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Brown & Brown, Inc. v. Cola

October 4, 2010

BROWN & BROWN, INC., BROWN & BROWN OF PENNSYLVANIA, INC. AND GRINSPEC, INC. PLAINTIFFS,
v.
ROBERT COLA, RYAN TOLA, AND DOYLE ALLIANCE GROUP, DEFENDANTS.



The opinion of the court was delivered by: Ronald L. Buckwalter, S.J.

MEMORANDUM AND ORDER

Currently pending before the Court are: (1) Defendant Ryan Tola's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2); and (2) Defendants Robert Cola, Ryan Tola, and Doyle Alliance Group's (collectively "all Defendants") Motion to Dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, Defendant Tola's Motion to Dismiss is denied and the Motion by all Defendants to Dismiss is granted in part and denied in part.

I. FACTUAL BACKGROUND

According to the facts set forth in the Complaint, Plaintiff Brown & Brown, Inc. ("Brown & Brown") is a national insurance brokerage and service company. (Compl. ¶ 13.) Brown & Brown and its subsidiaries, including Brown & Brown of Pennsylvania, Inc. ("Brown-PA") based in Pennsylvania, and Grinspec, Inc. ("Grinspec") based in New Jersey (collectively "Plaintiffs"), offer a broad range of insurance and reinsurance products and services, as well as risk management, third-party administration, insurance consulting, and other insurance-related services to both the public and private sectors. (Id. ¶¶ 13, 15.) One of the most important ways that Plaintiffs invest in their critical client relationships is through the training and development of their brokers and producers, who are provided with detailed confidential and proprietary information about Plaintiffs' insurance services, business strategies, pricing, and customers. (Id. ¶ 17.) According to the Complaint, were such information to be acquired by a competitor, Plaintiffs would suffer an unfair competitive disadvantage and would face severe damage to their business operations. (Id. ¶ 18.) The obligation of brokers and producers to safeguard Plaintiffs' business interests and confidences is detailed in an Employee Handbook and by individual Employment Agreements, both of which prohibit employees from soliciting or accepting business from clients of Brown & Brown and its subsidiaries, from recruiting or soliciting employees to leave Brown & Brown and its subsidiaries, and from using or disclosing confidential or proprietary information of Brown & Brown and its subsidiaries. (Id. ¶ 19.)

A. Brown & Brown Acquires Doyle Consulting Group, Inc.

As part of its ongoing strategy to acquire smaller, vibrant insurance brokers with potential for growth, Brown & Brown, in 2003, identified a network of related businesses in Pennsylvania and New Jersey as potential partners. (Id. ¶¶ 20-21.) One particular brokerage business -- Doyle Consulting Group, Inc. and Doyle Consulting Group of New Jersey, Inc. (collectively "Doyle Consulting") -- was owned by Francis Doyle and Kevin Mullin. Following preliminary discussions, Brown & Brown and Doyle Consulting executed an Asset Purchase Agreement through which Brown & Brown and Brown-PA acquired the assets of Doyle Consulting. (Id. ¶ 22.) Doyle Consulting's shareholders, Doyle and Mullin, were signatories to this Agreement. (Id. ¶ 23.) Plaintiffs purchased the full range of Doyle Consulting's assets, including, among other things, Doyle Consulting's current book of business, tangible personal property, seller contracts, governmental authorizations, records, intangible property such as intellectual property, claims against third parties, and good will. (Id. ¶¶ 24-25.) Plaintiffs' purchase of intellectual property assets from Doyle Consulting included all trademarks and trade names, together with all derivatives of such trademarks and trade names. (Id. ¶ 27.) The Asset Purchase Agreement required Doyle Consulting, Doyle, and Mullin to immediately cease using the corporate name "Doyle Consulting" and any other trademarks or trade names, and all derivatives thereof, in their business dealings. (Id. ¶ 28.) In consideration for these assets, Brown & Brown agreed to pay Doyle Consulting an amount in excess of seventeen million dollars. (Id. ¶ 26.) The Asset Purchase Agreement deal closed on February 1, 2004. (Id. ¶ 22.)

After the closing, Francis Doyle joined Brown-PA as its new executive vice president, and several other former Doyle Consulting employees were hired by Brown-PA. (Id. ¶ 31.) All customers and accounts of Doyle Consulting became customers and accounts of Brown & Brown and its subsidiaries. (Id.) Brown & Brown and Brown-PA continued to use the name "Doyle Consulting" as a service mark in dealings with customers, employees, and the industry in general. (Id. ¶ 32.) Indeed, numerous previous employees of Doyle Consulting, including Defendants Robert Cola and Ryan Tola, used and/or continue to use the internet domain name "@doyleconsultinggroup" or its derivative "@dcgbenefits.com" in e-mails sent in the ordinary course of performing and/or selling insurance services for Plaintiffs. (Id. ¶ 33.) As a result, customers and others to whom such e-mail communications are directed associate the name "Doyle Consulting" as a service mark affiliated with Brown & Brown and Brown-PA. (Id. ¶ 35.)

