Extreme LLC et al v. Glascoe et al
Filing
14
OPINION AND ORDER granting 8 Motion to Dismiss. Signed by Judge Daniel R. Dominguez on 07/20/2017. (JM)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
EXTREME LLC, et al.,
Plaintiffs,
v.
Civil No. 17-1347 (DRD)
EXTREME ELECTRONICS CORPORATION;
STEPHENSON
GLASCOE;
LINDA
GLASCOE Y LA SOCIEDAD LEGAL DE
GANANCIALES COMPUESTA POR AMBOS,
Defendants.
OPINION AND ORDER
On February 24, 2017, Plaintiffs Extreme LLC (“Extreme”)
and
Jeffrey
filed
the
Juniper
instant
Electronics
(“Glascoe”);
partnership
“Defendants”)
(“Juniper”)
case
Corporation
Linda
are
alleging
that
by
liable
(“Linda”);
both
for
of
economic
“Plaintiffs”)
Defendants
(“Electronics”);
Glascoe
composed
(collectively,
Extreme
Stephen
Glascoe1
and
them
losses
the
conjugal
(collectively,
suffered
by
Plaintiffs due to Defendants’ defamation of, and lies related
to, Plaintiffs’ business.
There was a discrepancy regarding the correct spelling of the Defendant’s
name. The Complaint stated the Defendant’s name as “Stephenson Glascoe” (see
Docket No. 1-1) whereas the Notice of Removal included a footnote explaining
that the correct spelling was “Stephen Glascoe” (see Docket No. 1). Finally,
the Sworn Statement provided by the Defendants stated the Defendant’s name as
“Steven Glascoe” (see Docket No. 8-1). For effects of this Opinion, we shall
refer to the Defendant as “Stephen Glascoe,” which was how he signed the
above-mentioned Sworn Statement.
1
1
Pending before the Court is Defendants’ unopposed Motion to
Dismiss for Lack of Personal Jurisdiction and Failure to State a
Cause of Action (Docket No. 11). Defendants allege Electronics
lacks sufficient contacts with Puerto Rico to support personal
jurisdiction
over
them.
For
the
reasons
discussed
herein,
Defendants’ Motion to Dismiss (Docket No. 11) is hereby GRANTED.
I.
FACTUAL ALLEGATIONS
Defendant Electronics
is a
Pennsylvania
corporation with
its principal place of business and headquarters located at 5289
Pottsville Pike, Reading, PA, 19605. Stephen Glascoe, President
of
Electronics,
and
Linda
Glascoe
reside
in
5289
Pottsville
Pike, Reading, Pennsylvania, 19605. See Docket No. 1-1 ¶1.
Plaintiff
Extreme
is
a
Puerto
Rico
corporation
duly
organized under the laws of Puerto Rico with its principal place
of business
and headquarters at
1507 Ashford Ave. #802, San
Juan, Puerto Rico 00911. Id. However, Jeffrey Juniper, manager
and member of Extreme, has homes at 1007 N Federal Highway,
Suite 279, Ft. Lauderdale, Florida, 33304 and at 1507 Avenida
Ashford #802, San Juan, Puerto Rico, 00911. Id.
According to the complaint, in June 2016, Plaintiff Juniper
started
negotiations,
through
Extreme
assets,
namely,
GPS
Trackers,
Stephen
Glascoe
would
receive
from
money
ownership in Extreme as part of the deal.
2
LLC,
to
acquire
Electronics.
and
a
some
Defendant
percentage
of
Plaintiffs allege that Defendants had told Plaintiffs that
Defendants
had
an
exclusive
license
to
distribute
the
GPS
trackers in Puerto Rico as well as had a list of contacts of
Puerto Rico-based boat fleets and motor vehicle dealers willing
to sell the GPS trackers. As part of the alleged transaction
between the parties, Defendant would provide Plaintiffs with a
list of GPS trackers for motor vehicles and boat fleets which it
could then sell to the list of contacts provided by Defendants.
See Docket No. 1-1 ¶6.
