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holding alter ego theory of liability inapplicable because KPMG was not a corporate entity but a limited liability partnership
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Civil Action No. 3:03-CV-2138-B.
September 3, 2004
MEMORANDUM ORDER
Before the court are the motions of the defendants Mohammed Benslimane ("Benslimane") and Moulay Abdellah Alaoui ("Alaoui"), Azeddine Benmoussa ("Benmoussa"), Abdullah Kamel, Saleh Abdullah Kamel ("Saleh Kamel"), Richard Menkin ("Menkin"), and Shezi Nackvi ("Nackvi") (collectively, the "defendants") to dismiss, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, the complaint of the plaintiffs Skidmore Energy, Inc. ("Skidmore") and Geoscience International, Inc. ("Geoscience") (together, the "plaintiffs") for lack of personal jurisdiction. For the reasons set forth below, the defendants' motions are GRANTED.
I. BACKGROUND
This case arises out of the spoiled investments of two American companies in Maghreb Petroleum Exploration Corporation ("MPE") (formerly Lone Star Energy Corporation), a Moroccan energy company. See generally Plaintiffs' Original Complaint ("Complaint"). On July 20, 1999, Skidmore, a Texas oil and gas exploration company with its principal place of business in Texas, formed and capitalized MPE in Morocco for the purpose of discovering commercial quantities of hydrocarbons. See id. at 2, ¶¶ 1, 4, 7. From July 1999 through December 2000, Skidmore invested substantial sums of money into MPE, which included employing Geoscience, a Texas corporation with its principal place of business in Texas, to collect geologic data to detect the presence of hydrocarbons under the Moroccan soil. See id. at 2, ¶¶ 11-13. Skidmore allegedly made this investment after retaining the services of, and receiving assurances from, Benmoussa, an accountant at a Moroccan subsidiary of KPMG. See id. at 3, ¶¶ 5-7; see also Motion to Dismiss on Behalf of Defendant Benmoussa under Federal Rules of Civil Procedure 12(b)(2), (4), (5), and Brief in Support Thereof ("Benmoussa Motion Brief") at 5. Benmoussa is a citizen of Morocco. Benmoussa Motion Brief at 5; Complaint at 3. In May 2000, Skidmore's investment began to pay off when one well "cut pay" by striking a deposit of oil, natural gas, and gas condensate. Complaint at ¶ 14.Sometime before September 2000, Skidmore agreed to take on several Moroccan investors, including Alaoui and Benslimane, two businessmen who allegedly invested in MPE through a Liechtenstein company called Mideast Fund for Morocco, Ltd. ("MFM") (formerly Armadillo Holdings, Ltd.). See id. at ¶¶ 8-10, 16. Skidmore asserts that it later discovered that MFM was actually owned by Bandar Bin Sultan ("Bandar") and the Dallah al Baraka Group, a Saudi Arabian corporation allegedly controlled by Saleh Kamel, see id. at 4-7, ¶¶ 27-28, and his son, Abdullah Kamel, see Plaintiffs' Response to Defendant Saleh Abdullah Kamel's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) at 2. Saleh Kamel, Abdullah Kamel, and Bandar all appear to be citizens of Saudi Arabia. See Complaint at 5-7.
According to the plaintiffs, MFM "refused to disclose its true ownership, refused to cooperate in providing the financing it had agreed to provide [to MPE], and interfered with Skidmore's efforts to bring in additional financing or shareholders. . . ." Complaint at ¶ 31; see also id. at ¶¶ 16-26, 34-36 (outlining the rocky investment relationship between Skidmore, MFM, and MPE). Specifically, the plaintiffs assert that the defendants MFM and Mediholding, a Moroccan company allegedly controlled by Alaoui and Benslimane, staged an illegal takeover of MPE, see id. at 7, ¶¶ 31-43, and that the defendants generally "carried out a scheme to destroy the value of Plaintiff Skidmore's equity in [MPE]." Id. at ¶ 41. The plaintiffs also argue that the defendants MFM and Mediholding improperly replaced MPE's president "with Dallah al Baraka's representative, Defendant Nackvi." Id. at ¶ 33. Nackvi is employed by an English company, Samaha Trading (UK), Ltd. ("Samaha Trading") (formerly Al Baraka Management Company (Offshore), Ltd.), and is currently a director of MPE. See id. at 6, 7; Brief in Support of Motion to Dismiss under Rule 12(b)(2) of Defendant Shezi Nackvi ("Nackvi Motion Brief") at 1-2. As a result of the defendants' allegedly illegal actions, the plaintiffs contend that MPE became "financially impaired, alienated its creditors, shut down all offshore and onshore operations" see Complaint at ¶ 37, and fraudulently diluted of the plaintiffs' interest in MPE.
