ISPEC, INC. v. TEX R.L. INDUSTRIAL CO., LTD. et al

Filing 60

OPINION AND ORDER granting Sun Capital's 34 Motion to Dismiss ; granting Albea Services' 44 Motion to Dismiss for Lack of Jurisdiction ; granting in part and denying in part 50 Motion for Default Judgment; judgment is entered for the sum of $265,456.50 in favor of pltf. ISPEC, INC. and against deft. TEX R. L. INDUSTRIAL CO., LTD.. Signed by Judge Faith S. Hochberg on 9/27/2013. (nr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
__________________________________________
:
ISPEC, INC.,
:
:
Plaintiff,
:
:
v.
:
:
TEX R.L. INDUSTRIAL CO., LTD. et al,
:
:
Defendants.
:
__________________________________________ :

Hon. Faith S. Hochberg, U.S.D.J.
Civil Case No. 12-4339 (FSH)
OPINION & ORDER
Date: September 27, 2013

HOCHBERG, District Judge:
This matter comes before the Court upon the motion to dismiss for lack of jurisdiction by
Sun Capital Partners, Inc. [Dkt. No. 34], the motion to dismiss for lack of jurisdiction by Albea
Services S.A.S. [Dkt. No. 44], and the motion for default judgment by Ispec, Inc. as to Tex. R.L.
[Dkt No. 50]. Ispec opposes the motion to dismiss by Albea Services, but does not oppose the
motion to dismiss by Sun Capital. The Court reviews the motions pursuant to Federal Rule of
Civil Procedure 78.
I.

Background
Plaintiff, Ispec, Inc. (“Ispec”) brought suit against a number of defendants in New Jersey

Superior Court. The case was removed to this Court, and Plaintiff thereafter filed a First
Amended Complaint naming as Defendants Tex R.L. Industrial Co., Ltd. (“Tex. R.L.”),
Zhongshan Meiquan Plastic Products Co., Ltd. (“ZMPP”), George Chen, Albea Group, Sun

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Capital Partners, Inc. (“Sun Capital”), Albea Services S.A.S. (“Albea Services”), and Twist
Beauty Packaging Holding Hong Kong Ltd. (“Twist Beauty”). 1
Plaintiff alleges that in 2009 it entered into a contract with Tex R.L. and ZMPP. (Am.
Compl. ¶ 27). George Chen is allegedly the president or general manager of Tex. R.L. and
ZMPP. (Id., ¶ 7). Ispec claims that it agreed to act as a sales representative on commission for
Tex R.L. and ZMPP’s products. (Id., ¶¶ 29-30). According to Ispec, Tex. R.L. or George Chen
paid it commissions until April 2012, when it ceased paying commissions. That same month,
Plaintiff alleges, Albea announced the acquisition of ZMPP from Tex R.L. (Id., ¶ 35).
According to Plaintiff, around the time of the acquisition, it received a termination notice from
George Chen, and an offer to pay about 25% of its unpaid commissions if it signed the
termination agreement. (Id., ¶ 34, 38). This suit then followed. The Complaint alleges
violations of the New Jersey Sales Representatives Rights’ Act, N.J.S.A. 2A:61A-1, et seq., and
several common law causes of action.
After the suit was removed to this Court, Sun Capital moved for leave to file a motion to
dismiss for lack of personal jurisdiction. Pursuant to an order by then Magistrate Judge Shwartz,
the parties engaged in limited jurisdictional discovery with respect to personal jurisdiction.
During discovery, defendants produced, inter alia, a Stock Purchase Agreement (“SPA”) that
provides for the purchase of ZMPP stock from George Chen and others as sellers to Twist
Beauty as a buyer. Tex R.L. was described by the SPA as a “Seller Affiliate.” The SPA also
notes the Ispec sales representative agreement. It provides that Chen and Tex. R.L. are to
terminate that agreement, and Chen is to indemnify Twist Beauty and ZMPP. [Dkt. No. 34-1 ¶¶
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Plaintiff also named Thierry Rabu and Sun European Partners LLP as defendants, but
those defendants were subsequently dismissed from this case. [Dkt. No. 56]. Albea Americas
was also originally named as a defendant, and was also dismissed. [Dkt No. 35].
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6-8]. Neither Sun Capital nor Albea Services is a party to the SPA. Both Sun Capital and Albea
Services have now moved to dismiss for lack of personal jurisdiction.
II.

