The opinion of the court was delivered by: MCAVOY
Plaintiff Frederick Murphy originally commenced this action by filing a complaint on February 7, 1994, wherein he seeks to recover damages pursuant to 42 U.S.C. § 1983, along with injunctive relief, for alleged violations by defendants of the Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 301 et seq., the Public Health Service Act ("PHSA"), 42 U.S.C. §§ 201 et seq., the First, Fourth, Sixth, and Fourteenth Amendments, and New York Law. The injuries claimed arise from an incident in which a New York State Police Officer sprayed plaintiff with a "pepper" spray called CAP-STUN. Defendant Zarc International ("Zarc") produces CAP-STUN and, according to plaintiff, conspired with other defendants to undertake an "illegal human experiment" whereby innocent citizens would be sprayed in order to determine the spray's effects. Zarc now moves for summary judgment pursuant to Fed. R. Civ. P. 56(c).
CAP-STUN is a product produced by defendant Zarc and "sold to law enforcement and military organizations around the world as a non-lethal use of force alternative." (Def.'s Mem. Supp. Summ. J. at 2.) According to defendant, CAP-STUN was first developed in the 1970s. After performing "an exhaustive study" and arranging "a broad range of testing" of the product, Zarc acquired all rights to CAP-STUN and began distributing its own "enhanced" version of CAP-STUN. (Id. at 3.) At around the same time, the Federal Bureau of Investigations ("FBI") apparently completed a three-year study of CAP-STUN and approved its use by FBI agents.
In 1992 the New York State Police decided to implement a study ("Pilot Study") of OC spray in order to determine whether it would be appropriate for use by State Police officers. The State Police subsequently obtained quotes from various OC spray distributors, including a quote for CAP-STUN. The CAP-STUN quote apparently did not come from defendant Zarc, however. Instead, it was provided by Integrated Systems International ("ISI"), a South Carolina Corporation that marketed and distributed CAP-STUN under the name "CAP-STUN Weapon Systems." Plaintiff alleges that ISI is merely the marketing division of defendant Zarc and not a separate company.
In November, 1992, the State Police decided to use CAP-STUN in its Pilot Study, and a purchase order was submitted to ISI in South Carolina. On December 4, 1992, either ISI or defendant Zarc dispatched a CAP-STUN trainer to Albany, New York, to instruct and certify a small number of State Police officers in the use of the spray. These officers in turn trained a larger group of officers from around New York, and all of the officers were issued CAP-STUN upon their completion of the training program. Apparently, after December 4, 1992, there was no further direct involvement by any Zarc or ISI personnel in the State Police's Pilot Study.
Plaintiff was sprayed with CAP-STUN on February 20, 1993, by an officer who was issued the product after the training sessions. Plaintiff apparently concedes that defendant Zarc had nothing to do with the decision to spray plaintiff. On May 31, 1993, the Pilot Study was completed, and in October of the same year the State Police issued its report, which recommended that an OC spray be acquired. This report was issued to defendant Zarc. After competitive bidding, the State Police decided to purchase TAC-DOWN, an OC spray product that competes with CAP-STUN. Defendant Zarc wrote a letter objecting to the apparent plan to purchase TAC-DOWN, and subsequently filed a bid protest. Ultimately, however, the State Police decided not to use CAP-STUN.
In his Complaint, plaintiff levels a number of serious charges at Zarc and the other defendants. He generally claims that defendants have conspired to subject innocent and unwitting citizens of New York to an illegal experiment designed to test the effects of CAP-STUN. Plaintiff also suggests that defendants devised a "test protocol" whereby people would be sprayed for no reason other than to test CAP-STUN, the results of those exposures would be recorded, and the information forwarded to Zarc for its use. Finally, plaintiff alleges that he became a victim of this nefarious scheme on February 20, 1993, in violation of his federal statutory and constitutional rights. Plaintiff seeks $ 20 million compensatory and punitive damages, as well as an injunction preventing Zarc from selling CAP-STUN in New York and preventing the State Police from using CAP-STUN until it is approved by the proper federal authorities.
A. PERSONAL JURISDICTION OVER ZARC
As in a diversity case, a district court having federal question jurisdiction over an action must look to the forum state's statutes to test personal jurisdiction. See e.g., Pilates, Inc. v. Pilates Inst., Inc., 891 F. Supp. 175, 179 (S.D.N.Y. 1995). Thus personal jurisdiction over defendant Zarc, a Maryland corporation with operations in Bethesda, Maryland, is governed by N.Y. Civ. Prac. L. & R. ("CPLR") 301 and 302. Bare legal allegations by plaintiff may be sufficient to withstand a dismissal motion for lack of personal jurisdiction,
but "without factual support, [such allegations] fail to make a prima facie showing at the summary judgment stage, once discovery has occurred." Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 199 (2d Cir.), cert. denied, 498 U.S. 854, 112 L. Ed. 2d 116, 111 S. Ct. 150 (1990). In other words, on the summary judgment motion at issue here -- after discovery -- plaintiff bears the burden of establishing whether jurisdiction is present.
The first possible basis for jurisdiction over defendant is New York CPLR 301, which authorizes general jurisdiction over a foreign corporation if the defendant was "doing business" in New York. Section 301 jurisdiction may be present even if the cause of action is unrelated to the party's activities in New York. However, a plaintiff must demonstrate that the defendant is doing business "not occasionally or casually, but with a fair measure of permanence and continuity." Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985). In a Section 301 analysis, New York courts focus upon several factors, including the existence of a New York Office, the solicitation of business in New York, the presence of bank accounts and other property in the state, and the presence of employees in the state. Id.
