Opinion
20 Civ. 4507 (AT) (GWG)
06-02-2022
MAHFOOZ AHMAD, Plaintiff, v. COLIN DAY, et al., Defendants.
REPORT & RECOMMENDATION
GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE
Pro se plaintiff Mahfooz Ahmad brings this case alleging claims of (1) employment discrimination and wrongful termination against his former employer iCIMS, iCIMS CEO Colin Day, iCIMS Deputy General Counsel Courtney Dutter (collectively, the “Original Defendants”), and (2) claims that are unclear, but appear to sound in intellectual property infringement, fraud, and misrepresentation against naviHealth, Inc. (“naviHealth”), Beacon Hill Staffing Group LLC (“Beacon Hill”), and Vista Equity Partners (“Vista”) (collectively, the “movants”), and which are possibly intended to have been alleged against the Original Defendants as well. See Amended Complaint, filed Aug. 25, 2021 (Docket # 76) (“Am. Comp.”). The movants each seek to dismiss Ahmad's claims against them under Fed.R.Civ.P. 12(b). For the reasons that follow, those motions should be granted and Ahmad's claims against naviHealth, Beacon Hill, and Vista should be dismissed.
See naviHealth's Motion to Dismiss, filed Jan. 14, 2022 (Docket # 104); naviHealth's Memorandum of Law in Support, filed Jan. 14, 2022 (Docket # 105) (“naviHealth Mem.”); Declaration of Megan Goggans Perry in Support, filed Jan. 14, 2022 (Docket # 106) (“Perry Decl.”); Beacon Hill's Motion to Dismiss, filed Jan. 18, 2022 (Docket # 109); Beacon Hill's Memorandum of Law in Support, filed Jan. 18, 2022 (Docket # 110) (“Beacon Hill Mem.”); Vista's Motion to Dismiss, filed Jan. 18, 2022 (Docket # 117); Vista's Memorandum of Law in Support, filed Jan. 18, 2022 (Docket # 118) (“Vista Mem.”); Plaintiff's Memorandum of Law in Opposition, filed Feb. 7, 2022 (Docket # 137) (“Pl. Opp.”); naviHealth's Reply Memorandum of Law, filed Feb. 28, 2022 (Docket # 148); Beacon Hill's Reply Memorandum of Law, filed Mar. 16, 2022 (Docket # 153); Vista's Reply Memorandum of Law, filed Mar. 16, 2022 (Docket # 154) (“Vista Reply”).
I. BACKGROUND
A. Procedural History
Ahmad, proceeding pro se, filed the original complaint in this action on June 11, 2020. See Complaint, filed June 11, 2020 (Docket # 2). An attorney filed a notice of appearance on behalf of Ahmad on December 1, 2020, see Notice of Appearance, filed Dec. 1, 2020 (Docket # 17), but quickly withdrew, see Order, dated Jan. 5, 2022 (Docket # 22), and Ahmad resumed his pro se status.
On January 8, 2021, the Original Defendants moved to compel arbitration. See Motion to Compel Arbitration, filed Jan. 8, 2021 (Docket # 24). On February 22, 2021, this Court stayed discovery pending resolution of the motion to compel arbitration. See Order, dated Feb. 22, 2021 (Docket # 34). On August 20, 2021, this Court denied the motion to compel arbitration. See Opinion and Order, dated Aug. 20, 2021 (Docket # 73).
On August 25, 2021, Ahmad filed the Amended Complaint, which added naviHealth, Beacon Hill, and Vista as defendants. See Am. Comp. The Original Defendants answered the Amended Complaint on September 15, 2021. See Answer, filed Sept. 15, 2021 (Docket # 78). naviHealth, Beacon Hill, and Vista then filed the instant motions.
B. Facts Alleged in the Complaint
The following recitation of facts is taken from the Amended Complaint.
Our summary of facts does not include any factual statements made in plaintiff's memorandum of law opposing defendants' motion. See Stallworth v. New York, 2017 WL 4355897, at *7 (S.D.N.Y. July 27, 2017) (in opposing motion to dismiss for lack of jurisdiction, plaintiff cannot rely on “factual assertions made only in his opposition brief without evidentiary support”).
In February 2016, Ahmad joined iCIMS as a Data Migration - Junior Project Specialist. Am. Comp. at 8. “Due to [his] great work,” Ahmad's title was subsequently changed twice, and he was “given responsibilities of [a] Software Implementation Manager” and later assigned to “projects of Software Integration with larger enterprise level clients.” Id.
