NUGENERATION TECHNOLOGIES, LLC v. SHOEB MOIYADI, ECOLINK, INC., & BRANDON PELISSERO
Civil Action No. 23-459 (RK) (TJB)
UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
August 7, 2023
NOT FOR PUBLICATION
KIRSCH, District Judge
THIS MATTER comes before the Court upon two motions to dismiss filed by Defendants Shoeb Moiyadi (“Moiyadi“), Ecolink, Inc. (“Ecolink“), and Brandon Pelissero (“Pelissero“). Moiyadi seeks dismissal based on lack of personal jurisdiction pursuant to
The Court has considered the parties’ submissions and resolves the matter without oral argument pursuant to
In this litigation, a California company alleges that its former consultant and distributor committed corporate espionage and client sabotage related to sales of the company‘s proprietary chemical solvent.
Plaintiff is a Delaware-registered limited liability company with its principal place of business in Emeryville, California. (Compl. ¶ 1, ECF No. 1.) Donato Polignone (“Polignone“) is Plaintiff‘s sole member. (Id. ¶ 2.) Plaintiff manufactures and distributes chemical solvents, including a line of fluorinated solvents sold under the brand name FluoSolv. (Id. ¶¶ 8, 9.)
Pursuant to a February 2013 “Consultant Agreement” between Plaintiff and Defendant Shoeb Moiyadi (“Moiyadi“) appended to the Complaint, Moiyadi and Polignone jointly developed and co-owned the FluoSolv brand. (Compl. Ex. B, ECF No. 1-3 at 1.) Moiyadi resides in San Jose, California. (Id. ¶ 3.) Beginning in 2013, Moiyadi served as Plaintiff‘s technology consultant, in which role he assisted Plaintiff with product development, technical support, and production engineering. (Id. ¶¶ 11, 16.) Plaintiff alleges that Moiyadi‘s responsibilities also included “purchasing and blending raw materials into finished FluoSolv products,” “selling finished FluoSolv products to third party distributors,” and interacting with Plaintiff‘s customers. (Id. ¶¶ 17, 27.) Plaintiff terminated Moiyadi‘s Consultant Agreement via letter dated January 5, 2023. (Compl. Ex. F, ECF No. 1-7.)
Defendant Ecolink, Inc. (“Ecolink“) is a company with its principal place of business in and created under the laws of Georgia. (Compl. ¶ 4.) Defendant Branon Pelissero (“Pelissero“) is Ecolink‘s Chief Executive Officer and resides in Decatur, Georgia. (Id. ¶ 7.) Ecolink served as a “third-party” “middleman” for Plaintiff, distributing Plaintiff‘s FluoSolv products “nationwide” in
Plaintiff alleges that beginning around March 2022, Moiyadi and Pelissero informed Plaintiff‘s customers that raw materials shortages had caused FluoSolv products to become unavailable. (Id. ¶ 27.) Plaintiff claims that Defendants fabricated these shortages to undermine the customers’ reliance on FluoSolv and Plaintiff. (Id. ¶¶ 28–30, 40.) In FluoSolv‘s place, Defendants allegedly offered Plaintiff‘s customers a new line of Ecolink‘s own fluorinated solvents, which they sold under the brand name “Lss Chemicals.” (Id. ¶¶ 32, 34–39.) Per the Complaint, the products sold by “Lss Chemicals” were developed based on Plaintiff‘s confidential chemical formulas that Moiyadi had access to (id. ¶¶ 47–48) and were marketed and sold relying on Defendants’ access to Plaintiff‘s “secret customer lists and trade information” (id. ¶¶ 47, 49).
On January 26, 2023, Plaintiff filed suit in this District alleging misappropriation of trade secrets in violation of
With respect to Moiyadi, Polignone avers that Plaintiff served multiple customers in New Jersey, including Kearfott Corp.; Sensor Scientific, Inc.; Thorlabs, Inc.; AST Bearings, LLC; Electro-Miniatures Corp.; Synergy Microwave Corp.; and VWR International, LLC. (Polignone Decl. ¶¶ 5, 10.) Moiyadi “would have been aware” of these customers, “communicated with some or all” of them regarding FluoSolv, and “developed relationships” with them. (Id. ¶¶ 5–7, 10.) Moiyadi allegedly “communicated with Kearfott‘s New Jersey location regarding FluoSolv” and “traveled to New Jersey for FluoSolv-related” work. (Id. ¶¶ 8–9.) On September 20, 2021, Moiyadi visited Kearfott and AST Bearings at their New Jersey locations to meet about FluoSolv. (Id. ¶ 14.) Because “[i]t was Moiyadi‘s job to maintain relationships with these and other customers,” Polignone believes Moiyadi “would have continued communicating with Kearfott and AST Bearings employees in New Jersey about FluoSolv until his termination.” (Id. ¶ 18.)
