Pincione v. D’Alfonso

SUMMARY ORDER Plaintiff Max Pincione appeals from a September 14, 2011, judgment of the United States District Court for the Southern District of New York (Crotty, /.), which granted the motions of Defendants Luciano D’Alfonso, Guiseppe Paolone, Guiliano Milia, Berardo Ambrosi, Banca Caripe S.p.A., and Dario Mancini to dismiss Pin-cione’s amended complaint for lack of personal jurisdiction. Although Defendants Claudio Digiacomo, Angelo Renzetti, Stefa-no Caravaggio, Andrea Iacone, and Ultras did not join in the motions to dismiss, the district court applied the arguments presented in the motions to the non-moving defendants and, in a thorough decision, dismissed the amended complaint with respect to those defendants as well. Pin-cione asserts that the amended complaint pleads adequate facts to establish personal jurisdiction over the defendants under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1965(a), or the New York Long-Arm Statute, N.Y. C.P.L.R. § 302(a)(1), (2), (3). We agree with the district court that it lacked personal jurisdiction over the defendants, and we affirm its decision. We assume the parties’ familiarity with the underlying facts and procedural history in this case. We review a district court’s dismissal of a complaint for lack of personal jurisdiction de novo with respect to legal conclu *24 sions. See Penguin Group (USA) Inc. v. Am. Buddha, 609 F.3d 30, 34 (2d Cir. 2010). Findings of fact regarding personal jurisdiction are reviewed under the clearly erroneous standard. Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 22 (2d Cir. 2004). At this preliminary stage, we construe pleadings and affidavits in the plaintiffs favor. See PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir.1997). RICO’s “Venue and Process” section, § 1965(a), “does not provide for nationwide personal jurisdiction over every defendant in every civil RICO case, no matter where the defendant is found.” PT United Can Co. Ltd. v. Crown Cork & Seal Co., Inc., 138 F.3d 65, 71 (2d Cir.1998). Instead, “ § 1965(a) grants personal jurisdiction over an initial defendant in a civil RICO case to the district court for the district in which that person resides, has an agent, or transacts his or her affairs.” Id. Here, none of the defendants reside or can be found in New York. Thus, any personal jurisdiction based on RICO must be based on the defendants either having an agent or otherwise transacting their affairs in New York. Pincione has not pleaded facts that satisfy either of these tests. Massimiliano Naddeo is the defendants’ only possible “agent” in New York. The allegations concerning his agency were entirely eonclusory and thus inadequate. Pincione has also failed to make a sufficient showing that any of the defendants “transacts his affairs” in New York. The district court held and Pincione does not dispute on appeal that the “transacts his affairs” language in § 1965 is “synonymous with the Clayton Act’s, 15 U.S.C. § 22, requirement that a party ‘transact[ ] business’ in the venue.” JApp’x at 273. “Under this definition, the business must be substantial in character, so that there is ‘some amount of business continuity and certainly more than a few isolated and peripheral contacts with the particular judicial district.’ ” Id. (quoting Gates v. Wilkinson, 2003 WL 21297296, at *4 (S.D.N.Y. June 4, 2003)). Pincione emphasizes that the defendants repeatedly contacted him while he was in New York. However, as the district court held, “these contacts do not rise to the level required by RICO. Rather, they were minimal and ... solely for the purposes of a business deal that took place in Italy.” JApp’x 275. Next, Pincione contends that the district court erred in finding that it lacked personal jurisdiction over the defendants under any of three provisions of the New York Long-Arm Statute. Under § 302(a)(1), a nondomiciliary defendant is subject to personal jurisdiction if he transacts business in New York and the claims against him arise out of that business activity. Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100, 103 (2d Cir.2006). “[T]he overriding criterion necessary to establish a transaction of business is some act by which the defendant purposefully avails itself of the privilege of conducting activities within New York.” Ehrenfeld v. Bin Mahfouz, 9 N.Y.3d 501, 508, 851 N.Y.S.2d 381, 881 N.E.2d 830 (2007) (internal quotation marks and alterations omitted). “Generally, telephone and mail contacts do not provide a basis for jurisdiction under CPLR § 302(a)(1).... ” Gap, Inc. v. Stone Int’l Trading, Inc., No. 93 Civ. 0638(SWK), 1994 WL 670020, at *7 (S.D.N.Y. Nov. 30, 1994) (internal quotation marks omitted). When determining whether a defendant transacts business in New York, courts examine the totality of a defendant’s conduct and activities in New York, including “whether [he] has an ongoing contractual relationship with a New York corporation^ ...] whether the contract was negotiated or executed in New York and whether, after executing a con *25 tract with a New York business, the defendant ... visited New York for the purpose of meeting with parties to the contract regarding the relationship.” Sunward Elecs., 362 F.3d at 22 (quoting Agency Rent A Car Sys., Inc. v. Grand Rent A Car Corp., 98 F.3d 25, 29 (2d Cir.1996)). The defendants’ alleged New York conduct or contacts consisted principally of correspondence, telephone calls, and participation in telephone and video conferences. Nothing in the pleadings suggests that these communications, while numerous, were made with the intent to project the defendants into New York and avail themselves of its laws. Rather, these contacts were intended to facilitate a business deal in Italy, where the relevant corporations and bank accounts were located. Even Naddeo’s visit to New York on behalf of and “in conspiracy with” the remaining defendants does not alter the analysis. Assuming Pincione adequately pleaded an agent/principal or co-conspirator relationship, Naddeo’s physical presence in New York for his initial meetings with Pincione cannot transform this fundamentally Italian deal into a New York business transaction. 1 Turning to § 302(a)(2), Pincione argues that personal jurisdiction over the defendants is proper because the torts that are the subject of the suit occurred in New York. Pincione concedes that for this argument to prevail, we must revisit our holding in Bensusan Restaurant Corp. v. King, 126 F.3d 25 (2d Cir.1997). Appellant’s Br. at 33 n. 4. There, we adopted the New York Court of Appeals’s holding in Feathers v. McLucas, 15 N.Y.2d 443, 458, 261 N.Y.S.2d 8, 209 N.E.2d 68 (1965), “that CPLR § 302(a)(2) reaches only tortious acts performed by a defendant who was physically present in New York when he performed the wrongful act.” Bensusan, 126 F.3d at 28. Moreover, we held that “[i]n the absence of some indication by the New York Court of Appeals that its decision ] in Feathers, ... as interpreted and construed [by this Court], no longer represents the law of New York, ... it would be impolitic for this Court to hold otherwise.” Id. at 29. Pincione has not identified any New York Court of Appeals decision issued after Bensusan that holds that Feathers no longer represents the law of New York. Accordingly, we decline to reconsider our interpretation of New York law as set forth in Bensusan. Finally, Pincione argues that personal jurisdiction extends to the defendants pursuant to §§ 302(a)(3)(ii), which applies to anyone who personally or through an agent commits a tort outside the state, causing injury within the state, if that person “expect[s] or should reasonably expect the tortious act to have consequences in the state and derive[s] substantial revenue from interstate or international commerce.” Id. (emphasis added). 2 On appeal, the parties dispute both the location of Pincione’s injury and whether the defendants derive substantial *26 revenue from interstate or international commerce. Like the district court, we hold that even if Pincione can establish that he sustained an injury in New York, he has not demonstrated that the defendants that he alleges caused that injury derive substantial revenue from interstate or international commerce. An injury occurs at the place of the “original event” which caused it. See Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 791 (2d Cir.1999). “This ‘original event’ is ... distinguished not only from the initial tort but from the final economic injury and the felt consequences of the tort.” Id. Generally, with commercial torts, the situs of the injury is New York if the plaintiff raises the inference that the tortious conduct caused him to lose business or customers within the state. See e.g., Sybron Corp. v. Wetzel, 46 N.Y.2d 197, 207, 413 N.Y.S.2d 127, 385 N.E.2d 1055 (1978) (finding § 302(a)(3)(ii) jurisdiction over foreign defendant based on its hiring of a former employee of a New York-based plaintiff to access the plaintiffs trade secrets and thereby causing plaintiff to lose customers in New York). However, “[t]he occurrence of financial consequences in New York due to the fortuitous location of plaintiffs in New York is not a sufficient basis for jurisdiction under § 302(a)(3) where the underlying events took place outside New York.” Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 209 (2d Cir. 2001) (quotation marks omitted). We agree with the district court that Pincione satisfied the “location” element of § 302(a)(3)(ii) to the extent he alleged that the fraudulent January 2007 balance sheet he received in New York “induced him to make his initial financial investment in Pescara 70.” J. App’x at 282. Nothing in the amended complaint indicates that Ban-ca Caripe and Mancini were involved in the production or dispatch of the balance sheet. With respect to the defendants who allegedly were associated with the fraudulent January 2007 balance sheet, we find that none derive substantial revenue from interstate or international commerce for substantially the same reasons identified by the district court. In particular, we agree that plaintiff cannot establish that defendants Guiseppe Paolone, Guiliano Milia, or Berardo Am-brosi received significant revenue from international commerce by alleging that Pin-cione invested money in their employer, Pescara Calcio, S.p.A. Nor can Pincione demonstrate that Angelo Renzetti received substantial revenue from interstate commerce based solely on Renzetti’s status as a shareholder in Pescara Calcio, S.p.A. The revenue requirement “is designed to narrow the long-arm reach to preclude the exercise of jurisdiction over nondomiciliar-ies who might cause direct, foreseeable injury within the State but whose business operations are of a local character.” LaMarca v. Fak-Mor Mfg. Co., 95 N.Y.2d 210, 215, 713 N.Y.S.2d 304, 735 N.E.2d 883 (2000) (internal quotation marks and citations omitted). Any revenue Renzetti derived was from the operation of an Italian soccer club in Italy, a business with a distinctly local character. See also Ziegler, Ziegler & Assocs. LLP v. China Digital Media Corp., No. 05 Civ. 4960(LAP), 2010 WL 2835567, at *5 (S.D.N.Y. July 13, 2010) (“Capital infused into a corporation *27 by means of stock purchases cannot be considered revenue per se, because it is not profit from sales. Rather, the revenues required under § 302(a)(3)(ii). must derive from sales of goods or services in interstate [or international] commerce.” (internal citation and quotation marks omitted)). We have considered Pincione’s remaining arguments and find them to be without merit. Accordingly, for the foregoing reasons, the judgment of the district court is AFFIRMED. Footnotes [1] In support of his position, Pincione relies principally on three decisions in which out-of-state communications were found to be sufficient to confer personal jurisdiction over a non-resident defendant. These cases, however, are readily distinguishable. For instance, in Fischbarg v. Doucet, 9 N.Y.3d 375, 849 N.Y.S.2d 501, 880 N.E.2d 22 (2007), a California-based defendant solicited and retained a New York attorney to perform legal services. Thus, the New York Court of Appeals held that the defendant had invoked the protections of the state of New York by engaging in an ongoing attorney-client relationship with a New York attorney. Id. at 26-35. [2] The amended complaint does not assert § 302(a)(3)(i) as a basis for personal jurisdiction. Pincione's opening brief, however, alleges that jurisdiction lies pursuant to this section, which applies to a tortious act outside the state if the defendant "regularly does or solicits business, or engages in any other persistent course of conduct, or derives sub *26 stantial revenue from goods used or consumed or services rendered in the state,” § 302(a)(3)(i). Even if Pincione had properly pleaded personal jurisdiction under § 302(a)(3)(i), we would affirm the district court’s decision. For the reasons discussed supra, with respect to § 302(a)(1), Pincione has not established that defendants regularly do or solicit business or engage in any other persistent course of conduct in New York. Additionally, Pincione has failed to allege that defendants “derive! ] substantial revenue from goods used or consumed or services rendered” in New York.