Opinion
601146/10.
Decided September 21, 2011.
Fox Rothschild LLP, New York, NY, (Robert J. Rohrberger), for Plaintiffs.
Mintz Gold LLP, New York, NY, (Steven G. Mintz), for Defendants.
Plaintiff Kforce, Inc., a specialty staffing firm, brings this action alleging violation of a post-employment restrictive covenant against defendants Ryan Foote (Foote) and Eric Kam (Kam), its former employees, and Solomon-Page Group, LLC (Solomon-Page), their new employer. Kam, who resides and works in New Jersey, now moves, pursuant to CPLR 3211 (a) (8), to dismiss the complaint as against him on the ground of lack of personal jurisdiction. Because Kam lacks sufficient minimum contacts with New York to support an exercise of personal jurisdiction over him, the motion to dismiss is granted.
On November 12, 2007, Kam signed an employment agreement with Kforce, and began his employment as an account manager in Kforce's Parsippany, New Jersey office (Aff. of Eric Kam, ¶¶ 4-5). In July 2009, Kam resigned from his position with Kforce, and began working at Solomon-Page's Saddle Brook, New Jersey office ( id., ¶ 6).
On May 4, 2010, nearly a year after Kam's resignation, Kforce filed this action, alleging claims against defendants for a declaratory judgment, breach of contract, misappropriation of confidential information/trade secrets, unfair competition, breach of fiduciary duty, conversion, and tortious interference (Complaint, ¶¶ 51-110). All of Kforce's claims arise out of the employment agreement that Kam signed with Kforce, which contains restrictive covenants, including non-solicitation and confidentiality provisions ( id., ¶¶ 26-30).Both Kforce and Solomon-Page are in the staffing industry, in which they identify companies in need of staffing services; solicit their business; build the relationship by providing quality personnel and responsive support; and bill competitively for the companies' services ( id., ¶¶ 5-9). Throughout his employment with both Kforce and Solomon Page, Kam worked as a recruiter, and placed temporary job candidates in the fields of accounting and finance (Kam Aff., ¶¶ 4-7). All of Kam's work, while at both Kforce and Solomon-Page, has been based in New Jersey, and focused on the placement of New Jersey candidates with New Jersey companies ( id., ¶¶ 5, 7). Kam lives in West Orange, New Jersey, and has limited involvement or contacts, both personally and professionally, with the State of New York ( id., ¶¶ 1, 8).
Where, as here, a particular defendant is not domiciled in New York, a plaintiff must allege jurisdictional contacts that, if proven, would be sufficient to demonstrate that an exercise of personal jurisdiction would be proper under either CPRL 301 (New York's general jurisdiction statute) or CPLR 302 (New York's long-arm jurisdiction statute). As the party seeking to assert personal jurisdiction, Kforce bears the burden of proof on this issue ( O'Brien v Hackensack Univ. Med. Ctr., 305 AD2d 199, 200 [1st Dept 2003] [on a motion to dismiss for lack of personal jurisdiction, "the burden rests on plaintiff as the party asserting jurisdiction"]; see also LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210).
Kforce asserts that jurisdiction rests over Kam pursuant to CPLR 302 (a) (1) and (a) (3). However, Kforce has not met its burden with respect to Kam. Indeed, the following undisputed facts strongly compel dismissal of the complaint as to Kam for lack of personal jurisdiction: (1) Kam resides in New Jersey; (2) Kam formed his contract with Kforce in New Jersey; (3) while employed by Kforce, Kam worked only in Kforce's New Jersey office; (4) Kam's job with Kforce involved recruiting and placing New Jersey candidates for jobs with New Jersey employers; (5) throughout his employment with Solomon-Page, Kam has worked only in Solomon-Page's New Jersey office; and (6) Kam's job with Solomon-Page is to recruit and place New Jersey candidates for jobs with New Jersey employers.
