United States District Court, S.D. New York
Oliver Lawrence Quinn moves under Fed.R.Civ.P. 12(b)(2) to
dismiss plaintiff Jalal Khan's claim against him for lack
of personal jurisdiction. For the following reasons, the
motion is granted.
brings this action against Emerald Operating Partners, LLC
("Emerald"); Quinn; and two other individuals -
Julien Samson and Trevor Bailey - whom Khan has yet to serve.
Khan, Quinn, Samson, and Bailey jointly formed Emerald, a
consulting business, on July 6, 2017. Compl. ¶ 12.
Pursuant to a verbal agreement, Khan was admitted as a 24%
member of Emerald on that same day. Id. ¶ 13. The
parties later formalized this arrangement in a written
operating agreement that became effective on July 12, 2018.
Id. ¶ 14.
employed Khan as a "strategy expert" from June 2017
through December 2018. Id. ¶ 21. According to
the complaint, Khan's efforts on Emerald's behalf
"resulted in the retention of at least two large
clients," thereby increasing Emerald's value by at
least $800, 000. Id. ¶¶ 22-23. Khan, a
citizen of New York with experience in the New York City
financial industry, was also recruited by Emerald to help the
company build a base of private equity clients there. Notice
of Removal ¶ 2; Khan Aff. ¶ 3. As further described
below, Khan and defendant Quinn invested considerable time in
the summer and fall of 2017 in an effort to expand
Emerald's business into New York City. However, this
effort was seemingly unsuccessful.
December 28, 2018, Quinn, Samson, and Bailey allegedly
terminated Khan's employment at Emerald and revoked his
membership interest. Compl. ¶¶ 27-28. For the
authority to do so, they invoked section 7.7(f) of the July
2018 operating agreement, which allowed Emerald's members
to require another member's withdrawal from the company
for failure "to perform services or meet performance
milestones." Id. ¶¶ 27-28. Khan now
alleges that his termination was illegitimate under the
operating agreement and that he is therefore owed unpaid
salary and dividends from Emerald. Id. ¶¶
30-34. In this suit, he brings causes of action for breach of
contract, id. ¶¶ 37-45; 51-57, breach of
fiduciary duty, id. ¶¶ 46-50; and unjust
enrichment, id. ¶¶ 58-66; he also seeks a
declaratory judgment that he is still a 24% member of
Emerald, id. ¶¶ 67-68.
relevant to Quinn's instant motion to dismiss, Khan
performed the majority of his work for Emerald in New York,
Khan Aff. ¶ 28, but Quinn's contacts with New York
were more modest. During the relevant period of time, Quinn
lived in Chattanooga, Tennessee. Quinn Decl. ¶ 3. Other
than the concededly-repeated contacts with New York described
below, he performed his Emerald-related work either in
Chattanooga; Richmond, Virginia (where defendant Julien
Samson lives and works); or at client locations, none of
which were in New York. Id. ¶ 13. Similarly,
Samson lived and generally worked in Richmond, Virginia, and
defendant Trevor Bailey lived and typically worked in
England. Id. ¶¶ 26-27. Emerald itself had
no employees in New York other than Khan.
argues that a provision of New York's long arm statute,
C.P.L.R. § 302(a)(1) nevertheless grants this Court
personal jurisdiction over Quinn. Khan bears the burden to
demonstrate that the Court has personal jurisdiction over
Quinn, Das v. Rio Tinto PLC, 332 F.Supp.3d 786, 799
(S.D.N.Y. 2018), but as this is a pre-discovery motion, Khan
need only make a "prima facie showing of
jurisdiction." Id. (quoting Jazini v.
Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir.
1998)). In evaluating whether the Khan has done so, the Court
assumes that Khan's factual allegations are true.
Ralph Lauren Corp. v. CSR Group, Inc., 16-cv-3387
(RJS), 2016 WL 4919961 at *2 (S.D.N.Y. Sept. 14, 2016).
§ 302(a) (1) provides federal courts sitting in New York
with personal jurisdiction over a non-domiciliary defendant
who "transacts any business within the state,"
where the "cause of action aris[es] from" such
transactions. This, as the language implies, is a two-prong
test. The first prong - the requirement that the defendant
have transacted business in New York - means that the
defendant must have "purposefully avail[ed] [himself] of
the privilege of conducting activities within [New York],
thus invoking the benefits and protections of its laws."
DirecTV Latin Am., LLC v. Park 610, LLC, 691
F.Supp.2d 405, 417 (S.D.N.Y. 2010) (second and third
alterations in original) (quoting CutCo Indus., Inc. v.
