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March 24, 1999


The opinion of the court was delivered by: Gershon, District Judge.


Invoking the court's diversity jurisdiction, plaintiff Theodore Rothstein brings this action against defendants Mark C. Carriere, Multi-Media Distributing Co., Inc. ("Multi-Media"), which does business as Leisure Time Entertainment, Inc., and Leisure Time Products, Inc. for malicious prosecution, intentional infliction of emotional distress and prima facie tort. Defendants move to dismiss the first amended complaint under Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction over them. They also move to dismiss under Rule 12(b)(3) and 28 U.S.C. § 1406(a) on the basis that venue is improper in the Eastern District of New York; in the alternative, they seek transfer of the case to the Central District of California, pursuant to 28 U.S.C. § 1404(a).


Plaintiff alleges the following in the first amended complaint: Plaintiff, a resident of Brooklyn, New York, is lawfully engaged in the adult entertainment business. Defendant Carriere, who resides in Brentwood, California, is also engaged in the adult entertainment business in this district. Carriere is the president, chief executive officer and majority shareholder of the corporate defendant Leisure Time Entertainment, Inc.

Leisure Time Entertainment, Inc., incorporated in Indiana, maintains offices in California and Indiana and is engaged in the adult entertainment business. Leisure Time Entertainment, Inc. includes many affiliated entities, such as defendant Multi-Media and defendant Leisure Time Products, Inc., which are also both engaged in the adult entertainment business. Multi-Media is incorporated in Indiana and maintains an office in Indiana. Leisure Time Products, Inc. is incorporated in California and maintains an office in California.

On June 3, 1993, Carriere was indicted in the State of Alabama on criminal charges of possession with intent to distribute obscene materials. Defendant Multi-Media was also indicted and charged with violating Alabama's obscenity laws. On January 4, 1994, Carriere was indicted by a federal grand jury in Louisville, Kentucky for violating federal obscenity laws. Defendant Leisure Time Products, Inc. was also indicted on similar charges. Carriere previously had been indicted and had pled guilty in three separate federal jurisdictions to obscenity and tax evasion charges.*fn1 Since one of the sentences he had received included a sentence of probation, Carriere faced possible incarceration for violating his probation if he were convicted on felony charges in Alabama and Kentucky.

In an effort to receive leniency for possible future sentences, Carriere met with Special Agent Matthew M. Pellegrino of the Federal Bureau of Investigation ("FBI") on March 18, 1994 at the Department of Justice in Washington, D.C. It was during this meeting, plaintiff alleges, that Carriere falsely and maliciously told investigators that plaintiff had been involved in criminal activities with Carriere in 1990 and 1991 involving transactions in obscene pornographic video tapes.

Carriere informed investigators that, on the recommendation of his then-sales manager, Donald Sarnblad, Carriere entered into a deal with Bizarre Video, located in Brooklyn, New York, in which Carriere agreed to mail a limited listing of Bizarre Video's tapes to a targeted group culled from Multi-Media's adult entertainment customer list. Plaintiff alleges that Carriere falsely and maliciously told investigators that plaintiff was the owner of Bizarre Video. In this regard, Carriere falsely explained that Morton Gordon, who is the actual owner of Bizarre Video, was merely serving as a front to conceal plaintiff's ownership. Carriere allegedly stated that it was plaintiff who controlled all decision-making and that plaintiff intended Carriere to sell and distribute obscene video tapes through Multi-Media's distribution network. Carriere also allegedly stated that, because of the success of the Bizarre Video materials, he authorized Sarnblad to arrange for the printing of a complete catalog of video tapes offered by Bizarre Video and that he and plaintiff each paid half of the printing costs. Moreover, it is alleged that Carriere falsely asserted that plaintiff represented to Sarnblad that Bizarre Video's tapes were "soft-core" pornography and that plaintiff had been selling them for years. Finally, Carriere falsely stated that, on his personal instructions, Sarnblad proposed to plaintiff that he accept cash in payment for the Bizarre Video tapes and that thereafter Sarnblad took cash to Brooklyn, New York, and plaintiff accepted it there.

Six months after Carriere's meeting in Washington, D.C., in September 1994, the State of Alabama dropped all charges against Carriere individually. He agreed on behalf of Multi-Media to plead guilty to certain obscenity charges and was sentenced to pay $50,000 in restitution and a $450,000 fine.

In April 1995, Carriere pled guilty in the U.S. District Court in the Western District of Kentucky based upon a cooperation agreement which envisioned a prison term of six months or less and a $500,000 fine. Just before sentencing on this plea, Special Assistant United States Attorney Gene Malpas wrote in a February 6, 1996 letter to the court, in relevant part:

On February 7, 1996, the day after the letter to the court, plaintiff along with Sarnblad, Morton Gordon and Bizarre Video were indicted in U.S. District Court for the Northern District of Florida in Tallahassee, Florida. The indictment charged seven counts of federal obscenity violations based on the distribution of Bizarre Video's obscene materials from Indiana and New York to Florida. If convicted on these charges, plaintiff faced up to 10 years in jail and fines up to $250,000.

Two days later, on February 9, 1996, Carriere was sentenced in the Western District of Kentucky. He received no prison time, despite prosecutors' request for six months of incarceration. He was assessed a $250,000 fine, and Multi-Media was fined $600,000.

During the pre-trial discovery proceedings in the prosecution against plaintiff in the Northern District of Florida, the government disclosed that Carriere was a cooperating witness in the case. At the same time, an affidavit filed with the district court revealed that Sarnblad denied the statements made by Carriere to the FBI. Specifically, he expressly denied that it was plaintiff who owned Bizarre Video or that plaintiff was involved in the transaction that Carriere had described between Multi-Media and Bizarre Video in New York. In addition, Eric Gutterman, another employee of Multi-Media, identified Morton Gordon as the owner of Bizarre Video and acknowledged that he delivered cash to Gordon in New York as payment for Bizarre Video's tapes. Documentary evidence, uncovered by the government from Multi-Media, later substantiated Sarnblad's denials and disputed Carriere's claims. After discovering that Carriere had lied with regard to ...

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