The plaintiffs imply, without making specific factual assertions, that Menkin is somehow related to the this alleged scheme through his relationship with Samaha Trading and Nackvi. See Complaint at 7. Menkin is a director of MPE who is currently employed by Samaha Trading in London, England See id.; Brief in Support of Motion to Dismiss under Rule 12(b)(2) of Defendant Richard Menkin ("Menkin Motion Brief") at 1-2.
On September 19, 2003, the plaintiffs filed suit in this court, seeking recovery against various defendants for alleged violations of the United States' Sherman Antitrust Act, 15 U.S.C. §§ 1-2, and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 et seq., and for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, libel, civil conspiracy, and fraud. See generally Complaint.
From February 20, 2004 to May 17, 2004, each of the nonresident defendants being sued in their individual capacity — Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi — filed a motion, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, to dismiss the case for lack of personal jurisdiction. The plaintiffs filed a boilerplate response to each motion, asserting that each defendant has subjected himself to the jurisdiction of this court.
See generally Motion of Mohammed Benslimane and Moulay Abdellah Alaoui to Dismiss for Lack of Personal Jurisdiction under Rule 12(b)(2), for Forum Non Conveniens under Rule 12(b)(3), for Insufficient Service of Process under Rule 12(b)(5) and for Failure to State a Claim upon which Relief Can Be Granted under Rule 12(b)(6) ("Benslimane and Alaoui Motion"); Benmoussa Motion Brief; Motion of Abdullah Kamel to Dismiss for Lack of Personal Jurisdiction under Rule 12(b)(2) and for Failure to State a Claim upon which Relief Can Be Granted under Rule 12(b)(6); Motion of Saleh Abdullah Kamel to Dismiss for Lack of Personal Jurisdiction under Rule 12(b)(2) and for Failure to State a Claim upon which Relief Can Be Granted under Rule 12(b)(6); Menkin Motion Brief; Motion of Shezi Nackvi to Dismiss for Lack of Personal Jurisdiction under Rule 12(b)(2) and for Failure to State a Claim upon which Relief Can Be Granted under Rule 12(b)(6).
See generally Brief in Support of Plaintiffs' Response to Defendant Moulay Abdellah Alaoui's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) ("Response Brief to Alaoui"); Brief in Support of Plaintiffs' Response to Defendant Azeddine Benmoussa's Motion to Dismiss under Rules 12(b)(2), 12(b)(4) and 12(b)(5) ("Response Brief to Benmoussa"); Brief in Support of Plaintiffs' Response to Defendant Mohammed Benslimane's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) ("Response Brief to Benslimane"); Brief in Support of Plaintiffs' Response to Defendant Abdullah Kamel Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) ("Response Brief to Abdullah Kamel"); Brief in Support of Plaintiffs' Response to Defendant Saleh Abdullah Kamel's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) ("Response Brief to Saleh Kamel"); Brief in Support of Plaintiffs' Response to Defendant Richard Menkin's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) ("Response Brief to Menkin"); Brief in Support of Plaintiffs' Response to Defendant Shezi Nackvi's Motion to Dismiss under Rules 9(b) [sic] and 12(b)(6) ("Response Brief to Nackvi").
II. ANALYSIS A. Personal Jurisdiction 1. The Factual Standard: A Prima Facie Case
When a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the district court's jurisdiction over the nonresident. Gardemal v. Westin Hotel Co., 186 F.3d 588, 592 (5th Cir. 1999); Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994). If the district court chooses to decide the matter without an evidentiary hearing, the plaintiff may meet its burden by presenting a prima facie case for personal jurisdiction. Gardemal, 186 F.3d at 592; Wilson, 20 F.3d at 648.The court will take the allegations of the complaint as true, except where they are controverted by opposing affidavits, and all conflicts in the facts are resolved in favor of the plaintiff. Gardemal, 186 F.3d at 592; Wilson, 20 F.3d at 648. In making its determination, the court may consider affidavits, interrogatories, depositions, oral testimony, or any combination of recognized discovery methods. Allred v. Moore Peterson, 117 F.3d 278, 281 (5th Cir. 1997); Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985).
