Peeq Media, LLC v. Buccheri et al
OPINION AND ORDER re: 5 MOTION to Dismiss for Lack of Jurisdiction , filed by Joe Buccheri, Jeffrey Reardon. For the foregoing reasons, Defendants' motion to dismiss for lack of personal jurisdiction, or to dismiss or transfer for improper venue, is DENIED. The Clerk of Court is directed to close the motion at Docket Number 5. (Signed by Judge J. Paul Oetken on 10/13/2016) (cla)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PEEQ MEDIA, LLC,
JOE BUCCHERI and JEFFREY REARDON,
OPINION AND ORDER
J. PAUL OETKEN, District Judge:
On June 1, 2016, Peeq Media, LLC (“Peeq”) filed this action in the Supreme Court of
New York, County of New York, against Joe Buccheri and Jeffrey Reardon (collectively
“Defendants”), alleging that the former breached his fiduciary duty and duty of loyalty to Peeq
and the latter aided and abetted him in his breach, helping Buccheri misappropriate proprietary
information for use by Coloredge, Inc. (“Coloredge”), a competitor of Peeq. (Dkt. No. 1-1
On July 5, 2016, Defendants removed the action to this Court, pursuant to 28 U.S.C.
§ 1441, based on complete diversity of citizenship of the parties. (See Dkt. No. 1.) Several days
later, Defendants moved to dismiss the action for lack of personal jurisdiction under Federal
Rule of Civil Procedure 12(b)(2) and improper venue under Rule 12(b)(3). (Dkt. No. 5.) For the
reasons that follow, the motion is denied.
The following facts are taken from the Complaint and are presumed true for the purposes
of this motion.
Plaintiff Peeq is a Delaware limited liability company with its principal office in New
York. (Compl. at 1.) Because the Plaintiff LLC’s sole member is alleged to be an individual
who is a citizen of Virginia, and Defendants are both alleged to be citizens of New Jersey, there
is complete diversity under 28 U.S.C. § 1332. Peeq provides digital, print, and multi-media
production services to companies, including managing advertisements and other images. (Id. at
Defendant Jeffrey Reardon worked at Peeq from the company’s start, and, beginning in
January 2008, served as its Chief Information Officer. (Id. at 2.) In October 2013, Reardon
resigned from Peeq and, in early 2014, he took a job as Director of Technology Services at a
creative production agency called Coloredge, Peeq’s “direct competitor.” (Id.)
While Reardon worked at Peeq and after his departure, Verizon was one of Peeq’s “key
customer[s],” and Peeq “spent more than seven years and millions of dollars” to develop and
improve upon a suite of software applications and platforms (collectively the “Verizon Portal” or
“Portal”) for the account (Id. at 2-3.) The Portal was used to provide Verizon-branded printed
material (such as brochures and price cards) to retailers and to enable Verizon personnel to
manage advertising print jobs. (Id. at 3.) One part of the Portal, the “VZW Retail Engine,”
contained product descriptions and prices so that Verizon could easily manage the content and
distribution of Verizon “call-out cards.” (Id.) Pursuant to Peeq’s “Employment Agreement”
with its employees, the Portal, including the VZW Retail Engine, belonged to Peeq. (Id. at 4.)
Peeq alleges that after his departure from the company, Reardon contacted Silicon
Publishing, Inc. to set up a software application like VZW Retail Engine in order to help
Coloredge “solicit Verizon’s business.” (Id.) Peeq contends that Reardon set up phone calls
with Silicon Publishing to explain the details of the platform he envisioned. (Id.) Before those
calls took place, Peeq claims that Reardon contacted Defendant Joe Buccheri—at the time a sales
representative at Peeq who spent a “substantial portion” of his time on the Verizon account—to
“request that he take part in [the] calls.” (Id. at 1-2, 5.) While Buccheri was employed at Peeq
and continued to be involved with maintaining Verizon’s account there, he participated in
multiple calls with Silicon Publishing organized by Reardon. (Id. at 5.) (The idea, Peeq
contends, was that Buccheri would ultimately jump ship to Coloredge. (Id.)) During these calls,
Buccheri allegedly “described the specifications, interface design and functionality of Peeq’s
VZW Retail Engine,” all of which he learned through his work at Peeq, while representing that
he was “somehow affiliated with Verizon as an employee or consultant.” (Id.)
