Gundlach v. International Business Machines Inc. et al

Filing 53

OPINION AND ORDER: Defendant IBM US's Motion is granted, and Defendant IBM Japan's Motion is denied without prejudice to possible renewal after jurisdictional discovery. The Clerk of Court is respectfully directed to terminate the pending Motions, (Docs. 31,33). As stated above, Plaintiff shall have 14 days from the date of this Order to advise whether he wishes to assert diversity jurisdiction. If he does, he shall file a second amended complaint conforming to this Opinion and Order within 21 days thereafter. In addition, the parties have recently submitted a series of letters to the Court raising a discovery dispute. If Plaintiff advises that he wishes to pursue the case by asserting diversity jurisdiction, the case will be r eferred to Magistrate Judge Paul E. Davison to address that issue, and to supervise the limited jurisdictional discovery authorized by this Opinion and Order. SO ORDERED. (Signed by Judge Cathy Seibel on 5/1/2012) The Clerks Office Has Mailed Copies. (lnl)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------------------------x
FREDERICK W. GUNDLACH,
Plaintiff,
- against INTERNATIONAL BUSINESS MACHINES
CORPORATION, IBM JAPAN, LTD, COGNOS K.K., and
JOHN DOE OR JANE DOES,

OPINION AND ORDER
No. 11-CV-846 (CS)

Defendants.
----------------------------------------------------------------------x
Appearances:
Frederick W. Gundlach
Denver Borough, PA
Pro Se Plaintiff
Allan S. Bloom
Erin Elizabeth Laruffa
Paul Hastings LLP
New York, New York
Counsel for Defendants
Seibel, J.
Before the Court are the Motions to Dismiss of Defendants International Business
Machines Corporation (“IBM US”), (Doc. 33), and IBM Japan, Ltd. (“IBM Japan”), (Doc. 31),
(collectively, “IBM”). IBM US seeks dismissal of Plaintiff Frederick Gundlach’s discrimination
claims under Federal Rule of Civil Procedure 12(b)(6) and on forum non conveniens grounds.
IBM Japan seeks dismissal of Plaintiff’s breach of contract and Japanese Labor Law claims
under Federal Rules of Civil Procedure 12(b)(2), (4), (5), and (6), and on forum non conveniens
grounds. For the following reasons, IBM US’s Motion is GRANTED and IBM Japan’s Motion
is DENIED without prejudice to renewal.

I.

Background
All of Plaintiff’s factual allegations are accepted as true for the purposes of these Motions

and construed in the light most favorable to Plaintiff.
A.

Plaintiff’s Employment with Cognos K.K.

In February 2008, Plaintiff commenced employment as a financial consultant in Japan
with Cognos K.K. (“Cognos”), a Japanese company. (FAC ¶ 20 at 6; IBM US’s Mem. 1.)1
Plaintiff and Cognos signed an employment contract, dated February 25, 2008, which laid out
the conditions of his employment and included the following terms: (1) his job as a contracted
employee would begin on February 25, 2008 and end on July 11, 2008, with the possibility of
renewal if both parties consented; (2) he would perform accounting work as a financial
consultant; (3) he would be based in Tokyo, Japan; and (4) Cognos could terminate him at any
time with thirty days’ advance notice. (FAC Ex. C.)2 Plaintiff asserts that this contract

1

“FAC” refers to Plaintiff’s First Amended Complaint, filed July 29, 2011. (Doc. 28.) “IBM US’s Mem.” refers to
Defendant International Business Machines Corporation’s Memorandum of Law in Support of Its Motion to Dismiss
Plaintiff’s Claims Against It. (Doc. 34.)
2

When deciding a motion to dismiss, the court is entitled to consider, among other things:
(1) facts alleged in the complaint and documents attached to it or incorporated in it by reference,
(2) documents ‘integral’ to the complaint and relied upon in it, even if not attached or incorporated
by reference, (3) documents or information contained in defendant’s motion papers if plaintiff has
knowledge or possession of the material and relied on it in framing the complaint, (4) public
disclosure documents required by law to be, and that have been, filed with the Securities and
Exchange Commission, and (5) facts of which judicial notice may properly be taken under Rule
201 of the Federal Rules of Evidence.

Weiss v. Inc. Vill. of Sag Harbor, 762 F. Supp. 2d 560, 567 (E.D.N.Y. 2011) (internal quotation marks omitted).
Therefore, I will consider the exhibits attached to Plaintiff’s FAC for the purposes of deciding these Motions. I will
also consider the employment contract between Plaintiff and IBM Japan, attached as Exhibit A to the Affirmation of
Allan S. Bloom (“Bloom Aff.”), (Doc. 35), because Plaintiff mentions and relies on this document in the FAC, (see
FAC ¶¶ 38–40, 42–43 at 7–8). Similarly, I will consider the correspondence with the Equal Employment
Opportunity Commission (“EEOC”) attached to Plaintiff’s Memorandum of Law in Objection to Defendant
International Business Machines Corporation’s Motion to Dismiss (“P’s IBM US Opp’n Mem.”), (Doc. 37), because
Plaintiff refers to those letters in the FAC, (see FAC ¶¶ 86–87 at 13).

2

contained a number of “irregularities” and “flaws,” (id. ¶¶ 22, 26 at 6), and that it was not
ultimately honored by Cognos because, as an example, Cognos failed to pay him overtime, (id. ¶
25 at 6).
Shortly thereafter, Cognos’s Finance Manager for Japan left the company, and on March
7, 2008, Plaintiff took over that role. (Id. Ex. Q at 1; id. ¶ 27 at 6.) Plaintiff asserts that this
switch in positions
did not come with a written contract. To memorialize the change in employment
duties and status, specific terms were deleted from the February 25th contract.
The monthly salary remained the same; the exchange was for ‘regular’ or what is
also called permanent employment in Japan. (In Japanese: kikan no sadame no
nai, “without end date”, or sei sha’in status.)
(Id. ¶ 28 at 6.) Plaintiff does not state who memorialized the changes. The copy of the contract
attached as Exhibit C to the FAC has two provisions crossed out: the one providing for a fixed
term of employment and the one specifying Plaintiff’s supervisor. The provision allowing
termination on thirty days’ notice was not crossed out. The cross-outs are accompanied by a
round red stamp, the significance of which is unexplained. Plaintiff does not say who crossed
those provisions out or who supposedly agreed to permanent employment. On March 17, 2008,
Plaintiff emailed two superiors at Cognos, Steve Gazzard and Representative Director Rohan
Persaud, requesting that those two provisions be removed. (See id. Ex. D.) Gazzard emailed
Persaud stating that he was “comfortable that we remove the end date – it has no real meaning
given that there is a notice period in the contract.” (Id.) There is no allegation that Persaud
agreed or that a new contract was ever concluded. According to Plaintiff, however, the March
2008 events converted him from a term-limited employee to a sei sha’in, or permanent,
employee. (Id. ¶¶ 28–34 at 6–7.)

3

B.

