed to that
Kelly indicated he would contact the
manufacturer as discussed.
The morning following the meeting, August 24, 2011, Combs
prepared the non-disclosure agreements, all dated August 23,
The non-disclosure agreements were never executed by
Ragner Technology was similarly never contacted
regarding Kelly’s communications with the manufacturer in
A little over two months later, on November 4, 2011, Mr.
Berardi filed a patent application entitled “Expandable and
contractible hose,” which Plaintiffs allege “claim[ed] novel
features of the prototypes of the Microhose product demonstrated
by Ragner Technology at the August 23, 2011 meeting.”
Berardi obtained U.S. Patent No. 8,291,941 (“the ‘941 patent”),
entitled “Expandable and contractible hose,” U.S. Patent No.
8,291,942 (“the ‘942 patent”) entitled “Expandable hose
assembly,” and U.S. Patent No. 8,479,776 (“the ‘776 patent”).
Blue Gentian, LLC is the owner of all the rights in the
‘941, ‘942, and ‘776 patents.
of Blue Gentian.
Mr. Berardi is a managing member
Blue Gentian, in turn, granted National
Express the exclusive right under the ‘941, ‘942, and ‘776
patents to market and sell the expandable hose product.
Plaintiffs filed their initial complaint on May 30, 2014 in
the United States District Court for the Southern District of
This was followed by a First Amended Complaint on June
This matter was then transferred, sua sponte, from
the Southern District of Florida to the District of New Jersey
by the Honorable William P. Dimitrouleas, U.S.D.J. on October
This case was originally assigned to the Honorable
Kevin McNulty, U.S.D.J. before being reassigned to the
undersigned on December 2, 2016 because of the pendency of
Plaintiffs’ April 29, 2016 Second Amended Complaint brings
three counts against Defendants: conspiracy to monopolize (in
the alternative, attempt to monopolize) (Count I); common law
fraud (Count II); and breach of contract (Count III).
This Court begins by considering the Berardi Defendants’
argument that this Court lacks personal jurisdiction over them.
As this case was transferred from the Southern District of
Florida, the Court first considers any decisions made by that
court with regard to personal jurisdiction.
The “law of the case” doctrine “posits that when a court
decides upon a rule of law, that decision should continue to
govern the same issues in subsequent stages in the same case.”
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 81516 (1988).
This “doctrine applies as much to the decisions of a
coordinate court in the same case as to a court’s own
Id. at 816.
“Federal courts routinely apply law-
of-the-case principles to transfer decisions of coordinate
“Indeed, the policies supporting the doctrine
apply with even greater force to transfer decisions than to
decisions of substantive law; transferee courts that feel
entirely free to revisit transfer decisions of a coordinate
court threaten to send litigants into a vicious circle of
In its order transferring this case to the District of New
Jersey, the Southern District of Florida did not specifically
address whether this Court has personal jurisdiction over
Its order stated, in pertinent part:
The Court concludes that it would serve the
interest of justice for this case to be transferred to
the District of New Jersey, as the claims in this action
may be affected by, and are intricately related to,
several pending actions in the District of New Jersey
involving the same set of patents and related patents
for expandable and contractible garden hose that are at
issue in the instant controversy.
Two other related
actions filed in the Southern District of Florida have
been transferred to the District of New Jersey. It is
likely that there could be inconsistent rulings among
the various federal district courts regarding the
patents at issue and the conduct by which the patentholders obtained those patents.
Plaintiffs Ragner Technology Corporation, and
Tristar Products, Inc. consent to transfer on the
grounds that the District of New Jersey is an appropriate
venue pursuant to 28 U.S.C. § 1404(a) and that transfer
will serve the interests of justice. Defendant National
Express, Inc. consents to the transfer and to
jurisdiction for this matter in the District of New
Defendants Michael Berardi and Cheryl Berardi do
not dispute that transfer pursuant to § 1404(a) would
serve the interests of justice; however, they assert
that the District of New Jersey does not have personal
acknowledge that Michael Berardi and Cheryl Berardi may
attempt to challenge personal jurisdiction in the
District of New Jersey.
Nonetheless, Plaintiffs are
willing to face that potentiality and request that the
Court transfer the action to the District of New Jersey
pursuant to § 1404(a).
(citations and footnotes omitted).
While the Southern District of Florida did not specifically
conclude that venue and personal jurisdiction were proper in the
District of New Jersey, “[a]n action can be brought only where
the court has personal jurisdiction over defendants, and thus a
court does not have authority to transfer a case to a court that
lacks personal jurisdiction.”
Hunt v. Global Incentive &
Meeting Mgmt., No. 09-4921, 2010 WL 3740808, at *8 (D.N.J. Sept.
