KULTUR FILMS v. Covent Garden

• Decision Date: 23 August 1994
• Docket Number: Civ. A. No. 93-4811.
• Citation: 860 F. Supp. 1055
• Parties: KULTUR INTERNATIONAL FILMS LTD., etc., Plaintiff, v. COVENT GARDEN PIONEER, FSP., LTD., etc., Defendant.
• Court: U.S. District Court — District of New Jersey

860 F. Supp. 1055

KULTUR INTERNATIONAL FILMS LTD., etc., Plaintiff, v. COVENT GARDEN PIONEER, FSP., LTD., etc., Defendant.

Civ. A. No. 93-4811.

United States District Court, D. New Jersey.

August 23, 1994.

Howard J. Schwartz, Cynthia D. Richardson, Porzio, Bromberg & Newman, Morristown, NJ, for plaintiff.

H. Curtis Meanor, Podvey, Sachs, Meanor, Catenacci, Hildner & Cocoziello, Newark, NJ, and Michael C. Silberberg, Morvillo, Abramowitz, Grand, Iason & Silberberg, New York City, for defendant.

OPINION

WOLIN, District Judge.

On September 24, 1993, plaintiff Kultur International Films, Ltd. ("Kultur"), a New Jersey corporation, with its principal place of business also in New Jersey, brought this action against defendant Covent Garden Pioneer FSP, Ltd. ("CGP"), a British corporation with its sole office located in London, England. Kultur originally filed its complaint in New Jersey Superior Court. CGP subsequently removed the action to this Court on October 29, 1993, pursuant to 28 U.S.C. §§ 1441 and 1446, and in conformity with the requirements for diversity jurisdiction set forth in 28 U.S.C. § 1332. Kultur pursues various contract and tort claims against CGP in connection with an alleged agreement between the parties whereby Kultur was to become the exclusive North American home video distributor for assorted classical music and opera programs owned by CGP.

On the pending motion, Kultur asks the Court to dismiss Kultur's complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). Alternatively, CGP requests that the action be dismissed on the ground of forum non conveniens.

DISCUSSION

A. Personal Jurisdiction

1. Standard of Review

Rule 4(f) of the Federal Rules of Civil Procedure allows the Court to exercise personal jurisdiction over a nonresident defendant to the extent allowed by the long-arm statute of the state where the court sits.¹ New Jersey's long-arm statute, N.J.Ct.R. 4:4-4, permits the exercise of personal jurisdiction over a nonresident defendant to the outer boundaries allowed under the Due Process Clause of the Fourteenth Amendment of the Constitution. DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 284 (3d Cir.), cert. denied, 454 U.S. 1085, 102 S.Ct. 642, 70 L.Ed.2d 620 (1981); Doumani v. Casino Control Comm'n, 614 F.Supp. 1465, 1471 (D.N.J.1985).

The purpose of restricting personal jurisdiction to the limits of due process is to protect the individual interests of nonresident defendants. United States v. Morton, 467 U.S. 822, 828, 104 S.Ct. 2769, 2773, 81 L.Ed.2d 680 (1984); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980). A court may exercise personal jurisdiction over a nonresident defendant only where "minimum contacts" exist such that jurisdiction "does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940)). A defendant establishes minimum contacts with a forum state by committing some act by which he purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958).

These contacts must be of the nature such that the individual nonresident defendant "should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528 (1985) (citing World-Wide Volkswagen, 444 U.S. at 295, 100 S.Ct. at 566). What constitutes minimum contacts varies with the "quality and nature of the defendant's activity," Hanson, 357 U.S. at 253, 78 S.Ct. at 1240, but the unilateral activity of a plaintiff claiming a relationship with a nonresident defendant does not suffice to create the requisite forum contacts. Id.; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 1873, 80 L.Ed.2d 404 (1984); Kulko v. Superior Court of California, 436 U.S. 84, 93-94, 98 S.Ct. 1690, 1698, 56 L.Ed.2d 132 (1978).

Defendants can be subject to specific or general personal jurisdiction in a forum state. If a plaintiff's cause of action against a defendant does not arise out of the defendant's contacts with the forum state, the plaintiff must establish that defendant has sustained "continuous and substantial contacts" with the forum state such as to create general jurisdiction over the defendant. Helicopteros, 466 U.S. at 416, 104 S.Ct. at 1873. Sporadic contacts between the nonresident defendant and the forum state may suffice if the plaintiff's cause of action arises out of, or relates to the defendant's contacts with the forum state. Id. at 414, 104 S.Ct. at 1872.

