McNULTY, District Judge.
This matter comes before the Court upon Defendants' Motion to Dismiss the Amended Complaint for lack of personal jurisdiction over the Defendants pursuant to Federal Rule of Civil Procedure 12(b)(2), or, in the alternative, to dismiss or transfer for improper venue pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a). The Complaint alleges violations of federal and New Jersey RICO laws and Florida's Civil Remedies for Criminal Practices Act, as well as various related common law causes of action, including fraud, conversion, conspiracy, breach of fiduciary duty, and unjust enrichment. Plaintiffs' claims all arise from a soured business deal to develop a boutique hotel in Fort Lauderdale, Florida.
For the reasons set forth below, I find that the Defendants have satisfactorily established that the District of New Jersey is an improper venue for this action. In addition, Plaintiffs have not met their burden of establishing that the Court has in personam jurisdiction over the Defendants. "A court without personal jurisdiction over the defendants or venue over a case has the option of dismissing the action or transferring the case to another district pursuant to 28 U.S.C. § 1406(a)." China Am. Co-op. Auto., Inc. v. Estrada Rivera Enterprises Corp., 2008 WL 305744 (D.N.J. Jan. 28, 2008) (citing Goldlawr v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962)). As I find that the Southern District of Florida is an appropriate venue for this action and that a district court sitting there will likely have personal jurisdiction over the Defendants, I will transfer this action to the United States District Court for the Southern District of Florida.
Plaintiffs in this case are essentially two foreign investment entities. Plaintiff Al-Ghena International Corp. ("Al-Ghena") is incorporated in the Commonwealth of Dominica with a principal place of business in Al-Qibla, Kuwait. Amended Complaint, February 7, 2012, ECF No. 8 ("AC" or "Complaint") at 2.
Both corporate Defendants, Cortez Holding Group, Inc. ("Cortez Holding") and Cortez Property Development LLC ("Cortez LLC"), are entities formed under the laws of Florida, and each has its principal place of business in Mission Viejo, California. AC at 2. Individual Defendants Talat Radwan ("Talat") and Jason Radwan ("Jason") (Talat's son) are residents of California and are principals of Cortez Holding. See AC at 2.
This dispute arises out of a failed business venture to acquire and develop real property in Fort Lauderdale, Florida. Plaintiffs allege that Talat approached Shairco and Al-Ghena in 2007 to solicit their investment for a down payment to buy Cortez LLC, an already-existing entity that owned property which, with the assistance of bank financing, was to be developed into a boutique hotel owned and operated by the LLC (the "Cortez Project"). See AC at 3-4.
Talat proposed that each investor (Shairco, Al-Ghena and Cortez Holding) make an initial contribution of $6 million USD, giving each company a one-third membership interest. Id. In December 2007, Plaintiffs executed the "Operating Agreement for Cortez Property Development, LLC" (the "Agreement"),
Much of the foregoing is stated as background for understanding the parties' contentions with respect to venue and personal jurisdiction. The gravamen of the Complaint is that Cortez Holding never invested its $6 million share of the down payment as required by the Agreement, despite Defendants' representations otherwise; that despite Plaintiffs' repeated requests for information about their investments and the status of the Project, the Defendants failed to comply with their obligation to produce and disclose books and records of the LLC pursuant to the terms of the Agreement; and that Defendants have "used the plaintiffs' money in ways for which they had no permission or authorization, and have converted that money to their own use." See AC at 1.
None of the Defendants maintain residential or business addresses, own property, pay taxes, or maintain bank accounts in New Jersey. Plaintiffs nonetheless maintain that Defendants repeatedly visited New Jersey in connection with the Cortez Project and other business ventures, and that these contacts with the State adequately establish a basis for venue and personal jurisdiction over the Defendants in this District.
According to Plaintiffs,
Pl. Opp. at 2. In his Affirmation, Alshair states that "[o]ver the past 12 years, I have personally come to New Jersey on behalf of Shairco many times. I estimate that on average I spend three to four months a year living in New Jersey and conducting Shairco business...." Alshair Aff. ¶ 10.
