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3 Lab, Inc. v. Kim

July 26, 2007

3 LAB, INC. AND DAVID CHUNG, PLAINTIFFS,
v.
JISOO KIM A/K/A TINA KIM, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Chesler, District Judge

OPINION

This matter comes before the Court upon the motions to dismiss filed by Defendants Michelle's Cosmetics, Inc., Michelle Kim, and Jin Young Noh [docket item 4] and Defendant Jisoo Kim [docket item 6]. Plaintiffs 3Lab, Inc. and David Chung oppose Defendants' motions to dismiss and have submitted a cross-motion for discovery limited to jurisdictional issues [docket items 12 and 14]. The Court has reviewed the papers submitted in support of and in opposition to the motions, and for the reasons set forth below, Defendants' motions to dismiss for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2) are granted and Plaintiff's cross-motion for discovery is denied.

I. Background

Plaintiff initiated this action in this Court, pursuant to 28 U.S.C. § 1332(a), asserting claims for trade defamation, defamation, tortious interference, and breach of the covenant of fair dealing. On June 1, 2007, Defendants Michelle's Cosmetics, Inc., Michelle Kim, and Jin Young Noh timely filed this motion to dismiss asserting lack of personal jurisdiction, Fed. R. Civ. P. 12(b)(2). On June 7, 2007, Defendant Jisoo Kim filed a separate motion to dismiss asserting lack of personal jurisdiction, Fed. R. Civ. P. 12(b)(2); failure to state a claim, Fed. R. Civ. P. 12(b)(6); and asking the Court to dismiss on the basis of forum non-conveniens, or in the alternative, to transfer the action to the Northern District of Georgia. Plaintiffs submitted opposition to the motions, asserting this Court has personal jurisdiction over all Defendants and cross-moved for limited discovery on the personal jurisdictional issues, and requesting that if the Court found Plaintiffs' complaint deficient, for leave to amend the complaint.

Plaintiff 3Lab, Inc., is a business organized under the laws of New Jersey and with its principal place of business in New Jersey and Plaintiff David Chung is a citizen of New Jersey. Defendant Jisoo Kim is a citizen of Georgia; Defendants Michelle Kim and Jin Young Noh are both citizens of California; and Defendant Michelle's Cosmetics is a business organized under the laws of California, with its principal place of business in California.

Plaintiff Chung formerly owned retail cosmetics businesses in California, New Jersey, and New York, and Defendants Jisoo Kim, Michelle Kim, and Jin Young Noh all previously worked in Chung's various stores. According to Chung, Jisoo Kim worked at three of his stores: Mona's Cosmetics, located in Englewood Cliffs, New Jersey from 1993 to 1994; Cici's Cosmetics, located in New York City, New York in 2002; and Mona's Cosmetics in Queens, New York from December 2002 through January 2004.*fn1 (Complaint at ¶ 13). According to Plaintiffs, Jisoo Kim terminated her business relationship with Chung on "bad terms" in 2004, because, during her employment she improperly sought to obtain corporate advantages. (Complaint at ¶ 13). Jisoo Kim moved to Georgia in 2004, where she currently resides and operates a retail cosmetics store. Jisoo Kim last purchased products from 3Lab in 2005, (Jisoo Kim Aff. at t ¶5), and Plaintiffs believe Jisoo Kim's Georgia-based business continues to purchase cosmetic supplies in New Jersey. (Chung Aff. at ¶13-14).

Michelle Kim served as Assistant Manager of Cosmetics World, located in Los Angeles, California, from 1995 through early 2003. (Complaint at ¶ 14). Jin Young Noh was the manager and president of Cosmetics World in Los Angeles from 1994 through November 2002. (Complaint at ¶ 15). Michelle Kim and Jin Young Noh continue to reside in the Los Angeles, California region, where they now operate Michelle's Cosmetics, Inc., a business that advertises and sells cosmetics only in Southern California. Plaintiffs believe Michelle's Cosmetics currently purchases products from various New Jersey companies. (Chung Aff. ¶14).

