United States District Court, S.D. New York
February 7, 2005.
WORLD SKATING FEDERATION, Plaintiff,
INTERNATIONAL SKATING UNION and OTTAVIO CINQUANTA, Defendants.
The opinion of the court was delivered by: JOHN SPRIZZO, Senior District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, World Skating Federation ("WSF" or "plaintiff"),
brings this antitrust action to recover for the allegedly
monopolistic behavior of defendants, International Skating Union
("ISU"), and its president, Ottavio Cinquanta, (collectively
"defendants"), in the field of international figure skating.
Defendants bring this motion to dismiss plaintiff's Complaint for
lack of subject matter jurisdiction, lack of personal
jurisdiction, improper venue, and failure to state a claim upon
which relief can be granted, pursuant to Federal Rules of Civil
Procedure 12(b)(1), 12(b) (2), 12 (b) (3), and 12 (b) (6),
respectively, as well as on forum non conveniens grounds. Because
this Court finds that it does not have personal jurisdiction over
the defendants and because it is not satisfied that such
jurisdiction exists in the alternative fora suggested by
plaintiff, the Court grants defendants' motion and dismisses
In the wake of the judging scandal that marred the figure
skating competition at the 2002 Winter Olympics in Salt Lake
City, Utah, a number of participants in the sport, including
coaches, and judges, decided to form the WSF, a "not-for-profit
international sports federation incorporated in the state of
Nevada."*fn2 See Compl. ¶¶ 2, 14, 27, 33. Announcing its
existence on March 25, 2003 at a Washington, D.C. press
conference, the WSF promulgated as its goal the restoration of
"merits-based competition to figure skating events," id. ¶ 2,
which it sought to achieve by persuading the International
Olympic Committee ("IOC") "to recognize the WSF as the
international federation for the sport of figure skating," id.
¶ 33. That distinction currently belongs to the ISU, "an
association formed under the laws of Switzerland." Id. ¶¶ 15,
Recognition by the IOC brings with it a number of benefits.
IOC-recognized governing bodies "oversee and administer" their
specific sports, id. ¶ 15, "provide judges and officials for
the Olympic Games," id. ¶ 26, and establish eligibility
requirements for athletes wishing to compete in "World and
Olympic competitions," id.
Plaintiff contends that ISU has exploited this last perquisite
in order to maintain its stranglehold over the sport of figure
skating. Id. ¶¶ 40-45.
According to plaintiff, following the creation of the WSF
defendants engaged in behavior designed to "virtually eliminate?
the ability of potential competing organizations to sponsor
skating competitions." Id. ¶ 41. Defendants issued letters and
press releases which indicated that any ISU member "who would
join the WSF, or support or endorse its activities" would be
acting "against the integrity, the exclusive role and interests
of the ISU" in "breach of the ISU Constitution and Regulations."
Id. ¶ 35.a. Such
a breach constituted a "breach of eligibility rules," id. ¶
35.c., which the ISU warned members could result in punitive
actions, id. ¶ 35.e., loss of eligibility, id. ¶ 35.f., and
withdrawal of honorary lifetime awards, id. ¶ 35.g. Since the
ISU determines the eligibility of athletes and judges to compete
in Olympic events, plaintiff contends that ISU's actions have
meant that "individuals who hope to participate in events on [the
Olympic] level cannot participate" in WSF-sanctioned
competitions, thus relegating the WSF to the use of ineligible
skaters and judges. Id. ¶¶ 41, 43.
Along with this power to coerce skaters and judges into not
participating in WSF events, WSF contends that defendants use
their control over international figure skating to maintain a
monopoly over the marketing and television rights in the sport.
