Opinion
Civil Action No. 03-926
December 29, 2003
MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION
I. RECOMMENDATION
For the reasons stated below, it is respectfully recommended that the Defendants' Motion to Dismiss (Doc. 3) be denied as it relates to the alleged lack of subject matter jurisdiction, lack of personal jurisdiction, and improper venue.
II. REPORT
BACKGROUND
1. Procedural History
Rudolph D. Dinardo ("the Plaintiff") commenced this diversity suit in the United States District Court for the Western District of Pennsylvania on June 20, 2003. See generally Compl. (Doc. 1). The Complaint centers around an alleged joint business venture between the Plaintiff, Andrew J. Nagy ("Nagy"), and Nagy Golf and Turf, Inc. ("Nagy Golf, Inc.") to form a West Virginia corporation — that later became known as Titan Manufacturing, Inc. ("Titan") — for the purpose of "manufacturing, selling, distributing and repairing golf carts." See id. ¶¶ 2-4. Nagy, Nagy Golf, Inc., and Titan are all named as defendants in this action. See id.
Nagy is the CEO and president of Nagy Golf, Inc. See id. ¶ 2. According to the Complaint, both Nagy and Nagy Golf, Inc. are citizens of Arizona and reside at same address. See id. ¶¶ 2 4.
Nagy, Nagy Golf, Inc., and Titan will be referred to collectively as "the Defendants".
The Complaint specifically alleges several state law causes of action against the various Defendants. They are as follows:
• Breach of fiduciary duty claims against Nagy. These claims are based upon Nagy's capacity as: a member of the board of directors of Titan, see Count I; an officer of Titan, see Count II; and a controlling shareholder of Titan, see Count III;
• Fraudulent misrepresentation and breach of contract against Nagy. See Counts IV VI;
• Wrongfully conversion against both Nagy and Nagy Golf, Inc. See Count V; and
• A shareholder's derivative action against all the Defendants based on Nagy's alleged misconduct, and the subsequent harm to Titan. See Count VII.
The Plaintiff seeks an accounting, damages in the amount of $183,000, attorney's fees and costs, and any other equitable relief the court finds just. See "Wherefore" Clauses.
On August 18, 2003, the Defendants filed a Motion to Dismiss ("the Defendants' Motion") pursuant to Federal Rule of Civil Procedure 12(b), which is presently before the court. See generally Defs.', Andrew J. Nagy, Titan Mfg., Inc., and Nagy Golf and Turf, Inc., Mot. to Dismiss (Doc. 3; hereinafter cited as "Defs.' Mot."). The Defendants contemporaneously filed a supporting brief. See Defs.' Mem. of Law in Supp. of Mot. to Dismiss (Doc. 4; hereinafter cited as "Defs.' Br."). The basis of the Defendants' Motion is that: 1) the District Court lacks jurisdiction over "the subject matter and persons named in the Complaint"; 2) the Plaintiff has failed to join an indispensable party; and 3) the Western District of Pennsylvania is an improper venue for the Plaintiff's action. See generally Defs.' Mot. at 1. On September 22, 2003, the Plaintiff filed a response brief. See generally Pl.'s Br. in Response to Defs.' Mot. to Dismiss (Doc. 6; hereinafter cited as "Pl.'s Br."). The briefing has come to a close, and the matter is now ripe for adjudication.
The Defendants' brief is not paginated; nonetheless, the undersigned will refer to specific page numbers in the analysis that follows.
2. Facts The events underlying the Plaintiff's action began at an unspecified date in 2000, when the Plaintiff was allegedly approached by Nagy in Washington, Pennsylvania ("Washington") to invest in a business venture in which the Plaintiff would become the partial owner of a company formed in West Virginia. See Pl.'s Br. at 1-2. The purpose of the company was to purchase the assets of Melex Products International, Inc. ("Melex") and then use those assets to manufacture and sell golf carts. See id. at 2.
