Opinion
02 Civ. 3927 (SAS)
October 9, 2002
James W. Carbin, Esq., Duane Morris, LLP, Newark, NJ, For Plaintiffs.
Jeffrey M. Herrmann, Esq., New York, NY, For Defendant.
OPINION AND ORDER
On October 23, 2001, various importers, purchasers, and owners of cargo brought suit against defendants in the Federal District Court of New Jersey for damages sustained from cargo lost or damaged at sea while in transit from various ports overseas to New York. See Verified Complaint. On May 15, 2002, the action was transferred to the Southern District of New York by stipulation between the plaintiffs and defendants Senator Lines GmbH and Hanjin Shipping Co., Ltd. See Stipulation and Order to Transfer. Among the cargo lost at sea was Mr. Holger Hegner's personal household goods which were being moved from his old home in Germany to his new home in New Jersey pursuant to a contract with defendant L. Rettenmayer Internationale Umzugslogistik GmbH (hereinafter "L. Rettenmayer" or "defendant"). See Plaintiffs' Opposition to Motion to Dismiss ("Pls. Opp.") at 1. L. Rettenmayer now moves to dismiss the complaint on the grounds that: (1) there is no admiralty jurisdiction; (2) this court lacks personal jurisdiction over defendant; and (3) any dispute between the parties is subject to a forum selection clause choosing the courts of Wiesbaden, Germany as the exclusive forum, pursuant to Rules 12(b)(1) (6), 12(b)(2) (5), and 12(b)(3) of the Federal Rules of Civil Procedure. See Defendant's Motion to Dismiss ("Def. Mot.") at 1.
This case is being brought pursuant to this Court's admiralty jurisdiction over maritime contracts, 28 U.S.C. § 1333(1).
This motion was severed from the balance of this action, which is now before Judge Allen Schwartz of this court. See Defendant's Reply at 1. For the reasons stated below, defendant's motion to dismiss for lack of personal jurisdiction is granted.
In light of this conclusion, defendant's remaining contentions need not be addressed.
I. BACKGROUND
In the early part of 2001, Holger Hegner, an employee of the German multinational corporation Siemens AG ("Siemens") and a plaintiff in this lawsuit, was being transferred from Germany to a Siemens facility in the United States. See Declaration of Jan Bovermann, L. Rettenmayer corporate officer, dated July 19, 2002 ("Bovermann Decl.") ¶ 3(a). Defendant L. Rettenmayer is a German-based international moving company. See Def. Mot. at 8. Siemens requested L. Rettenmayer's services to move Mr. Hegner's furniture and other household goods ("Household Goods") to Mr. Hegner's new home in Warren, New Jersey. See Bovermann Decl. ¶ 3(a).See also Siemens's Order Form, Ex. 1 to Defendant's Notice of Motion ("Notice of Motion"); L. Rettenmayer's Household Goods Waybill, Ex. 2 to Notice of Motion.
Defendant refers to "the Household Goods Waybill" while plaintiffs refer to "the bill of lading." As only one such document has been submitted, the Household Goods Waybill, Ex. 2 to Notice of Motion, and plaintiffs seem to quote from that document when referring to the bill of lading, I assume that plaintiffs and defendant are referring to the same document.
On January 10, 2001, L. Rettenmayer employees made a survey of the Household Goods at Mr. Hegner's home in Munich. See Povermann Decl. ¶ 3(b). On January 19, 2001, the firm of Carl Hartmann GmbH Co. of Bremen, Germany ("Hartmann"), a shipping agent, confirmed to L. Rettenmayer that it would arrange for sea shipment of the Household Goods and "container spotting" in Munich. Id. ¶ 3(c). On February 16, 2001, Hartmann informed L. Rettenmayer that the container (the "Container"), when loaded with the Household Goods, would be shipped by Hanjin Shipping Co. Ltd. aboard the vessel Choyang Park. Id. ¶ 3(d).
On February 22, 2001, a packing crew employed by L. Rettenmayer packed the Household Goods into boxes at Mr. Hegner's home in Munich, and packed the boxes into the Container supplied by Hartmann. Id. ¶ 3(e). Hartmann transported the Container by truck to the Port of Bremen, Germany. Id.