20, 2010) (citing Sunbelt Corp. v. Noble Denton & Assocs., Inc.,
5 F.3d 28, 31-33 (3d Cir. 1993)); accord Hoffman v. Blaski, 363
U.S. 335, 344 (1960) (“If when a suit is commenced, plaintiff
has a right to sue in that district, independently of the wishes
of defendant, it is a district ‘where [the action] might have
If he does not have that right, independently of
the wishes of defendant, it is not a district ‘where it might
have been brought,’ and it is immaterial that the defendant
subsequently [makes himself subject, by consent, waiver of venue
and personal jurisdiction defenses or otherwise, to the
jurisdiction of some other forum].” (alterations in original)
(citing Blaski v. Hoffman, 260 F.2d 317, 321 (7th Cir. 1958)));
Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509,
1515 (10th Cir. 1991) (“§ 1404(a) does not allow a court to
transfer a suit to a district which lacks personal jurisdiction
over the defendants, even if they consent to suit.”); Corry v.
CFM Majestic, Inc., 16 F. Supp. 2d 660, 663 (E.D. Va. 1998)
(“[T]ransfer is possible only if venue and personal jurisdiction
are proper in the transferee forum.
And, importantly, these
requirements cannot be waived.”).
Thus, it might be said that the Southern District of
Florida necessarily and implicitly concluded that the District
of New Jersey was a proper venue and had personal jurisdiction
over all Defendants in determining it was appropriate to
transfer the case to the District of New Jersey. 3
The Court finds Christianson v. Colt Indus. Operating
Corp., 486 U.S. 800 (1988), similar to this case. The Federal
Circuit in Christianson issued an order transferring an appeal
to the Seventh Circuit upon concluding it lacked jurisdiction.
Africa v. City of Philadelphia, 158 F.3d 711, 718 (3d Cir. 1998)
(“The law of the case doctrine . . . acts to preclude review of
only those legal issues that the court in a prior appeal
actually decided, either expressly or by implication . . . .”
Accordingly, the law of the case at this
time is that jurisdiction is proper in the District of New
Jersey, as implicitly concluded by the Southern District of
“[T]he decision of the transferor court that the suit could
have been brought in the transferee court is the law of the case
486 U.S. at 806. The Seventh Circuit then concluded the Federal
Circuit’s decision on the jurisdictional issue was in error and
transferred the case back. Id. The Court found “the Federal
Circuit . . . was the first to decide the jurisdictional issue.
That the Federal Circuit did not explicate its rationale is
irrelevant, for the law of the case turns on whether a court
previously ‘decide[d] upon a rule of law’ – which the Federal
Circuit necessarily did – not on whether, or how well, it
explained the decision.” Id. at 817. “Thus, the law of the
case was that the Seventh Circuit had jurisdiction, and it was
the Seventh Circuit, not the Federal Circuit, that departed from
the law of the case.” Id.
It appears to this Court that the Southern District of
Florida did not undertake a jurisdictional analysis and made no
determination regarding this Court’s jurisdiction over this
case. Nevertheless, this Court finds it must assume the law of
the case to be that this Court has personal jurisdiction over
Defendants. The Court thus views the Southern District of
Florida’s statement that the Berardi Defendants “may attempt to
challenge personal jurisdiction in the District of New Jersey”
and that “Plaintiffs are willing to face that potentiality” as
the Southern District of Florida recognizing that the law of the
case can be contested and the parties could argue clear error
and manifest injustice.
and should not be reconsidered except in unusual circumstances.”
Hayman Cash Register Co. v. Sarokin, 669 F.2d 162, 168, 170 (3d
Cir. 1982) (“Once the transferor court has decided the issue of
whether the suit ‘could have been brought’ in the transferee
court, 28 U.S.C. § 1406(a), this ruling becomes the law of the
If the party opposing the transfer believes the decision
is erroneous, it can either seek reconsideration in the
transferor court, or else petition for a writ of mandamus in the
court of appeals of the circuit in which the transferor court is
A disappointed litigant should not be given a second
opportunity to litigate a matter that has been fully considered
by a court of coordinate jurisdiction, absent unusual
circumstances.” (citations omitted)).
Importantly, however, “the law-of-the-case doctrine ‘merely
expresses the practice of courts generally to refuse to reopen
what has been decided, not a limit to their power.’”
Christianson, 486 U.S. at 817.
“A court has the power to
revisit prior decisions of its own or of a coordinate court in
any circumstance, although as a rule courts should be loath
[sic] to do so in the absence of extraordinary circumstances
such as where the initial decision was ‘clearly erroneous and
would work a manifest injustice.’”
Id. (quoting Arizona v.