Despite the parties' alleged understandings, Nagy proceeded to enter into a Letter of Agreement with Pezetel S.A. ("Pezetel"), the parent company of Melex, on October 10, 2000, whereby the assets would be purchased by Nagy Golf, Inc. See id. On November 24, 2000, Nagy Golf, Inc., Melex, and Pezetel allegedly executed an Asset Purchase Agreement that transferred the Melex assets to Nagy Golf, Inc. and granted Nagy Golf, Inc. a licence to use Melex's trademark, in exchange for $508,691.92. See id. During this time, Nagy continued to solicit the Plaintiff for an investment in the venture. See id.
On or about December 19, 2000, the Plaintiff wired $150,000 from his bank in Washington, allegedly based on "Defendant Nagy's representations that a West Virginia business was to be formed for the production of golf carts." See id. This contribution purportedly represented a partial payment for the overall purchase price of the Melex assets. See id. at 2-3. In May, 2001, the Plaintiff contributed another $50,000. See id. at 3.
Nagy then formed NGT, Inc. ("NGT"), a West Virginia corporation that, according to the Plaintiff, was a precursor to Titan. See id. Nagy was allegedly the sole shareholder, sole director, and President of NGT. See id. The Plaintiff alleges that all of the Melex assets were transferred to NGT; nonetheless, Nagy refused to offer the Plaintiff any ownership interest in the company. See id.
On February 15, 2002, Titan was formed, and an initial incorporation meeting was held on April 1, 2002. See id. According to the Plaintiff's account of that meeting, Nagy was elected President and named as a director, the Plaintiff was elected Vice-President and named as a director, and Bambi Hutnak was elected Secretary and Treasurer. See id.
On or about this date, Nagy, the Plaintiff, George Retos ("Retos"), and Titan entered into a Sales Agreement. See id. at 4. Under the agreement, the Plaintiff was to receive 33, 333 shares of Titan stock and a promissory note from Titan in the amount of $555,382 in exchange for the sale of the Plaintiff's interest in the Melex assets. See id. Nagy and Retos also allegedly received shares and notes in exchange for their respective interests in those assets. See id. The Plaintiff admits, however, that he did not sign the agreement, nor was he present at the meeting when the agreement was executed. See id.
Since that time, the Plaintiff has allegedly guaranteed loans on behalf of Titan. See id. at 5.
The Plaintiff's alleged injury is that the Defendants have subsequently denied him any "ownership interest" in Titan. See id. In addition, the Defendants have allegedly failed to remit the majority of his $200,000 investment. See id. While the Plaintiff concedes that $24,000 has been repaid by Nagy, he seeks the remaining $186,000 of his initial investment. See Compl. ¶ 42.
ANALYSIS 1. The Plaintiff Has Proffered Sufficient Evidence to Defeat the Defendants' Challenge to Personal Jurisdiction.
The Defendants purportedly challenge the District Court's exercise of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) as well. See Defs.' Mot. at 1 and Defs.' Br. at 3. The Defendants' subsequent briefing, however, appears to concede that subject matter jurisdiction exists. See Defs.' Br. at 3-4. The Defendants state: Plaintiff's Complaint asserts that this Court has jurisdiction over this matter based on diversity of citizenship under 18 U.S.C. § 1332 because the Plaintiff is a citizen of the Commonwealth of Pennsylvania, Defendant Nagy is a citizen of Arizona, Defendant Nagy Golf and Turf is a citizen of Arizona[,] and Defendant Titan is a citizen of West Virginia. Defendants do not dispute the citizenship asserted by the Plaintiff, but the parties' diverse citizenship does not dispose of the jurisdictional question. Plaintiff has failed to assert adequate facts in his Complaint to demonstrate sufficient contacts between the forum state and the non-resident Defendants that would give rise to personal jurisdiction. . . . See id. To the extent that this could be construed as an attack on subject matter jurisdiction, the Defendants' Motion should be denied. The Defendants concede that complete diversity exists, and the face of the Complaint alleges an amount that is well above the required threshold.
