CARDENAS v. SPINNAKER RESORTS, INC.

Filing 33

OPINION. Signed by Chief Judge Jose L. Linares on 8/3/2017. (ld, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

HENNA CARDENAS, individually and. on
beha f ofa putative class,

Civil Action No.: 16-2466 (JLL)
OPINION

Plaintiffs,
V.

SPINNAKER RESORTS, INC.,
Defendant.

LINARES, Chief District Judge.
This matter comes before the Court by way of Defendant Spinnaker Resorts, Inc.’s
(“Spinnaker”) Motion to Dismiss the Plaintiffs Complaint (ECF No. 1 (“Compl.”)) pursuant to
Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction. (ECF No.

25). Plaintiff Henna Cardenas has submitted an opposition (ECF No. 29), to which Defendant has
replied (ECF No. 31). The Court decides this matter without oral argument pursuant to Rule 7$
of the Federal Rules of Civil Procedure. For the reasons set forth below, the Court grants the
Motion to Dismiss.
I.

BACKGROUND’

Plaintiff Cardenas, on behalf of a proposed class, alleges that Defendant violated the Telephone
Consumer Protection Act of 1991, 47 U.S.C.

§

227 (“TCPA”) by making unsolicited telephone

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This background is derived from Plaintiffs Complaint (ECF No. 1), which the Court must accept as true at this stage
of the proceedings. SeeAlston v. Countiywide fin. Coip., 585 F.3d 753. 758 (3d Cir. 2009).

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calls. (Compi.

¶ 2). Defendant is a Florida corporation with its headquarters in Hilton Head, South

Carolina, and purportedly, relies on unsolicited telemarketing as a way to increase its customer
base and generate sales for its vacation ownership business. (Id. ¶j 1, 11). Defendant and/or its
agent made (and continue to make) multiple unsolicited promotional calls to the landline
telephones of Plaintiff, and other members of the putative class, who are registered on the “Do Not
Call Registry,” allegedly in violation of the TCPA. (Id.

¶J 2,

13, 15, 31, 32). Recipients of said

phone calls have placed numerous online consumer complaints regarding said conduct. (Id.

¶J 12,

17).
Plaintiff registered her landline phone number on the Do Not Call Registry on February 9,
2010. (Id.

¶ 19).

Starting in or around April 2015, Plaintiff began receiving multiple calls during

the day on her landline telephone from different New Jersey telephone numbers2 from
“telemarketer[s] always identifiying] themselves as calling from ‘Spinnaker Resorts.” (Id.
22; see ct/so ECF No. 10-1, Declaration of Henna Cardenas (“Cardenas Decl.”)

¶ 3-5).

¶J 20,

Plaintiff

estimates that she has received at least 70 umvanted calls since May 2015, and has received as
many as four calls per day. (Compl.

¶ 21).

Despite repeatedly telling the caller that she was not

interested, was on the “Do Not Call Registry,” and not to call her back again, Plaintiff continued
(and continues) to receive multiple calls a week. (Id.

¶J 23-28;

Cardenas Decl.

¶J 6-7).

Plaintiff

claims that she has suffered actual harm in the form of annoyance, nuisance, and invasion of
privacy. (Compi.

¶ 30).

On May 2, 2016, Plaintiff commenced this action against Spinnaker by filing a class action
Complaint3 alleging four violations of the TCPA. (See generally Compl.). Plaintiff alleges that

Plaintiff alleges that the following numbers have been identified as calling from Spinnaker: 908-206-8623; 908-2228013; 908-222-7407; 908-213-1884; 908-206-1351; and 908-213-0955. (Id. ¶f 20).
Cardenas brings this action on behalf of two proposed classes:

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2

A

this Court has personal jurisdiction over Spinnaker because Spinnaker “conducts a significant
amount of business in this District, solicits consumers in this District, made and continues to make
unsolicited calls in this District, and because the wrongful conduct giving rise to this case occurred
in, was directed to, and/or emanated from this District.” (Id.