According to the Complaint, after the initial negotiations
were finalized, Plaintiffs advanced one hundred twenty thousand
dollars ($120,000) to Defendants. Nonetheless, per the factual
allegations in the complaint, it seems that Plaintiffs have yet
to
lose
agreement
trackers
any
current
wherein
and
the
or
Extreme
license
prospective
would
to
clients.
distribute
the
Electronics’
acquire
However,
GPS
to
them
was
never
finalized because Plaintiffs found that Defendants did not have
an exclusive license for the sale and service of GPS trackers in
Puerto Rico.
did
not
contacts,
Additionally,
provide
Plaintiff
or clients
Plaintiffs allege that
Juniper
that they
with
said they
the
GPS
Defendants’
trackers,
would provide.
See
Docket No. 1-1 ¶7.
In January 2017, Plaintiffs once again offered Defendant
Glascoe the
possibility to work with Extreme and grant
3
five
percent (5) ownership of the entity as long as the co-defendants
complied
with
confidentiality
requirements,
non-competition
requirements, and Puerto Rico Act 20 requirements which promote
the
establishment
of
foreign
exportation
services
in
Puerto
Rico. Defendant Glascoe ignored the offer. See Docket No. 1-1
¶9.
Plaintiffs
aver
that
Defendants
then
illegally
changed
invoices provided by Extreme to Extreme’s clients to reflect
Electronics’ name. Plaintiffs also allege that Defendant Glascoe
requested
that
several
of
Extreme’s
clients
pay
Electronics
without providing the services nor paying for the merchandise.
See Docket No.1-1 ¶9.
Plaintiffs argue that Defendant Glascoe falsely stated that
he
was
the
owner
of
Electronics,
that
Electronics
had
the
exclusive license for the sale of the GPS trackers, and that
Plaintiffs did not have said license. Plaintiffs understand that
through
the
appropriation
of
Extreme’s
clients,
Defendants
received payments between seven thousand five hundred and ten
thousand dollars ($7,500-$10,000). Because of this, Plaintiffs
have been obligated to provide explanations to its clients and
risk
losing
their
clients.
Nonetheless,
per
the
factual
allegations in the complaint, Plaintiffs have yet to lose any
clients. See Docket No. 1-1 ¶12. Plaintiffs therefore demand the
return of the one hundred twenty thousand dollars ($120,000)
that
Plaintiff
Juniper
alleges
4
having
paid
to
Defendants
in
advance
for
their
GPS
equipment
and
the
list
of
potential
clients. Plaintiffs also demand one million dollars ($1,000,000)
in payment for Defendants’ having ruined Extreme’s reputation
which has in turn caused Plaintiff’s economic loss.
II.
FED R. CIV. P. 12(B)(2) STANDARD OF REVIEW
Pursuant to Fed. R. Civ. P. 12(b)(2)“Rule 12(b)(2)”), a
defendant may move to dismiss a complaint for lack of personal
jurisdiction.
an
Where, as here, the Court refrains from holding
evidentiary
standard.
618-19
hearing,
the
Court
applies
the
“prima
facie”
United States v. Swiss Am. Bank, Ltd., 274 F.3d 610,
(1st
generally
Cir.
2001)(internal
International
citations
Trading
omitted);
Partners,
Inc.
v.
see
Cobra
Scooters, LLC, 403 F. Supp.2d 180, 183 (D.P.R. 2005).
Per
the
responsible
“prima
for
facie”
establishing
standard,
that
jurisdiction over the defendants.
618.
However,
to
do
so,
the
the
the
Court
plaintiff
has
is
personal
Swiss Am. Bank, 274 F. 3d at
plaintiff
may
not
rely
on
the
pleadings. Negron-Torres v. Verizon Commc’ns, Inc., 478 F.3d 19,
23 (1st Cir. 2007)(internal citations omitted).
plaintiff
must
submit
properly
supported
facts
Rather, the
and
“make
affirmative proof.” Id. The plaintiff’s evidence is assumed to
be accurate and it is viewed in the light most favorable to the
plaintiff. Astro-Med, Inc. V. Nihon Kohden Am., Inc., 591 F.3d
1, 8 (1st Cir. 2009)(internal citations omitted). A defendant’s
5
evidence is only relevant to the extent that it is uncontested
by the plaintiff. Id. Here, Defendants’ evidence and allegations
are uncontested as Plaintiff has not opposed Defendants’ Motion
to Dismiss. See PRD Local Rule 7(b) (“[u]nless within fourteen
(14) days after the service of a motion the opposing party files
a written objection to the motion, incorporating a memorandum of
law,
the
opposing
party
shall
be
deemed
to
have
waived
objection.”)