Plaintiffs, however, offer few specifics about Talat Radwan's "multiple" business trips to New Jersey. Alshair maintains that "while I cannot provide more details as to the dates of [Talat's] visits without further research, I can say with certainty that they took place both before and after the signing of the Cortez agreement in December 2007." Id. ¶ 49. Alshair also recounts that Talat approached him about investing in other ventures, including the development of 154 acres in Voorhees, New Jersey, in 2004, and a waterfront townhouse development in Edgewater in 2007. See id. ¶¶ 37-44. Alshair maintains that Talat came to New Jersey at least once in 2004 and again in 2007 to discuss those potential ventures. See id. Alshair states that his relations with the Radwans were business-related, not personal; Alshair insists that he did not have "a single meeting or conversation in which [Talat] did not try to persuade me to invest my family's money in one project or another...." Id. ¶¶ 45-46.
With regard to Jason, Plaintiffs maintain that "a significant meeting took place in New Jersey in 2009, when Jason Radwan came to Edgewater to meet with Mr. Alshair. He used the meeting to assure Alshair that everything was in order, and that the only problems with the [Cortez] project were those caused by the declining economy...." Pl. Opp. at 6. Plaintiffs submit that Jason's profession as a minor league baseball player caused him to "regularly"
Both Radwans admit to visiting New Jersey in August 2009, but maintain that the purpose of the trip was a meeting with Toys R Us "that was completely unrelated to" the Cortez Project. See Declaration of Talat Radwan, May 4, 2012, ECF No. 14-3 ("Talat Decl.") at 14; Declaration of Jason Radwan, May 4, 2012, ECF No. 14-4 ("Jason Decl.") at 15. Talat also admits to visiting New Jersey "two or three other times since 2009," but maintains that the visits were "purely social" and that he "met with Mr. Alshair as part of [their] long social relationship." Talat Decl. ¶¶ 15-17.
In short, in the four years between December 2007, when the Agreement was signed, and January 3, 2012, when Plaintiffs filed their Verified Complaint, see ECF No. 1, Talat visited Alshair in New Jersey roughly two to five times. These were either visits in connection with the Cortez Project, or social visits during which business may have been discussed. Setting aside the August 2009 visit, which Talat maintains was "social," Plaintiffs have not provided any dates, times, locations, or agenda items for the "multiple" business meetings that allegedly occurred between Talat and Alshair in New Jersey. The parties seem to agree that Jason was in New Jersey just once during that four year period — also in August 2009 — and that he met with Alshair at that time.
Plaintiffs' jurisdictional pleadings tend to focus, not on Defendants' connections with the forum, but on those of Alshair and Shairco SA:
Pl. Opp. at 4. In addition, Plaintiffs submit that Shairco S.A. had a joint venture with "Tasty Trim," a New Jersey company, and that "Shairco has also looked at and negotiated various other projects in New Jersey." Id. at 5. Though Plaintiffs admit that most of these investment opportunities have not come to fruition, they maintain that "Shairco remains committed to expanding its business in New Jersey and the surrounding area, and Mr. Alshair has, if anything, been increasing his time here looking for and negotiating suitable projects." Id.
Defendants counter that neither Alshair nor Shairco S.A. is a citizen of New Jersey or a Plaintiff in this action; indeed, they contend, Shairco NJ was not even formed until 2011, in anticipation of this lawsuit,
Defendants have moved to dismiss Plaintiffs' Amended Complaint on the grounds that the alleged nature and frequency of Plaintiffs' contacts with New Jersey are insufficient to either create proper venue in New Jersey or establish personal jurisdiction over the Defendants. My analysis of the facts currently before the Court indicates that the District of New Jersey is not the proper venue for this action. I also find in the alternative, based on the Plaintiffs' pleadings, that it is unlikely that this Court has personal jurisdiction over the Defendants. Rather than imposing the "harsh remedy" of dismissing Plaintiffs' complaint, and because there is a clearly proper venue available, I will grant Defendants' motion pursuant to Fed. R. Civ. Proc. 12(b)(3) and transfer this action to the to the Southern District of Florida.
A party may move to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3). The movant has the burden of demonstrating that venue is improper. Myers v. Am. Dental Ass'n, 695 F.2d 716, 724-25 (3d Cir.1982). The court generally accepts the allegations in the pleadings as true and draws all reasonable inferences and resolves all factual conflicts in the plaintiffs favor. Bockman v. First Am. Marketing Corp., 459 Fed.App'x. 157, 158 n. 1 (3d Cir.2012).
The applicable venue statute provides:
28 U.S.C. § 1391(b).
First, venue would be proper in "a judicial district where any defendant resides,
Second, venue would be proper in "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated." 28 U.S.C. § 1391(b)(2). There is no dispute that "a substantial part of property that is the subject of the action is situated" in Fort Lauderdale, the county seat of Broward County, which is located in the Southern District of Florida. The real property owned by Cortez LLC, including additional properties the Radwans allegedly purchased without Plaintiffs' consent, is located in Broward County.