California, 460 U.S. 605, 618 n.8 (1983)) (“Thus, even when a
[transferor court]’s decision was law of the case, the
[transferee court] did not exceed its power in revisiting the
jurisdictional issue, and once it concluded that the prior
decision was ‘clearly wrong’ it was obliged to decline
A district court may reconsider a previous decision that
has become law of the case under four circumstances: (1)
where the transferor judge becomes unavailable, thereby
reconsideration; (2) where new evidence is available;
(3) where a supervening change in law occurs; or (4)
where the decision was clearly erroneous and would work
a manifest injustice.
Alexander v. Frankling Res., Inc., Nos. 07-848, 07-1309, 2007 WL
2021787, at *2 (D.N.J. July 9, 2007).
Accordingly, given the lack of explanation regarding any
finding that this Court has personal jurisdiction over
Defendants, this Court visits the issues of personal
jurisdiction and venue solely to determine whether the decision
was clearly erroneous and would work a manifest injustice. 5
Court begins with personal jurisdiction.
Preliminarily, the Court finds the Berardi Defendants did
not waive their argument that this Court does not have personal
jurisdiction over them.
It is clear that the Berardi Defendants
The first three exceptions clearly do not apply.
Defendants were not constrained from challenging the Southern
District of Florida’s order and seeking either reconsideration
or petitioning for a writ of mandamus with the appellate court.
There is further no argument that there is new evidence in this
case or new law applicable to this issue.
contested personal jurisdiction before the Southern District of
Indeed, in the order transferring this case to the
District of New Jersey, the Southern District of Florida
acknowledged that “Defendants Michael Berardi and Cheryl Berardi
. . . assert that the District of New Jersey does not have
personal jurisdiction over both individuals” and that they “may
attempt to challenge personal jurisdiction in the District of
This case was transferred to the District of New Jersey on
October 28, 2015.
On March 21, 2016, Plaintiffs requested the
Clerk enter default against Defendants for failing to respond to
the amended complaint.
In a responsive letter, Defendants
indicated their understanding that their fully briefed motion to
dismiss before the Southern District of Florida was ripe for
adjudication before the District of New Jersey.
A docket entry,
however, appears to have terminated the motion to dismiss
pending before the Southern District of Florida.
the letter further confirmed Defendants still disputed personal
jurisdiction and had planned to discuss the issue at the initial
conference before the Court, which had been rescheduled.
on March 22, 2016 Magistrate Judge Michael A. Hammer issued an
Order allowing Defendants to file any motion to dismiss by April
22, 2016, which specifically referenced Defendants’ intention to
challenge personal jurisdiction. 6
Before the April 22, 2016
deadline, Judge Hammer ordered Plaintiffs to file an amended
complaint by April 29, 2016 “for the limited purpose of
asserting personal jurisdiction over Defendants.”
responded to Plaintiffs’ April 29, 2016 Second Amended Complaint
by timely filing their motion to dismiss.
Defendants’ May 13, 2016 Motion to Dismiss was timely
filed, resulting in a timely assertion of their argument as to
lack of personal jurisdiction.
Pursuant to Federal Rule of
Civil Procedure 12(h), a party waives a lack of personal
jurisdiction defense by:
omitting it from a motion in the circumstances
described in Rule 12(g)(2); 7 or
failing to either:
make it by motion under this rule; or
(ii) include it in a responsive pleading or in
an amendment allowed by Rule 15(a)(1) as
a matter of course.
The Court is not convinced that Defendants waived such argument
The Court also reinforced that the motion to dismiss
pending before the Southern District of Florida was terminated.
The Court does not find the issue of when the motion to dismiss
that was pending before the Southern District of Florida was
terminated to be relevant to this waiver determination.
Rule 12(g)(2) provides: “Except as provided in Rule
12(h)(2) or (3), a party that makes a motion under this rule
must not make another motion under this rule raising a defense
or objection that was available to the party but omitted from
its earlier motion.”
by not immediately bringing it before the Court.
not file any earlier motions or substantive filings in the
District of New Jersey that this Court finds would result in a
waiver of their personal jurisdiction argument.
further been aware of Defendants’ argument that the District of
New Jersey lacks personal jurisdiction since the Berardi
Defendants raised the issue in the Southern District of Florida.
The Court finds Watwood v. Barber, 70 F.R.D. 1 (N.D. Ga.
1976) analogous to this case.
There, a case was transferred
from Alabama district court to Georgia.
Id. at 3.
plaintiffs argued the defendants waived their right to contest
personal jurisdiction in Georgia by not immediately contesting
it after the transfer order or prior to the Georgia court
deciding the motion to dismiss left pending by the Alabama
Id. at 8.
The Court found the issue was not waived, as
the issue was addressed, but rejected, by the Alabama court.
