United States District Court, S.D. New York
August 13, 2004.
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
PLAZA OPERATING PARTNERS, LTD. d/b/a THE PLAZA HOTEL, FAIRMONT HOTELS AND RESORTS, INC., AND FAIRMONT HOTEL MANAGEMENT L.P., Defendants. TULUN AHMED, MOHAMMED ALAM, MUSA CHOUDHURY, EMDADUR CHOWDHURY, SHAMSUL CHOWDHURY, ABDEL EL BETTAL, ADEL FATHELBAB, EHSAN KHAN, MOHAMMAD MAMUN, AND MOHAB SAYED, Plaintiffs-Intervenors, v. THE PLAZA HOTEL, et al., Defendants.
The opinion of the court was delivered by: LAURA TAYLOR SWAIN, District Judge
Plaintiff, the Equal Opportunity Employment Commission
("Plaintiff"), brings this action, alleging unlawful employment
practices on the basis of religion and/or national origin, under
Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 2000e-5(f)(1) and (3) and 2000e-6, and Title I of the Civil
Rights Act of 1991, 42 U.S.C. § 1981a. Defendant Fairmont Hotels and Resorts, Inc. ("FHRI"), a Canadian corporation, moves
pursuant to Rules 12(b)(1) and 12(b)(2) of the Federal Rules of
Civil Procedure to dismiss the Amended Complaint ("Complaint") as
against it for lack of subject matter jurisdiction and lack of
personal jurisdiction. Plaintiff seeks denial of the motion or,
in the alternative, leave to conduct further discovery to
establish jurisdiction over FHRI.
The Court has fully considered all submissions related to this
motion. For the reasons set forth below, Defendant's motion is
Subject Matter Jurisdiction
A case is properly dismissed for lack of subject matter
jurisdiction under Rule 12(b)(1) when the district court lacks
the statutory or constitutional power to adjudicate it. Makarova
v. U.S., 201 F.3d 110, 113 (2d Cir. 2000). Where the defendant
challenges the factual basis of jurisdiction, a district court
may refer to evidence outside the pleadings. Id.; See
Goodman v. Children's Television Workshop, No. 98 Civ. 8348,
1999 WL 228396, at *2 (S.D.N.Y. April 19, 1999). A plaintiff
asserting subject matter jurisdiction, once challenged, has the
burden of proving by a preponderance of the evidence that
jurisdiction exists. Makarova, 201 F.3d at 113. Unlike a motion
to dismiss under Rule 12(b)(6), a motion to dismiss for lack of
subject matter jurisdiction is not directed to the claim's
merits. See Exchange Nat'l Bank of Chicago v. Touche Ross &
Co., 544 F.2d 1126, 1130-31 (2d Cir. 1976), modified sub nom.
on other grounds. FHRI contends that the Court does not have subject matter
jurisdiction over Plaintiff's claim against it because Plaintiff
has not met its burden of showing that FHRI is an "employer"
within the meaning of Title VII. Title VII defines an "employer"
as "a person engaged in an industry affecting commerce who has
fifteen or more employees for each working day in each of twenty
or more calendar weeks in the current or preceding calendar year,
and any agent of such a person." 42 U.S.C.A. § 2000e(b) (West
2004). FHRI asserts that this 15-employee threshold constitutes a
jurisdictional prerequisite. The Second Circuit has held,
however, that the threshold number of employees established by
the definition of "employer" set forth in Title VII is not a
jurisdictional issue, at least as long as the plaintiff makes a
nonfrivolous claim that defendant is a covered employer.*fn1
Da Silva v. Kinsho Int'l Corp., 229 F.3d 358, 366 (2d Cir.
2000). A plaintiff's failure to prove that the defendant is a
covered employer "is a ground for defeating her federal claim on
the merits," and is therefore not an issue properly addressed on
a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction. Id. at 365. Accordingly, Defendant's motion is
denied to the extent it seek dismissal pursuant to Rule 12(b)(1)
of the Federal Rules of Civil Procedure. Having found that Defendant's motion to dismiss is predicated
improperly on Rule 12(b)(1), the Court could construe the motion
as one to dismiss under Rule 12(b)(6) (failure to state a claim
upon which relief can be granted) or, in that both parties have
proffered materials outside the pleadings, a motion for summary
judgment under Rule 56. See Fed.R.Civ.P. 12(b); EEOC v. St.
Francis Xavier Parochial School, 117 F.3d 621, 624 n. 3 (D.C.
Cir. 1997). The Court declines to do so because the alleged
infirmity with respect to FHRI's status as a covered employer
under Title VII is not apparent on the face of the complaint and
the evidence thus far proffered is insufficient to allow the
Court to make a full and fair determination of the issue.
Reasonable discovery is appropriate prior to any resolution of
this question. The Court urges the parties, who are in the
process of discovery, to give this issue precedence if their
views continue to diverge.
When a defendant brings a motion under Rule 12(b)(2) of the
Federal Rules of Civil Procedure to dismiss an action for lack of
personal jurisdiction, the plaintiff bears the burden of showing
that the court has jurisdiction over the defendant. Metropolitan
Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir.