2. The Legal Standard
A federal district court may exercise personal jurisdiction over a nonresident defendant if: (1) the long-arm statute of the forum state permits the exercise of personal jurisdiction over the defendant; and (2) the exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002); see also J.R. Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 869 (5th Cir. 2000). A defendant is amenable to the personal jurisdiction of a federal court sitting in a federal question case to the same extent that it would be amenable to the jurisdiction of a state court in the same forum. Burstein v. State Bar of Cal., 693 F.2d 511, 514 (5th Cir. 1982) ("[A] federal court, even in a federal question case, can use a state long-arm statute only to reach those parties whom a court of the state could also reach under it."). Applying state law, this court must first determine whether Texas, the forum state, could assert long-arm jurisdiction. Pedelahore v. Astropark, Inc., 745 F.2d 346, 347 (5th Cir. 1984). Because the Texas long-arm statute confers jurisdiction to the limits of the federal constitution, Access Telecom, Inc. v. MCI Telecomm. Corp., 197 F.3d 694, 716 (5th Cir. 1999); Hall v. Helicopteros Nacionales de Colombia, S.A., 638 S.W.2d 870, 872 (Tex. 1982), rev'd on other grounds, 466 U.S. 408 (1984), the court need only concern itself with the federal due process inquiry. Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999); Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 418 (5th Cir. 1993); see also TEX.CIV.PRAC. REM. CODE ANN. § 17.041, et seq. (Vernon 1997) (Texas long-arm statute).
3. Due Process Requirements
Due process requires the satisfaction of two elements to exercise personal jurisdiction over a nonresident defendant: (1) the nonresident must have some minimum contact with the forum that results from an affirmative act on his part such that the nonresident defendant could anticipate being haled into the courts of the forum state; and (2) it must be fair or reasonable to require the nonresident to defend the suit in the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-77 (1985). The Due Process Clause ensures that persons have a "fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign." Id. at 472 (quoting Shaffer v. Heinter, 433 U.S. 186, 218 (1977) (Stevens, J., concurring)).
(a) Minimum Contacts
To establish minimum contacts, a nonresident defendant must do some act by which it "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)); see also Electrosource, Inc. v. Horizon Battery Techs., Ltd., 176 F.3d 867, 871 (5th Cir. 1999). The unilateral activity of one asserting a relationship with the nonresident defendant does not satisfy this requirement. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298 (1980) (quoting Hanson, 357 U.S. at 253). In determining whether the exercise of jurisdiction is appropriate, the Supreme Court has considered whether a defendant's contacts with the forum state make it reasonable to require the defendant to defend the particular suit in that forum. Quill Corp. v. North Dakota, 504 U.S. 298, 307 (1992); Shaffer, 433 U.S. at 203.
Minimum contacts can be sufficient to establish two types of in personam jurisdiction over a nonresident defendant: specific jurisdiction and general jurisdiction. Specific jurisdiction exists if the cause of action is related to, or arises out of, the nonresident defendant's contacts with the forum state and those contacts meet the due process standard. Stripling, 234 F.3d at 871. "Specific jurisdiction over a nonresident corporation is appropriate when that corporation has purposefully directed its activities at the forum state and the `litigation results from alleged injuries that "arise out of or relate to" those activities.'" Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000) (quoting Burger King, 471 U.S. at 472; Helicopteros, 466 U.S. at 414). General jurisdiction, on the other hand, may be found when the claim is unrelated to the nonresident's contacts with the forum, but where those contacts are "continuous and systematic." Helicopteros, 466 U.S. at 415-16; Alpine View, 205 F.3d at 215.
Under either a specific or general jurisdiction analysis, "the constitutional touchstone remains whether the defendant purposefully established `minimum contacts' in the forum [s]tate." Burger King, 471 U.S. at 474 (quoting Int'l Shoe, 326 U.S. at 316). The "purposeful availment" requirement of the minimum contacts inquiry "ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts . . . or of the `unilateral activity of another party or a third person.'" Id. at 475 (citations omitted). A plaintiff must establish a substantial connection between the nonresident defendant and the forum state. Jones v. Petty-Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1068 n. 9 (5th Cir. 1992). "[W]hether the minimum contacts are sufficient to justify subjection of the non-resident to suit in the forum is determined not on a mechanical and quantitative test, but rather under the particular facts upon the quality and nature of the activity with relation to the forum state." Miss. Interstate Express, Inc. v. Transpo, Inc., 681 F.2d 1003, 1006 (5th Cir. 1982) (emphasis added); see also Coats v. Penrod Drilling Corp., 5 F.3d 877, 884 (5th Cir. 1993).