The Court concluded that “the discussion before the
transferor court of the issue of personal jurisdiction in
Georgia should be deemed sufficient to relieve these defendants
of any waiver of that defense pursuant to Rule 12(h)(1).”
A defense of lack of personal jurisdiction was not “then
available” to defendants, within the meaning of Rule
12(g), at the time of the hearing on the motion to
transfer. It became available only after the transfer
to Georgia was accomplished.
While better practice
would have dictated the submission of a motion for leave
to amend the answers or a motion to amend the pending
motions to dismiss in order to raise the newly-available
defense, the court cannot find a waiver of that defense
upon these facts.
Plaintiffs were on notice of
jurisdiction over them even if the court itself was not
let in on the secret until the submission of the instant
motion. While defendants should have made certain that
the documentary record reflected the previous raising of
the otherwise-waivable defense, the court cannot say
that their failure to do so should trigger the Rule
Like Watwood, the Berardi Defendants preserved their
contest to personal jurisdiction in the transferor court,
Plaintiffs were on notice of their argument, and the Court
discerns no actions taken by the Berardi Defendants that should
have convinced Plaintiffs that the Berardi Defendants were
abandoning this argument.
Accordingly, the Court finds
Defendants’ argument for lack of personal jurisdiction has been
preserved, and this Court must address it.
“To survive a motion to dismiss for lack of personal
jurisdiction, a plaintiff bears the burden of establishing the
court’s jurisdiction over the moving defendants.”
Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004) (citing
Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 368 (3d Cir.
2002)); Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d
Cir. 1996) (“[O]nce a defendant has raised a jurisdictional
defense, a plaintiff bears the burden of proving by affidavits
or other competent evidence that jurisdiction is proper.”
(citing Narco Avionics, Inc. v. Sportsman’s Mkt., Inc., 792 F.
Supp. 398, 402 (E.D. Pa. 1992))).
“However, when the court does
not hold an evidentiary hearing on the motion to dismiss, the
plaintiff need only establish a prima facie case of personal
jurisdiction and the plaintiff is entitled to have its
allegations taken as true and all factual disputes drawn in its
Id. (citing Pinker, 292 F.3d at 368).
A defendant is subject to the jurisdiction of a United
States District Court if the defendant “is subject to the
jurisdiction of a court of general jurisdiction in the state
where the district court is located.”
Fed. R. Civ. P.
“A federal court sitting in New Jersey has
jurisdiction over parties to the extent provided under New
Jersey state law.”
Miller Yacht Sales, 384 F.3d at 96.
Jersey’s long-arm statute provides for jurisdiction coextensive
with the due process requirements of the United States
[D]ue process requires only that in order to subject a
defendant to a judgment in personam, if he be not present
within the territory of the forum, he have certain
minimum contacts with it such that the maintenance of
the suit does not offend “traditional notions of fair
play and substantial justice.”
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
A defendant establishes minimum contacts by “purposefully
avail[ing] itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and
protections of its laws.”
Asahi Metal Indus. Co. v. Superior
Court of Cal., 480 U.S. 102, 109 (1987) (quoting Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)).
availment” requirement ensures that the defendant could
reasonably anticipate being haled into court in the forum and is
not haled into a forum as a result of “random,” “fortuitous,” or
“attenuated” contacts with the forum state.
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980); see also
Burger King Corp., 471 U.S. at 472, 475.
In determining whether a defendant’s contacts with a forum
state are sufficient to allow for personal jurisdiction over
that party, a court must consider whether such contacts are
related to or arise out of the cause of action at issue in the
A court may exercise specific personal
jurisdiction over a defendant where the cause of action is
related to or arises out of activities by the defendant that
took place within the forum state.
Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984).
cause of action has no relationship to a defendant’s contacts
with a forum state, the court may nonetheless exercise general
jurisdiction if the defendant has conducted “continuous and
systematic” business activity in the forum state.
Id. at 416.
“Once it has been decided that a defendant purposefully
established minimum contacts within the forum State, these
contacts may be considered in light of other factors to
determine whether the assertion of personal jurisdiction would
comport with ‘fair play and substantial justice.’”
Corp., 471 U.S. at 477 (quoting Int’l Shoe, 326 U.S. at 320).
Courts “may evaluate ‘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
Id. at 476-77 (quoting World-Wide
Volkswagen, 444 U.S. at 292).
“These considerations sometimes
serve to establish the reasonableness of jurisdiction upon a
lesser showing of minimum contacts than would otherwise be
Id. at 477.
“[W]here a defendant who purposefully
has directed his activities at forum residents seeks to defeat
jurisdiction, he must present a compelling case that the
presence of some other considerations would render jurisdiction
Plaintiffs’ Second Amended Complaint makes the following
allegations regarding this Court’s personal jurisdiction over
the Berardi Defendants:
“Defendant Michael Berardi (as the sole managing member
of Blue Gentian, LLC) directs Blue Gentian, LLC to
restrain competition in part in the State of New Jersey
threatening their customers.”
