The opinion of the court was delivered by: Honorable Richard J. Arcara United States District Judge
Pending before the Court are motions to dismiss by defendants MIH Scrap Metals International, LLC, and MIH Cathode Trading, LLC ("MIH" collectively); and by defendants Intertek Group PLC, Intertek Agri Services, Intertek Caleb Brett, Intertek Testing Services, and Intertek Testing Services (East Africa) (Pty) Ltd. ("Intertek" collectively).*fn1 Intertek seeks dismissal from the case for reasons including a lack of subject-matter jurisdiction, forum non conveniens, and a lack of specificity in the fraud and negligent-misrepresentation allegations against it. Both Intertek and MIH have asserted that this Court lacks personal jurisdiction over them. Plaintiffs AIG Europe, S.A. ("AIG") and Luvata Buffalo, Inc. ("Luvata") respond that their respective complaints are sufficiently specific to preserve their claims and their choice of forum. The Court held oral argument on June 24, 2010. For the reasons below, the Court will deny the motions.
This case concerns plaintiffs' attempt to determine how a shipment certified in Tanzania as 500 metric tons of industrially pure copper became a shipment of worthless rocks, sand, and debris by the time it approached its final destination in Buffalo. Plaintiff Luvata is a Delaware corporation with its principal place of business in Buffalo, New York. On or around March 20, 2007, Luvata entered a contract with MIH for 1,500 metric tons of 99.99% pure copper cathodes. The contract specified that Intertek would inspect any shipments under the contract, certify that any shipping containers used contained pure copper, and seal the containers to allow Luvata to know whether any containers had been tampered post-inspection.
Sometime after Luvata and MIH signed the contract, they arranged for a shipment of the first 500 metric tons of copper. Meanwhile, Luvata took out an insurance policy from AIG that would cover any losses sustained in connection with the shipment, including losses resulting from criminal theft or fraud. On or about July 21, 2007, Intertek transmitted to Luvata a survey report confirming an inspection of that shipment and providing details of the inspection. Relying on that survey report and various documents from MIH, Luvata transmitted to MIH a payment for the shipment that exceeded $3.7 million. Throughout the pendency of the transaction, the parties exchanged e-mail messages concerning the status of the shipment.
The shipment of copper cathodes traveled from its loading in Tanzania to Montreal and then Toronto. The shipment traveled in the form of 25 numbered shipping containers, with seals from Intertek that bore their own numbers. All 25 containers arrived in Toronto without any evidence of tampering. The container and seal numbers on the containers matched the numbers listed in the survey report and shipping documents. Once the containers arrived in Toronto, a sample of four containers were transported to their final destination at the Luvata's facility in Buffalo. Luvata opened these four containers and found, to its surprise, that the containers held no copper at all. Instead, these four containers contained worthless rocks, sand, and debris. Meanwhile, United States customs agents stopped and rejected the next four containers that were making their way from Toronto to Buffalo, because they too were found to contain worthless materials and no copper. Luvata arranged for an inspection of the remaining 17 containers still in Toronto. None of those containers held any copper. Luvata submitted a claim to AIG under the policy that it purchased to cover the shipment. AIG reimbursed Luvata in full. On or about September 19, 2008, Luvata assigned its rights relating to its loss to AIG, thereby giving AIG subrogation rights.
AIG and Luvata subsequently filed essentially identical complaints on July 1, 2009 and February 16, 2010. Plaintiffs have asserted seven claims against MIH and five against Intertek, accusing each of breach of contract, fraud, and negligent misrepresentation. In short, plaintiffs have alleged that MIH and Intertek never intended to fill the shipping containers with copper and knew from the beginning of the transaction that the containers would hold no copper, but pretended otherwise to induce payment from Luvata.
