Szulik v. Tag Virgin Islands, Inc.
858 F. Supp. 2d 532
E.D.N.C.2012Background
- Szulik filed suit on behalf of himself and family against TAG Virgin Islands, Tagliaferri, Cornell, and Feiner in EDNC.
- Plaintiffs allege TAG-managed investments under an IMA included kickbacks from IEAH and improper, risky investments.
- Szuliks claim correspondence and meetings occurred in North Carolina; IMA executed with signatures in NC and CT; governing law CT.
- TAG and Feiner moved to dismiss for lack of personal jurisdiction and improper venue; motions to strike and transfer discussed.
- Court determines personal jurisdiction and venue, and ultimately transfers entire case to the Southern District of New York.
- Feiner is transferred out; TAG defendants’ venue transfer analyzed under 1404(a) with factors weighing in favor of SDNY.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has personal jurisdiction over TAG defendants under 78aa | TAG has minimum contacts; nationwide service applies. | Insufficient connection to forum; limited contacts; merit to dismissal. | Yes, over TAG defendants under 78aa. |
| Whether the court has personal jurisdiction over Feiner | Feiner conspiratorially involved; effects test may apply. | Feiner lacked NC contacts; no purposeful availment; conspiracy/effects theories fail. | No, Feiner lacks NC-specific personal jurisdiction. |
| Whether venue is proper in EDNC as to each defendant | Venue proper due to contract-signing and actions in EDNC. | Feiner not subject to EDNC venue; substantial events in other districts. | Proper for TAG defendants; not proper for Feiner. |
| Whether to transfer Feiner’s claims to SDNY under 1406(a) and/or 1404(a) | Transfer to SDNY in interest of justice; Feiner joined with TAG disputes. | Dismiss Feiner; or keep case; not clear transfer favored. | Transfer Feiner’s claims to SDNY; otherwise keep for TAG defendants. |
| Whether to transfer the entire case to SDNY and sever/transfer Feiner | Unified case with intertwined facts; efficiency favors SDNY. | Possibly sever Feiner; maintain in EDNC for TAG. | Court transfers entire case to SDNY. |
Key Cases Cited
- Merck & Co., Inc. v. Reynolds, 130 S. Ct. 1784 (2010) (two-year statute tolling starts at discovery of facts constituting violation)
- Calder v. Jones, 465 U.S. 783 (1984) (effects test requires expressly aimed conduct at forum state)
- Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987) (sìgnificant minimum contacts must come from defendant's purposeful actions)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (personal jurisdiction requires focus on plaintiff's forum relation of defendant's conduct)
- Nichols v. G.D. Searle & Co., 991 F.2d 1195 (4th Cir. 1993) (prima facie standard for Rule 12(b)(2) where no evidentiary hearing)
- Porter v. Groat, 840 F.2d 255 (4th Cir. 1988) (section 1406(a) transfer authority and interest of justice)
- Cont’l Grain Co. v. Barge FBL-585, 364 U.S. 19 (1960) (avoid wasteful multiple proceedings; transfer for convenience)