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WRIGHT v. XEROX CORP.

April 19, 1995

CHARLES W. WRIGHT, et al., Plaintiffs,
v.
XEROX CORPORATION, et al., Defendants.



The opinion of the court was delivered by: ALFRED M. WOLIN

 WOLIN, District Judge

 This matter is opened before the Court by the motion of defendants Bill Clinton, Donald Dea, Rich Miller and Leo Dianetti (collectively the "individual defendants") to dismiss the complaint against them pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and pursuant to Rule 12(b)(4) for defective service of process. The motion has been decided upon the written submissions of the parties pursuant to Federal Rule of Civil Procedure 78. For the reasons given below, the motion to dismiss for lack of personal jurisdiction will be denied as to defendants Clinton and Dea. The motion will be granted as to defendant Dianetti, and the complaint against him will be dismissed. The Court will reserve judgment as to defendant Miller, and will make further provision for him as explained below. The motion to dismiss for defective service of process will be denied as to all the remaining defendants.

 BACKGROUND

 The complaint tells the following story. Plaintiff brings this action under New Jersey's Law Against Discrimination ("NJLAD") alleging racial discrimination against him by his former employer, defendant Xerox, and the individual defendants. Plaintiff is an African-American. The individual defendants are officials of Xerox who are alleged to have perpetrated the discriminatory acts. They are named in their personal capacities and as representatives of the corporate defendant. In addition to the NJLAD claim, plaintiff also alleges state common-law counts of wrongful discharge, intentional infliction of emotional distress, defamation, violation of an implied covenant of good faith in contracts, and interference with contract and prospective economic advantage.

 Plaintiff began his employment with Xerox in February, 1986. Until 1993, plaintiff worked in Xerox's Morris Plains, New Jersey office and lived in a nearby town. Plaintiff was employed in what is known as the Indirect Channels Organization ("ICO"). Defendant Dea was the general manager of this subdivision of Xerox. Plaintiff's general field of responsibility throughout his time at the company was the marketing of office machines, either directly or through the development of marketing plans. In 1992, Dea was replaced by defendant Miller as the manager of the ICO.

 By 1991, plaintiff had risen to the position of Region Sales Manager--Mid-Atlantic Region. In March of that year, he filed an internal complaint charging that he was being discriminated against because of his race. In summary, the internal complaint alleged that plaintiff's supervisor had curtailed his sales territory and other responsibilities, denied him compensation due for sales he had made, and declared plaintiff's territory "open" while transferring him to a territory that was already occupied. The complaint claimed that these actions were motivated by racial bias and retaliation for previously pursuing his grievances through less formal channels. Plaintiff alleges that he was the first person of his race to hold this position at Xerox, and that white peers did not experience the same difficulties.

 Plaintiff brought his problems to defendant Dea and exchanged correspondence with his division personnel manager without receiving satisfaction. In a memorandum dated July 1, 1991, Thomas Penders of Xerox's Human Resources department made what appears to be a settlement offer. Declaration of Charles Wright, dated Feb. 27, 1995 ("Wright Decla.") Exhibit A (Complaint) at Exhibit C. The memorandum did not admit that racial discrimination had occurred, but recognized "questionable management practices" in plaintiff's case. Plaintiff's performance evaluations were upgraded, and, to resolve the dispute over the sales territory, plaintiff was promoted retroactively. Plaintiff's immediate supervisors and the Human Resources Department agreed to find plaintiff a new assignment in the corporation away from the offending supervisors. After some further negotiation, plaintiff agreed to these basic terms, with the express assumption that Xerox management support his attempts to find a suitable new position within the company. Id., Exhibit E.

 The core of the complaint is that the individual defendants did not support plaintiff's attempts to transfer within the company. On the contrary, it is alleged that the defendants retaliated against plaintiff for filing his complaint and further discriminated against him by damaging his reputation within the company. Plaintiff claims that information from his personnel file concerning the internal complaint was wrongfully disseminated within the company, and that he was branded as a troublemaker. It is alleged that other divisions in Xerox failed to offer him a position because of these acts.

 Meanwhile, back at ICO, it is alleged that plaintiff's sales territory was eliminated through a reorganization that divided it between two white co-workers. This restructuring is alleged to have been accomplished by defendant Miller, who replaced Dea as plaintiff's manager. However, in December 1992, plaintiff secured an assignment in the Office Document Systems Division ("ODS"), and was given responsibility for developing a marketing plan for a certain printer.

 In August of 1993, defendant Clinton became the head of the ODS division. Clinton told defendant that he would have to accept a transfer to the Rochester, New York office, or risk termination. Plaintiff believes that the transfer was part of the ongoing pattern of retaliation against him. When plaintiff arrived at the Rochester office in October of that year, he discovered that his duties were different than those promised by Clinton. He was not permitted to do assignments that persons from his old New Jersey office specifically requested that he do. Clinton told plaintiff that his former managers had said that he was not liked personally.

 Hoping to escape the unsatisfactory situation in Rochester, plaintiff submitted a formal request to transfer. Against normal Xerox policy, and despite the fact that positions in New Jersey had been offered by company managers there, the request was denied by defendant Dianetti. Resigned to the transfer, plaintiff leased his residence and contracted to purchase a house in Rochester. Mrs. Wright took a leave of absence from her job in New Jersey. On January 18, the day the Wright family was to move to Rochester, plaintiff was told that he would be terminated as part of an "Involuntary Reduction in Force."

 Plaintiff claims that the reduction in force was a pretext. He alleges that his position was not abolished, but that he was replaced by a white person. This person was laid off in a previous round of terminations, and then re-hired in plaintiff's stead. He maintains that the dissemination of the information in his personnel file, the defamatory statements about his work attitude and propensity for "troublemaking," the transfer, and ultimately his termination were all in retaliation for filing the internal complaint and motivated by racial bias. He claims that if he had been allowed to transfer back to New Jersey, he would not have been terminated at all.