With respect to Ecolink and Pelissero, Plaintiff alleges that it hired Ecolink to ship FluoSolv products to Kearfott and its other New Jersey customers, which Ecolink did. (Id. ¶¶ 22, 24, 26.) Polignone avers that Pelissero “would have been aware of NuGenTec‘s New Jersey customers,” including Kearfott and AST Bearings. (Id. ¶¶ 21, 23.) Polignone asserts that Pelissero communicated with Kearfott‘s New Jersey location regarding FluoSolv. (Id. ¶ 25.) Polignone also alleges “on information and belief” that Pelissero communicated with Kearfott‘s New Jersey location and other of NuGenTec‘s New Jersey customers regarding LLS Chemical solvents. (Id. ¶¶ 27–28.)
Appended to the Complaint is an email chain among employees of Kearfott, one of Plaintiff‘s customers with a New Jersey presence. (Compl. Ex. E, ECF No. 1-6.) The email
II. LEGAL STANDARD
To meet its burden of establishing personal jurisdiction, a plaintiff may show the defendant‘s “continuous and systematic” contacts with the forum state such that the Court can exercise general jurisdiction over the plaintiff. See International Shoe Co. v. Washington, 326 U.S. 310, 318 (1945). Alternatively, the plaintiff may allege that a defendant has sufficient minimum contacts with a state to create specific jurisdiction, accomplished by “establish[ing] with reasonable particularity” three elements. Danziger & De Llano, LLP v. Morgan Verkamp LLC, 948 F.3d 124, 129–30 (3d Cir. 2020) (quoting Provident Nat‘l Bank v. Cal. Fed. Sav. & Loan Ass‘n, 819 F.2d 434, 437 (3d Cir. 1987)). First, the defendant must have “purposefully directed [its] activities’ at the forum.” O‘Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir. 2007) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). Second, the plaintiff‘s claims must “arise out of or relate to” the defendant‘s contacts with the forum. Id. (quoting Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984)). Third, the exercise of personal jurisdiction must not “offend traditional notions of fair play and substantial justice.” Id. (quoting Int‘l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
When jurisdiction is lacking, the Court may permit jurisdictional discovery “[i]f a plaintiff presents factual allegations that suggest with reasonable particularity the possible existence of the requisite contacts between the party and the forum state . . . .” Toys ‘R’ Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (internal citations and quotations omitted). Even after denying a motion to dismiss for lack of personal jurisdiction, a court “may always revisit the issue of personal jurisdiction if later revelations reveal that the facts alleged in support of jurisdiction remain in
III. DISCUSSION
Plaintiff‘s allegations do not establish that the Court can exercise personal jurisdiction over Moiyadi, Ecolink, or Pelissero. However, Plaintiff‘s evidence and arguments are not so speculative as to require outright dismissal. Rather, for the reasons given below, the Court will deny Defendants’ motions without prejudice and permit limited jurisdictional discovery into Defendants’ contacts with Plaintiff‘s New Jersey customers.
The Court considers whether Defendants are subject to personal jurisdiction by applying the traditional minimum contacts analysis.1
A. PURPOSEFUL AVAILMENT
First, the plaintiff must show that the defendant directed its activities at the New Jersey forum and purposefully availed itself of its benefits. See O‘Connor, 496 F.3d at 317. The defendant must “deliberately reach[] out beyond its home — by, for example, exploiting a market in the
Plaintiff alleges that Moiyadi‘s job responsibilities as Plaintiff‘s contractor included “purchasing and blending raw materials into finished FluoSolv products” and “selling finished FluoSolv products to third party distributors,” such as Ecolink. (Compl. ¶ 17.) During Moiyadi‘s tenure, Plaintiff claims it had seven FluoSolv customers in New Jersey, including Kearfott Corporation and AST Bearings, LLC. (Polignone Decl. ¶¶ 5–7, 10.) Per Plaintiff, Moiyadi‘s duties as Plaintiff‘s consultant “would have included maintaining relationships with FluoSolv customers,” including at least Kearfott and AST Bearings. (Id. ¶¶ 5–7, 10.) Plaintiff alleges, and Moiyadi agrees, that on September 20, 2021, Moiyadi met with Kearfott and AST Bearings employees at their New Jersey locations about FluoSolv. (Id. ¶ 14.) Moiyadi agrees that he communicated with Plaintiff‘s customers, including Kearfott‘s New Jersey location, and visited the New Jersey facility in 2021. (Moiyadi Decl. ¶¶ 17–21.) Moiyadi frames Plaintiff‘s arguments as hinging on the argument that Ecolink‘s contacts with New Jersey can be attributed to Moiyadi through the “conspiracy theory of jurisdiction,” which Moiyadi argues is an invalid basis to assert personal jurisdiction. (ECF No. 23 at 4 (“[A]lleged acts of [the co-Defendants] cannot be imputed to Moiyadi for jurisdiction as a matter of law.“).)