Id. ¶¶ 42-44. ISU sponsors a number of skating events in the
United States, including competitions held in Washington, D.C.,
New York, Pennsylvania, and Colorado. Id. ¶ 24. Defendants
benefit from ticket sales, merchandising, and television coverage
of these events. Id. ¶¶ 38-39. Plaintiff contends that despite
the exorbitant fees charged by ISU for the television rights,
allegedly in order to provide for "kickbacks" for defendant
Cinquanta, television networks will not do business with WSF or
other entities for fear of being blacklisted by ISU. Id. ¶¶
29-31, 42, 44.
Plaintiff commenced this action by Complaint dated December 9,
2003. Seeking injunctive relief and monetary damages, plaintiff
alleges that defendants were unjustly enriched, engaged in,
attempted to engage in, or conspired to engage in monopolization
in violation of 15 U.S.C. § 2, and engaged in restraint of trade
in violation of 15 U.S.C. § 1.
Defendants moved to dismiss this action, arguing, among other
things, that this Court does not have personal jurisdiction over
them. After Oral Argument on defendants' Motion, which was held
on August 9, 2004, the Court requested that the parties submit
letter briefs on the issue of long-arm jurisdiction in the
District of Columbia. See Order, dated Aug. 9, 2004. Plaintiff
submitted a letter dated August 30, 2004, Letter of Michael M.
Buchman ("Buchman Letter"), and defendants submitted a response,
Letter of Alan R. Glickman, dated Sept. 20, 2004.
On a motion to dismiss for lack of personal jurisdiction,
Fed.R.Civ.P. 12(b) (2), in which no discovery on the issue has been
taken, "plaintiff bears the burden of making a prima facie
case that jurisdiction exists." Fort Knox Music, Inc. v.
Baptiste, 139 F. Supp. 2d 505, 508 (S.D.N.Y. 2001); see also
Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F. 2d 194, 197
(2d Cir. 1990). Plaintiff need only make "legally sufficient
allegations of jurisdiction," and the court must "assume? the
truth of the plaintiff's factual allegations," Ball,
902 F.2d at 197, and view its affidavits "in the light most favorable to
[it]," Fort Knox Music, Inc., 139 F. Supp. 2d at 508; see
also Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904
(2d Cir. 1981).
Here, plaintiff points to two separate bases for personal
jurisdiction over defendants section 12 of the Clayton Act,
which governs service and confers jurisdiction over corporate
antitrust defendants, and the New York long-arm statute,
N.Y.C.P.L.R. 302. Aware that neither of these bases may be found
to be sufficient to sustain personal jurisdiction, plaintiff
alternatively requests transfer, pursuant to 28 U.S.C. § 1406, to
the federal district court for either the District of Columbia or
for Colorado. See Pl.'s Mem. at 32, 33; Buchman Letter at
Section 12 of the Clayton Act provides:
Any suit, action, or proceeding under the antitrust
laws against a corporation may be brought not only in
the judicial district whereof it is an inhabitant,
but also in any district wherein it may be found or
transacts business; and all process in such cases may
be served in the district of which it is an
inhabitant, or wherever it may be found.
15 U.S.C. § 22. Although section 12 is not without its
it is clear that the provision is directed
only to corporations and that it does not apply to other entities
that simply share common attributes with corporations.*fn4
See 15 U.S.C. § 22; Kingsepp v. Wesleyan Univ.,
763 F. Supp. 22
, 25 & n. 1, 26 (S.D.N.Y. 1991) (refusing to apply section 12
to a trust that had "some of the attributes of a corporation");
McManus v. Tato, 184 F. Supp. 958, 959 (S.D.N.Y. 1959)
(Weinfeld, J.) (determining that the text of the Clayton Act
compelled the strict interpretation of section 12).