To determine whether personal jurisdiction exists over a defendant, "a federal court sitting in diversity must undertake a two-step inquiry[:] [f]irst, the court must apply the relevant state long-arm statute to see if it permits the exercise of personal jurisdiction; [second], the court must apply the precepts of the Due Process Clause of the Constitution." See IMO Indus., Inc. v. Kierkert AG, 155 F.3d 254 59 (3d Cir. 1998). The Pennsylvania long-arm statute authorizes its courts to exercise personal jurisdiction "to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States." See 42 Pa.C.S.A. 5322(b); see also Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001) (stating courts may "exercise jurisdiction over nonresident defendants to the constitutional limits of due process clause of the fourteenth amendment") (citation omitted). The two-step inquiry, therefore, "is collapsed into a single step, requiring the court to determine if personal jurisdiction is consistent with the dictates of due process." See Perry v. Markman Capital Mgmt, Inc., 2002 WL 31248038, *3 (E.D. Pa. Oct. 4, 2002) (internal quotations and citation omitted); See also IMO Indus., Inc., 155 F.3d at 259 (explaining this effect under the New Jersey long-arm statute, which like Pennsylvania's, "permits the exercise of personal jurisdiction to the fullest limits of due process"). Thus, the proper inquiry is whether the exercise of personal jurisdiction is constitutional. See Pennzoil Prods. Co. v. Colelli Assocs., Inc., 149 F.3d 197, 200 (3d Cir. 1998).
Parenthetically, the undersigned recognizes that the Plaintiff has referenced other provisions of Pennsylvania's long-arm statute, e.g., personal jurisdiction based on transacting any business within the state. See Pl.'s Br. at 6 (citing 42 Pa.C.S.A. § 5322(a)(1)). For the reasons stated above, the court need not determine whether those provisions are fulfilled; nonetheless, relevant case law suggests that they would be, and that the Pennsylvania long-arm statute is no impediment to finding personal jurisdiction in this case. See, e.g., Financial Trust Co. v. Citibank, N.A., 268 F. Supp.2d 561, 567 (D.V.I. 2003) (stating that the equivalent "transaction any business" provision in the Virgin Islands long-arm statute could be satisfied by "only a single act which in fact amounts to the transaction of business within a state or territory") (citations omitted).
The constitutional limitations on the exercise of personal jurisdiction differ depending on whether a court seeks to exercise general or specific jurisdiction over the non-resident defendant. See Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992). In this instance, the District Court may limit its inquiry to whether specific jurisdiction exists over the Defendants in this instance.
The Defendants' contacts with Pennsylvania fall short of the continuous and systematic activity required for general jurisdiction. See, e.g., Pinker v. Roche, 292 F.3d 361, 369 n. 1 (3d Cir. 2002) ("`[G]eneral jurisdiction,' . . . is established when a defendant's contacts with the forum are `continuous and systematic.'") (citation omitted). As defense counsel properly points out: 1) the corporate Defendants were not incorporated nor registered as a foreign corporation under Pennsylvania law; 2) they do not have agents, employee, or officers therein; and 3) have not instituted any lawsuits in Pennsylvania. See Defs.' Br. at 4.
To properly exercise specific jurisdiction under the Due Process Clause, a two-part test must be satified. See IMO, 155 F.3d at 259. First, "the plaintiff must show that the defendant has constitutionally sufficient `minimum contacts' with the forum." See id. (citation omitted). Second, "the court must determine, in its discretion, that to do so would comport with `traditional notions of fair play and substantial justice.'" See id. (citations omitted).
Minimum contacts analysis — the first prong of the test — focuses on "the relationship among the defendant[s], the forum, and the litigation." See Pinker, 292 F.3d at 368 (citation omitted). Physical presence within the forum is not necessary to establish specific jurisdiction over a nonresident defendant. See IMO, 155 F.3d at 259 (citation omitted). Instead, minimum contacts are established "when a non-resident defendant has `purposefully directed' his activities at a resident of a forum and the injury arises from or is related to those activities." See Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001) (citations omitted). In other words, specific jurisdiction will be found "only if the plaintiff's cause of action arises out of a defendant's forum-related activities, such that the defendant should reasonably anticipate being haled into court in that forum." See Remick, 238 F.3d at 255 (citations and internal quotations omitted). In contrast, "random, fortuitous, or attenuated" contacts with the forum are insufficient. See BP Chem. Ltd. v. Formosa Chem. Fibre Corp., 229 F.3d 254, 261 (3d Cir. 2000) (citation and internal quotations omitted).