Plaintiff’s Employment with IBM Japan

IBM Japan is a “100% wholly-ow[n]ed subsidiary of defendant [IBM US]” and does
business in Japan. (Id. ¶¶ 1, 10 at 3–4.) Plaintiff asserts that IBM acquired Cognos and that May
1, 2008 was set as the date for Cognos employees to transfer to IBM Japan, (id. ¶¶ 19, 33 at 6–7),
but that the “management of IBM Japan, and in particular a John Doe or John Does, insisted that
plaintiff not be transferred to IBM Japan,” (id. ¶ 35 at 7). Plaintiff attributes this sentiment to
discrimination based on national origin. (Id.)
Plaintiff was not transferred to IBM Japan as an employee but was given an
employment contract. (Id. ¶¶ 35, 43 at 7–8.) According to Plaintiff, his contract with IBM Japan
“did not honor the terms of the Cognos employment,” (id. ¶ 38 at 7), in that it was term-limited,
(id. ¶¶ 42–44 at 8). Plaintiff construed this action as a “threat” by IBM Japan, intended to “cause
a breach of plaintiff’s employment agreement with Cognos” and induce Plaintiff to “accept
unequal terms and conditions as were offered to the remaining Cognos employees, the
overwhelming number of whom . . . were Japanese.” (Id. ¶ 39 at 8.)
On April 22, 2008, Plaintiff signed a fixed-term employment contract with IBM Japan for
the period May 1, 2008 through January 31, 2009. (Id. ¶ 69 at 11; IBM Japan’s Mem. 2;3 Bloom
Aff. Ex. A.) Sometime before January 31, 2009, Plaintiff was notified that his employment with
IBM Japan would end on January 31, 2009, and he was subsequently terminated on that date.
(FAC ¶¶ 79–80 at 12.) Plaintiff claims that after his termination, his “work was divided and
given to employees, one or all of whom were at least 10 years younger than plaintiff,” (id. ¶ 82 at
12), and attributes this action to age discrimination, (id. ¶ 84 at 12). Plaintiff’s permission to

3

“IBM Japan’s Mem.” refers to Defendant IBM Japan Ltd’s Memorandum of Law in Support of Its Motion to
Dismiss Plaintiff’s Claims Against It. (Doc. 32.)

4

work in Japan expired on November 17, 2010, and he returned to the United States on December
20, 2010. (Id. ¶ 96 at 14.) He currently resides in Pennsylvania.
C.

Procedural History

On October 8, 2008, Plaintiff contacted the EEOC via its website and notified them of his
national origin and/or age discrimination claims. (Id. ¶ 76 at 12.) He informed the Human
Resources departments of IBM US and IBM Japan of the same. (Id. ¶ 75 at 12.) On November
12, 2008, Plaintiff filed a formal charge with the EEOC alleging that he faced discrimination
when IBM Japan accepted “all the other employees in the [Cognos] transfer as ‘sei sha’in,’” or
permanent employees, but made him “‘keiyaku sha’in,’”—a contract employee with limited
terms and conditions of employment. (Id. Ex. B at 1.) IBM US responded to the charge on
February 23, 2009, contending that it could not be held responsible for the actions of IBM Japan
because it did not “control” IBM Japan within the meaning of the relevant employment
discrimination statutes. (Id. ¶ 86 at 13; P’s IBM US Opp’n Mem. Attachment 1.) The EEOC
sought a substantive response from IBM US, and on September 13, 2010, IBM US responded
again, maintaining its initial defense and asserting that no discrimination had taken place. (FAC
¶¶ 88–89 at 13.) By letter dated November 2, 2010, the EEOC notified Plaintiff of its
determination that no violation of federal law had been established and provided Plaintiff with a
right to sue letter. (Id. Ex. A.) Plaintiff commenced this lawsuit by filing a complaint on
February 7, 2011, (Doc. 1); he amended his complaint on July 29, 2011, (Doc. 28).
II.

Discussion
A.

Motion to Dismiss Standard

“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
5

U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim
has facial plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id. “While a
complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555 (internal citations and quotation marks omitted). While
Federal Rule of Civil Procedure 8 “marks a notable and generous departure from the hypertechnical, code-pleading regime of a prior era, . . . it does not unlock the doors of discovery for a
plaintiff armed with nothing more than conclusions.” Iqbal, 556 U.S. at 678–79.
In considering whether a complaint states a claim upon which relief can be granted, the
court “begin[s] by identifying pleadings that, because they are no more than conclusions, are not
entitled to the assumption of truth,” and then determines whether the remaining well-pleaded
factual allegations, accepted as true, “plausibly give rise to an entitlement to relief.” Id. at 679.
Deciding whether a complaint states a plausible claim for relief is “a context-specific task that
requires the reviewing court to draw on its judicial experience and common sense.” Id.
“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged – but it has not ‘shown’ – ‘that the pleader is entitled to
relief.’” Id. (quoting Fed. R. Civ. P. 8(a)(2)).
“While pro se complaints must contain sufficient factual allegations to meet the
plausibility standard, [courts] read them with ‘special solicitude’ and interpret them ‘to raise the
strongest arguments that they suggest.’” Roman v. Donelli, 347 F. App’x 662, 663 (2d Cir.
2009) (summary order) (emphasis in original) (quoting Triestman v. Fed. Bureau of Prisons, 470
6

F.3d 471, 474–75 (2d Cir. 2006)).4 Where, however, the plaintiff is an attorney, as Plaintiff is
here, he or she is not entitled to the same liberality afforded other pro se plaintiffs. See Cohen v.
Cnty. of Nassau, No. 10-CV-5836, 2011 WL 2604345, at *1 n.1 (E.D.N.Y. June 29, 2011)
(“Given that plaintiff is an attorney, his pleadings are not entitled to the degree of liberality
ordinarily given to pro se plaintiffs.”); Fenner v. City of N.Y., No. 08-CV-2355, 2009 WL
5066810, at *3 (E.D.N.Y. Dec. 21, 2009) (“Although pro se litigants are generally entitled to a
broad reading of their submissions because of their lack of familiarity with the law, that is not the
case with attorneys who have chosen to proceed pro se. It is well settled in the Second Circuit
that since the reason for affording pro se litigants special deference is not present when the
litigant is an attorney, no special consideration is required.”) (internal citation omitted).
B.

Claims Against IBM US

Plaintiff alleges that IBM US discriminated against him on the basis of his national origin
and age. IBM US contests the merits of Plaintiff’s claims and also asserts that it cannot be held
responsible for the actions of IBM Japan because the federal laws at issue are not applicable to
employment actions taken by a foreign employer when the foreign employer is not “controlled”
by a U.S. company. See 42 U.S.C. § 2000e-1(c)(2). (See also IBM US’s Mem. 3.) I need not
determine whether IBM Japan is “controlled” by IBM US because Plaintiff has failed to state a
claim against IBM US for employment discrimination.
1.

