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Marlin Leasing Corp. v. Advanced Fire & Security, Inc.

United States District Court, D. New Jersey

March 31, 2014

MARLIN LEASING CORP., et al., Plaintiffs,
v.
ADVANCED FIRE & SECURITY, INC., et al., Defendants.

MEMORANDUM OPINION

JOSEPH H. RODRIGUEZ, District Judge.

This matter is before the Court on Defendants' Motion to Dismiss for Lack of Personal Jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) or, alternatively, to Transfer Venue pursuant to 28 U.S.C. §1404(a) or §1406(a) [Doc. No. 6]. Oral argument was heard on March 27, 2014 and the record of that proceeding is incorporated here. For the reasons placed on the record that day, as well as those set forth below, the motion will be granted.

Background

Plaintiffs in this case are Marlin Leasing Corporation, a Delaware corporation authorized to do business in New Jersey, which "maintains a place of business" in Mt. Laurel, New Jersey and Marlin Business Bank, a Utah state chartered commercial bank which "maintains a place of business" in Salt Lake City, Utah. Marlin Leasing is in the business of providing commercial financing and leasing services and Marlin Business Bank is in the business of providing commercial financing.

Defendants are Advanced Security & Fire, Inc., ("ASF") an Alabama corporation which "maintains a place of business" in Huntsville, Alabama, and William Murphy, the founder & President of ASF, whose "home address" is in Alabama. ASF is in the business of selling security equipment.

According to the Amended Complaint, beginning in mid-2012, Defendants referred potential equipment lease customers to Plaintiffs, along with the customers' applications for lease financing. Upon Plaintiffs' credit approval of the customer, Plaintiffs funded the purported purchase of equipment for each customer by paying Defendant ASF the invoiced equipment cost. Defendants agreed to sell the specified equipment to Plaintiffs and deliver equipment to each customer, and Defendants represented that each customer would lease the specified equipment from Plaintiffs. That is, Defendants allegedly sold security equipment to Plaintiffs and arranged for Plaintiffs to lease that equipment to Defendants' equipment lease customers, with the arrangements financed by Plaintiffs in Mt. Laurel, New Jersey.

In about December of 2012, some customers, representing approximately 23 out of the 48 transactions conducted, contacted Plaintiffs with complaints that the equipment listed on the invoices sent to Plaintiffs by Defendants had never been supplied to the customers. Plaintiffs accuse Defendants of fraud and forgeries which have resulted in damages of $780, 755.81 owed to Plaintiffs. The Amended Complaint asserts claims for Breach of Contract, Promissory Estoppel/Detrimental Reliance, Unjust Enrichment, Common Law Fraud, Negligent Misrepresentation, "Prima Facie Tort, " and Tortious Interference.

Discussion

In the context of a motion to dismiss for lack of personal jurisdiction, a plaintiff has the burden of persuasion to establish that jurisdiction is proper and must provide facts based upon competent evidence, such as affidavits. Metcalfe v. Renaissance Marine, Inc. , 566 F.3d 324, 330 (3d Cir. 2009); see also Time Share Vacation Club v. Atlantic Resorts, Ltd. , 735 F.2d 61, 66 n.9 (3d Cir. 1984) (explaining that, unlike a motion for failure to state a claim, a plaintiff may not rely on pleadings alone for contests of personal jurisdiction).[1]

Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure allows a federal district court to "exercise[ ] personal jurisdiction according to the law of the state where it sits." O'Connor v. Sandy Lane Hotel Co. , 496 F.3d 312, 316 (3d Cir. 2007). Normally, this is a two-part inquiry; there must be a state statutory basis for exercising jurisdiction over a non-resident defendant as well as a constitutional basis whereby the minimum contacts between the non-resident and the forum state satisfy due process under the Fourteenth Amendment. See Metcalfe , 566 F.3d at 330. New Jersey's long-arm rule, however, extends jurisdiction over non-resident defendants to the full extent permitted by the United States Constitution. Carteret Sav. Bank, FA v. Shushan , 954 F.2d 141, 145 (3d Cir. 1992); see also N.J. Ct. R. 4-4(b)(1). As such, inquiry into whether personal jurisdiction exists over a non-resident defendant in New Jersey concerns only questions of due process under the Constitution. Carteret , 954 F.2d at 145.

Personal jurisdiction may be exercised under two distinct theories: general jurisdiction or specific jurisdiction. O'Connor , 496 F.3d at 317.

General personal jurisdiction exists when the evidence shows the defendant's contacts with the forum, whether or not related to the litigation, are "continuous and systematic." Helicopteros Nacionales de Colombia. S.A. v. Hall , 466 U.S. 408, 416 (1984). In other words, "the defendant has purposefully directed its activities toward residents of the forum state or otherwise purposefully availed itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." IMO Indus., Inc. v. Kiekert AG , 155 F.3d 254, 259 (3d Cir. 1998) (internal quotations and citations omitted). General jurisdiction requires "a very high threshold of business activity." Compagnie des Bauxites de Guinea v. Ins. Co. of N. Am. , 651 F.2d 877, 891 n.2 (3d Cir. 1981).

Plaintiffs do not offer any evidence of continuous and systematic contacts between Defendants and this forum. They argue, however, that they are entitled to jurisdictional discovery, and that discovery may support the exercise of general personal jurisdiction. In contrast, Defendants have offered the following uncontested statements regarding their lack of continuous and systematic contacts with the state:

-ASF and Murphy are residents of Alabama. Decl. of William Murphy, ¶¶ 2, 4. They have never owned ...

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