Defendants also submit that a "substantial part of the events or omissions giving rise to the claim" occurred in Broward County and that it is the most convenient location for resolution of this dispute.
Def. MTD at 16.
Plaintiffs do not dispute that the Southern District of Florida might provide one appropriate venue for this action. They argue, however, that New Jersey is a proper venue as well. Section 1391(b)(2) requires only that "a substantial part of the events giving rise to the plaintiffs' claims" occurred in New Jersey in order for venue to properly lie here. Plaintiffs allege that "during the course of negotiations, Talat Radwan and a representative and authorized agent of Shairco had various meetings in the State of New Jersey to discuss the prospect of joining in the venture" and that, because of Talat's representations during these meetings, the Plaintiffs invested $12 million USD. These events, plaintiffs say, constitute "a substantial part of the events giving rise to the plaintiffs' claims." See Pl. Opp. at 15.
Plaintiffs are correct that "there can be more than one district where `a substantial part of the events may occur.'" Id. at 14. The test still requires, however, that the
Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291, 294 (3d Cir.1994). Surveying a handful of cases decided by sister circuits, the Court concluded: "The test for determining venue is not the defendant's `contacts' with a particular district, but rather the location of those "events or omissions giving rise to the claim," theoretically a more easily demonstrable circumstance than where a "claim arose." Although the statute no longer requires a court to select the "best" forum, the weighing of "substantial" may at times seem to take on that flavor." Id. Accord Bockman v. First Am. Mktg. Corp., 459 Fed.Appx. 157, 161 (3d Cir.2012); Leone v. Cataldo, 574 F.Supp.2d 471, 483 (E.D.Pa. 2008). In addition, the Third Circuit instructed that when "assessing whether events or omissions giving rise to the claims are substantial, it is necessary to look at the nature of the dispute." Cottman Transmission Sys., 36 F.3d at 295.
The overwhelming majority of events or omissions giving rise to the Plaintiffs' claims did not occur in New Jersey. And those that did allegedly occur here do not rise to the level of "substantial" events or omissions when considered in the context of this dispute.
To establish venue, Plaintiffs rely extensively on allegations of misleading comments made by the Radwans during meetings with Alshair in New Jersey. With regard to Talat, Plaintiffs allege:
Pl. Opp. at 10-11. See also id. at 15-16.
With regard to Jason, Plaintiffs allege:
Id. at 12.
These conclusory allegations do not establish a "substantial event" that gave rise to Plaintiffs' claim. Most of the allegations seem to involve conversations "about" the project when it was underway, or unsuccessful attempts to persuade Alshair to authorize alternative investments. As discussed above, Plaintiffs have not substantiated, or even clarified, their allegations that "numerous discussions/negotiations" related to the Cortez Project took place in New Jersey. Nor have Plaintiffs provided any details of the discussions that led to the alleged perpetration of the "critical aspect of the scheme." In short, these allegations are little more than bare conclusions; the when, the where, and the what are missing.
Plaintiffs acknowledge that they invested $12,000,000 to purchase a hotel site in Florida, that they did so willingly pursuant to the terms of a Joint Operating Agreement, and that the real property they invested to purchase was in fact purchased by and remains under the ownership of Cortez LLC. Plaintiffs do not make any credible, fact-based allegation that the Radwans' intention, from the beginning, was to solicit funds to be used for ulterior purposes. Rather, the gravamen of Plaintiffs' claim, as currently pleaded, is that the Radwans, acting as Cortez Holding, failed to comply with their obligations under the Agreement (i.e. they never invested their $6,000,000 share, or used it for unauthorized purposes, and failed to provide an accounting of the partners' investments), and that they subsequently mismanaged the investment, thus breaching the terms of the Agreement and their fiduciary duty to the Plaintiffs. (The fiduciary obligation is said to arise "as a matter of contract and as a matter of law." AC at 27).