¶ 8).

On July 8, 2016 Spinnaker filed

a Motion to dismiss for lack of personal jurisdiction. (ECF No. 9). Plaintiff opposed this motion
onJuly 18, 2016 (ECFN0. 10) and onJuly25, 2016 Spinnakerreplied(ECFNo. 12). OnAugust
3, 2016 this Court denied Defendant’s Motion to Dismiss on the basis that Plaintiff had alleged
enough facts to entitle her to jurisdictional discovery. (ECF No. 13). Thereafter, jurisdictional
discovery commenced in order to determine whether a basis exists for this Court to exercise
personal jurisdiction over Spinnaker.
On May 19, 2017 discovery concluded and on June 9, 2017 Defendant filed the instant
Motion to Dismiss for lack of personal jurisdiction. (ECf No. 25). On July 3, 2017, Plaintiff
opposed this Motion (ECF No. 29) and Defendant responded on July 24, 2017 (ECf No. 31).
II. LEGAL STANDARD
Once a defendant files a motion to dismiss for lack of personal jurisdiction pursuant to
Federal Rule of Civil Procedure 1 2(b)(2), the “plaintiff must prove by affidavits or other competent
evidence that jurisdiction is proper.” Metcalfe

Cir. 2009) (internal citations omitted).

i’.

Renaissance Marine, h?c.. 566 f.3d 324, 330 (3d

Where, as here, the district court does not hold an

No Consent-DNC Class: All individuals in the United States (1) who had his or her telephone number(s)
registered with the National Do Not Call Registry for at least thirty days, (2) who thereafter received more
than one telephone call made by or on behalf of Defendant Continuum [sic] within a 1 2-month period
starting february 12, 2012 to present, and (3) for whom Defendant obtained prior express consent to call in
the same manner as Defendant claims it obtained consent to call on the Plaintiff.
Stop Calling Class: All individuals in the United States (1) who had his or her telephone number(s)
registered with the National Do Not Call Registry for at least thirty days; (2) who received more than one
telephone call made by or on behalf ofDefendant within a 12-month period from April 21, 2012 to present:
(3) who requested that Defendant not call them again; (4) and who received at least one additional call from
Defendant at least thirty days after the request to stop calling. (Compl. ¶ 33).

evidentiary hearing, a plaintiff need only establish a “prima fade case of personal jurisdiction and
the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its
favor.” Miller Yacht Sates, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). Additionally, “[i]f the
contents of the plaintiffs complaint conflict with the defendant’s affidavits, the district court must
construe all reasonable inferences that can be drawn from the papers in the plaintiffs favor.”
Haffen v. Butter Specialties, Inc., 2011 WL 831933, *2 (D.N.J. Mar. 3,2011) (quoting 4 Wright
& Miller, Federal Practice and Procedure: Civil 3d 1067.6 (3d ed. 2002)). The plaintiff, however,
retains “the burden of demonstrating that the defendants’ contacts with the forum state are
sufficient to give the court in personam jurisdiction.” Mesalic v. fiberftoat Corp., $97 F.2d 696,
699 (3d Cir. 1990). “These contacts must be shown ‘with reasonable particularity.” We//ness
Pttbl ‘g v. Barefoot, 128 F. App’x 266, 26$ (3d Cir. 2005) (quoting Mellon Bank v. farino, 960
F.2d 1217, 1223 (3dCir. 1992)).
“A federal court sitting in New Jersey has jurisdiction over parties to the extent provided
under New Jersey state law.” Miller Yacht Sales, Inc., 384 F.3d at 96 (3d Cir. 2004). “New
Jersey’s long-ann statute provides for jurisdiction coextensive with the due process requirements
of the United States Constitution.” Id. (citing N.J. Ct. R. 4:4-4(c)). A district court sitting in New
Jersey may therefore exercise personal jurisdiction over a non-resident defendant if the defendant
has “certain minimum contacts with [New Jersey] such that the maintenance of the suit does not
offend ‘traditional notions of fair play and substantial justice.” Hemy Heide, Inc. v. WRH Prods.