Silicon Publishing ultimately developed for Coloredge a call-out card application that
allowed Coloredge to service Verizon. (Id. at 6.) The application could not have come into
being, Peeq argues, without Buccheri’s knowledge of Peeq’s Platform, which he gleaned through
his work at the company in its New York headquarters, through remote log-in, and from his
frequent communication with employees based in the New York office. (Dkt. No. 12 at 4, 7.)
Peeq further alleges that, under the terms of his employment (as evidenced by the employee
handbook), Buccheri was aware that the Platform was “the sole and exclusive property of Peeq,”
and that he had a duty not to “divert” business from or “interfere” with Peeq. (Compl. at 3, 6.)
As a result, Peeq asserts against Buccheri a claim for breach of fiduciary duty and duty of loyalty
to Peeq. (Id. at 6-7.) Peeq alleges that that Reardon aided and abetted Buccheri by providing
“substantial assistance and encouragement.” (Id. at 7.)
“[T]he plaintiff bears the burden of establishing personal jurisdiction.” Karoon v. Credit
Suisse Grp. AG, No. 15 Civ. 4643, 2016 WL 815278, at *2 (S.D.N.Y. Feb. 29, 2016) (Oetken, J.)
(alteration in original) (quoting Cortlandt St. Recovery Corp. v. Deutsche Bank AG, London
Branch, No. 14 Civ. 1568, 2015 WL 5091170, at *2 (S.D.N.Y. Aug. 28, 2015)). To survive a
motion to dismiss for lack of personal jurisdiction, a plaintiff “need only make a prima facie
showing of personal jurisdiction.” Chloé v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163
(2d Cir. 2010) (quoting Porina v. Marward Shipping Co., 521 F.3d 122, 126 (2d Cir. 2008)). “A
prima facie case for personal jurisdiction involves three elements: ‘(1) proper service of process
upon the defendant; (2) a statutory basis for personal jurisdiction; and (3) accordance with
constitutional due process principles.’” Karoon, 2016 WL 815278, at *2 (quoting Reich v.
Lopez, 38 F. Supp. 3d 436, 454 (S.D.N.Y. 2014)). “Plaintiffs can make such a showing through
the submission of affidavits and supporting materials that contain “an averment of facts that, if
credited, would suffice to establish jurisdiction over the defendant.” Id. (quoting Cortlandt St.
Recovery Corp., 2015 WL 5091170, at *2). Courts “construe the pleadings and affidavits in the
light most favorable to plaintiffs, resolving all doubts in their favor.” Chloé, 616 F.3d at 163
(quoting Porina, 521 F.3d at 126).
A court may exercise specific or general personal jurisdiction over a defendant. Daimler
AG v. Bauman, 134 S. Ct. 746, 754 (2014). Peeq alleges that the Court has specific jurisdiction
over Defendants. Specific jurisdiction subjects a defendant to suit only on claims that “arise
from conduct related to the forum.” Cortlandt St. Recovery Corp., 2015 WL 5091170, at *2. In
diversity cases, like this one, “a federal court’s personal jurisdiction is determined by the law of
the state in which the district is located.” Karoon, 2016 WL 815278, at *2 (quoting Reich, 38 F.
Supp. 3d at 545). To determine whether it has personal jurisdiction over Defendants, the Court
therefore looks to the law of New York. The Court next determines “whether the exercise of
personal jurisdiction is consistent with due process.” Id. (citing Daimler, 134 S. Ct. at 751).
New York Law
The New York long-arm statute provides for jurisdiction over a non-domiciliary where
(1) the defendant “in person or through an agent . . . transacts any business within the state or
contracts anywhere to supply goods or services in the state,” so long as (2) the cause of action
“aris[es] from” that business transaction. N.Y. C.P.L.R. § 302(a)(1); Licci v. Lebanese Canadian
Bank, SAL, 673 F.3d 50, 60 (2d Cir. 2012).
Buccheri, Peeq alleges, worked in New York for Peeq at the time of the conduct at issue
here. But Buccheri argues that he did not transact business in New York sufficient to establish
personal jurisdiction because he largely worked from his New Jersey home and “travelled to
New York for Peeq business . . . approximately 3 to 4 times per month.” (Dkt. No. 6 at 2.)
Further, he contends that the conduct at issue has no relationship to his New York visits: Verizon
is headquartered in New Jersey and Silicon Publishing is based in California. (Id.) Buccheri’s
protests are unavailing.
With respect to Section 302(a)(1)’s first prong, Peeq alleges sufficient facts that Buccheri
transacted business in New York.
