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INTERNATIONAL PRIVATE SATELLITE PTNRS. v. LUCKY CA

September 5, 1997

INTERNATIONAL PRIVATE SATELLITE PARTNERS, L.P., d/b/a Orion Atlantic, L.P., Plaintiff,
v.
LUCKY CAT LIMITED, et al., Defendants.



The opinion of the court was delivered by: LARIMER

 Plaintiff, International Private Satellite Partners, L.P., d/b/a Orion Atlantic, L.P. ("Orion"), commenced this action against defendants Lucky Cat Limited ("Lucky Cat") and Swiftcall (Jersey) Limited ("Swiftcall (Jersey)"), to recover damages for an alleged breach of contract. Swiftcall (Jersey) has moved pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure to dismiss the complaint for lack of personal jurisdiction.

 BACKGROUND

 Orion is a limited partnership in the business of providing international satellite communications services to business customers. The complaint alleges that in 1995, Orion entered into four contracts with Swiftcall Limited, an England-based company in the business of providing telecommunications services, under which Orion agreed to provide satellite communications links between Swiftcall Limited's premises for three years. Each of the four contracts provided, inter alia, that "the parties hereby irrevocably submit to the jurisdiction and venue in the State of New York in connection with any action to enforce or interpret this Agreement."

 Plaintiff alleges that Swiftcall Limited breached the contracts by failing to pay Orion certain charges. Plaintiff also alleges that on or about May 31, 1996, Swiftcall Limited ceased doing business, and that Golden Pages (Jersey) Limited continued providing the services that Swiftcall Limited had previously performed. Golden Pages (Jersey) Limited subsequently changed its name to Swiftcall (Jersey) Limited.

 According to plaintiff, Swiftcall Limited subsequently resumed business under the name Lucky Cat Limited. At this point it is not entirely clear what the relationship is between Lucky Cat and Swiftcall (Jersey), but plaintiff seeks to hold both Lucky Cat and Swiftcall (Jersey) liable under Orion's contracts with Swiftcall Limited.

 DISCUSSION

 The only basis upon which plaintiff premises personal jurisdiction over defendants is the forum selection clause in the contracts between Orion and Swiftcall Limited. Swiftcall (Jersey) contends that it is not a successor to Swiftcall Limited and that it is therefore not bound by that clause. Swiftcall (Jersey) admits that it purchased a customer list and certain computer equipment from Swiftcall Limited in June 1996, but denies that it assumed any obligations of Swiftcall Limited under any existing contracts.

 "A plaintiff facing a Fed. R. Civ. P. 12(b)(2) motion to dismiss made before any discovery need only allege facts constituting a prima facie showing of personal jurisdiction." PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997). Since there has been no discovery in this case, then, plaintiff may defeat Swiftcall (Jersey)'s motion "based on legally sufficient allegations of jurisdiction." Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir.), cert. denied, 136 L. Ed. 2d 398, 117 S. Ct. 508 (1996); accord Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.), cert. denied, 498 U.S. 854, 112 L. Ed. 2d 116, 111 S. Ct. 150 (1990). In deciding the motion, the court must also "construe the pleadings and affidavits in plaintiff's favor at this early stage." PDK Labs, 103 F.3d at 1108.

 In addition, on a motion of this type, the court "has considerable procedural leeway. It may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion." Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981). While plaintiff has the ultimate burden of establishing jurisdiction by a preponderance of the evidence, prior to an evidentiary hearing or trial "a prima facie showing suffices, notwithstanding any controverting presentation by the moving party, to defeat the motion." Id.; accord Benjamin Sheridan Corp. v. Benjamin Air Rifle Co., 827 F. Supp. 171, 174 (W.D.N.Y. 1993).

 As stated, the basis for personal jurisdiction over Swiftcall (Jersey) is a forum selection clause. "Forum selection and choice of law clauses are presumptively valid where the underlying transaction is fundamentally international in character." Roby v. Corporation of Lloyd's, 996 F.2d 1353, 1362 (2d Cir.) (citing M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 32 L. Ed. 2d 513, 92 S. Ct. 1907 (1972)), cert. denied, 510 U.S. 945, 114 S. Ct. 385, 126 L. Ed. 2d 333 (1993). The existence of a valid forum selection clause that is enforceable against the parties to an action "obviates the need for a separate analysis of the propriety of personal jurisdiction." Packer v. TDI Sys., Inc., 959 F. Supp. 192, 196 (S.D.N.Y. 1997) (citing Jones v. Weibrecht, 901 F.2d 17, 18 (2d Cir. 1990)).

 In the case at bar, Swiftcall (Jersey) does not contest the validity of the forum selection clause at issue; it simply contends that Swiftcall (Jersey) is not bound by it because it was not a party to the underlying contract. However, "it is well established that 'a range of transaction participants, parties and non-parties, should benefit from and be subject to forum selection clauses.'" Graham Tech. Solutions, Inc. v. Thinking Pictures, Inc., 949 F. Supp. 1427, 1434 (N.D.Cal. 1997) (quoting Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 514 n. 5 (9th Cir. 1988)). An entity that is not a party to a contract containing a forum selection clause may therefore be bound by the clause if the entity is "'closely related' to the dispute such that it becomes 'foreseeable' that it will be bound." Hugel v. Corporation of Lloyd's, 999 F.2d 206, 209 (7th Cir. 1993) (quoting Manetti-Farrow, 858 F.2d at 514 n. 5).

 I find that plaintiff's allegations are sufficient at this stage to show that Swiftcall (Jersey) is bound by the forum selection clause. Swiftcall (Jersey) admits to having purchased some assets and customer lists from Swiftcall Limited, and that it entered into the business of providing services similar to those previously performed by Swiftcall Limited. Since the precise contours of the transactions and relationship between Swiftcall (Jersey) and Swiftcall Limited are not clear at this point, I cannot simply accept Swiftcall (Jersey)'s assertion that it did not assume any of Swiftcall Limited's contractual obligations. Construing the pleadings and affidavits in plaintiff's favor, PDK Labs, 103 F.3d at 1108, I conclude that there is a basis upon which it could be found that it was foreseeable to Swiftcall (Jersey) that by engaging in its transaction with Swiftcall Limited and thereafter performing the same services as Swiftcall Limited, Swiftcall (Jersey) might be closely enough related to disputes arising out of Swiftcall Limited's contracts to bind Swiftcall (Jersey) under the forum selection clause. See Hugel, 999 F.2d at 210 (plaintiff corporations owned by individual plaintiff were so closely related to dispute between individual plaintiff and defendant that they were bound by forum selection clause entered into between individual plaintiff and defendant); Manetti-Farrow, 858 F.2d at 514 n. 5 (defendants' conduct was so closely related to contractual relationship between plaintiff and other defendant that all defendants were bound by other defendant's forum selection clause); Graham Technology, 949 F. Supp. at 1434 (plaintiffs' conduct was closely related to contractual relationship between parties to forum selection clause, and therefore plaintiffs were bound by clause).

 In addition, under New York law, which governs the issue of personal jurisdiction in this case, see Cutco Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986), in some circumstances a corporation may be held liable for breach of another corporation's contracts on a theory of successor liability. Successor liability may be found where: a company has expressly or impliedly agreed to assume another company's debts and obligations; the transaction conveying one company's assets to the other was fraudulent; there was a de facto merger or consolidation of the companies; or the purchasing company was a mere continuation of the selling company. Old Republic Ins. Co. v. Hansa World Cargo Serv., 170 F.R.D. 361, 376 (S.D.N.Y. 1997); American Buying Ins. Serv. v. K. Kornreich & Sons, 944 F. Supp. ...


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