Opinion
HHDCV166071791S
11-02-2017
State of Connecticut v. Reservation Services International, Inc. et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION FOR ORDER (#125)
Kevin G. Dubay, J.
The present action arises from a dispute between the plaintiff, the State of Connecticut, and the defendants, Reservation Services International, Inc. (RSI), Reservation Services Group, LLC (RSG), Reservation Services Intervals, LLC (Intervals), SI Holdings, LLC (Holdings), VIP Executives, LLC, doing business as Travel Deals (Travel Deals), Sky Group, Inc., doing business as Travel Smart (Travel Smart), and Vacation Smart International, Inc. (Vacation Smart), regarding alleged violations of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. Currently pending before the court is a motion for order that was filed by the plaintiff. Specifically, the plaintiff seeks an order that (I) establishes a schedule under which RSI, RSG, Intervals, and Holdings (collectively, Reservation defendants) must comply with the plaintiff's requests for jurisdictional discovery, (II) overrules the Reservation defendants' objections to the plaintiff's jurisdictional discovery requests, and (III) prescribes an evidentiary hearing on the issue of whether the court has personal jurisdiction over the Reservation defendants. For the reasons set forth subsequently in this memorandum, the plaintiff's motion for order is granted in part and denied in part without prejudice.
Although it is not expressly defined in Connecticut jurisprudence, the term " jurisdictional discovery" refers to " any preliminary discovery to establish whether a . . . court has jurisdiction over the person, the res, or the subject matter of the dispute . . ." (Emphasis omitted; footnote omitted.) S. Strong, " Jurisdictional Discovery in United States Federal Courts, " 67 Wash. & Lee L. Rev. 489, 491 (2010).
DISCUSSION
I
The plaintiff first claims that the court should enter an order that establishes a schedule under which the Reservation defendants must comply with the plaintiff's requests for jurisdictional discovery.
Our Supreme Court's decision in Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 56-60, 459 A.2d 503 (1983), governs jurisdictional discovery. There, the court held that, in light of Practice Book (1978-97) § 218 (now § 13-2), " discovery may be had to establish facts pertaining to personal jurisdiction." Id., 57; see also id., 57 n.7 (" The court may even apply sanctions for failure to obey a discovery order intended to establish or to refute jurisdiction"). Our Supreme Court further held that the granting or denial of a request for jurisdictional discovery rests in the sound discretion of the trial court. See id., 57. " That discretion is limited, however, by the provisions of the rules [of practice] pertaining to discovery; Practice Book § § 217-21 [now § § 13-2 through 13-5]; especially the mandatory provision that discovery shall be permitted if the disclosure sought would be of assistance in the prosecution or defense of the action." (Emphasis in original; footnote omitted; internal quotation marks omitted.) Id., 57-59; see footnote 2 of this memorandum.
Practice Book § 13-2 provides in relevant part: " In any civil action . . . where the judicial authority finds it reasonably probable that evidence outside the record will be required, a party may obtain . . . discovery of information or disclosure, production and inspection of papers, books, documents and electronically stored information material to the subject matter involved in the pending action, which are not privileged, whether the discovery or disclosure relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, and which are within the knowledge, possession or power of the party or person to whom the discovery is addressed. Discovery shall be permitted if the disclosure sought would be of assistance in the prosecution or defense of the action and if it can be provided by the disclosing party or person with substantially greater facility than it could otherwise be obtained by the party seeking disclosure . . ." (Emphasis added.)
