Alexander v. Porter
MEMORANDUM & ORDER granting 15 Motion to Dismiss for Lack of Jurisdiction; finding as moot 15 Motion to Dismiss for Failure to State a Claim. Ordered by Judge Sandra L. Townes on 12/23/2014. (Barrett, C)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
MEMORANDUM & ORDER
1 3-C\ 63(SLT)(JO)
TOWNES, United States District Judge:
Plaintiff Gershon Alexander ("Alexander") filed this diversity action against John Porter
("Porter") on December 5, 2013, alleging unjust enrichment and fraud. (ECF No. 1.) On April
11, 2014, Porter filed a motion to dismiss for lack of personal jurisdiction pursuant to Federal
Rule of Civil Procedure 12(b)(2) and alternatively for failure to state a claim upon which relief
may be granted pursuant to Rule 12(b)(6). (ECF No. 15.) Because this Court finds that it lacks
personal jurisdiction over Porter, Porter's motion is granted.
On a motion to dismiss for lack of personal jurisdiction brought pursuant to Federal Rule
of Civil Procedure 12(b)(2), the plaintiff bears the burden of showing that the court has
jurisdiction over the defendant. In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d
Cir. 2003) (citation omitted). Because Porter brings this motion prior to discovery, Alexander
may defeat this motion "by making a prima facie showing of jurisdiction by way of the
complaint's allegations, affidavits, and other supporting evidence." Mortg Funding Corp. v.
Boyer Lake Pointe, LC, 379 F. Supp. 2d 282, 285 (E.D.N.Y. 2005) (citations omitted).
"Furthermore, in considering a Rule 12(b)(2) motion, the pleadings and affidavits are to be
construed in the light most favorable to plaintiff, the non-moving party, and all doubts are to be
resolved in plaintiff's favor." Allied Dynamics Corp. v. Kennametal, Inc., 965 F. Supp. 2d 276,
287 (E.D.N.Y. 2013) (citation omitted). However, "conclusory statements, without supporting
facts," will not suffice. Mirman v. Feiner, 900 F. Supp. 2d 305, 309 (E.D.N.Y. 2012) (citation
A. Factual Background
The complaint and affidavits submitted by the parties present very limited facts, which
the Court repeats here. The Court assumes these facts to be true only for the purpose of deciding
this motion and construes them in the light most favorable to Alexander, the non-moving party.
This case arises from a loan between Alexander, a New York resident, and Porter, a
Georgia resident. (Compi. ¶IJ 1, 3-5, ECF No. 1.) Porter works for CBRE, a global real estate
services company, at its Atlanta, Georgia offices. (Porter Aff. ¶ 7, ECF No. 15-2.) CBRE also
maintains offices in New York, (id. at ¶ 8), and Alexander alleges that Porter "frequently
conducts business in New York and New Jersey," (Rebhun Aff. ¶ 9, ECF No. 16).
On or about March 12, 2009, Alexander and one of his associates loaned Porter
$625,000. (Compi. ¶ 4, ECF No. 1.) Alexander personally loaned Porter $375,000 of that
amount. (Id. at ¶ 5.) To complete this loan, Alexander followed Porter's directions and wired
the money from his New York bank accounts into accounts in The Buckhead Community Bank
and Silverton Bank, both in Atlanta, Georgia. (Rebhun Aff. ¶J 5, 10-11, 13-14, ECF No. 16.)
The parties' agreement required the loan to be repaid on or before July 12, 2009. (Compi. ¶ 10,
ECF No. 1.) As of December 2013 Porter had not repaid the loan. (Id. at ¶ 11.)
B. Procedural History
Alexander filed this diversity action against Porter on December 5, 2013, alleging unjust
enrichment and fraud. (ECF No. 1.) On April 11, 2014, Porter filed the instant motion to
dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and
alternatively for failure to state a claim upon which relief may be granted pursuant to Rule
12(b)(6). (ECF No. 15.) In his reply, Porter argues for the first time that he is not the proper
party to this case. (See ECF No. 17.)
