Daou v. Early Advantage, LLC, 1:05-CV-0620 LEK/DRH.

• Decision Date: 06 January 2006
• Docket Number: No. 1:05-CV-0620 LEK/DRH.,1:05-CV-0620 LEK/DRH.
• Citation: 410 F.Supp.2d 82
• Parties: Antony DAOU, Plaintiff, v. EARLY ADVANTAGE, LLC, Defendant.
• Court: U.S. District Court — Northern District of New York

410 F.Supp.2d 82

Antony DAOU, Plaintiff, v. EARLY ADVANTAGE, LLC, Defendant.

No. 1:05-CV-0620 LEK/DRH.

United States District Court, N.D. New York.

January 6, 2006.

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Eve I. Klein, Duane, Morris Law Firm, New York, NY, for Plaintiff.

Lloyd De Vos, De Vos & Co. PLLC, New York, NY, for Defendant.

MEMORANDUM-DECISION AND ORDER¹

KAHN, District Judge.

I. Background

Plaintiff Antony Daou ("Daou" or "Plaintiff") brought this action against Defendant Early Advantage, LLC ("EALLC" or "Defendant"), claiming, inter alia, breach of contract, that Defendant failed to pay Daou an agreed upon non-discretionary bonus, that Defendant failed to pay Daou for compensatory/vacation days, unjust enrichment of Defendant, and damages for anticipatory breach/repudiation of contract by Defendant. See Complaint (Dkt. No. 1). Plaintiff claims violation of Connecticut law. See id. Defendant claims that on May 27, 2005, the summons and complaint were served upon it by personal service in Fairfield, Connecticut, at EALLC's offices. See Mem. of Law in Support (Dkt. No. 9, attach.3) at 3.

On July 21, 2005, Defendant filed a Motion to Dismiss for lack of personal jurisdiction over Defendant, pursuant to Federal Rule of Civil Procedure ("Rule" or "F.R.C.P.") 12(b)(2), or in the alternative to dismiss for improper venue, pursuant to Rule 12(b)(3), or for transfer of venue to the United States District Court for the District of Connecticut, and for a more definite statement of Plaintiff's claims surrounding the non-payment of the non-discretionary bonus pursuant to Rule 12(e). Deft's Motion (Dkt. No. 9). Plaintiff and Defendant have fully briefed the issues (Dkt. Nos. 9-11 & 13-15), and the Court now considers the motion.

From September 2000 until February 18, 2005, Plaintiff was employed by Defendant EALLC. Defendant is a Connecticut company, with its principal place of business located in the State of Connecticut. Defendant provides educational resources for children, such as language courses (including the popular "Muzzy" language series). Complaint (Dkt. No. 1) at ¶ 1; Plntf's Mem. in Opp. (Dkt. No. 10) at 3. Defendant is an independent publisher, and provides material "through direct response marketing (mail order)." Id. See also Daou Affidavit (Dkt. No. 11) at ¶¶ 9-10.

Plaintiff was a high-ranking employee of Defendant, working in the North American, European and United Kingdom markets. Id. at 2. "Daou was the Managing Director of EA's wholly owned subsidiary, Early Advantage (UK) Ltd. (`EA UK') and Head of International Operations and Licensing for the EA Group of Companies that in addition to EA and EA UK also includes ... Early Advantage Luxembourg and Early Advantage Canada." Complaint (Dkt. No. 1) at ¶ 3. See also Daou Affidavit (Dkt. No. 11) at ¶ 5. For most of his employment with EALLC, Plaintiff maintained his residence in the State of Connecticut. Plaintiff moved to Sharon Springs, New York, in the Fall (September) of 2004. Plntf's Mem. in Opp. (Dkt. No. 10) at 2; Decl. of Ward in Sup. of Motion (Dkt. No. 9) at 3. Daou worked out of EALLC's Connecticut office and U.K. locations, as well as out of his home in New York following his change of residence. "At all times, Daou also spent considerable time working in Europe where typically he worked from Defendant's UK locations for one to two weeks per month." Complaint (Dkt. No. 1) at ¶ 5. Plaintiff claims that his relocation to New York was approved by Defendant, and that work was sent to Plaintiff at his New York home-office by Defendant. Plntf's Mem. in Opp. (Dkt. No. 10) at 5-6. Plaintiff continued to maintain an address in Connecticut until December of 2004, mostly due to pressure from Defendant and Defendant's principal and president David S. Ward ("Ward"). Id. at 6. Following his termination, Plaintiff filed for unemployment benefits in New York State, but the New York office transferred the application to Connecticut, which, Plaintiff claims, is why it appears that he has applied to Connecticut for unemployment benefits despite claiming to be a resident of New York. Decl. of Daou (Dkt. No. 15) at 2.