In the present case, as a part of its jurisdictional discovery requests, the plaintiff seeks information regarding (1) descriptions of RSI's products that have been offered for sale to Connecticut consumers, (2) the Reservation defendants' relationships with " certain named entities, " including Travel Deals, Travel Smart, and Vacation Smart, (3) " the number of Connecticut consumers who purchased travel club memberships, " (4) " the identity of [the] Connecticut consumers [who purchased travel club memberships], " (5) " communications between the [Reservation] [d]efendants and Connecticut consumers, " (6) " the registration of domain names for travel club memberships sold to Connecticut consumers, " (7) " total revenue from Connecticut consumers from the travel club memberships and related purchases, " (8) " cancellations by Connecticut consumers of their memberships, " and (9) " related litigation and arbitration . . ." The disclosure of such information would assist the plaintiff in establishing the court's personal jurisdiction over each of the Reservation defendants. See General Statutes § 33-929(f) (making or performing a contract in Connecticut, repeatedly soliciting business in Connecticut, distributing goods, and committing tortious conduct in Connecticut are bases for exercising long-arm jurisdiction); General Statutes 52-59b(a) (transacting business in Connecticut is a basis for exercising long-arm jurisdiction); Daimler AG v. Bauman, 571 U.S. ___, n.13, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (" Agency relationships . . . may be relevant to the existence of specific jurisdiction." [emphasis in original]); Divicino v. Polaris Industries, 129 F.Supp.2d 425, 433 (D.Conn. 2001) (explaining that " [advertising] in [a] forum" and " [establishing] channels for providing information for customers within [a] forum." are relevant factors in establishing personal jurisdiction); see also Rios v. Fergusan, 51 Conn.Supp. 212, 225, 978 A.2d 592 (2008) (on-line presence can be pertinent to establishing personal jurisdiction); Edberg v. Neogen Corp., 17 F.Supp.2d 104, 115 (D.Conn. 1998) (same). Thus, the court must permit such discovery. See Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 57-58. Accordingly, the court grants the plaintiff's motion for an order that establishes a schedule under which the Reservation defendants must comply with the plaintiff's jurisdictional discovery requests.
The court notes that in Matthews v. SBA, Inc., 149 Conn.App. 513, 546, 89 A.3d 938, cert. denied, 312 Conn. 917, 94 A.3d 642 (2014), the Appellate Court held that § 52-59b, rather than § 33-929(f), provides longarm jurisdiction over out-of-state limited liability companies.
II
Second, the plaintiff claims that the court should overrule the Reservation defendants' objections to the plaintiff's jurisdictional discovery.
As discussed previously in part I of this memorandum, a party may request jurisdictional discovery from a litigant for the purpose of establishing facts that are relevant to personal jurisdiction. See Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 57. As a corollary, " [t]he opposing party . . . likewise retains the ability to object to such requests by any number of procedural vehicles, including written objection, motion to quash, motion to limit, or motion for a protective order. See Practice Book § 13-5 . . . The [trial] court, in its discretion, may grant or deny such objections as it deems appropriate." (Citation omitted; footnote added; internal quotation marks omitted.) Brody v. Brody, 153 Conn.App. 625, 638, 103 A.3d 981, cert. denied, 315 Conn. 910, 105 A.3d 901 (2014).
Practice Book § 13-5 provides in relevant part: " Upon motion by a party from whom discovery is sought, and for good cause shown, the judicial authority may make any order which justice requires to protect a party from annoyance, embarrassment, oppression, or undue burden or expense, including . . . (1) that the discovery not be had; (2) that the discovery may be had only on specified terms and conditions . . . (3) that the discovery may be had only by a method of discovery other than that selected by the party seeking discovery; (4) that certain matters not be inquired into, or that the scope of the discovery be limited to certain matters . . . (7) that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way . . . [or] (9) specified terms and conditions relating to the discovery of electronically stored information . . ."
In the present case, the Reservation defendants object to the plaintiff's jurisdictional discovery requests on, inter alia, the following grounds: (A) jurisdictional discovery pursuant to Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 56-60, is " obsolete and improper" under Daimler AG v. Bauman, supra, 571 U.S. ___, and its progeny; (B) the Reservation defendants are not subject to the court's personal jurisdiction; (C) permitting jurisdictional discovery in the present case would violate the tenth amendment to the United States constitution; and (D) here, permitting jurisdictional discovery would violate article first, § § 7 and 8, of the constitution of Connecticut. The court will address the Reservation defendants' objections in turn.
The tenth amendment to the United States constitution provides: " The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."