Courts in this District have held that out-of-state employees who typically (even
exclusively) work from home “transacted business in New York” within the meaning of N.Y.
C.P.L.R. § 302(a)(1). Where an employee “ma[kes] his living by working for a New York-based
company,” LeCroy Corp. v. Hallberg, No. 09 Civ. 8767, 2010 WL 3958761, at *3 (S.D.N.Y.
Oct. 4, 2010), working from home does not undermine that employee’s New York contacts
where “21st-Century technology” enables him to maintain consistent contacts with his employer
over email, phone, and remote log-on to the company’s servers, Opticare Acquisition Corp. v.
Castillo, 806 N.Y.S.2d 84, 90 (N.Y. App. Div. 2d Dep’t 2005). See Mercator Risk Services Inc.
v. Girden, No. 08 Civ. 10795, 2008 WL 5429886, at * 3 (S.D.N.Y. Dec. 30, 2008) (holding that
an out-of-state employee of a New York company met the statutory requirement because the
employee had “interacted with their employer’s New York headquarters, accessed data
maintained by their employer in New York, availed themselves of the benefit of being employed
by a New York company, and generated profits for a New York company”); Olympus Am., Inc.
v. Fujinon, Inc., 8 A.D.3d 76, 77 (N.Y. App. Div. 1st Dep’t 2004) (finding that an out-of-state
employee had “project[ed] himself into local commerce by generating sales between the New
York headquarters and the customers in his territories through the phone calls and e-mails he
regularly made or sent to New York”).
Consistent with this line of cases, Peeq alleges that Buccheri not only traveled to New
York “regularly, including for sales meetings, and whenever requested by Peeq executives,” but
also routinely “access[ed] Peeq’s email server and log[ged] in remotely into the web-based
software applications used to service Verizon, all of which were located in Peeq’s New York
offices.” (Dkt. No. 12 at 4.) Moreover, Buccheri had “continuous communications, by phone
and email, with other Peeq employees at the New York offices, Peeq’s web developers for the
applications used to service Verizon, and individuals at the production and printing facilities in
New York.” (Id.) Given the many signals that Buccheri’s work for Peeq transpired physically
and virtually in New York, Buccheri’s suggestion that he “only occasionally travel[ed] to New
York for reasons wholly unrelated to Plaintiff’s claims” is unpersuasive. (Dkt. No. 6 at 1.)
Section 302(a)(1)’s second prong is also satisfied because the cause of action at issue
here arises from Buccheri’s New York business contacts.
To satisfy the statutory requirement that the action “aris[e] from” business contacts in
New York, courts require “‘some articulable nexus between the business contacts and the cause
of action sued upon’ which amounts to ‘a substantial relationship to the transaction out of which
the instant cause of action arose.’” AVRA Surgical Robotics, 41 F. Supp. 3d at 359 (quoting
McGowan v. Smith, 419 N.E.2d 321, 323 (N.Y. 1981)). The requirement is satisfied “unless ‘the
event giving rise to the plaintiff’s injury had . . . a tangential relationship to any contacts the
defendant had with New York.’” Chloé, 616 F.3d at 167 (quoting Solé Resort, S.A. de C.V. v.
Allure Resorts Mgmt., LLC, 450 F.3d 100, 104 (2d Cir. 2006)). To that end, courts in this
District have held that the “nexus” requirement is satisfied where a defendant’s New York
contacts involved learning information that formed the basis of a claim regarding the “alleged
[mis]use of this information.” LeCroy Corp., 2010 WL 3958761, at *4. Here, Peeq has
adequately alleged that Buccheri’s New York contacts are related to the instant action because,
as described above, his contacts with the company, its servers and platforms, and its employees
were the means through which he learned about and interacted with the proprietary Verizon
Platform. (Dkt. No. 12 at 4.)
Additionally, an alleged breach of a duty to a New York-based employer has been held to
satisfy the long-arm statute’s “nexus” requirement. See, e.g., LeCroy Corp., 2010 WL 3958761,
at *4; Mercator Risk Servs. Inc., 2008 WL 5429886, at * 4; see also DIMON Inc. v. Folium, Inc.,
48 F. Supp. 2d 359, 364–65 (S.D.N.Y. 1999) (“A cause of action can be said to arise from
transaction of business in New York when . . . the New York business . . . [was] essential to the
birth of the . . . fiduciary relationship” whose breach is alleged (first alteration in original)
(quoting Nat’l Cathode Corp. v. Mexus Co., 855 F.Supp. 644, 647 (S.D.N.Y. 1994))). As in
those cases, Buccheri’s fiduciary duty and duty of loyalty—which Peeq alleges he breached in
the instant action—derive from an employment agreement with the New York company under
New York law. (Dkt. No. 12-3 at 20-21.)