Alexander contends that New York's long-arm statute provides a basis for personal
jurisdiction over Porter and asks the Court to convert this motion to one for summary judgment.
(See ECF No. 16.) Alexander seeks leave to conduct jurisdictional discovery in the event the
Court finds it lacks personal jurisdiction over Porter. (See id.) Alexander likewise seeks leave to
amend should this Court find that Alexander's complaint fails to state a claim upon which relief
maybe granted. (See id.)
In a diversity case such as this, personal jurisdiction is determined by the law of the state
in which the district court sits. CutCo Indus., Inc. v. Naughton, 806 F.2d 361 5 365 (2d Cir. 1986)
(citing Arrowsmith v. United Press mt '1, 320 F.2d 219, 223 (2d Cir. 1963) (en banc)). Alexander
argues that New York's long-arm statute permits this Court to exercise personal jurisdiction over
Porter. Porter argues that New York's long-arm statute does not provide jurisdiction because,
among other things, Porter has not transacted business in New York, did not commit a tort while
physically present in New York, and lacks sufficient contacts with New York.
A. New York's long-arm statute
1. C.P.L.R. § 302(a)(1)
New York's long-arm statute provides that "a court may exercise personal jurisdiction
over any non-domiciliary.. . who in person or through an agent. . . transacts any business
within the state." C.P.L.R. § 302(a)(1). "To establish personal jurisdiction under section
302(a)(1), two requirements must be met: (1) The defendant must have transacted business
within the state; and (2) the claim asserted must arise from that business activity." Sole Resort,
S.A. de C. V. v. Allure Resorts Mgmt., LLC, 450
F.3d 100, 103 (2d Cir. 2006) (citation omitted).
The New York Court of Appeals has explained that "[t]he overriding criterion necessary
to establish a transaction of business is some act by which the defendant purposefully avails
itself of the privilege of conducting activities within [New York]." Ehrenfeld v. Bin Mahfouz, 9
N.Y.3d 501, 508, 881 N.E.2d 830 (2007) (internal citation and quotation marks omitted). Courts
look at the totality of the circumstances in making this determination. Bank Brussels Lambert v.
Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 787 (2d Cir. 1999) (citations omitted).
Alexander offers two arguments to show Porter transacted business in New York. First,
Alexander simply asserts that "the transaction took place in New York" and that "Porter admits
that [the] transaction [at issue] took place in New York." (Rebhun Aff. ¶J 5, 27, ECF No. 16.)
Porter denies this. (Porter Aff. ¶ 6, ECF No. 15-2.) Although this Court must construe the facts
in the light most favorable to Alexander, this type of unsupported conclusory statement does not
suffice to show Porter transacted business in New York. See Mirman, 900 F. Supp. 2d at 309
(noting that "the Court is not bound by conclusory statements, without supporting facts")
Alexander's second, argument that he satisfies prong one is that Alexander is a New York
resident and wired Porter the money from two different New York bank accounts. Alexander
cites no case law or additional allegations in support of this argument. That one party to an
agreement is a New York resident does not, without more, suffice to show a transaction of
business in New York. See Seldon v. Magedson, No. 11 Civ. 6218(PAC)(MHD), 2012 WL
4475274, at *13 (S.D.N.Y. July 10, 2012) (noting that under C.P.L.R. § 302(a)(1) "a single
agreement (or a single set of agreements) between a New York resident and someone outside of
the state is, without more, insufficient to confer jurisdiction if the contract's 'center of gravity' is
not in New York"). Nor does the fact that Alexander wired Porter money from Alexander's New
York bank accounts to Georgia bank accounts allegedly owned or controlled by Porter show
Porter invoked the privileges or protections of New York law. See Ehrenfeld, 9 N.Y.3d at 508;
Optimum Worldwide Ltd. v. Kiebener, No. 95 Civ. 1359(HB)(HBP), 1997 WL 433470, at *6
(S.D.N.Y. Aug. 1, 1997) ("Although [defendant] telephoned [plaintiff] and had him wire funds
for the sweater transaction from New York to Moscow, wire communications alone are
insufficient for inpersonam jurisdiction under CPLR § 302(a)(1).").