Consideration of Plaintiffs' allegations as breach of contract claims requires consideration of the location of the contract's negotiation, execution and performance, the location of property governed by the contract, and the location of the breach. See Cottman Transmission Sys., 36 F.3d 291 at 295; Leone, 574 F.Supp.2d at 484 ("In determining whether a substantial part of the acts giving rise to a contract claim occurred in a district, a court should consider where the contract was negotiated, executed, and performed and where the breach occurred."). Neither Party's pleadings indicate where and when material contract negotiations took place, or where the Agreement was finally executed; in any event, no one alleges that these events occurred in New Jersey. Facts regarding the participation of Al-Ghena, the Kuwaiti entity and third party to the Agreement, are also notably absent from the pleadings. Some critical portion of the contract negotiations and certainly the contract's execution must have involved Al-Ghena, which is not alleged to have any ties to New Jersey or to have participated in meetings in New Jersey. The Agreement was performed in Florida, where the real property was purchased. The location of the breach, while perhaps harder to pinpoint, is Florida or California since the Radwans' alleged failure to remit their full share of the investment and their subsequent
Consideration of Plaintiffs' allegations as claims of fraud or misrepresentation does not transform the District of New Jersey into a proper venue. Plaintiffs vaguely allege that the Defendants used meetings with Alshair in New Jersey to "create the false impression that the project was proceeding in a normal way," but according to the Plaintiffs' pleadings, Defendants' misrepresentations and stonewalling about the status of the Cortez Project and the use of Plaintiffs' funds after the investment was made occurred electronically, primarily through email correspondence sent to Plaintiffs, and later to Plaintiffs' attorney, Jeffrey Bronster, by Jason, presumably acting from California. See AC at 11-15 and Appendix. The alleged later misrepresentations, to the extent they exist, are unrelated to Plaintiffs' physical location, which, even by Plaintiffs' account, was not New Jersey more than 75% of the time in Mr. Alshair's case and perhaps 100% of the time in Al-Ghena's case. While the office of the attorney, Mr. Bronster, is located in New Jersey, Jason's electronic responses to Bronster, even coupled with the emails directed at Plaintiffs' unspecified locations, do not amount to a "substantial occurrence" in New Jersey. See Loeb v. Bank of Am., 254 F.Supp.2d 581, 587 (E.D.Pa.2003) (finding correspondence, telephone calls, and even "impact of economic harm" to be "woefully insufficient to establish venue in this district").
Consideration of Plaintiffs' claims as RICO allegations does not change the picture. The Complaint alleges as racketeering activity two acts of wire fraud in violation of 18 U.S.C. § 1343:
AC at 21. There is no indication that these alleged fraudulent representations originated from or caused substantial effects in New Jersey; rather it appears that they originated in California and perhaps caused effects wherever the Plaintiffs were physically located at the time they received the email.
In short, if the handful of New Jersey discussions between the Radwans and Alshair were eliminated from the pleadings, the critical elements of the Plaintiffs' claim would not be appreciably altered or affected. The vaguely-described meetings and misrepresentations that allegedly occurred in New Jersey are not particularly germane to the Plaintiffs' claims and therefore do not constitute "substantial events or omissions." See Cottman Transmission Sys., 36 F.3d 291, 294 ("Events or omissions that might only have some tangential connection with the dispute in litigation are not enough."); Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 357 (2d Cir. 2005) ("for venue to be proper, significant events or omissions material to the plaintiffs claim must have occurred in the district in question, even if other material events occurred elsewhere"). The Agreement, which was the foundation of the Parties' relationship and any abuse thereof, seemingly was negotiated and executed elsewhere; the investment money was sent to Florida to purchase property located in Florida; the financing and permits that stalled the project originated in Florida; the misrepresentations regarding the status of the project and the use or misuse of the investment funds were made via email from California; subsequent alleged illicit use of the investment funds likely occurred from California and Florida; the books and records that were never turned over or never existed in the first place would or should have been generated or located in California or Florida.
Accordingly, I cannot conclude that the District of New Jersey is a proper venue for this action. The question then becomes whether dismissal or transfer is appropriate, and, if transfer, to which proper venue.
If a court determines that venue has been improperly laid within its district, § 1406(a)
While it is generally recognized that a plaintiff's choice of forum should be honored, that choice must be one among the permissible options. The District of New Jersey does not meet the requirements of either § 1391(b)(1) or (b)(2) and therefore, despite Plaintiffs' clearly expressed choice, cannot be considered. As between the Central District of California and the Southern District of Florida, Plaintiffs have not expressed a preference. Defendants, however, submit, and I too agree, that the balance of factors in this case weighs in favor of transfer to the Southern District of Florida.