Plaintiff‘s allegations are sufficient to establish that Moiyadi purposefully availed himself of the New Jersey forum. Plaintiff adequately alleges that Moiyadi, as Plaintiff‘s contractor, targeted Plaintiff‘s customers in New Jersey, shipped products to distributors for delivery to
With respect to Ecolink and Pelissero, Plaintiff argues that Pelissero was Ecolink‘s go-between with Plaintiff and Plaintiff‘s New Jersey customers. (ECF No. 21 at 6.) As Ecolink‘s CEO, Pelissero “would have been aware of NuGenTec‘s New Jersey customers,” including Kearfott and AST Bearings.” (Polignone Decl. ¶¶ 21, 23.) Polignone avers that Plaintiff hired Ecolink to ship FluoSolv products to Kearfott and other customers in New Jersey, and that Ecolink delivered FluoSolv products to New Jersey for Plaintiff. (Id. ¶¶ 22, 24, 26.) Pelissero communicated with Kearfott‘s New Jersey location regarding FluoSolv. (Id. ¶ 25.) Ecolink disclaims significant contacts with New Jersey, arguing that only 1.3% of its revenue came from New Jersey customers in 2022; that it expects no revenue from FluoSolv customers in New Jersey in 2023; that none of its employees reside in New Jersey; and that Ecolink has “never targeted its marketing at New Jersey specifically.” (ECF No. 24 at 2–3.) Ecolink also argues that the fact that it is registered to do business in New Jersey is irrelevant to the specific jurisdiction analysis. (ECF
The Court finds that Plaintiff has made out a prima facie case that the Court can exercise personal jurisdiction over Ecolink, but not over Pelissero. Plaintiff alleges that Ecolink shipped products to customers in New Jersey. This is sufficient to show “a deliberate targeting of the forum,” D‘Jamoos, 566 F.3d at 103 (quoting O‘Connor, 496 F.3d at 317), especially because Ecolink does not dispute that they had some business contacts with Plaintiff‘s New Jersey customers in 2021 and 2022. Pelissero admits that Ecolink directly serviced New Jersey customers, including through their FluoSolv sales. (Pelissero Decl. ¶ 10 (“In the year 2021, the total revenue associated with Ecolink‘s business operations that derived from New Jersey customers was 2.5%.“)). Pelissero notes that “many” of Ecolink‘s interactions with its New Jersey-based customers were directed to locations outside of New Jersey (id. ¶ 13), which indicates that Ecolink sold FluoSolv to at least some of its New Jersey customers at their New Jersey locations.