Standard of Review
A federal court sitting in diversity may assert personal jurisdiction over a nonresident

only to the extent authorized by the state in which the court sits. Fed. R. Civ. P. 4(k); D’Jamoos
ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009). Under New
Jersey Court Rule 4:4-4, a court is permitted to assert personal jurisdiction over nonresidents “to
the extent permitted by the Due Process Clause of the Fourteenth Amendment.” Control
Screening LLC v. Tech. Application & Prod. Co., 687 F.3d 163, 167 (3d Cir. 2012). Under the
Due Process Clause, for a court to exercise personal jurisdiction, the plaintiff must demonstrate
that the defendant has “minimum contacts” with the forum. The court must also determine that
exercising jurisdiction comports with notions of “fair play and substantial justice.” Int’l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945).
There are two types of personal jurisdiction: general jurisdiction and specific jurisdiction.
General jurisdiction exists when a corporation’s contacts with a forum state “are so continuous
and systematic as to render them essentially at home in [that state].” Goodyear Dunlop Tires
Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011) (internal quotation marks omitted). By
contrast, “specific jurisdiction is confined to adjudication of issues deriving from, or connected
with, the very controversy that establishes jurisdiction.” Id. (internal quotation marks and
citation omitted). An assertion of specific jurisdiction is appropriate only if the defendant
purposefully directed its activities at the forum state, and the litigation arises out of or relates to
those activities. O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007). If these
two factors are met, “courts may consider additional factors to ensure that the assertion of

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jurisdiction otherwise comports with fair play and substantial justice.” Kehm Oil Co. v. Texaco,
Inc., 537 F.3d 290, 300 (3d Cir. 2008) (quotation and citation omitted).
Once the defendant raises the issue of personal jurisdiction, the plaintiff bears the burden
of proving facts sufficient to establish jurisdiction. Carteret Sav. Bank, FA v. Shushan, 954 F.2d
141, 146 (3d Cir. 1992). The plaintiff must establish “with reasonable particularity sufficient
contacts between the defendant and the forum state.” Mellon Bank v. Farino, 960 F.2d 1217,
1223 (3d Cir. 1992) (quotation omitted).
I.

The Motion to Dismiss by Albea Services

Albea Services has moved to dismiss for lack of personal jurisdiction. Plaintiff alleges
this Court has general jurisdiction over Albea Services, and opposes dismissal. 2
Albea Services is a French corporation, and has its sole location in France. The
undisputed evidence in the record shows that Albea Services does not have an office or bank
account in New Jersey, pay any taxes in New Jersey, have a registered agent in New Jersey,
solicit or advertise in New Jersey, derive substantial revenue or benefit from goods consumed or
used in New Jersey, or maintain or employ any agents in New Jersey. It is part of a global
business branded “Albea” that manufactures and sells beauty packaging products such as tubes
and packaging for lipsticks and mascara. It is neither the parent nor subsidiary of any of the
other defendants in this case. [Dkt. No. 44-3]. It is not a signatory of the sales representative
contract with Plaintiff. It also did not sign the SPA. [Dkt. No. 44-1].

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Ispec does not assert that this Court has specific jurisdiction over Albea Services. It has
therefore waived that argument. Even if it had asserted that the Court has specific jurisdiction, it
has not made any allegations or provided any evidence that Albea Services purposefully directed
its activities at this forum. O'Connor, 496 F.3d at 317. Ispec’s claims relate to the signing of a
contract to which Albea Services undisputedly was not a party.
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Plaintiff nevertheless alleges that this Court has general jurisdiction over Albea Services
because that company maintains an agency relationship with Albea Americas, Inc. (“Albea
Americas”), which operates a manufacturing plant in Washington, New Jersey. Albea Services
and Albea Americas are two separate corporate entities. [Dkt. No. 44-3]. Albea Services has
also provided an affidavit from the plant manager in Washington, NJ, that he reports to a general
manager for Albea Americas in Tennessee, and has very little contact with personnel from Albea
Services in France. [Dkt. No. 44-4]. The plant manager avers that personnel from Albea
Services do not exercise oversight over the running of the plant in Washington, New Jersey.
These averrals are unrebutted, despite ample time to take jurisdictional discovery.
When determining whether a relationship between two companies gives rise to general
jurisdiction, the Court “must respect the distinct corporate identities of these entities, unless there
is sufficient evidence to demonstrate that [one] was acting as an agent or ‘alter ego’ of [the
other].” Fisher v. Teva PFC, No. 04-CV-2780, 2005 U.S. Dist. LEXIS 18134, at *9 (D.N.J.
Aug. 16, 2005) (citing Seltzer v. I.C. Optics, Ltd., 339 F. Supp. 2d 601, 609 (3d Cir. 2004)). 3
Even after jurisdictional discovery, the only evidence Plaintiff has provided to show the
purported principle-agent relationship between Albea Services and Albea Americas are printouts from a website named “www.albea-group.com.” Ispec relies on an organizational chart and
other information taken from that website to support its claim. As the Third Circuit has noted, “a
company’s website is a marketing tool. Often, marketing material is full of imprecise puffery
that no one should take at face value.” Victaulic Co. v. Tieman, 499 F.3d 227, 236 (3d Cir.
2007). This website does not provide evidence of the actual relationship among the various
3