Title VII—National Origin Discrimination

Plaintiff alleges that IBM Japan (and by association, IBM US) discriminated against him
on the basis of national origin when he was not offered permanent employment with IBM Japan

4

Copies of all unpublished opinions cited herein will be sent to the pro se Plaintiff along with this Memorandum
Opinion and Order.

7

after having negotiated a permanent position at Cognos, but rather was relegated to a termlimited contract, while other, primarily Japanese employees, received the same terms of
employment that they enjoyed at Cognos. (FAC ¶¶ 35, 40, 44–48 at 7–8.)
To state a claim for national origin discrimination under Title VII of the Civil Rights
Act of 1964, 42 U.S.C. § 2000e et seq., a plaintiff must “demonstrate membership in a protected
class, qualification for his [or her] position, an adverse employment action, and circumstances
that support an inference of discrimination.” Gorokhovsky v. City of N.Y., No. 10-CV-8848,
2011 WL 2019423, at *6 (S.D.N.Y. May 19, 2011). At the pleading stage, a plaintiff need not
establish a prima facie case of discrimination, but rather, need only plead sufficient facts to meet
the general pleading requirements under Twombly and Iqbal. See Anderson v. Davis Polk &
Wardwell LLP, No. 10-CV-9338, 2012 WL 734120, at *2 (S.D.N.Y. Mar. 6, 2012)
(“Reconciling Swierkiewicz, Twombly, and Iqbal, a complaint need not establish a prima facie
case of employment discrimination to survive a motion to dismiss; however, the claim must be
facially plausible and must give fair notice to the defendants of the basis for the claim.”)
(emphasis in original) (internal quotation marks omitted); Lugo-Young v. Courier Network, Inc.,
No. 10-CV-3197, 2012 WL 847381, at *3–4 (E.D.N.Y. Mar. 13, 2012) (same).
Plaintiff’s claim that he was treated differently from other former Cognos employees
when he was not offered permanent employment, but rather a term-limited contract, culminating
in his termination at the end of January 2009, fails. First, Plaintiff does not plausibly allege that
he suffered an adverse employment action. Plaintiff does not dispute that his initial employment
contract with Cognos was term-limited but claims that he became a permanent employee of
Cognos when he took on the role of Finance Manager for Japan on March 7, 2008. (FAC ¶¶ 26–
28.) This claim is not plausible. Plaintiff did not receive a new contract to confirm this switch to
8

permanent employment status, and the documentary evidence at best demonstrates that one of
Plaintiff’s superiors merely stated that he felt “comfortable” removing the end date from
Plaintiff’s employment contract only because “it ha[d] no real meaning” anyway, given that
Cognos could still terminate him at any time with thirty days’ notice. (Id. Ex. D.) This exchange
demonstrates, contrary to Plaintiff’s argument, that while at Cognos even after March 2008,
Cognos reserved the right to dismiss him and did not accord him permanent employee status.
Continuation of the non-permanent status at IBM is thus not an adverse action. Furthermore,
Plaintiff’s assertion that “[u]nder Japanese law, certain conforming writings are required not to
confer ‘regular employment,’” actually undermines his argument. (P’s IBM US Opp’n Mem. 12
(emphasis in original).) Nothing in the record indicates that his initial employment contract with
Cognos ceased to apply after March 7, 2008, notwithstanding the alleged removal of the
termination date. (See FAC Ex. D.) Therefore, Plaintiff’s employment was in fact governed by
a conformed writing, indicating, under Plaintiff’s logic, that he was not a “regular” employee.
Finally, Plaintiff’s assertion that the acquisition of Cognos took place in February 2008, so both
his promotion to Finance Manager and any changes to his employment contract or status as a
result thereof, occurred on IBM’s watch, (see P’s IBM US Opp’n Mem. 12), proves nothing, and
in any event is undercut by his assertion that as of April 2008, Cognos may still have been hiring
people without IBM Japan’s knowledge, (see FAC ¶ 49 at 8).
Second, Plaintiff has failed to plausibly plead that the circumstances under which he went
from Cognos to IBM Japan involved discriminatory conduct. The thrust of Plaintiff’s argument
is that all non-American employees transferred from Cognos to IBM Japan “were given regular
(‘sei sha’in’) employment status, which they had previously. But plaintiff was not given the
same.” (P’s IBM US Opp’n Mem. 13.) Plaintiff has not, however, pointed to a single fact that
9

supports the allegation that his treatment was based on his national origin. The fact that Plaintiff
may have been the only American employed by Cognos until April 2008, (FAC ¶ 45 at 8),
without more—e.g., a comment relating to Plaintiff’s nationality or outward hostility towards
Americans5—does not raise an inference of discrimination. If Plaintiff were similarly situated to
Cognos’s other employees—i.e., if they had contracts allowing their termination on thirty days’
notice—and they were all nevertheless given permanent employee status at IBM Japan, Plaintiff
might have a plausible argument that his not being accorded that status was based on his national
origin. But absent facts supporting an allegation that he was similarly situated to the nonAmerican employees, no such inference arises. See Hilton v. Bedford Paving, LLC, 769 F. Supp.
2d 92, 101 (W.D.N.Y. 2010) (complaint did not adequately plead claim for disparate treatment
discrimination because African-American plaintiff did not “plausibly allege that he was treated
differently than any similarly-situated white employee”); Horne v. Buffalo Police Benevolent
Ass’n, No. 07-CV-781, 2010 WL 2178813, at *8 (W.D.N.Y. May 28, 2010) (plaintiff failed to
allege violation of Title VII where complaint lacked facts suggesting action was taken on basis
of race or gender and did not provide examples of similarly situated officers being treated
differently); Billue v. Praxair, Inc., No. 05-CV-170, 2007 WL 1231841, at *4 (D. Conn. Apr. 26,
2007) (to raise inference of discrimination, plaintiff may show that “defendant treated him less
favorably than a similarly situated employee outside his protected group,” but in so doing,
plaintiff must ultimately “specifically show himself to be similarly situated in all material

5

Plaintiff points to a Ninth Circuit case and congressional testimony from 1991 to show that IBM Japan’s previous
hiring practices were discriminatory. (See FAC ¶¶ 58–60 at 9–10.) Even if these excerpts affirmatively showed that
IBM Japan discriminated in the past based on national origin, hiring incidents that occurred almost twenty years
before the conduct at issue here and became notorious in no way create an inference that Plaintiff in fact suffered
discrimination by IBM US.