(1) Specific Jurisdiction
With respect to each of these defendants — Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi — the plaintiffs contend that this court may find personal jurisdiction on three grounds. First, the plaintiffs assert that this court has jurisdiction under the Texas long-arm statute because the defendants committed an intentional tort — the alleged fraudulent dilution of the Plaintiffs' interest in MPE — with effects in Texas. Second, the plaintiffs assert personal jurisdiction under RICO, arguing that each of the defendants committed "intentional torts directed at Texas and use of the District Courts in Texas." Third, the plaintiffs argue that personal jurisdiction exists under the "absent co-conspirator doctrine."
See Response Brief to Alaoui at 2-4; Response Brief to Benmoussa at 2-4; Response Brief to Benslimane at 2-4; Response Brief to Abdullah Kamel at 2-4; Response Brief to Saleh Kamel at 2-4; Response Brief to Menkin at 2-4; Response Brief to Nackvi at 2-4.
See Response Brief to Alaoui at 2-3; Response Brief to Benmoussa at 2-3; Response Brief to Benslimane at 2-3; Response Brief to Abdullah Kamel at 2-3; Response Brief to Saleh Kamel at 2-3; Response Brief to Menkin at 2-3; Response Brief to Nackvi at 2-3.
See Response Brief to Alaoui at 3; Response Brief to Benmoussa at 3; Response Brief to Benslimane at 3; Response Brief to Abdullah Kamel at 3; Response Brief to Saleh Kamel at 3; Response Brief to Menkin at 3; Response Brief to Nackvi at 3-4.
See Response Brief to Alaoui at 3-4; Response Brief to Benmoussa at 3-4; Response Brief to Benslimane at 3-4; Response Brief to Abdullah Kamel at 3-4; Response Brief to Saleh Kamel at 4; Response Brief to Menkin at 3-4; Response Brief to Nackvi at 4.
As discussed below, the plaintiffs' arguments are without merit and do not make out a prima facie case for personal jurisdiction over any of these defendants.
(i) Jurisdiction under the Texas Long-Arm Statute
The defendants argue that the plaintiffs have not made any allegations that would subject them to jurisdiction in Texas and, therefore, that they are not subject to personal jurisdiction in Texas because minimum contacts are absent. The court agrees.
See Brief in Support of Motion to Dismiss Under Rule 12(b)(2) of Defendants, Mohammed Benslimane and Moulay Abdellah Alaoui ("Benslimane and Alaoui Motion Brief") at 2-6; Benmoussa Motion Brief at 4-6; Brief in Support of Motion to Dismiss under Rule 12(b)(2) of Defendant, Abdullah Kamel ("Abdullah Kamel Motion Brief") at 2-6; Brief in Support of Motion Saleh Abdullah Kamel to Dismiss for Lack of Personal Jurisdiction under Rule 12(b)(2) ("Saleh Kamel Motion Brief") at 2-8; Menkin Motion Brief at 2-4; Nackvi Motion Brief at 2-6.
Minimum contacts exist where a nonresident defendant expressly aims intentionally tortious activity into the forum state. See Calder v. Jones, 465 U.S. 783, 789-90 (1984). "Even an act done outside the state that has consequences or effects within the state will suffice as a basis for jurisdiction in a suit arising from those consequences if the effects are seriously harmful and were intended or highly likely to follow from the nonresident defendant's conduct." Guidry, 188 F.3d at 628.
The Calder "effects" test applies to intentional business torts. Although Calder involved the intentional tort of libel, the Fifth Circuit has held that the Supreme Court did not intend to limit its holding only to libel cases. See Guidry v. United States Tobacco Co., 188 F.3d 619, 629 (5th Cir. 1999).
However, the Calder "effects" test "is not a substitute for a nonresident's minimum contacts that demonstrate purposeful availment of the benefits of the forum state." Allred, 117 F.3d at 286. The mere allegation that the plaintiff feels the effect of the defendant's tortious conduct in the forum state merely because the plaintiff is located there is insufficient to satisfy Calder. See Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869-870 (5th Cir. 2001). According to the Panda Brandywine court:
If we were to accept Appellants' arguments, a nonresident defendant would be subject to jurisdiction in Texas for an intentional tort simply because the plaintiff's complaint alleged injury in Texas to Texas residents regardless of the defendant's contacts, and would have to appear in Texas to defend the suit "no matter how groundless or frivolous the suit may be." Such result would completely vitiate the constitutional requirement of minimum contacts and purposeful availment.Id. at 870 (citation omitted). Thus, Calder did not change the fact that even in intentional tort cases the jurisdictional inquiry "focuses on the relations among the defendant, the forum and the litigation." See Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780 (1984). "Nor did Calder carve out a special intentional torts exception to the traditional specific jurisdiction analysis, so that a plaintiff could always sue in his or her home state." IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 265 (3d Cir. 1998).
