MacDermid, Inc. v. Deiter, No. 11-5388 (2d Cir. 2012)

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Justia Opinion Summary

Plaintiff appealed the district court's dismissal of his complaint for lack of personal jurisdiction. At issue was whether a court in Connecticut could properly exercise long-arm jurisdiction over a defendant who, while domiciled and working in Canada, was alleged to have accessed a computer server located in Connecticut to misappropriate confidential information belonging to her employer. The court held that Connecticut district court had long-arm jurisdiction over defendant; defendant had sufficient minimum contacts in Connecticut; and the exercise of personal jurisdiction comported with due process. Accordingly, the court reversed and remanded.

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11-5388-cv MacDermid, Inc. v. Deiter 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT _____________________ August Term, 2012 (Argued: November 8, 2012 Decided: December 26, 2012) Docket No. 11-5388-cv _____________________ MACDERMID, INC., Plaintiff-Appellant, v. JACKIE DEITER, Defendant-Appellee. Before: NEWMAN, B.D. PARKER, and RAGGI, Circuit Judges. ___________________ Plaintiff-Appellant appeals from the dismissal of its complaint for lack of personal jurisdiction by the United States District Court for the District of Connecticut (Eginton, J.). See Fed. R. Civ. P. 12(b)(2). We hold that the foreign defendant s remote use of a computer in Connecticut satisfied the jurisdictional requirements of both the Connecticut long-arm statute and due process. REVERSED and REMANDED. ___________________ GIOVANNA TIBERII WELLER, Carmody & Torrance LLP, Waterbury, Conn.; SHERWIN M. YODER, Carmody & Torrance LLP, New Haven, Conn., for Plaintiff-Appellant MacDermid, Inc. 1 1 2 3 4 5 6 7 8 9 WILLIAM C. CHARAMUT, William C. Charamut, Attorney at Law, LLC, Rocky Hill, Conn., for Defendant-Appellee Jackie Deiter. ______________________________________________________________________________ BARRINGTON D. PARKER, Circuit Judge: This appeal calls on us to decide whether a court in Connecticut may properly exercise 10 long-arm jurisdiction over a defendant who, while domiciled and working in Canada, is alleged 11 to have accessed a computer server located in Connecticut to misappropriate confidential 12 information belonging to her employer. The United States District Court for the District of 13 Connecticut (Eginton, J.) dismissed the complaint for lack of personal jurisdiction, reasoning 14 that the defendant had not used a computer in Connecticut and consequently was not amenable to 15 long-arm jurisdiction. See Conn. Gen. Stat. § 52-59b(a); Fed. R. Civ. P. 12(b)(2). We hold that, 16 consistent with due process, the Connecticut statute authorizes jurisdiction, and we reverse. 17 18 BACKGROUND Plaintiff-Appellant MacDermid, Inc. is a specialty chemical company with its principal 19 place of business in Waterbury, Connecticut. Defendant-Appellee Jackie Deiter lives near 20 Toronto in Fort Erie, Ontario, Canada, and she was employed in Canada by MacDermid s 21 Canadian subsidiary, MacDermid Chemicals, Inc., as an account manager from May 2008 until 22 her termination in April 2011. 23 The facts that were adduced on Deiter s Rule 12(b)(2) motion and are not disputed show 24 that MacDermid stores proprietary and confidential electronic data on computer servers that it 25 maintains in Waterbury and that employees of MacDermid Chemicals can access that 26 information only by accessing the Waterbury servers. The record reflects that employees of 2 1 MacDermid and its subsidiaries are, as a condition of employment, made aware of the housing of 2 the companies email system and their confidential and proprietary information in Waterbury. 3 The record further reflects that Deiter agreed in writing to safeguard and to properly use 4 MacDermid s confidential information and that she was not authorized to transfer such 5 information to a personal email account. 6 For reasons not relevant here, MacDermid Chemicals decided to terminate Deiter 7 effective April 7, 2011. Deiter became aware of her impending termination and, just prior to it, 8 forwarded from her MacDermid email account to her personal email account allegedly 9 confidential and proprietary MacDermid data files. Deiter had to access MacDermid s 10 11 Waterbury computer servers both to obtain and to email the files. MacDermid then sued Deiter in United States District Court for the District of 12 Connecticut, alleging unauthorized access and misuse of a computer system and 13 misappropriation of trade secrets in violation of Conn. Gen. Stat. §§ 53a-251 and 35-51 et seq. 14 Jurisdiction was based on diversity of citizenship and the Connecticut long-arm statute. Deiter 15 moved pursuant to Rule 12(b)(2) to dismiss the complaint for lack of personal jurisdiction. The 16 district court concluded that the long-arm statute did not reach Deiter s conduct and dismissed 17 the complaint. MacDermid appealed. 