10

respects to the individuals with whom he compares h[im]self”) (internal quotation marks
omitted).
Furthermore, the allegations in the FAC actually undermine Plaintiff’s differential
treatment argument. Plaintiff asserts that Laszio Domonkos, an American, was hired by Cognos
in April 2008 as a permanent employee, (see FAC ¶ 49 at 8; id. Ex. R), and was among those
transferred to IBM Japan as permanent employees on May 1, 2008, (id. ¶¶ 49, 51 at 8–9).
Therefore, IBM clearly did not give permanent status to everyone except the American
employees. Finally, Plaintiff’s argument that out of five non-Japanese employees who were
transferred from Cognos to IBM Japan, the only three remaining at IBM Japan for a
“considerable length of time are of Asian country nationality (Korea, Philippines, Indonesia),”
(id. ¶ 57 at 9)—the American (Domonkos) and an Australian left voluntarily, (see id. Ex. R)—
fails to raise an inference of discrimination. That three non-Japanese employees lasted longer
than two other non-Japanese employees says nothing about whether Plaintiff was discriminated
against as an American when they all left Cognos and joined IBM Japan.
In sum, the FAC fails to set forth facts rendering plausible the conclusions that Plaintiff’s
status was downgraded upon IBM Japan’s acquisition of Cognos or that any such action occurred
because he was American. See Ortega v. N.Y.C. Off-Track Betting Corp., No. 97-CV-7582,
1999 WL 342353, at *5 (S.D.N.Y. May 27, 1999) (complaint failed to raise inference of
discrimination because it did not specify how complained-of actions were “motivated by, or
g[a]ve rise to an inference of, discrimination” based on protected characteristic); cf. Starr v. Sony
BMG Music Entm’t, 592 F.3d 314, 321 (2d Cir. 2010) (complaint must have enough factual
content to allow court to draw reasonable inference that defendant is liable for alleged
misconduct); LaFlamme v. Societe Air France, 702 F. Supp. 2d 136, 154 (E.D.N.Y. 2010)
11

(“[B]ecause the allegations in the Complaint, however true, do not allow the court to infer any
more than the mere possibility of misconduct, dismissal here is required.”) (internal quotation
marks omitted). Accordingly, Plaintiff’s Title VII claim is dismissed.
2.

ADEA Claim

Plaintiff alleges that IBM discriminated against him on the basis of age in violation of the
Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. § 621 et seq. The ADEA
provides that an employer may not “fail or refuse to hire or to discharge any individual or
otherwise discriminate against any individual with respect to his compensation, terms,
conditions, or privileges of employment, because of such individual’s age.” 29 U.S.C. §
623(a)(1). A complaint alleging age discrimination “must permit a court to infer that it is
plausible that the plaintiff suffered an adverse employment action because of his age.”
Anderson, 2012 WL 734120, at *9.
Plaintiff has failed to plausibly plead that he was treated differently because of his age.
Assuming for the sake of argument that Plaintiff is over forty years old and therefore entitled to
the protections of the ADEA,6 see 29 U.S.C. § 631(a); Miller v. Nat’l Ass’n of Sec. Dealers, Inc.,
703 F. Supp. 2d 230, 243 (E.D.N.Y. 2010) (“class entitled to the statutory protection of the
ADEA is limited to persons 40 years of age or older”)—a fact which Plaintiff has not alleged—
his claim still fails. Plaintiff’s only allegation of age discrimination is his statement that after he

6

If Plaintiff was over forty years old when he was hired by IBM Japan—which, if he was over forty when he was
terminated, is likely, given that he only worked for IBM Japan for nine months—this fact would also undermine his
age discrimination claim. See Liburd v. Bronx Lebanon Hosp. Ctr., No. 07-CV-11316, 2008 WL 3861352, at *6
(S.D.N.Y. Aug. 19, 2008) (plaintiff’s age discrimination claim “belied by her having been hired when she was fortyseven years old, and thus already a member of the protected class”); Whyte v. Contemporary Guidance Servs., Inc.,
No. 03-CV-5544, 2004 WL 1497560, at *3 (S.D.N.Y. July 2, 2004) (allegation that defendant discriminates against
older employees contradicted by plaintiff’s allegation that he was hired when he was over forty, and thus already
member of protected class).

12

was terminated, his work was divided among other personnel, at least one of whom was
considerably younger. (FAC ¶¶ 82, 84 at 12.) This statement hardly shows that “IBM
terminated plaintiff for reasons having to do with [his] age,” (id. ¶ 84 at 12; see P’s IBM US
Opp’n Mem. 14), or that IBM considered his age in any way when it terminated him at the end
of his fixed-term contract.7 See Foster v. Humane Soc’y of Rochester & Monroe Cnty., Inc., 724
F. Supp. 2d 382, 390–91 (W.D.N.Y. 2010) (proposed amended complaint failed to state age
discrimination claim where plaintiff alleged that she was over forty when fired, defendant fired
two other upper level management employees over forty, and that after plaintiff was terminated,
she was replaced by a woman in her thirties); id. at 391 (plaintiff’s allegation that she was
replaced by woman in her early thirties “is not enough to give rise to an age discrimination claim
. . . . If it were, then any time an ADEA-covered employer terminated an employee over age
forty, the employer would be unable to replace that employee with someone younger, without
exposing itself to potential liability for age discrimination. That is not the law.”); Liburd, 2008
WL 3861352, at *6 (allegation that plaintiff was replaced by younger employee after
termination, “without more, is not enough to survive a motion to dismiss”); Wilson v. Family
Dollar Stores, No. 06-CV-639, 2007 WL 952066, at *9 (E.D.N.Y. Mar. 29, 2007) (plaintiff’s age
discrimination claim failed where she did not allege her age, and did “nothing more than simply
state that she was discriminated against based on her age and has failed to state any of the events
or incidents that she believes form the basis of her . . . claim”).

7

Indeed, even the EEOC noted that “[w]hile age discrimination was indicated on [Plaintiff’s] charge, [he] did not
provide any specific allegations of age discrimination.” (FAC Ex. A.)

13

3.

Leave to Amend

Leave to amend should be “freely give[n] when justice so requires.” Fed. R. Civ. P.
15(a)(2); see Zucker v. Five Towns Coll., No. 09-CV-4884, 2010 WL 3310698, at *3 (E.D.N.Y.
Aug. 18, 2010). It is within the discretion of the district court to grant or deny leave to amend,
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007), and “[l]eave to amend,
though liberally granted, may properly be denied for: undue delay, bad faith or dilatory motive
on the part of the movant, repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility
of amendment, etc.,” Ruotolo v. City of N.Y., 514 F.3d 184, 191 (2d Cir. 2008) (internal
quotation marks omitted). Furthermore, a district court has no obligation to grant leave to amend
sua sponte. See Gallop v. Cheney, 642 F.3d 364, 369 (2d Cir. 2011) (“[N]o court can be said to
have erred in failing to grant a request [to amend the complaint] that was not made . . . .”).
At a pre-motion conference on July 15, 2011, the Court and the parties discussed the
deficiencies in Plaintiff’s Complaint, including his failure to allege how other employees of
different national origin or age were treated differently. Plaintiff was granted leave to amend his
Complaint and instructed to plead facts in support of these allegations. Thus, because Plaintiff
has already had the opportunity to cure the deficiencies in his Complaint relating to his
discrimination claims, I decline to now sua sponte grant leave to amend. See Ariel (UK) Ltd. v.
Reuters Grp., PLC, 277 F. App’x 43, 45–46 (2d Cir. 2008) (summary order) (district court did
not exceed its discretion in not sua sponte granting leave to amend where Plaintiff had already
amended complaint once and amendment would have been futile); Payne v. Malemathew, No.
09-CV-1634, 2011 WL 3043920, at *5 (S.D.N.Y. July 22, 2011) (“That Plaintiff was provided

14

notice of his pleading deficiencies and the opportunity to cure them is sufficient ground to deny
leave to amend sua sponte.”).
C.

