Gmurzynska v. Hutton, 01 Civ. 5002(RMB).

• Decision Date: 13 March 2003
• Docket Number: No. 01 Civ. 5002(RMB).,01 Civ. 5002(RMB).
• Citation: 257 F.Supp.2d 621
• Parties: Galerie GMURZYNSKA, Plaintiff, v. Ingrid HUTTON, Leonard Hutton Galleries, Inc., Magdalena Dabrowski, Eugena Ordonez a/k/a Eugena Chu, Alexandra Shatskikh, and Bengt Schwitters, Defendants.
• Court: U.S. District Court — Southern District of New York

257 F.Supp.2d 621

Galerie GMURZYNSKA, Plaintiff, v. Ingrid HUTTON, Leonard Hutton Galleries, Inc., Magdalena Dabrowski, Eugena Ordonez a/k/a Eugena Chu, Alexandra Shatskikh, and Bengt Schwitters, Defendants.

No. 01 Civ. 5002(RMB).

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

March 13, 2003.

COPYRIGHT MATERIAL OMITTED

Judd Burnstein, New York City, for plaintiff.

Daniel Weiner, Hughes, Hubbard & Reed, LLP, New York City, Jeremiah Gutman, Pollet & Felleman, New York City, for defendants.

DECISION & ORDER

BERMAN, District Judge.

On or about April 30, 2001, plaintiff Galerie Gmurzynska ("Plaintiff or "Galerie") filed a verified complaint ("Complaint" or "Compl") against defendants Ingrid Hutton ("Hutton"), Leonard Hutton Galleries, Inc. ("Hutton Galleries"), Magdalena Dabrowski ("Dabrowski"), Eugena Ordonez a/k/a/ Eugena Chu ("Ordonez"), Alexandra Shatskikh ("Shatskikh"), and Bengt Schwitters ("Schwitters") (collectively, "Defendants") in New York State Supreme Court, New York County. Plaintiff alleged three causes of action against Defendants arising from an alleged scheme to destroy Plaintiffs reputation in the Russian Avant Garde art world, including: (i) violation of 15 U.S.C. § 1125(a)(1)(B), a provision of the Lanham Act;¹ (ii) tortious interference with business expectancy; and (iii) defamation. Plaintiff also seeks a declaratory judgment.

On June 6, 2001, Ordonez removed the action to federal court on the ground, among others, that Plaintiffs action raises a federal question under 15 U.S.C. § 1125(a)(1)(B). June 6, 2001 Notice of Removal at 1 (because a "federal question is ... raised by plaintiffs ... [t]his Court has original jurisdiction thereof). Plaintiff did not oppose removal.

On January 11, 2002, Schwitters filed a motion to dismiss Plaintiffs suit as to him for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure ("Fed. R.Civ.P." or "Rule") 12(b)(2) ("Schwitters' Mem."), and included an affidavit dated January 10, 2002 ("Schwitters' Aff."). On March 4, 2002, Plaintiff filed a memorandum of law in opposition ("PI. Opp. to Schwitters' Mem."). On March 25, 2002, Schwitters filed a reply brief ("Schwitters' Reply").

On January 31, 2002, Defendants (other than Schwitters) filed a motion to dismiss the Complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6) ("Def.Mem."). On March 4, 2002, Plaintiff filed a brief in opposition ("PI. Opp. to Def. Mem."). On March 18, 2002, Defendants filed a reply memorandum of law ("Def.Reply"). For the reasons set forth below, Schwitters' Rule 12(b)(2) motion to dismiss and the remaining Defendants' Rule 12(b)(6) motion to dismiss are granted.

I. Background

The following allegations, which are set forth in the Complaint, are taken to be true for purposes of this motion. See Friedlander v. Roberts, 51 F.Supp.2d 385, 386 (S.D.N.Y.1999).

Plaintiff is an art gallery based in Cologne, Germany and is the "world's leading dealer of Russian Avant Garde art." Compl. ¶ 2. Hutton Galleries, a New Yorkbased gallery, is Plaintiffs "main competitor." Id. ¶ 1. Plaintiff alleges that it is the target of "illicit efforts," orchestrated by Defendants, consisting of "false rumors and accusations that certain works of art it has sold or traded or still owns are not authentic." Id. ¶ 1-2. Plaintiff claims that "these rumors and accusations are part and parcel of a conspiracy ... to denigrate Galerie and monopolize both the international and New York market for Russian Avant Garde art." Id. ¶ 2.

Plaintiff alleges that Defendants devised two related "schemes" to destroy Plaintiff. Id. ¶¶ 3-4, 6. The first scheme allegedly involved false statements by art experts, specifically Defendants Dabrowski, Ordonez, and Shatskikh, (collectively, "Defendant Experts"), that "specific works of art offered for sale by Galerie ... are not genuine" and that "Hutton Galleries—not Galerie—is the only place the serious buyer should go to purchase Russian Avant Garde art." Id. ¶ 4, 6. Plaintiff alleges that Hutton and Hutton Galleries are "behind the [Defendant Experts'] false claims that Galerie is selling inauthentic works of art" because "any time Galerie is harmed by false claims that it sells inauthentic art, Hutton is necessarily assisted because it is Galerie's only major competitor in the New York market." Id. ¶¶ 3-4. Plaintiff also alleges, "on information and belief," that "these experts [are] beholden to Hutton financially" and that Hutton has "repeatedly used the same cast of unprincipled experts ... to do her bidding." Id. 114.

