United States District Court, D. Rhode Island
The Hilb Group, LLC and The Hilb Group of New England, LLC, Plaintiffs,
Baruch Rabinowitz, Defendant.
MEMORANDUM AND ORDER
William E. Smith Chief Judge
the Court is Defendant's Objection, ECF No. 19, to
Magistrate Judge Lincoln Almond's Report and
Recommendation (“R&R”), ECF No. 18, regarding
Defendant's Motion to Dismiss for Lack of Personal
Jurisdiction pursuant to Rule 12(b)2, Fed. R. Civ. P., or for
an order transferring the case to the Eastern District of New
York pursuant to 28 U.S.C. § 1404. ECF No. 6. For the
reasons that follow, Defendant's Objection is OVERRULED
in part and GRANTED in part, and the Court ACCEPTS and ADOPTS
the R&R in part and MODIFIES in part pursuant to 28
U.S.C. § 636(c).
party objects to a report and recommendation, the Court
reviews the specific challenges de novo. 28 U.S.C.
§ 636(b)(1)(C); see United States v. Raddatz,
447 U.S. 667, 673-74 (1980). The objecting party, however, is
not permitted to raise new arguments that were not raised
before the magistrate judge. Paterson-Leitch Co. v. Mass.
Mun. Wholesale Elec. Co., 840 F.2d 985, 990-91 (1st Cir.
the R&R recommended denying the Defendant's motions.
See R&R 1. In the Objection, Defendant alleges
that the R&R is in error because:(1)Plaintiff's
claims do not arise out of or relate to Defendant's Rhode
Island activities; (2)Defendant did not purposefully avail
himself of the privileges of conducting business in Rhode
Island; (3) the “Gestalt” factors favor the
Defendant; and (4) Defendant has properly identified two key
witnesses who are unwilling to travel to Rhode Island for
trial. Obj. to R&R (“Obj.”) 2.
Court concludes that Defendant's objections are without
merit. First, contrary to Defendant's allegations,
Plaintiff's claim is related to Defendant's in-forum
contacts. See Obj. 2. As the R&R explains, for
breach of contract cases, “relatedness is established
if the defendant's contacts with the forum ‘were
instrumental either in the formation of the contract or in
its breach.'” R&R. 8 (quoting Phillips
Exeter Acad. v. Howard Phillips Fund, Inc., 196
F.3d 284, 289 (1st Cir. 1999)). The Defendant is correct that
the R&R relies in part upon allegations that are arguably
not well-plead or relevant. See R&R 9. The
R&R states that Defendant interviewed for the job in
Rhode Island, and that the Non-Solicitation agreement in
question was formed by THG-NE in Rhode Island. Id.
These allegations were not, however, stated in the Complaint
or supplemental filings and therefore cannot be considered a
well-plead fact that the Court must accept as
true. See Ticketmaster-New York, Inc. v.
Alioto, 26 F.3d 201, 203 (1st Cir. 1994) (stating that
“[the court] draw[s] the facts from the pleadings and
the parties' supplementary filings . . . taking facts
affirmatively alleged by plaintiffs as true.”). There
was therefore no well-plead evidence that this was a job
interview or that the Non-Solicitation Agreement was
“formed, at least on THG-NE's end” during
this meeting. See R&R 9.
these allegations can be considered well-plead facts, they
are irrelevant for the purposes of establishing relatedness
and the R&R's partial reliance upon them is improper.
See Phillips Exeter, 196 F.3d at 289.
the R&R correctly states that the alleged breach of
contract occurred in Rhode Island such that the relat-edness
requirement is satisfied. See R&R 9. The alleged
breach occurred in Rhode Island because Defendant allegedly
purposefully stole clients that belonged to Plaintiff,
directly injuring Plaintiff in Rhode Island. See Hugell v.
McNell, 886 F.2d 1, 4 (1st Cir. 1989) (stating that
personal jurisdiction is proper when an intentional and
harmful action from an out-of-state defendant is directed at
the forum state, and the defendant knows that the plaintiff
will be harmed by the action in the forum
state). Since the breach occurred in Rhode Island,
Plaintiff's claim arises out of, or relates to, the
Defendant's Rhode Island activities. See Phillips
Exeter, 196 F.3d at 289.