B. Plaintiffs' Hiring of Robert Cola

Prior to February 2004, Defendant Robert Cola was an employee and key broker for Doyle Consulting. (Id. ¶ 36.) On February 1, 2004, Cola entered into a written employment agreement with Brown-PA ("Cola Employment Agreement"), which contained a non-solicitation of customers provision prohibiting him from directly or indirectly soliciting or inducing any existing or prospective customers of Brown & Brown and Brown-PA, or any of their affiliates, both during his employment with Brown-PA and for twenty-four months after the termination of his employment. (Id. ¶¶ 37-38.) This provision did not prevent Cola from working for a competitor, so long as he did not solicit or accept business from Plaintiffs' customers and he advised any prospective future employers of his contractual non-solicitation obligations. (Id. ¶¶ 40-41.) In addition, Cola expressly agreed not to use or disclose any confidential proprietary information of Brown & Brown or its affiliates both during or after his employment with Brown-PA. Such information included customer lists; insurance carriers; accounts and prospect lists; policy forms and/or rating information; expiration dates; information on risk characteristics; information concerning insurance markets for large or unusual risks; business, selling, and customers strategies and plans; and customer specifications, such as preferences, practices, idiosyncrasies, pricing minimums and maximums, usual needs, time constraints, names, and addresses. (Id. ¶ 42.) Cola further contracted that, both during his employment with Brown-PA and for two years after the cessation of such employment, he would not, directly or indirectly, solicit employees of Brown-PA or Brown & Brown to work for a competitor. (Id. ¶ 44.) Finally, Cola agreed that, during his employment with Brown-PA, he would "not undertake the active planning or organizing of any business activity competitive with the work Employee performs." (Id. ¶ 46.) Although the Cola Employment Agreement is with Brown-PA, it expressly identifies Brown & Brown as an intended third-party beneficiary. (Id. ¶ 60.)

C. Plaintiffs' Hiring of Ryan Tola

Prior to February 2004, Defendant Ryan Tola was an employee and key broker for Doyle Consulting. (Id. ¶ 47.) On February 1, 2004, Tola entered into a written employment agreement with Brown-PA, giving him the position of producer and senior consultant. (Id.) Several years later, on April 2, 2007, Tola was promoted and began employment with another Brown & Brown subsidiary -- Plaintiff Grinspec. (Id. ¶ 48.) As a result, he signed a new employment agreement ("Tola Employment Agreement"), dated April 2, 2007. (Id.) This Agreement contained a number of restrictive covenants similar to Cola's. (Id. ¶ 49.) First, it included a non-solicitation of customers provision, prohibiting him from directly or indirectly soliciting or inducing any existing or prospective customers of Brown & Brown and Grinspec, or any of their affiliates, both during his employment with Grinspec and for twenty-four months after the termination of his employment. (Id. ¶ 50.) This provision did not prevent Tola from working for a competitor, so long as he did not solicit or accept business from Plaintiffs' customers and he advised any prospective future employers of his contractual non-solicitation obligations. (Id. ¶¶ 52-53.) In addition, Tola expressly agreed not to use or disclose any confidential proprietary information of Brown & Brown or its affiliates both during or after his employment with Grinspec. Such information included customer lists; insurance carriers; accounts and prospect lists; policy forms and/or rating information; expiration dates; information on risk characteristics; information concerning insurance markets for large or unusual risks; business, selling, and customers strategies and plans; and customer specifications, such as preferences, practices, idiosyncrasies, pricing minimums and maximums, usual needs, time constraints, names, and addresses. (Id. ¶ 54.) Tola further contracted that, both during his employment with Grinspec and for two years after the cessation of such employment, he would not, directly or indirectly, solicit employees of Grinspec or Brown & Brown to work for a competitor. (Id. ¶ 56.) Finally, Tola, agreed that during his employment with Grinspec, he would "not undertake the active planning or organizing of any business activity competitive with the work Employee performs." (Id. ¶ 57.) Although the Tola Employment Agreement is with Grinspec, it expressly identifies Brown & Brown as an intended third-party beneficiary. (Id. ¶ 60.)