Co., Inc., 766 F.2d 105, 10$ (3d Cir. 1985) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310,
316 (1945)).
“Minimum contacts can be analyzed in the context of general jurisdiction or specific
jurisdiction.” Metcalfe, 566 F.3d at 334. “General jurisdiction results from, among other things,

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‘systematic and continuous’ contact between a non-resident defendant and the forum state.”
Sptigllo v. Cabaret Lounge, 344 F. App’x 724, 725 (3d Cir. 2009) (quoting Jut ‘1 Shoe, 326 U.S. at

320. “Specific jurisdiction over a defendant exists when that defendant has ‘purposefully directed
his activities at residents of the forum and the litigation results from alleged injuries that arise out
of or relate to those activities.” Miller Yacht Sales, 384 F.3d at 96 (quoting Burger King Corp. v.
Rtedzewicz, 471 U.S. 462, 472 (1985)).
A. General Jurisdiction

“[G]eneraljurisdiction exists when a defendant has maintained systematic and continuous
contacts with the forum state.’ This is a fact-specific inquiry, and the ‘nonresident’s contacts to
the forum must be continuous and substantial’ to support the exercise of general jurisdiction.”
Aipaio v. Dttpre, 527 F. App’x 10$, 113 (3d Cir. 2013) (internal citations omitted). In recent years,

the United States Supreme Court has offered guidance on the level of “continuous and substantial”
contacts that might justify the exercise of general or “all purpose” jurisdiction.
In Goodyear Dunlop Tires Operations v. Brown the Court addressed a situation in which
the foreign subsidiaries of an American corporation challenged a North Carolina court’s exercise
of personal jurisdiction over them. 131 5. Ct. 2846 (2011). A unanimous Court discussed the
parameters of general jurisdiction, writing that “[flor an individual, the paradigm forum for the
exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent
place, one in which the corporation is fairly regarded as at home.” Id. at 2853-54. The Court
reiterated the principal that “[a] corporation’s ‘continuous activity of some sorts within a state’
• ‘is not enough to support the demand that the corporation be amenable to suits unrelated to that
activity.” Id. at 2856 (quoting Int’l Shoe Co., 326 U.S. at 318).

The Court further noted that

neither regular purchases of goods from a state nor the sales of goods to a state were sufficient, in

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themselves, to subject an entity to general jurisdiction on claims unrelated to the sales/purchases.
Id. at 2856-57 (citing Helicopteros Nacionales Dc Colombia v. Hall, 466 U.S. 408, 418 (1984)).

As the Defendant subsidiaries in Goodyear had only “attenuated” contacts with the state (i.e., their
products were sold into the state via intermediaries)4 and were “in no sense at home in North
Carolina,” the Court found that the subsidiaries were not subject to general jurisdiction in North
Carolina’s courts. Id. at 2857.
The Supreme Court confirmed the narrow applicability of the general jurisdiction doctrine
in Daimler AG v. Bauman, 134 S. Ct. 746 (2014). In Daimler, the Court rejected a formulation of
the doctrine that would “approve the exercise of general jurisdiction in every State in which a
corporation ‘engages in a substantial, continuous, and systematic course of business,”
characterizing that broad definition as “unacceptably grasping.” Id. at 761 (internal citation
omitted).

