CHEN v. WANG
3:22-cv-04708
D.N.J.Nov 12, 2024Background
- Plaintiff Xiongjian Chen, former COO of CAG, claims his contract rights to stock options were wrongly denied in a business transaction involving CAG and related entities.
- Defendants include Peter Wang (former CAG CEO/Chairman), multiple Cenntro-related business entities, and CENN, the successor to Naked Brand Group.
- Plaintiff alleges breach of agreements, tortious interference, fraud, and other claims stemming from Wang and related entities' conduct during a corporate transaction which allegedly excluded the conversion of his options to publicly traded stock.
- The Court had previously dismissed all claims for lack of personal jurisdiction and insufficient pleading but allowed leave to amend.
- In the Amended Complaint, Plaintiff added CAC (a New Jersey-based subsidiary) as a party and raised additional claims, including civil conspiracy, and further argued that jurisdiction could be established through alter ego or agency theories.
- The matter is before the court on Defendants’ renewed motion to dismiss under Rule 12(b)(2) (personal jurisdiction) and Rule 12(b)(6) (failure to state a claim).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over CAG/CEL | CAG/CEL have sufficient New Jersey contacts or are alter egos of local CAC/Wang | No continuous/systematic NJ contacts; alter ego theory lacks factual basis | No personal jurisdiction over CAG/CEL/CAC |
| Wang’s liability for breach of contract | Wang personally committed or bound himself via options agreements | Wang signed only in corporate capacity; no personal intent to be bound | Wang not liable; claims dismissed |
| Tortious interference, fraud, misrepresentation | Wang acted outside his role, or his representations/directives caused harm | Wang acted within role, no actionable false statements, or independent duty | Claims dismissed, except promissory estoppel survives against Wang |
| Civil conspiracy | Defendants acted together to deny plaintiff’s rights unlawfully | No viable underlying tort or unlawful act | Claim dismissed |
Key Cases Cited
- Daimler AG v. Bauman, 571 U.S. 117 (limits on general jurisdiction over foreign corporations; alter ego not enough for jurisdiction)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for facial plausibility)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment in contract-related personal jurisdiction)
- Phillips v. County of Allegheny, 515 F.3d 224 (Rule 12(b)(6) motion standards; well-pleaded facts)
- Gennari v. Weichert Co. Realtors, 691 A.2d 350 (pleading elements for common-law fraud in NJ)
- Saltiel v. GSI Consultants, Inc., 788 A.2d 268 (economic loss doctrine, distinction between contract and tort in NJ)
- Printing Mart-Morristown v. Sharp Elec. Corp., 563 A.2d 31 (tortious interference standards in NJ)
- Bestfoods, 524 U.S. 51 (corporate law re: when parent and subsidiary are distinct for liability)