Nonetheless, iCIMS terminated Ahmad in June 2018. See id. According to Ahmad, this termination was the last in a series of discriminatory events that occurred because he is Muslim and which took place throughout his employment with iCIMS. See Id. at 8-10.
While employed at iCIMS, Ahmad “submitted a business plan for a new business model to iCIMS CEO Colin Day.” Id. at 8 (punctuation omitted). Ahmad named the business plan “Jobtrail.” Id. According to Ahmad, “Jobtrail” is a “novel intellectual property invention.” Id. at 10. iCIMS fired Ahmad five days later. Id. at 8. Ahmad “offered iCIMS to buy the new business plan . . . but it didn't matter to [Day] as iCIMS had already learned everything about” Jobtrail. Id. at 10.
In August 2018 - that is, several months after Ahmad was fired from iCIMS - Vista “invested hundreds of millions of dollars in iCIMS.” Id. at 11.
Ahmad asserts that iCIMS “illegally] cop[ied]” and “st[ole]” his “[i]nvention,” id. at 10, and that in 2020, “iCIMS . . . was able to reverse-engineer [Jobtrail] and began to offer it as services to its clients,” id. at 11. In 2020, iCIMS was “publicly falsely advertising that it had invented/acquired a unique way of finding new talent for employers.” Id. at 12.
In 2019, following his termination, Ahmad received several “unsolicited” communications from Beacon Hill regarding “a contractual job opportunity for [Ahmad] to work with [n]aviHealth . . ., [an iCIMS] business partner.” Id. at 11. Specifically, Ahmad was told by a Beacon Hill employee that he would “work on the implementation of iCIMS . . . software with [n]aviHealth.” Id. Ahmad states that he “was lured into accepting this new (misrepresented) job offer along with signing of a (misrepresented) agreement in July 2019.” Id.
Once Ahmad accepted the job, which had the title “Senior Configuration Engineer,” he “found out that the new job was a scam, created with the sole purpose of gaining [Ahmad's] signatures on an agreement titled ‘Invention Assignment Agreement' along with another unnecessary ‘Business Associate addendum' contract that was added with the misrepresented job contract.” Id. Ahmad represents that these agreements “were purposefully added by defendants and its affiliates so that through misrepresentation iCIMS and its affiliates could benefit from plaintiff[']s invention which Plaintiff had refused to hand over in June 2018 and refused to sign additional agreements at the time . . . of Plaintiff's wrongful termination in June 2018.” Id. at 11-12. Ahmad has put into the record copies of portions of the two agreements - that is, the “Invention Assignment Agreement” and the “Business Associate addendum” - which are both dated July 12, 2019. See Contractor Confidentiality and Invention Assignment Agreement & Business Associate Addendum, annexed as Ex. F to Pl. Opp. (Docket # 137-1), at *14-17 (“July 12 Agreements”).
“*__” designates pagination assigned by the ECF system, which we employ where a document's own pagination is absent or inconsistent.
II. LEGAL STANDARDS
A case must be dismissed for lack of subject matter jurisdiction under Federal Rule 12(b)(1) “when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (citing Fed.R.Civ.P. 12(b)(1)). The plaintiff carries “the burden of proving by a preponderance of the evidence that [jurisdiction] exists.” Id. When deciding a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, “the district court must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction.” Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014).
Where jurisdictional facts are disputed, however, “the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits.” APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003) (punctuation omitted) (quoting LeBlanc v. Cleveland, 198 F.3d 353, 356 (2d Cir. 1999)); accord Cortland Street Recovery Corp. v. Hellas Telecomms., S.a.r.l., 790 F.3d 411, 417 (2d Cir. 2015).
On a motion to dismiss for lack of personal jurisdiction, “[t]he plaintiff bears the burden of establishing a prima facie basis for demonstrating that jurisdiction . . . is appropriate as to each defendant.” Nnaka v. Fed. Rep. of Nigeria, 2019 WL 6831532, at *3 (S.D.N.Y. Aug. 12, 2019) (citing cases); see also Fire & Police Pension Ass'n of Colo. v. Bank of Montreal, 368 F.Supp.3d 681, 692 (S.D.N.Y. 2019) (“At the pleading stage - and prior to discovery - a plaintiff need only make a prima facie showing that jurisdiction exists by pleading legally sufficient allegations of jurisdiction.”). “If the court considers only the pleadings and affidavits, the plaintiff's prima facie showing ‘must include an averment of facts that, if credited by the ultimate trier of fact, would suffice to establish jurisdiction over the defendant.'” Bank of Montreal, 368 F.Supp.3d at 692 (quoting In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir. 2013)). “Courts may rely on materials outside the pleadings in considering a motion to dismiss for lack of personal jurisdiction, but they must be construed in the light most favorable to the plaintiff.” Id. (citing DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001)). Of course, “[t]he allegations in the complaint must be taken as true to the extent they are uncontroverted by the defendant's affidavits.” Id. (quoting MacDermid, Inc. v. Deiter, 702 F.3d 725, 727 (2d Cir. 2012)); see also Nnaka, 2019 WL 6831532, at *3.