In this case, the plaintiffs have failed to carry their burden of establishing this court's in personam jurisdiction over nonresident defendants Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi. The plaintiffs make the following jurisdictional allegations with respect to each designated defendant:
Alaoui: "Defendant Moulay Abdellah Alaoui . . . is a businessman in Morocco with his principal address [in] . . . Rabat, Morocco." "Alaoui is subject to the personal jurisdiction of this court because its [sic] directors committed intentional torts directed towards the Plaintiffs, who are residents of Texas, and because he has already availed itself [sic] the benefits and protections of [this court]."
Benmoussa: "Defendant Azeddine Benmoussa . . . is an accountant with KPMG having it's principal office [in] . . . Rabat, Morocco. . . . On information and belief, he is a citizen of Morocco." "Benmoussa is subject to the personal jurisdiction of this court he [sic] committed intentional torts directed towards the plaintiffs, who he knew to be residents of Texas." "[Benmoussa] claimed to be the sole representative of KPMG in Morocco. KPMG is subject to the personal jurisdiction in Texas because it is a registered business entity in the state."
Benslimane: "Defendant Moahmmed Benslimane . . . is a banker with his office [in] . . . Rabat, Morocco. Mr. Benslimane does business worldwide and among other things also runs a `political research institute' in Paris, France." "Benslimane is subject to the personal jurisdiction of this court because its [sic] directors committed intentional torts directed towards the Plaintiffs, who are residents of Texas, and because he has already availed itself [sic] to the benefits and protections of [this court]."
Abdullah Kamel: "Defendant Abdellah [sic] Kamel . . . is the son of [Saleh] Kamel and is believed to be the chief lieutenant and operating officer of the Kamel organization, and has been at various times a director of Defendant MPE. He may be served [in] . . . Saudi Arabia . . . or [in] . . . London, . . . England" "Abdullah Kamel is subject to the personal jurisdiction of this court because he[,] as a director of MFM, committed intentional torts directed towards the Plaintiffs, who are residents of Texas, and because MFM directly and as a controlling interest of MPE, has already availed itself to the benefits and protections of [this court]."
Saleh Kamel: "Defendant S.A. Kamel is the founder of the Dallah al Baraka Group and owns all or the majority of, or exercises control over, numerous businesses throughout the world . . . [and] various financial institutions throughout the Middle East and Africa. . . ." Saleh Kamel "has frequently visited the United States in furtherance of the wrongful activities complained of herein." He may be served [in] . . . Saudi Arabia . . . or [in] . . . London . . . England" "Saleh Abdullah Kamel is subject to the personal jurisdiction of this court because[,] as director of [Samaha Trading] and MFM, he committed intentional torts directed towards the Plaintiffs, who are residents of Texas. [Samaha Trading], as a controlling interest of MFM and MPE, has already availed itself to the benefits and protections of [this court]."
Menkin: "Defendant Richard Menkin . . . is the Deputy Managing Director for Samaha Trading (UK) Ltd. and has a principal place of business [in] London . . . England" "Menkin is subject to the personal jurisdiction of this court because he committed intentional torts directed towards the Plaintiffs, who are residents of Texas, and because he, as director of [MPE], has already availed himself to the benefits and protections of [this court]."
Nackvi: "Defendant Shezi Nackvi . . . is a MPE Director and has a principal place of business at Samaha Trading (UK) Ltd. located [in] . . . London . . . England" "Nackvi is subject to the personal jurisdiction of this court because he committed intentional torts directed towards the Plaintiffs, who are residents of Texas, and because he, as director of [MPE], has already availed himself of the benefits and protections of [this court]."
Complaint at 7; see also Benslimane and Alaoui Motion at ¶ 1.
Plaintiffs' Response to Defendant Moulay Abdellah Alaoui's Motion to Dismiss under Rules 12(b)(2), 12(b)(3), 12(b)(5), and 12(b)(6) at 2.
Complaint at 3; see also Benmoussa Motion Brief at 5.
Plaintiffs' Response to Defendant Azeddine Benmoussa's Motion to Dismiss under Rules 12(b)(2), 12(b)(4) and 12(b)(5) at 2.
Response Brief to Benmoussa at 3.
Complaint at 6; see also Benslimane and Alaoui Motion at ¶ 1.