In order to choose the proper venue for this action, the Court is guided by the public and private interests weighed in this Circuit by courts considering a § 1404
Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir.1995).
Many of these factors have already have been discussed at length — for example, the location of the real property and investments, the events that precluded financing and development of the project, the location of witnesses, including Fort Lauderdale city officials, and the location of books and records (not only those of Cortez Holding and Cortez LLC, but also city records). They point to Florida as the more appropriate venue for this action. Defendants also argue that "Florida has an interest in enforcing contracts that invoke its law," that "the actions of the Fort Lauderdale City Commission are likely to be very relevant to the issues to be resolved," and that "the judges of the Southern District of Florida are familiar with issues pertaining to the unfortunate and significant decrease in development activity regarding Florida real estate." Def. MTD at 17.
Plaintiffs, by maintaining a singular focus on New Jersey, have glossed over many of these important considerations. They maintain that "the majority of the public considerations listed in Jumara do not appear to be implicated in this lawsuit," and that it is yet unclear "what state's laws will apply to this case." However, if any forum has a vested interest in this matter, it would be the state of Florida, considering that the stalled multi-million dollar real estate project is located there. If, as alleged, the Radwans are
Plaintiffs also point out that Florida is no more of a "convenient" forum for Defendants than New Jersey since the Defendants are residents of California, and thus, either venue in Florida or New Jersey would require their cross-country travel. Plaintiffs, again, do not mention Al-Ghena and the convenience of its representative, but rather argue that Alshair's presence in New Jersey three to four months per year establish that this State is a convenient forum. For all of the reasons discussed above, Alshair's forum preference and convenience cannot overcome the other considerations at play here.
I find, on balance, that the Southern District of Florida is the most convenient and appropriate venue for this action and it shall therefore be transferred accordingly.
Many of the same considerations that inform my venue analysis indicate that, even if this action were to remain in the District of New Jersey, I would be compelled to dismiss it for lack of personal jurisdiction over the Defendants. For completeness, I briefly discuss this as an alternative ground for dismissal or transfer of venue.
Once a defendant files a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing sufficient facts to show that jurisdiction exists. Marten v. Godwin, 499 F.3d 290, 295-96 (3d Cir.2007). Initially, a court must accept the plaintiffs allegations as true and construe disputed facts in favor of the plaintiff, Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 368 (3d Cir.2002), but the court must still examine any evidence presented with regard to disputed factual allegations. See, e.g., Eurofins Pharma U.S. Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 155-56 (3d Cir.2010) (examining the evidence supporting the plaintiffs allegations); Patterson v. FBI, 893 F.2d 595, 603-04 (3d Cir.1990) ("`A Rule 12(b)(2) motion, such as the motion made by the defendants here, is inherently a matter which requires resolution of factual issues outside the pleadings, i.e. whether in personam jurisdiction actually lies. Once the defense has been raised, then the plaintiff must sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence.'") (quoting Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n. 9 (3d Cir.1984)).
The plaintiff "need only establish a prima facie case of personal jurisdiction." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.2004). However, a plaintiff may not "rely on the bare pleadings alone" in order to withstand a motion to dismiss for lack of personal jurisdiction; "[o]nce the motion is made, plaintiff must respond with actual proofs, not mere allegations." Patterson, 893 F.2d at 604 (internal citations omitted); Time Share Vacation Club, 735 F.2d at 66 n. 9.
To assess whether it has personal jurisdiction over a defendant, a district court must undertake a two-step inquiry. IMO Indus., Inc. v. Kiekert, AG, 155 F.3d 254, 259 (3d Cir.1998). First, the court is required to use the relevant state's long-arm
In New Jersey, the first step collapses into the second because "New Jersey's long-arm statute provides for jurisdiction coextensive with the due process requirements of the United States Constitution." Miller Yacht Sales, 384 F.3d at 96 (citing N.J. Ct. R. 4:4-4(c)). Accordingly, personal jurisdiction over a non-resident defendant is proper in this Court if the defendant has "`certain minimum contacts with [New Jersey] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).
