Henkin v. Gibraltar Private Bank & Trust Company
Filing
39
MEMORANDUM AND ORDER granting 27 Motion to Dismiss for Lack of Jurisdiction. For the reasons stated herein, Defendant's motion to dismiss for lack of personal jurisdiction is granted. Although the Court also finds that venue is improper, it declines to dismiss the case but rather exercises its discretion in the interest of justice and transfers the case to the appropriate forum. Accordingly, the case is transferred to the United States District Court for the Southern District of Florida. (Ordered by Judge Leonard D. Wexler on 1/22/2018.) (Fagan, Linda)
FI LED
IN CLERK'S OFFICE
U.S. DISTRICT COURT E.D.N.Y.
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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*
JAN 22 2018
*
LONG ISLAND OFFICE
EDWARDR. HENKIN,
MEMORANDUM AND ORDER
Plaintiff,
CV 16-5452
-against(Wexler, J.)
GIBRALTAR PRIVATE BANK & TRUST
COMPANY,
Defendant.
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APPEARANCES:
ARONOW LAW P.C.
By: Darren Aronow, Esq.
20 Crossways Park Drive, North Suite 210
Woodbury, New York 11797
and
BA){TER & BA){TER, LLP
By: Justin Baxter, Esq.
8835 S.W. Canyon Lane, Suite 130
Portland, Oregon 97225
Attorneys for Plaintiff
BUCKLEY SANDLER LLP
By: Ross E. Morrison, Esq. and Dana W. Kumar, Esq.
1133 Avenue of the Americas, Suite 3100
New York, New York 10036
Attorneys for Defendant
WE){LER, District Judge:
Plaintiff Edward R. Henkin ("Henkin" or "Plaintiff') commenced this action alleging two
violations of the Fair Credit Reporting Act (''FCRA"), 15 U.S.C. § 1681 et seq., by defendant
Gibraltar Private Bank & Trust Company ("Gibraltar" or "Defendant"). Currently before the
Court is defendant's motion to dismiss the complaint for lack of personal jurisdiction pursuant to
Rule 12(b)(2), or alternatively, for improper venue pursuant to Rule 12(b)(3) of the Federal
Rules of Civil Procedure. Motion, Docket Entry ("DE") [27]. Plaintiff opposes the motion, but
requests in the alternative that the matter be transferred.
I. BACKGROUND
The facts taken from the complaint are assumed to be true for the purpose of this motion.
Plaintiff is a natural person who resides in Suffolk County, New York, and is a "consumer"
within the meaning of the FCRA. Gibraltar is a "furnisher of credit information" within the
meaning of the FCRA with its headquarters in Coral Gables, Florida. It is duly authorized and
qualified to do business in New York and maintains a branch location at 280 Park Avenue, 29th
Floor East, New York, New York.
On December 6, 2007, Henkin and non-party Susan Henkin obtained a second lien loan
("the Loan") from Gibraltar. Attached to the complaint is a Home Equity Line of Credit Note,
dated December 6, 2007 and showing a line of credit of $358,000, which was recorded on
February 19, 2008 in Miami-Dade County, Florida. The copy of the Note attached to the
complaint appears to be incomplete, consisting of a single page. There is no indication where the
agreement was signed or negotiated, nor are there any factual allegations in the complaint
regarding these issues. In addition, the Property Address on the Note has been redacted and the
complaint does not indicate where the property securing the loan was located,
The Loan was paid as shown in a Satisfaction of Mortgage dated May 29, 2013 executed
by Gibraltar and recorded on June 4, 2013 in Miami-Dade County, Florida. Compl. Ex. A
("Satisfaction"). Despite the Satisfaction, Defendant continued to report the mortgage loan as
delinquent on Henkin' s credit report. On October 1, 2014, Plaintiff sent a letter to Defendant
and the three major credit bureaus "disputing the manner in which the loan was being reported."
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The Complaint annexes an Experian report dated March 18, 2015 that shows the loan as "written
off' or "paid in full for less than full balance" and indicating that the account would continue on
the record until September 2017. Plaintiff alleges that despite being put on notice of the
Satisfaction, Gibraltar continued to report the loan as delinquent and verified the debt to the
credit bureaus.
As a result of Defendant's actions including inaccurate reporting of delinquencies,
Plaintiff was denied credit. He· alleges that he was unable to obtain a conventional mortgage and
as a result "was forced to sell his family home." He does not indicate where the family home
was located. Plaintiff claims actual damages of$269,753.00 plus continuing interest payments
as well as damages for inter alia, costs for credit repair and monitoring, liquidation of assets,
detriment to his credit rating, and emotional distress from embarrassment and humiliation.