Ecolink‘s other attempts to distance itself from New Jersey are unavailing. Ecolink argues that the fraction of its sales coming from New Jersey — 2.5% in 2021 and 1.3% in 2022 — were too small to establish minimum contacts. (ECF No. 24 at 2; Pelissero Decl. ¶¶ 10–11.) However, the dollar amount of a defendant‘s sales is not “dispositive on the issue of whether a party has engaged in ‘continuous and systematic’ activity that would subject a party to personal jurisdiction.” Helicopteros Nacionales, 466 U.S. at 416; see also Gourmet Video, Inc. v. Alpha Blue Archives, Inc., No. 08-2158, 2008 WL 4755350, at *6 (D.N.J. Oct. 29, 2008) (finding sufficient minimum contacts despite defendants’ estimate that less than two percent of their sales occurred in New Jersey). Ecolink emphasizes that no Ecolink employee was based in New Jersey during the relevant period. (Pelissero Decl. ¶¶ 6–7, 20.) However, “[t]he defendant need not be
However, with respect to Pelissero, Plaintiff has not sufficiently alleged purposeful availment. Plaintiff argues that Pelissero is subject to the Court‘s jurisdiction to the same extent as Ecolink because Pelissero took the jurisdiction-creating actions on Ecolink‘s behalf. (ECF No. 22 at 15.) It is true that alleged tortious actions Pelissero took personally in his capacity as Ecolink‘s CEO are attributed as Pelissero‘s own New Jersey contacts. See Collins v. James W. Turner Constr., Ltd, No. 16-2877, 2017 WL 210236, at *8 (D.N.J. Jan. 18, 2017) (“[A]ctions taken by a defendant in his or her ‘corporate capacity’ may only be used to establish personal jurisdiction over the defendant where those actions tend to establish individual liability.“). However, Plaintiff‘s allegations that Ecolink distributed FluoSolv products to their New Jersey customers do not make clear what role Pelissero — distinct from Ecolink — played in interacting with and shipping to Ecolink‘s New Jersey customers, such that the Court may conclude that Ecolink‘s contacts with Plaintiff‘s New Jersey customers are Pelissero‘s as well.
B. RELATIONSHIP TO THE DISPUTE
To establish specific jurisdiction, Plaintiff‘s claims must “arise out of or relate to” Defendants’ contacts with New Jersey. O‘Connor, 496 F.3d at 318 (citing Helicopteros, 466 U.S. at 414). This second element requires “a strong ‘relationship among the defendant, the forum, and the litigation.‘” Hepp v. Facebook, 14 F.4th 204, 208 (3d Cir. 2021) (quoting Ford Motor Co., 141 S. Ct. at 1026). However, the element is not so demanding that “only a strict causal relationship between the defendant‘s in-state activity and the litigation will do.” Ford Motor Co., 141 S. Ct. at 1026 (quoting Daimler, 571 U.S., at 127). The “relate to” language of the element “contemplates that some relationships will support jurisdiction without a causal showing.” Id.
To establish the necessary connection between Defendants’ 2021 and 2022 contacts with Plaintiff‘s New Jersey customers and the instant suit, Plaintiff relies on the January 2023 email chain among Kearfott employees. (ECF No. 20 at 10–11.) This email chain includes the words “FluoSolv (discontinued)” in the subject line, mentions “replacement material from Ecolink,” and was forwarded to email addresses purportedly belonging to Moiyadi and Pelissero. (Id. (citing Compl. Ex. E, ECF No. 1-6).) Plaintiff argues that this email reflects Defendants’ misrepresentation to Kearfott that FluoSolv was discontinued and their offer to supplant FluoSolv with their own “replacement” solvent. (Compl. ¶¶ 44, 49.) Plaintiff extrapolates from this email to argue that “Moiyadi, Pelissero, and Ecolink have had similar conversations with and made similar misrepresentations to NuGenTec‘s other customers, both in New Jersey and nationwide.” (Compl. ¶¶ 40, 45.) Defendants disagree, arguing that whatever modest New Jersey contacts they have are unrelated to the wrongdoing alleged in Plaintiff‘s Complaint. (ECF Nos. 23 at 2; 24 at 4.) Defendants contest the significance of the January 2023 Kearfott email chain and whether it can connect their business ties to New Jersey from 2021 and 2022 to the instant claims. (ECF Nos. 23 at 3; 24 at 4–5.)
At this juncture, Plaintiff has not carried its burden to sufficiently tie Defendants’ contacts to Plaintiff‘s New Jersey customers to the instant dispute. Plaintiff lacks sufficiently concrete evidence that Defendants abused their relationships with Plaintiff‘s New Jersey customers to undercut FluoSolv and sell their competing product. Plaintiff alleges generally that Moiyadi “communicated with some or all of NuGenTec‘s New Jersey customers” and that “[o]n information and belief, Moiyadi has communicated with Kearfott‘s New Jersey location regarding
The January 2023 email chain does not itself create the jurisdictional ties Plaintiff must show. Defendants correctly note that the email is unclear where the Kearfott employees were located. (See generally Compl. Ex. E, ECF No. 1-6.) If the Kearfott employees do not work for Kearfott‘s New Jersey office, then, even assuming the email reflects Defendants’ attempt to steal Plaintiff‘s customers, it does not show a sufficiently “strong relationship among the defendant, the forum, and the litigation.” Hepp, 14 F.4th at 208 (citations omitted); see also Ameripay, LLC v. Ameripay Payroll, Ltd., 334 F. Supp. 2d 629, 635 (D.N.J. 2004) (“Defendant‘s relationship with Swift is not a ‘contact’ with New Jersey, since Defendant only does business with Swift‘s Illinois headquarters and has no relationship with its New Jersey subsidiary.“). The email‘s jurisdictional weight is also muted because, although it hints that the discussions about Kearfott using a FluoSolv replacement was prompted by Defendants, the exhibit does not show whether Defendants ever responded to the email chain forwarded to them. See Serv. Experts LLC v. Baxter, No. 21-18281, 2023 WL 3452330, at *4 (D.N.J. May 15, 2023) (“We do not see how emails sent and received outside of New Jersey are relevant to a minimum contacts analysis with New Jersey.“).2
Although the Court finds Plaintiff has not met its burden to establish personal jurisdiction, Plaintiff requests that even if the Court finds it did not make a prima facie showing of jurisdiction over Defendants, the Court should order jurisdictional discovery. (ECF No. 21 at 17 (citing Toys ‘R’ Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003))).