Court therefore modifies the R&R to exclude any language
that the contract was negotiated or formed by Defendant in
Rhode Island but overrules Defendant's first
Defendant purposefully availed himself to the privilege of
conducting business in Rhode Island. To demonstrate
purposeful availment, the Plaintiff must show that
“defendants voluntarily took action that made it
foreseeable they might be required to defend themselves in
court in [the forum state].” PFIP, LLC v. Planet
Fitness Enter., Inc., No. Civ.04-250-JD, 2004 WL
2538489, at *7 (D.N.H. Nov. 10, 2004) (citing Jet Wine
& Spirits, Inc. v. Bacardi & Co., 298 F.3d 1, 11
(1st Cir. 2002)). Here, Plaintiff demonstrated that Defendant
received benefits from employment in Rhode Island,
corresponded daily and extensively with the Rhode Island
office via email and telephone, relied heavily on Rhode
Island employees for job- related tasks, and visited the
Rhode Island office six times for work. See R&R
10. These voluntary actions made it foreseeable for Plaintiff
to be hauled into court in Rhode Island. See Brian
Jackson & Co. v. Eximias Pharm. Corp., 248 F.Supp.2d
31, 36-73 (D.R.I. 2003) (“[c]ourts in this and other
circuits have recognized . . . that Internet-based contacts,
such as e-mail communications, particularly when coupled with
other more traditional contacts, offer compelling grounds for
the assertion of personal jurisdiction over a non-resident
defendant”). Plaintiff therefore adequately
demonstrated that Defendant purposefully availed himself of
the privileges of conducting business in Rhode Island and
Defendant's second objection is overruled. Third, the
Defendant has not demonstrated that any of the
“Gestalt” factors weigh in his favor. These
(1) the defendant's burden of appearing [in the forum
state]; (2)the forum state's interest in adjudicating the
dispute; (3) the plaintiff's interest in obtaining
convenient and effective relief; (4) the judicial
system's interest in obtaining the most effective
resolution of the controversy; and (5) the common interests
of all sovereigns in promoting substantive social policies.
R&R 11; see also Ticketmaster-New York, 26 F.3d
at 210 (“[T]he weaker the plaintiff's showing on
the first two prongs... the less a defendant need show in
terms of unreasonableness to defeat jurisdiction”).
Plaintiff has a strong case on the first two prongs. Thus,
Defendant must meet a higher burden in demonstrating that the
Gestalt factors weigh in his favor. See Ticketmaster-New
York, 26 F.3d at 210. Defendant has not met this burden.
See Memo. In Supp. of Def. Mot. to Dismiss 13, ECF
No. 6-1. First, he overstates the difficulty he faces in
appearing in Rhode Island, especially when considering the
ease of modern transportation. See id.; Pritzker
v. Yari, 42 F.3d 53, 64 (1st Cir. 1994). Conversely,
Defendant understates the importance of Rhode Island's
interest in adjudicating a case where a Rhode Island
plaintiff is injured. See Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 473(1985) (“A State
generally has a manifest interest in providing its residents
with a convenient forum for redressing injuries inflicted by
out-of-state actors.”). Similarly, the third factor
weighs in the Plaintiff's favor because it is plainly
more convenient for Plaintiff to litigate in Rhode Island.
See Sawtelle v. Farrell, 70 F.3d 1381, 1395 (1st
Cir. 1995). Therefore, even if Defendant is burdened
by appearing in Rhode Island, as he alleges, that burden is
not so “special or unusual” that it can overcome
the other two factors that weigh in Plaintiff's favor.
See Pritzker, 42 F.3d at 64. The
“Gestalt” factors, therefore, favor Plaintiff and
Defendant's third objection is overruled.
the Court agrees that Defendant has properly identified two
witnesses who are unwilling to appear in Rhode Island for
trial. See Reply to Resp. Memo. 11, ECF No. 16. The
R&R is therefore modified to exclude any language that
implies Plaintiff has not properly identified material
witnesses who are unwilling to travel to Rhode Island.
the Court still adopts the R&R's decision to deny the
transfer of venue request. Defendant has not proffered
evidence strong enough to overcome the presumptive validity
this Court must give to Plaintiff's choice of venue.
See Coady v. Ashcraft & Gerel, 223 F.3d 1, 11
(1st Cir. 2000). Defendant complains that two witnesses would
be unwilling to voluntarily travel to Rhode Island for trial.
See Objection 2. But, as the R&R explains,
transferring this case to New York would merely shift the
burden from Defendant to Plaintiff, who's principle
witnesses and evidentiary documents are in Rhode Island.
See R&R 14. Such burden shifting does not
justify a transfer, particularly considering the deference
this Court must give to Plaintiff's choice of venue.
See Eximias, 248 F.Supp.2d at 38. (“Section
1404(a) provides for transfer to a more convenient forum, not
to a forum likely to prove ...