III.
To
party,
establish
Plaintiffs
Court’s
the
DISCUSSION
personal
must
satisfy
both
jurisdiction
Puerto
Rico’s
over
a
long-arm
statute and the Due Process Clause of the Fourteenth Amendment.
Negron-Torres, 478 F.3d at 24 (citing Swiss Am. Bank, 274 F.3d
at 618).
Puerto Rico’s long-arm statue confers Puerto Rico’s
courts with jurisdiction over a non-resident defendant if said
defendant
either
personally
tortuous
agent.”
or
acts
Id.
4.7(a)(1)).
jurisdiction
“(1)[t]ransacted
through
within
(quoting
As
to
an
Puerto
P.R.
Puerto
the
agent”;
Rico
Laws
Rico’s
maximum
6
business
or
in
(2)
tit.
or
32,
long-arm
limits
Rico
“participated
personally
Ann.
Puerto
set
through
App.
statute
forth
III,
in
his
R.
extends
by
the
Constitution, the due process analysis is determinative.
Id.
(internal citation omitted).2
Under the Due Process Clause, a plaintiff must prove the
existence of either specific or general jurisdiction.
Negron-
Torres, 478 F.3d at 24 (citing Harlow v. Children’s Hosp., 432
F.3d 50, 57 (1st Cir. 2005)).
The turning point in determining
whether there exists personal jurisdiction is “the existence of
‘minimum
contacts’
forum.”
nonresident
Id.
between
Therefore,
defendant
the
nonresident
the
maintains
Court
defendant
must
sufficient
find
“minimum
and
the
that
the
contacts”
with Puerto Rico so as to comport to “traditional notions of
fair play and substantial justice” and be subject to the Court’s
jurisdiction.
See
Int’l
Shoe
Co.
v.
Wash.
Office
of
The contacts requirement necessary under Puerto Rico’s long-arm statute is a
mirror image of the contacts necessary under Federal Law. See A.H. Thomas Co.
v. Superior Court, 98 P.R.R. 864, 870 (1970) wherein Puerto Rico’s Supreme
Court, by interpreting earlier federal jurisprudence, elaborates three rules
to determine in personam jurisdiction over a nonresident:
2
1. The nonresident defendant must do some act or consummate some
transaction within the forum. It is not necessary that defendant’s
agent be physically within the forum, for this act or transaction may
be by mail only. A single event will suffice if its effects within the
state are substantial enough to qualify under Rule Three;
2. The cause of action must be one which arises out of, or results from,
the activities of the defendant within the forum. It is conceivable
that the actual cause of action might come to fruition in another
state, but because of the activities of defendant in the forum state
there would still be ‘a substantial minimum contact;”
3. Having established by Rules One and Two a minimum contact between the
defendant and the state, the assumption of jurisdiction based upon such
contact must be consonant with the due process tenets of ‘fair play’
and ‘substantial justice.’ If this test is fulfilled, there exists a
‘substantial minimum contact’ between the forum and the defendant. The
reasonableness of subjecting the defendant to jurisdiction under this
rule is frequently tested by standards analogous to those of forum non
conveniens.
(internal citations omitted).
7
Unemployment
Finally,
Comp.
the
&
Placement,
“minimum
326
contacts”
U.S.
310,
316
standard
has
(1945).
several
requirements which the plaintiff’s must comply. As such, the
First Circuit has stated that:
[f]or specific jurisdiction, the plaintiff's claim
must be related to the defendant's contacts. For
general jurisdiction, in which the cause of action may
be
unrelated
to
the
defendant's
contacts,
the
defendant must have continuous and systematic contacts
with
the
state.