The Court observed that “the inquiry under Goodyear is not whether a foreign

corporation’s in-forum contacts can be said to be in some sense ‘continuous and systematic,’ it is
whether that corporation’s ‘affiliations with the State are so ‘continuous and systematic’ as to
render it essentially at home in the fontrn State.” Id. at 761 (quoting Goodyear, 131 5. Ct. at
2851). The Court also clarified that “the general jurisdiction inquiry does not ‘focus solely on the
magnitude of the defendant’s in-state contacts.’ General jurisdiction instead calls for an appraisal
of a corporation’s activities in their entirety, nationwide and worldwide. A corporation that

operates in many places can carcely be deemed at home in all of them. Otherwise ‘at home’
would be synonymous with ‘doing business’ tests framed before specific jurisdiction evolved in
the United States.” Id. at 762, n. 20. The Court ultimately found that there was

“no

basis to subject

may bolster
The Goodyear Court also specified that while the “[fjlow of a manufacturefs products into a forum
ties serving to bolster the exercise of specific jurisdiction do not
an affiliation germane to specific jurisdiction
warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant.” Id. at 2855
(emphases in original).

‘

...

.

.

.

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Daimler to general jurisdiction in California, for Daimler’s slim contacts with the State hardly
render it at home there.” Id. at 760, 76 1-62.
B. Specific Jurisdiction
“Specific jurisdiction is established when a non-resident defendant has ‘purposefully
directed’ his activities at a resident of the forum and the injury arises from or is related to those
activities.” Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001) (quoting Burger King,
471 U.S. at 472). In other words, specific jurisdiction exists where the “cause of action arises out
of [t]he defendant’s forum-related activities, such that the defendant should reasonably anticipate
being haled into court in that forum.” Abel v. Kirbaran, 267 F. App’x 106, 108 (3d Cir. 200$)
(internal citations and quotations omitted).
Three elements must be met to establish specific jurisdiction. HS Real Co., LLC v. Slier,
526 F. App’x 203, 206 (3d Cir. 2013). First, the defendant must have purposefully availed itself
of the privilege of conducting activities within the forum. Id. Second, “plaintiffs’ claims must
arise out of or relate to at least one of the contacts with the forum.” Id. (internal citations and
quotations omitted). Third, the exercise of jurisdiction must comport with traditional notions of
fair play and substantial justice. O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d
Cir. 2007).
Because the existence of specific jurisdiction depends on a link between the defendant’s
activity and the resulting harni, a specific jurisdiction analysis is necessarily claim specific.
Remick v. Manfredy, 23$ F.3d 248, 255 (3d Cir. 2001) (“Such a determination is claim specific
because a conclusion that the District Court has personal jurisdiction over one of the defendants
as to a particular claim asserted by [plaintiff] does not necessarily mean that it has personal
jurisdiction over that same defendant as to [plaintiffi’s other claims.”).

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III. ANALYSIS

Defendant contends that this Court does not have personal jurisdiction over it because
Spinnaker is “not ‘at home” and “lacks minimum contacts [with the forum], either directly or
under agency principles.” (ECF No. 25 at 6). Specifically, Defendant argues that jurisdictional
discovery proves that neither Resort Sales Missouri, Inc. nor Resort Sales by Spinnaker, Inc.
(collectively, the “Resort Sales Companies”), the companies responsible for marketing
Spinnaker’s timeshares, are agents of Spinnaker for the purposes ofjurisdiction. (Id.). Defendant
further contends that even if the Resort Sales Companies were agents of Spinnaker, Plaintiff fails
to show that either company made the calls in question. (ECf No. 31 at 7).
In opposition, Plaintiff argues that the Court can exercise jurisdiction over Defendant
pursuant to an agency theory “because the subsidiaries conduct business in this District on
Spinnaker’s behalf, there is common ownership, Spinnaker supports its subsidiaries financially,
and Spinnaker controls its subsidiaries’ affairs.” (ECF No. 29 at 12). Plaintiff concedes that this
Court does not have general jurisdiction over Spinnaker and/or its subsidiaries (ECF No. 29 at 23),
thus the Court will only address specific jurisdiction.
In tenris of specific jurisdiction, Defendant is a Florida corporation with its headquarters
in South Carolina (Compi.