“Mr. and Mrs. Berardi own the video production company
Berardi Productions, Inc. . . .
Inc. has an exclusive agreement to produce at least
television and online advertisement for the Xhose
product sold by Defendant National Express.
Mrs. Berardi (the sole officers of Berardi Productions,
Inc.) direct Berardi Productions, Inc. to produce
anticompetitive Xhose TV commercials for Defendant
National Express which air in the State of New Jersey.”
“Defendants Mr. and Mrs. Berardi write, produce, direct,
and edit the anticompetitive Xhose TV commercials which
air in the State of New Jersey. Defendant Mr. Berardi
can be seen in at least one commercial.”
“On or about May 2014, Defendant Michael Berardi met
with Keith Mirchandani, the executive officer and
Mirchandani’s home in the State of New Jersey. Defendant
Michael Berardi and Mr. Mirchandani discussed various
business matters, including at least the potential
resolution of patent matters related to [‘941, ‘942, and
“[P]ersonal jurisdiction is proper in this Court as to
Defendant Cheryl Berardi, because Cheryl Berardi
solicits business and does business within the State of
New Jersey, including but not limited to directing
anticompetitive marketing to competitors and customers
in the State of New Jersey. Therefore, the Court has
Berardi . . . .”
“[P]ersonal jurisdiction is proper in this Court as to
Defendant Michael Berardi, because Michael Berardi
solicits business and conducts business within the State
of New Jersey, including but not limited to directing
(through Blue Gentian, LLC an entity of which Defendant
Berardi is the sole member) restraint of competition in
part in the State of New Jersey by suing competitors
claiming infringement and threatening their customers of
fraudulently obtained [‘941, ‘942, and ‘776 patents],
and directing anticompetitive marketing to competitors
and customers in the State of New Jersey.”
Nearly all of the allegations asserted in Plaintiffs’
Second Amended Complaint regarding Mr. Berardi’s contacts with
the forum state relate to his contacts in his capacity as a
member of Blue Gentian and as an officer of Berardi Productions.
Similarly, Mrs. Berardi’s contacts with the forum state relate
to her contacts in her capacity as an officer of Berardi
Accordingly, this Court turns to whether it is
proper for the Court to consider the Berardi Defendants’
contacts with the forum state while acting on behalf of either
Blue Gentian or Berardi Productions.
“As a general rule, an individual whose contacts with the
forum state are in his corporate capacity does not thereby
become subject to jurisdiction in his individual capacity.”
Collins v. James W. Turner Constr., Ltd., No. 16-2877, 2017 WL
210236, at *8 (D.N.J. Jan. 18, 2017) (quoting Nicholas v. Saul
Stone & Co. LLC, No. 97-860, 1998 WL 34111036 (D.N.J. June 30,
In Educational Testing Service v. Katzman, 631 F. Supp.
550 (D.N.J. 1986), 8 the court surveyed significant case law that
The Third Circuit, in remanding a case back to the district
court, directed the district court’s attention to Educational
Testing Service, stating “on remand the District Court may
address the question of whether the individual defendants . . .
are not subject to personal jurisdiction because the relevant
had developed in the Eastern District of Pennsylvania throughout
the late 1970s and early 1980s regarding personal jurisdiction
over a corporate officer acting in his corporate capacity.
at 557; see Acteon, Inc. v. Vista Dental Prods., No. 05-3847,
2006 WL 1207999, at *3-4 (D.N.J. May 3, 2006) (stating that
“[w]hether ‘a defendant’s contacts with the forum state made in
his corporate capacity [may] be considered’ in the personal
jurisdiction analysis was thoroughly examined in Educational
Testing Services v. Katzman” and finding “the Katzman holding is
consistent with earlier Third Circuit precedent”).
Noting that “this issue has not received as much attention
by district courts applying New Jersey law,” the Katzman court
also surveyed a small number of New Jersey state court decisions
that addressed this topic.
631 F. Supp. at 558.
careful examination of these cases, particularly in light of the
recent pronouncements on personal jurisdiction of the Supreme
Court,” the court found as follows:
[T]he emerging doctrine in this area appears to be that
actions taken within the forum state by a corporate
official in his official capacity may be considered for
purposes of establishing jurisdiction over him in his
However, actions taken by an
individual in his corporate capacity outside the forum
jurisdiction over the individual.
contacts were established in their roles as corporate officers.”
Wellness Publ’g v. Barefoot, 128 F. App’x 266, 269 n.2 (3d Cir.
Id. at 559.