The Container was scheduled to arrive on March 10, 2001, and thereafter to be cleared through customs and delivered by Universal Relocation Systems, Inc. of Fairfield, New Jersey ("Universal") to Mr. Hegner's new home in New Jersey. Id. ¶¶ 3(f), 4. During the ocean voyage, however, the Container holding the Household Goods was lost at sea and therefore never reached the United States. Id. ¶ 3(f).
II. PERSONAL JURISDICTION
Plaintiffs argue that this Court has jurisdiction over L. Rettenmayer on the basis of its business transactions in New York upon which this claim is based. Plaintiffs also argue that L. Rettenmayer's contacts with New York are sufficient to confer general personal jurisdiction over it. In the alternative, they contend that this Court has jurisdiction over L. Rettenmayer by virtue of the New York presence of its agent, Universal.
A. Legal Standard
A court is obligated to dismiss an action against a defendant over whom it has no personal jurisdiction. See Fed.R.Civ.P. 12(b)(2); Laborers Local 17 Health and Benefit Fund v. Philip Morris, Inc., 26 F. Supp.2d 593, 597 (S.D.N.Y. 1998). "Prior to discovery, a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith legally sufficient allegations of jurisdiction, i.e. by making a 'prima facie showing' of jurisdiction." Jazini v. Nissan Motor Co., 148 F.3d 181, 184 (2d Cir. 1998) (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)). In doing so, "plaintiffs may rely entirely on allegations of fact, and they will prevail even if the moving party makes contrary allegations which controvert their prima facie case." Cornell v. Asicurazioni Generali S.p.A. et al., Nos. 98 Civ. 9186, 97 Civ. 2262, 2000 WL 284222, at *1 (S.D.N.Y. Mar. 16, 2000) (citations omitted). A court may also consider materials outside the pleadings. See Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001). In reviewing a motion to dismiss for lack of personal jurisdiction, a court must view all of the pleadings in the light most favorable to plaintiffs, resolving any doubts in plaintiffs' favor. See Hoffritz for Cutlery, Inc. v. Amalac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985).
In admiralty cases, the law of the forum state governs the personal jurisdiction analysis. See Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro In Amministrazione Straordinara, 937 F.2d 44, 50 (2d Cir. 1991). Accordingly, New York law governs here. The only presumable bases for jurisdiction under New York law are New York Civil Practice Law Rules ("CPLR") §§ 301 and 302. If jurisdiction is appropriate under state law, a court must then determine whether the exercise of that jurisdiction satisfies the requirements of due process. See Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). A state may only exercise personal jurisdiction over a non-resident defendant with whom it has certain "minimum contacts . . . such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." See Fort Knox Music, Inc. v. Baptiste, 203 F.3d 193, 196 (2d Cir. 2000) (internal marks omitted).
B. New York Law
1. Specific Jurisdiction
Section 302(a)(1) of the CPLR , New York's long-arm statute, provides for jurisdiction over any non-domiciliary who transacts any business within the state or contracts anywhere to supply goods or services in the state, so long as the cause of action arises from that contract. See N.Y. C.P.L.R. § 302 (McKinney 2002); Bank Brussels Lambert, 171 F.3d at 787. This section extends a court's jurisdiction "to any nonresident who has purposely availed [itself] of the privilege of conducting activities within New York and thereby invoked the benefits and protections of its laws." Bank Brussels Lambert, 171 F.3d at 787 (quotation marks omitted). "To determine whether a party has 'transacted business' in New York, courts must look at the totality of the circumstances concerning the party's interactions with, and activities within, the state." Id. A single business transaction can satisfy this provision, even where the defendant never enters the state, so long as the claim arises from that transaction. See Haddad Bros., Inc. v. Little Things Mean A Lot, Inc., No. 00 Civ. 0578, 2000 WL 1099866, at *6 (S.D.N.Y. Aug. 4, 2000); Citigroup Inc. v. City Holding Co., 97 F. Supp.2d 549, 564 (S.D.N.Y. 2000).
Section 302(a) provides, in relevant part: "As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent: 1. transacts any business within the state or contracts anywhere to supply goods or services in the state." N.Y. C.P.L.R. § 302(a) (McKinney 2002).