 Plaintiff filed this action in the Superior Court of New Jersey, Essex County. Defendants removed it here on the basis of diversity of citizenship. The individual defendants now move for dismissal for lack of personal jurisdiction. As will be discussed more fully below, all live and work for Xerox in the State of New York.

 DISCUSSION

 In cases where the defendant has raised a jurisdictional defense, "the plaintiff bears the burden of demonstrating contacts with the forum state sufficient to give the court in personam jurisdiction." Time Share Vacation v. Atlantic Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984) (quoting Compagnie des Bauxites de Guinee v. L'Union Atlantique, 723 F.2d 357, 362 (3d Cir. 1983)). However, upon a Rule 12(b)(2) attack on personal jurisdiction, the Court must accept as true the allegations in the complaint, and resolve disputed issues of fact in favor of the plaintiff. Carteret Savs. Bank v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir.), cert. denied, 121 L. Ed. 2d 29, 113 S. Ct. 61 (1992).

 This Court may exercise jurisdiction over any person who would be subject to the jurisdiction of the courts of the State of New Jersey. Fed. R. Civ. P. 4(e); North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 689 (3d Cir.), cert. denied, 498 U.S. 847, 112 L. Ed. 2d 101, 111 S. Ct. 133 (1990). New Jersey's long-arm jurisdiction rule permits personal jurisdiction over non-resident defendants to the extent permitted by due process clause of the Fourteenth Amendment to the United States Constitution. DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 284 (3d Cir.), cert. denied, 454 U.S. 1085, 70 L. Ed. 2d 620, 102 S. Ct. 642 (1981).

 1. Minimum Contacts

 International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945), is continually invoked as the "constitutional touchstone" for due process analysis of personal jurisdiction matters. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985). International Shoe held that a court may exercise personal jurisdiction over a non-resident defendant only where "minimum contacts" exist such that jurisdiction "does not offend 'traditional notions of fair play and substantial justice.'" 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940)). The purpose of restricting personal jurisdiction to the limits of due process is to protect the individual interests of non-resident defendants. United States v. Morton, 467 U.S. 822, 828, 81 L. Ed. 2d 680, 104 S. Ct. 2769 (1984); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980).

 Contacts with the forum sufficient to support personal jurisdiction over a non-resident defendant must be of a type that the individual "should reasonably anticipate being haled into court there." Burger King, 471 U.S. at 474 (citing World-Wide Volkswagen, 444 U.S. at 295). What constitutes minimum contacts varies with the "quality and nature of the defendant's activity," Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958), but the unilateral activity of a plaintiff claiming a relationship with a nonresident defendant does not suffice to create the requisite forum contacts. Id.; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 80 L. Ed. 2d 404, 104 S. Ct. 1868 (1984); Kulko v. Superior Court of California, 436 U.S. 84, 93-94, 56 L. Ed. 2d 132, 98 S. Ct. 1690 (1978).

 Defendants can be subject to either specific or general personal jurisdiction in a forum state. Specific personal jurisdiction may arise from particular or sporadic contacts if the cause of action arises out of, or relates to the defendant's forum related activities. Helicopteros, 466 U.S. at 414 & n.8; North Penn-Gas Co., 897 F.2d at 690. There is sufficient due process contact for personal jurisdiction if the defendant purposefully has directed his activities at residents of the forum. Henry Heide, Inc. v. WRH Prods. Co., 766 F.2d 105, 108 (3d Cir. 1985). Where the nature or quality of a defendant's contact warrants, a single act can support jurisdiction when it is connected with the injury sued upon. Burger King, 471 U.S. at 475 n.18.

 If a plaintiff's cause of action against a defendant does not arise out of the defendant's contacts with the forum state, the plaintiff must establish general personal jurisdiction over the defendant. Where defendant's activities in the forum are unrelated to the subject matter of the suit, plaintiff must show "continuous and substantial contacts" with the forum state. Helicopteros, 466 U.S. at 414-16 & n.9; Provident Nat'l Bank v. California Fed. Savs. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987). The Court is satisfied that general jurisdiction does not exist as to any of the individual defendants. Therefore, this branch of the doctrine will not be discussed further.

 As a threshold matter, the Court will address defendants' claim that they cannot be subjected to the personal jurisdiction of this Court because their actions were pursuant to their duties as Xerox employees. The Court rejects this argument. Xerox's undoubted contacts with this forum will not be attributed to the individual defendants. However, a defendant's status as an employee will not nullify the power of his contacts with the forum to create amenability to suit there. Educational Testing Serv. v. Katzman, 631 F. Supp. 550, 559 (D.N.J. 1986).

 Defendant's citation of Shapiro v. Sun Life Assurance Co., 117 F.R.D. 550 (D.N.J. 1987) is unavailing. That case is distinguished by Judge Rodriguez's finding that the plaintiff's allegations showed that the non-resident defendants did not intend to harm the plaintiff, but were acting as "mere conduits" of their corporate employer's policy. Id. at 556. The Court distinguished cases like Calder in which, as in this case, defendants had the authority within the scope of their employment to intentionally and wrongfully harm the plaintiff. Id.1

 The Supreme Court's mandate to examine the "quality and nature of the defendant's activity," Hanson, 357 U.S. at 253, requires the Court to give particular weight to contacts with the forum that form the basis of an allegation of an intentional tort. As a matter of logic, where acts are intentional, the Court may assign a heightened level of foreseeability to their consequences. Courts have recognized the special importance of intentional, tortious acts in assessing whether personal jurisdiction over a non-resident defendant is reasonable. Shushan, 954 F.2d at 147 (citing Knight v. San ...


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