In Seltzer, the Third Circuit observed that “[i]n the corporate context, courts have said
that the subsidiary may be acting as an agent of the parent, and thereby able to subject the parent
to personal jurisdiction in the forum, if the subsidiary is doing business in the forum that would
otherwise have to be done in the forum by the parent.” 339 F. Supp. 2d 609.
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Albea-branded companies. Ispec has provided no convincing evidence of an agency relationship
between Albea Services and Albea Americas.
Ispec also argues that this Court may exercise general jurisdiction over Albea Services
because the “www.albea-group.com” website is accessible in New Jersey, and there is an
advertisement for employment at the Albea group of companies on that website. “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 personal jurisdiction.” Zippo Mfg. Co. v. Zippo DOT Com, Inc., 952
F. Supp. 1119, 1124 (W.D. Pa. 1997). 4 This passive website with the Albea brand also does not
permit this Court to exercise general jurisdiction over Albea Services.
The parties had the opportunity to conduct jurisdictional discovery. After such discovery,
Plaintiff has not presented any evidence to this Court that Albea Services is “essentially at home”
in New Jersey. It has not met its burden of proving facts sufficient to establish personal
jurisdiction over Albea Services. The Court will dismiss Albea Services.
Finally, Plaintiff also names “Albea Group” as a defendant in this case. The General
Counsel of the Albea-brand companies has averred that no such entity exists, and Ispec has not
brought any evidence to demonstrate its existence. “Albea Group” will also be dismissed from
this case. 5

4

See also Toys "R" Us v. Step Two, S.A., 318 F.3d 446, 452 (3d Cir. 2003) (recognizing
Zippo, 952 F. Supp. 1119, as a “seminal authority” on personal jurisdiction based upon
websites).
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Sun Capital has also filed a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(2) for lack of personal jurisdiction. Plaintiff filed no response to the motion.
This Court then entered an order directing Plaintiff to file a response or the motion would be
considered unopposed. [Dkt. No. 48]. Plaintiff did not respond, even after such notice from this
Court, and this motion to dismiss is therefore unopposed. See, e.g., Green v. Essex County
Superior Court Clerk, No. 02-1872, 2006 U.S. Dist. LEXIS 22151, 2006 WL 932055, at *1, n.1
(D.N.J. April 6, 2006) (“Plaintiff did not respond to Defendant’s motion; consequently, the Court
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III.

Motion for Default Judgment by Ispec
Lastly, Plaintiff has moved for judgment of default to be entered against Tex. R.L.

pursuant to Federal Rule of Civil Procedure 55. As discussed above, Plaintiff filed the instant
action against Defendants seeking funds owed to Plaintiff. The Clerk of the Court entered
default against Defendant Tex R.L. Plaintiff has provided Tex R.L. with written notice of its
motion for default judgment, and Tex R.L. has failed to respond to the motion and the time for
such response has elapsed. Plaintiff seeks a judgment in accordance with N.J.S.A. 2A:61A-3. 6
Under the terms of that statute, Plaintiff seeks $265,456.50 for unpaid commissions multiplied
by three pursuant to N.J.S.A 2A:61A-3(a). Plaintiff also seeks attorneys’ fees in the amount of
$16,155.00 pursuant to that statute. Those claims are supported by affidavits and documentary
evidence, and default judgment will be entered thereon. However, Plaintiff also seeks
$974,495.20 for future loss of profit for ten years. Plaintiff has provided no evidence to support
its claim that it is entitled to ten years of lost profits other than a spreadsheet of its past profits
with a handwritten note stating the average of its past profits. Accordingly, default judgment
will not be entered on Plaintiff’s lost profits claim.

will review the motion as unopposed.”). Clearly, Plaintiff has chosen not to oppose this motion.
Sun Capital is a Florida corporation with its principal place of business in Florida. It has no
office, bank accounts, agents, employees, property, or subsidiaries in New Jersey. It does not
pay taxes in New Jersey, solicit business in New Jersey, or derive substantial benefit from goods,
materials, or services used in New Jersey. [Dkt. No. 34-2]. There has been nothing shown from
the jurisdictional discovery from which this Court could conclude Sun Capital has “minimum
contacts” with New Jersey. Plaintiff has not met its burden of showing facts sufficient to
establish jurisdiction over Sun Capital. Sun Capital will also be dismissed.
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That statute provides: “A principal who violates or fails to comply with the provisions of
. . . this act shall be liable to the sales representative for all amounts due the sales representative,
exemplary damages in an amount of three times the amount of commissions owed to the sales
representative and all attorney's fees actually and reasonably incurred by the sales representative
in the action and court costs.”
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Conclusion and Order
For the reasons stated above,
IT IS on this 27th day of September, 2013,
ORDERED that the unopposed motion to dismiss by Sun Capital Partners, Inc. [Dkt. No.
34] is GRANTED, and the complaint is DISMISSED as to that party; and it is further
ORDERED that the motion to dismiss by Albea Services, S.A.S. [Dkt. No. 44] is
GRANTED, and the complaint is DISMISSED as to that party; and it is further
ORDERED that “Albea Group” is DISMISSED from this case; and it is further
ORDERED that the motion for default judgment by Ispec, Inc. [Dkt. No. 50], is
GRANTED IN PART and DENIED IN PART. Plaintiff is GRANTED DEFAULT
JUDGMENT as to $265,456.50 for unpaid commissions and attorney’s fees in the amount of
$16,155.00. However, Plaintiff’s motion for $974,495.20 for future loss of profit is DENIED.

s/ Faith S. Hochberg __________
Hon. Faith S. Hochberg, U.S.D.J.

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