Second,
for
either
type
of
jurisdiction, the defendant's contacts with the state
must be purposeful. And third, the exercise of
jurisdiction
must
be
reasonable
under
the
circumstances.
Harlow, 432 F.3d at 57.
A. Specific Jurisdiction
Specific jurisdiction over a nonresident defendant exists
“where the cause of action arises directly out of, or related
to, the defendant’s forum-based contacts.”
United Elec., Radio
& Mach. Workers of Am. v. 163 Pleasant St. Corp., 960 F.2d 1080,
1089-91 (1st Cir. 1992).
The First Circuit divides specific
jurisdiction into a tripartite analysis: relatedness, purposeful
availment,
and
reasonableness.
Exempted
Ltd.,
437
citation
omitted).
F.3d
The
118,
First
See
135
Platten
(1st
Circuit
Cir.
also
v.
HG
2006)
states
Bermuda
(internal
that
“[a]n
affirmative finding on each of the three elements of the test is
required
to
support
a
finding
8
of
specific
jurisdiction.”
Phillips Exeter Academy v. Howard Phillips Fund, 196 F.3d 284,
288 (1st Cir. 1999).
With regards to the first requirement, the First Circuit
has
emphasized
that
causation
is
central
to
a
relatedness
finding. This means that “[t]he relatedness requirement is not
an open door; it is closely read, and it requires a showing of a
material connection....
insufficient.
A broad ‘but-for’ argument is generally
Because ‘but for’ events can be very remote,...
due process demands something like a ‘proximate cause’ nexus.”
Negron-Torres, 478 F.3d at 25 (quoting Harlow, 432 F.3d at 6162)(internal citations and quotations omitted). In essence, the
relatedness factor dictates that the Court must “ask whether the
claim
that
undergirds
the
litigation
directly
relates
to
or
arises out of the defendant's contacts with the forum.” Phillips
Exeter Academy, 196 F. 3d at 288.
In the case at bar, the relatedness element requires a
“nexus”
between
defendants’
contacts
with
Puerto
Rico
and
plaintiffs’ injury “such . . . [that] the litigation itself is
founded directly on those activities.”
Mass. Sch. Of Law at
Andover v. Am. Bar Ass’n, 142 F.3d 26, 34 (1st Cir. 1998).
Plaintiffs
economic
here
losses
allege
in
that
Puerto
Defendants
Rico
due
to
are
liable
Defendants’
for
their
continued
defamation of Extreme’s name to Plaintiffs’ Puerto Rico clients.
However, Plaintiffs presented no proof, such as letters which
9
Defendants
phone
might
records,
have
which
sent
can
to
Extreme’s
attest
to
clients
their
or
provided
allegations
that
Defendants contacted Extreme’s clients and insulted Extreme.
The relatedness inquiry in the current tort claim concerns
whether Electronics’ contacts with Puerto Rico were the “cause
in
fact”
Mass.
and
Sch.
of
“legal
Law,
cause”
142
of
F.3d
Plaintiffs’
at
35
cause
(internal
of
action.
citations
and
quotations omitted); Nowak v. Tak How Invs., Ltd., 94 F.3d 708,
715 (1st Cir. 1996); see generally Hogar CREA Inc. v. Hogar CREA
Intern. Of Connecticut, Inc., 708 F. Supp.2d 158, 167(D. P.R.
2009)
(holding
that
the
plaintiff’s
did
not
identify
the
applicable state law on which they based their tort claim and
this in turn failed to demonstrate how they intended to meet
their burden of demonstrating forum contacts in relation to the
tort claim). As well, the First Circuit has repeatedly stated
that, specifically in a claim such as the present defamation
claim, cause in fact refers to whether “the injury would not
have occurred ‘but for’ the defendant’s forum-state activity”
whereas legal cause refers to whether “the defendant’s in-state
conduct gave birth to the cause of action.” Callahan v. Harvest
Bd. Intern., Inc., 138 F.Supp.2d 147 (D. Mass. 2001) (citing
Mass. Sch. of Law, 142 F.3d at 35 (internal citations omitted)).
Defendants’ contacts with Puerto Rico consist of one phone
call and one trip to Puerto Rico to meet with Plaintiff Juniper.