“[A]ctions taken by a defendant in his or her
‘corporate capacity’ may only be used to establish personal
jurisdiction over the defendant where those actions tend to
establish individual liability.”
Collins, 2017 WL 210236, at
*8; accord Payer v. Berrones, No. 12-1704, 2013 WL 5758717, at
*3 (D.N.J. Oct. 23, 2013) (“[W]hile jurisdiction over an
employee does not automatically flow from jurisdiction over the
employer, an individual’s contacts with the forum, made in a
corporate capacity, may be credited in the jurisdictional
analysis, where those contacts support individual liability.”);
Nelligan v. Zaio Corp., No. 10-1408, 2011 WL 1085525, at *7
(D.N.J. Mar. 21, 2011) (“[C]ase law suggests that actions taken
by an individual defendant in his ‘corporate capacity’ may be
considered in a personal jurisdiction analysis if the facts
alleged support individual liability . . . .”).
“[A]ctions taken in the forum by the corporate entity
should not be imputed to an individual defendant for purposes of
personal jurisdiction unless the plaintiff establishes that the
individual defendant himself took the specific action.”
Import Corp. v. Metro. Plant & Flower Corp., No. 05-54, 2005 WL
1677479, at *5 (D.N.J. July 15, 2005).
The Eastern District of Pennsylvania has stated: “In order
to determine whether the corporate officer will be subject to
personal jurisdiction, the following factors should be examined:
‘the officer’s role in the corporate structure, the quality of
the officer’s contacts, and the extent and nature of the
officer’s participation in the alleged tortious conduct.’”
Elbeco Inc. v. Estrella de Plato, Corp., 989 F. Supp. 669, 676
(E.D. Pa. 1997) (quoting Maleski v. D.P. Realty Tr., 653 A.2d 54
(Pa. Commw. Ct. 1994)).
“An analysis of these factors will
determine if the defendant’s contacts with the forum related to
the corporate capacity ‘may be considered in deciding if he
should be subject to personal jurisdiction in an individual
Id. (quoting TJS Brokerage & Co. v. Mahoney, 940 F.
Supp. 784, 789 (E.D. Pa. 1996)).
Accordingly, if the Second Amended Complaint sufficiently
alleges the Berardi Defendants could be subject to individual
liability, this Court will consider actions taken by the Berardi
Defendants in their corporate capacity in its personal
jurisdiction analysis to the extent those actions were done
within the forum state. 9
The Second Amended Complaint alleges Mr. Berardi, “as the
sole managing member of Blue Gentian,” “direct[ed] Blue Gentian,
While “[t]he Court of Appeals for the Third Circuit has not
decided a case involving the appropriate standard for individual
liability under the antitrust laws,” In re Mushroom Direct
Purchaser Antitrust Litig., No. 06-0620, 2017 WL 895582, at *9
(E.D. Pa. Mar. 6, 2017), district courts in this jurisdiction
and in other circuits have found there can be individual
liability under antitrust laws. See id.
LLC to restrain competition in part in the State of New Jersey
by suing competitors claiming infringement and threatening their
The complaint specifically pinpoints two 2013 law
suits filed in the District of New Jersey: dockets 13-481 and
The Second Amended Complaint also alleges Mr. Berardi
met with Keith Mirchandani, the executive officer and president
of Tristar, in his New Jersey home, to discuss resolving various
This meeting was done in his capacity as
Managing Member of Blue Gentian.
As to both Berardi Defendants, the Second Amended Complaint
states the Berardi Defendants direct Berardi Productions to
produce anticompetitive commercials “which air in the State of
It further states the Berardi Defendants “write,
produce, direct, and edit” the anticompetitive advertisements
that air in New Jersey.
The Court finds the Second Amended Complaint sufficiently
supports personal jurisdiction over Mr. Berardi based on his
contacts through Blue Gentian.
The 13-481 action was filed in
the District of New Jersey on October 23, 2012 by Blue Gentian
and National Express.
The 13-7099 action was filed in the
District of New Jersey on November 21, 2013 by Blue Gentian and
The Court finds the filing of these actions
constitute the minimum contacts necessary for this Court to
assert personal jurisdiction over Mr. Berardi.
Amended Complaint pleads that Mr. Berardi took specific action
and directed the filing of these lawsuits in his capacity as
The Court finds that in using New Jersey
courts to allegedly conspire or attempt to monopolize a market
with fraudulently obtained patents, Mr. Berardi purposefully
availed himself of the privilege of conducting activities in the
State of New Jersey.
Mr. Berardi was invoking the benefits and
protections of the District of New Jersey, located in the forum
If such use was fraudulent or constituted an attempt to
monopolize, Mr. Berardi could reasonably expect to be haled into
court in the state in which he filed the lawsuits.
with the meeting in New Jersey with Mirchandani, the Court finds
Mr. Berardi has such minimum contacts to confer personal
jurisdiction on this Court.