Here, despite identifying ISU as "an association formed under
the laws of Switzerland," Compl. ¶ 15, plaintiff argues that ISU
should be considered a corporation under section 12 because its
"structure is far more akin to that of an American corporation
than to that of an American association," Pl.'s Mem. at 29; see
Flurin Peter von Planta, dated June 4, 2004 ("von Planta
Plaintiff's argument is meritless. Section 12 as written, and
as interpreted, does not apply to entities that simply share
common attributes with corporations. It applies only to
corporations. Indeed, plaintiff itself describes ISU as an
"association," Compl. ¶ 15, and, despite indicating that ISU
maintains some of the attributes of a corporation, see von
Planta Decl. ¶¶ 13-14, plaintiff simply has not convinced this
Court that "corporation," as understood for purposes of section
12, should be read to include "Swiss associations sharing some
similarities with corporations."*fn6 See, e.g.,
Kingsepp, 763 F. Supp. at 25 & n. 1, 26; cf. Kresberg v.
Int'l Paper Co., 149 F.2d 911, 913 (2d Cir. 1945). Therefore,
plaintiff has failed to meet its burden of showing that its
factual allegations support jurisdiction under the Clayton Act.
Absent an applicable federal grant of personal jurisdiction, a
federal court must look to the rules of the forum state to
determine if jurisdiction exists. See PDK Labs, Inc. v.
Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997). Plaintiff
points to two provisions of the New York long-arm statute
C.P.L.R. section 302(a) (1) and (2) which it claims confers
jurisdiction over defendants.
C.P.L.R. section 302(a) (1) provides for personal jurisdiction
over any non-domiciliary "who in person or through an agent . . .
transacts any business within the state or contracts anywhere to
supply goods or services in the state." N.Y.C.P.L.R. 302(a)(1).
The statute confers jurisdiction only "[a]s to a cause
of action arising from" such transaction of business, id.,
which has been interpreted as requiring an "articulable nexus
between the business transacted and the cause of action sued
upon," McGowan v. Smith, 52 N.Y.2d 268, 272, 419 N.E.2d 321,
323, 437 N.Y.S.2d 643, 645 (1981), such that the cause of action
would not exist without the New York activities of the defendant,
Beacon Enters., Inc. v. Menzies, 715 F.2d 757, 765 (2d Cir.
1983); Fort Knox Music, Inc., 139 F. Supp. 2d at 510-11.
Section 302(a)(2) provides for jurisdiction over
non-domiciliaries "[a]s to a cause of action arising from" the
commission of a "tortious act within the state." N.Y.C.P.L.R.
302(a). The provision requires that the defendant be physically
present within New York at the time of the tortious act. See
Feathers v. McLucas, 15 N.Y.2d 443, 460, 209 N.E.2d 68, 77,
261 N.Y.S.2d 8, 20-21 (1965); see also Bensusan Rest. Corp. v.
King, 126 F.3d 25, 28-29 (2d Cir. 1997). Plaintiff does not
allege that defendants committed any such tortious act in New
Plaintiff bases jurisdiction under these provisions on two New
York contacts of defendants. Plaintiff contends that defendants
entered into contracts in New York with major television
networks, see Compl. ¶¶ 13, 29-30; Pl.'s Mem. at 31-32, and
that ISU sanctioned the Campbell's International Figure Skating
Classic, which was held in New York on October 3, 2003, see
Compl. ¶¶ 13, 24; Pl.'s Mem. at 30-31.
Plaintiff's arguments are without merit. With regard to the
Campbell's International Figure Skating Classic, it is clear that
plaintiff's injuries did not arise out of ISU's sanctioning of
this event. Indeed, that event had absolutely no bearing on the
ability of WSF to sanction its own competitions and is at best
tangentially connected to plaintiff's cause of action. It is
surprising that plaintiff has cited no cases that have sustained
jurisdiction on such a slender reed, and the Court is aware of
none. See, e.g., Beacon Enters., Inc., 715 F.2d at 765;
Fort Knox Music, Inc., 139 F. Supp. 2d at 510-11.