Although the Reservation defendants object to the plaintiff's jurisdictional discovery requests on the basis of article first, § 7, of the constitution of Connecticut, they do not provide any analysis on this point in their objection to the plaintiff's motion for order. It is well settled that " [a]nalysis, rather than mere abstract assertion, is required in order to avoid abandoning an issue by failure to brief the issue properly . . . The parties may not merely cite a legal principle without analyzing the relationship between the facts of the case and the law cited . . . It is not enough merely to mention a possible argument in the most skeletal way, leaving the court to do counsel's work, create the ossature for the argument, and put flesh on its bones." (Internal quotation marks omitted.) NRT New England, LLC v. Jones, 162 Conn.App. 840, 856, 134 A.3d 632 (2016). Therefore, the court declines to address the portion of the Reservation defendants' objection relating to article first, § 7, of the Connecticut constitution.
Article first, § 8, of the constitution of Connecticut, as amended by article seventeen of the amendments, provides in relevant part: " No person shall be compelled to give evidence against himself . . ."
A
First, the Reservation defendants object to the plaintiff's jurisdictional discovery requests on the ground that jurisdictional discovery pursuant to Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 56-60, is " obsolete and improper" under Daimler AG v. Bauman, supra, 571 U.S. ___, and its progeny. The Reservation defendants' objection lacks merit. As the United States Court of Appeals for the Second Circuit has recently noted, in Daimler AG v. Bauman, supra, " the Supreme Court [of the United States] narrowed the test for general jurisdiction . . ." Waldman v. Palestine Liberation Organization, 835 F.3d 317, 322, 326 (2d Cir. 2016). Pursuant to Daimler, " [a] court may assert general personal jurisdiction over a foreign defendant . . . only when the defendant's affiliations with the State in which suit is brought are so constant and pervasive as to render [it] essentially at home in the forum State." (Internal quotation marks omitted.) Id., 331. Thus, rather than discarding the procedural mechanism of jurisdictional discovery, the United States Supreme Court altered the standard for exercising general jurisdiction over an out-of-state defendant. This conclusion finds further support in the fact that, in Daimler, the trial court authorized the plaintiffs to procure jurisdictional discovery from the defendant; see id., (stating that trial court granted defendant's motion to dismiss for lack of personal jurisdiction " [a]fter allowing jurisdictional discovery on plaintiffs' agency allegations"); and, on appeal, the Supreme Court of the United States did not reason or conclude that the grant of jurisdictional discovery was improper. Consequently, the Reservation defendants' objection is overruled.
Indeed, the mechanism of jurisdictional discovery is well established on the federal level. See Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 n.13, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978) (" [W]here issues arise as to jurisdiction or venue, discovery is available to ascertain the facts bearing on such issues"); see also General Industries Co. v. Birmingham Sound Reproducers, Ltd., 26 F.R.D. 559, 561 (E.D.N.Y. 1961).
B
Second, the Reservation defendants object to the plaintiff's jurisdictional discovery requests on the ground that they are not subject to the court's personal jurisdiction. A substantially similar argument was rejected in Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 57 n.7. There, our Supreme Court concluded that " [t]he contention of the defendant that to order discovery would impermissibly impose the court's jurisdiction over the defendant prior to having even made the determination as to whether the court in fact had jurisdiction over this defendant, is erroneous. A court must have jurisdiction to determine its own jurisdiction, especially where . . . the defendants have . . . put that question into issue." (Emphasis added; internal quotation marks omitted.) Id. Here, through their respective motions to dismiss, the Reservation defendants have placed into issue the court's personal jurisdiction over them. Thus, the court has jurisdiction to determine whether it has personal jurisdiction over the Reservation defendants. Accordingly, the Reservation defendants' objection is overruled.