There are two kinds of personal jurisdiction that allow a district court to hear a case involving a non-resident defendant: general and specific. See Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414-415, n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). A court may exercise general jurisdiction when a defendant has "continuous and systematic contacts" with the forum state. Id. at 415 n. 9, 104 S.Ct. 1868. The defendant's "contacts need not relate to the subject matter of the litigation," Ameripay, LLC v. Ameripay Payroll, Ltd., 334 F.Supp.2d 629, 633 (D.N.J. 2004), but must rise to "a Very high threshold of business activity.'" Id. at 633 (quoting Compagnie des Bauxites de Guinea v. Ins. Co. of N. America, 651 F.2d 877, 891 (3d Cir.1981)). The facts required to establish sufficient contacts for general jurisdiction must be extensive and persuasive. Reliance Steel Prods. Co. v. Watson, Ess, Marshall & Enggas, 675 F.2d 587, 589 (3d Cir.1982). In other words, the plaintiff must demonstrate "significantly more than minimum contacts." Provident Nat'l Bank, 819 F.2d at 437.
In contrast to general jurisdiction, specific jurisdiction relies on the defendant's forum-related activities that give rise to the plaintiffs claims. See Helicopteros, 466 U.S. at 413-14, 104 S.Ct. 1868. Establishing specific jurisdiction requires a three-part inquiry: (1) whether the defendant purposefully directed its activities at the forum; (2) whether the litigation arises out of or relates to at least one of the contacts; and (3) whether the exercise of jurisdiction otherwise comports with traditional notions of fair play and substantial justice. O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir.2007). The defendant need not be physically located in the state while committing the alleged acts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Nor is specific jurisdiction defeated merely because the bulk of harm occurred outside the forum. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984). A single act may satisfy the minimum contacts test if it creates a substantial connection with the forum. Burger King, 471 U.S. at 476 n. 18, 105 S.Ct. 2174.
Plaintiffs allege that Talat "has been coming to and involved with the state of New Jersey for years." PI. Opp. at 10. As discussed above, Plaintiffs maintain that, prior to the Cortez Project, Talat approached Alshair about investing in two New Jersey real estate projects — the Voorhees Project in 2004
According to Plaintiffs' allegations, neither Talat nor his investment company ever actually made those investments in New Jersey, nor did New Jersey residents or entities invest with Talat as a result of his activities directed at the forum. Two visits over a three year-period and a single brochure that yielded no actual investment activity hardly amount to a "very high threshold of business activity." See Leja v. Schmidt Mfg., Inc., 743 F.Supp.2d 444, 452 (D.N.J.2010) (where defendant solicited business in New Jersey by sending various mailings, sold to six New Jersey distributors, sent sales representatives on two business trips to New Jersey and maintained fax and email contact with New Jersey customers, court applied the "solicitation plus" test which "is predicated on the idea that business activities which constitute "nothing more than ... solicitation" are "not enough to bring the defendant within the district" in which the solicitation occurred for the purposes of [general] personal jurisdiction" and found no personal jurisdiction over defendant) (citing Green v. Chicago, Burlington & Quincy Ry. Co., 205 U.S. 530, 533-34, 27 S.Ct. 595, 51 L.Ed. 916 (1907)); Nautilus Ins. Co. v. Green Eye Tech., LLC, 2012 WL 5451808 (E.D.Pa. Nov. 8, 2012) ("sporadic business connections to Pennsylvania fall far short of the "continuous and systemic contacts" required to justify a court's assertion of general jurisdiction.").
The Cortez Project, while resulting in monetary investment, has no significant ties to New Jersey, other than the fact that one of its investors spends "on average... three to four months a year living in New Jersey." Alshair Aff. ¶ 10. The entity that is a New Jersey resident, Shairco NJ, was not in existence until 2011 and is not a signatory to the Agreement. Al-Ghena, the Kuwaiti entity, has no alleged ties to New Jersey, nor is it alleged that an Al-Ghena representative participated in discussions that occurred in New Jersey.