Under the totality of the circumstances, none of Alexander's causes of action appear to
have arisen from a transaction of business in New York. Section 302(a)(1) therefore does not
provide a basis for personal jurisdiction.
2. C.P.L.R. § 302(a)(2)
Alexander next argues that this Court has personal jurisdiction over Porter pursuant to
C.P.L.R. § 302(a)(2), which provides that a court may exercise personal jurisdiction over any
non-domiciliary who "commits a tortious act within the state, except as to a cause of action for
defamation of character arising from the act." Section 302(a)(2) provides for jurisdiction where
the defendant committed a tortious act in New York and the cause of action arises from that
tortious act. Telebyte, Inc. v. Kendaco, Inc., 105 F. Supp. 2d 131, 134 (E.D.N.Y. 2000).
However, this provision "reaches only tortious acts performed by a defendant who was
physically present in New York when he performed the wrongful act." Bensusan Rest. Corp. v.
King, 126 F.3d 25, 28 (2d Cir. 1997) (citing Feathers v. McLucas, 15 N.Y.2d 443, 458, 261
N.Y.S.2d 8, 209 N.E.2d 68 (1965)).
Alexander does not allege that Porter was physically present in New York when Porter
committed the alleged wrongful acts. Thus, C.P.L.R. § 302(a)(2) does not provide a basis for
jurisdiction. See Bensusan, 126 F.3d at 27-29.
3. C.P.L.R. § 302(a)(3)
Alexander next argues that this court has personal jurisdiction over Porter pursuant to
C.P.L.R. § 302(a)(3), which provides for jurisdiction over any non-domiciliary who in person or
through an agent:
commits a tortious act without the state causing injury to person or property
within the state. . . if he
(i) regularly does or solicits business, or engages in any other persistent course of
conduct, or derives substantial revenue from goods used or consumed or services
rendered, in the state, or
(ii) expects or should reasonably expect the act to have consequences in the state
and derives substantial revenue from interstate or international commerce.
For C.P.L.R. § 302(a)(3) to apply, "(1) a defendant must have committed a tortious act outside
New York, (2) the cause of action must arise from that tortious act, and (3) the act must have
caused injury to a person or property within New York." Doe v. Delaware State Police, 939 F.
Supp. 2d 313, 325-26 (S.D.N.Y. 2013) (citing LaMarca v. Pak—MorMfg. Co., 95 N.Y.2d 210,
713 N.Y.S.2d 304, 735 N.E.2d 883, 886 (2000)).
Clause (1) additionally requires the plaintiff to demonstrate one of four alternative forms
of ongoing New York activity by the defendant: regularly doing business in New York,
regularly soliciting business in New York, engaging in a "persistent course of conduct," or
deriving "substantial revenue from goods used or consumed or services rendered" in New York.
See C.P.L.R. § 302(a)(3)(i). A plaintiff asserting jurisdiction under clause (ii) must demonstrate
that the defendant "expected or should reasonably have expected the [tortious] act to have
consequences in [New York], and that defendant derived substantial revenue from interstate or
international commerce." Doe, 939 F. Supp. 2d at 326 (citations and internal quotation marks
omitted). Porter contends that Alexander cannot show Porter satisfies the additional contacts
requirement of clause (i) or the commerce requirement of clause (ii).
Alexander argues that Porter satisfies the additional contacts requirement of clause (i)
because Porter "does business in New York" and "derives revenue in New York." (Rebhun Aff.
¶ 32, ECF No. 16.) To support this statement, Alexander attaches a copy of Porter's
informational page on his employer's website. (See ECF No. 16-3.) Alexander specifically
directs the Court to an entry under the heading "corporate real estate," which states "BMW,
Retail Lease 1227,782 SF I New York City, NY." (Id.) Alexander also relies on this entry for
his argument that Porter meets the commerce requirement of clause (ii).