L. Rettenmayer contracted with Hartmann and Universal to ship and deliver Mr. Hegner's Household Goods to his new home in New Jersey. Plaintiffs argue that according to the bill of lading, "the goods were to be carried aboard the M/V CHOYANG PARK from Bremerhaven and delivered to New York." Pls. Opp. at 1. Yet plaintiffs admit that: "The bill of lading provides that defendant L. Rettenmayer contracted to carry and deliver the goods to: Delivery Address: Mr. Holger Hegner, 15 Hillcrest Blvd., USA Warren, N.J. 07059." Id. at 1. See also Household Goods Waybill, Ex. 2 to Notice of Motion. Even if the ship itself was ultimately bound for New York, it is clear that L. Rettenmayer contracted to pack and ship the goods to New Jersey. Therefore, there is no personal jurisdiction over L. Rettenmayer on the basis of Section 302(a).
Plaintiffs refer to the cargo's destination as "Newark/New York" four times in their five-page Opposition. See Pls. Opp. at 1, 3. However, adding "/New York" to "Newark" does not magically move Newark, New Jersey into New York. Moreover, plaintiffs fail to cite any authority for the proposition that a transaction in the New York/New Jersey metropolitan area is tantamount to a transaction in New York.
2. General Jurisdiction
Section 301 of the CPLR subjects a foreign corporation to general jurisdiction if it is "doing business" in the state. See N.Y. C.P.L.R. § 301 (McKinney 2002); Aerotel Ltd. v. Sprint Corp., 100 F. Supp.2d 189, 191 (S.D.N.Y. 2000) (interpreting section 301). Under this test, "a foreign corporation is amenable to suit in New York if it is '"engaged in such a continuous and systematic course of 'doing business' here as to warrant a finding of its 'presence' in this jurisdiction." Aerotel, 100 F. Supp.2d at 191-92 (quoting Frummer v. Hilton Hotels Int'l Inc., 19 N.Y.2d 533, 536 (1967)).
To determine whether a foreign corporation is doing business in New York, courts have focused on a traditional set of indicia: (1) whether the company has an office in the state; (2) whether it has any bank accounts or other property in the state; (3) whether it has a phone listing in the state; (4) whether it does public relations work here; and (5) whether there are individuals permanently located in the state to promote its interests. See Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 98 (2d Cir. 2000) (Leval, J.) (citing Hoffritz, 763 F.2d at 58; Frummer, 19 N.Y.2d at 537), cert. denied, 532 U.S. 941 (2001). Casual or occasional activity does not constitute doing business; rather, section 301 requires a showing of "continuous, permanent, and substantial activity in New York." Landoil Res. Corp. v. Alexander Alexander, Inc., 918 F.2d 1039, 1043 (2d Cir. 1990). "The 'doing business' standard is a stringent one because a corporation which is amenable to the Court's general jurisdiction may be sued in New York on causes of action wholly unrelated to acts done in New York.'" Jacobs v. Felix Bloch Erben Verlag fur Buhne Film und Funk KG, 160 F. Supp.2d 722, 731 (S.D.N.Y. 2001) (quoting Ball v. Metallurgie Hoboken-Overpelt S.A., 902 F.2d at 198).
For purposes of section 301, plaintiffs have not met their burden of demonstrating that L. Rettenmayer is "doing business" in New York. L. Rettenmayer has no office in New York, no bank accounts or other property in the state, no phone listing in the state, does no public relations work in the state, and has no employees located in the state. See Bovermann Decl. ¶¶ 2, 6, 11. L. Rettenmayer is a family owned corporation organized under the laws of Germany with its principal office in Wiesbaden, Germany. it has no offices in the United States. See id. ¶¶ 6, 8. Defendant asserts that it is neither licensed nor qualified to conduct business in New York and does not do business within New York. See id. ¶¶ 2, 6-8.
The terms of L. Rettenmayer's membership in Overseas Movers Network International forbid the maintenance of offices or advertising outside of Europe. See Bovermann Decl. ¶ 6.
Plaintiffs have made no specific allegations to the contrary. Rather, plaintiffs allege L. Rettenmayer "regularly conducts business" in New York. Pls. Opp. at 3. "Legal conclusions couched as factual allegations are not fact [ual allegations] and cannot substitute for [them]."Schenker v Assicurazioni Generali S.p.A., No. 98 Civ. 9186, 2002 WL 1560788, at *2 (S.D.N.Y. July 15, 2002) (holding that plaintiffs' conclusory allegations were insufficient to make out prima facie case for mere department status of foreign corporation defendant). Plaintiffs fail to make any factual allegations to make a prima facie showing of jurisdiction under section 301.
3. Agency
Plaintiffs also argue that defendant is subject to general personal jurisdiction in New York because it contracted to carry goods through an agent, Universal, in New York. See Pls. Opp. at 3 (citing Furman v. General Dynamics Corp., 377 F. Supp. 37, 42 (S.D.N.Y. 1974)). "The continuous presence and substantial activities that satisfy the requirements of doing business do not necessarily need to be conducted by the foreign corporation itself." Wiwa, 226 F.3d at 95. While "the presence of [a] subsidiary alone does not establish the parent's presence in the state," Jazini, 148 F.3d at 184 (citing Volkswagenwerk AG v. Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir. 1984)), personal jurisdiction over a foreign parent exists where its New York subsidiary is either a "mere department," or an "agent," of the parent. Jazini, 148 F.3d at 184 (citing Koehler v. Bank of Bermuda, Ltd., 101 F.3d 863, 865 (2d Cir. 1996)).
To determine whether Universal is a mere department or alter ego of L. Rettenmayer, the Court must consider the four factors outlined in Beech Aircraft: (1) common ownership, which is essential; (2) financial dependency of the subsidiary on the parent; (3) the degree to which the parent interferes in the selection and assignment of the subsidiary's personnel and fails to observe corporate formalities; and (4) the degree of control that the parent exercises over the subsidiary's marketing and operational policies. See Beech Aircraft, 751 F.2d at 120-22. Plaintiffs are entitled to limited discovery on this issue if they make out a prima facie case that Universal is a mere department of L. Rettenmayer. See, e.g., Schenker, 2002 WL 1560788, at *1-*2.
Plaintiffs fail to satisfy the first, and essential, Beech Aircraft factor. See also Levant Line v. Marine Enter., 166 B.R. 221, 231 (S.D.N.Y. 1994) (citing cases). Universal, the agent on which plaintiffs rest their argument, is not wholly owned by L. Rettenmayer. Indeed, L. Rettenmayer owns no part of Universal and none of the officers or directors of L. Rettenmayer is a shareholder, officer, director, or employee of Universal. See Bovermann Decl. ¶¶ 7, 8.
To establish that a corporation doing business in New York is an agent of a related foreign corporation, the plaintiff must show that the former "does all the business which [the foreign corporation] could do were it here by its own officials." Frummer, 19 N.Y.2d at 537; accord Jazini, 148 F.3d at 184; Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116, 120-21 (2d Cir. 1967); Cornell, 2000 WL 284222, at *3; Palmieri v. Estefan, 793 F. Supp. 1182, 1190 (S.D.N.Y. 1992). Universal is located in New Jersey, not New York, and was employed to deliver the Household Goods to Mr. Hegner's new home in New Jersey, not New York. Therefore Universal was not doing the business in New York that L. Rettenmayer would be doing were it here by its own officials, since Universal was doing no business for L. Rettenmayer in New York. Plaintiffs fail to plead a prima facie case that Universal is a mere department or agent of L. Rettenmayer.
