The opinion of the court was delivered by: MCLAUGHLIN
McLAUGHLIN, District Judge
This is an action for trademark infringement and unfair competition. Plaintiff, Soltex Polymer Corporation ("Soltex"), alleges that defendants have infringed its trademarks FORTIFLEX and FORTILENE by use of the identical mark FORTIFLEX and the similar mark FORTILON.
According to the complaint, Soltex sells raw plastic materials under two general technical classifications: high density polyethylene and polypropylene. The former is sold under the FORTIFLEX trademark, and the latter under the FORTILENE mark. The complaint alleges that defendants have sold plastic products manufactured from raw plastic materials using the FORTIFLEX mark, and have sold various rubber and plastic materials under the allegedly confusing trademark FORTILON.
Defendants Fortex Industries, Inc. ("Fortex") and Fortiflex, Inc. ("Fortiflex") have filed counterclaims against Soltex and six of its officers and directors (Messrs. Sadler, Osterreith, Americo, Degreve, Fitzgerald and Buckingham). In additiona, Fortex and Fortiflex have sought to join as counterclaim defendants, Solvay et Cie Societe Anonyme ("Solvay et Cie"), Soltex's Belgian parent corporation, and two principal officer of Solvay et Cie, who also sit on the Soltex board of directors (Messrs. Solvay and Loutrel). A third corporation, the Hedwin Company, is also named as a counterclaim defendant. The counterclaim allege, inter alia, conspiracy, unfair competition, and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq. ("RICO"). All counterclaim defendants, except Soltex and the Hedwin Company, have moved to dismiss under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction.
The motion was referred to Magistrate Shira A. Scheindlin, and on June 20, 1983 the Magistrate provided this Court with a Report and Recommendation that recommended dismissal of all counterclaims against the moving counterclaim defendants. Upon receipt of the Magistrate's Report and Recommendation, the counterclaim plaintiffs filed extensive objections, upon which I must now rule.
I. Personal Jurisdiction Over The Eight Individual Counterclaim Defendants
The individual counterclaim defendants include M. Whitson Sadler, President and Chief Executive Officer, and a member of the Board of Directors of Soltex; Michael Osterreith, former Vice President and currently a member of the Board of Directors of Soltex; P. J. Americo, Vice President and General Manager-Plastics of Soltex; Rene Degreve, Vice President of Soltex; Maurice P. Fitzgerald, Vice President of Soltex; Edwin J. Buckingham, III, General Counsel and Vice President of Soltex. Although these six individuals reside in the United States, they do not reside in New York. The two remaining counterclaim defendants are Jacques Solvay, Chairman of the Board of Directors of Solvay et Cie and a member of the Board of Directors of Soltex; and Claude Loutrel, a member of the Board of Directors of both Solvay and Soltex. Solvay is a citizen and a resident of Belgium. Loutrel is a citizen of France and a resident of Belgium.
In their affidavits, each of the six American counterclaim defendants has stated that he lives and works outside New York. They have further sworn that their sole employment compensation has been from Soltex since joining that company. In addition, each has sworn that he conducts no business of any kind in his own behalf, with the exception of Mr. Sadler who owns a farm in Texas. Although each defendant admits travelling to New York on Soltex business or for family or vacation visits, none maintains a New York office or place of business, mailing address, or telephone listing. None of the American counterclaim defendants owns any real property in this state. Furthermore, none of them is incorporated, licensed, or otherwise qualified to do business in the State of New York, with the exception of Mr. Buckingham, who was admitted to the Bar of the State of New York in 1973.
The two Belgian counterclaim defendants state that they live and work in Belgium, that they have never resided in New York, never maintained a New York mailing address or telephone listing, and never owned real property in New York. Moreover, they do not regularly conduct or transact business on their own behalf in New York either personally or through an agent.
B. Counterclaim Plaintiff's Argument
The counterclaim plaintiffs assert personal jurisdiction over the eight individual counterclaim defendants under both federal and state law. The federal predicate for personal jurisdiction is RICO (discussed infra at p.12), while the state predicate rests upon two theories.
The counterclaim plaintiffs argue that the individuals are subject to this Court's jurisdiction because they participated in a civil conspiracy in which at least one unlawful act was committed in New York. Thus, counterclaim plaintiffs allege that the individual co-conspirators are subject to in personam jurisdiction pursuant to N.Y.Civ.Prac. Law § 302(a)(2) (McKinney 1971), because each conspirator is liable for the acts of his co-conspirators. They also invoke N.Y.Civ.Pract. Law § 302(a)(3) (McKinney 1971).
Fleshing out the conspiracy claim, the answer alleges that Soltex, Solvay et Cie, and their respective officers and directors participated in the following illegal acts: (1) filing the present lawsuit without probable cause; (2) intentionally providing misleading information to, or intentionally failing to correct misleading information in the possession of Standard & Poors concerning the ownership of the Hedwin Company; and, (3) perpetrating a fraud on the United States Patent and Trademark Office by (i) fraudulently renewing the trademark FORTILENE after abandonment of that trademark and the subsequent adoption by counterclaim plaintiff Fortex of the mark FORTILON, and (ii) instituting an opposition proceeding before the United States Patent and Trademark Trial and Appeal Board against the registration of the mark FORTIFLEX by the counterclaim plaintiff Fortex, after assuring Fortex that it did not consider Fortex's use of the mark on buckets and pails in the United States an infringement on Soltex's use of the mark on high density polyethylene.