Plaintiffs' Response to Defendant Mohammed Benslimane's Motion to Dismiss under Rules 12(b)(2), 12(b)(3), 12(b)(5), and 12(b)(6) at 2.
Complaint at 6; see also Abdullah Kamel Motion Brief at 1-2.
Plaintiffs' Response to Defendant Abdullah Kamel's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) at 2.
Complaint at 5-6; see also Saleh Kamel Motion Brief at 2.
Complaint at 6; see also Saleh Kamel Motion Brief at 2-3.
Complaint at 6.
Plaintiffs' Response to Defendant Saleh Abdullah Kamel's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) at 2.
Complaint at 7; see also Menkin Motion Brief at 1-2.
Plaintiffs' Response to Defendant Richard Menkin's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) at 2.
Complaint at 7; see also Nackvi Motion Brief at 1-2.
Plaintiffs' Response to Defendant Shezi Nackvi's Motion to Dismiss under Rules 12(b)(2) and 12(b)(6) at 2.
The plaintiffs ask the court to fill in the interstices left vacant by their failure to allege sufficient facts to support a connection between Texas and any of these defendants. The plaintiffs' allegations about these nonresident defendants are plainly insufficient to establish a prima facie case for jurisdiction, as (1) there is no evidence that any defendant expressly aimed his conduct at Texas, and (2) there is no evidence that any defendant purposefully availed himself of the privilege of conducting activities within Texas.
Each defendant correctly asserts that the plaintiffs' complaint establishes that he is a nonresident. See Benslimane and Alaoui Motion Brief at 2; Benmoussa Motion Brief at 5; Abdullah Kamel Motion Brief at 2; Saleh Kamel Motion Brief at 3; Menkin Motion Brief at 2; Nackvi Motion Brief at 2; see also Complaint at 3-7.
First, the plaintiffs have failed to point to any actions that adequately demonstrate that Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, or Nackvi targeted (or "expressly aimed") their conduct at Texas. See Noonan v. Winston Co., 135 F.3d 85, 90-91 (1st Cir. 1998) (holding that the Calder effects test was not satisfied, even though plaintiffs felt tortious conduct there, because defendants did not target the forum); Gen. Elec. Capital Corp. v. Grossman, 991 F.2d 1376, 1387-88 (8th Cir. 1993) (concluding that Calder is of little help to a plaintiff where the "`focal point' of the alleged wrongdoing" occurred outside of the forum state, even where the "effects of the harm" occurred inside the forum state). In fact, it is clear that the focal point of the alleged wrongdoing occurred in Morocco, not Texas. Plaintiffs concede that MPE is a Moroccan company, see Complaint at 4, and that the alleged fraudulent dilution of the plaintiffs' interest in MPE "took place in Morocco." Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi have no relation to Texas other than the fortuity that the plaintiffs reside there. See Panda Brandywine, 253 F.3d at 869; Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 772-73 (5th Cir. 1988).
Conclusory allegations regarding the foreseeability of damage to Skidmore and Geoscience, two Texas corporations, see Response Brief to Alaoui at 2-3; Response Brief to Benmoussa at 2-3; Response Brief to Benslimane at 2-3; Response Brief to Abdullah Kamel at 2-3; Response Brief to Saleh Kamel at 2-3; Response Brief to Menkin at 2-3; Response Brief to Nackvi at 2-3, are insufficient to confer specific jurisdiction on this court. See Panda Brandywine, 253 F.3d at 869 ("[T]he prima-facie-case requirement does not require the court to credit conclusory allegations, even if uncontroverted.").
See Response Brief to Alaoui at 2-3; Response Brief to Benmoussa at 2-3; Response Brief to Benslimane at 2-3; Response Brief to Abdullah Kamel at 2-3; Response Brief to Saleh Kamel at 2-3; Response Brief to Menkin at 2-3; Response Brief to Nackvi at 3.
Second, there are no facts suggesting that any of these nonresident defendants purposefully availed themselves of the privilege of conducting activities in Texas and invoked the benefits and protections of Texas' laws. See Panda Brandywine, 253 F.3d at 869 (finding the plaintiff's allegations to support personal jurisdiction insufficient where there were no facts to suggest that the defendant "purposefully availed itself of the privilege of conducting activities in Texas . . ."). The plaintiffs cite no legal authority to support the argument that Alaoui, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and/or Nackvi, through their interest in, or control or management of, MFM and MPE, can be rendered liable in this court in their individual capacities merely because MFM and MPE made application for service in the Northern District of Texas in connection with a lawsuit filed in Morocco against the plaintiffs. The defendants' "contacts with [Texas] are not to be judged according to [MFM and MPE's] activities [here]." See Calder, 465 U.S. at 790. Furthermore, because MFM and MPE's application for service did not involve a claim for affirmative relief, it cannot serve as a basis for waiving an objection to personal jurisdiction. See PaineWebber, Inc. v. Chase Manhattan Private Bank ( Switzerland), 260 F.3d 453, 460-61 (5th Cir. 2001) (finding that a party normally submits itself to the jurisdiction of the court only when it seeks affirmative relief "with respect to the adjudication of claims arising from the same subject matter").