Plaintiff has also completely failed to plead that the
sanctioning of the event constituted a tortious activity for
which defendants were physically present in New York. See
Lehigh Valley Indus., Inc. v. Lehigh Colonial Corp.,
527 F.2d 87, 92-93 (2d Cir. 1975). Likewise, plaintiff's eleventh-hour
argument that defendants need not be present in New York because
they were engaged in a conspiracy with Campbell's Soup is wholly
conclusory and therefore insufficient. See id. at 93-94 ("New
York law seems to be clear that the bland assertion of conspiracy
or agency is insufficient to establish jurisdiction for the
purposes of section 302(a)(2).")
Similarly, plaintiff's argument that this cause of action arose
out of television contracts that defendants entered into several
years before the idea of forming WSF had even been conceived
borders on the frivolous. See Tr. at 67-69; see, e.g.,
Fort Knox Music, Inc., 139 F. Supp. 2d at 510-11; Holness v.
Mar. Overseas Corp., 251 A.D.2d 220, 224, 676 N.Y.S.2d 540, 544
(1st Dep't 1998). In addition, plaintiff's contention, made for
the first time at Oral Argument, that the contracts entered into
in New York led to defendants' demand that the television
networks blacklist WSF, see Tr. at 69-71, is not only
conclusory but has not been pleaded. In fact, the one paragraph
that plaintiff relies upon actually attributes the "blacklisting"
to third parties and makes no allegation that defendant is
responsible. Compl. ¶ ***ILLEGIBLE TEXT***
Therefore, this Court finds that plaintiff's allegations will
far short of establishing a prima facie case for jurisdiction
the New York long-arm statute.*fn7
Apparently aware of the insufficiency of its bases of
jurisdiction under the Clayton Act and the New York long-arm
statute, plaintiff seeks to avoid dismissal of its Complaint by
having this Court transfer this action to the federal district
court for the District of Columbia or Colorado pursuant to
28 U.S.C. § 1406(a).
Under § 1406(a) "[t]he district court of a district in which is
filed a case laying venue in the wrong division or district shall
dismiss, or if it be in the interest of justice, transfer such
case to any district or division in which it could have been
brought." 28 U.S.C. § 1406(a). A court that does not have
personal jurisdiction over the defendants may nonetheless
transfer under the provision, see Goldlawr, Inc. v. Heiman,
369 U.S. 463, 466 (1962), but it may only transfer the action to
a court that would have personal jurisdiction, see In re Ski
Train Fire in Kaprun, Aus., on Nov. 11, 2000, No. 01 Civ. 6554,
2004 U.S. Dist. LEXIS 8176, at *20-22 (S.D.N.Y. May 5, 2004), and
where such transfer is found to be "in the interest of justice,"
28 U.S.C. § 1406(a).
Here, plaintiff points to several contacts that defendants have
with Colorado and the District of Columbia, all of which are
substantially similar to the New York contacts. See Compl. ¶¶
24, 35; Pl.'s Mem. at 32-33; Buchman Letter at 2-5. Given that
the long-arm statutes of both jurisdictions require that the
cause of action arise out of the in-state contacts of defendants,
see Colo. Rev. Stat. § 13-1-124; D.C. Code Ann. § 13-423, it is
not clear that jurisdiction can be properly found in either
Because this Court is not convinced that this action "could have
been brought" in either district, and because such a
determination is best left to the courts in those jurisdictions,
this Court will not transfer this action.
Moreover, this Court does not think that transferring this
action would be in the interest of justice. Plaintiff seems to
have been aware of the doubtful justification for jurisdiction in
New York since the onset of this action, and has repeatedly
raised the prospect of simply transferring this action elsewhere
in order to cure these deficiencies.*fn8 See Pl.'s Mem. at
32-33; Tr. at 71-80. Section 1406 should not be a panacea for
lawyers who bring suits in jurisdictions where they know or
should know that they do not belong. See Spar, Inc. v. Info.
Res., Inc., 956 F.2d 392, 394 (2d Cir. 1992).
Based on the foregoing, defendants' motion to dismiss
plaintiff's Complaint shall be and hereby is granted. The Court
directs the Clerk of the Court to enter judgment dismissing the
It is SO ORDERED.