18 19 20 21 22 23 DISCUSSION We review de novo the district court s decision to dismiss under Rule 12(b)(2). Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010). In such a case, [t]he plaintiff bears the burden of establishing personal jurisdiction over the defendant. Prior to trial, however, when a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, the plaintiff need 3 1 2 3 4 Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. 5 Navimpex Centrala Navala, 989 F.2d 572, 580 (2d Cir. 1993) (citation and internal quotation 6 marks omitted). Because Deiter s motion to dismiss was decided without a hearing and because 7 Deiter submitted no affidavit testimony with the motion, the facts asserted in MacDermid s 8 complaint and affidavit in opposition to Deiter s motion are assumed to be true. See Hoffritz for 9 Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 56-57 (2d Cir. 1985). In order for the district court to 10 have jurisdiction over Deiter, it must be proper under both the Connecticut long-arm statute and 11 the Due Process Clause of the Fourteenth Amendment. See Chloe, 616 F.3d at 163-65. 12 only make a prima facie showing. The allegations in the complaint must be taken as true to the extent they are uncontroverted by the defendant s affidavits. I. 13 Connecticut s long-arm statute provides that a 14 15 16 17 18 19 20 21 22 23 24 25 26 court may exercise personal jurisdiction over any nonresident individual . . . who in person or through an agent: (1) Transacts any business within the state; (2) commits a tortious act within the state . . . ; (3) commits a tortious act outside the state causing injury to person or property within the state . . . if such person or agent (A) 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 (B) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; . . . or (5) uses a computer, as defined in subdivision (1) of subsection (a) of section 53-451, or a computer network, as defined in subdivision (3) of subsection (a) of said section, located within the state. 27 28 29 30 31 32 Conn. Gen. Stat. § 52-59b(a). The statute incorporates the following definitions: (1) Computer means an electronic, magnetic or optical device or group of devices that, pursuant to a computer program, human instruction or permanent instructions contained in the device or group of devices, can automatically perform computer operations with or on computer data and can communicate the results to another computer or to a person. Computer includes any connected or directly related device, equipment or facility that enables the computer to store, retrieve or 4 1 2 3 4 5 6 7 8 communicate computer programs, computer data or the results of computer operations to or from a person, another computer or another device. . . . (3) Computer network means a set of related, remotely connected devices and any communications facilities including more than one computer with the capability to transmit data among them through the communications facilities. Conn. Gen. Stat. § 53-451(a). In concluding that Connecticut s long-arm statute did not apply, the court reasoned that 9 Deiter had not used a Connecticut computer or computer network but had simply sent email 10 from one computer in Canada to another computer in Canada ; that is, from her MacDermid 11 computer at her home to her personal computer at her home. 12 While it is true that Deiter physically interacted only with computers in Canada, we do 13 not believe that this fact defeats long-arm jurisdiction. The record before the district court 14 indicated that, [i]n order to use [her] MacDermid e-mail account and to obtain said confidential 15 data files, Ms. Deiter accessed computer servers located in MacDermid s offices in Waterbury, 16 Connecticut. A computer server meets the Connecticut long-arm statute s definition of 17 computer because it is 18 19 20 21 22 23 24 25 an electronic . . . device . . . that, pursuant to . . . human instruction . . . can automatically perform computer operations with . . . computer data and can communicate the results to another computer or to a person [or is a] connected or directly related device . . . that enables the computer to store, retrieve or communicate . . . computer data . . . to or from a person, another computer or another device. Conn. Gen. Stat. § 53-451(a)(1).1 1 Since MacDermid s affidavit testimony refers to servers, plural, MacDermid may be asserting that Deiter used a set of devices that would satisfy the long-arm statute s definition of computer network. Conn. Gen. Stat. § 53-451(a)(3). But since the servers utilized were at least computers, see Conn. Gen. Stat. § 53-451(a)(1), it is inconsequential whether they were also so connected that they constituted a network. 