Claims Against IBM Japan
1.

Supplemental Subject-Matter Jurisdiction

Having dismissed all claims over which this Court has original jurisdiction, I ordinarily
would decline to exercise supplemental jurisdiction over the non-federal claims. See Kolari v.
N.Y.-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006) (district court balances “the
traditional values of judicial economy, convenience, fairness, and comity[] in deciding whether
to exercise [supplemental] jurisdiction,” but, “in the usual case in which all federal-law claims
are eliminated before trial, the balance of factors . . . will point toward declining to exercise
jurisdiction over the remaining state-law claims”) (third alteration in original) (internal quotation
marks and citation omitted). It appears to the Court, however, that although Plaintiff has asserted
only federal-question subject-matter jurisdiction under 28 U.S.C. § 1331, (FAC at 1), and may be
affirmatively disclaiming diversity jurisdiction, (see P’s IBM Japan Opp’n Mem. 14),8 diversity
of citizenship under 28 U.S.C. § 1332(a)(2) exists between Plaintiff and IBM Japan. (See FAC
at 2 (Plaintiff resides in Pennsylvania; IBM Japan resides in Japan).) Plaintiff shall have 14 days
from the date of this Order to advise whether he wishes to assert diversity jurisdiction. If he does
not, the remaining claims will be dismissed without prejudice. If he does, he shall file a second
amended complaint conforming to this Opinion and Order within 21 days thereafter. In the
meantime I will consider the pending Motions on the assumption that Plaintiff will wish to assert
diversity jurisdiction.

8

“P’s IBM Japan Opp’n Mem.” refers to Plaintiff’s Memorandum of Law in Objection to Defendant IBM Japan,
Limited’s Motion to Dismiss. (Doc. 40.)

15

2.

Personal Jurisdiction—New York’s Long-Arm Statute

Plaintiff advances a claim against IBM Japan for breach of contract under Japanese
contract law and for violation of Japanese Labor Standards Law.9 (Id. at 15, 18.) Before
considering the merits of these claims, I must consider whether jurisdiction exists over IBM
Japan. See Mende v. Milestone Tech., Inc., 269 F. Supp. 2d 246, 251 (S.D.N.Y. 2003). At the
motion to dismiss stage, the plaintiff generally must make a prima facie showing by his
pleadings and affidavits that the court has jurisdiction over each of the defendants. See CutCo
Indus., Inc. v. Naughton, 806 F.2d 361, 364–65 (2d Cir. 1986) (at evidentiary hearing or trial,
plaintiff must demonstrate personal jurisdiction by preponderance of the evidence). A federal
court sitting in diversity looks to the law of the state in which it sits to ascertain whether it may
exercise personal jurisdiction over a foreign defendant. See Bank Brussels Lambert v. Fiddler
Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002). In such cases, the court must first
determine if the forum’s law would confer jurisdiction through its long-arm statute and then
decide if the exercise of such jurisdiction is permissible under the Due Process Clause of the
Fourteenth Amendment. Id.
Plaintiff asserts that this Court has jurisdiction over IBM Japan under New York Civil
Practice Law and Rules (“CPLR”) section 301.10 (FAC at 1; P’s IBM Japan Opp’n Mem. 7.)

9

The FAC is not clear, but it seems that Plaintiff argues that the contracts he had with Cognos and IBM Japan were
invalid, rather than breached, and that therefore by default Plaintiff was, under Japanese Labor Law, entitled to be
regarded as a permanent employee. Plaintiff also apparently argues he was entitled to be paid for overtime work.
10

Plaintiff explicitly states that he “did not put forth a Section 302 theory in the amended complaint—because
Section 301 applies—and so plaintiff will not respond here to Defendant’s Section 302 arguments.” (P’s IBM Japan
Opp’n Mem. 7.) Accordingly, Plaintiff has abandoned any claim that the Court has jurisdiction over IBM Japan
under CPLR section 302. Cf. Kamanou v. Exec. Sec’y of Comm’n of Econ. Cmty. of W. African States, No. 10-CV7286, 2012 WL 868700, at *3 (S.D.N.Y. Mar. 14, 2012) (plaintiff faces obligation, in response to defendant’s
motion to dismiss, to “present arguments as to each of her causes of action. Plaintiff’s failure to do so constitutes
abandonment of those claims”).

16

“Under the New York long-arm statute, general jurisdiction exists over non-residents ‘doing
business’ in New York.” Arquest, Inc. v. Kimberly-Clark Worldwide, Inc., No. 07-CV-11202,
2008 WL 2971775, at *5 (S.D.N.Y. July 31, 2008) (citing N.Y. C.P.L.R. § 301). The Court may
exercise jurisdiction over an “out-of-state defendant if the defendant engages in continuous and
systematic business activities within New York,” or in other words, does business “with a fair
measure of permanence and continuity.” Id. (internal quotation marks omitted). This standard is
“stringent” and, “[a]t its core, . . . boils down to ‘presence.’” Id. (quoting Overseas Media, Inc.
v. Skvortsov, 407 F. Supp. 2d 563, 567 (S.D.N.Y. 2006)). Factors that courts consider in
determining a defendant’s presence in the state include: “the existence of an office in New York;
the solicitation of business in the state; the presence of bank accounts and other property in the
state; and the presence of employees of the foreign defendant in the state.” Hoffritz for Cutlery,
Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985).
Plaintiff has not alleged that IBM Japan has an office, bank accounts, property, or
employees in New York, or that it solicits business here, and has therefore failed to make a
prima facie showing of personal jurisdiction by this measure. Plaintiff instead attempts to
demonstrate this Court’s jurisdiction over IBM Japan through the “‘mere department’ and
‘agency’ doctrines of doing business in New York.” (FAC at 1.) See Jazini v. Nissan Motor
Co., 148 F.3d 181, 184 (2d Cir. 1998) (Where a plaintiff alleges that a “foreign corporation is
present in New York state because of the activities there of its subsidiary, the presence of the
subsidiary alone does not establish the parent’s presence in the state. For New York courts to
have personal jurisdiction in that situation, the subsidiary must be either an ‘agent’ or a ‘mere
department’ of the foreign parent.”) (internal citation omitted).

