Opinion
No. 00-CV-0341E(M).
February 28, 2001.
Christopher A. Zampogna, Esq., c/o Cohen Lombardo, Buffalo, NY., Attorneys for the Plaintiff.
Anthony J. Dain, Esq. and David M. Plouff, Esq., c/o Procopio, Cory, Hargreaves Savitch, San Diego, CA., Attorneys for the Defendant.
MEMORANDUM and ORDER
Plaintiff herein argues, inter alia, that defendant Margi Systems, Inc. ("Margi") discriminated against her on the basis of her physical disabilities in violation of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., and retaliated against her for her having made complaints about sexual harassment in violation of Title VII of the Civil Rights Act ("Title VII"), 42 U.S.C. § 2000e-3 (a). Presently before this Court is Margi's motion to dismiss for lack of personal jurisdiction or, in the alternative, to transfer the action to the Northern District of California pursuant to either 28 U.S.C. § 1406 (a) (transfer for improper venue) or 28 U.S.C. § 1404 (a) (transfer in the interest of justice). For the reasons that follow, such motion is denied.
Personal jurisdiction over a given defendant in a diversity case is determined according to the law of the forum state. Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985). In this action, the relevant jurisdictional statute is its so-called "long arm" statute, set forth in section 302 of the New York Civil Practice Law and Rules ("CPLR"). While the plaintiff bears the ultimate burden of establishing jurisdiction over a defendant by the preponderance of the evidence, where such is challenged prior to discovery the plaintiff may overcome the challenge simply by making a good faith pleading to that effect. See Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998). In making this prima facie jurisdictional determination, the pleadings and affidavits are construed and any ambiguity resolved in favor of the plaintiff. Hoffritz, at 57.
In light of the above discussion and as culled from the submitted materials, Margi is a California corporation which manufactures and markets computer hardware. Compl. ¶ 65; Mem. Of Law in Opp'n Ex. A (Charge of Discrimination filed with Equal Employment Opportunity Commission). Plaintiff, a New York resident, began her employment with Margi May 18, 1998 as "Director of Sales" for the Eastern United States. Mem. of Law in Opp'n Ex. A; Roland Aff. ¶ 2. Instead of working in and from California, however, plaintiff was "allowed to work out of [her] home in Buffalo and reported to [her] supervisor by telephone." Mem. of Law in Opp'n Ex. A; Roland Aff. ¶ 4.
Plaintiff states that she visited Margi's California headquarters "on an infrequent basis," perhaps "four times per year, but conducted most of her communications with [such office] via [facsimile], e-mail, or telephone." Roland Aff. ¶ 5. In this regard, Margi provided plaintiff a number of items for her use while working out of her home, including computer equipment, a fax machine and a telephone. Mem. of Law in Opp'n Ex. D (letter from Margi's counsel requesting the return of certain items). Morever, plaintiff was held out as conducting Margi's business from a Buffalo area telephone number. Id. Ex. C (Supplier Profile listing plaintiff as having a 716 area code). Plaintiff claims that a principal reason for her hiring — and, presumably, for this working arrangement — is that she was able to exploit her local contacts at Ingram Micro, a distributer of computer products and services with offices near Buffalo, N.Y., so as to secure sales for Margi. Mem. of Law in Opp'n at 4; Roland Aff. ¶ 11.
During her employment at Margi, plaintiff claims that she was subjected to certain co-worker's harassing behavior towards women. Compl. ¶ 7; Mem. of Law in Opp'n Ex. A. After making a number of complaints regarding such behavior and upon Margi's "learning" that plaintiff suffers from multiple sclerosis, the company demoted plaintiff and, by telephone call placed from Margi's California headquarters on April 30, 1999 to plaintiff's home office in New York, informed plaintiff that she was terminated from employment by Margi. Compl. ¶¶ 12-15; Mem. of Law in Opp'n Ex. A.
In response to these allegations, Margi concedes that, although "she performed some duties from her home, [p]laintiff would travel to California approximately every six to eight weeks and work out of [d]efendant's Fremont office for about one week at a time." Mem. of Points at 1. It further states that "[a]ll of the decisions pertaining to [p]laintiff's employment, including her termination, were made from [d]efendant's headquarters in Fremont, California." Id. at 2. In addition, Margi argues that it has never directed sales efforts to New York and that plaintiff has not shown that any Margi customers are located there. Mem. of Points in Reply at 2. In addition, Margi argues that it has insufficient contacts with New York such that it can be haled into a New York court.
Under CPLR 302(a)(3), a court may exercise personal jurisdiction over a defendant who "commits a tortious act without the state, causing injury to a person or property within the state" if the limitations in one of two alternative subdivisions are met. According to CPLR 302(a)(3) (ii) — the subdivision applicable to the present matter —, an exercise of jurisdiction under CPLR 302(a)(3) is proper where a defendant "expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce." The expectation element is construed to be a "foreseeability requirement" that "relates to forum consequences generally and not to the specific event which produced the injury within the state." Fantis Foods, Inc. v. Standard Importing Co., 49 N.Y.2d 317, 327 n. 4 (1980). This ensures that there is "some link between a defendant and New York State to make it reasonable to require a defendant to come to New York to answer for tortious conduct committed elsewhere." Ingraham v. Carroll, 90 N.Y.2d 592, 598 (1997). On the other hand, the substantial interstate commerce revenue element "narrows the long-arm reach to preclude the exercise of jurisdiction over nondomiciliaries who might cause direct, foreseeable injury within the State but whose business operations are of a local character." Id. at 599. As set forth in LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210 (2000), "[t]he conferral of jurisdiction under this provision rests on five elements: [f]irst, that defendant committed a tortious act outside the State; second, that the cause of action arises from that act; third, that the act caused injury to a person or property within the State; fourth, that defendant expected or should reasonably have expected the act to have consequences in the State; and fifth, that defendant derived substantial revenue from interstate or international commerce." Id. at 214. Insofar as there appears to be no real dispute among the parties (1) that, if defendants committed a tortious act, such act occurred — at least in part — in California, (2) that the decision to terminate plaintiff is the precipitating factor in this action, (3) that, because plaintiff is a resident of New York, this decision to terminate caused "injury" in New York and (4) that Margi derives substantial revenue from interstate commerce such that its business operations are not of a local character specific to California, the undersigned's attention focuses on whether the defendant expected or should reasonably have expected the decision to terminate plaintiff would have consequences in New York.
