The opinion of the court was delivered by: DOUGLAS EATON, Magistrate Judge
Plaintiff Robert Diaz Associates Enterprises, Inc. alleges that, in
August 2003, the defendants wrongfully (a) changed the password for
plaintiff's account at a company named Interland, Inc., and (b) hacked
into Interland's computer servers and copied plaintiff's work product and
trade secrets. Plaintiff seeks compensatory damages, punitive damages,
attorneys fees, and a permanent injunction. It sues under the civil
provisions of the Electronic Communications Privacy Act of 1986
(18 U.S.C. § 2707) and the Computer Fraud and Abuse Act of 1986
(18 U.S.C. § 1030). Also, under New York state law, plaintiff sues for
conversion, misappropriation of trade secrets, and breach of contract.
On December 30, 2003, the parties consented to have this case assigned
to me for all purposes pursuant to 28 U.S.C. § 636(c).
On January 8, 2004, the first five defendants (Elete, Inc., Elete
Sports Couture, Eletecouture.com, C. Lamont Smith, and Brian Huebsch)
moved to dismiss for lack of personal jurisdiction and improper venue.
These five defendants are collectively referred to as the "Elete
On February 3, 2004, plaintiff served opposition papers. On February
20, the Elete defendants served a reply affirmation which annexed an
I find personal jurisdiction over the Elete defendants, on the basis of
the New York Civil Practice Law and Rules ("CPLR")
§ 302(a)(3)(ii), as to the first four Causes of Action, which allege tortious acts. I decline to dismiss the Fifth Cause of
Action prior to discovery. I find that venue is proper in our District.
A. Plaintiff and the defendants as initially listed
Plaintiff Robert Diaz Associates Enterprises, Inc. ("RDA") is a New
York corporation with its principal place of business in Manhattan. It is
an information technology consulting firm that developed certain
proprietary applications for the administration of web sites and for the
operation of e-commerce enterprises (also called "proprietary back-end
coding"). RDA operates an Internet consulting division, RDAOnline, based
in New York City. RDAOnline provides customers with Internet web
page design and applications. (Compl. ¶ 3.)
Elete, Inc. ("Elete") is a Delaware Corporation with its corporate
offices located in Denver, Colorado. (12/18/03 Smith Aff. ¶¶ 4, 7.)
Elete says that Elete Sports Couture and Eletecouture.com are trademarks
of Elete. Elete says that it has not operated a business under either of
these names, but that it does operate an Internet e-commerce site at
eletecouture.com. (12/18/03 Smith Aff. ¶ 5.) Elete sells sports
apparel. (See eletecouture.com.)
C. Lamont Smith ("Smith") is the principal owner of Elete, Inc.
(12/18/03 Smith Aff. ¶ 1.) He signed the contract between RDA and
Elete. (Exh. 2 to 2/3/04 Pl. Memo.)
Brian Huebsch ("Huebsch") says he is general counsel of Elete, Inc.,
Elete Sports Couture, and Eletecouture.com. (12/18/03 Huebsch Aff. ¶
Castle Studios ("Castle") is an unincorporated business entity that
maintains its principal place of business in West Hollywood, California.
It provides Internet services and consulting. (Compl. ¶ 8.) Castle
has not appeared in this action; it is unclear whether Castle has been
served with the summons and complaint.
Tim Alexander ("Alexander") owns and operates Castle. Alexander acted
as the agent of Huebsch and Elete during the time period in question.
(Compl. ¶ 8.) He was served with the summons and complaint in October
2003, but he has not yet made an appearance in our Court. If plaintiff
wishes to move for a default judgment against Castle or Alexander, it
must make the motion to Judge Herman and explain that Castle and Alexander have
not consented under 28 U.S.C. § 636(c).
Interland, Inc. ("Interland") is a Minnesota corporation with its
principal place of business in Atlanta, Georgia. It is RDA's Internet
Service Provider. RDA stores electronic information on the servers
maintained by Interland. (Compl. ¶ 9.) Interland was dismissed from
this lawsuit based on a ...