17

Plaintiff argues the reverse of the situation described in Jazini, attempting to show that
Defendant IBM Japan is subject to jurisdiction here because it is a mere department or agent of
its New York-based parent corporation. Courts have, under certain circumstances, found this
reverse jurisdictional theory plausible. See, e.g., Sayles v. Pac. Eng’g & Constructors, Ltd.
(PECL), No. 08-CV-676, 2010 WL 5334272, at *5 (W.D.N.Y. Dec. 20, 2010) (jurisdictional
discovery issue relates to whether foreign defendants are mere departments of parent
corporations with contacts in New York); Freeman v. Gordon & Breach, Science Publishers,
Inc., 398 F. Supp. 519, 521–22 (S.D.N.Y. 1975) (subsidiary subject to personal jurisdiction in
New York because while “not ‘physically’ present in New York,” it was “doing business in this
State” due to relationship with parent).
a.

Agency

“To establish that a subsidiary is an agent of the parent, the plaintiff must show that the
subsidiary does all the business which [the parent corporation] could do were it here by its own
officials.” Jazini, 148 F.3d at 184 (alteration in original) (internal quotation marks omitted). An
“alternative[]” approach looks to “whether the subsidiary is carrying out its own business, or the
business of the parent.” Gallelli v. Crown Imports, LLC, 701 F. Supp. 2d 263, 272 (E.D.N.Y.
2010).
Plaintiff’s construction of agency jurisdiction is insufficient to establish personal
jurisdiction over IBM Japan. First, it casts the net too broadly. Plaintiff argues that “[i]f the
Japanese unit of IBM USA does things in Japan that IBM USA would have to do itself in Japan,
if it [sic] not for the existence of IBM Japan,” then the entities are thereby “undertaking a
common activity” and “separate corporate existences are merely a formality.” (P’s IBM Japan
Opp’n Mem. 10 (emphasis in original).) This logic, without other indications of a principal18

agent relationship, is problematic because it would seem to apply to nearly every parentsubsidiary relationship; a parent company creating a subsidiary to operate in a foreign country
clearly intends that subsidiary to perform work in the foreign country that the parent might
otherwise perform. Yet it is not the case that every foreign subsidiary can be sued in New
York—for any action occurring anywhere in the world—simply because its parent company is
based in New York. See Jazini, 148 F.3d at 184 (presence of New York entity alone not enough
to establish related foreign entity’s presence in state); Volkswagenwerk Aktiengesellschaft v.
Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir. 1984) (“presence of a local corporation does
not create jurisdiction over a related, but independently managed, foreign corporation”). Second,
Plaintiff’s argument flouts the general purpose behind personal jurisdiction. New York’s longarm statute operates to establish jurisdiction over those out-of-state defendants who continually
do business in New York to such a degree that they essentially maintain a presence in the state.
See Beacon Enters., Inc. v. Menzies, 715 F.2d 757, 762 (2d Cir. 1983). It was not intended as a
tool to drag into court in New York all foreign subsidiaries of New York companies who
otherwise lack any connection to New York, just because the foreign subsidiary’s activities may
benefit the New York parent. Plaintiff certainly has not cited to cases upholding such a theory.11
Accordingly, Plaintiff has not met his burden of establishing jurisdiction under this theory.

11

The only case Plaintiff cites that might lend support to this theory is Freeman v. Gordon & Breach, Science
Publishers, Inc., 398 F. Supp. 519 (S.D.N.Y. 1975). But Freeman cannot be read so broadly. In that case, the court
found that the parent and subsidiary were “integral part[s] of a united endeavor” and that “while two separate
corporate entities have been established, only one commonly owned enterprise exists which, in order to function,
must rely upon the joint endeavors of each constituent part.” 398 F. Supp. at 522. Therefore, while Freeman
supports the reverse theory of jurisdiction generally, the case implements this theory in the limited situation where
the parent and subsidiary were so intertwined that they were dependent on each other in order to function; it cannot
be said to stand for the proposition that all foreign subsidiaries of New York companies can be sued in New York
simply because their operations benefit the parent.

19

b.

Mere Department

“A subsidiary will be considered a mere department of [a parent corporation] where the
[parent’s] control over the subsidiary is pervasive enough that the corporate separation is more
formal than real.” Gallelli, 701 F. Supp. 2d at 271–72 (internal quotation marks omitted). In
deciding whether a foreign entity is a “mere department” of a New York corporation, courts look
to four factors: (1) common ownership; (2) “financial dependency of the subsidiary on the
parent”; (3) “the degree to which the parent corporation interferes in the selection and
assignment of the subsidiary’s executive personnel and fails to observe corporate formalities”;
and (4) “the degree of control over the marketing and operational policies of the subsidiary
exercised by the parent.” Volkswagenwerk, 751 F.2d at 120–22. While the first factor is
“essential,” id. at 120, “[e]ach of the [other factors] need not weigh entirely in plaintiffs’ favor”;
rather, “Volkswagenwerk necessitates a balancing process,” Advance Coating Tech., Inc. v. LEP
Chem. Ltd., 142 F.R.D. 91, 95 (S.D.N.Y. 1992).
The parties do not dispute that the first factor is met.12 (P’s IBM Japan Opp’n Mem. 11;
IBM Japan’s Reply Mem. 1–2.13) Plaintiff has not made a plausible showing with regard to the
second factor. He has alleged only that IBM US lent money to IBM Japan’s parent so that IBM
Japan could gain a tax benefit through a transaction with its parent. (FAC ¶ 5 at 4; id. Ex. M.)
While only “some measure of financial dependence” is required, Advance Coating, 142 F.R.D. at
95; but see Gallelli, 701 F. Supp. 2d at 273–74 (“Courts considering [financial dependency]

12

IBM US does not own IBM Japan directly, but owns 100% of an intermediary company that, through another
intermediary company, owns 100% of IBM Japan. (See FAC Ex. F at 2.) Thus, for the purposes of this analysis,
common ownership is established. See Storm LLC v. Telenor Mobile Commc’ns AS, 2006 WL 3735657, at *1–2, 13
(S.D.N.Y. Dec. 15, 2006).

13

“IBM Japan’s Reply Mem.” refers to Defendant IBM Japan Ltd’s Reply Memorandum of Law in Support of Its
Motion to Dismiss Plaintiff’s Claims Against It. (Doc. 42.)