The Court concludes that Plaintiff has “present[ed] factual allegations that suggest with reasonable particularity the possible existence of the requisite contacts” between Moiyadi and New Jersey. Toys “R” Us, 318 F.3d at 456 (internal quotation marks omitted) (quoting Mellon Bank (E.) PSFS, Nat‘l Ass‘n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992)). The competent evidence in Plaintiff‘s verified Complaint, its exhibits, and Plaintiff‘s sworn declaration raise the possibility of jurisdiction beyond mere speculation and sufficiently suggest that the wrongdoing Plaintiff alleges arises in part from Defendants’ New Jersey contacts. Plaintiff claims that Defendants exploited their relationships with Plaintiff‘s customers — built through delivering products to the New Jersey customers for Plaintiff in 2021 and 2022 — to sell a competing solvent. Plaintiff‘s claims are directly tied to Moiyadi‘s and Ecolink‘s previous relationships with Plaintiff‘s customers. At this juncture, the Court cannot accept Defendants’ invitation to conclude that the January 2023 Kearfott email chain is irrelevant to the jurisdictional analysis. The January 2023 email chain among Kearfott employees includes the words “FluoSolv (discontinued)” in the subject line and mentions “replacement material from Ecolink,” and was forwarded to the “Ecolink team (Brandon & Shoeb).” (ECF No. 1-6.)3 Perhaps this email, as Defendants vigorously argue,
Because the Complaint presents non-frivolous allegations that may establish personal jurisdiction over Defendants if borne out, the Court will order limited jurisdictional discovery. See Efofex, Inc. v. Realhub Inc., No. 21-8454, 2022 WL 2718138, at *2–3 (D.N.J. July 13, 2022); Logic Tech. Dev. LLC v. Levy, No. 17-4630, 2018 WL 3405262, at *3 (D.N.J. July 12, 2018). However, jurisdictional discovery is not “a fishing expedition” into the underlying merits. LaSala v. Marfin Popular Bank Pub. Co., 410 F. App‘x 474, 478 (3d Cir. 2011). Plaintiff has offered a list of its New Jersey customers while Moiyadi, Ecolink, and Pelissero were associated with NuGenTec, (ECF No. 22 ¶ 5), and argues, with some support, that Defendants targeted these customers to sell their infringing solvent to them. The Court authorizes limited jurisdictional discovery into the extent of Defendants’ relationships with these customers.4
Therefore, Defendants’ motions to dismiss for lack of personal jurisdiction are denied without prejudice. The Court will permit discovery to determine whether personal jurisdiction exists. Because the Court will allow limited jurisdictional discovery to proceed, it declines to reach Ecolink‘s and Pelissero‘s requests (ECF No. 19-1) to dismiss for improper venue or transfer the case to another forum pursuant to
The Court DENIES Defendants’ motions to dismiss (ECF Nos. 18, 19) without prejudice, in order for the parties to conduct brief jurisdictional discovery within the boundaries stated above. The parties are instructed to meet and confer regarding the jurisdictional discovery to be conducted and contact the chambers of the Honorable Tonianne J. Bongiovanni within ten days of the date of this decision to set a discovery schedule. Upon the completion of jurisdictional discovery, Defendants may renew an appropriate motion or file a responsive pleading. An order consistent with this memorandum Opinion will be entered.
Dated: August 7, 2023
ROBERT KIRSCH
UNITED STATES DISTRICT JUDGE