Once a defendant challenges the exercise of personal jurisdiction, the plaintiff initially bears the burden of demonstrating facts to establish the minimum contacts the Constitution requires. See Grand Entm't Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d Cir. 1993). Such facts may be shown "by affidavits or other competent evidence that jurisdiction is proper." See Dayhoff, Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d. Cir. 1996) (citations omitted). In reviewing those facts, the court "must accept [them] as true and construe disputed facts in favor of the plaintiff." See Pinker, 292 F.3d at 368 (citation and internal quotations omitted).
Having carefully considered the Plaintiff's submissions, the undersigned finds that the Plaintiff has met its burden of proffering evidence demonstrating that the Defendants have sufficient contacts with the forum state of Pennsylvania as to justify a finding of specific jurisdiction. As elaborated in greater detail below, the Plaintiff's submissions make clear that the Defendants have "reach[ed] out beyond [their] state[s] and create[d] continuing obligations with the citizens of another state." See Gen. Elec. Co., 270 F.3d at 150 (citations and internal quotations omitted). Moreover, because all of the Plaintiff's claims arise out of the proposed business relationship between the Plaintiff and the Defendants to manufacture and distribute golf carts, the District Court may properly exercise specific jurisdiction over the Defendants in this instance.
The parties do not distinguish between the three defendants for the purpose of jurisdictional analysis, and the District Court should follow their lead. See generally Defs.'Br. at 3-4; Pl.'s Br. at 5-9.
According to the Plaintiff's submissions, the Defendants: 1) actively solicited the Plaintiff to become involved in the joint business venture to purchase assets related to the manufacturing of golf carts, meeting with the Plaintiff on three occasions at Retos' office in Washington around September or October, 2000, see Aff. of George Retos ¶ 1 (attached at Ex. A to Pl.'s Br.); 2) solicited the Plaintiff's involvement after Nagy entered into the letter agreement with Pezetel to purchase said assets, again meeting in Washington, see id. ¶ 2; 3) met with Retos in Washington to resolve disputes with Pezetel in December 2000, see id. ¶ 3; 4) received funds send from the Plaintiff's bank account in Washington on two occasions (December 19, 2000 and May 2000), see id. ¶ 4, 7; 5) met with the Plaintiff in Washington on two occasions in January and February, 2000 to discuss setting up the corporation that would later become Titan, see id. ¶ 5; 6) arranged to store assets from the Melex purchase in Washington, see id. ¶ 6; 7) held a pre-incorporation meeting in Washington on January 19, 2002 regarding the leases and loans for Titan; 8) met with the Plaintiff in Upper St. Clair, Pennsylvania to discuss whether to permanently locate the office of Titan in Washington, see id. ¶ 9; 9) executed two $90,000 loans in Washington on behalf of Titan, see id. ¶ 10; 10) met with Washington County's Redevelopment Authority to acquire property in Washington for Titan's office, see id. at ¶ 11; and 11) entered into a lease on behalf of Titan with the Washington Crown Center Mall to sell golf carts at that location, see id. ¶ 12.
Case law from the United States Court of Appeals for the Third Circuit ("the Third Circuit") confirms that such contacts are sufficient. First, the record is replete with the Defendants' numerous "physical contacts with the forum," the Defendants having convened nearly a dozen times in Pennsylvania to discuss and resolve issues related to the joint venture with the Plaintiff. See generally Gen. Elec. Co., 270 F.3d at 150 ("[s]pecific jurisdiction frequently depends on physical contacts with the forum," and "[a]ctual presence during pre-contractual negotiations, performance, and resolution of post-contract difficulties" supports finding of jurisdiction) (citation omitted).
Second, while the existence of a contractual relationship alone does not "automatically establish sufficient minimum contacts . . . [the parties'] prior negotiations[,] contemplated future consequences, . . . and actual course of dealing" factor into the determination of whether minimum contacts are present. See BP Chem. Ltd., 229 F.3d at 260 (citations and internal quotations omitted); see also Gen. Elec. Co., 270 F.3d at 151 (stating "[i]n the commercial milieu, the intention to establish a common venture extending over a substantial period of time" supports a finding of specific jurisdiction).
