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Square D Company v. Scott Electric Co.

November 12, 2008


The opinion of the court was delivered by: Judge Nora Barry Fischer


This matter is before the Court on Defendant Steven Mandel's ("Defendant") Motion for Reconsideration [227] of the Court's Memorandum Opinion denying his motion to dismiss for lack of personal jurisdiction (Docket No. [155]). For the following reasons, said motion is hereby DENIED.*fn1


The purpose of a motion for reconsideration "is to correct manifest errors of law or fact or to present newly discovered evidence." Max's Seafood Cafe by Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. N.J. 1999)(quoting Harsco Corp., v. Zlotnicki, 779 F.2d 906 (3d Cir. 1985)). When considering interlocutory orders, the district courts possess inherent power to "reconsider them when it is consonant with justice to do so." United States v. Jerry, 487 F.2d 600, 605 (3d Cir. 1973). However, even in the case of interlocutory orders, "courts should grant motions for reconsideration sparingly" because of the interest in finality. Jairett v. First Montauk Sec. Corp., 153 F. Supp. 2d 562, 580 (E.D. Pa. 2001).

In his brief in support of the instant motion, Defendant argues that the Court should reconsider its Memorandum Opinion of September 30, 2008 and dismiss Plaintiff's claims against Defendant Mandel because this Court lacks personal jurisdiction over him. (Docket No. 228). Specifically, Mandel argues that the Court's Memorandum Opinion does not set forth any basis on which this Court can exercise personal jurisdiction over Mandel individually because his contacts with Pennsylvania were made on behalf of Defendant Any Electric LLC ("Any Electric"), which are insufficient for this Court to exercise jurisdiction over Mandel under the "fiduciary shield" doctrine. (Docket No. 228 at 5).


A. Timing of the Argument

At the outset, the Court notes the inappropriate timing of the legal argument presented in the instant motion as Mandel did not raise the fiduciary shield doctrine in the underlying motion to dismiss. (See Docket Nos. 155-57). Rather, Defendant asserted that the Court could not exercise jurisdiction over him in his capacity as an agent of Any Electric because the court lacked jurisdiction over Any Electric. (Docket No. 157 at 12-13). In support of this proposition, Defendant cited a district court case where the court found it lacked jurisdiction over the chairman of a corporation because it lacked personal jurisdiction over the corporation. Romann v. Geissenberger Mfg. Corp., 865 F. Supp. 255, 263 (E.D. Pa. 1994). Defendant further stated that exercising jurisdiction over him would be improper because Plaintiff had not alleged he had any contacts with Pennsylvania in his individual capacity. (Id. at 13). At no point in his brief in support of the underlying motion did Defendant raise the fiduciary shield doctrine or cite to any authority in which the doctrine is discussed. (See Docket No. 157).

Plaintiff, in response to the underlying motion, set forth the factual and legal basis upon which it believes this Court can exercise jurisdiction over Mandel. (Docket No. 198 at 20-21). Specifically, Plaintiff argued that Mandel could be held individually liable under the Lanham Act and Pennsylvania law because he was an actual participant in the alleged sales of counterfeit goods, and presented legal authority and evidence in support of that claim. Id. However, Defendant made no attempt to raise the fiduciary shield doctrine in response to Plaintiff's arguments on this issue despite having ample opportunity to do so in his reply brief and at oral argument. (See Docket Nos. 203 and242).

A motion for reconsideration is not an opportunity for the parties to present new legal arguments that could have been made in the original motion. U.S. Claims, Inc. v. Flomenhaft, 519 F. Supp. 2d 515, 526 (E.D. Pa. 2007). Any arguments regarding the applicability of the fiduciary shield doctrine to Defendant Mandel could and should have been raised in his motion to dismiss, his reply brief, or at oral argument, especially in light of the fact that Plaintiff had timely set forth all of its legal and factual arguments as to this Court's personal jurisdiction over Mandel.

B. Applicability of the Fiduciary Shield Doctrine

Defendant's new legal argument as to applicability of the fiduciary shield in the instant case would have in no way prevented the Court from denying Mandel's underlying motion to dismiss. Although Defendant in the instant motion sets forth the fiduciary shield doctrine as though it is well-settled law, it is not.*fn2 While a complete analysis of the doctrine is not necessary for the instant motion, based on the United States Supreme Court's decisions in Calder v. Jones, 465 U.S. 783 (1984) and Keeton v. Hustler, 465 U.S. 770 (1984), courts of appeal that have addressed this issue have rejected the proposition that due process requires application of the fiduciary shield doctrine.*fn3 See Hardin Roller Corp. v. Universal Printing Mach., Inc., 236 F.3d 839, 842 (7th Cir. 2001); Davis v. Metro Prod., Inc., 885 F.2d 515, 521 (9th Cir.1989). While there may be a basis for applying the doctrine under state law, neither the Pennsylvania Supreme Court nor the United States Court of Appeals for the Third Circuit has addressed whether the doctrine is applicable in this Commonwealth. See Bragg v. Linden Research, Inc., 487 F. Supp. 2d 593, 602 (E.D. Pa. 2007); Irons v. Transcor Am., Civ. A. No. 01-4328, 2002 U.S. Dist. LEXIS 14149 (E.D. Pa. July 8, 2002)(reviewing district court cases within this circuit that have addressed the issue).

However, even if Defendant had properly raised this argument in his original motion to dismiss, the Court would not have had to predict whether the Pennsylvania Supreme Court would adopt the fiduciary shield doctrine because there are exceptions to the doctrine which are applicable in this case. The United States Court of Appeals for the Third Circuit has held that "[a] corporate officer is individually liable for the torts he personally commits and cannot shield himself behind a corporation when he is an actual participant in the tort." Donsco, Inc. v. Casper Corp., 587 F.2d 602, 606 (3d Cir. 1978)(holding corporate officer individually liable for his participation in a corporation's acts in violation of the Lanham Act and related torts); see also Elec. Lab. Supply Co. v. Cullen, 977 F.2d 798, 807 (3d Cir. 1992).*fn4 Thus, even those district courts within this circuit that have applied the fiduciary shield doctrine have recognized that there is an exception where "the defendant had a major role in the corporate structure, the quality of his contacts with the state were significant, and his participation in the tortious conduct alleged was extensive." Bragg, 487 F. Supp. 2d at 603 (E.D. Pa. 2007)(quoting TJS Brokerage & Co. v. Mahoney, 940 F. Supp. 784, 789 (E.D. Pa. 1996)). Here, Mandel, by his own admission, was the sole employee of Any Electric. As set forth in the Court's Memorandum Opinion, all of the contacts that give ...

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