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April 8, 2005.


The opinion of the court was delivered by: DAVID HURD, District Judge



  On April 26, 2002, plaintiff Oriska Insurance Company ("Oriska") filed suit against defendants Brown & Brown of Texas, Inc. ("B & B Texas"), Professional Employers Assurance Group ("PEAG"), and Mitchell Zogob ("Zogob"), who was the owner of PEAG, claiming that they falsely represented to insurance customers in Texas that they had the authority to issue certificates of insurance on Oriska's behalf.*fn1 Defendants allegedly wrongfully issued the certificates which verified workers' compensation and employers' liability insurance issued by Oriska. Brown & Brown, Inc. ("B & B Inc.") was added as an additional defendant on May 6, 2004, by amended complaint. Plaintiff alleged that B & B Texas was an instrumentality of B & B Inc., and therefore, B & B Texas and B & B Inc. are engaged in an agency relationship.

  Pursuant to Fed.R. Civ. Pro. 12(b)(2), defendant B & B Texas moves to dismiss for lack of personal jurisdiction. Additionally, defendant B & B Inc. moves to dismiss for failure to state a claim under Fed.R. Civ. Pro. 12(b)(6). Alternatively, pursuant to 28 U.S.C. § 1404(a), both move to transfer venue to the Southern District of Texas. Plaintiff opposes and cross moves for further discovery on the issue of personal jurisdiction. Oral arguments were heard on this matter on November 12, 2002, in Utica, New York. Decision was reserved. II. FACTS

  The underlying facts giving rise to this dispute are as follows. In February 2002, Zogob entered into a Confidential Data Release and Indemnification Agreement with Oriska. The agreement granted Zogob access to Oriska's confidential business information in exchange for Zogob's promise to identify and procure persons interested in investing in Oriska. Zogob, and/or his company PEAG, breached the agreement and misrepresented to B & B Texas that he was an agent of Oriska authorized to confer upon B & B Texas authority to bind Oriska to insurance coverage in Texas. Then B & B Texas, acting as Oriska's authorized representative, issued approximately 8,000 certificates of insurance for the benefit of customer employers of a professional employer organization (defendants Contractor's Advantage, Inc. and Steller Administration, Inc.).*fn2 The certificates indicated that plaintiff had issued those customers workers' compensation and employers' liability coverage. Plaintiff claims to have been damaged because the customers who received such certificates have made claims on the insurance policies purportedly issued by it, but which it never gave Zogob, PEAG, or B & B Texas authority to issue.

  Following plaintiff's initial filing of suit, the parties engaged in substantial motion practice. B & B Texas moved to dismiss for lack of personal jurisdiction and was denied without prejudice while plaintiff was granted limited discovery on the issue of whether B & B Texas' relationship with non-party B & B Inc. would render it subject to jurisdiction in New York. As noted, plaintiff then amended its complaint to add twelve causes of action against B & B Texas, including federal statutory claims and eight common law causes of action, and four new defendants including B & B Inc. These motions have followed.


  A. Fed.R.Civ.P. 12(b)(2)

  On a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction, "plaintiff bears the burden of showing that the court has jurisdiction over the defendant." Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999) (citing Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1996)). A plaintiff may carry this burden "by pleading in good faith . . . legally sufficient allegations of jurisdiction, i.e., by making a `prima facie showing' of jurisdiction." Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990)). Therefore, plaintiff may make a prima facie showing solely on the allegations. Ball, 902 F.2d at 197. Further, "all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor[.]" Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001) (quoting A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993)).

  In diversity cases the federal courts generally apply state law in deciding substantive questions and federal law in deciding procedural ones. See Hanna v. Plumer, 380 U.S. 460, 465 (1965). "The amenability of a foreign corporation to suit in a federal court in a diversity action [, however,] is determined in accordance with the law of the state where the court sits, with `federal law' entering the picture only for the purpose of deciding whether a state's assertion of jurisdiction contravenes a constitutional guarantee." Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir. 1963). Therefore, New York law is used to determine whether personal jurisdiction may be exercised over defendant in this case.


  B & B Texas claims that New York lacks personal jurisdiction over this action as it has no meaningful connections to New York. In response, plaintiff maintains that New York may exercise personal jurisdiction over B & B Texas, a foreign subsidiary, due to its relationship with, and the activities conducted by, its parent, B & B Inc., in New York. It contends that B & B Texas is "doing business" under CPLR § 301 or "transacting business" under CPLR § 302 in New York because (1) B & B Texas and B & B Inc. are engaged in such a relationship that gives rise to the valid inference of an agency relationship; or (2) B & B Texas is a "mere department" of B & B Inc.

  A. Personal Jurisdiction

  It is well established that "the `doing business' test does not subject a subsidiary corporation to personal jurisdiction simply because a state has jurisdiction over the parent, even if the parent is the sole shareholder of the subsidiary." Saraceno v. S.C. Johnson & Son, Inc., 83 F.R.D. 65, 67 (S.D.N.Y. 1979) (citing cases); see also Ross v. Colorado Outward Bound School, Inc., 603 F. Supp. 306, 310 (W.D.N.Y. 1985) (mere existence of "garden-variety" parent-subsidiary relationship is not sufficient to establish jurisdiction). Instead, "the presence of the parent company may serve as a basis of jurisdiction over the [foreign] subsidiary only if the parent is acting as the agent of the subsidiary or if the control by the parent over the subsidiary is so complete that the subsidiary is a `mere department' of the parent." ...

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