¶ 1) and allegedly does not have employees. (ECF No. 9-2, Declaration

of Basil W. Matthews (“Matthews Decl.”)

¶J 7, 9). Moreover, Defendant “does not conduct

telernarketing activities or make telephone calls to solicit sales from potential customers.” (Id.
¶J1 0, 11). Instead, Defendant contends that “[all] telernarketing activities directed to potential
customers are conducted by Spinnaker’s subsidiary corporations Resort Sales Missouri, Inc., a
Missouri Corporation, or Resort Sales by Spinnaker, Inc., a South Carolina corporation, or
independent telemarketing companies they hire.” (Id.

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¶ 8). Further, Defendant is not registered to

do business in New Jersey and “solicits no business there.” (ECF No. 25 at 18). Thus, since
Defendant itself did not make the calls in question to Plaintiff, and Plaintiff fails to allege other
ways in which Defendant purposefully availed itself of the forum, the Court does not have specific
jurisdiction over Defendant. See I McIntyre Mach, Ltd. v. Nicastro, 564 U.S. 873, $86 (2011).
Instead, the Court must consider if an agency relationship exists between Defendant and the Resort
Sales Companies.
The Court finds that the Resort Sales Companies are not agents of Defendant for
jurisdictional purposes and, moreover, even if they were, Plaintiff has failed to allege that the
Resort Sales Companies made the unsolicited phone calls in question thus invalidating any agency
argument. “To determine if a subsidiary is acting as an agent of the parent, courts consider (1)
whether the subsidiary is doing business in the forum that would otherwise be performed by the
parent; (2) whether there is common ownership of the parent and subsidiary; (3) whether there is
financial dependency; and (4) whether the parent interferes with the subsidiary’s personnel,
disregards the corporate formalities, and/or controls the subsidiary’s marketing and operational
policies.” Edelson V, L.F. v. Encore Networks, Inc.,2012 WL4891696, *3 (D.N.J. Oct. 12, 2012)
(quotingDeweyv. VolkswagenAG, 55$f. Stipp. 2d 505, 513 (D.N.J. 200$)).
Plaintiff claims the first requirement of agency is met because the Resort Sales Companies
solicited business in New Jersey on behalf of Defendant, who would otherwise have had to solicit
such business itself. (ECf No. 29 at 14). The record shows that the absence of the Resort Sales
Companies does not necessarily mean that Defendant performed the call itself since it could turn
to independent contractors—and in fact has already done so in part. Additionally, Defendant is a
real estate company but Plaintiff does not allege that said subsidiaries are authorized to make real
estate transactions on Defendant’s behalf.

“Therefore, ‘because it cannot be said that [the

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subsidiary] can do all of the business [the parent] could do were its own officials present in [New
Jersey], an agency relationship did not exist.” Seltzer v. I.C. Optics, Ltd., 339 F. Supp. 2d 601,
610 (D.N.J. 2004) (internal quotations omitted). As for the second factor, common ownership of
the parent and subsidiary, Defendant concedes that the Resort Sales Companies are “wholly-owned
subsidiaries of Spinnaker.” (ECF No. 31 at 10). However, “forum contacts of a subsidiary
corporation will not be imputed to a parent corporation without a showing of something more than
mere ownership.” Leo v. Kerr-McGee, 1996 WL 254054, *5 (D.N.J. May 10, 1996) (quoting
Ffitndstein v. Omnicom Group, Inc., 285 N.J. Super. 245, 252 (App. Div. 1995)). Thus, common
ownership of Defendant and the Resort Sales Companies alone is not dispositive.
The third factor, financial dependency, is also not met here. A subsidiary is dependent if
it “needs financial support from its parent on a regular basis or for expenses other than the strategic
acquisitions of other corporations.” Qitalily Int’l Packaging, LTD. v. Chamilia, Inc., 2015 WL
4749156, *6 (D.N.J. Aug. 5, 2015).