D. Cola and Tola's Employment with Plaintiffs

All employees of Brown & Brown and its subsidiaries are subject to strict guidelines prohibiting the improper use and disclosure of confidential information. (Id. ¶ 62.) All employees must agree to and sign a detailed Employee Handbook, which specifically notes that Plaintiffs' employees have access to highly confidential company information and charges Plaintiffs' employees with the responsibility to keep such information confidential. (Id. ¶ 64.) Both Cola and Tola expressly agreed to and signed the Employee Handbook. (Id. ¶ 65.)

Cola began his employment with Brown-PA in February 2004, as a producer. (Id. ¶ 66.) By February 2006, he held the highest executive position at Brown-PA as a "Profit Center Leader" responsible for the overall operation of the office, its employees, and its customers. (Id.) Cola reported directly to Brown & Brown's regional president and served as an officer of Brown-PA. (Id.) Aside from being a key producer, manager, and employee of Brown-PA with respect to various marketing programs and strategies, he produced, managed, and serviced numerous and significant customers of Plaintiffs. (Id. ¶¶ 67-68.) In return, he was highly compensated and received significant salary, bonuses, and benefits pursuant to his Employment Agreement. (Id. ¶ 69.)

Tola, who began with Brown-PA in February 2004, ultimately commenced his employment as Profit Center Leader of Grinspec on April 1, 2007. (Id. ¶ 70.) Until his resignation in 2010, he held this highest executive position, served as an officer of Grinspec, and was responsible for the overall operation of the office, its employees, and its customers. (Id.) Like Cola, he was not only a key producer, manager, and employee of Brown-PA with respect to various marketing programs and strategies, but he produced, managed, and serviced numerous and significant customers of Plaintiffs. (Id. ¶¶ 71-72.) Again, he was highly compensated through salary, bonuses, and benefits pursuant to his Employment Agreement. (Id. ¶ 73.)

During the course of their job performances, Cola and Tola each acquired and developed trade secrets and confidential and proprietary information with regard to the business of Brown & Brown, Brown-PA, and Grinspec. (Id. ¶ 74.) Both individuals had access to all of their respective employer's documents and information, including materials related to customers, policies, renewal dates, and other confidential and proprietary information. (Id. ¶ 76.) Maintaining the confidentiality of such core confidential and proprietary information was and remains crucial to Plaintiffs, and Plaintiffs have taken reasonable steps to protect and maintain the secrecy of such information. (Id. ¶¶ 80-81.)

E. Defendants' Alleged Wrongful Conduct and Efforts to Steal the Assets and Business that Doyle Consulting Sold to Plaintiffs

As noted above, following the sale of Doyle Consulting to Brown & Brown, Francis Doyle was employed by Brown-PA from February 1, 2004 through January 30, 2006. (Id. ¶ 82.) Doyle, however, purportedly developed a scheme to both take back the very business and goodwill that he had earlier sold to Brown & Brown and reacquire the very employees who, as part of the sale, moved to Brown & Brown. (Id. ¶ 83.) Indeed, in March 2010, Doyle formed a new insurance brokerage firm named Doyle Alliance, and allegedly began operations to compete with Brown & Brown in the insurance agency, brokerage and consulting business. (Id. ¶ 84.) Plaintiffs assert that the use of the name "Doyle Alliance" was in blatant disregard of the Asset Purchase Agreement and was designed to (a) "poach" Brown & Brown's business by using the goodwill purchased by Brown & Brown's acquisition of the trade name; (b) confuse the public; and (c) unlawfully "jump start" Doyle's business. (Id. ¶ 85.)

Doyle recruited and offered employment to both Cola and Tola, and encouraged them to solicit and take Plaintiffs' customers and use Plaintiffs' confidential business information. (Id. ¶ 87.) On June 11, 2010, Cola advised Brown & Brown's Regional President, Thomas E. Riley, that he was resigning, but represented that he was not going to join Doyle. (Id. ¶ 88.) Around the same time period, Tola advised Riley that, despite his friend Cola's actions, he had no intention of resigning from Brown & Brown and/or joining Doyle. (Id. ¶ 89.) Nonetheless, nine days later, on June 15, 2010, Tola resigned his position effective immediately. (Id. ¶ 90.)

