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ROBERT DIAZ ASSOCIATES ENTERPRISES, INC. v. ELETE

May 13, 2004.

ROBERT DIAZ ASSOCIATES ENTERPRISES, INC., Plaintiff, -against- ELETE, INC.; ELETE SPORTS COUTURE; ELETECOUTURE.COM; C. LAMONT SMITH; BRIAN HUEBSCH; TIM ALEXANDER; and CASTLE STUDIOS, Defendants


The opinion of the court was delivered by: DOUGLAS EATON, Magistrate Judge

OPINION AND ORDER

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 defendants."

  On February 3, 2004, plaintiff served opposition papers. On February 20, the Elete defendants served a reply affirmation which annexed an affidavit.

  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.

  BACKGROUND

 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. ¶ 1.)

  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 ...


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