II. DISMISSAL FOR LACK OF PERSONAL JURISDICTION
A. Legal Standards
When opposing a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2),
plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Metro.
Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). Before discovery has
been conducted, "a plaintiff challenged by a jurisdiction testing motion may defeat the motion by
pleading in good faith, legally sufficient allegations of jurisdiction. At that preliminary stage, the
plaintiffs prima facie showing may be established solely by allegations." Dorchester Fin. Sec.,
Inc. v. Banco BRJ, S.A., 722 F.3d 81, 84-85 (2d Cir. 2013) (quoting Ball v. Metallurgie
Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)); see also Thomas v. Ashcroft, 470
F.3d 491, 495 (2d Cir. 2006) ("In order to survive a motion to dismiss for lack of personal
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jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists."). Plaintiff may
also make a prima facie showing through his "own affidavits and supporting materials
containing an avennent of the facts" that would support the court's exercise of jurisdiction.
Whitaker v. Am. Telecasting Inc., 261F.3d196, 208 (2d Cir. 2001) (internal quotation and
citation omitted). Here, only Defendant has submitted an affidavit, but at this juncture, the Court
may assess only Plaintiffs submissions "notwithstanding any controverting presentation by
[defendant]." Dorchester, 722 F.3d at 86 (quoting Marine Midland Bank v. Miller, 664 F.2d
899, 904 (2d Cir. 1981)).
In federal question cases where the federal statute at issue does not contain its own
jurisdictional provision, personal jurisdiction is determined in accordance with the laws of the
forum state. Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 35 (2d Cir. 2010); see also
Shostackv. Diller, No. 15CIV2255, 2016 WL 958687, at *2 (S.D.N.Y. Mar. 8, 2016)
(detennining personal jurisdiction under New York law in federal question case alleging claims
under, inter alia, the FCRA). Courts may exercise either general or specific personal
jurisdiction. "General jurisdiction allows a court to adjudicate 'any and all' claims against a
defendant, regardless of whether the claims are connected to the forum state." Bonkowski v. HP
Hood LLC, 2016 WL 4536868, at *2 (E.D.N.Y. Aug. 30, 2016) (citing Goodyear Dunlop Tires
Operations, S.A. v. Brown, 564 U.S. 915, 131 S. Ct. 2846, 180 L.Ed.2d 796 (2011); Brown v.
Lockheed Martin Corp., 814 F.3d 619, 624 (2d Cir. 2016)). "Specific jurisdiction exists when 'a
State exercises personal jurisdiction over a defendant in a suit arising out of or related to the
defendant's contacts with the forum.''' Chloe v. Queen Bee ofBeverly Hills, LLC, 616 F.3d 158,
164 (2d Cir. 2010) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,
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414 & n. 8, 104 S. Ct. 1868, 80 L.Ed.2d 404 (1984)). The exercise of personal jurisdiction,
whether general or specific, must comport with requirements of Due Process, "which requires
that any jurisdictional exercise be consistent with 'traditional notions of fair play and substantial
justice."' Brown, 814 F.3d at 625 (quoting Int'! Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct.
154, 90 L.Ed. 95 (1945)). Plaintiff claims that this Court has personal jurisdiction over
Defendant pursuant to both New York's general jurisdiction provision, Civil Practice Law and
Rules ("CPLR") §301 and its long-arm statute, CPLR §302(a).
B. General Jurisdiction
General jurisdiction over a foreign corporation may be found under CPLR §301 if that
corporation "has engaged in such acontinuous and systematic course of 'doing business' here
that a finding of its 'presence' in this jurisdiction is warranted." Landoil Resources Corp. v.
Alexander & Alexander Servs., 77 N.Y.2d 28, 33, 563 N.Y.S.2d 739, 565 N.E.2d 488 (1990).
New York's jurisprudence regarding the "doing business" standard has been put into serious
question by the Supreme Court's ruling in Daimler AG v. Bauman, -- U.S.--, 134 S. Ct. 746, 187
L. Ed. 2d 624 (2014). After Daimler, the inquiry is "not whether a foreign corporation's inforum 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 forum State."' Daimler AG, 134 S. Ct. at 761 (quoting Goodyear, 564
U.S. at 920). The Second Circuit has determined that under Daimler, "except in a truly
'exceptional' case, a corporate defendant may be treated as 'essentially at home' only where it is
incorporated or maintains its principal place of business." Brown, 814 F.3d at 627 (2d Cir.