The Court also finds exercising personal jurisdiction over
Mr. Berardi comports with fair play and substantial justice.
This Court, and the federal judiciary generally, has a
significant interest in adjudicating this case in the District
of New Jersey, where several related matters are also being
Hearing this case in this district allows for
optimal use of judicial resources and will allow for consistent
rulings in these cases.
The Court does not find the burden on
Mr. Berardi, a resident of Florida, to be overly burdensome.
However, the Court finds the Second Amended Complaint
deficient in terms of supporting personal jurisdiction over Mrs.
Plaintiffs’ allegations regarding the Berardi
Productions’ advertisements are not specific enough for this
Court to determine whether they are contacts with the forum
state that could support personal jurisdiction.
the advertisements “air in the State of New Jersey” does not
tell this Court whether these were national advertisements,
airing in all states including New Jersey, or whether these
advertisements were specifically targeted toward New Jersey
residents and broadcast in New Jersey.
advertisements not directed at a particular forum, and
advertisements which are not direct solicitations, but rather
merely ‘spread knowledge of defendant’s facilities among the
general public,’ have not been sufficient to establish
Seltzer v. I.C. Optics, Ltd., 339 F. Supp. 2d
601, 612 (D.N.J. 2004).
Even if these advertisements were specifically targeted
toward New Jersey residents and aired only in New Jersey, Mrs.
Berardi’s declaration states she “[n]ever made any determination
as to where any such television commercials might be aired” and
“never directed any marketing or advertising related to the
XHOSE, specifically toward, or in the State of New Jersey.”
further states she “[n]ever directed any marketing or
advertising directed specifically toward, or in, New Jersey,
regarding the Plaintiffs in this action or their customers.”
This would not constitute “specific action” taken by Mrs.
Berardi directed to the forum state.
Norben Import Corp., 2005
WL 1677479, at *5.
As the content disseminated through Berardi Productions is
the only contact Mrs. Berardi is alleged to have with the forum
state, the Court finds it cannot assert personal jurisdiction
over Mrs. Berardi.
The Court finds the Southern District of
Florida’s implicit conclusion that this Court has personal
jurisdiction over Mrs. Berardi clearly erroneous.
further finds asserting personal jurisdiction over Mrs. Berardi
simply to comply with the law of the case would result in
It is fundamentally unfair to require a
defendant to litigate a matter in a district in which the
defendant lacks sufficient contacts.
Further, the Court finds
that upon “conclud[ing] that the prior decision was ‘clearly
erroneous,’” this Court is “oblig[ated] to decline
Christianson, 486 U.S. at 817.
Finding this Court has personal jurisdiction over Mr.
Berardi, the Court also addresses venue.
28 U.S.C. § 1391(b)
provides that venue is proper in:
a judicial district in which any defendant resides,
if all defendants are residents of the State in
which the district is located;
a judicial district in which a substantial part of
the events or omissions giving rise to the claim
occurred, or a substantial part of property that is
the subject of the action is situated; or
if there is no district in which an action may
otherwise be brought as provided in this section,
any judicial district in which any defendant is
subject to the court’s personal jurisdiction with
respect to such action.
According to the Second Amended Complaint, the Berardi
Defendants reside in Florida.
Accordingly, § 1391(b)(1) does
not provide for venue in the District of New Jersey.
§ 1391(b)(2) allows for venue in “a judicial district in which a
substantial part of the events or omissions giving rise to the
“The test for determining venue is not the defendant’s
‘contacts’ with a particular district, but rather the location
of those ‘events or omissions giving rise to the claim,’
theoretically a more easily demonstrable circumstance than where
a ‘claim arose.’”
Cottman Transmission Sys. v. Martino, 36 F.3d
291, 294 (3d Cir. 1994).
“In assessing whether events or
omissions giving rise to the claims are substantial, it is
necessary to look at the nature of the dispute.”
Id. at 295.
“Events or omissions that might have some tangential connection
with the dispute in litigation are not enough.”
Id. at 294.
“Substantiality is intended to preserve the element of fairness
so that a defendant is not haled into a remote district having
no real relationship to the dispute.”
The Court finds sufficient allegations in the complaint
regarding “events or omissions giving rise to the claim”
occurring in New Jersey that it cannot conclude the Southern
District of Florida’s implicit decision that venue was proper
constituted clear error.
Plaintiffs bring three counts in their Second Amended
Complaint: (1) conspiracy to monopolize, (2) common law fraud,
and (3) breach of contract.
The Court focuses on the first
Count, as it is what allows this case to proceed in federal
The Court thus considers the nature of the dispute to be
a conspiracy to monopolize or an attempt to monopolize.
suits brought in the State of New Jersey make up a large part of
Plaintiffs’ monopolization claim.
