Worldwide Futgol Associates v. Event Entertainment, CV 96-5612 (RJD).

CourtUnited States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
Citation983 F.Supp. 173
Docket NumberNo. CV 96-5612 (RJD).,CV 96-5612 (RJD).
PartiesWORLDWIDE FUTGOL ASSOCIATES, INC., Plaintiff, v. EVENT ENTERTAINMENT, INC., Defendant.
Decision Date10 November 1997

David G. Lubell, Tanner Propp, LLP, New York City, for Plaintiff.

Jeffrey L. Zivyak, Zivyak Klein & Liss, New York City, for Defendant.

MEMORANDUM & ORDER

DEARIE, District Judge.

This is a diversity action based on a contract (the "Agreement") between Worldwide Futgol Associates, Inc. ("WFA"), a licensor and distributor of United States television rights to international soccer matches, and Event Entertainment, Inc. ("Event"), whereby Event purchased the rights to certain soccer matches. Event has moved to dismiss the complaint, pursuant to Federal Rule of Civil Procedure 12(b)(2), on the ground that it is not subject to the personal jurisdiction of the Court. Alternatively, Event moves for a transfer of venue to the Central District of California pursuant to 28 U.S.C. § 1404(a). For the reasons stated below, the motion to dismiss is granted and the action is transferred to the Central District of California.

Background

The Agreement is a one-page memorandum executed by Julio Vanegas, WFA's General Manager, and Rick Kulis, Event's President. It provides for Event to pay $360,000 for the United States ("except California") closed circuit television rights to three international soccer matches: an October 16, 1996 match between Mexico and Jamaica; an October 30, 1996 match between Mexico and Honduras (collectively, the "Matches"). The sale price was to be paid in installments of $120,000, due October 12, 1996, and $240,000, due October 17, 1996. Payment of the second installment was conditioned on Mexico winning the October 16, 1996 Match with Jamaica. WFA claims that Event broadcast the first Match but failed to make either payment. Event claims that WFA failed to provide promised customers for the broadcasts, cut off the satellite feed for the October 16 Match, and withheld certain customer proceeds when Event broadcast the Match through an alternate feed.

Event is a California corporation with its principal place of business in California. WFA is a New York corporation with its principal place of business in New York. Event is in the business of providing broadcasts of limited access sporting events. After acquiring the rights to a particular broadcast, Event accepts orders from customers — sports bars, restaurants and hotels — for the broadcast. Upon receiving payment from a customer, Event directs its subcontractor, which is located in Denver, Colorado, to address the satellite signal of the event, in unencrypted form, to the customer's satellite dish. Each satellite dish bears a unique addressable code number which allows Event's subcontractor to provide unencrypted signals to individual customers.

Prior to entering the Agreement, Event, through a joint venture with another entity, purchased the rights to televise the Matches in California. According to affidavits submitted on WFA's behalf, Event telephoned Ricky Schanks, an independent broker in the field of international soccer, shortly before the first Match to express its interest in obtaining broader rights to the Matches. This and subsequent calls were made by Event representatives in California to Schanks' home in New York.1 Schanks put Event in contact with WFA, which owned the television rights to the Matches. The parties negotiated the Agreement in a series of bicoastal telephone calls. WFA faxed the Agreement to Event in California for signature and return fax. Event then contracted with numerous customers, a number of which may have been in New York, to provide access to the October 16 Mexico-Jamaica Match.

Discussion

The party seeking to invoke the Court's jurisdiction has the burden of establishing personal jurisdiction over a defendant. See Falik v. Smith, 884 F.Supp. 862, 864 (S.D.N.Y.1995) (Carter, J.). For purposes of this motion, the plaintiff need only make a prima facie showing of jurisdiction, and all factual matters are to be viewed in the light most favorable to the plaintiff. PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir.1997); Welinsky v. Resort of the World D.N.V., 839 F.2d 928, 930 (2d Cir.1988); Falik, 884 F.Supp. at 864.2

New York law governs the issue of personal jurisdiction in this diversity action. See CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir.1986) (citing Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir.1963)); Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985); Wilhelmshaven Acquisition Corp. v. Asher, 810 F.Supp. 108, 111 (S.D.N.Y.1993) (Cedarbaum, J.). New York's long arm statute provides, in relevant part:

As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary ... who in person or through an agent:

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

N.Y.C.P.L.R. § 302(a)(1) (McKinney 1990). Additionally, a foreign corporation "doing business" in New York is "present" in the state, and therefore subject to personal jurisdiction here pursuant to C.P.L.R. § 301, regardless of whether the cause of action relates to the corporation's New York contacts. See Hoffritz for Cutlery, 763 F.2d at 57-58.

1. Transacting Business in New York

A court may exercise jurisdiction over a defendant under C.P.L.R. § 302(a)(1) if (a) the defendant "transacts business" within the state and (b) the cause of action arises from that transaction of business. Agency Rent A Car System, Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir. 1996). Whether a defendant has transacted business in the state depends on consideration of numerous factors, such as whether (a) the defendant has an ongoing relationship with a New York corporation; (b) the contract was negotiated or executed in New York; (c) the contract contains a New York choice-of-law clause; and (d) payments were to be made into New York or performance was to be supervised from New York. Id. The ultimate determination should be based on the totality of the circumstances. Id.