To establish specific jurisdiction, there is sufficient due process contact for personal jurisdiction if the defendant purposefully has directed his activities at residents of the forum. Henry Heide, Inc. v. WRH Prods. Co., 766 F.2d 105, 108 (3d Cir. 1985). Here the focus is on whether the defendant conducted activities in the forum such that the defendant might "reasonably anticipate being haled into court there." World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567.

Invoking constitutional principles of due process, CGP asserts that it is not subject to the jurisdiction of this Court. Once a defendant properly disputes the existence of personal jurisdiction, the plaintiff bears the burden of establishing, by a preponderance of the evidence, sufficient facts demonstrating the court's jurisdiction. Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir.), cert. denied, ___ U.S. ___, 113 S.Ct. 61, 121 L.Ed.2d 29 (1992). To this end, the plaintiff must present a prima facie case for the exercise of personal jurisdiction by "establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Mellon Bank (East) PSFS Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir.1992) (citing Provident Nat'l Bank v. California Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir.1987)).

"At no point may a plaintiff rely on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction. Once the motion is made, plaintiff must respond with actual proofs, not mere allegations." Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n. 9 (3d Cir.1984). See also Carteret Sav. Bank, 954 F.2d at 146; Farino, 960 F.2d at 1223.

If the plaintiff establishes a prima facie case supporting personal jurisdiction, the defendant then "bears the burden of showing the unreasonableness of an otherwise constitutional assertion of jurisdiction...." Farino, 960 F.2d at 1223. Given the parties' respective burdens, the Court has reviewed the permitted submissions and, having resolved all disputes in favor of Kultur, makes the following findings of fact.

2. Facts

Kultur, a New Jersey corporation, is well known in the entertainment industry and is one of the largest distributors of classical music and opera videotapes in the United States. (Certification of Dennis Hedlund Affidavit ¶ 1) CGP is a British corporation which, at a minimum, appears to own the rights to produce, sell and distribute video programs of various ballets and operas. CGP does none of the following in the State of New Jersey: (1) pay taxes, (2) maintain an office, mailing address, telephone number or bank accounts, (3) solicit or operate any business via agents, representatives or employees, (4) own real or personal property. (Affidavit of Robert Albert ("Albert Affidavit") ¶¶ 2-10)

The genesis of this litigation dates back to December 1992, when Dennis Hedlund, president of Kultur, met with Revel Guest of Transatlantic Films in New York. (Hedlund Certification ¶ 2) During the course of this business meeting Guest, who also is the Executive Producer at CGP, suggested that Hedlund call Christopher Higham, CGP's Sales and Marketing Director, to discuss a potential distribution project in North America for the videotapes of various ballet and opera productions from the Royal Opera House. (Id. at ¶ 3)

Hedlund subsequently contacted Higham in early 1993 and the parties set about negotiating an agreement for the North American distribution of various CGP videos by Kultur. The negotiations were somewhat fruitful, but led only to the exchange of various proposed Heads of Agreement (dated March 25, March 31 and April 15, 1993), and a proposed License Agreement, drafted by Kultur and dated June 16, 1993. (Hedlund Certification, Exhibits F, K; CGP's Brief in Support of Motion to Dismiss, Exhibits 2-4) Neither of the parties executed any of these proposed agreements. Whether or not there existed some type of oral agreement between the parties is hotly disputed and rests at the heart of this litigation.

On the pending jurisdictional motion, however, the Court will refrain from inquiring into the merits of Kultur's claims. See Associated Business Telephone Sys. v. Danihels, 829 F.Supp. 707, 711 (D.N.J.1993) (assuming existence of disputed contract on jurisdictional motion). Rather, the Court turns to those facts relevant to determining whether this Court may properly exercise personal jurisdiction over CGP by virtue of CGP's contacts with New Jersey.

As indicated above, the initial meeting between Guest and Hedlund occurred in New York. During the course of the subsequent negotiations, CGP sent faxes, letters and materials and placed calls to Kultur at its West Long Branch, New Jersey office. Kultur has provided evidence of certain of these communications:

1. a February 5, 1993, fax from Higham indicating CGP's desire to do business with Kultur;

2. a February 11, 1993, fax from Higham which confirms ongoing negotiations and Hedlund's planned visit

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