In addition to the conspiracy theory, counterclaim plaintiffs charge that the individual defendants engaged in tortious conduct outside the state, causing injury to plaintiffs in New York, thereby establishing jurisdiction under N.Y.Civ.Prac. Law § 302(a)(3) (McKinney 1971). This charge is based on the alleged fraud on the United States Patent and Trademark Office. Counterclaim plaintiffs argue that counterclaim defendants engaged in this fraud by making false and fraudulent misstatements and omissions in connection with renewal of U.S. Registration 651, 021 for the trademark FORTILENE on or about November 15, 1977. Counterclaim plaintiffs contend that this fraud, as well as the alleged common-law conspiracy and the RICO conspiracy, are all tortious acts committed outside New York causing injury to this State. The injury is the $200,000 that the counterclaim plaintiffs incurred to defend the present lawsuit.
With respect to the remaining requirements of N.Y.Civ.Prac. Law § 302(a)(3), counterclaim plaintiffs rely on subsection (ii) which requires that the defendant have expected or reasonably should have expected his acts to have consequences in New York and that the defendant derives substantial revenue from interstate or international commerce. Counterclaim plaintiffs suggest that this requirement is met by the individual counterclaim defendants by reason of their membership in the conspiracy. The contention is that Soltex and Solvay et Cie derive substantial revenue from interstate or foreign commerce, and to the extent the individual counterclaim defendants are paid officers, directors, or employees of thos corporations, they should likewise be deemed to derive such revenue.
Magistrate Scheindlin, in her Report and Recommendation, however, concluded that the fiduciary shield doctrine (as enunciated in Marine Midland Bank, N.A. v. Miller, 664 F.2d 899 (2d Cir. 1981)) precludes exercise of personal jurisdiction over the individual counterclaim defendants. The Magistrate, accordingly, found it unnecessary to decide whether the counterclaim defendants had committed acts that would be sufficient to invoke long-arm jurisdiction under N.Y. CPLR § 302.
Personal jurisdiction is a composite notion of two separate ideas: amenability to jurisdiction, or predicate, and notice to the defendant through valid service of process. DeMelo v. Toche Marine, Inc. 711 F.2d 1260, 1264 (5th Cir. 1983). "Amenability to jurisdiction means that a defendant is within the substantive reach of a forum's jurisdiction under applicable law. Service of process is simply the physical means by which that jurisdiction is asserted." Id. (citations omitted).
a. N.Y.Civ.Prac. Law § 302
The acts of a conspirator may be attributed to a co-conspirator to obtain personal jurisdiction over the latter under N.Y.Civ.Prac. Law § 302. Louis Marx & Co. v. Fuji Seiko Co., Ltd., 453 F. Supp. 385, 391 (S.D.N.Y. 1978); Ghazoul v. International Management Services Inc., 398 F. Supp. 307, 312 (S.D.N.Y. 1975). Nevertheless, the mere allegation of conspiracy "does not suffice for purposes of the long arm statute." Louis Marx & Co., supra, 453 F. Supp. at 391.At a minimum, the plaintiff must allege specific facts that, if proven, would demonstrate the defendant's membership in the conspiracy. Id. Although counterclaim plaintiffs have had extensive discovery on the jurisdictional issue, they have been unable to adduce sufficient evidence of anything beyond the wildest speculation that the individual counterclaim defendants even knew of the conspiracy - much less were members of it.
Moreover, even if they had established a prima facie case of conspiracy for jurisdictional purposes, the fiduciary shield doctrine would, under the circumstances of this case, preclude the exercise of personal jurisdiction under § 302 over the eight individual counterclaim defendants.
In Columbia Briargate Co. v. First National Bank in Dallas, 713 F.2d 1052 (4th Cir. 1983), the Fourth Circuit Court of Appeals traced the evolution of the fiduciary shield doctrine:
This doctrine of "fiduciary shield" . . . emerged . . . as a novel principle by way of dicta in a series of decisions of the New York state and federal courts in the mid-sixties. . . . Its source is generally identified as dictum in Boas & Associates v. Vernier, 22 A.D.2d 561, 563, 257 N.Y.S.2d 487, 490 (1st Dep't. 1965). The first identification of the doctrine in the New York federal courts was in United States v. Montreal Trust Company, 358 F.2d 239 (2d Cir. 1966), cert. denied, 384 U.S. 919, 86 S. Ct. 1366, 16 L. Ed. 2d 440.
The Second Circuit's most recent exposition of the doctrine, however, is found in Marine Midland Bank, N.A. v. Miller, supra, 664 F.2d 899. There the court stated that:
It is undisputed that an individual who commits a tort while acting in his capacity as a corporate officer or employee may be held personally liable. . . . At issue in this case is not whether such a person may be liable, but rather whether and when a person acting in New York in his capacity as a corporate employee may be subject to ...