1996). The plaintiff's obligation varies, however, depending upon
the procedural posture of the litigation. Ball v. Metallurgie
Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990). Where
as in this case discovery has not been conducted regarding
the defendant's contacts with the forum state, the plaintiff may
satisfy its burden "by making a prima facie showing, based only
on the `good faith' allegations in the pleadings, of a
permissible basis for personal jurisdiction." Atl. Mut. Ins. Co.
v. M/V Humacao, 169 F. Supp.2d 211, 214 (S.D.N.Y. 2001) (citing Ball, 902 F.2d
at 197). "At [this] preliminary stage, the plaintiff's prima
facie showing may be established solely by allegations." Ball,
902 F.2d at 197. The court may consider matters outside the
pleadings without converting a motion to dismiss into a motion
for summary judgment. Bensusan Restaurant Corp. v. King,
937 F. Supp. 295, 298 (S.D.N.Y. 1996), aff'd, 126 F.3d 25 (2d Cir.
1997). "The court must accept the averment of facts in the
pleadings and motion papers as true, and resolve all doubts in
the plaintiff's favor." Kernan v. Kurz-Hastings, Inc.,
997 F. Supp. 367, 371 (W.D.N.Y. 1998) (citing Cutco Industries, Inc. v.
Naughton, 806 F.2d 361, 365 (2d Cir. 1986)). Further, the court
should "construe jurisdictional allegations liberally." Atl.
Mut. Ins., 169 F. Supp.2d at 214 (quoting Robinson v. Overseas
Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1990) (citation
In evaluating personal jurisdiction, the Court engages in a
two-part analysis: first, it must determine whether there is
jurisdiction over the defendant under New York law, and second,
if New York law would support jurisdiction, the Court examines
"whether an exercise of jurisdiction under these laws is
consistent with federal due process requirements." Bank Brussels
Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d
Cir. 2002). Both state law and due process requirements must be
met in order to exercise jurisdiction over a non-domiciliary.
Id. In this case, FHRI has not argued that its contacts with
New York State are so attenuated as to offend the "minimum
contacts" test of due process established in Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). Because FHRI does not
argue that it lacks sufficient contacts with New York to satisfy
federal due process requirements, the only issue to be addressed
is whether the statutory requirements for jurisdiction under New
York law have been met. See Wilson v. Danka Corp., No. 01 Civ. 10592, 2002 U.S.
Dist. LEXIS 25055, at *7 (S.D.N.Y. Dec. 10, 2002).
Plaintiff contends that this Court has personal jurisdiction
over FHRI pursuant to Section 301 of the New York Civil Practice
Law and Rules ("CPLR"). CPLR § 301 provides for the exercise of
"jurisdiction over such persons, property, or status as might
have been exercised heretofore." N.Y. CPLR § 301 (McKinney 2001).
This Section has been interpreted to permit the exercise of a
personal jurisdiction over a foreign corporation that is "engaged
in a continuous and systematic course of `doing business' [in New
York] as to warrant a finding of its `presence' in this
jurisdiction." Frummer v. Hilton Hotels Int'l, Inc., 19 N.Y.2d 533,
536 (1967) (citations omitted). "The essential factual
inquiry is whether the defendant has a permanent and continuous
presence in the State, as opposed to merely occasional or casual
contact with the State." Holness v. Mar. Overseas Corp.,
251 A.D.2d 220, 222 (1st Dept. 1998).
The complaint in this action alleges that, "[a]t all relevant
times, Defendant Fairmont Hotels and Resorts, Inc. has
continuously been a corporation doing business in the State of
New York and the county of New York." (Compl. ¶ 6.) Plaintiff
alleges that FHRI has engaged in this continuous course of
business by managing the day-to-day operations of the Plaza Hotel
in Manhattan. (Pl.'s Memo at 7.) FHRI contests Plaintiff's
factual allegations and proffers its own averment of facts to
show that it is merely an investment holding company with no
involvement in the day-to-day operations of the Plaza. (Def.'s
Memo at 5.) In bringing a Rule 12(b)(2) motion, however, a
defendant must "assume the truth of the plaintiff's factual
allegations for the purposes of the motion" and be "content to
challenge only [their] sufficiency. . . ." Ball, 902 F.2d at 197. A defendant who
wishes to contest a plaintiff's factual allegations in support of
jurisdiction may request an adjudication of disputed
jurisdictional facts, either at a post-discovery hearing on the
issue or in the course of a trial on the merits. Ball, 902 F.2d
at 197. Prior to discovery, however, if a plaintiff is able to
make a prima facie showing of jurisdiction through its own
pleadings or supporting materials, a Rule 12(b)(2) motion to
dismiss for lack of personal jurisdiction will be defeated
"notwithstanding any controverting presentation by the moving
party." Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904
(2d Cir. 1981).
Plaintiff's factual allegations, liberally construed, are
sufficient to constitute a prima facie showing of personal
jurisdiction over FHRI pursuant to CPLR § 301. The day-to-day
management of a major hotel is clearly a continuous and
systematic course of "doing business" within the scope of CPLR §
301. Accordingly, Defendant's motion is denied to the extent that
it seeks dismissal pursuant to Rule 12(b)(2) of the Federal Rules
of Civil Procedure.*fn2 CONCLUSION
For the foregoing reasons, Defendant FHRI's motion to dismiss
the Complaint as against Defendant FHRI is denied in its