4. Discovery
Plaintiffs also request discovery on the issue of jurisdiction to show L. Rettenmayer is subject to personal jurisdiction in New York because of its continuous course of doing business in New York and through its relationship with Universal. Plaintiffs assert that "discovery will likely show that L. Rettenmayer regularly conducts business" in New York and "throughout the New York metropolitan area." Pls. Opp. at 3. Plaintiffs also request discovery "to demonstrate an ongoing relationship between L. Rettenmayer and its agent, Universal." Id. at 4. These statements alone are not enough to allow discovery. Vague and generalized allegations, such as these, are insufficient to make a prima facie showing of jurisdiction over an out-of-state defendant. See Hennigan v. Taser Intern., Inc., No. 00 Civ. 2981, 2001 WL 185122, at *2 (S.D.N.Y. Feb. 26, 2001); Ring Sales v. Wakefield Engineering, 90 A.D.2d 496, 497 (2d Dep't 1982). Although a plaintiff opposing a Rule 12(b)(2) motion is entitled to have its complaint interpreted in its favor, plaintiffs have submitted no affidavits to support their allegations and have alleged no specific facts supporting their claim of jurisdiction over L. Rettenmayer.
Because plaintiffs have failed to make out a prima facie case for this Court's exercise of personal jurisdiction, they are not entitled to discovery. See Jazini, 148 F.3d at 185-86 (denying request for jurisdictional discovery for failure to make out prima facie case);Cornell, 2000 WL 284222, at *1 (same); see also In re Ski Train Fire in Kaprun, Austria on Nov. 11, 2000, MDL Nos. 1428, 01 Civ. 6554, 2002 WL 31106403, at *8-*9 (S.D.N.Y. Sept. 19, 2002) (dismissing case for lack of personal jurisdiction where no discovery had been conducted, because plaintiff failed to make out prima facie case); Jerge v. Potter, No. 99 Civ. 312, 2000 WL 1160459, at *2-*3 (W.D.N.Y. Aug. 11, 2000) (same);Laborers Local 17, 26 F. Supp.2d at 597-98, 604 (same).
III. TRANSFER OF VENUE
Plaintiffs have requested that if personal jurisdiction is not found in New York, "the appropriate remedy would be to transfer the case back to New Jersey, rather than dismiss L. Rettenmayer." Pls. Opp. at 3.
"For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district court or division where it might have been brought." 28 U.S.C. § 1404(a). The burden is on the moving party "to make a clear and convincing showing that 'transfer will serve the interests of convenience and fairness.'" NBA Props. v. Salvino, Inc., No. 99 Civ. 11799, 2000 WL 323257, at *3 (S.D.N.Y. Mar. 27, 2000) (citations omitted). The movant must support its motion with a detailed factual affidavit. See Nabisco, Inc. v. Brach's Confections, Inc., No. 00 Civ. 5875, 2000 WL 1677935, at *1 (S.D.N.Y. Nov. 8, 2000).
"A motion to transfer venue is not ordinarily granted at the request of the party who chose the forum in the first place." Ferrostaal, Inc. v. Union Pac. R.R. Co., 109 F. Supp.2d 146, 151 (S.D.N.Y. 2000) (quotation marks omitted). Therefore, a plaintiff moving to transfer must demonstrate that, since the action was filed, there has been a change of circumstances which warrants transfer of venue. See id.; see also Hsin Ten Enterprise USA, Inc. v. Clark Enterprises, 138 F. Supp.2d 449, 465 (S.D.N.Y. 2000); Crane v. Metro-North Commuter R.R., No. 87 Civ. 2876, 1989 WL 74954, at *3 (S.D.N.Y. June 26, 1989).
First, plaintiffs have not submitted an affidavit in support of their transfer request. In fact, they have offered no reasons why the action should be transferred back to New Jersey in the interest of justice.Second, plaintiffs have not alleged any change of circumstances warranting transfer of this suit. See Harem-Christensen Corp. v. M. S. Frigo Harmony, 477 F. Supp. 694, 698 (S.D.N.Y. 1979) (after finding no personal jurisdiction over defendant, court refused to transfer venue pursuant to section 1404(a), as plaintiffs' "mistake" in bringing suit in the wrong forum was not a change in circumstances and was not sufficient reason to compel a change of venue in the interest of justice). Indeed, plaintiffs recently stipulated to a transfer of this case from New Jersey to New York, only now requesting a transfer back to New Jersey if jurisdiction is not found in New York. Accordingly, plaintiffs' request to transfer venue is denied.
IV. CONCLUSION
For the reasons stated above, defendant's motion to dismiss for lack of personal jurisdiction is granted. The claims against L. Rettenmayer are dismissed without prejudice.