5 1 Because we are constrained to accept as true MacDermid s uncontroverted assertions that 2 Deiter used the Connecticut servers and because the servers are computers under the long-arm 3 statute, we conclude that Deiter used a computer in Connecticut and that the Connecticut district 4 court had long-arm jurisdiction under § 52-59b(a)(5). 5 It is not material that Deiter was outside of Connecticut when she accessed the Waterbury 6 servers. The statute requires only that the computer or network, not the user, be located in 7 Connecticut. See § 52-59b(a)(5). The statute reaches persons outside the state who remotely 8 access computers within the state, and we read § 52-59b(a)(5) to apply to torts committed by 9 persons not in Connecticut based on conduct not covered by §§ 52-59b(a)(1), (2), or (3). This 10 conclusion is reinforced by the fact that § 52-59b(a)(5) was enacted as part of a statutory scheme 11 intended to prohibit unauthorized persons from using computers or networks with intent to, 12 among other things, cause a computer to malfunction, alter or erase data, or copy computer data 13 or programs. See Conn. Pub. Act No. 99-160 § 1(b) (1999). Extending the statute to reach a 14 nonresident who committed any of the above activities while present in Connecticut would not 15 have been necessary because that person would already have been subject to jurisdiction under § 16 52-59b(a)(2). Further, it cannot be said that Deiter s conduct is covered by § 52-59b(a)(3) 17 because she is not alleged to have regularly conducted business in Connecticut, or to have 18 derived revenue from her conduct. See § 52-59b(a)(3). 19 Deiter also contends that she did not use a computer as that term is defined with regard 20 to computer crimes in § 53-451(a)(13), another provision in the same statutory scheme. See 21 Conn. Pub. Act No. 99-160 § 1(a) (1999). First, that definitional provision is not incorporated 22 into the long-arm statute. See § 52-59b(a). And second, even if that provision did apply, she did 6 1 use a computer under § 53-451(a)(13) because she cause[d] a computer . . . to perform . . . 2 computer operations. § 53-451(a)(13). Accordingly, long-arm jurisdiction over Deiter is 3 authorized by § 52-59b(a)(5).2 4 5 II. Because jurisdiction over Deiter is proper under the Connecticut long-arm statute, we 6 turn to the second step in our analysis: whether such jurisdiction accords with due process. 7 Although the district court did not consider this issue, we may do so. See Bank Brussels 8 Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 129 n.5 (2d Cir. 2002) (Where a 9 district court has not reached the due process reasonableness component of personal jurisdiction 10 analysis before dismissing, the issue remains reviewable on appeal because it was pressed or 11 passed upon below. ). 12 Generally, a court may exercise personal jurisdiction over a nonresident defendant only 13 so long as there exist minimum contacts between the defendant and the forum State. 14 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). The contacts must be 15 such that maintenance of the suit does not offend traditional notions of fair play and substantial 16 justice. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation 17 marks omitted). 18 Connecticut courts have personal jurisdiction over a nonresident foreigner who has 19 purposefully directed his activities at residents of the forum where the litigation results from 20 alleged injuries that arise out of or relate to those activities. Burger King Corp. v. Rudzewicz, 2 Because we hold that jurisdiction is proper under § 52-59b(a)(5), we need not further address MacDermid s alternative arguments that jurisdiction would be proper under the longarm statute s §§ 52-59b(a)(2), (3). 