10
See Docket No. 8-1. These two instances of contact with Puerto
Rico are insufficient to support jurisdiction, particularly as
they are not causally related to Plaintiffs’ injuries. Moreover,
while Plaintiffs allege that negotiations of the deal between
the
parties
took
place
on
the
Island
(Docket
No.
1-1
¶3),
Defendant provided a Sworn Statement detailing that the parties
met once in person, per invitation of Plaintiff Juniper himself.
See Docket No. 8-1. Co-defendant Stephen Glascoe also stated
that he never spoke to any automobile dealer or boat vessel
dealer regarding the sale of its GPS trackers in Puerto Rico,
neither
by
telephone
or
through
e-mail.
Id.
In
regards
to
Defendant Linda, co-defendant in the claim, she stated that she
never
spoke
to
any
automobile
dealer
or
boat
vessel
dealer
located within Puerto Rico. Furthermore, she did not attend any
meeting
in
Puerto
Rico
with
Plaintiff
Juniper
or
anyone
affiliated with Extreme. See Docket No. 8-2. Currently, these
Sworn Statements are unopposed, as such Plaintiffs waived any
objection and the information contained therein. See PRD Local
Rule 7(b) ¶1.
Plaintiffs,
they
claim
specifically
therefore,
cannot
related
to
due
Defendant
to
the
establish
defamation
of
Electronics’
that
the
Extreme
actions
injury
occurred
in
Puerto
Rico. They do not provide any specific evidence which proves
that Defendants’ in-state conduct gave rise to Plaintiffs’ tort
11
claim. In fact, the only “proof” that Plaintiffs included in the
Complaint as evidence that Electronics was allegedly contacting
Extreme’s
clients
in
order
to
provide
services
for
the
GPS
trackers is an email sent by Linda to an Accounting department
(allegedly belonging to one of Plaintiff’s clients) (see Docket
No. 1-1 ¶9). In said e-mail she instructs the department to not
remit any payments to Extreme LLC or Jeff Juniper and to void
all
pending
invoices
for
Extreme
LLC.
See
Docket
No.
1-1,
Exhibit B. This is insufficient to prove that Electronics’ has
defamed Extreme’s name and caused its economic loss.
Consequently, Plaintiffs do not meet the requirements of
the relatedness test, as Defendants’ contacts with Puerto Rico
were
not
Burger
the
King
proximate
v.
cause
Rudzewicz,
of
471
Plaintiffs’
U.S.
462,
injuries.
486
See
(2003)
(“The
“quality and nature” of an interstate transaction may sometimes
be so “random,” “fortuitous,” or “attenuated” that it cannot
fairly be said that the potential defendant ‘should reasonably
anticipate being haled into court’ in another jurisdiction.”)
(internal citations omitted).
Further, in the case
at bar,
Defendants’ contacts with Puerto Rico do not reach the requisite
threshold,
as
there
is
no
“in-state
conduct”
forming
important, or at least material, element of proof.”
“an
United
Elec., 960 F. 2d at 1089 (quoting Marino v. Hyatt Corp., 793
12
F.2d 427, 430 (1st Cir. 1986))(internal quotations omitted).
As
such, the Court lacks specific jurisdiction over Defendants.
Likewise, in terms of the alleged $120,000 dollars that
Plaintiff paid in advance to Defendants at the outset of the
negotiations
record
of
(see
where
Docket
the
No.1-1
¶6),
transaction
Plaintiffs
itself
occurred
provided
no
(whether
in
Puerto Rico or stateside) or even if it occurred in the first
place. See Verde Capital Corp. v. Lausell Aluminum Jalousies,
Inc., 729 F. Supp. 92, 93 (S.D. Fla. 1989) wherein the Southern
District of Florida stated that “standing alone, a promise to
make payments in the forum state does not constitute minimum
contacts and therefore does not comport with the due process
clause.”
In
the
case
at
bar,
while
there
was
an
alleged
“promise” of a payment and a supposed payment, since Plaintiffs
have
provided
insufficient
no
to
proof
of
establish
said
transaction,
specific
this
jurisdiction
or
is
also
minimum
contacts over Defendants.