The New York Court of Appeals has stated that while "clause (i) does not require the
quantity of New York contacts that is necessary to obtain general jurisdiction under the 'doing
business' test of CPLR 301 . . . it does require something more than the 'one shot' single
business transaction described in CPLR 302(a)(1)." Ingraham v. Carroll, 90 N.Y.2d 592, 597,
687 N.E.2d 1293 (1997). Alexander's conclusory statement that Porter "does business in New
York" and "derives revenue in New York," supported by the "one shot" example of an apparent
retail lease in New York—which Alexander does not argue is attributable to Porter
individually—does not satisfy Alexander's initial burden to show that jurisdiction exists. See
Mirman, 900 F. Supp. 2d at 309 (noting that "the Court is not bound by conclusory statements,
without supporting facts"); Maggi v. Women's Coil. Hosp., No. 03-0768, 2007 WL 841765, at
*2_3 (N.D.N.Y. Mar. 19, 2007) (finding conclusory statement that defendant hospital "contracts
business within the state of New York" insufficient basis for jurisdiction).
Moreover, "[wjhere the defendant's asserted contacts with the state are based on sales
resulting in substantial revenue, 'hard evidence' of that revenue is required." Roberts-Gordon,
LLC v. Superior Radiant Prods., Ltd., 85 F. Supp. 2d 202, 215 (W.D.N.Y. 2000) (citation
omitted); see also Plastwood Corp. v. Robinson, No. 04 CV. 3214(BSJ), 2004 WL 1933625, at
*5 (S.D.N.Y. Aug. 30, 2004) (noting plaintiff "must produce 'hard evidence' of substantial
revenue derived from New York customers"). Thus, Alexander's identification of a "one shot"
New York business transaction, with no evidence of the revenue derived therefrom, does not
suffice to show jurisdiction exists under C.P.L.R. § 302(a)(3)(i).
Neither does this entry on Porter's employer's website satisfy the requirement in clause
(ii) that Porter "derives substantial revenue from interstate or international commerce." See
C.P.L.R. § 302(a)(3)(ii). Alexander incorrectly assumes that income derived from an employer's
interstate revenue satisfies this requirement. See Int'l Healthcare Exch., Inc. v. Global
Healthcare Exch., LLC, 470 F. Supp. 2d 345, 360 (S.D.N.Y. 2007) ("The revenue of a
corporation is imputed to individuals for jurisdictional purposes only if they are major
shareholders."); Beeney v. InSightec, Inc., No. 13 Civ. 8022(GBD), 2014 WL 3610941, at *4
(S.D.N.Y. July 7, 2014) ("Plaintiff's alternative basis for jurisdiction, under § 302(a)(3)(ii), is
also unavailing because he has not alleged that the Individual Defendants derived substantial
revenue from interstate or international commerce. . . . Plaintiff's assumption that income
derived from an employer's interstate revenue satisfies this requirement is erroneous."); Family
Internet, Inc. v. Cybernex, Inc., No. 98 Civ. 0637(RWS), 1999 WL 796177, at *7 (S.D.N.Y. Oct.
6 5 1999) (noting that C.P.L.R. § 302(a)(ii) requires defendant to derive substantial revenue from
interstate or international commerce and that allegations regarding employer's revenue would
not suffice). Because Alexander nowhere suggests Porter individually satisfies clause (ii)'s
commerce requirement or that CBRE's revenue can be imputed to Porter, Alexander has failed to
meet his burden to show jurisdiction exists.
Because no basis for jurisdiction exists under New York law, the Court need not consider
whether the exercise of jurisdiction would comport with due process. Ball v. Metallurgie
Hoboken-Overpelt, S.A., 902 F.2d 194, 198 (2d Cir. 1990). Neither does the Court reach Porter's
arguments that Alexander has failed to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6) or that Porter is not the proper party to this lawsuit,' or Alexander's requests to convert
this motion to one for summary judgment or to amend his complaint to clarify his claims. See
Phillips v. Reed Grp., Ltd., 955 F. Supp. 2d 201, 224 (S.D.N.Y. 2013) ("Where the grounds for a
motion to dismiss include lack of personal jurisdiction. . . and failure to state a claim upon
which relief can be granted, the Court must first consider the jurisdictional claims before
considering the merits of the case."); Arrowsmith, 320 F.2d at 221 (noting that "logic compel[s]
initial consideration of the issue of jurisdiction over the defendant—a court without such
jurisdiction lacks power to dismiss a complaint for failure to state a claim").
