Federal Trade Commission et al v. Quincy Bioscience Holding Company, Inc. et al

Filing 272

OPINION & ORDER granting 210 Motion for Partial Summary Judgment; terminating 243 Motion for Oral Argument; denying 247 Motion for Partial Summary Judgment; terminating 251 Motion for Oral Argument: The Court lacks jurisdiction over the NYAG's claims against Mr. Underwood individually, and those claims are therefore dismissed. (Signed by Judge Louis L. Stanton on 7/5/2022) (ml)

Case 1:17-cv-00124-LLS Document 272 Filed 07/05/22 Page 1 of 5
P<)CUY

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
FEDERAL TRADE COMMISSION, ET AL.,

. LEC1 ·
· iO('

- against -

#:

17 Civ. 124

QUINCY BIOSCIENCE HOLDING CO.,
ET. AL.,

\CALLY FILED

L

Plaintiffs,

INC.,

(LLS)

OPINION & ORDER

Defendants.
Defendant Mark Underwood moves for partial summary judgment
seeking to dismiss plaintiff the New York Attorney General's
(NYAG's)

claims against him for lack of personal jurisdiction.

The NYAG opposes Mr. Underwood's motion, and cross-moves for
partial summary judgment on the issue of this Court's personal
jurisdiction over Mr. Underwood.
Mr. Underwood's motion is granted.
Upon review of the recent case law, the Court agrees that
the doctrine of pendent personal jurisdiction does not apply in
this case, where the Court's exercise of personal jurisdiction
over Underwood as to the NYAG's claims would be "anchored" by
its jurisdiction over a separate plaintiff's
See Canaday v. Anthem Companies,

Inc.,

(the FTC's)

9 F.4th 392

claims.

(6th Cir.

2021), cert. denied, No. 21-1098, 2022 WL 1914113 (U.S. June 6,
2022)

(rejecting such a version of pendent party jurisdiction);

see also Of. Br., 0kt. No. 211, at 13-15 (collecting cases).
As other courts have reasoned, the expansive interpretation
of the doctrine of pendent party jurisdiction that the NYAG
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l
I

r

Case 1:17-cv-00124-LLS Document 272 Filed 07/05/22 Page 2 of 5

advocates for here would be inconsistent with the basic
principle underlying personal jurisdiction and due process,
namely that there must exist a nexus between the defendant and
the forum for each claim asserted, regardless of considerations
of judicial economy and convenience. See e.g., Chizniak v.
CertainTeed Corp., No. 17-CV-1075, 2020 WL 495129, at *5 n.4
(N.D.N.Y.

Jan.

30, 2020)

(rejecting application of pendent party

personal jurisdiction doctrine to allow additional plaintiffs to
piggyback on anchor claim brought by other set of plaintiffs
because doing so "would counteract the Due Process Clause
requirement that personal jurisdiction comports with traditional
notions of fair play and substantial justice"); Wiggins v. Bank
of Am., N.A.,

488 F. Supp.

3d 611,

624

(S.D. Ohio 2020)

("This

Court has previously declined to exercise its discretion to
apply pendent jurisdiction when multiple plaintiffs-not a single
plaintiff-assert separate claims against the same defendants .
. this application of pendent jurisdiction raised serious Due
Process Clause concerns" and "the Court cannot offend Due
Process Clause in order to create efficiency")

(internal

citations and quotation marks omitted) (emphasis in original)
Since the Court may not exercise jurisdiction over the
NYAG's claims against Mr. Underwood through the doctrine of
pendent personal jurisdiction, it must consider whether
jurisdiction is proper under N.Y. C.P.L.R. § 302.
The undisputed facts show that Mr. Underwood is not
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Case 1:17-cv-00124-LLS Document 272 Filed 07/05/22 Page 3 of 5

domiciled in New York, and does not personally have continuous
or permanent contacts with New York. The question is therefore
whether through his role as President, co-founder and board
member of defendant corporation Quincy Bioscience Holding
Company,

Inc., Mr. Underwood was a primary actor in Quincy's

transactions in New York that gave rise to the litigation. See
Arma v. Buyseasons,
2008)

Inc., 591 F. Scpp. 2d 637,

647

(S.D.N.Y.

("As a necessary part of this inquiry, a plaintiff must

demonstrate that the out-of-state corporate officers were
primary actor[s]

in the transaction in New York that gave rise

to the litigation, and not merely some corporate employee[s]
who played no part in it.") (internal quotations and citations
omitted) ( alterations in original) .
Plaintiff has not raised a genuine dispute of material fact
as to Underwood's role as a "primary actor" in directing the
allegedly infringing advertisements targeting New York
specifically.
Plaintiff concedes that Prevagen advertisements are
disseminated nationwide. See Pl. R. 56.1 Statement, 0kt. No.
249, at~ 13. It presents no evidence to show that Mr. Underwood
participated in developing advertising specifically for New
York, besides repeatedly asserting that Mr. Underwood "may have
been the sole individual responsible for reviewing and editing
packaging and advertising",
Dk t . No . 2 3 8 , at

~~

see Pl. Response to Of. R. 56.1,

3 , 4 , 5 , 7 , 12 , 13 , 14 , 1 6, a statement
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Case 1:17-cv-00124-LLS Document 272 Filed 07/05/22 Page 4 of 5

based on Mr.

Underwood's testimony that he handled all corporate

functions at the Company's inception more than 14 years ago. See
Of. Reply. Br. at 13. That supposition does not contradict
Underwood's assertions that many individuals are responsible for
sales and marketing at the company, see Of. R.
~~

56.1 Statement at

16-22, that he was part of a marketing team at the Company,

id. at ~17,

and that he was not involved in directing any New

York-market specific advertising or purchasing media spots for
such ads.

Id. at ~14; see also Of. Br. 5-7.

In fact,

Underwood

asserts that the Company itself does not, and has never had, New
York specific marketing teams or claims, see Of. R.

56.1

Statement at~ 15, and plaintiff does not contradict that
statement. See Pl. Response to Of. R. 56.1 at~ 15.
Therefore, although it is undisputed that Mr. Underwood is
the President,

co-founder, and board member of the company, that

Prevagen advertisements have been disseminated to consumers in
the State of New York through a variety of media,
Underwood has a role in the creation,
placement of the advertisements
Of. Response to Pl. R.
respectively),

56.1,

review,

(see Pl. R.

0kt. Nos.

and that Mr.

approval and

56.1 Statement and

249 and 265,

none of those facts create a material dispute as

to whether Mr. Underwood is a "primary actor" in Quincy's
marketing and advertising as it relctes to the state of New
York,
Prod.,

and defendant has shown that he is not. See, e.g., Ontel
Inc. v.

Project Strategies Corp.,
-4-

899 F. Supp. 1144, 1149

Case 1:17-cv-00124-LLS Document 272 Filed 07/05/22 Page 5 of 5

(S.D.N.Y. 1995)

("It is not enough that Ziskind, as President of

P.S.C., likely possessed authority to direct all the activities
that gave rise to this suit.

Accordingly, the action

against Ziskind is dismissed for lack of personal
jurisdiction.") (emphasis in original).
The Court lacks jurisdiction over the NYAG's claims against
Mr. Underwood individually, and those claims are therefore
dismissed.
So Ordered.
Dated:

New York, New York
July 5, 2022

L~>

L. 0~~

Louis L. Stanton
U.S.O.J.

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