While there were other
significant events occurring in the State of Florida as well,
the Court finds there are enough contacts in New Jersey that
prevent this Court from concluding that it was clear error to
determine venue was proper in the District of New Jersey. 10
A 1990 amendment to the venue statute “changed pre-existing
law to the extent that the earlier version had encouraged an
approach that a claim could generally arise in only one venue.”
Cottman, 36 F.3d at 294. Thus, “the statute no longer requires
a court to select the ‘best’ forum.” Id. “Under the amended
subsection (2), . . . [courts] are permitted to find venue
proper in any number of districts, as long as each of the
districts was host to ‘a substantial part of the events or
omissions giving rise to the claim.’” Desouza v. Blender, No.
93-6706, 1994 WL 105536, at *2 (E.D. Pa. Mar. 28, 1994). “It
At this juncture, 11 the Court finds its options for the
disposition of this case to be: (1) transfer of the case to an
appropriate district; 12 (2) severance of the case, allowing this
does not require a majority of the events to take place here,
nor that the challenged forum be the best forum for the lawsuit
to be venued.” Park Inn Int’l, L.L.C. v. Mody Enters., Inc.,
105 F. Supp. 2d 370, 376 (D.N.J. 2000). But see Cottman, 36
F.3d at 294 (“Although the statute no longer requires a court to
select the ‘best’ forum, the weighing of ‘substantial’ may at
times seem to take on that flavor.’”).
On April 15, 2016, Judge Hammer ordered Plaintiffs to file
an amended complaint “for the limited purpose of asserting
personal jurisdiction over Defendants.” Plaintiffs’ Second
Amended Complaint was thus specifically amended to properly
plead jurisdiction. The Court finds a third amended complaint
would be unlikely to cure any deficiencies and jurisdictional
discovery unlikely to result in a different outcome.
This Court has authority to transfer a case, sua sponte,
for lack of jurisdiction pursuant to 28 U.S.C. § 1631. 28
U.S.C. § 1631 provides:
Whenever a civil action is filed in a court as defined
in section 610 of this title or an appeal, including a
petition for review of administrative action, is noticed
for or filed with such a court and that court finds that
there is a want of jurisdiction, the court shall, if it
is in the interest of justice, transfer such action or
appeal to any other such court in which the action or
appeal could have been brought at the time it was filed
or noticed, and the action or appeal shall proceed as if
it had been filed in or noticed for the court to which
it is transferred on the date upon which it was actually
filed in or noticed for the court from which it is
Pursuant to § 1631, this Court has authority to transfer this
case “to any other such court in which the action or appeal
could have been brought at the time it was filed or noticed.”
As the district where this case was originally filed, the
Court to retain jurisdiction over National Express and Mr.
Berardi and dismiss Mrs. Berardi; or (3) severance of the case,
allowing this Court to retain jurisdiction over National Express
and Mr. Berardi and transfer the claims against Mrs. Berardi.
The Court is hesitant to transfer this case, given the
related cases currently being litigated in the District of New
The Court finds judicial resources are best conserved,
and consistent decisions will be made, if this case is able to
proceed in the District of New Jersey.
As to severing this case and transferring the claims
against Mrs. Berardi, the Court is concerned this would result
in duplicitous litigation, a waste of judicial resources, and
possibly inconsistent decisions, as the claims against Mrs.
Berardi are the same as those against the other two defendants.
The Court is inclined therefore to exercise its
jurisdiction over National Express and Mr. Berardi and dismiss
Mrs. Berardi as a party defendant without prejudice.
believes proceeding in this way will allow for optimal use of
judicial resources and the most consistency in this case, as
well as promote the expeditious resolution of this and related
The Court invites the parties to submit supplemental
Southern District of Florida would be a proper court to hear
this matter pursuant to § 1631.
briefing regarding how this case should proceed. 13
Court’s finding that it lacks personal jurisdiction over Mrs.
Berardi, the parties are directed to consider the options
discussed by the Court and the parties’ preference for how to
proceed before a final decision on Defendants’ motion is
An appropriate Order will be entered.
Date: February 7, 2018
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
Given the Court’s finding that there are insufficient
contacts with the forum state to support personal jurisdiction
over Mrs. Berardi, the Court will decline to address Defendants’
other arguments for dismissal of this case pursuant to Federal
Rule of Civil Procedure 12(b)(6), argued in Docket No. 74,
Docket No. 75, and the parties’ supplemental briefing, until the
issue of personal jurisdiction is fully resolved.
If any party finds Mrs. Berardi to be an indispensable
party pursuant to Federal Rule of Civil Procedure 19(b), the
parties are directed to brief this issue and any related issues
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