WILLIAM E. SMITH, Chief District Judge.
On February 27, 2015, United States Magistrate Judge Patricia A. Sullivan issued a Report and Recommendation ("R&R") in the above-captioned matter (ECF No. 104) recommending that Defendants' Motion to Dismiss for Lack of Personal Jurisdiction (ECF No. 73) be GRANTED as to Defendant Jacky Yung and DENIED as to Defendant Andrew Yung. Plaintiff, Quick Fitting, Inc. ("Quick Fitting"), filed an objection to the R&R (ECF No. 111), and Defendants Andrew and Jacky Yung (collectively, "the Yungs") filed a response to that objection (ECF No. 117). Because this Court agrees with Judge Sullivan's analysis, it hereby accepts, pursuant to 28 U.S.C. § 636(b)(1), the R&R. The relevant facts, procedural background, and analysis are fully set forth in the R&R. The Court limits its discussion to and presents only those facts pertinent to Plaintiff's objections.
Generally, "[i]n considering an objection to an R&R, the Court conducts `a de novo determination of those portions of the [R&R] to which objection is made' and `may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.'"
The Court is not convinced that a motion to dismiss for lack of jurisdiction is a non-dispositive motion: unlike a motion to remand, granting a motion to dismiss "involuntarily dismiss[es] an action," 28 U.S.C. 636(b)(1)(A), rather than sending it to be heard by another court. In any event, under either level of review, the Court accepts the R&R for the reasons that follow.
Quick Fitting first contests Judge Sullivan's conclusion that the only basis for personal jurisdiction over Andrew Yung was the fact that he "signed [the 2010 License Agreement] with Quick Fitting on behalf of an entity he did not have authority to bind, which agreement includes a Rhode Island forum selection clause." (R&R 2, ECF No. 104.) According to Quick Fitting, "[t]he court should have found jurisdiction due to Andrew Yung's execution of the 2010 License Agreement — regardless of the inclusion of the forum-selection — coupled with his activities in supplying push-fit plumbing products to Quick Fitting thereafter." (Pl.'s Objection 4, ECF No. 111.) However, because the Court agrees with Judge Sullivan's recommendation to exercise pendant personal jurisdiction over all claims against Andrew Yung (R&R 16 n.10, ECF No. 104), it need not reach the question of whether the 2010 License Agreement, combined with "his activities in supplying push-fit plumbing products to Quick Fitting," are sufficient to establish personal jurisdiction over all claims against him.
Quick Fitting next argues that Judge Sullivan erred in finding no personal jurisdiction over either Andrew or Jacky Yung based on their execution of the 2011 Non-Disclosure Agreement ("NDA") on behalf of Eastern Foundry & Fittings, Inc. ("EFF") before it was incorporated. Quick Fitting takes issue with Judge Sullivan's supposedly "broad and unsupported assumption" that "if Andrew and Jacky were not acting for EFF Trading [EFF Inc.] because it was not yet incorporated, they were acting for its predecessor, Wai Feng Trading." (Pl.'s Objection 6, ECF No. 111 (quoting R&R 18, ECF No. 104).) The crux of Quick Fitting's argument is that because Andrew and Jacky Yung executed the 2011 NDA on behalf of an entity that had not yet been incorporated, their actions in the five-month period between their signing of the contract and EFF's incorporation — including one visit to Rhode Island in September 2011 — confer personal jurisdiction.
As Defendants point out, the cases Quick Fitting cites in support of this argument are easily distinguishable in that those cases found personal liability where a non-existent corporation had failed to pay its debts. (Defs.' Resp. 17-18, ECF No. 117);
Moreover, Quick Fitting does not address Judge Sullivan's conclusion — with which this Court agrees — that:
(R&R 18, ECF No. 104.) As Quick Fitting admits, a contract alone is not sufficient to confer personal jurisdiction. (Pl.'s Objection 9, ECF No. 111.) Quick Fitting instead argues that "the 2011 Non-Disclosure Agreement with the non-existent EFF Inc., and the continuous business carried on by Andrew and Jacky Yung prior to the company's incorporation more than five months later, satisfies the `contract-plus' analysis adopted in the First Circuit." (
Quick Fitting further contends that Judge Sullivan erred in failing to find jurisdiction based on the intentional tortious conduct alleged. Specifically, Quick Fitting asserts that:
Quick Fitting's reliance on
Finally, Quick Fitting argues that Judge Sullivan erred in failing to pierce the corporate veil. Quick Fitting acknowledges that "[t]he R&R communicates a certain degree of frustration concerning the detail provided by the plaintiff in its First Amended Complaint, as well as the further detail set forth in plaintiff's proposed Second Amended Complaint," but nonetheless "urges that the proffered level of detail strongly suggests that the individuals, Jacky and Andrew Yung, have indeed treated their respective entities as mere convenience, intermingling assets, equipment, personnel, and even ownership, without regard to corporate form or separation." (Pl.'s Objection 14, ECF No. 111.) It is not clear whether Quick Fitting is attempting to argue that its admitted lack of detail actually supports its veil-piercing argument, or that Judge Sullivan was incorrect in her assessment of the level of detail. Regardless, the fact remains that Quick Fitting "has offered no evidence of the use of a sham entity, of undercapitalization, of the lack of corporate records, of insolvency, or of the improper use of the corporate form by dominant shareholders." (R&R 21, ECF No. 104.)
For these reasons, the R&R is ADOPTED, and Defendants' Motion to Dismiss for Lack of Personal Jurisdiction is GRANTED as to Jacky Yung and DENIED as to Andrew Yung.
IT IS SO ORDERED.