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Symmetra Pty Ltd v. Human Facets, LLC

United States District Court, Second Circuit

June 13, 2013

SYMMETRA PTY LTD, Plaintiff
v.
HUMAN FACETS, LLC and HELEN TURNBULL, Defendants.

SYMMETRA PTY LTD v. HUMAN FACETS, LLC, Dist. Court, S.D. New York 2013

Eric M. Creizman, Esq., Creizman, LLC, New York, NY. for Plaintiff.

Jan Douglas Atlas, Esq. Kopelowitz Ostrow Ferguson Weiselberg Keechl, Fort Lauderdale, FL, for Defendants.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION[1]

Symmetra Pty Ltd. ("Symmetra") brings this action to recover for the economic and reputational injuries it allegedly suffered at the hands of Human Facets, LLC ("Human Facets") and Helen Turnbull (collectively, "Defendants") following the breakdown of the parties' business relationship. Symmetra alleges seven causes of action for: (1) intentional interference with contractual relationships; (2) intentional interference with prospective economic advantage; (3) unfair competition; (4) defamatory injury to reputation; (5) injurious falsehood; (6) libel; and (7) slander. Presently pending is Defendants' motion to dismiss the Amended Complaint for lack of personal jurisdiction. For the following reasons, the motion is denied.

II. BACKGROUND

A. Facts

1. Relevant Parties

Symmetra, [2] an Australian corporation, [3] provides diversity and tolerance training sessions to corporate clients.[4] Symmetra's clients include such blue-chip companies as Goldman Sachs, Credit Suisse, Novartis, IBM, Ernst & Young, ConocoPhillips, Shell, and Motorola.[5] Heather Price is Symmetra's CEO.[6]

Human Facets is a limited liability company organized under the laws of, and conducting business in, Florida.[7] Helen Turnbull, who lives in Florida, is Human Facets' owner and managing member.[8] Like Symmetra, Human Facets provides consulting and training services on diversity and tolerance to corporate clients.[9]

2. The Parties' Business Relationship

In 2010, Symmetra developed a corporate training program titled "Unconscious Bias."[10] This program is "designed to identify and overcome latent and repressed cognitive associations, stereotypes, and preferences that can contribute to an intolerant and discriminatory office environment."[11] In general, the program involves: (1) explaining to its client that its purpose is to ferret out unconscious biases in the workplace; (2) administering diagnostic tests to managers and officers to that end; (3) providing individualized diversity coaching based on the results of this test; (4) running group training sessions to combat unconscious bias; and (5) working with the Human Resources department of the client company to develop policies, practices, and procedures aimed at combating unconscious bias.[12] Initially the program was deployed in Australia, where it went on to receive industry accolades.[13]

In order to run its Unconscious Bias programs, Symmetra contracted with Human Facets to use its unconscious bias assessment tool, "Cognizant, " and engaged Human Facets' personnel to interpret Cognizant test results.[14] Symmetra also engaged Human Facets to supply individualized coaching keyed to the results of the Cognizant tests.[15] Turnbull was one of the diversity coaches engaged by Symmetra.[16]

The Unconscious Bias program met with success in Australia, leading Symmetra to contemplate rolling it out in the wider markets of the United States and Asia.[17] Symmetra had previously engaged Human Facets on a case-by-case basis, writing a new (sub)contract for each new engagement;[18] but in August 2011, in anticipation of servicing these wider markets, the parties began negotiating a comprehensive long-term contract setting forth standard terms for future engagements.[19]

Unfortunately, they could not agree on several key terms, including the geographical scope of Symmetra's exclusive rights to Cognizant, the contours of the relationship between the parties in the United States e.g., who got which territories and, last but not least, Human Facets' compensation.[20] In April 2013, they agreed that they could not reach an agreement, and they executed a formal disengagement agreement that May.[21] Under the terms of this agreement, Human Facets agreed to complete its three then-existing subcontracts with Symmetra, and the parties agreed that they would operate independently, while respecting one another's intellectual property.[22]

3. Human Facets' Alleged Smear Campaign Against Symmetra

Symmetra alleges that its relationship with Human Facets had begun to sour as early as March 2012, when Turnbull, claiming to be offended by Symmetra's critique of her business expenditures, delayed sending Cognizant tests to a corporate client of Symmetra.[23] The situation allegedly devolved from there. When the parties' negotiations failed in April 2012, Human Facets allegedly began waging a "smear campaign" against Symmetra.[24] Symmetra alleges that:

Defendants have contacted, and continue to contact, Symmetra's existing and potential clients and business partners casting aspersions on Symmetra's qualifications and expertise in diversity consulting, falsely accusing Symmetra of misappropriating the Cognizant tool, falsely accusing Symmetra of copying Human Facets' teaching methods and ideas, and making other false and misleading statements suggesting that Symmetra engages in sharp business practices. Human Facets also has claimed credit for programs and innovations designed and implemented solely by Symmetra.[25]

In particular, Symmetra alleges on information and belief that, using client information that it gleaned during its subcontracting relationship with Symmetra, Human Facets contacted the New York executives of at least five prospective clients of Symmetra between May 2012 and September 2012.[26] In each of these communications, Human Facets stated that Symmetra had misappropriated Human Facets' intellectual property, and implied that engaging Symmetra would embroil the company in a legal dispute.[27] Symmetra further alleges that as a result of these communications, it was not engaged by any of the companies that Human Facets contacted.[28]

Additionally, Symmetra alleges that in September 2012, Turnbull sent two e-mails to the president of QED Consulting, a New York diversity-consulting company which Symmetra hoped to use to subcontract the work it had previously given Human Facets.[29] The first e-mail advised QED that Symmetra had "copied" Human Facets' award-winning Cognizant product, and that Human Facets and Symmetra were involved in a dispute over intellectual property.[30] Citing concerns raised by this e-mail, QED terminated its negotiations with Symmetra.[31]

B. Additional Jurisdictional Facts

Symmetra alleges the following additional jurisdictional facts. First, that Human Facets "employs or otherwise contracts with Barbara Berry, a Senior Associate Consultant of Human Facets, who is based in Queens, New York."[32] Specifically, Symmetra alleges that Human Facets employs Berry in order to "create a permanent presence for Human Facets in New York, by delivering workshops and marketing the services of Human Facets[;]" and that "Berry continues to reside and maintain an office in New York, and is described on Human Facets' website as a Senior Associate Consultant."[33]

Second, Symmetra alleges that Defendants conducted business in New York between 2007 and 2012. In support of this allegation, Price testifies that Turnbull visited New York in 2007 in order to establish a business relationship with Symmetra, [34] and that for two days in 2008 Turnbull and she held marketing meetings with New York companies.[35] Price further testifies that Turnbull ran diversity workshops in New York in 2009 and 2011 for Baker Hughes Industries, a long-time client of Human Facets.[36] Similarly, Price testifies that "Turnbull regularly markets by telephone, email, and tele-seminar[] to organizations in New York...."[37] Third, and relatedly, Symmetra alleges, through Price's testimony, that "Human Facets has no clients at all in the State of Florida."[38]

Fourth, Symmetra alleges that it entered into a United States distribution agreement with Human Facets in 2007, and that in connection with this agreement, it "made clear that New York would be the focal point of any business Symmetra did in the United States...."[39] In keeping with this plan, the distribution agreement between the parties designated New York State for choice of law and forum.[40]

Finally, Symmetra alleges that in March 2012, Turnbull and Price attended a diversity consulting award ceremony in New York in order to solicit business clients.[41] Price created a merged contact list based on the business prospects that she met at this event and sent it to Turnbull, who subsequently ...


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