The opinion of the court was delivered by: PETER LEISURE, District Judge
This case arises from an oral agreement between plaintiff and
defendant, which provided that they would administer a
promotional campaign for a third party client of plaintiff.
Plaintiff, Ventura Associates, Inc. ("Ventura"), alleges that
defendant, International Outsourcing Services, Inc. ("IOS"),
breached the agreement and caused Ventura to incur liabilities of
$131,787.30 to its client. Consequently, Ventura seeks damages in
that amount from IOS. IOS now petitions the Court to dismiss
Ventura's claim for lack of personal and subject matter
jurisdiction pursuant to Federal Rules of Civil Procedure
12(b)(2) and 12(b)(1), or, in the alternative, to enjoin its
prosecution to defer to IOS's declaratory judgment action that
was pending in the Western District of Texas. For the reasons
below, defendant's motion to dismiss is denied.
Ventura is a New York corporation engaged in the business of
promotion fulfillment. (See Affidavit of Nigel Morgan dated
October 22, 2004 ("Morgan Aff.") ¶ 1.) On October 1, 2001,
Ventura contracted with Masterfoods USA ("Masterfoods") to
fulfill an advertising promotion for Whiskas Cat Food, one of
Masterfoods' products. (Id. ¶ 5.) As part of the promotion,
Ventura was responsible for arranging the distribution of 5,000
$25 gas cards to purchasers of Whiskas Cat Food and others.
On January 2, 2002, Ventura entered into an oral agreement with
IOS, an Indiana limited liability company that provides a variety
of outsourced services to businesses around the world. (See
Affidavit of Frank Clausen dated October 5, 2004 ¶ 3.) The oral
agreement provided that IOS would conduct the actual distribution
of the gas cards throughout the United States. (Id. ¶ 6; see
also Complaint ("Compl.") ¶ 6.) According to IOS, it distributed
137 gas cards on December 14, 2003, but withheld the remaining
4,863 cards because a Ventura employee informed it that the gas cards may be defective. (See Affidavit of Patrick J.
Corbett, Esq. dated October 27, 2004, Ex. 10.) The remaining
cards were never distributed and subsequently expired. (Id.,
Ex. 6.) When Ventura informed Masterfoods that the cards had not
been distributed, Masterfoods sought reimbursement of $131,787.30
from Ventura, which is the pro-rated amount Masterfoods paid for
the remaining cards. (Id., Ex. 8.) Ventura then filed a claim
with its insurer, The Hartford Fire Insurance Company
("Hartford"), for this amount. (See Morgan Aff. ¶ 9.)
Ultimately, Masterfoods was reimbursed in full, with $106,787.30
paid by Hartford and $25,000 paid by Ventura in the form of its
After some correspondence between counsel for Ventura and
counsel for IOS in which Ventura's counsel asserted that IOS was
responsible for the full amount paid to Masterfoods, IOS filed an
action in Texas state court on July 9, 2004 seeking a declaratory
judgment that it had not breached the oral agreement with
Ventura. Ventura later removed the case to federal court and
filed a motion to dismiss for failure to state a claim or, in the
alternative, to transfer the case to this District. On August 2,
2004, Ventura filed this breach of contract action against IOS,
claiming damages of $131,787.30. In November 2004, IOS submitted
the instant motion to dismiss.
On December 7, 2004, District Judge David Briones of the United
States District Court for the Western District of Texas, El Paso
Division, granted Ventura's motion to transfer, denied its motion
to dismiss as moot, and transferred the action to the Southern
District of New York. See Int'l Outsourcing Servs. v. Ventura
Assocs., No. 04 CA 353, 2004 U.S. Dist. LEXIS 27761 (W.D. Tex.