See Response Brief to Alaoui at 3; Response Brief to Benslimane at 3; Response Brief to Abdullah Kamel at 3; Response Brief to Saleh Kamel at 3; Response Brief to Menkin at 3; Response Brief to Nackvi at 3.
Abdullah Kamel, Saleh Kamel, Menkin and Nackvi, as directors of either MFM or MPE, are arguably safeguarded by the fiduciary shield doctrine, which "protects an employee of a company from personal jurisdiction when the employee's actions have been on behalf of his employer." Stuart v. Spademan, 772 F.2d 1185, 1197 (5th Cir. 1985).
According to the Supreme Court in Calder:
Petitioners are correct that their contacts with California are not to be judged according to their employer's activities there. On the other hand, their status as employees does not somehow insulate them from jurisdiction. Each defendant's contacts with the forum state must be assessed individually.Calder, 465 U.S. at 790.
The plaintiffs also incorrectly assert that Benmoussa, a Moroccan resident employed by a KPMG subsidiary company, can be sued in Texas in his individual capacity merely because the KPMG parent company is subject to personal jurisdiction in Texas. See Response Brief to Benmoussa at 3. Minimum contacts must be met as to each defendant, including Benmoussa. Rush v. Savchuk, 444 U.S. 320, 331-32 (1980); see also Keeton, 465 U.S. at 781 n. 13. ("[J]urisdiction over an employee does not automatically follow from jurisdiction over the corporation which employs him."); Hsin Ten Enter. USA, Inc. v. Clark Enters., 138 F. Supp. 2d 449, 456-57 (S.D.N.Y. 2000) (finding jurisdiction improper under New York's analogous long-arm statute when plaintiff failed to allege that individual defendant, rather than corporation he owned, transacted business in New York); Brady v. Burtt, 979 F. Supp. 524, 529 (W.D. Mich. 1997) ("In general, the activities of an officer on behalf of a corporation do not confer jurisdiction over the officer individually."); 4A CHARLES ALAN WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE PROCEDURE (CIVIL) § 1069.4 (3d ed. 2004) ("[P]ersonal jurisdiction over individual officers and employees of a corporation may not be predicated on the federal court's jurisdiction over the corporation itself. . . ."). Here, all of the plaintiffs' allegations about Benmoussa pertain to alleged actions in Morocco, or, in one case, France — not Texas. See Complaint at 3, ¶¶ 6, 7, 29; see also Benmoussa Motion Brief at 5-6. Benmoussa's contacts with Texas are clearly not substantial enough that he could reasonably "expect to be haled before a [Texas] court." See Shaffer, 433 U.S. at 215-16.
In sum, the court concludes that the plaintiffs have failed to allege facts demonstrating that any of these nonresident defendants — Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi — had purposeful contacts with Texas that would give rise to specific jurisdiction in this court.
(ii) Jurisdiction under RICO
Next, the plaintiffs argue that Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi are amenable to this court's jurisdiction under 18 U.S.C. § 1965(b), the venue provision of RICO. The court disagrees.
See Response Brief to Alaoui at 3; Response Brief to Benmoussa at 3; Response Brief to Benslimane at 3; Response Brief to Abdullah Kamel at 3; Response Brief to Saleh Kamel at 3; Response Brief to Menkin at 3; Response Brief to Nackvi at 3-4.
