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June 14, 2000


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


On November 23, 1999, Photoactive Productions, Inc., doing business as Creative Placement Group ("CPG" or the "plaintiff") filed a complaint in New York Supreme Court, Suffolk County (Index No. 99-26689) alleging that AL-OR International LTD ("AL-OR" or the "defendant") failed to pay it money due and owing as a result of services in connection with the designing of magazine advertisements. On December 22, 1999, AL-OR removed this case to the United States District Court for the Eastern District of New York pursuant to 28 U.S.C. § 1441. Presently before the Court is AL-OR's motion to dismiss for lack of personal jurisdiction, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure ("Fed.R.Civ.P."). Alternatively, AL-OR moves pursuant to 28 U.S.C. § 1404(a) to transfer this matter to the United States District Court for the Central District of California.


Unless otherwise stated, the facts set forth below are taken from the plaintiff's complaint. As this decision involves a motion to dismiss for lack of personal jurisdiction and a motion to transfer, the Court will also consider the various affidavits submitted by the parties. See Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 196-98 (2d Cir.) (discussing procedure for challenging personal jurisdiction), cert. denied, 498 U.S. 854, 111 S.Ct. 150, 112 L.Ed.2d 116 (1990); see also Factors Etc., Inc. v. Pro Arts Inc., 579 F.2d 215, 218 (2d Cir. 1978), cert. denied, 440 U.S. 908, 99 S.Ct. 1215, 59 L.Ed.2d 455 (1979) (holding that motion to transfer venue must be supported by affidavit). As such, the facts set forth below are also taken from the sworn affidavits and declarations of Jack Zemer, Doron Basha, Marianne Terchunian, Craig Mowry, and Ori Zemer.

CPG is a corporation duly organized and existing under the laws of the State of New York with its principal place of business in East Quogue, New York. AL-OR is a corporation organized and existing under the laws of the State of California with its principal place of business in La Jolla, San Diego County, California. CPG alleges that AL-OR failed to pay for advertising and related services that it rendered. CPG is in the business of providing advertising, media planning and placement, and related services (collectively "CPG Services"). Between the period of April 1999 to December 1999, CPG provided Services to AL-OR. The plaintiff contends that it is owed the sum of $896,294.50 from AL-OR for CPG Services that remain unpaid.

AL-OR markets, manufacturers, and distributes for sale a line of fine jewelry, watches, belts, handbags, and other accessories marketed under the brand name Charriol ("Charriol Products"). CPG contends that a substantial portion of the money owed to it by AL-OR represents out-of-pocket costs that CPG incurred to coordinate, plan, and run print advertisements in nationally circulated magazines for AL-OR.

In January 1999, discussions between AL-OR and CPG took place regarding the possibility of AL-OR using CPG as its advertising broker for the 1999 calendar year. All communications were done by either telephone, fax, mail or email. In April 1999, CPG began providing services for AL-OR. In October 1999 a dispute arose over the quality of CPG services and the billing methodology of CPG.

AL-OR submits that it has no offices, warehouses, employees or residences within New York. AL-OR further claims that it does not maintain any officers, agents, or business representatives in New York; it does not own any real or personal property in New York; and it does not maintain any telephone numbers or directory listings in New York. According to AL-OR, it's sales of Charriol Products to retailers in New York are solicited primarily by way of telephone contact by AL-OR's in house employees, from its headquarters in La Jolla, California. Sales of Charriol Products by AL-OR to retailers within New York represents approximately three to five percent of AL-OR's total sales.

AL-OR contends that New York is an inconvenient forum because all the evidence, documents, witnesses, principals, and officers are located in California. Furthermore, AL-OR asserts that none of its employees or representatives have ever traveled to New York to negotiate, discuss or enter into a contract with CPG. Therefore, AL-OR argues that it does not have sufficient minimum contacts with New York to justify a finding of jurisdiction in the Eastern District of New York.

