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Universal Trading & Investment Co., Inc. v. Yulia Tymoshenko

December 12, 2012


The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge:


DOC #: DATE FILED: _December 12, 2012


Plaintiff Universal Trading & Investment Co., Inc. ("Universal Trading"), a Massachusetts corporation, is the judgment creditor of an $18,344,480 default judgment against United Energy Systems of Ukraine, PFG ("United Energy"). Compl. at ¶ 2; Nov. 4, 2011, Dkt. No. 1; United Energy Sys. of Ukraine, PFG v. Univ. Trading & Inv. Co., Inc., Registration of Foreign Judgment, No. 11-mc-249-P1 (S.D.N.Y. July 19, 2011), Dkt. No. 1. Defendant Yulia Tymoshenko, is a Ukrainian national. Compl. at ¶ 3. She is the former president of United Energy and served in many high-ranking government positions in the Ukraine. Id. at ¶¶ 2-3. Universal Trading alleges that Tymoshenko was involved in a complicated bribery and money laundering scheme involving United Energy's assets. Universal Trading now seeks to collect the judgment debt entered against United Energy from Tymoshenko because she is alleged to have "converted, withheld and fraudulently transferred" over $2 billion from United Energy for the purpose of "avoiding creditors and hiding assets . . . in various jurisdictions." *fn1 Id. at ¶¶ 17-18. Tymoshenko has moved to dismiss the complaint for lack of personal jurisdiction. For the reasons discussed below, her motion is granted.


I. The Record

In considering a motion to dismiss, a court must accept all factual allegations in the complaint as true and draw reasonable inferences in favor of the plaintiff. Erickson v. Pardus, 551 U.S.89, 93-94 (2007). Further, courts are "normally required to look only at the allegations on the face of the complaint," Roth v. Jennings, 489 F.3d 499, 510 (2d Cir. 2007), though they may also consider "documents attached to the complaint or incorporated into it by reference, any documents that are integral to the Plaintiff's allegations even if not explicitly incorporated by reference, and facts of which the Court may take judicial notice." Gilmartin v. Marsh & McLennan Cos., Inc., No. 10 Civ. 8158, 2012 WL 2196114, at *5 (S.D.N.Y. June 15, 2012) (citing ATSI Commc'ns, Inc. v. Shaar Fund Ltd., 493 F.3d 87, 89 (2d Cir. 2007)).

Plaintiff's opposition to the motion to dismiss is replete with factual assertions that do not fit into any of these categories. The Court declines to take these assertions into account because "[n]ew facts and allegations, first raised in a Plaintiff's opposition papers, may not be considered" in deciding a motion to dismiss. Simone v. U.S., No. 09 Civ. 3904, 2012 WL 4891617, at *6 (E.D.N.Y. Oct. 9, 2012) (citations omitted). Similarly, the Court would err if it "consider[ed the] affidavits and exhibits submitted . . . in ruling on [the] motion to dismiss," as that would constitute "improper[] reli[ance] on matters outside the pleadings." Friedl v. City of New York, 210 F.3d 79, 83-84 (2d Cir. 2000) (internal quotations omitted) Universal Trading has also requested that the Court take judicial notice of voluminous filings, all of which are opposed by Tymoshenko. See Dkt. Nos. 24, 27. Courts may only take judicial notice facts that are "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot be reasonably questioned," Fed. R. Evid. 201(b), and must be cautious in doing so "because the effect . . . is to deprive a party of the opportunity to use rebuttal evidence, cross-examination, and argument to attack contrary evidence." Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d 66, 70 (2d Cir. 1998). Universal Trading requests that the Court take notice of statements made in several filings in other litigation. While "'[a] court may take judicial notice of a document filed in another court . . . to establish the fact of such litigation and related filings,'" it may not take judicial notice "'for the truth of the matters asserted in the other litigation.'" Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (quoting Int'l Star Class Yacht Racing, 146 F.3d at 70). The Court therefore declines to take notice of factual assertions in Requests for Judicial Notice A, B, C, E, F, G, I, J, L, and M. It is unnecessary for the court to determine the propriety of Requests for Judicial Notice D, H and K, which are neither cited nor relied upon in Universal Trading's papers.

II. Personal Jurisdiction

A. Legal Standard

The Court has subject matter jurisdiction as a result of the parties' diversity of citizenship. Compl. at ¶ 6. Accordingly, personal jurisdiction is governed by New York law, D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 104 (2d. Cir. 2006), which provides for personal jurisdiction over out-of-state defendants based on general jurisdiction under NYCPLR § 301 ("Section 301") or long-arm jurisdiction under NYCPLR § 302 ("Section 302"). Universal Trading "carries the burden of demonstrating that jurisdiction exists," Penachio v. Benedict, 461 Fed. Appx. 4, 5 (2d Cir. 2012) (citing Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994)), and appears to argue that the Court has both long-arm and general jurisdiction. See Pl.'s Opp'n at 4, Oct. 22, 2012, Dkt. No. 23.

Section 301 grants jurisdiction over a foreign party "engaged in such a continuous and systematic course of 'doing business' [in New York] as to warrant a finding of its 'presence' in this jurisdiction." Laufer v. Ostrow, 434 N.E.2d 692, 649 (N.Y. 1982) (quoting McGowan v. Smith, 419 N.E.2d 321, 323 (N.Y. 1981)). This requires a finding that they are "'present' in the state 'not occasionally or casually, but with a fair measure of permanence and continuity.'" Landoil Resources Corp. v. Alexander & Alexander Servs., 77 N.Y.S.2d 28, 34 (1990).

Section 302(a)(1) provides that a court may exercise personal jurisdiction over a nondomiciliary who "transacts any business within [New York], provided that the cause of action arises out of the transaction of business." Deer Consumer Prods., Inc. v. Little, 938 N.Y.S.2d 767, 776 (N.Y. Sup. Ct. 2012) (citing Lebel v. Tello, 707 N.Y.S.2d 426, 426 (1st Dep't 2000)). To satisfy Section 302(a)(1), "there must be 'an articulable nexus or a substantial relationship between transactions occurring within the state and the cause of action sued upon.'" Tamam v. Fransabank Sal, 677 F. Supp. 2d 720, 726 (S.D.N.Y. 2010) (quoting Sunward Elecs., Inc. v. ...

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