20

factor have held that a finding of financial dependency requires a showing that the subsidiary
would be unable to function without the financial support of the parent.”), a simple transaction or
even a series of transactions that confers a benefit but is not necessary to the subsidiary’s
functioning would not suffice to demonstrate dependence. See Reers v. Deutsche Bahn AG, 320
F. Supp. 2d 140, 157 (S.D.N.Y. 2004) (financial dependency showing lacking where plaintiffs
alleged facts indicating “some measure of control over the broad financial policies of its
subsidiaries,” but “have not clearly alleged dependency”); Jerge v. Potter, No. 99-CV-0312,
2000 WL 1160459, at *3 (W.D.N.Y. Aug. 11, 2000) (“Examples of situations in which financial
dependency has been found are no-interest loans, control of finances of subsidiary by parent and
financing of inventory by parent.”) (footnotes omitted); id. (parent providing initial financing for
subsidiary insufficient to render subsidiary a “mere department”); Advance Coating, 142 F.R.D.
at 95 (financial dependency standard met where there were “guarantees to a prospective high
level employee of salary protection; . . . assurances to him that the company would be fully
funded by the parent; . . . grant[] of a below market value lease to the subsidiary . . . ; and the
provision of interest-free loans”) (internal quotation marks omitted).
The third and fourth factors are unclear. As to factor three, Plaintiff alleges that IBM US
and Japan “share corporate officials and managers,” (P’s IBM Japan Opp’n Mem. 12), “IBM
USA officials authorize changes in the subsidiary’s executive personnel,” (FAC ¶ 6 at 4),
personnel decisions are made in “‘global’ committees, which are set up and controlled by IBM
USA,” (id.), and that “some of the senior management of [IBM Japan] were seconded there from
. . . the IBM parent in America,” (P’s IBM US Opp’n Mem. Attachment 2). As to the fourth
factor, Plaintiff asserts that IBM US “controls the marketing and operating policies” of IBM

21

Japan, and that the companies have “standardized marketing and operational policies to the
extent possible, as part of a . . . ‘globally integrated enterprise’ policy.” (FAC ¶ 7 at 4.)
IBM Japan contests that Plaintiff has sufficiently demonstrated these factors, and while
Plaintiff’s arguments are fairly conclusory, IBM Japan has not actually provided any information
about the company that would show why IBM US and Japan are distinct entities;14 instead, it
simply states that Plaintiff is incorrect and distinguishes the case law relied on by Plaintiff.15 To
be sure, Plaintiff bears the burden of making out a prima facie case of personal jurisdiction. But
given that (1) Plaintiff has made a “sufficient start” at showing that the exercise of personal
jurisdiction over IBM Japan might be proper, Pandeosingh v. Am. Med. Response, Inc., No. 09CV-5143, 2012 WL 511815, at *5 (E.D.N.Y. Feb. 15, 2012) (internal quotation marks omitted),
which IBM has not refuted; and (2) jurisdictional allegations should be construed liberally, see
Mende, 269 F. Supp. 2d at 251 (court should “construe jurisdictional allegations liberally and
take as true uncontroverted factual allegations”) (internal quotation marks omitted), and in light
of Plaintiff’s indirect requests for limited discovery, (see P’s IBM Japan Opp’n Mem. 11, 13), I
find that Plaintiff has made a showing sufficient to at least warrant limited discovery in order to
determine whether personal jurisdiction over IBM Japan is proper. See Pandeosingh, 2012 WL

14

On a motion to dismiss, parties may submit affidavits to resolve jurisdictional disputes. See S. New England Tel.
Co. v. Global NAPS Inc., 624 F.3d 123, 138 (2d Cir. 2010) (district court adjudicating motion to dismiss for lack of
personal jurisdiction may rely on pleadings and affidavits or conduct evidentiary hearing); Hunter v. Deutsche
Lufthansa AG, No. 09-CV-3166, 2012 WL 1059417, at *4 (E.D.N.Y. Mar. 28, 2012) (in deciding motion to dismiss
for lack of personal jurisdiction, court may make determination on basis of affidavits); Freeman, 398 F. Supp. at 520
(“With regard to motions addressed to personal jurisdiction, it is proper for the Court to rely on affidavits to
establish jurisdictional facts.”) (internal quotation marks omitted).

15

The information set forth in IBM US’s February 23, 2009 EEOC response, (see P’s IBM US Opp’n Mem.
Attachment 1), is of the sort that could demonstrate to the Court that personal jurisdiction is lacking. And indeed, if
I could consider it for its truth, it might bring this case close to dismissal on jurisdictional grounds. The information
contained in the letter, however, was addressed to control for Title VII purposes and is not entirely on point for the
analysis of the third and fourth factors in the “mere department” theory of jurisdiction, and therefore, dismissal at
this time is not warranted.

22

511815, at *5 (“Where a plaintiff has failed to make a prima facie showing, but has made a
sufficient start toward establishing personal jurisdiction, limited discovery may be appropriate.”)
(internal quotation marks omitted); Ayyash v. Bank Al-Madina, No. 04-CV-9201, 2006 WL
587342, at *6 (S.D.N.Y. Mar. 9, 2006) (limited discovery ordered before ruling on subject matter
and personal jurisdiction where plaintiff had not made prima facie showing of jurisdiction, but
had at least made a “sufficient start at making such a showing”) (internal quotation marks
omitted); Uebler v. Boss Media, AB, 363 F. Supp. 2d 499, 506 (E.D.N.Y. 2005) (balance of the
Volkswagenwerk factors not clear, so, while plaintiff had not made prima facie showing of
personal jurisdiction, discovery was appropriate); cf. Hunter, 2012 WL 1059417, at *4 (“In
deciding a pre-trial motion to dismiss for lack of personal jurisdiction . . ., a district court has
considerable procedural leeway, and may make its determination on the basis of affidavits alone;
or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the
merits of the motion.”) (internal quotation marks omitted); Linde v. Arab Bank, PLC, 262 F.R.D.
136, 145 (E.D.N.Y. 2009) (“The Second Circuit has made clear . . . that a prima facie case is not
absolutely necessary for a court to grant jurisdictional discovery. Rather the showing necessary .
. . is committed to the sound discretion of the district court on a case-by-case basis without
bright-line limits.”) (internal quotation marks and citation omitted). Furthermore, limited
discovery is particularly appropriate where, as here, the bulk of the relevant information is within
the defendants’ knowledge or possession. See Uebler, 363 F. Supp. 2d at 506 (decision to permit
discovery “bolstered by the fact that the facts necessary to establish personal jurisdiction lie
within [Defendant’s] exclusive knowledge”).

23

3.

Personal Jurisdiction—Federal Rule of Civil Procedure 4(k)(2)

Plaintiff also asserts that this Court has jurisdiction over IBM Japan pursuant to Federal
Rule of Civil Procedure 4(k)(2). (P’s IBM Japan Opp’n Mem. 15.) Rule 4(k)(2) confers
personal jurisdiction over a defendant in certain circumstances for a “claim that arises under
federal law.” Fed. R. Civ. P. 4(k)(2). Because both of Plaintiff’s federal causes of action fail to
state a claim on which relief can be granted, and in any event are not advanced against IBM
Japan, jurisdiction over IBM Japan under Rule 4(k)(2) is inappropriate.
4.

