The opinion of the court was delivered by: Sprizzo, District Judge:
Plaintiff ICC Primex Plastics Corp. ("Primex") brings this
action against defendants LA/ES Laminati Estrusi Termoplastici
S.P.A. ("LA/ES"), CO-EX Corporation ("CO-EX") and individual
defendant Cosimo Conterno. The action stems from a failed joint
venture allegedly entered into by Primex and LA/ES, and
includes allegations that the defendants breached their
obligations under a letter of intent to form the joint venture,
misappropriated information provided to them by the plaintiff
and used that information for their own purposes in derogation
of a fiduciary duty, interfered with Primex`s business
opportunities, and breached fiduciary duties owed to the
plaintiff. All defendants move to dismiss the action for lack
of personal jurisdiction, Fed.R.Civ.P. 12(b)(2), or for a
transfer to the District of Connecticut. 28 U.S.C. § 1404(a).
The Court has held a hearing and considered all of the
testimony and exhibits submitted by the parties and, for the
reasons that follow, the motions to dismiss are granted.*fn1
The following constitutes
the Court`s findings of fact and conclusions of law pursuant to
LA/ES is an Italian Corporation engaged in the business of
acetate sheet production for the optical industry. See
Transcript of Hearing ("Tr.") at 43. Its main office is in
Italy and it has no offices or sales personnel in the State of
New York. See Tr. 44. LA/ES's sales representatives solicit
business throughout the world and the United States, including
the State of New York, primarily by mail and telephone from
Italy. See Defendant`s Response to Plaintiff`s
Interrogatories No. 9 ("Int.") (annexed to Affidavit of Karin
Schlosser ("Schlosser Aff.") at Ex. 14). Those representatives
have made sales calls upon customers in New York on occasion,
and have attended some trade shows in New York. See Tr. 47;
Int. No. 9. Moreover, in addition to the sales representatives
located in Italy, LA/ES presently has a sales agent located in
Connecticut, Roland Optical Co., which receives a commission on
its sales.*fn2 See Tr. 47. LA/ES also has a number of
customers in New York and received gross revenue of $404,130.00
from sales to New York customers between June 1, 1987 and
August 1990. See Int. No. 56 & Schedule C.
Individual defendant Cosimo Conterno is an Italian citizen
residing in Switzerland. See Tr. 43. He is the chief
executive officer of both LA/ES and Estrusione Materie
Plastiche, S.A. ("EMP"), a Swiss corporation which manufactures
extrusion polycarbonate thin wall sheet. See id. Conterno
does not maintain any offices or residences in New York, but he
has travelled to New York and continues to travel to
Connecticut from time to time for business reasons. See Tr.
44; Affidavit of Cosimo Conterno at ¶ 14 (July 31, 1990)
("Conterno Aff. I"); Int. No. 61-68.
In late 1987, Conterno and LA/ES entered into discussions with
Primex regarding the possibility of forming a joint venture for
the production and distribution in the United States of
polycarbonate wall sheets, which are typically used in the
construction of greenhouses. See Tr. 19-20, 44-47, 100-03.
These discussions included trips by plaintiff`s representatives
Murray Aibinder and Paul Bertsch to Italy to meet with Conterno
and inspect LA/ES` plants, see Tr. 45-46, 100, 136, and
visits by Conterno to Primex`s offices in Indiana and New
Jersey. See Tr. 46; Conterno Aff. I at ¶ 4. In addition,
LA/ES and Conterno furnished technical materials and other data
to Primex. See Tr. 46-47, 133, 143-45.
These preliminary discussions resulted in the execution of a
letter of intent on January 12, 1988. See Schlosser Aff. at
Ex. 1. The letter of intent contemplated three stages leading
to the formation of the joint venture: (1) the parties would
explore the feasibility of the project, with Primex responsible
for the investigation of the cost and feasibility of marketing,
distribution, and manufacturing the product in the United
States and LA/ES and Conterno responsible for negotiations with
suppliers of resin, a raw material necessary for production;
(2) the parties would form a corporation which would market in
the United States polycarbonate sheets manufactured in Europe
for six months; and (3) if the marketing experiment phase
proved successful, the company would thereafter begin to
manufacture as well as distribute the product in the United
States. See Schlosser Aff. at Ex. 1; see Tr. 101-104. The
evidence at the hearing established that the
most critical prerequisite for the success of the joint venture
was the success of Conterno`s efforts to obtain a global
contract for raw materials, such as the resin necessary to
manufacture the product. See Tr. 76, 102-05, 120-22;
Defendant`s Memorandum of Law in Support of Motion to Dismiss
at Ex. B (letter from John Farber to Cosimo Conterno (March 8,
1988)). However, although Conterno had discussions with some
suppliers and visited one in May, 1988 in Michigan, he was not
able to obtain such a contract. See Schlosser Aff. at Ex. 2
(letter from C. Conterno to M. Aibinder (Aug. 24, 1988)).