III. DISCUSSION
The movants seek dismissal on various grounds: lack of Article III standing, failure to state a claim, lack of personal jurisdiction, improper venue, and forum non conveniens. We conclude that Ahmad lacks Article III standing to assert his claims against naviHealth and Beacon Hill and that Ahmad has failed to establish that this Court may exercise personal jurisdiction over Vista. We therefore do not reach the movants' remaining arguments in support of dismissal.
A. Standing
naviHealth and Beacon Hill argue that Ahmad lacks Article III standing to assert his claims against them. See naviHealth Mem. at 14-17; Beacon Hill Mem. at 10-11.
1. Governing Law
Under Article III of the United States Constitution, federal courts may hear only “[c]ases” and “[c]ontroversies.” U.S. Const. art. III, § 2, cl. 1. “Standing to sue is a doctrine rooted in the traditional understanding of a case or controversy.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). “If [a] plaintiff[] lack[s] Article III standing, a court has no subject matter jurisdiction to hear their claim.” Cent. States S.E. & S.W. Areas Health & Welfare Fund. v. Merck-Medco Managed Care, LLC, 433 F.3d 181, 198 (2d Cir. 2005). Thus, “[i]t is well established . . . that before a federal court can consider the merits of a legal claim, the person seeking to invoke the jurisdiction of the court must establish the requisite standing to sue.” Whitmore v. Arkansas, 495 U.S. 149, 154 (1990).
To satisfy the Article III standing requirement, the claimant must show: (1) that he or she “suffered an injury in fact - an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical”; (2) that there is “a causal connection between the injury and the conduct complained of” such that the injury is “fairly traceable to the challenged action of the defendant”; and (3) that it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotation marks and citations omitted).
2. Analysis
Ahmad's Amended Complaint alleges that naviHealth and Beacon Hill engaged in acts of misrepresentation that caused Ahmad to sign away the rights to the invention he had presented to iCIMS: that is, the intellectual property underlying Jobtrail. See Am. Comp. at 11-12. In other words, Ahmad's claims against naviHealth and Beacon Hill turn solely on his being tricked into signing the July 12 Agreements. See id. Implicit in the Amended Complaint is that the signing of these agreements somehow allowed iCIMS to “benefit from plaintiff's invention.” Am. Comp. at 12.
This is the entirety of the Amended Complaint's allegations pertaining to naviHealth and Beacon Hill. Thus, nothing in the Amended Complaint shows how the alleged trickery caused Ahmad any injury. As a result, Ahmad's complaint founders on the causation element of the standing analysis. The causation element requires a plaintiff to “demonstrate a causal nexus between the defendant's conduct and the injury.” Rothstein v. UBS AG, 708 F.3d 82, 91 (2d Cir. 2013) (quoting Heldman v. Sobol, 962 F.3d 148, 156 (2d Cir. 1992)). Certainly, this requirement is a “lesser burden” than the familiar tort law principle of proximate cause, id. at 92, and “the fact that there is an intervening cause of the plaintiff's injury may foreclose a finding of proximate cause but is not necessarily a basis for finding that the injury is not ‘fairly traceable' to the acts of the defendant.” Id. Nonetheless, the causation element obligates the claimant to establish that his or her injury-in-fact is “fairly traceable to the challenged action of the defendant” before the court. Lujan, 504 U.S. at 560. This analysis “turns on the degree to which the defendant's actions constrained or influenced the decision of the final actor in the chain of causation.” Carver v. City of New York, 621 F.3d 221, 226 (2d Cir. 2010).
Here, the Amended Complaint does not show that Ahmad's signing of the agreement with naviHealth caused in any way the misappropriation of his invention, which is Ahmad's sole injury. In other words, Ahmad has not shown that his injury - that he was deprived of the fruits of his invention - is traceable to the conduct he alleges in the Amended Complaint - that is, his signing of the July 12 Agreements. The connection between these two events simply cannot be discerned from the Amended Complaint. The only pages of the Agreements that Ahmad admits to signing, see July 12 Agreements, say nothing that would allow such a causal connection to be made. And Ahmad points to nothing on these pages that allows the inference that his signing of these pages - even if the signing was procured by deceitful conduct - was in fact the cause of the loss of the fruits of his invention. Indeed, any conclusion that there was any causal connection between these two events would be based on pure speculation.
