National Tele. Dir. Consult. v. Bellsouth Advert.

• Decision Date: 27 October 1998
• Docket Number: No. 98 Civ. 2278(BDP).,98 Civ. 2278(BDP).
• Citation: 25 F.Supp.2d 192
• Parties: NATIONAL TELEPHONE DIRECTORY CONSULTANTS, INC., Plaintiff, v. BELLSOUTH ADVERTISING & PUBLISHING CORPORATION and Yellow Pages Publishers Association, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

25 F.Supp.2d 192

NATIONAL TELEPHONE DIRECTORY CONSULTANTS, INC., Plaintiff, v. BELLSOUTH ADVERTISING & PUBLISHING CORPORATION and Yellow Pages Publishers Association, Inc., Defendants.

No. 98 Civ. 2278(BDP).

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

October 27, 1998.

COPYRIGHT MATERIAL OMITTED

Raymond Wiss, Wiss Cooke & Santomauro, Pearl River, NY, for National Telephone Directory Consultants, Inc.

Charles M. Stern, Katten Muchin & Zavis, Los Angeles, CA, for Yellow Pages.

Allen Kezsbom, Fried Frank Harris Shriver & Jacobson, New York City, for Bellsouth Publishing.

Neal S. Berinhout, Kilpatrick Stockton LLP, Atlanta, GA, for Bellsouth Advertising & Publishing Co.

MEMORANDUM DECISION AND ORDER

PARKER, District Judge.

Plaintiff National Telephone Directory Consultants, Inc. ("NTDC") seeks monetary damages from defendants Bellsouth Advertising & Publishing Corporation ("BAPCO") and Yellow Pages Publishers Association, Inc. ("YPPA") for alleged breach of contract, tortious interference with prospective business relations, conspiracy and related claims under Georgia statutory law and under both Georgia and federal common law for restraint of trade and unfair business practice. Both defendants move pursuant to Fed. R.Civ.P Rule 12(b)(2) to dismiss for lack of personal jurisdiction, and in the alternative, under 28 U.S.C. § 1404, to transfer venue to the United States District Court for the Northern District of Georgia. For the reasons that follow, the motion to dismiss is granted.

BACKGROUND

The following facts are drawn from the complaint, affidavits and documentary exhibits submitted by both parties, and on this motion, are construed in the light most favorable to plaintiff. Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 56-57 (2d Cir. 1985). Absent an evidentiary hearing, plaintiff bears the burden to make a prima facie showing of personal jurisdiction. CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir.1986).

BAPCO is a publisher of printed telephone directories, including Yellow Pages, for cities within a nine state region in the Southeastern United States: Georgia, North Carolina, South Carolina, Florida, Louisiana, Alabama, Mississippi, Kentucky and Tennessee. BAPCO is incorporated under the laws of Georgia and its principal place of business is in Atlanta, Georgia. BAPCO sells advertising in its Yellow Pages that is either national or local. NTDC is a Certified Marketing Representative ("CMR") incorporated under the laws of New York with its principal place of business in Pearl River, New York. National advertisers are solicited by CMRs, and BAPCO has its own sales force to solicit local advertisers within the cities for which it publishes directories. YPPA is a national trade association in the Yellow Pages industry that was incorporated in Delaware as a non-profit corporation with headquarters in Denver, Colorado. Publishers and CMRs are members of YPPA. YPPA has 123 publisher members and 188 CMR members. Both BAPCO and NTDC are members of YPPA.

On June 9, 1997, NTDC and BAPCO entered into a contract ("Contract") in which BAPCO agreed to accept and publish national yellow pages listings and advertising timely submitted by NTDC, in return for which NTDC would receive a commission. The Contract adopted YPPA's definition of what constituted a "national" account. The discussions concerning the Contract were conducted by NTDC in New York and BAPCO in Georgia. The Contract was executed by NTDC in New York and BAPCO in Georgia. In the process of entering into the Contract, no representative of BAPCO traveled to New York. The Contract stated that it was to be construed under the laws of Georgia. YPPA is not a party to the Contract.

This dispute arises out of NTDC's claim that, despite the fact that two advertising programs submitted by NTDC to BAPCO are national under the definition contained in the Contract, BAPCO rejected the programs. The two rejected advertisers are attorneys with offices solely in Atlanta, Georgia and Raleigh, North Carolina respectively. NTDC claims it has requested that YPPA compel BAPCO to adhere to YPPA's bylaws and guidelines and to accept the programs, and YPPA failed to do so. Thus, NTDC has sued BAPCO and YPPA for breach of contract, tortious interference with prospective business relations, conspiracy and related claims under Georgia statutory law and under both Georgia and federal common law for restraint of trade and unfair business practice.

