Zibiz Corp. v. FCN TECHNOLOGY SOLUTIONS
777 F. Supp. 2d 408
E.D.N.Y2011Background
- Zibiz Corporation (Delaware) sues FCN Technology Solutions (Maryland) in the EDNY under diversity jurisdiction for breach of contract, tortious interference, and misappropriation of trade secrets.
- FCN moves to dismiss under Rule 12(b)(2) for lack of personal jurisdiction.
- Plaintiff alleges the two Agreements (Non-Disclosure and Partnership) created a working relationship and that FCN used confidential information to bid on a Phase I PACAF Virtualization project in Hawaii.
- Plaintiff claims FCN submitted a bid based largely on confidential information provided by plaintiff and that Air Force awarded the contract to FCN, not plaintiff.
- The court examines whether FCN has general jurisdiction under CPLR 301 or long-arm jurisdiction under CPLR 302, and whether any activity in New York relates to the claims.
- The court grants FCN’s motion, dismissing the complaint without prejudice for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FCN is subject to general jurisdiction under CPLR 301 | FCN had a New York-based employee and other contacts showing continuous activity. | No continuous, systematic presence in New York; minimal New York activity. | No general jurisdiction under CPLR 301. |
| Whether FCN is subject to New York long-arm jurisdiction under CPLR 302(a)(1) | FCN transacted business in New York related to the PACAF project and bid communications. | No substantial nexus between New York activities and the Hawaii-based bid; no ongoing NY transaction. | No jurisdiction under CPLR 302(a)(1) due to lack of transacted business with a substantial nexus. |
| Whether the presence of a New York-based employee and a passive NY website suffices for jurisdiction | New York presence and on-line information show purposeful availment. | A single telecommuting employee and a passive website are insufficient. | Insufficient to confer jurisdiction. |
Key Cases Cited
- Grand River Enterprises Six Nations, Ltd. v. Pryor, 425 F.3d 158 (2d Cir. 2005) (two-step inquiry: forum law then due process for jurisdiction)
- Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779 (2d Cir. 1999) (due process framework for New York jurisdiction in diversity)
- D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006) (forum state law governs personal jurisdiction in diversity cases)
- Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88 (2d Cir. 2000) (presence in forum requires substantial, continuous ties to reach jurisdiction)
- Landoil Resources Corp. v. Alexander & Alexander Services, Inc., 918 F.2d 1039 (2d Cir. 1990) (continuous, permanent activity required for general jurisdiction)
- Sunward Electronics, Inc. v. McDonald, 362 F.3d 17 (2d Cir. 2004) (transactional connections and choice-of-law considerations in CPLR 302 analysis)
- Mortgage Funding Corp. v. Boyer Lake Pointe, LC, 379 F. Supp. 2d 282 (E.D.N.Y. 2005) (contract relationships and forum connections in CPLR 302 analysis)
- Berkshire Capital Group, LLC v. Palmet Ventures, LLC, 307 F. App'x 479 (2d Cir. 2008) (choice-of-law clause alone is not dispositive for jurisdiction)