Although RICO authorizes nationwide service of process, it does not provide for service of process in a foreign country. See Stauffacher v. Bennett, 969 F.2d 455, 460-61 (7th Cir. 1992) (holding that the RICO statute, 18 U.S.C. § 1965(b), authorizes nationwide but not international service of process and stating that the plaintiff must rely on a state long-arm statute for authorization to serve an out-of-country defendant), cert. denied, 506 U.S. 1034 (1992); Avianca, Inc. v. Corriea, 705 F. Supp. 666, 684 (D.D.C. 1989) (finding that the RICO statute makes no provision for international service of process); Soltex Polymer Corp. v. Fortex Indus., Inc., 590 F.Supp. 1453, 1460 (E.D.N.Y. 1984) ("Although RICO authorizes nationwide service of process, see 18 U.S.C. § 1965, it does not, by its very language, authorize service in a foreign country."). Accordingly, RICO does not allow the court to exercise personal jurisdiction over foreign defendants served in a foreign country. See, e.g., Omni Video Games, Inc. v. Wing Co., 754 F.Supp. 261, 263 (D.R.I. 1991) (finding that RICO did not allow the court to exercise personal jurisdiction over Japanese defendants served in Japan); North Carolina v. Alexander Alexander Servs., Inc., 680 F. Supp. 746, 749 (E.D.N.C. 1988) ("[T]he federal RICO statute does not provide for service on foreign defendants. Accordingly, the court cannot exercise personal jurisdiction over foreign defendants. . . .") (citation omitted); Nordic Bank v. Trend Group, Ltd., 619 F. Supp. 542, 564 (S.D.N.Y. 1985) ("Since effective service is a prerequisite to the exercise of jurisdiction, any foreign party against whom a RICO claim is asserted must be served with process in this country."); see also Brink's Mat, Ltd. v. Diamond, 906 F.2d 1519, 1523-25 (11th Cir. 1990) (Aldisert, J., dissenting).
In this case, it does not appear that Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, or Nackvi were served in the United States. Accordingly, the court cannot exercise personal jurisdiction over these defendants on RICO grounds. See Alexander, 680 F. Supp. at 749; Nordic Bank, 619 F. Supp. at 564. The plaintiffs must, therefore, rely on the Texas long-arm statute for jurisdiction, see Stauffacher, 969 F.2d at 461, which does not allow this court to exercise jurisdiction, either. See Section II.A.3(a)(1)(i), supra.
(iii) Jurisdiction under the "Absent Co-Conspirator Doctrine"
The plaintiffs' third contention is that, because this court has jurisdiction over KPMG, the "absent co-conspirator doctrine" permits this court to take jurisdiction over Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi as well. The plaintiffs, however, cite no relevant authority to support jurisdiction based on this doctrine, and the court is unwilling to introduce such a doctrine into the common law.(2) General Jurisdiction
Because the plaintiffs are asserting that the claims in this case arise out of the defendants' contacts with Texas, and because the plaintiffs have not alleged that any of the defendants had continuous and systematic contacts with Texas outside of these claims, see Helicopteros, 466 U.S. at 415-16, the court will not address the question of general jurisdiction.
(b) Fair Play and Substantial Justice
The due process inquiry limits the court's power to exercise personal jurisdiction over a nonresident if the exercise of jurisdiction under the circumstances would offend "traditional notions of fair play and substantial justice." Int'l Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Because the plaintiffs have not shown that Alaoui, Benmoussa, Benslimane, Abdullah Kamel, Saleh Kamel, Menkin, or Nackvi have purposefully established the necessary minimum contacts in Texas, the court need not consider whether assertion of jurisdiction over these defendants would comport with the principles of fair play and substantial justice. See Burger King, 471 U.S. at 476; Wilson, 20 F.3d at 650 n. 7.
III. CONCLUSION
Based on the facts currently before the court, an exercise of jurisdiction over Moulay Abdellah Alaoui, Azeddine Benmoussa, Mohammed Benslimane, Abdullah Kamel, Saleh Abdullah Kamel, Richard Menkin, and Shezi Nackvi would be inconsistent with the requirements of due process. Accordingly, these defendants' motions to dismiss for lack of personal jurisdiction are GRANTED, and the plaintiffs' claims against them are DISMISSED without prejudice to their being litigated in an appropriate forum.
In light of this ruling, the following motions of the defendants' are DENIED as moot: (1) the motions of Benslimane and Alaoui, Abdullah Kamel, Saleh Kamel, Menkin, and Nackvi to dismiss for failure to state a claim under FED. R. CIV.P. 12(b)(6); (2) the motions of Benslimane and Alaoui, Abdullah Kamel, and Saleh Kamel to dismiss for lack of subject matter jurisdiction under FED. R. CIV.P. 12(b)(1); (3) the motions of Benslimane and Alaoui, and Benmoussa to dismiss for insufficient service of process under FED. R. Civ.P. 12(b)(5); (4) the motion of Benmoussa to dismiss for insufficient process under FED.R.CIV.P. 12(b)(4); and (5) the motion of Benslimane and Alaoui to dismiss for forum non conveniens under FED. R. CIV.P. 12(b)(3).