While the defendants have put copies of what they claim to be the full text of the July 12 Agreements into the record, see Contractor Confidentiality and Invention Assignment Agreement, annexed as Ex. 1 to Perry Decl. (Docket # 106-1) (“Assignment Agreement”); Business Associate Addendum, annexed as Ex. 2 to Perry Decl. (Docket # 106-2), Ahmad disputes that he signed the full version of these agreements, asserting that he put his name only on the first page and on the last page of each agreement and that nothing in between those pages should have any effect. See Pl. Opp. at 13-14.
Moreover, if we accepted defendants' invitation to look at the July 12 Agreements in full, see naviHealth Mem. at 16, the full text of the agreements would not help Ahmad because they apply only to intellectual property created during the term of plaintiff's employment with naviHealth, which post-dated his work at iCIMS and his creation of Jobtrail. See Assignment Agreement ¶ 6.
In sum, while Ahmad alleges that Beacon Hill and naviHealth schemed to have Ahmad sign the July 12 Agreements, Ahmad offers nothing to implicate those agreements in the theft of his intellectual property. Thus, assuming Ahmad suffered an injury-in-fact when his “invention” was allegedly misappropriated by iCIMS, Ahmad fails to show that any such injury is “fairly” (or even remotely) “traceable” to the conduct of Beacon Hill or naviHealth. Lujan, 504 U.S. at 560. See Liu v. United States Congress, 834 Fed.Appx. 600, 604-05 (2d Cir. 2020) (causation element of standing test not met where parties sued were not responsible for plaintiff's alleged injury). (summary order).
It is unclear if the complaint intends to assert any employment discrimination claim as to Vista. If it can be so read, certainly nothing links Vista to any injury Ahmad suffered by virtue of his employment or termination by iCIMS. Indeed, Ahmad admits that Vista did not invest in iCIMS until after Ahmad was terminated. See Pl. Opp. at 6-7.
B. Personal Jurisdiction over Vista
Vista argues that this Court lacks personal jurisdiction with respect to Ahmad's claims against it. See Vista Mem. at 15-18; Vista Reply at 10-11. We agree.
“District courts deciding a motion to dismiss for lack of personal jurisdiction engage in a two-part analysis, first determining whether there is a statutory basis for exercising personal jurisdiction and second deciding whether the exercise of jurisdiction comports with due process.” BWP Media USA Inc. v. Hollywood Fan Sites, LLC, 69 F.Supp.3d 342, 349 (S.D.N.Y. 2014); accord Herod's Stone Design v. Mediterranean Shipping Co. S.A., 434 F.Supp.3d 142, 152-53 (S.D.N.Y. 2020). “In diversity cases, federal courts must look to the forum state's long-arm statute to determine if personal jurisdiction may be obtained over a nonresident defendant.” Savin v. Rainer, 898 F.2d 304, 306 (2d Cir. 1990); accord Cortlandt St. Recovery Corp. v. Deutsche Bank AG, London Branch, 2015 WL 5091170, at *5 (S.D.N.Y. Aug. 28, 2015). We therefore turn to New York's long-arm statute, C.P.L.R. §§ 301, 302(a).
“General jurisdiction in New York is provided for in C.P.L.R. § 301, which allows a court to exercise ‘such jurisdiction over persons, property, or status as might have been exercised heretofore.'” Aybar v. Aybar, 93 N.Y.S.3d 159, 163 (2d Dep't 2019) (quoting C.P.L.R. § 301); accord MTS Logistics, Inc. v. Innovative Commodities Grp., LLC, 442 F.Supp.3d 738, 754 (S.D.N.Y. 2020). “Under C.P.L.R. § 301, jurisdiction is proper when a company has engaged in such a continuous and systematic course of doing business in New York that a finding of its presence in New York is warranted.” MTS Logistics, 442 F.Supp.3d at 754 (quoting Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 224 (2d Cir. 2014)) (punctuation omitted). Here, Ahmad has pleaded that Vista “is located in Austin, Texas.” Am. Comp. at 5. There is no allegation that Vista maintains a place of business in New York or is incorporated in New York. Indeed, Ahmad offers nothing else about Vista's contacts with New York and thus there is no basis on which Vista is subject to general jurisdiction. could be found .
