supplying a critical and necessary part in the overall scheme to defraud.
The plaintiffs further allege that Boyd communicated with the plaintiffs in May 1995 which communications were allegedly designed to "vouch for Defendants' bona fides, to assuage Plaintiffs' concerns about being repaid, to convince them to continue to 'play ball' with Defendants and not to interfere with Defendants' activities by, for example, complaining to criminal authorities." Affidavit of Mark O. Andre in Opposition to Motion to Dismiss ("Andre Aff.") P 91. The plaintiffs further allege that Boyd benefitted from the alleged wrongdoing by allegedly using some proceeds of the scheme to pay off the mortgage note on his home which was more than $ 280,000.00 in default. The bank then allegedly sold and conveyed the note and the lien on Boyd's home to ESF-Barbados. If the plaintiffs' allegations are true, it can be inferred that Boyd knew the fraudulent schemes would impose injury on the plaintiffs, four of whom are residents of the State of New York, and that the tortious activity in New York was intended to advance the objectives of the defendants.
The Court finds that these allegations suffice to demonstrate that Boyd's efforts to allegedly launder the proceeds of the alleged fraudulent schemes were on behalf of and to the benefit of all the defendants, including Boyd.
In addition, the Court finds that it is of little consequence that Boyd may have joined the alleged conspiracy after the overt acts in New York had been committed and after the plaintiffs had invested money in the alleged fraudulent schemes. Boyd's alleged "joining of the conspiracy, adoption of its goals, and action in furtherance of it, thus constituted a ratification of those acts already committed with the purpose of accomplishing the same goal." Dixon v. Mack, 507 F. Supp. 345, 350 (S.D.N.Y. 1980) (plaintiff made the necessary prima facie factual showing that the defendant was a member in the conspiracy where defendant joined conspiracy with knowledge that overt acts in furtherance of the conspiracy had already taken place in New York). Boyd's "knowing ratification of acts committed in New York constitutes an awareness of the ramifications or effects in New York of his own activity as a co-conspirator." Id. In addition, the Court notes that "it is black letter conspiracy law that one who joins a conspiracy in progress ratifies all that has come before." Id. at 350-51. Thus, considering the pleadings and the affidavits in the light most favorable to the plaintiffs, the Court concludes that the plaintiffs have alleged a sufficient relationship between Boyd and the conspiracy.
2. Due process considerations
Finally, exercise of personal jurisdiction over Boyd must comport with "traditional notions of fair play and substantial justice" as expressed in the due process clause of the Fourteenth Amendment. McGee v. Int'l Life Ins. Co., 355 U.S. 220, 222, 78 S. Ct. 199, 201, 2 L. Ed. 2d 223 (1957) (citing Int'l Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945)). "By requiring 'fair warning' that an individual's activities in a state may subject him to suit there, the Due Process Clause protects that person's liberty interest and 'gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.'" Metropolitan Life Ins., 84 F.3d at 567 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S. Ct. 2174, 2182, 85 L. Ed. 2d 528 (1985)).
The due process requirement has two components: the "minimum contacts" inquiry and the "reasonableness" inquiry. Minimum contacts with the forum state ensure that a "defendant has sufficient contacts with the forum state to justify the court's exercise of jurisdiction." Id. The "reasonableness" inquiry requires that a court evaluate the following factors: (1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies. Asahi Metal Industry Co., Ltd. v. Superior Court of California, Solano County, 480 U.S. 102, 113-14, 107 S. Ct. 1026, 1032-33, 94 L. Ed. 2d 92 (1987).
The Court finds that exercise of jurisdiction comports with the due process requirement. "By joining the conspiracy with the knowledge that overt acts in furtherance of the conspiracy had taken place in New York, [the defendant] purposely [availed himself] of the privilege of conducting activities within the forum state." Dixon, 507 F. Supp. at 352. Indeed, "the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." Id. As such, although Boyd resides and does business in Texas, the Court finds that the plaintiffs have alleged minimum contacts with New York.
The Court further finds that it is "reasonable" to bring this litigation in New York. First, New York has an undeniable interest in providing redress to its own citizens. Four of the five plaintiffs are residents of the State of New York. The locus of the tort is in New York. The tortious acts that serve as the basis for this lawsuit, specifically, the initial meetings in August 1993 which laid the foundation for the defendants' alleged fraudulent schemes, occurred in New York. The injury to the plaintiffs occurred in New York.
Boyd also contends that the plaintiffs have filed suits arising from the same operative facts in Texas and Arizona. Hence, Boyd maintains that "by their voluntary action of seeking-out a Texas forum, Plaintiffs have undisputedly conceded that no claims exist which they could not otherwise bring in their Texas case where jurisdiction is not an issue." Motion to Dismiss P 6. With respect to the plaintiff's action in Texas which the plaintiffs contend was withdrawn, the Court notes that the allegations may be similar but the relief requested is different. In that action, the plaintiffs are requesting that a lien on Boyd's house, and a constructive trust over the mortgage note, be placed. Merely because the plaintiffs have brought actions in other jurisdictions does not bar the exercise of jurisdiction by this Court. The Court fails to see how the plaintiffs' interests in proceeding in a convenient forum would be better served by litigating in another state.
The plaintiff acknowledges the burden on Boyd of defending a law suit in New York. However, "the conveniences of modem communication and transportation ease what would have been a serious burden only a few decades ago." Metropolitan Life Ins., 84 F.3d at 574. Hence, the Court concludes that this factor, alone, "falls short of overcoming the [plaintiffs'] threshold showing of minimum contacts." Id.
Furthermore, Boyd has not suggested, much less shown, any substantive social policies, or how the interstate judicial system's interest in obtaining the most efficient resolution of the controversy, would be furthered by permitting this case to be heard in Texas or in another forum.
In sum, the Court finds that the due process requirement is properly met in the present case.
Having reviewed the submissions of all parties and heard oral argument, for the reasons set forth above, it is hereby
ORDERED, that the defendant Samuel L. Boyd's motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(2), for lack of personal jurisdiction, is DENIED, without prejudice with leave to renew after the close of discovery.
Dated: Uniondale, New York
January 31, 1998
ARTHUR D. SPATT
United States District Judge
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