Pursuant to CPLR 302 (a) (1), New York's long-arm statute, New York courts can exercise personal jurisdiction over any non-domiciliary who, in person or through his agent, "transacts any business within the state, or contracts anywhere to supply goods or services in the state," but only with regard to causes of action "arising from" such in-state transaction of business. Personal jurisdiction does not exist unless the non-domiciliary "has purposefully transacted business within the state, and there is a substantial relationship' between this activity and the plaintiff's cause of action" ( Greco v Ulmer Berne LLP ,23 Misc 3d 875, 880 [Sup Ct, Kings County 2009], quoting Cornely v Dynamic HVAC Supply, LLC ,44 AD3d 986, 986 [2d Dept 2007]; see also PDK Labs, Inc. v Friedlander, 103 F3d 1105, 1109 [2d Cir 1997] [a defendant is subject to personal jurisdiction under CPLR 302 (a) (1) if it "transacts any business within the state" and the cause of action "arises out of" that transaction]). Thus, it is "[e]ssential to the maintenance of a suit against a non-domiciliary under" CPLR 302 (a) (1) that there exist "some articulable nexus between the business transacted and the cause of action sued upon" ( McGowan v Smith, 52 NY2d 268, 272; accord Kreutter v McFadden Oil Corp., 71 NY2d 460). "[J]urisdiction is not justified where the relationship between the claim and the transaction is too attenuated" or "merely coincidental" ( Johnson v Ward ,4 NY3d 516, 520; accord O'Brien v Miller ,60 AD3d 555 [1st Dept 2009]).
Applying the above-cited principles, and crediting the non-conclusory allegations advanced by plaintiffs ( Brandt v Toraby, 273 AD2d 429 [2d Dept 2000]), it is apparent that Kam's minimal contacts with New York are not sufficient to constitute the purposeful activity required for long-arm jurisdiction pursuant to CPLR 302 (a) (1).
In support of its argument for jurisdiction under CPLR 302 (a) (1), Kforce has not established that Kam transacted business in New York, or that the causes of action against Kam arise out of the alleged transactions in New York. Instead, Kforce simply provides a laundry list of alleged activities by Kam that are supposedly related to New York. However, Kforce does not allege any activities or transactions in New York by Kam since terminating his employment with Kforce, and joining Solomon-Page. Moreover, all of the activities alleged to have occurred in New York are either overstated or misrepresented.
For instance, Kforce suggests that Kam is subject to jurisdiction in New York because Kforce classifies the department that he worked in as the "NY/NJ Market" (Pl Br., at 19). However, it is undisputed that Kam only worked in Kforce's Parsippany, New Jersey office. The name that Kforce uses to refer to Kam's department is arbitrary and irrelevant.
Similarly, Kforce asserts that Kam "regularly received emails from other Kforce employees in New York," and that "Kforce applicants also reached out to Kam to submit them for positions in New York" ( id. at 19-20). To the extent that Kam was the recipient of any such communications from New York, Kam did not "purposefully avail" himself of New York ( see Fischbarg v Doucet ,9 NY3d 375, 380 ["Purposeful activities are those with which a defendant, through volitional acts, avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws'"]).
Moreover, although Kforce asserts that "Kam called and emailed Kforce Clients, located in New York, about interviews and job positions" (Pl Br., at 20), such activities do not constitute the transaction of business in New York for jurisdictional purposes ( see International Customs Assoc., Inc. v Ford Motor Co., 893 F Supp 1251, 1261 [SD NY 1995], affd 201 F3d 431 [2d Cir 1999], cert denied 530 US 1264 ["Telephone calls and correspondence sent into New York, by a non-domiciliary defendant who is outside New York, generally are insufficient to establish personal jurisdiction"]; Deutsche Bank Sec. Inc. v Montana Bd. of Invs. , 21 AD3d 90, 94 [1st Dept 2005], affd 7 NY3d 65, cert denied 549 US 1095 ["electronic communications, telephone calls or letters, in and of themselves, are generally not enough to establish jurisdiction"]; Warck-Meister v Diana Lowenstein Fine Arts ,7 AD3d 351, 352 [1st Dept 2004] ["The various telephone, fax and e-mail communications upon which plaintiff relies, purportedly concerning defendants' exhibition and sale of her art, are not, under the circumstances herein, adequate transactional predicates for an assertion of jurisdiction under CPLR 302 (a) (1)"]).
Kforce's allegation that Kam "also attended at least three sales training sessions for Kforce in New York" (Pl Br., at 20) also fails to give rise to personal jurisdiction. These generic company-wide training meetings are wholly unrelated to the claims at issue in the complaint. More importantly, "[t]o establish jurisdiction in New York based on a meeting or meetings in that state, the meeting or meetings must be essential to the formulation of a business relationship" ( United Computer Capital Corp. v Secure Prods., L.P., 218 F Supp 2d 273, 278 [ND NY 2002]).