EALLC undertakes national and regional advertising, and purchasers respond via call centers located in Connecticut and elsewhere, including Dial America, which Plaintiff alleges has New York locations. See Daou Affidavit (Dkt. No. 11) at ¶ 10; Plntf's Mem. in Opp. (Dkt. No. 10) at 3-4. New York is an important market for EALLC, constituting "approximately 8% of the total annual activity of EA in the U.S." ($2 million), and New York "has been the single largest source of sales for EA" by state. Daou Affidavit (Dkt. No. 11) at ¶ 13; Plntf's Mem. in Opp. (Dkt. No. 10) at 3-4. According to Plaintiff, EALLC specifically targets New York customers, as well. Plntf's Mem. in Opp. (Dkt. No. 10) at 3-5.

Plaintiff further alleges that the "Great Books Summer Reading Program", which he started and managed, specifically targeted New York schools. Daou Affidavit (Dkt. No. 11) at ¶¶ 14-15. However, Defendant stresses that the Great Books Program is a separately incorporated company, and Defendant provided the Connecticut Articles of Organization and the Application for Employer Identification Number for Great Books Summer Reading Program LLC, as exhibits to the Declaration of Ward. Decl. of Ward (Dkt. No. 14) at ¶ 3 and Ex. A & B.²

Regarding change of venue, Defendant claims that:

The office of EALLC is in Connecticut. Daou worked from the EALLC office in Connecticut. All of the potential EALLC witnesses are available, and would be deposed, in Connecticut. Any documents that may be requested by Daou from EALLC are kept in Connecticut. All of Daou's contacts, both with EALLC and in his personal life, were in Connecticut until he chose to move to New York in September, 2004. In fact, Daou maintained an address in Connecticut through the end of 2004.

Deft's Mem. of Law in Sup. of Motion (Dkt. No. 9) at 10. In response, Plaintiff argues that:

While [Plaintiff] has had contact with Connecticut, none of the other factors militate in favor of transferring this action. While certain deponents, such as Ward, may reside in Connecticut, depositions in this matter should be limited, as should the exchange of documents. Most significantly, [Plaintiff], an individual, has properly chosen to commence this action primarily stemming from EA's wrongful refusal to pay him accrued wages in this forum, in which his home is located.

Plntf's Mem. in Opp. (Dkt. No. 10) at 16-17.

After due consideration of the facts of this matter, as set forth above, and the arguments of the parties, and for the reasons below, the Court hereby: (1) denies Defendant's motion to dismiss for lack of personal jurisdiction and improper venue; (2) grants Defendant's request in the alternative and orders that the case be transferred to the more appropriate, alternate venue of the United States District Court for the District of Connecticut, Bridgeport Division; and (3) denies Defendant's remaining request for a more definite statement of claim, pursuant to Rule 12(e), without prejudice to the motion being refiled following transfer.

II. Discussion

A. Standards of Law

1. Rule 12(b)(2) — Motion to Dismiss for Lack of Personal Jurisdiction

As this Court has subject matter jurisdiction in this case pursuant to 28 U.S.C. § 1332 — diversity jurisdiction — "the Court must apply the law of the state in which it sits when determining whether personal jurisdiction exists over each defendant." Pianelli v. Hershey, No. 99-CV-64(FJS)(GJD), 2000 WL 98098, at *2 (N.D.N.Y. Jan. 28, 2000) (Scullin, D.J.) (citing Schomann Int'l Corp. v. N. Wireless, Ltd., 35 F.Supp.2d 205, 207 (N.D.N.Y.1999) (McAvoy, C.J.) (citing, inter alia, CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir.1986))). See also Okin v. Jiminy Peak, Inc., No. CV-94-4330, 1995 WL 116277, at *4-*5 (E.D.N.Y. Feb.24, 1995) (citing, United States v. First Nat'l City Bank, 379 U.S. 378, 381-82, 85 S.Ct. 528, 13 L.Ed.2d 365 (1965); Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir.1963) (en banc)). Thus, in this case the relevant law is that of New York State, as discussed in Section II.A.3, infra.

When a Rule 12(b)(2) motion to dismiss has been filed, as in the present case, Plaintiff "bears the burden of establishing that the court has jurisdiction over the defendant, since Defendant has served the Rule 12(b)(2) motion". Aldinger v. Segler, No. 04 CV. 4405(RJH), 2005 WL 2591958, at *2 (S.D.N.Y. Oct.13, 2005) (internal quotation marks omitted; citing and quoting Whitaker v. American Telecasting, Inc., 261 F.3d 196, 208 (2d Cir.2001)).

When considering whether personal jurisdiction exists under Rule 12(b)(2), the Court analyzes the following factors:

"(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies."

In re Parmalat Secur. Litig., 376 F.Supp.2d 449, 457 (S.D.N.Y.2005) (citing and quoting Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 568 (2d Cir. 1996)). The Parmalat Court continued: "Moreover, `[w]here a plaintiff makes the threshold showing of the minimum contacts required by the first test, a defendant must present "a compelling case that the presence of some other considerations would render jurisdiction unreasonable."'" In re Parmalat, 376 F.Supp.2d at 457 (citing and quoting Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 129 (2d Cir.2002)).

A decision from the Eastern District of New York sets forth the standard for consideration even more concisely:

When a defendant moves to dismiss a complaint under Rule 12(b...