While Conterno was endeavoring to obtain the contract, Primex
spoke to a number of sales representatives and requested that
one of those firms, Polymark, Inc. ("Polymark") make a
presentation to the joint venture partners. The principals of
Polymark were David Bilhorn, Byron Roderick, and Leo Carter. A
meeting was held at Primex`s offices in New York on May 18,
1988,*fn3 the major purpose of which was to introduce the
Polymark representatives to Conterno. See Tr. 49-54, 63-64,
71-74, 107-08, 138-41; Affidavit of Murray Aibinder at ¶ 17.
Following their presentation, which Conterno criticized as
overly "optimistic," Tr. 55, 74, Aibinder and Conterno decided
to offer the position to Bilhorn and Roderick, but not Carter.
See Tr. 75-76, 109-10; Affidavit of David Bilhorn ("Bilhorn
Aff.") at ¶ 8. Polymark rejected that offer. See Tr. 60, 68,
109-10; Bilhorn Aff. at ¶ 8. Moreover, although Aibinder had
some discussions with Polymark after the meeting, he was not
successful in persuading Polymark to accept the position as
sales representatives on the basis offered by Aibinder and
Conterno. See Tr. 115-17.
Other matters were also discussed at the meeting, including
product specifications, commercial considerations, and the need
for a favorable contract for raw materials. See Tr. 107. At
the end of the meeting, it was agreed that Aibinder would draft
the joint venture agreement, and that Conterno would provide
more technical information to Primex and continue to try to
obtain the necessary contract for the raw materials. See Tr.
However, unbeknownst to Aibinder, after Polymark rejected the
offer made by Primex and LA/ES, David Bilhorn contacted
Conterno to inquire if LA/ES would be interested in exporting
its products to the United States and marketing them through
Polymark. See Tr. 59; Affidavit of Cosimo Conterno at ¶ 4
(Dec. 28, 1990) ("Conterno Aff. II"); Bilhorn Aff. at ¶ 9.
Since he had been thus far unable to obtain a price concession
on the raw materials and since he felt that Primex had no
independent knowledge of the marketplace, Conterno decided to
investigate the possibility of a business relationship with
Polymark. See Tr. 59, 69, 84-86; Conterno Aff. II at ¶¶ 4-5.
He asked Ian Jeremy Baines to speak to Bilhorn. See Tr.
10-12, 69, 85-86. Baines reported to Conterno that he thought
that Bilhorn was knowledgeable about the business. See Tr.
14. Thereafter, Baines and Conterno decided to form a company
to market polycarbonate structured sheets in the United States
and to hire Bilhorn as a salesman. See Tr. 14-15, 70.
The company they formed in September 1988 was defendant CO-EX
Corporation.*fn4 CO-EX is a Connecticut corporation and has
its principal place of business there. See Tr. 91. It has no
offices or employees in New York, see Tr. 91-92, but it does
solicit business in the state by mail and telephone. See Tr.
3-4. Its representatives, including Bilhorn,*fn5 also have
trade shows and made occasional sales calls upon New York
customers. See Tr. 4-5, 10, 16-17, 29. Moreover, CO-EX
presently sells products to potential customers in New York
through a representative in New Jersey, whose sales must be
approved by CO-EX. See Tr. 92, 95-96.
The evidence further demonstrated that CO-EX's sales to New
York customers between August 1988 and June 1990 totalled
approximately $120,000 and constituted approximately 10% of
CO-EX's business. See Tr. 18; Schlosser Aff. at Exs. 9, 10,
11. In addition, CO-EX sometimes provides its customers with
promotional material seeking to have them persuade their
customers to purchase its product, however, none of CO-EX's
customers have any authority to bind CO-EX. See Tr. 24-26.
Nor did CO-EX have any control over the manner or means by
which its customers resold its product. See Tr. 21, 24-27,
Plaintiff first argues that CO-EX and LA/ES are subject to
personal jurisdiction because those companies are "doing
business" in New York State. Under N.Y.Civ.Prac.L. & R.
("CPLR") 301 (McKinney 1990), a court may exercise personal
jurisdiction over a defendant on any cause of action where the
defendant is "`engaged in such a continuous and systematic
course of "doing business" here as to warrant a finding of its
"presence" in this jurisdiction.`" Landoil Resources Corp. v.
Alexander & Alexander Servs. Inc., 918 F.2d 1039, 1043 (2d
Cir. 1990) (quoting McGowan v. Smith, 52 N.Y.2d 268, 272,
419 N.E.2d 321, 323, 437 N.Y.S.2d 643, 645 (1981)). In applying
this test, New York courts have consistently held that the
solicitation of business alone will not justify the exercise of
general personal jurisdiction over defendant. See Landoil
Resources, supra, 918 F.2d at 1043; Laufer v. Ostrow,
55 N.Y.2d 305, 310, 434 N.E.2d ...