MIG Investments LLC v. Aetrex Worldwide, Inc.
852 F. Supp. 2d 493
D. Del.2012Background
- This case involves Just4Fit and MIG asserting contract-related claims against Aetrex, with TP Defendants (Danenberg, Just4Fit Israel, Blue Bird, Michalovski) and Aetrex seeking to consolidate related actions.
- Merger Agreement and Virtual Store License Agreement (VLA) governed the relationships; Just4Fit formed to operate Virtual Stores under exclusive license from Aetrex.
- Disputed issues include alleged fraud, misrepresentation, breach of contract, and related remedies arising from the VLA and Earnout provisions.
- Danenberg’s alleged communications and actions underpin the alleged misrepresentations about meeting the 25 Virtual Stores deadline by July 1, 2010.
- Aetrex seeks to consolidate Aetrex I (Delaware action) with Aetrex II (MIG’s post-merger earnout dispute) due to overlapping facts and contract interpretations.
- The court grants in part and denies in part TP Defendants’ motion to dismiss, denies their motion to strike, and grants consolidation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has personal jurisdiction over TP Defendants | Aetrex asserts Delaware long-arm statute § 3104(c) and conspiracy theories. | TP Defendants dispute personal jurisdiction or rely on lack of connected contacts. | Jurisdiction over Danenberg (Del. long-arm) affirmed; Michalovski, Just4Fit Israel, and Blue Bird denied under § 3104(c) and conspiracy theory respectively. |
| Whether Just4Fit Israel, Michalovski, and Blue Bird may be subject to conspiracy-based jurisdiction | Conspiracy theory supports jurisdiction for Michalovski and Just4Fit Israel; Blue Bird lacks enough contacts. | No proper conspiracy-based basis for Blue Bird; others may be reached via conspiracy theory. | Conspiracy theory supports jurisdiction over Michalovski and Just4Fit Israel; Blue Bird denied. |
| Whether the TP Complaint should be stricken under Rule 14(a)(1) | TP Defendants could be liable to Aetrex via equitable indemnification. | No direct liability theory pled against TP Defendants for Aetrex’s breach of VLA; insufficient joinder basis. | Motion to Strike denied; joinder under Rule 20(a) deemed appropriate. |
| Whether the TP Defendants should be joined to Aetrex’s counterclaim | Joinder under Rule 20(a) appropriate given common questions of law and fact. | Not applicable (defendants objected to improper impleader). | Rule 20(a) joinder granted; TP Defendants joined (except Blue Bird). |
| Whether the actions should be consolidated | Cases involve overlapping contract interpretations and witnesses; consolidation efficient. | Cases involve different contracts and parties; consolidation would be inefficient. | Consolidation granted; D.I. 22 and related filings consolidated into Lead Case 10-905-LPS. |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (Supreme Court 1945) (establishes minimum contacts for due process)
- Provident Nat’l Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434 (3d Cir. 1987) (burden to prove minimum contacts on prima facie basis)
- Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61 (3d Cir. 1984) (minimum contacts and related jurisprudence in 3d Cir.)
- Shamrock Holdings of Cal., Inc. v. Arenson, 421 F.Supp.2d 800 (D.Del. 2006) (Delaware long-arm via incorporation in context of merger)
- Istituto Bancario Italiano SpA v. Hunter Eng’g, Co., 449 A.2d 210 (Del. 1982) (conspiracy theory of personal jurisdiction)
- Gaffin v. Teledyne, Inc., 611 A.2d 467 (Del. 1992) (fraud pleading standards and particularity)
- Budget Blinds, Inc. v. White, 536 F.3d 244 (3d Cir. 2008) (web/domain registrations alone not jurisdictional acts)
- Barzingus v. Wilheim, 306 F.3d 17 (10th Cir. 2010) (arising from arbitration-related standards (example))
- Twombly v. Bell Atl. Corp., 550 U.S. 544 (Supreme Court 2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (Supreme Court 2009) ( plausibility standard for complaint pleading)
- Istituto Bancario Italiano SpA v. Hunter Eng’g, Co., 449 A.2d 210 (Del. 1982) (conspiracy theory of personal jurisdiction)
- Blair v. Infineon Techs. AG, 720 F.Supp.2d 462 (D.Del. 2010) (factors for piercing corporate veil)