Even putting section 302 aside, under the Due Process Clause, general jurisdiction over a nonresident corporation based on the corporation's in-state presence is constitutional only if the corporation's in-state contacts “are so continuous and systematic as to render it essentially at home in the forum State.” Daimler AG v. Bauman, 571 U.S. 117, 139 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)) (punctuation omitted). Daimler held that it is the “exceptional case” where “a corporation's operations in a forum other than its formal place of incorporation or principal place of business . . . be so substantial and of such a nature as to render the corporation at home in that State.” Id. at 139 n.19; accord BNSF Ry. Co. v. Tyrrell, 137 S.Ct. 1549, 1558-59 (2017). Accordingly, subjecting Vista to general personal jurisdiction would violate the Due Process Clause. See Thackurdeen v. Duke Univ., 130 F.Supp.3d 792, 799 (S.D.N.Y. 2015) (“Neither Duke nor OTS is incorporated or has its principal place of operation in New York and Plaintiffs have failed to explain why this represents an exceptional case to the general rule.”); Aybar, 93 N.Y.S.3d at 165 (under Daimler, Ford was not subject to general jurisdiction in New York despite “extensive commercial activities,” operating a factory in New York, employing approximately 600 persons in New York, and contracting with “‘hundreds' of dealerships in the state”).
Section 302(a) authorizes the exercise of specific personal jurisdiction over a nonresident defendant in four circumstances: (1) if the defendant “transacts any business within the state or contracts anywhere to supply goods or services in the state,” Id. § 302(a)(1); (2) if the defendant “commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act,” id. § 302(a)(2); (3) if the defendant “commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce,” id. § 302(a)(3); (4) if the defendant “owns, uses or possesses any real property situated within the state,” id. § 302(a)(4).
Ahmad's substantive allegations in the Amended Complaint against Vista consist of two sentences:
Vista Equity Partners invested hundreds of millions of dollars in iCIMS Inc just two months after my wrongful termination. Around 17th August 2018, Vista Equity Partners invested hundreds of millions of dollars in iCIMS Inc.
Am. Comp. at 11.
Ahmad does not allege, however, that Vista transacted business, committed a tort, or possessed real property in New York. See id. at 8-12; C.P.L.R. § 302(a). Thus, only § 302(a)(3) is potentially applicable. But we do not see how the two sentences above suggest that Vista committed a “tortious act” merely by investing money in iCIMS. C.P.L.R. § 302(a)(3). Additionally, we do not see how it could have “reasonably expect[ed]” that the act of investing would have “consequences” for Ahmad within New York. Id. Also, Ahmad has offered no evidence that Vista “derives substantial revenue from interstate or international commerce.” Id. Finally, Ahmad has offered no evidence that Vista “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in” New York. Id. Accordingly, § 302(a) does not authorize personal jurisdiction over Vista in this case.
Ahmad appears to argue that Vista is subject to personal jurisdiction because it “has been subject to this Court's Jurisdiction previously.” Pl. Opp. at 28 (citing Transformacon, Inc. v. Vista Equity Partners, Inc., 1:15-cv-3371 (S.D.N.Y. 2015)). In Transformacon, however, the plaintiff's complaint against Vista based personal jurisdiction on a forum selection clause agreed to by the parties, see Complaint, Transformacon, Inc. v. Vista Equity Partners, Inc., 1:15-cv-3371 (Docket # 1) (S.D.N.Y. Apr. 30, 2015), ¶ 18. Here, Vista and Ahmad have not entered into such an agreement. See Pl. Opp. at 11 (“Plaintiff has never entered into a written or verbal agreement with [Vista].”). In any case, not objecting to personal jurisdiction in an unrelated case does not affect Vista's ability to object to jurisdiction in the instant case. See Moldauer v. Constellation Brands, Inc., 87 F.Supp.3d 148, 155 (D.D.C. 2015) (per curiam) (“voluntarily participating in a single lawsuit does not establish sufficient activity in a state to warrant exercising general jurisdiction, unless the prior and current lawsuits are substantially related”). Accordingly, Vista's motion to dismiss for lack of personal jurisdiction should be granted.
IV. CONCLUSION
For the foregoing reasons, the motions to dismiss filed by naviHealth, Beacon Hill, and Vista (Docket ## 104, 109, 117) should be granted, and Ahmad's claims against all three movants should be dismissed.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days including weekends and holidays from service of this Report and Recommendation to serve and file any objections. See also Fed.R.Civ.P. 6(a), (b), (d). Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with copies sent to the Hon. Analisa Torres and to the undersigned, at 500 Pearl Street, New York, New York 10007. Any request for an extension of time to file objections must be directed to Judge Torres. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).