New York courts have held that conducting contractual negotiations by phone, fax or mail with a party in New York does not constitute the transaction of business within the state. See Glassman v. Hyder, 23 N.Y.2d 354, 361-63, 244 N.E.2d 259, 262-63, 296 N.Y.S.2d 783, 788-89 (1968); Success Marketing Electronics, Inc. v. Titan Security, Inc., 204 A.D.2d 711, 612 N.Y.S.2d 451 (2d Dep't 1994); Spectra Prods., Inc. v. Indian River Citrus Specialties, Inc., 144 A.D.2d 832, 833-34, 534 N.Y.S.2d 570, 572 (3d Dep't 1988); Paradise Prods. Corp. v. Allmark Equipment Co., Inc., 138 A.D.2d 470, 471-72, 526 N.Y.S.2d 119, 121 (2d Dep't 1988) ("[i]t has been held repeatedly that interstate negotiations by telephone are not contacts that subject a defendant to jurisdiction at the instance of the New York party receiving them"); Cooperstein v. Pan-Oceanic Marine, Inc., 124 A.D.2d 632, 633, 507 N.Y.S.2d 893, 894 (2d Dep't 1986), leave to appeal denied, 69 N.Y.2d 611, 511 N.E.2d 84, 517 N.Y.S.2d 1025 (1987); J.E.T. Advertising Assocs., Inc. v. Lawn King, Inc., 84 A.D.2d 744, 745, 443 N.Y.S.2d 745, 747 (2d Dep't 1981); Vincent C. Alexander, 1996 Supplemental Practice Commentary to § 302, at C302:10 ("courts seem generally loath to uphold jurisdiction under the `transaction in New York' prong of CPLR 302(a)(1) if the contract at issue was negotiated solely by mail, telephone and fax without any New York presence by the defendant").

Here, Event's only direct contacts with New York relating directly to the Agreement were its telephone and fax contact with WFA and Schanks. Although telephone contact can, in rare cases, constitute "transacting business" in the state if the defendant actively "projects" itself into New York events, such as by actively participating in a New York art auction by telephone, Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 256 N.E.2d 506, 308 N.Y.S.2d 337 (1970), such is not the case here. Furthermore, a plaintiff's New York activities relating to the contract cannot be imputed to the defendant for jurisdictional purposes. See, e.g., J.E.T. Advertising, 84 A.D.2d at 745, 443 N.Y.S.2d at 747.

Nor has Event engaged in the type of purposeful activity connected with New York that is constitutionally required to confer jurisdiction in New York. See Schultz v. Hyman, 201 A.D.2d 956, 607 N.Y.S.2d 824 (4th Dep't 1994) (exercise of personal jurisdiction over nonresident defendant must comport not only with New York law but with judicial interpretations of Due Process Clause). Pursuant to the Due Process Clause, a nonresident defendant must have sufficient minimum contacts with the forum state such that it has purposefully availed itself of the benefits and protections of the laws of that state and may reasonably expect to be haled into court there to defend its actions. See International Shoe Co. v. State of Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 159-60, 90 L.Ed. 95 (1958); Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 ("it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws"), reh'g denied, 358 U.S. 858, 79 S.Ct. 10, 3 L.Ed.2d 92 (1958); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 566 (1980); see Asahi Metal Indus. Co. v. Superior Ct. of Cal., 480 U.S. 102, 112, 107 S.Ct. 1026, 1032, 94 L.Ed.2d 92 (1987) ("[t]he substantial connection between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State.") (plurality opinion) (...

To continue reading

Request your trial
31 cases
  • International Healthcare v. Global Healthcare
    • United States
    • U.S. District Court — Southern District of New York
    • January 11, 2007
    ...205, 208 (S.D.N.Y.1978), or fall into an exception for nonessential contract negotiations, e.g., Worldwide Futgol Assocs., Inc. v. Event Entm't, Inc., 983 F.Supp. 173, 177 (E.D.N.Y.1997). Here, Dorff and Gaither's alleged acts were connected to Cuene's ongoing employment and underlie the di......
  • Arista Tech. v. Arthur D. Little Enterprises
    • United States
    • U.S. District Court — Eastern District of New York
    • December 28, 2000
    ...Visiting Nurse Ass'n of Eastern Massachusetts, Inc., 42 F.Supp.2d 327, 330-31 (S.D.N.Y.1999); Worldwide Futgol Assocs., Inc. v. Event Entertainment, Inc., 983 F.Supp. 173, 176-77 (E.D.N.Y.1997). The ultimate conclusion should be based on the totality of the circumstances. See Agency Rent A ......
  • Skrodzki v. Marcello
    • United States
    • U.S. District Court — Eastern District of New York
    • August 19, 2011
    ...was negotiated solely by mail, telephone, and fax without any New York presence by the defendant.” Worldwide Futgol Assoc., Inc. v. Event Entm't, Inc., 983 F.Supp. 173, 177 (E.D.N.Y.1997); see United Computer Capital Corp. v. Secure Prods., L.P., 218 F.Supp.2d 273, 278 (N.D.N.Y.2002) (“Wher......
  • Seldon v. Magedson
    • United States
    • U.S. District Court — Southern District of New York
    • July 9, 2012
    ...and fax without any New York presence by the defendant.'" Skrodzki, 810 F. Supp.2d at 512 (quoting Worldwide Futgol Assoc.. Inc. v. Event Entm't. Inc.. 983 F. Supp. 173, 177 (E.D.N.Y. 1997)). A defendant's communications into New York will suffice to establish specific jurisdiction only if ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT