The opinion of the court was delivered by: Yvette Kane, Chief Judge United States District Court Middle District of Pennsylvania
On December 15, 2009, Plaintiffs Ryan Shafik, Rockwood Strategies, L.P. (hereinafter "Rockwood"), and Andrew Emerick filed the instant action against Defendant John Curran in this Court. (Doc. No. 1.) The complaint alleges breach of contract for Defendant's failure to make payments pursuant to a contract for Plaintiffs to perform campaign services for Defendant's prospective senatorial campaign in the state of Maryland. The complaint also alleges fraud, defamation, and intentional infliction of emotional distress ("IIED") for other actions committed by Curran with respect to Plaintiffs' participation in the campaign. On February 16, 2010, Defendant filed the pending motion to dismiss for lack of personal jurisdiction and improper venue. (Doc. No. 6.) For the reasons that follow, the Court finds that Plaintiff Emerick's claims will be dismissed for lack of personal jurisdiction as to Emerick's claims over Curran; Plaintiff Shafik's defamation claim will be dismissed for lack of personal jurisdiction; and in all other respects, the motion to dismiss will be denied.
Beginning around August 2009, Defendant John Curranbegan to contemplate running for public office as United States Senator for the state of Maryland. In furtherance of this ambition, Curran contacted Plaintiff Ryan Shafik, a campaign consultant and the owner of Rockwood Strategies. Curran and Shafik arranged to meet on August 3, 2009, in Gettysburg, Pennsylvania, to discuss the possibility of a working relationship wherein Shafik and Rockwood would advise Curran on his senatorial campaign. The Gettysburg location was a midway point between Curran's office in Westminster, Maryland, and Shafik's office in New Cumberland, Pennsylvania. At the meeting, Shafik explained to Curran what was needed to run a campaign and what services he and his company could perform for Curran. Shortly thereafter, Curran entered into a contract for Shafik and Rockwood to perform numerous services in support of his campaign.
On August 17, 2009, Curran requested that Shafik develop a strategic campaign plan with a limitless budget. Curran averred that he was willing and able to fund the campaign from his personal wealth of over $20 million. Shafik developed a campaign plan as instructed, and Curran approved the plan. Shafik immediately began making arrangements for Curran's campaign and incurring debt on behalf of the campaign. Specifically, as one service he provided for the campaign, Shafik recruited Plaintiff Andrew Emerick to serve as Curran's campaign manager. Shafik introduced Emerick to Curran in August 2009 at Curran's office in Maryland, at which point Emerick was interviewed for the position. During his initial discussion with Emerick, Curran again specifically represented that the campaign would run on a limitless budget, which he intended to fund with his own money. Emerick notified Curran that working as his campaign manager would require him to curtail his involvement with his family business. At the conclusion of the meeting, Curran hired Emerick to be his campaign manager. Emerick's contract provided that he would be paid a salary of $85,000 for services to be performed from September 2009 through November 2010.
The parties continued to meet on a weekly or biweekly basis at Curran's office in Maryland. In between the physical meetings, Curran would contact Shafik on a daily basis by phone or by e-mail to discuss campaign details. Emerick immediately created a campaign office, began to hire additional campaign staff, and opened a campaign bank account. Curran promised to wire $100,000 to the campaign account by September 30, 2009, to pay for these and other initial arrangements and services. September 30, 2009, came and went with no funds deposited. Curran then promised to write a check in the amount of $200,000 to the campaign account on or before October 13, 2009. Curran defaulted on this promise, as well.
During the period from August to October, both Shafik and Emerick were performing services pursuant to their contracts with Curran and were incurring debt on behalf of the campaign. Curran promised to deposit money into the campaign account, but did not do so. On October 18, 2009, Curran terminated his relationship with Emerick, Shafik, and Rockwood through an electronic communication. The next day, Curran told certain donors and members of the press that he was still running for Senator, and he told others that he was not. Curran never payed Plaintiffs the sum of their contracts and did not reimburse them for expenses made on behalf of the campaign.
On December 15, 2009, Shafik, Rockwood, and Emerick filed suit against Curran in the Middle District of Pennsylvania. Though comprised entirely of state law claims, Plaintiffs allege that this Court has subject matter jurisdiction over the action by virtue of the diversity statute, 28 U.S.C. § 1332. The complaint states that Curran is a citizen of North Carolina, Emerick is a citizen of Maryland, Shafik and Rockwood are citizens of Pennsylvania, and the amount in controversy exceeds $75,000. The complaint further states that venue in this district is proper because the services performed by Shafik and Rockwood, which form the bulk of this action, occurred within this judicial district.
Defendants have moved to dismiss the complaint for lack of personal jurisdiction and improper venue. Though Defendants do not specifically move to dismiss the case for lack of subject matter jurisdiction, they allege that Curran is both a citizen and a resident of Maryland, thus complete diversity does not exist in this matter.
Federal Rule of Civil Procedure 12(b)(2) provides that a court shall dismiss a complaint for lack of in personam jurisdiction. Fed. R. Civ. P. 12(b)(2). Rule 4(e) of the Federal Rules of Civil Procedure authorizes a court to assert personal jurisdiction over non-state residents to the extent Pennsylvania law allows. Fed R. Civ. P. 4(e). Pennsylvania law, in turn, authorizes personal jurisdiction to the fullest extent the Constitution allows. 42 Pa. Con. Stat. Ann. § 5322(b). The Due Process Clause allows a court to have personal jurisdiction so long as there are "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). From this overarching directive, courts have developed two avenues to establishing personal jurisdiction: general jurisdiction and specific jurisdiction. General jurisdiction is established by showing substantial and continuous contact with the forum state; specific jurisdiction may be established by showing the existence of sufficient minimum contacts with the forum state from which the pending cause of action arises. Id.
The plaintiff has the burden of establishing the existence of personal jurisdiction, but need only make a prima facie case of jurisdiction at this point in the proceedings. North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 689 (3d Cir. 1990); In re Chocolate Confectionary Antitrust Litigation, 602 F. Supp. 2d 538, 556 (M.D. Pa. 2009). A plaintiff must make such a showing through "sworn affidavits or other competent evidence." Id.
With respect to subject matter jurisdiction, a court has an affirmative duty to ensure that it has subject matter jurisdiction over the action at all points, and may raise the issue sua sponte. Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010) (raising the subject matter jurisdiction issue sua sponte). Thus, "it is incumbent upon the courts to resolve such doubts, one way or the other, before proceeding to a disposition on the merits." Id. at 418 (internal citations omitted). The party asserting diversity jurisdiction bears the burden of proof, and generally will meet this burden by proving diversity of citizenship by a preponderance of the evidence. McCann v. Newman Irrevocable Trust, 458 F.3d 281, 286 (3d Cir. 2006). Thus, a court is not obligated to rely solely on the facts alleged in the complaint or to ...