B. General Jurisdiction
Federal district courts have general jurisdiction when “the
litigation is not directly founded on the defendant’s forumbased contacts, but the defendant has nevertheless engaged in
continuous and systematic activity, unrelated to the suit, in
the forum state.”
Negron-Torres, 478 F.3d at 25 (citing United
Elec., 960 F.2d at 1088). Plaintiffs aver that Electronics has
13
engaged in continuous and systematic activity in Puerto Rico by
calling
its
Plaintiffs.
finding
of
clients
and
Plaintiffs’
general
by
stating
arguments
jurisdiction
libelous
however
with
do
regards
claims
not
to
against
support
a
Electronics’
contacts in Puerto Rico as Plaintiffs have provided no evidence
that
Defendants,
even
if
they
were
located
in
Pennsylvania,
contacted any of Extreme’s clients. For example, not even phone
records
or
even
client
complaints
stating
that
Electronics
contacted them were provided for the Court in an attempt to
prove
that
the
Court
should
exercise
jurisdiction
over
Defendants.
Corporate Contracts and Minimum Contacts
The Supreme Court has repeatedly stated that a “corporate
personality is a fiction.” Int’l Shoe Co., 326 U.S. at 316-317.
As such, the Supreme Court has likewise stated that:
To say that the corporation is so far ‘present’ there
as to satisfy due process requirements, for purposes
of taxation or the maintenance of suits against it in
the courts of the state, is to beg the question to be
decided. For the terms ‘present’ or ‘presence’ are
used merely to symbolize those activities of the
corporation's agent within the state which courts will
deem to be sufficient to satisfy the demands of due
process. Those demands may be met by such contacts of
the corporation with the state of the forum as make it
reasonable, in the context of our federal system of
government, to require the corporation to defend the
particular suit which is brought there.
14
Id.; Martinez v. Aero Caribbean, 764 F. 3d 1062 (9th Cir. 2014).
In Martinez v. Aero Caribbean, the Ninth Circuit held that that
in-state
service
of
process
on
an
officer
of
a
foreign
corporation was not sufficient under due process clause for a
court to have personal jurisdiction over the corporation, even
if
the
officer
Martinez,
764
considering
was
F.
that
acting
3d
at
“[a]
on
1062.
court
may
behalf
This
of
is
exercise
corporation.
See
especially
true
general
personal
jurisdiction over a corporation only when its contacts ‘render
it essentially at home’”. Id. at 1064.
The Court also held
“that
jurisdiction
the
“paradigm”
corporation's
place
fora
of
for
general
incorporation
and
principal
are
place
a
of
business.” Id. at 1070. Here, as stated in the unopposed Motion
to Dismiss, Defendants alleged that “home” and their principal
place of business is Pennsylvania. See Docket No.11.
The International Shoe court also explained that a “casual
presence . . . or even his conduct of single or isolated items
of activities in a state on the corporation’s behalf are not
enough to subject it to suit on causes of action unconnected
with the activities there.” Int’l. Shoe Co., 326 U.S. at 159
(citations omitted).
In the case at bar, Defendant Glascoe only
had a minimal presence in Puerto Rico, for one night only. See
Docket No. 8-1. Likewise, any negotiations that Defendants had
with
Plaintiff
Juniper
for
the
15
sale
of
Electronics’
GPS
equipment and client lists occurred via telephone. Id. Nothing
in
the
record
reflects
Defendants’
intention
to
establish
systematic ties with Puerto Rico.
While it is a heavily disputed topic among lower courts
whether a contract is sufficient to establish “contact” with a
specific forum, the Supreme Court has normally abided by the
idea that if “the question is whether an individual’s contract
with
an
out-of-state
party
alone
can
automatically
establish
sufficient minimum contacts in the other party’s home forum . .
. the answer clearly is that it cannot.” Burger King, 471 U.S.
at
478.
Instead
contracts
must
be
analyzed
in
light
of
the
negotiations that happened before the signing of the agreement
and the potential future consequences that the same might have.
See Id. at 479.