DISCUSSION

Subject matter jurisdiction is predicated on diversity of citizenship. 28 U.S.C. § 1332(a). Plaintiff is a New York corporation with its principal place of business in New York; defendants are Georgia and Delaware corporations with principal places of business in Georgia and Colorado respectively; plaintiff seeks damages in excess of $75,000 exclusive of interest and costs. The New York long arm statute, N.Y.Civ.Prac.L. & R. § 302, controls the question of whether this Court has personal jurisdiction over the defendants since, in diversity cases, a federal court applies the long-arm statute of the state in which it sits. Savin v. Ranier, 898 F.2d 304, 306 (2d Cir.1990).

NTDC asserts personal jurisdiction pursuant to two sections of the New York Civil Practice Law and Rules ("CPLR"): (1) § 302(a)(1), and (2) § 302(a)(3)(ii). We will take each section in turn.

Under CPLR § 302(a)(1) a court may exercise personal jurisdiction over:

any non-domiciliary, or his executor or administrator, who in person or through his agent:

1. transacts any business within the state or contracts anywhere to supply goods or services in the state....

CPLR § 302(a)(1). Courts look to the "totality of circumstances" to determine whether a party has "transacted business" within the meaning of § 302(a)(1). Snyder v. Madera Broadcasting, Inc., 872 F.Supp. 1191, 1194 (E.D.N.Y.1995) (citing Sterling Nat'l Bank & Trust Co. v. Fidelity Mortgage Investors, 510 F.2d 870, 873 (2d Cir.1975)). Such circumstances include, but are not limited to: (1) whether the defendant has an ongoing contractual relationship with a New York corporation; (2) whether the contract was negotiated or executed in New York and whether, after executing a contract with a New York business, the defendant visited New York for the purpose of meeting with the parties to the contract regarding the relationship; (3) what the choice of law clause is in the contract; and (4) whether the contract requires notices and payments to be sent into the forum state or requires supervision by the corporation in the forum state. Agency Rent A Car System, Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir.1996). No one factor is dispositive, and all are relevant. Id. In addition, in making a determination that jurisdiction exists, a court must ensure that due process requirements have been met, such that the defendant can reasonably "anticipate being haled into court" in that forum. World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). These concerns are satisfied where the defendant's activities "constitute purposeful efforts to invoke the benefits and protection of New York law." First City Federal Sav. Bank v. Dennis, 680 F.Supp. 579, 584 (S.D.N.Y.1988) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)).

Considering the factors of Agency Rent A Car as well as NTDC's assertions, the Court concludes that the requirements of § 302(a)(1) have not been met with respect to either defendant. The Contract, which is BAPCO's standard form agreement, was drafted in its entirety in Georgia and involved no negotiations in New York. Further, the Contract states that it is to be construed by the laws of Georgia. The Contract was signed by BAPCO in Georgia and NTDC in New York, and no representative of BAPCO has ever visited plaintiff's offices. Also, there was no need for supervision of NTDC in New York because the Contract allowed NTDC to submit national advertisers to BAPCO, and BAPCO would then either accept or reject the proffered advertisers whenever submitted. Likewise, as previously noted, YPPA is not a party to the disputed contract. No officer or employee of YPPA has ever met with NTDC in New York. Further, NTDC, like other YPPA members, sent a membership application to YPPA's administrative office in Michigan.

BAPCO maintains no offices, employees, property, bank accounts, distributers, mailing addresses, post office boxes, local telephone numbers or registered agents in New York. Further, BAPCO does not contract to supply goods or services in New York. The Contract allowed NTDC to supply advertisers for BAPCO's southeastern directories. Likewise, YPPA does not have any tangible assets, bank accounts or other property in New York. YPPA has never had a convention, training session, or membership or committee meeting in New York.

NTDC asserts that under § 302(a)(1) this Court has jurisdiction because BAPCO has solicited its business and other CMRs in New York by forwarding to NTDC and other New York CMRs mail, fax, email, and various other literature specifically designed to promote and advertise in New York the services of BAPCO. Further, NTDC asserts that YPPA has distributed over the years to NTDC and other New York CMRs, various literature designed to promote its services as a facilitator of yellow pages advertising between publishers and CMRs. In short, NTDC claims both BAPCO and YPPA have engaged in an on-going marketing campaign with NTDC and other New York CMRs over the years. We note that even if this Court were to assume, arguendo, that BAPCO and YPPA had such an ongoing relationship with NTDC, it would, in itself, be insufficient to confer jurisdiction under § 302(a)(1). See Roper Starch Worldwide, Inc. v. Reymer & Associates, Inc., 2 F.Supp.2d 470, 474 (S.D.N.Y.1998). Further, it is the nature and the quality of the contacts with New York, not purely the amount of contacts that must be...