As regards Reardon, Peeq has made a showing that he “transact[ed] . . . business within
the state” sufficient to satisfy N.Y. C.P.L.R. § 302(a)(1). Under the “business transaction”
requirement, Peeq meets the standard discussed above, describing that “Reardon was working
full-time in Coloredge’s New York office” at the time of the conduct central to this dispute. (Dkt
No. 12-1 ¶ 8.) To meet the “nexus” requirement, Peeq alleges that the same business that
connects Reardon to New York—his position as Director of Technology Services at
Coloredge—is the root of the instant action. That is, Reardon’s aiding and abetting of
Buccheri’s breach of duty “ar[ose] from” his job at Coloredge and wish to woo Verizon to
become a client there. See Solé Resort, S.A. de C.V., 450 F.3d at 104. Peeq thus makes out a
prima facie case of personal jurisdiction for Reardon. 1
Having found personal jurisdiction under New York law with respect to each Defendant,
the Court next turns to constitutional due process.
“To establish personal jurisdiction over a defendant, due process requires a plaintiff to
allege (1) that a defendant has certain minimum contacts with the relevant forum, and (2) that the
exercise of jurisdiction is reasonable in the circumstances.” Eades v. Kennedy, PC Law Offices,
799 F.3d 161, 168-69 (2d Cir. 2015) (internal quotation marks omitted) (quoting In re Terrorist
Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir. 2013)). Ultimately, the exercise of
jurisdiction must “comport with fair play and substantial justice.” Id. (quoting Licci v. Lebanese
Canadian Bank, SAL, 732 F.3d 161, 164 (2d Cir. 2013)).
Because the Court finds personal jurisdiction under N.Y. C.P.L.R. § 301(a)(1), it
need not address Peeq’s argument, in the alternative, that jurisdiction exists over Buccheri and
Reardon under N.Y. C.P.L.R § 302(a)(3).
In evaluating whether there are sufficient minimum contacts for purposes of the due
process inquiry, courts look broadly at the “totality of Defendants’ contacts with the forum
state.” Chloé, 616 F.3d at 164. Sufficient contacts exist “where the defendant purposefully
availed itself of the privilege of doing business in the forum and could foresee being haled into
court there.” Eades, 799 F.3d at 169 (quoting Licci , 732 F.3d at 170). These contacts need not
be extensive; “single or occasional acts of [a] corporate agent . . . may sometimes be enough.”
Id. (quoting Daimler, 134 S.Ct.at 754).
Here, the pattern of contact with New York that supports statutory jurisdiction over
Buccheri and Reardon also serves to satisfy the due process minimum contacts requirement.
Defendants’ full-time employment with New York-based Peeq and New York-based Coloredge
(even assuming substantial time worked from home) demonstrates that they “purposefully
availed” themselves of the “privilege of doing business in the forum.” Such employment
relationships evince an expectation that an out-of-state defendant may be haled into court in New
York. See Mercator Risk Servs., Inc., 2008 WL 5429886, at *4 (“Defendants purposely engaged
in a major contractual relationship—an employment relationship—with a New York corporation.
They purposely . . . earned profits for that corporation, and communicated with that corporation;
some of them even traveled to that corporation’s headquarters in New York. As a result,
Defendants should have reasonably been able to anticipate being haled into court in New
York.”). 2 As a result, Defendants’ contacts meet the “minimum contacts” requirement.
Buccheri additionally argues that, these contacts notwithstanding, he should not
be subject to personal jurisdiction in New York because “[t]he plaintiff cannot be the only link
between the defendant and the forum.” Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014). But this
language is meant to except individuals who have had only “random, fortuitous, or attenuated”
contacts with the forum. Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475
“[W]here the plaintiff has made a threshold showing of minimum contacts at the first
stage,” a defendant may still show that the court lacks personal jurisdiction by “present[ing] ‘a
compelling case that the presence of some other considerations would render jurisdiction
unreasonable.’” Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 568 (2d Cir. 1996)
(quoting Burger King Corp., 471 U.S. at 477). But “generalized complaints of inconvenience
. . . do not add up to ‘a compelling case.’” Chloé, 616 F.3d at 173 (internal quotation mark
omitted) (quoting Metro. Life, 84 F.3d at 568). As a result, “dismissals resulting from the
reasonableness test should be few and far between.” Metro. Life, 84 F.3d at 575.