Here,
Plaintiffs
failed
twice
to
reach
any
type
of
agreement with Defendants. Defendants ignored both offers. See
Docket No. 1-1 ¶9. It is clear then that Defendants contacts
with Puerto Rico, in light of the fact that no formal agreement
was
ever reached
between the parties, are not sufficient to
establish minimum contacts with the Forum. See generally TXU
Energy Retail company, LP v. Emanuel Medical Center, Inc., 2003
WL 21281651, at *1 (N. D. Tex. May 28, 2003) (Holding that the
defendant’s
contracts
conduct
for
the
of
regularly
purchase
of
16
entering
natural
into
gas
short-term
from
Texas
corporations was not sufficiently continuous and systematic to
warrant jurisdiction over the corporation).
Finally, the Supreme Court has emphasized that in contract
negotiations, the party which “reaches out” of its forum to
establish a relationship with another party, might be subject to
the other party’s jurisdiction in case of a possible suit. The
Supreme Court could not be any clearer as when it states that
parties who “in interstate contractual obligations, . . .‘reach
out beyond one state and create continuing relationships and
obligations
with
citizens
of
another
state’
are
subject
to
regulation and sanctions in the other State for the consequences
of their activities.” Burger King, 471 U.S. at 478 (internal
citations omitted). Here, Plaintiffs, having “reached out” to
Defendants located in Pennsylvania in order to conduct business
with them, are subject to the jurisdiction of Pennsylvania, not
the other way around.
Extreme Electronics’ Contacts with Puerto Rico
Plaintiffs argue that
Defendants have
sufficient minimum
contacts in Puerto Rico, standing alone, to warrant the exercise
of personal jurisdiction.
The Court, as has been previously
dictated by the First Circuit, may exercise general jurisdiction
over
Electronics
if
Plaintiffs
requirements:
(1)
Electronics
Puerto
(2)
that
Rico;
said
establish
has
following
sufficient
contacts
17
the
with
three
contacts
Puerto
Rico
with
are
purposeful;
Cossaboon
and
v.
2010)(citing
(3)
Me.
maintaining
Med.
Harlow,
Ctr.,
432
F.3d
jurisdiction
600
at
F.3d
57).
25,
At
is
reasonable.
32
first
(1st
Cir.
glance,
it
seems, like the Court has general jurisdiction over Defendant
Electronics.
However,
after
analyzing
the
underlying
allegations, we conclude that maintaining jurisdiction would not
be reasonable under the current circumstances.
See Cossaboon,
600 F.3d at 33.
In
order
to
analyze
the
reasonableness
inquiry,
courts
weigh the following “Gestalt factors,” which “serve to assist
the court in achieving substantial justice.” (Rodríguez v. Dixie
Southern Indus., Inc., 113 F. Supp. 2d 242, 53, P.R. D. 2000).
In a close case, they may even “tip the constitutional balance
of the court's analysis.” Id. These factors include:
(1) the defendant's burden of appearing, (2) the forum
state's interest in adjudicating the dispute, (3) the
plaintiff's interest in obtaining convenient and
effective relief, (4) the judicial system's interest
in obtaining the most effective resolution of the
controversy, and (5) the common interests of all
sovereigns in promoting substantive social policies.
Id. (citing Ticketmaster-New York, Inc. v. Alioto, 26 F. 3d 201,
209 (1st Cir. 1994).
As to the first factor, the Court notes that Defendant’s
burden of appearing in Puerto Rico would be
Puerto
Rico’s
always
be
District
burdensome
Court
for
a
has
stated,
defendant
18
to
substantial.
“[i]t
defend
will
itself
As
almost
in
a
foreign jurisdiction.” Rodríguez, 113 F. Supp. 2d at 253.
In
the present case, it would be burdensome for Defendants to have
to appear in the local District Court considering that they have
never conducted business in Puerto Rico, nor own any property or
bank accounts in the Island. See Docket Nos. 8-1 and 8-2.
Thus,
the first factor weighs in Defendants’ favor.