In response to defendant's motion, plaintiff argues that ISI/Cap-Stun Weapon Systems is Zarc's marketing division, rather than a separate entity, and has done business in the state. In addition, "Zarc actively advertises, promotes, distributes, and sells Cap-Stun within the State of New York." (Ballan Aff. at P 7.) Because plaintiff believes that ISI is merely Zarc's marketing division, it is unclear whether his claims of action by "Zarc" refer to endeavors undertaken by ISI or by Zarc itself. Regardless, plaintiff has not established that either Zarc or ISI has an office, bank accounts, property, or permanent employees in New York. All he has established is that CAP-STUN has been sold to several police agencies in New York by either Zarc or ISI and that either Zarc or ISI will send advertising materials into New York upon request. Therefore, even assuming ISI is the marketing division of Zarc, the Court finds that plaintiff is unable to offer sufficient evidence of the traditional signs of defendant "doing business" in New York under Section 301.
The second possible basis for jurisdiction is New York's long-arm statute, CPLR 302. Even if defendant's contacts with New York are not so continuous and systematic that they establish jurisdiction under Section 301, jurisdiction may be established under Section 302 when a defendant has transacted business in New York and the cause of action arises out of the subject matter of the business transaction. PaineWebber, Inc. v. Westgate Group, Inc., 748 F. Supp. 115, 118 (S.D.N.Y. 1990). In applying Section 302 to make a personal jurisdiction determination, the court properly should consider the totality of the defendant's activities. Sterling Nat'l Bank & Trust Co. v. Fidelity Mortgage Investors, 510 F.2d 870, 873 (2d Cir. 1975). Of course, at the summary judgment stage, the burden remains on the plaintiff to present more than mere allegations that sufficient contacts exist.
After reviewing the record, the Court is inclined to agree with plaintiff that ISI/CAP-STUN Weapon Systems, if not Zarc, has transacted business in New York and the cause of action here arises out of the subject matter of ISI's business transactions. In order to survive defendant Zarc's motion, however, plaintiff must establish that ISI's activities somehow are attributable to Zarc. The Court notes in plaintiff's favor that a principal can become subject to general jurisdiction in New York through the actions of its agents within the state. N.Y. Civ. Prac. L. & R. 302(a)(1); Ball, 902 F.2d at 199. A formal agency relationship between a defendant and an alleged agent need not be established. Plaintiff must only demonstrate that the alleged agent engaged in business activity related to the cause of action for the benefit of and with the knowledge and consent of the non-resident principal, and that the principal exercised "some control" over the alleged agent. Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 527 N.Y.S.2d 195, 199, 522 N.E.2d 40 (Ct. App. 1988).
In regard to the "some control" requirement, jurisdiction has been denied "where the corporate entities were truly separate, where the foreign defendant relinquished title and risk of loss outside the state, and where promotion of the defendant's product by the in-state corporation constituted 'mere solicitation.'" Ball, 902 F.2d at 199. Short of an express agency agreement, jurisdiction has been found where actions taken by the in-state entity with respect to third parties were binding on the foreign defendant, see id., or where the defendant assumed responsibility for the in-state project "as an organizing institution." Pfaff v. Denver Art Museum, 1995 U.S. Dist. LEXIS 8573, *6, 1995 WL 373489 at *2 (S.D.N.Y. June 22, 1995). Again, plaintiff argues in this case that ISI/CAP-STUN Weapon Systems is not an independent contractor or other separate entity, but rather is merely the marketing division of defendant Zarc.
The Court does not believe that plaintiff has established with adequate certainty that ISI is in fact the "marketing division" of defendant and thus merely a part of the same company. However, plaintiff has sufficiently verified (1) that ISI engaged in business activity related to the cause of action; (2) for the benefit of and with the knowledge and consent of Zarc; and (3) that Zarc exercised "some control" over ISI. Cf. Kreutter, 527 N.Y.S.2d at 199. ISI promotes sales, provides training, and essentially does everything Zarc would do if it sold CAP-STUN in New York in its own right. Plaintiff also has submitted Bills of Lading that reveal that even if ISI sold the CAP-STUN to the New York State Police, the product was shipped directly from Zarc. (Ballan Aff. Ex. E.) Finally, while the letterheads submitted by plaintiff are less than convincing,
the business card presented appears to indicate that ISI/CAP-STUN Weapon Systems is in fact the marketing division of defendant Zarc. (Id. at Ex. J.)
The Court tends to believe that plaintiff could have done a much better job in establishing the connection between ISI and Zarc, given the fact that discovery is now complete. The evidence submitted has not been significantly controverted by defendant, however, and it does give rise to an inference that Zarc either was directly involved in the selling of CAP-STUN to the state police or exercised "some control" over ISI's selling of the product. As a result, the Court believes that finding jurisdiction here satisfies minimum due process requirements because it does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945).
B. PLAINTIFF'S CLAIMS AGAINST ZARC
1. Summary Judgment Standard
Pursuant to Fed. R. Civ. P. 56(c), a trial judge may grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The moving party has the initial burden of informing the Court of the basis for its motion and identifying the matter that it believes demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The substantive law determines which facts are material to the outcome of a particular case. See Anderson, 477 U.S. at 250. In determining whether summary judgment is ...