Here, the record indicates that the Defendants executed loan agreements in Pennsylvania, discussed and made inquiries to the relevant authorities about housing Titan's corporate office in Pennsylvania, and leased retail space in Pennsylvania. See discussion, supra, at 10-11. In addition, the continuing relationship between the Plaintiff and the Defendants lasted over two years. See id. Accepting these facts as true, the parties clearly "contemplated future consequences" that relate to this forum, and possessed some "intention to establish a common venture extending over a substantial period of time." See generally Gen. Elec. Co., 270 F.3d at 151. The Defendants' conclusory assertions to the contrary are unpersuasive. See Defs.' Br. at 4 (stating "the purported contracts entered into between the parties did not intend that any of the relevant activities involving the manufacture of golf carts would take place in Pennsylvania [and that the] Plaintiff merely sought to become involved in business ventures which were to operate outside [Pennsylvania]")
As the record demonstrates both physical contacts and deliberate assumption of long-term obligations, it is imminently reasonable hold the Defendants accountable "for the consequences of their activities" in Pennsylvania. See Mellon Bank (East) PSFS, Nat'l Ass'n, 960 F.2d at 1222 (citation and internal quotations omitted).
The Defendants reliance on the fact that they have no physical presence in Pennsylvania does not affect the court's analysis. See Defs.' Br. at 4 (stating that the corporate Defendants were not incorporated nor registered as a foreign corporation under Pennsylvania law; that they do not have agents, employee, or officers therein; and that have not instituted any lawsuits in Pennsylvania). As previously stated, physical presence is not a "jurisdictional litmus test." See Mellon Bank (East) PSFS, Nat'l Ass'n, 960 F.2d at 1225 (rejecting defendant's arguments that they had no "physical contacts . . . with Pennsylvania, e.g., no residence, no office, no bank accounts, no telephone listing, no property in the Commonwealth," stating that "courts have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction") (citations and internal quotations omitted).
For all of the reasons stated above, the Plaintiff has sufficiently shown that the Defendants had "minimum contacts in the forum state." See generally Grand Entm't Group, Ltd., 988 F.2d at 481 (citations and internal quotations omitted). The only matter that remains is whether "the assertion of personal jurisdiction would comport with `fair play and substantial justice.'" See Pennzoil Prods. Co., 149 F.3d at 201 (citations omitted); see also Grand Entm't Group, Ltd., 988 F.2d at 483 (stating "[o]nce the plaintiff has made out a prima facie case of minimum contacts, . . . the defendant must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable") (citations and internal quotations omitted).
The burden on the Defendants to make such a showing is "heavy," and they have failed to meet it. See id. (stating "the defendants must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable") (citations and internal quotations omitted). In fact, the Defendants have failed to provide any meaningful arguments in this regard. See Defs.' Br. at 3-4. As the Defendants have not put forward any reasons suggesting that jurisdiction would be unreasonable in this instance, the undersigned will not address the issue. See Mellon Bank (East) PSFS, Nat'l Ass'n, 960 F.2d at 1226-27 (concluding that the court need not consider factors bearing on "fair play and substantial justice" where the defendants limited their arguments to whether sufficient minimum contacts existed).
The District Court may properly exercise specific jurisdiction over the Defendants in this instance. It is therefore recommended that the Defendants' Motion based on lack of personal jurisdiction be denied.
2. Venue Properly Lies in this District Under 28 U.S.C. § 1391(a).
The Defendants next contend that venue is not proper in the Western District of Pennsylvania. See generally Defs.' Br. at 6-7. They argue that "the acts and omissions set forth in the Complaint could only be deemed to have occurred outside of Pennsylvania in view of the respective domiciles of the Defendants and the location of all relevant business activities." into a remote district having no real relationship to the dispute." See Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291, 294 (3d Cir. 1994). Moreover, "events or omissions that might only have some tangential connection with the dispute in litigation are not enough." See id.