The second, third, and fourth factors weigh in Defendant’s
favor as well. The Defendants contend that Plaintiffs do not
have a valid cause of action. The Plaintiffs claim that the
continued defamation of Extreme as well as the lies that the
Defendants allegedly said about the entity have caused Extreme
to suffer economic loss. However, Plaintiffs have not provided
any specified allegations as to the libelous statements made by
Defendants
order
to
which
prove
have
a
negatively
defamation
affected
tort,
their
regardless
business.
if
its
In
libel
(written) or slander (oral), under Puerto Rico law defendants
must prove the following three requirements “1) that the alleged
supposed
defamatory
statements
are
false;
(2)
that
the
defamatory statements (written or spoken) were negligently made
to another; and (3) that the plaintiff suffered damages.” OjedaRodríguez v. Zayas, 666 F. Supp. 2d 240, 254-255 (D.P.R. 2009)
(citing Torres Silva v. El Mundo, Inc., 106 D.P.R. 415, P.R.
Office
Trans.
Plaintiffs
have
581
(1977).
failed
to
In
the
present
19
present
case,
however,
to
Court
specific
the
statements
which
demonstrate
false
claims
made
against
Plaintiffs by Defendants. The Plaintiffs simply allege, in a
conclusory
manner,
that
“the
damage
that
has
been
done
and
continues to be done by the defendant against plantiff,
can
cause plaintiff to loose [sic] its clients and its business on
the sale and servicing of GPS trackers” (Docket No. 1-1 ¶13)
(emphasis ours). These statements are inadequate to demonstrate
that Defendants’ actions are the cause of Extreme’s economic
loss.
Defendants
litigate
this
also
argue
dispute
is
that
the
the
state
appropriate
of
Florida,
forum
where
to
both
parties do business. This argument is based on the fact that the
majority of Electronics’ business is in Florida (Docket No. 8-1)
and Plaintiff states in the Complaint that his address is in the
state of Florida. See Docket No. 1-1 ¶1.
Finally, the fifth and final factor as well weighs heavily
in the Defendants’ favor.
In the case at bar, there is no
evidence whatsoever that Defendants’ contacts with Puerto Rico,
as minimal as they are, contributed to the harm suffered by
Plaintiffs.
Therefore,
“policy
considerations
weigh
heavily
against subjecting a foreign corporation to litigate a case in
federal
court
when
said
corporation
did
not
directly
cause
Plaintiffs’ harm.” Muniz v. Walgreen Co., 46 F. Supp. 3d 117 (D.
P.R. 2014).
Most notably, in the Complaint, plaintiffs stated
20
that “[t]his case has no impact over the public interest since
it’s
related
to
a
business
transaction
between
two
private
parties.” See Docket No. 1-1 ¶13.
Under
these
circumstances,
Plaintiffs
have
failed
to
establish any minimum contacts which may grant Puerto Rico with
the
jurisdiction
Defendants
as
to
there
see
was
their
no
contractual
contract
agreed
claims
upon.
against
They
have
provided no proof which gives rise to their claims of libel per
quod as the announcements shared do not comply with elements of
libel per quod set forth in case law. See F.A.A. v. Cooper, 566
U.S. 284, 295-297 (2012). Moreover, they have provided no proof
or allegations in the complaint, bank records or otherwise, of
any bank transactions ever having occurred within the Puerto
Rican forum regarding the collection of the $120,000 dollars.
Hence, exercising general jurisdiction over Electronics to
entertain Plaintiffs’ causes of action would be unreasonable,
especially given the fact that Plaintiffs can file suit in a
Florida state court.
Accordingly, Defendants’ Motion to Dismiss
for Lack of Personal and Subject Matter Jurisdiction (Docket No.
11) is hereby GRANTED.
IV.
For
the
aforementioned
CONCLUSION
reasons,
the
Court
hereby
GRANTS
Defendants’ Motion to Dismiss for Lack of Personal and Subject
Matter
Jurisdiction
(Docket
No.
21
11).
Judgment
of
dismissal
without prejudice is to be entered as to Extreme Electronics
Corporation,
Stephen
Glascoe,
Linda
Glascoe
and
the
conjugal
partnership composed by both of them.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 20th day of July, 2017.
/s/ DANIEL R. DOMÍNGUEZ
DANIEL R. DOMÍNGUEZ
U.S. District Judge
22
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