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TJS BROKERAGE & CO. v. MAHONEY

September 18, 1996

TJS BROKERAGE & CO., INC., Plaintiff,
v.
THOMAS P. MAHONEY, et al., Defendants.



The opinion of the court was delivered by: JOYNER

 Joyner, J.

 September 18, 1996

 Plaintiff TJS Brokerage & Co., Inc. ("TJS") has brought this diversity action against Defendants Thomas P. Mahoney ("Mahoney"), Cost Control Consultants Corporation ("Cost Control"), Garden State Consolidating, Inc. ("Garden State"), and Hanover Warehouse, Inc. ("Hanover") pursuant to 28 U.S.C. § 1332. Defendant Mahoney has filed a pro se motion to dismiss TJS's complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) or, alternatively, to transfer the action to the Southern District of New York. Defendants Garden State and Hanover have jointly moved to dismiss TJS's complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) or, in the alternative, to transfer the action to the District of New Jersey, Newark Division. Plaintiff TJS has opposed the defendants' motions and asked the Court in the alternative, to grant it an opportunity to conduct discovery in order to ascertain whether a sufficient basis for personal jurisdiction over the defendants exists. Defendant Cost Control has not appeared in this action.

 BACKGROUND

 TJS is a motor carrier freight broker located in Philadelphia and licensed to transport commodities on behalf of various shippers. In its complaint, TJS alleges that on January 20, 1993, TJS entered into an exclusive agency agreement with Cost Control, a New York corporation whose sole shareholder and president is Defendant Mahoney. The agreement called for Cost Control to broker freight shipments and procure carriers for transportation on behalf of TJS. Pursuant to the agency agreement, Mr. Mahoney agreed to personally guarantee any and all obligations owed by Cost Control to TJS. The agreement also contained non-compete and non-disclosure covenants to protect proprietary information and documents that TJS had accumulated and to which Mahoney and Cost Control would have access. These covenants were to be effective for two years after the termination of the agency relationship.

 TJS alleges that in the fall of 1994, Cost Control, through Mr. Mahoney, notified TJS that it was terminating the agreement because Cost Control had decided to handle only air freight. TJS also asserts that Cost Control violated the non-compete clause by directing business previously given to TJS to other freight brokers and shipper's agents, including Hanover, a New Jersey company that operates a public warehouse, and Garden State, a New Jersey-based freight forwarder.

 The complaint contains four counts. In Count I, TJS asserts a breach of contract claim against Defendants Cost Control and Mahoney. TJS alleges that Cost Control breached the agency agreement by competing with TJS within two years of the termination of the agency agreement, soliciting business from and doing business with carriers and customers of TJS, and directing TJS' business to Hanover and Garden State.

 TJS asserts in Count II that Garden State and Hanover, which are allegedly related entities, tortiously interfered with the contractual relationship between TJS and Cost Control.

 In Count III, TJS alleges that all of the defendants tortiously interfered with TJS's contractual relations with its customers and clients by improperly using proprietary information and documents developed by TJS.

 Finally, in Count IV, TJS alleges that all of the defendants conspired to misappropriate TJS's customers, trade secrets and proprietary information and to interfere with TJS' contractual and business relations in order to unfairly compete with TJS.

 DISCUSSION

 I. MOTION TO DISMISS STANDARD OF REVIEW

 Once a defendant raises a personal jurisdiction defense, the plaintiff bears the burden of coming forward with a set of facts sufficient to create a prima facie case of jurisdiction. Mellon Bank PSFS v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992); Provident Nat'l Bank v. California Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987). Plaintiff's jurisdictional allegations must be supported with appropriate affidavits or documents, because a Rule 12(b)(2) motion "requires resolution of factual issues outside the pleadings." Time Share Vacation Club v. Atlantic Resorts, Ltd, 735 F.2d 61, 67 n.9 (3d Cir. 1984); Strick Corp. v. A.J.F. Warehouse Distrib., Inc., 532 F. Supp. 951, 953 (E.D. Pa. 1982). Any conflict in affidavits submitted by plaintiff and defendant is resolved in favor of the plaintiff. DiMark Marketing v. Louisiana Health Servs., 913 F. Supp. 402, 404 (E.D.Pa. 1994).

 A federal district court is permitted to exercise "personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of that state." Provident, 819 F.2d at 436 (citing Fed. R. Civ. P. 4(e)).


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