Under this analysis, the court considers the location of those events and omissions that give rise to the plaintiff's claim and not the defendant's contacts with a particular district. See, e.g.,Pro Spice, Inc. v. Omni Trade Group, Inc., 173 F. Supp.2d 336, 339 (E.D. Pa. 2001) (citing Cottman Transmission Sys., 36 F.3d at 294). Nonetheless, "many of the factors that the Court analyze in determining [the] Defendant's `minimum contacts' with Pennsylvania are also relevant to the determination that venue is proper in [a given] District." See Westcode, Inc. v. RBE Electronics, Inc., 2000 WL 124566, *7 (E.D. Pa. Feb. 1, 2000) (citingBABN Techs. Corp. v. Bruno, 25 F. Supp.2d 593, 598-99 (E.D. Pa. 1998)); see also Omnikem, Inc v. Shepherd Tissue, Inc., 2000 WL 486610, *5 (E.D. Pa. Apr. 26, 2000) (stating same). The burden of demonstrating that venue is improper ultimately rests with the party that challenges it — i.e., the Defendants. See Pro Spice, Inc., 173 F. Supp.2d at 339 (citing Myers v. Am. Dental Ass'n, 695 F.2d 716, 724-25 (3d Cir. 1982)).
As the preceding discussion of personal jurisdiction indicates, the undersigned has already found that a substantial part of the events or omissions giving rise to the Plaintiff's causes of action occurred in Pennsylvania. See discussion, supra, at 6-15. Among others, events that occurred in Pennsylvania included: the Plaintiff's solicitation to make his initial investment in the Defendants' business — the funds at issue in this dispute; the execution of loan agreements by the Plaintiff; the transmission of money to the Defendants; and various corporate meetings by the Defendants. See id. Further, the injury alleged is to a Pennsylvania resident.
In addition, contrary to the Defendants' musings, two of the three Defendants — Nagy Golf, Inc. and Titan — are deemed "residents" of Pennsylvania for venue purposes, as the court has concluded that all of the Defendants are subject to personal jurisdiction. See 28 U.S.C. § 1391(c) ("For purposes of venue, . . . a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction."); see also Financial Trust Co. v. Citibank, N.A., 268 F. Supp.2d 561, 569 (D.V.I. 2003).
The relevant case law indicates that these events are sufficient to establish venue, and the Defendants have not cited authority to the contrary. See, e.g., Westcode, 2000 WL 124566 at *7 (holding venue requirements were satisfied by facts establishing personal jurisdiction in breach of contract action where injury was inflicted on a resident of the forum); Omnikem, 2000 WL 486610 at *5 (same); Nowicki v. United Timber Co., 1999 WL 619648, *4-5 (E.D. Pa. Aug. 12, 1999) (holding venue was proper where the parties negotiated a contract via telephone while the plaintiff was located in the forum, stating "negotiations are . . . substantial events for the purposes of establishing venue") (citations omitted);Torchmark Corp. v. Rice, 945 F. Supp.2d 172, 179 (E.D. Ark. 1996) (holding solicitation and negotiation of sale of stock via telephone with plaintiff located in forum was sufficient to establish venue in breach of fiduciary duty suit).
Indeed, this is not a case where the Defendants are "haled into a remote district having no real relationship to the dispute." See Cottman Transmission Sys., 36 F.3d at 294. Thus, the Defendants' Motion, to the extent that it is based on improper venue, should be denied.
III. CONCLUSION
The undersigned recognizes that no recommendation has been made in regard to the Plaintiff's alleged failure to join an indispensable party. Having considered the Defendants' scant briefing on this issue, the undersigned would likely find that defense counsel has failed to meet its burden to show that Retos is "indispensable" as defined by Federal Rule of Civil Procedure 19. In fact, defense counsel has simply not presented any meaningful analysis relating to the four balancing factors outlined in Rule 19(b). Nonetheless, it is important at this juncture to determine the proper parties to suit in order to ensure a complete and final resolution of this dispute. Accordingly, the undersigned has contemporaneously filed an order requesting that counsel for all parties meet for a case management conference in order to reach an amicable solution in regard to this issue. Thus, the undersigned will suspend ruling on this issue until that time.
In accordance with the Magistrates Act, 28 U.S.C. § 636(b)(1)(B) and (C), and Rule 72.1.4(B) of the Local Rules for Magistrates, objections to this report and recommendation are due by January 14, 2004. Response to objections are due by January 26, 2004.