Forum Non Conveniens

IBM Japan asserts that the FAC should be dismissed on forum non conveniens grounds.
(IBM Japan Mem. 21.) The decision to dismiss a case on forum non conveniens grounds lies
wholly within the broad discretion of the district court. Piper Aircraft Co. v. Reyno, 454 U.S.
235, 258 (1981); Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001) (en banc).
There are three steps to the forum non conveniens inquiry:
[T]he first level of inquiry pertains to determining whether the plaintiff’s choice
[of forum] is entitled to more or less deference. A determination of what degree
of deference is owed a plaintiff’s choice of forum does not dispose of a forum non
conveniens motion . . . . [T]he next level of inquiry requires a court . . . to
determine whether an adequate alternative forum exists. When such is the case
the court must go to the third step and balance factors of private and public
interest to decide, based on weighing the relative hardships involved, whether the
case should be adjudicated in the plaintiff’s chosen forum or in the alternative
forum suggested by the defendant.
Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 70 (2d Cir. 2003) (second alteration
in original) (internal quotation marks and citations omitted); accord Tel. Sys. Int’l, Inc. v.
Network Telecom PLC, 303 F. Supp. 2d 377, 380 (S.D.N.Y. 2003). The party seeking dismissal
bears the burden of proof on all elements of its motion. Id.

24

Although the arguments suggesting that this case ought to be adjudicated in Japan are
quite compelling, IBM Japan has failed to show that an adequate alternative forum exists.
Nowhere in its Memorandum of Law does IBM Japan fully grapple with this issue. In its reply
to Plaintiff’s assertion that the statute of limitations has run in Japan for bringing a Japanese
Labor Law claim, (P’s IBM Japan Opp’n Mem. 25), IBM Japan merely asserts that “Japan
provides a forum for these claims (including the Prefectural Labor Bureau, the Perfectural [sic]
Labor Committee, and the court system in Japan),” (IBM Japan’s Reply Mem. 9), without any
nod to Plaintiff’s statute of limitations argument or assurance that Plaintiff’s claims can actually
be brought in those forums. See Paisola v. GAP Adventures, Inc., No. 10-CV-8920, 2012 WL
1019585, at *2–4 (S.D.N.Y. Mar. 26, 2012) (adopting report and recommendation finding that
no adequate alternative forum existed because claim would be time-barred under Canadian law);
Airflow Catalyst Sys., Inc. v. Huss Techs. GmbH, No. 11-CV-6012, 2011 WL 5326535, at *3
(W.D.N.Y. Nov. 3, 2011) (“[P]roposed alternative fora have been ruled inadequate where . . . a
statute of limitations bars the bringing of a case in a foreign forum that would be timely in the
United States.”); In re Rezulin Prods. Liab. Litig., 214 F. Supp. 2d 396, 401 (S.D.N.Y. 2002)
(conditioning grant of dismissal on forum non conveniens grounds on, among other things,
defendants’ waiver of right to assert statute of limitations defense in alternative forum).
Therefore, IBM Japan has failed to fulfill its burden at this stage, although this does not foreclose
the possibility of a successful forum non conveniens argument at a later stage.16

16

In subsequent motion practice, IBM Japan might, for example, set forth the applicable Japanese statutes of
limitations for Plaintiff’s claims and indicate why they have not run, or, agree to waive a statute of limitations
defense if the case were to be dismissed on the ground of forum non conveniens.

25

5.

Service of Process

Defendants’ argument for dismissal based on improper service is unavailing. Service of
process must comport both with the statute under which service is effectuated as well as due
process requirements. In this case, the statutory prong concerns the Hague Convention on the
Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters
(“Hague Convention”). See Ackermann v. Levine, 788 F.2d 830, 838 (2d Cir. 1986). “As a
ratified treaty, the [Hague] Convention is of course ‘the supreme law of the land.’” Id. (quoting
U.S. Const. art. VI, cl. 2). Under the Hague Convention, service is permitted in a number of
ways—specifically, under Articles 5, 8, and 10. See id. at 838–39. Article 10 states that
“[p]rovided the State of destination does not object, the present Convention shall not interfere
with (a) the freedom to send judicial documents, by postal channels, directly to persons abroad.”
Id. at 839. The Second Circuit has interpreted this to mean that where a country “has made no
objection to the use of ‘postal channels’ under Article 10(a), service of process by registered mail
remains an appropriate method of service . . . under the [Hague] Convention.” Id.; see Rogers v.
Kasahara, No. 06-CV-2033, 2006 WL 6312904, at *3 (D.N.J. Oct. 16, 2006) (“The Second
Circuit represents the other side of a lengthy debate” on the meaning of Article 10(a) and holds
that “service of process by registered mail is valid in a country that has not opposed Article
10(a),” so long as litigants are provided with sufficient notice of the pending action).
As Plaintiff aptly points out, (see P’s IBM Japan Opp’n Mem. 30), Japan, a signatory to
the Hague Convention, clarified its position on Article 10(a) in 2003, specifying that it does not
formally object to Article 10(a). Courts in the U.S. have construed this to mean that “service of
process by international mail to Japan is allowed under the Hague Convention.” Levi Strauss &
Co. v. Toyo Enter. Co., 665 F. Supp. 2d 1084, 1094 (N.D. Cal. 2009); see Rogers, 2006 WL
26

6312904, at * 5 (“[S]ervice of process by registered mail on the Japanese defendants was
proper.”). Thus, because Plaintiff served his Summons and Complaint on IBM Japan via
registered mail, (see Proof of Service, (Doc. 15); IBM Japan’s Mem. 23–24), under the Hague
Convention and Federal Rule of Civil Procedure 4(f), IBM Japan was properly served, and the
FAC will not be dismissed on this ground.
6.

Failure to State a Claim

I may not consider a party’s motion under Fed. R. Civ. P. 12(b)(6) without first
determining whether jurisdiction exists. See Arrowsmith v. United Press Int’l, 320 F.2d 219, 221
(2d Cir. 1963) (finding district court erred by ruling on question of failure to state a claim before
determining whether personal jurisdiction existed); Mende, 269 F. Supp. 2d at 251 (“Before
addressing Defendants’ Rule 12(b)(6) motion to dismiss, the Court must first address the
preliminary questions of service and personal jurisdiction.”). Accordingly, I defer consideration
of the adequacy of the pleading of Plaintiff’s Japanese breach of contract and Labor Law claims.
As Plaintiff has the opportunity to amend his FAC as to IBM Japan, however, he is advised that
he may wish to clarify exactly what breaches he is alleging, as well as the theory of his Labor
Law claim.

27

III.

Conclusion
For the reasons stated above, Defendant IBM US's Motion is granted, and Defendant

IBM Japan's Motion is denied without prejudice to possible renewal after jurisdictional
discovery. The Clerk of Court is respectfully directed to terminate the pending Motions, (Docs.
31,33). As stated above, Plaintiff shall have 14 days from the date of this Order to advise
whether he wishes to assert diversity jurisdiction. Ifhe does, he shall file a second amended
complaint conforming to this Opinion and Order within 21 days thereafter.
In addition, the parties have recently submitted a series of letters to the Court raising a
discovery dispute. If Plaintiff advises that he wishes to pursue the case by asserting diversity
jurisdiction, the case will be referred to Magistrate Judge Paul E. Davison to address that issue,
and to supervise the limited jurisdictional discovery authorized by this Opinion and Order.

SO ORDERED.
Dated: May_'_,2012
White Plains, New York

Cat4~
C~Y

SEIBEL, U.S.DJ.

28