2016); see also Gucci Am., Inc. v. Weixing Li, 768 F.3d 122, 136 (2d Cir. 2014)(noting that
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prior to Daimler, existence of NY branch would have been sufficient "because through the
activity of its New York branch, it engaged in a continuous and systematic course of doing
business in New York").
Here, Gibraltar's principal place of business is Florida, and thus it is "essentially at
home" only in that jurisdiction. As such, there can only be general jurisdiction over Defendant if
this is an "exceptional case" in which Gibraltar's operations in New York are "so substantial and
of such a nature as to render the corporation at home" in the state. Daimler AG, 134 S. Ct. at
761, n.19. In assessing the extent of a party's contacts in New York, the court examines those
contacts "not in isolation but in the context ofthe company's overall activity." Brown, 814 F.3d
at 629 (emphasis in original). Plaintiffs lone allegation regarding Gibraltar's contacts with New
York is the claim that it has a single branch office in New York that is authorized to do business
in the state. 1 As this evidence is clearly insufficient to carry Plaintiffs burden of showing that
Gibraltar's contacts constitute an "exceptional case," there is no general jurisdiction over the
Defendant.
Plaintiff argues that as a national association, Gibraltar's "place of incorporation is the
United States," including New York, and suggests general jurisdiction may be found on this
1
To the extent that allegation can be read as a claim that Gibraltar is registered in New York, the
Court notes that Plaintiff does not argue on this motion that such registration constitutes consent to suit.
While the question of the effect ofNew York's business registration requirements on jurisdiction has not
been explicitly addressed by the Second Circuit. that Court has addressed Connecticut's business
registration process. It concluded that given Goodyear and Daimler and the "essentially at home" test,
"federal due process rights likely constrain an interpretation that transforms a run-of-the-mill registration
and appointment statute into a corporate 'consent'-perhaps unwitting-to the exercise of general
jurisdiction by state courts." Brown, 814 F.3d at 637. On the current record, the Court declines to
address whether registering to do business in New York constitutes consent to suit in the state. See,
Bonkowski, 2016 WL 4536868, at *3 (discussing issue and declining to rule "[f]inding neither controlling
case law nor a scintilla of discussion on this point from either partyt').
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.
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basis. This argument, made without citation to authority, flies in the face of Daimler's
requirement that a corporation be "essentially at home" in a particular state for that state to
exercise general jurisdiction over it. See generally Daimler, 134 S. Ct. at 762, n. 20 (noting that
"[a] corporation that operates in many places can scarcely be deemed at home in all of them").
C. Specific Jurisdiction
Pursuant to §302(a)(3)(ii), the court may exercise personal jurisdiction over an individual
who "commits a tortious act without the state causing injury to person or property within the
state ... ifhe ... expects or should reasonably expect the act to have consequences in the state and
derives substantial revenue from interstate or international commerce." C.P.L.R. §302(a)(3)(ii).
Any finding of jurisdiction under this section must also comport with due process.
Plaintiff argues that Defendant committed acts in violation of federal law pertaining to its
response, or lack of response, to his complaints regarding the reporting of the disposition of the
Loan to the credit reporting agencies. Plaintiff claims that as a consequence of Defendant's
conduct, he was unable to refinance a separate mortgage and was forced to sell his family home,
and that harm was a consequence reasonably foreseeable to Defendant. He fails, however, to
allege that any action was taken by Gibraltar by or through its New York office.
"The inquiry whether a forum State may assert specific jurisdiction over a nonresident
defendant focuses on the relationship among the defendant, the forum, and the litigation. For a
State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct
must create a substantial connection with the forum State." Walden v. Fiore, -- U.S.--, 134 S.Ct.
1115, 1121, 188 L.Ed.2d 12 (2014) (internal quotation and citations omitted). First, the
relationship between the defendant and the forum state "must arise out of contacts that the
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defendant himself creates with the forum State." Id. at 122 (internal quotation and citation
omitted). The "'minimum contacts' analysis looks to the defendant's contacts with the forum
State itself, not the defendant's contacts with persons who reside there," id., and the "same
principles apply when intentional torts are involved." Id at 1123.
Significant to the current case, "plaintiff cannot be the only link between the defendant
and the forum. Rather, it is the defendant's conduct that must form the necessary connection with
the forum State that is the basis for its jurisdiction over him." Walden, 134 S. Ct. at 1122. Even
charging Gibraltar with the information of Plaintiff's New York residency, "a defendant's mere
knowledge that a plaintiff resides in a specific jurisdiction would be insufficient to subject a
defendant to specific jurisdiction in that jurisdiction if the defendant does nothing in connection
with the tort in thatjurisdiction." Waldman v. Palestine Liberation Org., 835 F.3d 317, 338 (2d
Cir. 2016).