Naughton, 806 F.2d 361, 365 (2d Cir. 1986)). The second
prong - the requirement that the cause of action "arise
from" the defendant's business transactions in New
York - means that there must be "some articulable nexus
between the business transacted and the cause of action sued
upon." Ross v. UKI Ltd., 02-cv-9297 (WHP), 2004
WL 384885 at *4 (S.D.N.Y. Mar. 1, 2004) (quoting McGowan
v. Smith, 419 N.E.2d 321, 323 (N.Y. 1981)).
first prong of the personal jurisdiction test is here
satisfied. Quinn had repeated contacts with this state, which
together amount to "transacting business" in New
York. The facts alleged by Khan, which Quinn largely does not
dispute, strongly suggest that the two were engaged in a
concerted effort in the summer and fall of 2017 to build a
client base for Emerald in New York City. First, Quinn used
his personal credit card to rent Emerald a "virtual
office" on Avenue of the Americas in Manhattan. Khan
Aff. ¶ 4; Quinn Decl. ¶ 11. This arrangement
provided a phone answering and mail forwarding service, as
well as limited use of a conference room, at which Quinn
attended four meetings with clients and prospective clients
in 2017 and 2018. Quinn Decl. ¶¶ 11, 15-18; Khan
Aff. ¶ 5. The virtual office contract also allowed
Emerald to use the building's Manhattan address on its
marketing materials; and indeed, during Khan's employment
with Emerald, the company used the Avenue of the Americas
address on its marketing materials, website, business cards,
letterhead, pitch books, and contracts, and it directed
clients to mail payments to that address. Khan Aff.
addition to the meetings in the Avenue of the Americas
conference room, Quinn also attended many other meetings in
New York City during the summer and fall of 2017. In July
2017, Quinn traveled to New York to meet Khan for a three-day
strategy session about Emerald. Id. ¶ 3. Over
the remainder of that year, Quinn attended approximately ten
to twenty meetings with prospective clients at their offices
in New York, though none of these meetings actually generated
any business, Quinn Decl. ¶ 19; Khan Aff. ¶ 13-23.
During a several-month period in 2017, Quinn was coming to
New York roughly once every two weeks to attend meetings.
Khan Aff. ¶ 14.
contacts amount to transacting business in New York for the
purposes of C.P.L.R. § 302(a)(1). Although Quinn's
efforts to expand Emerald's client base into New York
city were ultimately unsuccessful, and although his 2017
meetings with prospective clients did not initiate any
"transaction" in the most formal sense, his
prolonged, repeated, deliberate attempts to build a business
in New York are more than enough to demonstrate
"purposeful availment" of the protections of New
York law. See Gucci Am. v. Weixing Li, 135 F.Supp.3d
87, 97 (S.D.N.Y. 2015) (quoting Licci ex rel. Licci v.
Lebanese Canadian Bank, SAL, 732 F.3d 161, 171 (2d Cir.
2013)) (holding that "in-forum conduct [that] is
deliberate and recurring, not 'random, isolated, or
fortuitous" satisfies the first prong of C.P.L.R. §
302(a)(1). Indeed, the facts of this case resemble those of
El Cid, Ltd. v. New Jersey Zinc Co., 444 F.Supp.
845, 849 (S.D.N.Y. 1977), where a court in this district held
that two out-of-state defendants had subjected themselves to
personal jurisdiction in New York by "participating in
at least ten meetings in New York," which meetings
"were undertaken to promote . . . business
second prong of the personal jurisdiction test, however, Khan
is on weaker ground. Quinn's business transactions in New
York are not alone sufficient to grant this Court personal
jurisdiction; there must also be "some articulable
nexus" between those transactions and Khan's cause
of action. Ross, 2004 WL 384885 at *4. Khan alleges
that Quinn breached the operating agreement (as well as the
fiduciary duties flowing from that agreement) by voting to
terminate Khan's interest in Emerald in December 2018.
But Khan does not make a prima facie showing of a nexus
between his causes of action and Quinn's contacts with
New York a year or more earlier.
main issue is one of timing: Quinn and Khan's meetings
with prospective clients in New York City occurred in 2017,
and their efforts to build a client base there appear to have
waned after then. See Khan Aff. ¶¶ 16-21.
Although Quinn attended three meetings at the Avenue of the
Americas conference room in 2018, at least two of those
meetings were with existing Emerald clients that were not
based in New York. Quinn Decl. ¶¶ 17-18; Khan Aff.
¶ 23. And on July 1, 2018, Emerald downgraded its
virtual office contract such that the company would only
receive as-needed use of the conference room, rather than a
regular allotment of time. Quinn Decl. ¶ 12. While Khan
continued working from New York until he was terminated in
December 2018, and while the company continued using the
Manhattan address on its marketing materials, Khan Aff.
¶¶ 6-7, 28, the Court infers from all of these
facts that by 2018, Quinn and Emerald had abandoned their
ambition of expanding their business into New York City.
chronology is significant because the parties entered into a
written operating agreement for Emerald - i.e., the contract
that forms the basis of Khan's breach claims against
Quinn - on July 12, 2018. Compl. ¶ 14. Virtually all of
Quinn's Emerald-related contacts with New York, save one,
or two meetings in the virtual office conference room,
occurred before the parties entered into the operating
agreement. See Quinn Decl. ¶¶ 17-18;
Compl. ¶ 14. It is thus difficult to see a nexus between
the alleged breach of this contract in December 2018, ...