To evaluate reasonableness, courts consider, among other things: the burden of litigating
in the forum for the defendant; the plaintiff’s interest in obtaining relief; the interests of the
forum state; and the interstate judicial system’s interest in efficient resolution of cases. Chloé,
616 F.3d at 164 (citing Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113-14 (1987)).
Peeq argues that both it and the state of New York have a strong interest in resolving the
dispute in this jurisdiction because Peeq is based in New York and Defendants allegedly diverted
business to a competitor, also based in New York. (Dkt. No. 12 at 12.)
Defendants, in contrast, do not make arguments about the reasonableness of the forum
separate from the minimum contacts question. Their objection to the reasonableness of this
forum thus amounts, at best, to a “generalized complaint of inconvenience,” rather than a
(1985)). Contrary to Buccheri’s contention that his employment at Peeq (the plaintiff here)
precludes jurisdiction, the Supreme Court has made clear that a defendant’s “status as
employee does not somehow insulate [him] from jurisdiction” when, as in this case, the
contacts as a whole support a finding of jurisdiction. Calder v. Jones, 465 U.S. 783, 790 (1984).
specific and “compelling” showing. Chloé, 616 F.3d at 173 (quoting Metro. Life, 84 F.3d at
568). Defendants have not shown enough to displace Peeq’s arguments regarding the
reasonableness of the instant forum.
Defendants also ask that the Court dismiss the action for improper venue, or, in the
alternative, transfer the case to the District of New Jersey. (Dkt. No. 6 at 8-9.)
Venue is not improper in this District. This case was removed to this Court from the
Supreme Court of New York, County of New York. (Dkt. No. 1.) The removal statute provides
for venue in “the district court . . . for the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441. Because this case was properly removed, Defendants
cannot now challenge venue in this Court as improper. See Guccione v. Harrah’s Mktg. Servs.
Corp., No. 06 Civ. 4361, 2009 WL 2337995, at *2 n.6 (S.D.N.Y. July 29, 2009) (citing PT
United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 72 (2d Cir. 1998)).
Regarding the alternative request for transfer, district courts consider a number of factors
in determining whether transfer is appropriate under 28 U.S.C. § 1404, including: “(1) the
plaintiffs choice of forum, (2) the convenience of witnesses, (3) the location of relevant
documents and relative ease of access to sources of proof, (4) the convenience of parties, (5) the
locus of operative facts, (6) the availability of process to compel the attendance of unwilling
witnesses, [and] (7) the relative means of the parties.” D.H. Blair & Co. v. Gottdiener, 462 F.3d
95, 106–07 (2d Cir. 2006) (alteration in original). Plaintiff’s forum choice is given “substantial”
weight. In re Warrick, 70 F.3d 736, 741 (2d Cir. 1995) (per curiam) (quoting A. Olinick & Sons
v. Dempster Bros., Inc., 365 F.2d 439, 444 (2d Cir. 1966)). As such, “the burden is on the
moving party . . . to make a ‘clear and convincing showing’ that transfer is proper.” Hershman
v. UnumProvident Corp., 658 F. Supp. 2d 598, 600 (S.D.N.Y. 2009) (quoting Habrout v. City of
New York, 143 F. Supp. 2d 399, 401 (S.D.N.Y. 2001)).
Defendants here rest largely on their arguments regarding personal jurisdiction to
challenge Peeq’s venue choice. They argue that Defendants and Verizon are residents of the
state of New Jersey, and Silicon Publishing is based in California. (Dkt. No. 6 at 8-9.) However,
given the considerable deference given to a plaintiff’s choice of venue and the fact that a
substantial part of the operative facts giving rise to the claim occurred in New York, which is
where relevant witnesses and documents are likely to reside, Defendants have not made a clear
and convincing showing that transfer to New Jersey is justified in this case.
For the foregoing reasons, Defendants’ motion to dismiss for lack of personal
jurisdiction, or to dismiss or transfer for improper venue, is DENIED.
The Clerk of Court is directed to close the motion at Docket Number 5.
Dated: October 13, 2016
New York, New York
J. PAUL OETKEN
United States District Judge
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