EMANUEL v. CARDIS ENTERPRISES INTERNATIONAL (USA), INC.
1:16-cv-00675
D. Del.
Aug 5, 2016

Background

  • Plaintiffs Josh Emanuel (New Jersey resident) and JECO Technologies, Inc. (Florida LLC) sued Cardis Enterprises International (Delaware corporation) in D.N.J. for breach of a June 25, 2013 consulting agreement, unjust enrichment, and conversion after Cardis failed to pay $43,000 in consulting fees/expenses following a mutual termination that same year.
  • The Agreement required Emanuel to perform services and provided JECO $30,000/month plus expenses and potential stock options upon meeting incentives; services were to be rendered solely by Emanuel.
  • Section 5.9 of the Agreement states the Agreement “shall be construed and governed in accordance with the law of the State of Delaware and the courts of Delaware shall have exclusive jurisdiction.”
  • Cardis moved to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2) or, alternatively, to transfer venue to D. Del. under 28 U.S.C. § 1404(a). Cardis submitted a CEO declaration denying New Jersey contacts beyond dealings with JECO/Emanuel.
  • The parties disputed factual contacts (where negotiations occurred, whether Cardis solicited NJ business through Emanuel); plaintiffs offered no affidavits to create factual record on jurisdictional contacts.
  • The Court found the personal-jurisdiction analysis uncertain and concluded the forum-selection clause made transfer to Delaware appropriate.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether D.N.J. has personal jurisdiction over Cardis Cardis entered contract with NJ-based JECO and Emanuel performed services in NJ, creating contacts Cardis is a Delaware corporation with PPB in NY and has no other NJ contacts (no clients, revenue, bank accounts, registration) Jurisdictional contacts were murky; factual development required but unnecessary given forum clause — court did not decide jurisdiction and opted to transfer
Enforceability of forum-selection clause (§5.9 naming Delaware courts "exclusive jurisdiction") Clause is boilerplate, titled as "choice of law," not explicit forum-selection language; transfer would be inconvenient/unreasonable Clause clearly grants exclusive jurisdiction to Delaware courts and is binding Clause is valid and enforceable; court ordered transfer to D. Del.
Whether convenience of parties outweighs forum clause under §1404(a) / Atlantic Marine Plaintiffs: New Jersey is more convenient; most witnesses/parties located in NY/NJ Cardis: parties agreed to Delaware forum; Atlantic Marine requires enforcing valid forum clauses except in extraordinary circumstances Atlantic Marine controls; convenience does not overcome a valid forum-selection clause; no extraordinary circumstances shown; transfer ordered
Whether plaintiffs showed fraud, public-policy or extraordinary hardship to avoid clause Plaintiffs argued clause was boilerplate and titled ambiguously; claimed inconvenience Cardis denied misconduct; argued clause negotiated and binding Plaintiffs failed to show fraud, public-policy violation, or that enforcement would be unreasonable; clause enforced

Key Cases Cited

  • Daimler AG v. Bauman, 134 S. Ct. 746 (general jurisdiction standard; corporations "at home")
  • Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (distinction between general and specific jurisdiction)
  • Int’l Shoe Co. v. Washington, 326 U.S. 310 (minimum contacts/due process framework)
  • Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and contract contacts analysis)
  • Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (specific jurisdiction principles)
  • Atlantic Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 134 S. Ct. 568 (forum-selection clauses normally enforced; governing §1404 analysis)
  • M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (validity and enforceability of forum-selection clauses)
  • Jumara v. State Farm Ins. Co., 55 F.3d 873 (private and public interest factors for §1404 transfer)
  • Schwilm v. Holbrook, 661 F.2d 12 (transfer where bona fide jurisdictional dispute exists)
  • MoneyGram Payment Sys., Inc. v. Consorcio Oriental, S.A., 65 Fed. Appx. 844 (NJ long-arm and jurisdictional analysis)
Read the full case