The second scheme allegedly involved a March 1998 exhibition of paintings by German artist Kurt Schwitters at the Sprengel Museum ("Sprengel" or "Museum") in Hanover, Germany. Id. ¶ 7.² The exhibition, one-third of which was comprised of works acquired "through purchases or trades with Galerie," id. ¶ 8, required the assistance of the Schwitters family to be successful. Id. Defendant Bengt Schwitters allegedly used the exhibition as his "primary tool" to destroy Plaintiff by causing the Museum to publish an exhibition catalogue, which "falsely claimed in essence, that some of the works in the Schwitters Collection contained inauthentic works of art provided ... by Galerie" and "falsely suggested that Galerie had not been cooperative with the Sprengel Museum in connection with the Exhibit." Id. ¶¶ 9, 63-66.³

Plaintiff alleges that the "two strands of the conspiracy against Galerie—(a) Hutton and the [Defendant] Experts, and (b) Bengt Schwitters and the Museum—came together," id. ¶ 73, when Ordonez and Shatskikh, "at the behest of Hutton, offered their assistance to Sprengel in the wake of the scandal created by the first catalogue." Id. Thereafter, the Sprengel, allegedly at Schwitters' direction, published additional catalogues which, among other things, "continued to rely upon Shatskikh's and Ordonez's unprincipled analyses" and "permitted Bengt Schwitters to include a forward—written by Bengt and his mother—which viciously attacked Galerie." Id. ¶ 74. Plaintiff also alleges that Defendants enlisted an art journalist, Sylvia Hochfield, "to write a negative article about Galerie and its dispute with Sprengel. Toward this end, Bengt Schwitters authorized the Museum to provide all of its 'expert' analysis to Hochfield." Id. ¶ 75.

II. Standard of Review

A. Schwitters' Motion

On a motion to dismiss for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), "the plaintiff bears the burden of showing that the court has jurisdiction over the defendant." Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999). Where the parties have not commenced discovery, plaintiff need only assert "facts constituting a prima facie showing of personal jurisdiction" to defeat a motion to dismiss. PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997). "[A]ll pleadings and affidavits are construed in the light most favorable to plaintiff, and where doubts exist, they are resolved in the plaintiffs favor." Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985). However, "conclusory allegations are not enough to establish personal jurisdiction." Marczeski v. Kamba, 99 Civ. 02479, 2001 WL 237204, at *1 (D.Conn. Feb.23, 2001) (citing Harris v. Wells, 832 F.Supp. 31, 34 (D.Conn.1993)).

B. Defendants' Motion

"In reviewing a Rule 12(b)(6) motion, this Court must accept the factual allegations of the complaint as true and must draw all reasonable inferences in favor of the plaintiff." Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir.1996). Dismissal of the complaint is proper when "it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). "The issue is not whether a plaintiff is likely to prevail ultimately, `but whether the claimant is entitled to offer evidence to support the claims.'" Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir.1995) (quoting Weisman v. LeLandais, 532 F.2d 308, 311 (2d Cir.1976) (per curiam)). However, "legal conclusions, deductions, or opinions couched as factual allegations are not given a presumption of truthfulness." L'Europeenne de Banque v. La Republica de Venezuela, 700 F.Supp. 114, 122 (S.D.N.Y.1988).

III. Analysis

A. Schwitters' Motion

Schwitters, indisputably a Norwegian citizen and a resident of Germany, maintains that "[t]he Court's assumption of jurisdiction over [him] ... will violate the due process clause of the Fifth Amendment... because [he] had no contacts with the forum state."⁴ Schwitters' Mem. at 1. Schwitters asserts that Plaintiff, itself a German gallery, "complain[s] of acts allegedly occurring in Germany," Schwitters' Mem. at 2, which involve "a dispute among three German entities in Germany." Schwitters' Reply at 8.

Plaintiff argues that "personal jurisdiction over Schwitters is proper based not upon his own acts within the United States, but the local acts of his co-conspirators in furtherance of the conspiracy, as well as his own acts outside the forum with foreseeable effects in the forum." PI. Opp. to Schwitters' Mem. at 1-2. Plaintiff contends that jurisdiction is appropriate under either Section 302(a)(2) of New York's long arm statute, New York Civil Practices Law and Review ("C.P.L.R."), or pursuant to Fed.R.Civ.P. 4(k)(2).⁵

Plaintiff fails to demonstrate that personal jurisdiction over Schwitters exists. Regardless of whether New York's long-arm statute or Rule 4(k)(2) is invoked, this Court can only exercise jurisdiction if doing so satisfies due process requirements.⁶ Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc., 26 F.Supp.2d 593, 598 (S.D.N.Y.1998) ("[A] federal court can assert jurisdiction over a non-resident defendant under the long-arm statute of the state in which it sits,...