Dec. 7, 2004). Subsequently, this Court accepted IOS's
transferred action as related to Ventura's action.*fn1 In the instant motion, IOS argues that (1) Ventura's breach of
contract claim should be dismissed because the Court cannot
properly exercise personal jurisdiction over IOS and (2) Ventura
fails to satisfy the $75,000 amount in controversy requirement
for diversity jurisdiction. Moreover, even if there are proper
jurisdictional bases to proceed, IOS contends that this case
should be enjoined to defer to its properly commenced action in
Texas pursuant to the first to file rule. Plainly, this argument
has been rendered moot by the subsequent transfer of IOS's action
to this District. Therefore, the Court need only consider IOS's
two jurisdictional arguments.
I. Personal Jurisdiction over IOS
When considering a Rule 12(b)(2) motion to dismiss for lack of
personal jurisdiction, it is well established that "the plaintiff
bears the burden of showing that the court has jurisdiction over
the defendant." In re Magnetic Audiotape Antitrust Litigation,
334 F.3d 204, 206 (2d Cir. 2003) (per curiam); Metro. Life Ins.
Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996).
"Prior to discovery, a plaintiff may defeat a motion to dismiss
based on legally sufficient allegations of jurisdiction." Metro.
Life, 84 F.3d at 566. "Eventually, personal jurisdiction must be
established by a preponderance of the evidence, either at an
evidentiary hearing or at trial. But where the issue is addressed
on affidavits, all allegations are construed in the light most
favorable to the plaintiff and doubts are resolved in the
plaintiff's favor, notwithstanding a controverting presentation
by the moving party." A.I. Trade Fin., Inc. v. Petra Bank,
989 F.2d 76, 79-80 (2d Cir. 1993); see also Whitaker v. Am.
Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001).
Furthermore, "[a]bsent a specific grant of jurisdiction, the
reach of a federal district court's personal jurisdiction is
coterminous with that of the personal jurisdiction of a court of general jurisdiction in the state in which the court sits."
Geller Media Mgmt., Inc. v. Beaudreault, 910 F. Supp. 135, 137
(S.D.N.Y. 1996) (Leisure, J.) (citing Fed.R.Civ.P.
4(k)(1)(A)). Thus, "the amenability of a foreign corporation to
suit in a federal court in a diversity action 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." Metro. Life, 84 F.3d at 567
(quoting Arrowsmith v. United Press Int'l, 320 F.2d 219, 223
(2d Cir. 1963) (en banc)). To determine whether it has personal
jurisdiction over IOS, the Court must engage in a two-part
inquiry. First, it must determine whether there is personal
jurisdiction over IOS under New York state law; second, if New
York law provides for personal jurisdiction, the Court must
determine whether the assertion of jurisdiction comports with the
constitutional requirements of due process. Id.
There are two types of jurisdiction that a court may exercise
over a defendant: general and specific. See Helicopteros
Nacionales de Colombia v. Hall, 466 U.S. 408, 414 (1984). In the
case of general jurisdiction, plaintiff's claim need not arise
out of defendant's contacts with the forum state, but defendant's
contacts must be substantial; with specific jurisdiction,
however, defendant's contacts need not be as substantial but
plaintiff's claim must arise out of the contacts. These two types
of jurisdiction are reflected both in New York's jurisdictional
statutes, see N.Y.C.P.L.R. §§ 301-302 (McKinney 2001), and in
the jurisprudence interpreting the Due Process limits of
jurisdiction, see Helicopteros, 466 U.S. at 414.
Here, the parties have submitted competing affidavits in
support of their divergent views on jurisdiction. Relying on the
affidavits of its Chief Financial Officer, Nigel Morgan, and
Executive Vice-President, Lisa Manhart, Ventura contends that the
Court has personal jurisdiction over IOS pursuant to Sections 301
and 302 of the New York Civil Practice Law and Rules ("CPLR"). (See Memorandum Of Law In Opposition To
Defendant's Motion To Dismiss Or Transfer ("Pl. Mem.") at 4-8.)
IOS, meanwhile, maintains that it is a New Jersey company that
has no connection ...