CPG also contends that AL-OR's employees have visited New York for business purposes. For example, in September 1999, Ori Zemer, AL-OR's marketing director, traveled to Manhattan to meet with Craig Mowry, chairman of CPG, and a representative of the Italian edition of Vogue to discuss the publisher's production of a photographic layout showing Charriol products. In addition, CPG claims that Doron Basha, AL-OR's Vice President for Sales and Marketing, traveled to New York in July 1999 to assist CPG in selecting an outdoor site to shoot a commercial. According to CPG, on the same trip, Basha also met with other CPG officers to discuss strategies for achieving AL-OR's marketing objectives. Further, CPG claims that representatives of AL-OR also attend and maintain a vendor booth at the annual "JA" jewelry show held in the winter and summer each year at the Jacob Javits Convention Center in New York. Finally, CPG submits that in June 1999, Jack Zemer, AL-OR's principal, and Doron Basha attended a consumer show at the Jewelry Information Center in New York City.


A. Standards of Review

With regard to a motion to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant. See Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999); Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999) (citing Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir.), cert. denied, 519 U.S. 1006, 117 S.Ct. 508, 136 L.Ed.2d 398 (1996)). While the plaintiff will ultimately have to prove the existence of personal jurisdiction over the defendant by a preponderance of evidence, prior to discovery, a plaintiff may defeat such a motion with legally sufficient allegations of jurisdiction that are pleaded in good faith. See Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998); see also Wilcock v. Equidev Capital L.L.C, 1999 WL 1129068, 1999 U.S.Dist. LEXIS 18898, *2 (S.D.N.Y. Dec. 9, 1999).

Motions to dismiss under 12(b)(2) test the plaintiff's theory of jurisdiction and test the facts supporting the jurisdictional theory. See Credit Lyonnais Sec. (U.S.A.), Inc. v. Alcantara, 183 F.3d 151, 153 (2d Cir. 1999). To survive such a motion to dismiss, the plaintiff is required to make a prima facie showing of jurisdiction, including an averment of facts that, if credited by the ultimate trier of fact, sufficiently establish jurisdiction over the defendant. See Kernan, 175 F.3d at 240; Bank Brussels Lambert, 171 F.3d at 784.

In reaching a decision as to whether jurisdiction is appropriate, the Court need only determine whether the facts alleged by the plaintiff, if true, are sufficient to establish jurisdiction. See Credit Lyonnais Sec., Inc., 183 F.3d at 153. No evidentiary hearing or factual determination is necessary for this purpose. See id. When considering various affidavits and sworn declarations, the Court must construe them in the "light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor, notwithstanding a controverting presentation by the moving party." A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993).

Personal jurisdiction over a nonresident defendant in a federal diversity action is determined by the law of the forum state. See id.; Jazini, 148 F.3d at 183-84; Kronisch v. United States, 150 F.3d 112 (2d Cir. 1998). Thus, in resolving questions of personal jurisdiction in a diversity action,

a district court must conduct a two-part inquiry. . . . "First, it must determine whether the plaintiff has shown that the defendant is amenable to service of process under the forum state's laws; and second, it must assess whether the court's assertion of jurisdiction under these laws comports with the requirements of due process."

Kernan, 175 F.3d at 240 (quoting Metropolitan Life Ins., 84 F.3d at 567) (other citation omitted).

Before analyzing the merits of the defendant's motion to dismiss for lack of personal jurisdiction and the defendant's motion to transfer venue, the Court notes that the defendant's argument that a forum selection clause contained in the agreement between the parties choosing California as the proper forum is without merit. The defendant states in its memorandum of law that the "contract was executed by AL-OR in La Jolla, California, and returned to CPG. As executed, the contract provided that any disputes between AL-OR and CPG arising under the contract would be resolved in a forum in Los Angeles, California, and that such resolution would be made according to and under the laws of the State of California."

However, upon reviewing the "forum selection clause," it is clear that it is in fact an arbitration clause. The agreement states that "any dispute between CHARRIOL and CREATIVE PLACEMENT GROUP that arises out of this Agreement will be resolved through a binding arbitration proceeding to be conducted under the auspices and the commercial arbitration rules of the American Arbitration Association." As neither party has apparently invoked its right to arbitrate, the Court concludes that this clause is not relevant in regard to the ...

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