On October 5, 2009, MIH filed a motion to dismiss for lack of personal jurisdiction (Dkt. No. 18). In support of this motion, MIH asserts that it has no offices, bank accounts, or regular clients in New York, meaning that it has no continuous or systematic course of doing business in New York within the meaning of New York's rules for "long-arm" personal jurisdiction. MIH asserts further that it does not have an ongoing contractual relationship with Luvata, and neither negotiated the contract in New York nor traveled to New York to meet with Luvata to form the contract. In opposition to this motion, plaintiffs assert that MIH did have an ongoing business relationship with Luvata because it knew that this first shipment of 500 metric tons was destined for Buffalo and because it knew that the remaining 1,000 metric tons would be delivered to Buffalo at some future time. Plaintiffs assert further that MIH has engaged in tortious conduct that caused damages within New York.
On January 6, 2010, Intertek filed an amended motion to dismiss on multiple grounds (Dkt. No. 31). Intertek has made an argument about a lack of personal jurisdiction that is essentially identical to the argument that MIH made. Additionally, Intertek asserts that its inspection contract limits its maximum liability, and thus the maximum amount in controversy concerning it, to under $20,000 in U.S. currency, well below the $75,000 threshold needed for diversity cases. Intertek seeks dismissal as against certain "service lines" named as defendants in plaintiffs' complaints because they are not actual entities that can be sued. Intertek also seeks dismissal under the doctrine of forum non conveniens, claiming that litigating in Buffalo is inconvenient compared to Tanzania, where the shipment was loaded, or England, a forum selected by Intertek and a third party allegedly acting on Luvata's behalf. Finally, Intertek seeks dismissal of the fraud and negligent misrepresentation claims against it for lack of particularity. In short, plaintiffs respond to these arguments by asserting that Intertek and Luvata negotiated and communicated directly with each other for a shipment that Intertek knew would arrive in Buffalo. Plaintiffs assert further that their complaints set forth a detailed theory of fraud in which the only allegations made upon information and belief concern details that currently lie within Intertek's exclusive control.
MIH and Intertek have made several arguments for dismissal. Each argument requires a different analysis. To the extent, however, that the arguments require an assessment of the allegations in plaintiffs' complaint, the Court will proceed through each argument by "accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff's favor." Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 61 (2d Cir. 2010) (internal quotation marks and citation omitted).
A. MIH's Motion to Dismiss for Lack of Personal Jurisdiction
"In deciding a pretrial motion to dismiss for lack of personal jurisdiction a district court has considerable procedural leeway. It may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion. If the court chooses not to conduct a full-blown evidentiary hearing on the motion, the plaintiff need make only a prima facie showing of jurisdiction through its own affidavits and supporting materials. Eventually, of course, the plaintiff must establish jurisdiction by a preponderance of the evidence, either at a pretrial evidentiary hearing or at trial. But until such a hearing is held, a prima facie showing suffices, notwithstanding any controverting presentation by the moving party, to defeat the motion." Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981) (citations omitted). Here, the parties have not requested an evidentiary hearing regarding personal jurisdiction over MIH. The parties instead have chosen to submit extensive briefing with exhibits. The papers now in the docket suffice to determine whether plaintiffs have at least made a prima facie showing that this Court has personal jurisdiction over MIH. Cf. Parker Waichman Alonso LLP v. Orlando Firm, P.C., No. 09 Civ. 7401, 2010 WL 1956871, at *5 (S.D.N.Y. May 14, 2010) ("Because personal jurisdiction is inherently a matter requiring the resolution of factual issues outside of the pleadings... all pertinent documentation submitted by the parties may be considered in deciding the motion.") (internal quotation marks and citations omitted). Consequently, the Court will assess MIH's motion using that standard.
"District courts resolving issues of personal jurisdiction must... engage in a two-part analysis. First, a district court must determine whether, under the laws of the forum state (New York in this case), there is jurisdiction over the defendant. Second, [it] must determine whether an exercise of jurisdiction under these laws is consistent with federal due process requirements." Grand River Enters. Six Nations, Ltd. v. Pryor, ...