C
Third, the Reservation defendants object to the plaintiff's jurisdictional discovery requests on the ground that permitting jurisdictional discovery in the present case would violate the tenth amendment to the United States constitution. The Reservation defendants' objection lacks merit because " [t]here is nothing in the history of [the Tenth Amendment's] adoption to suggest that it was more than declaratory of the relationship between the national and state government . . . The Tenth Amendment does not protect any specific personal right . . ." (Citation omitted; internal quotation marks omitted.) Mann v. Meachem, 929 F.Supp. 622, 634 (N.D.N.Y. 1996). Accordingly, the Reservation defendants' objection is overruled.
D
Fourth, the Reservation defendants object to the plaintiff's jurisdictional discovery requests on the ground that permitting jurisdictional discovery in the present case would violate article first, § 8, of the constitution of Connecticut. In so doing, the Reservation defendants rely on a Superior Court case, Burritt Interfinancial Bancorporation v. Brooke Pointe Associates, 42 Conn.Supp. 445, 625 A.2d 851 (1992), in which Judge Blue concluded that article first, § 8, of the Connecticut constitution protected two defendants in a civil action " against the compulsory disclosure of incriminatory books and papers to a plaintiff." Id., 446. The present case is distinguishable from Burritt because, there, the defendants faced the risk of incrimination and the possibility of further criminal prosecution as a result of disclosure; see id., 449-51; and here, no such circumstances exist. Accordingly, the Reservation defendants' objection is overruled, and the court grants the plaintiff's motion for an order that overrules the Reservation defendants' objections to the plaintiff's jurisdictional discovery requests.
III
Lastly, the plaintiff claims that the court should enter an order that prescribes an evidentiary hearing on the issue of whether the court has personal jurisdiction over the Reservation defendants.
Evidentiary hearings on jurisdictional issues are governed by Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 55-56. There, our Supreme Court reasoned that " [a] motion to dismiss may . . . raise issues of fact and would, therefore, require a . . . hearing [to determine the facts] . . . [A]ffidavits are insufficient to determine the facts unless, like the summary judgment, they disclose that no genuine issue as to a material fact exists . . . In almost every setting where important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses." (Citation emitted; footnote added; internal quotation marks omitted.) Id., 56. In turn, the court held that " [w]hen issues of fact are necessary to the determination of a court's jurisdiction, due process requires that a trial-like hearing be held, in which an opportunity is provided to present evidence and to cross-examine adverse witnesses." Id. " Put another way, the due process requirement of a hearing is required only when issues of facts are disputed." (Emphasis in original.) Weihing v. Dodsworth, 100 Conn.App. 29, 38, 917 A.2d 53 (2007). " In the absence of any disputed facts pertaining to jurisdiction, a court is not obligated to hold an evidentiary hearing before dismissing an action for lack of jurisdiction." (Internal quotation marks omitted.) Pinchbeck v. Dep't of Pub. Health, 65 Conn.App. 201, 209, 782 A.2d 242, cert. denied, 258 Conn. 928, 783 A.2d 1029 (2001). " [I]t is the plaintiff's burden both to request an evidentiary hearing and to present evidence that establishes disputed factual allegations in support of an evidentiary hearing . . ." Walshon v. Ballon Stoll Bader & Nadler, P.C., 121 Conn.App. 366, 371, 996 A.2d 1195 (2010).
Under Practice Book § 17-49, summary judgment " shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."
As discussed previously in part I of this memorandum, the plaintiff is entitled to jurisdictional discovery from the Reservation defendants on the issue of personal jurisdiction. Thus, at this time, the factual record is not fully developed. Consequently, the court declines to determine whether an evidentiary hearing is necessary--i.e., whether a genuine issue of jurisdictional fact exists--until the factual record is more fully developed. Jurisdictional discovery could generate evidence that tends to show the existence or absence of disputed facts that are relevant to establishing personal jurisdiction. Accordingly, the court denies without prejudice the plaintiff's motion for an order that prescribes an evidentiary hearing on the issue of personal jurisdiction. The plaintiff may renew its motion for an evidentiary hearing at or near the end of the jurisdictional discovery process.
CONCLUSION
For the foregoing reasons, the plaintiff's motion for order is granted in part and denied in part without prejudice.