Chung contends that after his business relationship ended with Michelle Kim and Jin Young Noh they "began taking steps to sabotage plaintiffs' business activities[.]" (Complaint at ¶16). The allegations before this Court seem to center around a Korean television program, "PD Diary," that produced an investigative news story about Chung's new company, 3Lab. (Complaint at ¶20-27). 3Lab produces luxury cosmetics and, in 2003, formed a contractual relationship with an independent legal business entity in Korea to export its products for sale in Korea. (Id. at ¶18). Plaintiffs and the independent retailer invested "millions of dollars in the design, production, manufacture, and marketing preparations" and launched the retail and distribution business sometime in 2005. (Id. at ¶19).

On August 29, 2006, MBC, a Korean news channel, aired the investigative news program, "PD Diary." (Chung Aff. at ¶ 3). The fifty-minute program focused exclusively on 3Lab, and reported that 3Lab, which purports to produce and sell luxury cosmetics, actually produces products of inferior quality. (Chung Aff. at ¶3). Plaintiffs assert the Korean language program aired in Korea and in the United States, including New Jersey, and caused damage to 3Lab's trade name and reputation, and caused "interruption and interference" to Plaintiffs' business. (Id.)

According to Plaintiffs, "[u]pon information and belief . . . Jisoo Kim caused and/or contributed to the production and/or airing of the false and defamatory statements uttered against defendants by PD Diary" and "PD Diary reporters and producers engaged in various activities in [New Jersey] in pursuance of 'facts' underlying their story. Upon information and belief, all those acts were led and planted by some [or] all of the defendants." (Complaint at ¶21-22). Plaintiff further asserts that in February 2007, "and on other previous occasions," Jisoo Kim made false and defamatory remarks, "consistent with information used in the PD Diary story," and that Jisoo Kim and Michelle Kim have told unidentified "third-parties" that Plaintiffs are bankrupt, and that Plaintiffs' products are "fraudulent" or "phony cosmetics." (Complaint at ¶23-24). Finally, Plaintiff states that "[a]ll defendants and certain unknown persons are believed to have [willfully] engaged in the legal violations against plaintiffs." (Complaint at ¶27).

In opposition to Defendants' motions to dismiss and in support of Plaintiffs' cross-motion for discovery, Chung states that certain unidentified PD Diary reporters informed him that "'three individuals' from the United States" provided the information for the investigative news report, and Chung "believe[s]" the "'three sources' . . . included at least one of the defendants." (Chung Aff. at ¶6). Moreover, before the program aired in August 2006, one or more of the unidentified sources traveled from the United States to Korea "to participate in conferences with PD Diary" and "the PD Diary news team traveled to New Jersey in pursuit of the story planted by their 'sources.'" (Id. at ¶11-12).

Plaintiffs also assert additional facts for the first time in opposition to the motions to dismiss, and seems to indicate that one or more of the Defendants may have provided a "tip" that resulted in Estee Lauder investigating Chung's company*fn2 for selling "grey market" products in violation of his distribution agreement, which resulted in a three to four month suspension of his contract to distribute their products. (Chung Aff. at ¶9-10). Chung also contends Defendants were among only a "handful of individuals" privy to "insider information" that was "spread in the media and the Internet" and directed at Plaintiffs, and Plaintiffs believe Defendants have posted information on the Internet "intending [Plaintiffs] to be smeared in New Jersey." (Id. at ¶10-11).

II. Discussion

"It is well established that in deciding a motion to dismiss for lack of jurisdiction, a court is required to accept the plaintiff's allegations as true, and is to construe disputed facts in favor of the plaintiff." Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir.2003) (citing Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 368 (3d Cir.2002)). However, where, as here, a defendant has raised the defense of lack of personal jurisdiction, "the plaintiff bears the burden to prove, by a preponderance of evidence, facts sufficient to establish personal jurisdiction." ...


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