Quotation marks and citations omitted.
The record, thus far, supports such a finding. In this regard, the undersigned finds it determinative that plaintiff utilized a New York telephone number for company business, that Margi procured office equipment for plaintiff so that she could work from her home and that, by all accounts, plaintiff was in regular contact with Margi's California headquarters when she worked in New York. Simply stated, there has been a sufficient showing that Margi had reason to expect that its decision to terminate plaintiff would have direct consequences in New York.
The instant analysis is not ended, however, because this Court must also determine whether the exercise of jurisdiction under CPLR 302 comports with due process — i.e., whether defendant has "certain minimum contacts with [New York] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). In determining whether sufficient contacts exist, this Court considers whether "the defendant's conduct and connection with the forum State are such that [it] should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Inasmuch as plaintiff has made a prima facie showing that Margi regularly and continuously dealt with plaintiff as its employee when she worked from her home office in New York and that Margi provided the necessary infrastructure which facilitated such cross-country communication, Margi reasonably should have anticipated being haled into court in New York for claims arising out of such conduct. In this sense, Margi took purposeful action to conduct business in New York. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).
Due process considerations also require that "traditional notions of fair play and substantial justice" will not be offended by the maintenance of this suit in this Court — i.e., that the assertion of jurisdiction be "reasonable" under the circumstances present in this case. "Reasonableness" is determined on a number of factors, including "(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial's system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering social substantive policies." Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 244 (2d Cir. 1999). As applied to this case, it seems apparent that Margi, a California corporation, will be burdened if it is forced to defend itself in this forum. As Margi points out in its moving papers, "all its personnel, records and operations are located at the opposite end of the U.S." Mem. of Law at 5. However and inasmuch as the "conveniences of modern communication and transportation ease what would have been a serious burden only a few decades ago," such a factor is not sufficient to overcome plaintiff's showing of minimum contacts. Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 574 (2d Cir. 1996). Moreover, New York's interest in the dispute is strong, inasmuch as plaintiff is a New York resident and has asserted, in addition to her federal causes of action, claims premised on the laws of New York. Relatedly, it is plainly more convenient and effective for plaintiff to pursue these claims in this state. The fourth factor, however, does weigh in Margi's favor — viz., much of the evidence in this action is likely to be found in California. Yet as was stated previously, this factor is not sufficient — even when considered with Margi's burden of having to defend itself here — to overcome plaintiff's showing of minimum contacts. The final factor, the interests in promoting substantive policies, weighs in favor of neither party, inasmuch as both California and New York have interests in ensuring that employment relationships are transacted lawfully. On balance, therefore, the undersigned finds that exercising jurisdiction in this forum over Margi pursuant to CPLR 302(a)(3) comports with due process requirements.
Insofar as Margi seeks to transfer this action on the basis of improper venue, such motion is denied. Firstly, Title VII provides, in relevant part, that the instant action "may be brought * * * in the judicial district in which the aggrieved person would have worked but for the alleged unlawful employment practice." 42 U.S.C. § 2000e-5 (f)(3). Inasmuch as it appears plain that, but for the alleged unlawful employment practice, plaintiff would have continued to work for Margi out of her home in New York, this action is properly before this Court. Secondly and with regard to a transfer pursuant to 28 U.S.C. § 1404 (a), it is well-settled that a plaintiff's choice of forum should not be disturbed absent a strong showing that the balance of convenience favors the alternative forum. See R. Maganlal Co. v. M.G. Chem. Co., 942 F.2d 164, 167 (2d Cir. 1991). In making this determination, "courts generally consider several factors including the convenience of the witnesses, the location of relevant documents and the relative ease of access to sources of proof, the convenience of the parties, the locus of the operative facts, the availability of process to compel the attendance of unwilling witnesses, the relative means of the parties, the forum's familiarity with the governing law, the weight accorded the plaintiff's choice of forum, and trial efficiency and the interest of justice, based on the totality of the circumstances." Wilshire Credit Corp. v. Barrett Capita/Management Corp., 976 F. Supp. 174, 181 (W.D.N.Y. 1997). As indicated previously, the argument in favor of transferring this action to the Northern District of California is one based purely on the convenience or inconvenience to Margi in defending against the instant action in this forum. Nevertheless, where the "transfer would merely shift the inconvenience from one party to the other, `the plaintiff's choice of forum should not be disturbed.'" Id. at 182. That said, the motion to transfer the action on this basis will be denied.
Quoting De Luxe Game Corp. v. Wonder Products Co., 166 F. Supp. 56, 61 (S.D.N.Y. 1958).
Accordingly, it is hereby ORDERED that Margi Systems' motion to dismiss for lack of personal jurisdiction or, in the alternative, to transfer the action to the Northern District of California pursuant to either 28 U.S.C. § 1406 (a) or 28 U.S.C. § 1404 (a) is denied.