7 1 471 U.S. 462, 472 (1985) (internal quotation marks omitted); see also Calder v. Jones, 465 U.S. 2 783, 789 (1984) (In the context of intentional torts, jurisdiction is proper over defendants whose 3 intentional, and allegedly tortious, actions were expressly aimed at [the forum state]. ). [I]t is 4 essential in each case that there be some act by which the defendant purposefully avails itself of 5 the privilege of conducting activities within the forum State, thus invoking the benefits and 6 protections of its laws. Burger King, 471 U.S. at 475 (internal quotation marks omitted). 7 Physical presence in the forum state, however, is not required. Id. at 476. 8 9 We believe that this test is met here. Deiter purposefully availed herself of the privilege of conducting activities within Connecticut because she was aware of the centralization and 10 housing of the companies e-mail system and the storage of confidential, proprietary information 11 and trade secrets in Waterbury, Connecticut, and she used that email system and its Connecticut 12 servers in retrieving and emailing confidential files. Most Internet users, perhaps, have no idea 13 of the location of the servers through which they send their emails. Here, however, MacDermid 14 has alleged that Deiter knew that the email servers she used and the confidential files she 15 misappropriated were both located in Connecticut. She used those servers to send an email 16 which itself constituted the alleged tort. And in addition to purposefully availing herself of the 17 privilege of conducting computer activities in Connecticut, she directed her allegedly tortious 18 conduct towards MacDermid, a Connecticut corporation. Cf. Calder, 465 U.S. at 790 (holding 19 California jurisdiction to be proper over Florida writer and publisher who directed their tortious 20 conduct, defamation, toward a California resident). 21 22 If a defendant has sufficient minimum contacts, as in this case, we must also determine whether the exercise of personal jurisdiction is reasonable under the Due Process Clause. Chloe, 8 1 616 F.3d at 172-73. The Supreme Court and our Court consider five factors for determining 2 whether an exercise of jurisdiction is reasonable: 3 4 5 6 7 8 9 10 A court must consider [1] the burden on the defendant, [2] the interests of the forum State, and [3] the plaintiff s interest in obtaining relief. It must also weigh in its determination [4] the interstate judicial system s interest in obtaining the most efficient resolution of controversies; and [5] the shared interest of the several States in furthering fundamental substantive social policies. Id. at 173 (quoting Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113-14 (1987)). Having considered these factors, we conclude that they support the exercise of personal 11 jurisdiction in this case. First, although Deiter would have to travel to Connecticut to defend this 12 suit, this burden alone does not render the exercise of personal jurisdiction unreasonable. See 13 Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 244 (2d Cir. 1999) (holding that burden on 14 Japanese defendant was insufficient to overcome its minimum contacts, particularly because the 15 conveniences of modern communication and transportation ease what would have been a serious 16 burden only a few decades ago ). Second, both Connecticut and MacDermid have significant 17 interests in resolving the matter in Connecticut. Not only is the company based in Connecticut, 18 which is where the majority of corporate witnesses are located, but also Connecticut has an 19 interest in the proper interpretation of its laws. Chloe, 616 F.3d at 173 (holding that exercise of 20 personal jurisdiction is reasonable where, inter alia, forum state has an interest in providing 21 effective means of redress for its residents ); Kernan, 175 F.3d at 244-45 (holding that exercise 22 of personal jurisdiction is reasonable in New York where injured plaintiff was a New York 23 resident and New York laws indisputably applied). Cf. Metropolitan Life Ins. Co. v. Robertson- 24 Ceco, Corp., 84 F.3d 560, 574 (2d Cir. 1996) (holding that exercise of personal jurisdiction was 25 not reasonable where injury did not occur in forum state and plaintiff was not based in forum 9 1 state. Further, efficiency and social policies against computer-based theft are generally best 2 served by adjudication in the state from which computer files have been misappropriated. 3 Accordingly, we conclude that jurisdiction is reasonable in this case. 4 5 6 CONCLUSION For the reasons stated, we reverse the judgment of the district court and remand for further proceedings. 7 10