Accordingly, Kforce has failed to sustain its burden of demonstrating, or even suggesting, that Kam transacted any business in New York, let alone any business that was "substantially related" to Kforce's causes of action against Kam. Indeed, Kforce admits that it is unaware of any actions by Kam directed to New York, in general, or affecting Kforce's New York business, in particular, since his employment at Solomon-Page (Pl Br., at 21).
Kforce also fails to meet its burden with respect to CPLR 302 (a) (3), which allows the court "to exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent . . . commits a tortious act without the state causing injury to person or property within the state," but only if he "(i) regularly does or solicits business or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce."
Jurisdiction pursuant to CPLR 302 (a) (3) (i) is inappropriate because Kforce fails to present any facts showing that Kam either "regularly does or solicits business" in New York, "or derives substantial revenue" from any activities in New York. As previously noted, Kam works in New Jersey, placing New Jersey staffing candidates with New Jersey companies ( see Kam Aff., ¶¶ 3, 5-7). His business activities are, and have always been primarily, if not exclusively, directed towards New Jersey ( id., ¶¶ 4-7). Moreover, there is no evidence that he has engaged in any regular or persistent course of conduct in relation to New York, and indeed, with regard to the claims at issue, any activities in which Kam engaged occurred primarily, if not exclusively, in New Jersey ( id., ¶¶ 4-8).
Further, the complaint does not allege facts sufficient to demonstrate personal jurisdiction under subsection (ii). Kforce alleges no facts that would support a contention that Kam should have expected his allegedly tortious conduct to have an impact in New York. Kam is a New Jersey resident, who has worked solely in the New Jersey offices of both Kforce and Solomon-Page, where he placed New Jersey candidates with New Jersey companies. Kforce does not dispute this. The mere fact that Kam received occasional e-mails from individuals in New York, without any evidence of any placements or transactions arising out of such communications, would not reasonably cause one to expect that their alleged activities would result in consequences in New York.
In addition, the mere allegation that Kforce has its principal place of business in New York cannot be the basis for such an expectation ( see Fantis Foods, Inc. v Standard Importing Co., 49 NY2d 317, 326 [dismissing claim for tortious interference with contract for lack of personal jurisdiction under CPLR 302 (a) (3) on the ground that "the residence or domicile of the injured party within a State is not a sufficient predicate for jurisdiction"]; see also Sybron Corp. v Wetzel, 61 AD2d 697, 702 [4th Dept], appeal dismissed 45 NY2d 734 ["Section 302 (a) (3) is not satisfied by remote or consequential injuries which occur in New York only because the plaintiff is domiciled, incorporated or doing business in the state"]).
More importantly, Kforce did not suffer any consequence or injury in New York because (1) it is a Florida corporation; and (2) any alleged interference or unfair competition by Kam could only have taken place or caused harm in New Jersey, where he worked.
Moreover, Kforce has failed to present any evidence that Kam derives "substantial revenue from interstate or international commerce" (CPLR 302 [a] [ii]). Although Kforce alleges that Kam is subject to personal jurisdiction because he "received revenue as a result of his servicing Kforce's New York Clients and Applicants" (Pl Br., at 23-24), the issue is whether Kam derives substantial, not just any, revenue from interstate or international commerce. Additionally, in support of its argument, Kforce attaches e-mail communications received by Kam regarding potential job openings or placements. None of the documents relied upon by Kforce evidence, or even indicate, that Kam placed a candidate in a New York company, or conducted any other transactions, that directly resulted in Kam deriving any revenue from interstate commerce.
In sum, the extremely limited contacts that Kam has with New York are insufficient to sustain personal jurisdiction over him. As such, his motion to dismiss the complaint is granted.
I have considered the remaining arguments, and I find them to be without merit.
Accordingly, it is
ORDERED that the motion of defendant Eric Kam to dismiss the complaint herein is granted and the complaint is dismissed in its entirety as against said defendant, with costs and disbursements to said defendant as taxed by the Clerk of the Court, and the Clerk is directed to enter judgment accordingly in favor of said defendants; and it is further
ORDERED that the action is severed and continued against the remaining defendants.