However, Defendant points out that the Resort Sales

Companies each have separate and various bank accounts (ECF No. 31 at 12; ECF No. 25-2
Declaration of Steven F. Gooby (“Gooby Dccl.”), Exs. 7, 13), and credit card merchant accounts,
which shows that the Resort Sales Companies receive revenue from sources other than just
Defendant. (Gooby Decl., Exs. 8, 14). Thus, the Court is not persuaded that the Resort Sales
Companies are financially dependent on Defendant.
Finally, the Court must determine “whether the parent interferes with the subsidiary’s
personnel, disregards the corporate formalities, and/or controls the subsidiary’s marketing and
operational policies.” Edelson, 2012 WL 4891696 at *3• Plaintiff first asserts that Defendnat
exerts control through its shared corporate officers with its subsidiaries.5 However, as noted above,

Plaintiff also asserts both Defendnat and the Resort Sales Companies have the same Executive Director of Sales and
Marketing, Shawn Oliver, despite Spinnaker’s assertions to the contrary (ECf No. 29 at 20). Plaintiff relies on a

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the existence of common officers between a parent and a subsidiary does not establish control.
Leo, 1996 WL 254054 at *5• Plaintiff also argues that Spinnaker controls the Resort Sales
Companies because it extended its contract with Southwind Management Corporation to provide
payroll and human resources to cover the Resort Sales Companies thereby making personnel and
operational decisions on their behalf. (ECF No. 29 at 22). However, this connection is tenuous at
best and merely shows that the Resort Sales Companies and Spinnaker utilize the same third-party
company for certain services.

It does not prove that Defendant “controls the subsidiary’s

marketing and operational policies.” Edetson, 2012 WL 4891696 at *3
The Court is not satisfied with Plaintiffs argument that agency exists between the Resort
Sales Companies and Defendant and thus will not impute the former’s contacts with New Jersey
to the latter. Even if Plaintiff had satisfactorily established agency, Plaintiff fails to allege that the
Resort Sales Companies made the unsolicited telephone calls that gave rise to this action. The
Complaint clearly attributes the telephone calls to Defendant, not to its subsidiaries and Plaintiff
has not attempted to amend it. (Cornpl. 1

¶J 2,

13, 15, 31, 32). Furthermore, during jurisdictional

discovery, after Plaintiff subpoenaed the Resort Sales Companies (Gooby Decl., Exs. 5, 11), both
Resort Sales Companies denied making the calls in question to Plaintiff. (Gooby Decl., Ex. 12 at
Nos. 6-10; Gooby Decl. Ex. 6 at Nos. 6-10). Defendant contends that these responses demonstrate
that any telemarketing calls to Plaintiff must have come from independent telemarketing
companies, not its subsidiaries. The Court finds that Plaintiff has failed to show that the Resort
Sales Companies made the alleged phone calls. Since Plaintiffs argument for specific personal
jurisdiction is based on the premise that the Resort Sales Companies made telephone calls to

caption from Spinnaker’s website proclaiming Oliver to be said Director of Defendant. Defendant responds that the
caption was in error and the subpoenaed payroll records clearly show that Oliver works for Resort Sales by Spinnaker
not for Defendant. (ECF No. 31 at 14). Since this argument is really just an elaboration of Plaintiffs assertion that
the Resort Sales Companies and Defendant have common ownership, the Court need not address it further.

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Plaintiff and other class members, Plaintiffs failure to show that the Resort Sales Companies made
such calls defeats its jurisdictional argument. Accordingly, even if the Resort Sales Companies
are agents of Defendant, the Court cannot have specific personal jurisdiction over Defendant
without the requisite minimum contacts with the forum.
IV. CONCLUSION

For the aforementioned reasons, Defendant’s Motion to Dismiss the Complaint is hereby
granted. An appropriate Order accompanies this Opinion.

DATED: August8, 2017
JOSE. T,4If’JAREV
Chie/)zIge, United States District Court

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