Here, the only connection between the allegedly tortious acts committed by Defendant
and the state of New York is Plaintiff's presence within the state. The mere facts of Plaintiff's
presence in New York and the alleged harm he suffered by selling his family home, also
presumably located in New York, are insufficient to subject Gibraltar to jurisdiction in New
York. See generally Penguin Grp., 609 F.3d at 38 (noting that it is "settled New York law that
the suffering of economic damages in New York is insufficient, alone, to establish a 'direct'
injury in New York for N.Y. C.P.L.R. § 302(a)(3) purposes"); Whitaker, 261 F.3d at 209 ("The
occurrence of financial consequences in New York due to the fortuitous location of plaintiffs in
New York is not a sufficient basis for jurisdiction under§ 302(a)(3) where the underlying events
took place outside New York" (internal citations omitted)); NewMarkets Partners LLC v.
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Oppenheim, 638 F. Supp. 2d 394, 403 (S.D.N.Y. 2009) (where events giving rise to injury
occurred without the state, there is no jurisdiction under §302(a)(3) "even if Plaintiffs suffered
financial harm in New York"). Plaintiff has failed to establish aprimafacie showing of personal
jurisdiction, and accordingly, Defendant's motion to dismiss for lack of such jurisdiction is
granted.
III. DISMISSAL FOR IMPROPER VENUE
A. Legal Standards
Venue is proper in, inter alia, "a judicial district in which any defendant resides," or "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." 28 U.S.C.
§139l(b). In this case, venue is improper on either basis.
For purposes of venue, a corporation resides in any judicial district "within which its
contacts would be sufficient to subject it to personal jurisdiction ifthat district were a separate
State." 28 U.S.C. §1391(d). As discussed above, Gibraltar is not subject to personal jurisdiction
in New York in this case, nor does it reside in the state. Thus, venue in the Eastern District of
New York is improper under §1391(b)(l). Venue is also improper under subsection (b)(2) since
the events forming the basis for this suit occurred in Florida, not New York. Accordingly, the
Court concludes that the Eastern District of New York is an improper venue.
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..
B. Dismissal or Transfer
Plaintiff urges the Court to transfer the case to a proper venue rather than dismissing it. 2
Pursuant to 28 U.S.C. § 1406, "[t]he district court of a district in which is filed a case laying
venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer
such case to any district or division in which it could have been brought. 28 U.S.C. §1406(a).
The decision to transfer or dismiss is within the Court's discretion. See Minnette v. Time
Warner, 997 F.2d I 023, I 026 (2d Cir.1993). A case may be transferred even where the court
does not have personal jurisdiction over the defendant. Bonkowski, 2016 WL 4536868, at *4
(citing Go/dlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82 S. Ct. 913, 8 L.Ed.2d 39 (1962)).
The Court finds that a transfer would further the goals of expeditious and orderly
adjudication of the case on the merits. Gibraltar's headquarters is located in Florida, and the
majority of trial witnesses are presumably located in that state. In the interests of justice, the
Court finds that transfer to the Southern District of Florida is warranted, and exercises its
discretion to order a transfer of the case rather than its dismissal.
IV. CONCLUSION
For the reasons stated above, Defendant's motion to dismiss for lack of personal
jurisdiction is granted. Although the Court also finds that venue is improper, it declines to
dismiss the case but rather exercises its discretion in the interest of justice and transfers the case
2
Although Plaintiff requests a transfer pursuant to 28 U.S.C. §1631, it is more appropriately made under
§ 1406 and the Court will treat it as such. See generally SongByrd, Inc. v. Estate ofGrossman, 206 F.3d
172, 179 n.9 (2d Cir. 2000) (noting that ''the legislative history of section 1631 provides some reason to
believe that this section authorizes transfers only to cure lack of subject matter jurisdiction"); YurasovLichtenberg v. Betz, No. 1SCV1430, 2016 WL 4544031, at *7 (E.D.N.Y. Aug. 30, 2016) ("[a] court
seeking to transfer to cure lack of personal jurisdiction instead should use the 'transfer authority derived
from either section 1406(a) or section 1404(a).'" (quotingSongByrd, 206 F.3d at 179, n.9)).
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to the appropriate forum. Accordingly, the case is transferred to the United States District Court
for the Southern District of Florida.
SO ORDERED.
,/)
,
\
LEONARD D. WEXLER
UNITED STATES DISTRICY.-YGE
Dated: Central Islip, New York
January 22, 2018
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