The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendants Logix Development Corporation (hereinafter, "Logix")
and D. Keith Howington and Anne Howington (hereinafter, the
"Howingtons") (collectively, the "Defendants") have moved for
dismissal of the complaint filed by plaintiff J. Roger Faherty
(hereinafter, "Faherty) based on: (1) lack of personal
jurisdiction pursuant to Rule 12(b) (2), Fed.R.Civ.P.; (2)
improper venue pursuant to Rule 12(b) (3), Fed.R.Civ.P.; and
(3) failure to state a claim upon which relief can be granted
pursuant to Rule 12(b) (6), Fed.R.Civ.P.
For the reasons set forth below, the motion to dismiss is
granted for lack of personal jurisdiction under Rule 12(b) (2),
Fed.R.Civ.P. Lacking the requisite jurisdiction, this Court
refrains from reaching the merits of the remaining issues
Plaintiff filed his complaint on April 14, 2004, commencing
this action against Defendants Playboy Enterprises Inc., Playboy
International Inc., Spice Entertainment Inc., Logix, and the
Howingtons. The initial complaint alleged four causes of action:
breach of contract, statutory indemnification, tortious
interference with a contract, and common law conspiracy. On January 14, 2005, Defendants Logix and the Howingtons moved
to dismiss the complaint on grounds of lack of jurisdiction,
improper venue, and failure to state a claim. Faherty filed
opposition to the motion to dismiss and cross-moved to stay the
instant proceedings pending resolution of an ongoing and related
suit currently scheduled for trial in the Superior Court of
California, County of Los Angeles. The motion was marked fully
submitted on March 9, 2005.
Defendants Playboy Enterprises Inc., Playboy International Inc.
(hereinafter, collectively "Playboy") and Spice Entertainment
Inc., (hereinafter, "Spice") have stipulated with Faherty to
staying the instant action pending the resolution of the
California suit. This Court so ordered the parties' stipulation
on February 11, 2005. As such, the instant motion to dismiss does
not encompass any arguments set forth by Defendants Playboy or
The facts are set forth in the statements of the parties and
are not in dispute except as noted below. All well-pleaded
allegations are accepted as true for the purpose of this motion.
See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.
2002). The following statements do not constitute findings of the
Court. Faherty, a citizen and resident of New Jersey, filed a
complaint on April 14, 2004, against Defendants Spice and
Playboy, Defendant Logix, and Defendants D. Keith Howington and
Defendant Spice Entertainment, Inc., formerly known as Spice
Entertainment Companies, Inc., (collectively, "Spice"), is a
corporation organized and existing under the laws of the State of
Delaware, with a principal place of business in Chicago,
Illinois. Defendant Spice is a wholly owned subsidiary of
Defendant Playboy is a corporation organized and existing under
the laws of the State of Delaware, having its principal place of
business in Chicago, Illinois.
Defendant Logix is a corporation organized and existing under
the laws of the State of California, with its principal place of
business in Camarillo, California.
Defendants D. Keith Howington and Anne Howington are citizens
and residents of the State of California, residing in Ventura
County, California, and are the principal shareholders, officers,
and directors of Logix.
Faherty was the Chief Executive Officer of Spice until Playboy
acquired Spice on March 15, 1999. In connection with this acquisition, Spice effected a spin-off of a wholly-owned
subsidiary, Directrix, Inc., (hereinafter, "Directrix"), to
Spice's shareholders. At that point, Faherty ended his employment
with Spice and assumed the position of Chief Executive Officer at
The instant action arises from and relates to an alleged breach
by Defendants Spice and Playboy of the indemnification provisions
applicable to corporate officers and directors, as set forth in
the June 13, 1997 Amended and Restated By-Laws (hereinafter, the
"By-Laws") of Defendant Spice, presently a wholly-owned
subsidiary of Defendant Playboy.
On May 17, 2001, Logix and the Howingtons, as plaintiffs,
commenced suit against Faherty, Spice, Playboy, and other
defendants in the Superior Court of California, (hereinafter, the
"California Action"). The California Action focused upon an
alleged breach of an Agreement dated January 18, 1997,
(hereinafter, the "Main Agreement"), between Logix and Emerald
Media, Inc. (hereinafter, "EMI").
In the California Action, Logix and the Howingtons sought to
hold Spice, Playboy, Faherty and others liable for EMI's alleged
breach of the Main Agreement under an alter ego theory of liability. Plaintiffs further alleged that they had been
defrauded by Spice, Playboy, Faherty, and others.
Trial in the California Action is scheduled to proceed in late
Defendants Playboy and Spice Settle with Logix and the
In February 2004, Logix and the Howingtons entered into a
confidential settlement agreement (hereinafter, the "Settlement
Agreement") with Defendants Playboy and Spice, in which they
settled their claims against Playboy and Spice for $8.5 million.
Faherty was not included as a ...