While "physical entrance [into the forum] is not required ... what is necessary is a deliberate targeting of the forum... [a]nd contacts with a state's citizens that take place outside the state are not purposeful contacts with the state itself." O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir.2007). Thus, if the Plaintiffs were not in New Jersey or even New Jersey residents when a majority of critical Cortez Project conversations took place, the Florida-based Cortez Project, standing alone, cannot provide the predicate of "continuous and systematic contacts" with New Jersey. See Marten v. Godwin, 499 F.3d 290, 298 (3d Cir.2007) ("a plaintiffs residence is relevant to the "jurisdictional inquiry" insofar as residence in the forum may, because of defendant's relationship with the plaintiff, enhance defendant's contacts with the forum. However, the state of a plaintiffs residence does not on its own create jurisdiction
Finally, it is axiomatic that neither the unilateral activities of Mr. Alshair/Shairco in New Jersey, nor Mr. Alshair's unilateral expectation that his involvement in any U.S. litigation would occur in New Jersey, are relevant to this jurisdictional analysis. See Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) ("The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.... [I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws."); accord O'Connor, 496 F.3d at 317 ("unilateral activity of those who claim some relationship with a nonresident defendant" is insufficient). It is the Defendant's contacts with a forum state that must create a reasonable expectation of being haled into court in that forum and therefore it is the Defendant's activities that must inform and control the jurisdictional analysis. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) ("it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there"); Asahi Metal Indus. Co., Ltd. v. Superior Court of California, Solano Cnty., 480 U.S. 102, 112, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) ("The substantial connection between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State") (internal quotation and citation omitted); Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 63 (3d Cir.1984) ("Essentially, before hearing a case, a court must ask whether "the quality and nature of the defendant's activity is such that it is reasonable and fair to require [that it] conduct [its] defense in that state." Kulko v. Superior Court of California, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978)").
Accordingly, this Court cannot assert general personal jurisdiction over Talat Radwan.
Plaintiffs assert that Jason's occupation as a professional baseball player required his attendance in New Jersey for games "a significant number of times" over a two year period. See PI. Opp. at 11. Plaintiffs' maintain that this is significant because Jason was "coming to New Jersey on a regular basis to pursue his livelihood, just as much as if he was engaged in corporate business activities." Id. However, these allegations rest on the conclusory statement that Jason was in New Jersey on business "a significant number of times" without providing a single date or other detail in support. The extent of Plaintiffs' evidence is information on the Canadian-American baseball league downloaded from the internet that includes league statistics for a number of teams, including the Broxton Rox, Jason's Massachusetts-based team. See Alshair Aff. Exs. B and C. This information indicates that there were New Jersey teams in the league but it does not support Plaintiffs' allegation that Jason was in fact in New Jersey pursuing business activities "a significant number of times" over a seven year period.
Regardless of how many times Jason's league happened to schedule baseball games in New Jersey and how many of those games Jason actually attended,
According to Plaintiffs' reasoning, Jason (or any other athlete who plays interstate sports) reasonably should expect to be haled into court in any state in which he plays. But, for the reasons expressed above, this is not "purposeful availment" sufficient to subject him to suit here on activities unrelated to baseball. Cf. Burger King Corp. 471 U.S. at 475, 105 S.Ct. 2174; cf. Guyton v. A.M. Gen., 2001 WL 1623345 (E.D.Pa. Dec. 17, 2001) ("where a defendant has deliberately created continuing obligations between himself and residents of the forum, he manifestly has availed himself of the privilege of conducting business there") (citing Travelers Health Ass'n v. Virginia, 339 U.S. 643, 648, 70 S.Ct. 927, 94 L.Ed. 1154 (1950)).
Accordingly, this Court cannot assert general personal jurisdiction over Jason Radwan.
In determining whether the court can assert jurisdiction over a defendant, "[identifying some purposeful contact with the forum is but the first step in the specific-jurisdiction analysis. The plaintiffs' claims must also `arise out of or relate to' at least one of those contacts." O'Connor, 496 F.3d at 318. Thus, while not identical, the specific jurisdiction analysis considers many of the same factors required for determining proper venue, particularly where, as here, both questions turn on the substantiality of events occurring in the forum. Also as with the venue analysis, "specific personal jurisdiction generally must be evaluated in both a claim-specific and defendant-specific fashion." Lexington Ins. Co. v. Forrest, 354 F.Supp.2d 549, 551 (E.D.Pa.2005) (citing Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 94 n. 1 (3d Cir.2004); Remick v. Manfredy, 238 F.3d 248, 255-56 (3d Cir.2001); Rush v. Savchuk, 444 U.S. 320, 332, 100 S.Ct. 571,
The Third Circuit "has never adopted a definitive approach to the relatedness requirement." Nonetheless, "[i]n contract cases, courts should inquire whether the defendant's contacts with the forum were instrumental in either the formation of the contract or its breach." Id. at 320. With regard to tort claims, the Circuit has eschewed any hybrid or sliding scale approach. Id. at 321. Instead, the Third Circuit has opted for an enhanced "but-for-test," reasoning that such a test "at least makes an attempt to preserve the distinction between general and specific jurisdiction [and] draws a bright line separating the related from the unrelated.... More importantly, by ensuring the existence of some minimal link between contacts and claims, but-for causation provides a useful starting point for the relatedness inquiry." Id. at 322. The "but-for-test" alone, however, is overinclusive; thus, the Third Circuit has held that "specific jurisdiction requires a closer and more direct casual connection than that provided by the but-for-test.... The casual connection can be somewhat looser than the tort concept of proximate causation, but it must nonetheless be intimate enough to keep the quid pro quo
The baseline inquiry for Plaintiffs' tort claims is but-for-causation. While Plaintiffs' brief and the Alshair Affirmation attempt to establish some link between the Radwans' actions directed at New Jersey and the Plaintiffs' common law tort claims, they do not pass the "but-for-test." Still less do they establish a "direct casual connection" between a purposeful contact and Plaintiffs' claims. Plaintiffs rely on the allegation that the Radwans made misleading statements during discussions with Alshair in New Jersey both before and after the Plaintiffs invested in the Cortez Project. As established in the venue analysis, above, these allegations fail to establish that the Radwans directed fraudulent activity at New Jersey.