B. Jurisdictional Discovery
Alexander requests permission to conduct jurisdictional discovery. (Rebhun Aff. ¶ 9,
ECF No. 16.) Where, as here, a plaintiff has failed to make a prima facie showing of personal
jurisdiction, "it is 'well within' a court's discretion to deny jurisdictional discovery." Wego
This Court would in any case decline to consider this argument because Porter raises it
for the first time in his reply. See Klosin v. Conway, 501 F. Supp. 2d 429, 435-36 (W.D.N.Y.
2007) (noting that the court need not reach an argument raised for the first time in a reply brief
and citing cases).
Chem. & Mineral Corp. v. Magnablend Inc., 945 F. Supp. 2d 377, 386 (E.D.N.Y. 2013)
(citations omitted). Courts frequently permit jurisdictional discovery where the plaintiff has
made a "sufficient start" toward establishing jurisdiction, see, e.g., Hollins v. US. Tennis Ass 'n,
469 F. Supp. 2d 67, 70-71 (E.D.N.Y. 2006), but will not permit jurisdictional discovery on the
basis of a generalized request more akin to a "fishing expedition," see Wego Chem., 945 F. Supp.
2d at 386 (citations omitted).
The Second Circuit's decisions in Jazini v. Nissan Motor Co., 148 F.3d 181 (2d Cir.
1998), and Texas Int'l Magnetics, Inc. v. BASF Aktiengesellschaft,
31 F. App'x 738 (2d Cir.
2002), provide useful guidance. In Jazini, the Second Circuit found that the district court acted
within its discretion in denying jurisdictional discovery where the plaintiff relied on "conclusory
non-fact-specific jurisdictional allegations" the district court's opinion described as "sparse."
Jazini, 148 F.3d at 183, 185-86. The Second Circuit distinguished Jazini in Texas Int'l, finding
that the plaintiffs were entitled to jurisdictional discovery where the plaintiffs' jurisdictional
allegations were "neither sparse nor insufficiently specific" but "simply insufficiently
developed." Texas Int'l, 31 F. App'x at 739. Similarly, in In re Magnetic Audiotape Antitrust
Litigation, 334 F.3d at 208, the companion case to Texas Int'l, the Second Circuit "reasoned that
since the analysis involved a 'multi-factor test that is very fact-specific,' discovery was necessary
to develop plaintiffs' allegations of jurisdiction prior to a finding that plaintiffs failed to make a
prima facie showing." Hollins, 469 F. Supp. 2d at 71 (discussing Texas Int'l and In re Magnetic
Audiotape Antitrust Litig).
Here, Alexander has not made a "sufficient start" toward establishing jurisdiction over
Porter. Rather, his complaint and affidavit in support of jurisdiction contain the kind of
"conclusory non-fact-specific jurisdictional allegations" the Second Circuit found did not require
jurisdictional discovery in Jazini. For example, Alexander asserts that "[Porter] does business in
New York and... derives revenue in New York." (Rebhun Aff. ¶ 32.) The chief fact Alexander
alleges in support of these statements—the reference to a single entry on Porter's page on his
employer's website—provides no support because, as discussed above, the single-shot
transaction does not suffice to show Porter regularly does business in New York and is not
accompanied by "hard evidence" of revenue, which Alexander does not even argue is
attributable to Porter. Nor does this case involve the type of complex, fact-specific analysis at
issue in In re Magnetic Audiotape Antitrust Litigation. Instead, Alexander's conclusory nonfact-specific jurisdictional allegations make his request for jurisdictional discovery more akin to
a fishing expedition. The Court therefore declines to exercise its discretion to permit
For the reasons set forth above, Defendant's motion to dismiss (ECF No. 115 is granted.
The Clerk of Court is respectfully requested to close the case.
/s/ Sandra L. Townes
United States District Judge
Brooklyn, New York
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