The racketeering allegations of the Complaint, including the appendix of supporting documentation, do not contain a single factual allegation specifically tied to New Jersey. The Complaint simply alleges generally that Defendants' racketeering activity occurred in New Jersey and elsewhere.
While the Third Circuit has found that a RICO claim "can be said to arise out of informational communications that are critical to the maintenance of the enterprise at the center of the RICO conspiracy," those communications must be directed at the forum in question. Compare Lexington Ins. Co., 354 F.Supp.2d at 552 (E.D.Pa.2005) (finding that defendants' informational communications in furtherance of a RICO enterprise sent from London to plaintiffs located in Pennsylvania were sufficient to establish specific personal jurisdiction over defendants in Pennsylvania), with Sunbelt Corp. v. Noble, Denton & Associates, Inc., 5 F.3d 28, 32 (3d Cir.1993) ("informational communications in furtherance of [a] contract do not establish the purposeful activity necessary for a valid assertion of personal jurisdiction over [a nonresident defendant]."). The allegations do not assert that the Plaintiffs were in New Jersey when they received Defendants' misleading emails, or that racketeering-related communications had any cognizable relationship with New Jersey.
With regard to Cortez Holding, Plaintiffs maintain that because a corporation "acts only through its agents, officers, and employees," the relevant contacts are those of Talat and Jason Radwan — "the two people who from the inception controlled and directed the affairs of Cortez Holding," and who "came to New Jersey on multiple occasions to pursue the criminal venture of which the corporation was part and parcel." Pl. Opp. at 13.
Plaintiffs' argument that a corporation acts only through persons is oversimplified. True, a corporation may maintain contacts with a state through its human
While the Radwans' activities on behalf of Cortez Holding may be relevant, a distinction must be drawn between their actions as agents and their personal action. The Plaintiffs have made no effort to draw such a distinction in their pleadings.
The overwhelming majority of Plaintiffs' jurisdictional allegations are "no more than [] conclusory statements] which only restate[] an ultimate fact which [Plaintiffs] must prove. What is required, however, is actual evidence[.]" Time Share, 735 F.2d at 65. See Reliance Steel Prods., 675 F.2d at 589 (3d Cir.1982) (facts required to establish sufficient contacts for general jurisdiction must be extensive and persuasive). Mr. Alshair states the need for "further research," Alshair. Aff. ¶ 49, but he
I have reviewed the Amended Complaint and the Alshair Affirmation, and I have considered both in the light most favorable to the Plaintiffs. I find that they do not meet the requisites for venue under 28 U.S.C. § 1392(b). I also find that it is unlikely that the Court has personal jurisdiction over the Defendants. On the other hand, the Southern District of Florida appears to be the most appropriate venue for this action and it is very likely that it can exercise personal jurisdiction over the Defendants.
Accordingly,
See Appendix to Plaintiffs' Verified Complaint, January 3, 2012, ECF No. 1-1 ("Appendix"), at 4. As discussed in more detail below, Defendants were never able to obtain financing for the Cortez Project. Plaintiffs did, however, make a $12 million USD investment pursuant to the terms of the Agreement.
Appendix at 33.
Plaintiffs maintain that these details were not known to them until they received this document sometime in 2010. See AC at 11-14. The Agreement provides a breakdown of the purchase price which stipulates a down payment of $18,000,000 USD:
Agreement § 2.7.
Appendix at 34.
28 U.S.C. § 1391(c)(1) (2012).