Plaintiffs allege, upon information and belief, that immediately after their resignations, Cola and Tola both began to work as insurance brokers and consultants for Doyle Alliance. (Id. ¶ 91.) Plaintiffs also contend that while Cola and Tola were still employed by Brown & Brown, they were actively engaged in building a competitive business by meeting with Doyle, setting up an office, soliciting Brown & Brown's customers, and using Brown & Brown's proprietary information. (Id. ¶¶ 92-95.) Tola and Cola, with Doyle Alliance's knowledge and consent, have since solicited Plaintiffs' customers to cease being customers of Plaintiffs. (Id. ¶ 96.) In addition, Plaintiffs claim that Tola and Cola, sometimes with the assistance of Doyle Alliance representatives, have made false, detrimental, and disparaging statements about Plaintiffs and/or their products or services, and have caused Broker of Record letters*fn1 to be issued under the name of Doyle Alliance. (Id. ¶¶ 97-98.)

Ultimately, Plaintiffs allege that Cola and Tola breached their Employment Agreements and unlawfully solicited numerous customers to leave Plaintiffs and do business with Doyle Alliance, some of which solicitation occurred while Cola and Tola were still employed by Plaintiffs. (Id. ¶ 100-101.) Indeed, numerous customers of Plaintiffs have either moved their business from Plaintiffs to Doyle Alliance, provided notice that they are moving their business from Plaintiffs to Cola, Tola, and/or Doyle Alliance, or have caused Broker of Record letters to be issued in favor of Doyle Alliance. (Id. ¶ 102.) Plaintiffs estimate the losses caused by these alleged violations of the Employment Agreements to be in excess of two million dollars. (Id. ¶ 103.)

F. The Present Lawsuit

On August 4, 2010, Plaintiffs commenced the present lawsuit against Cola, Tola, and Doyle Alliance Group, setting forth fifteen Counts as follows. Count I claims unfair competition under the Lanham Act, 15 U.S.C. § 1125, due to Defendants' use of the name "Doyle Alliance Group" and the internet domain "doylealliancegroup.com." (Id. ¶¶ 109-118.) Count II asserts trademark infringement under the Lanham Act resulting from Defendants' use of the internet domain name "doylealliance group.com." (Id. ¶¶ 119-124.) Count III sets forth a state law claim of unfair competition, again caused by Defendants' use of the name "Doyle Alliance Group." (Id. ¶¶ 125-133.) Count IV claims breach of contract against solely Cola and Tola, due to their alleged violation of their respective Employment Agreements. (Id. ¶¶ 134-140.) Count V avers a breach of fiduciary duty and/or duty of loyalty against Defendants Cola and Tola. (Id. ¶¶ 141-146.) Count VI asserts tortious interference with existing contractual relations against Doyle Alliance only for interfering with Cola and Tola's Employment Agreements. (Id. ¶¶ 148-156.) Count VII sets forth another tortious interference claim against all Defendants for interference with Plaintiffs' contractual and business relationships with customers. (Id. ¶¶ 157-163.) Count VIII contends that all Defendants tortiously interfered with Brown & Brown's contractual relations with its employees. (Id. ¶¶ 164-171.) Counts IX, X, and XI allege, against all Defendants, misappropriation of business, misappropriation of confidential and proprietary information, and misappropriation of property, respectively. (Id. ¶¶ 172-190.) Finally, Counts XII, XIII, XIV, and XV respectively assert unfair competition, civil conspiracy, conversion, and unjust enrichment against all Defendants. (Id. ¶¶ 188-211.)

On September 7, 2010, Defendant Ryan Tola filed a Motion to Dismiss the Complaint in its entirety under Federal Rule of Civil Procedure 12(b)(2). On the same date, all Defendants joined in a Motion to Dismiss Plaintiffs' Complaint under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. The Court now turns to a discussion of these Motions.

II. APPLICABLE STANDARDS OF REVIEW

A. Rule 12(b)(2)

Motions to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) require the court to accept as true the allegations of the pleadings and all reasonable inferences therefrom, and to resolve all factual disputes in favor of the plaintiff. FED. R. CIV. P. 12(b)(2); see also Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002). The rule, however, "does not limit the scope of the court's review to the face of the pleadings"; rather the court must consider any affidavits submitted by the parties. Scott v. Lackey, No. CIV.A.02-1586, 2005 WL 2035598, at *1-2 (M.D. Pa. Aug. 11, 2005).

Although a defendant has the initial burden of raising the defense of lack of personal jurisdiction, once such a defense is raised, the burden shifts to the plaintiff to demonstrate facts that suffice to support an exercise of personal jurisdiction. Provident Nat. Bank v. Cal. Fed. Sav. & Loan Ass'n., 819 F.2d 434, 437 (3d Cir. 1987); Cumberland Truck Equip. Co. v. Detroit Diesel Corp., 401 F. Supp. 2d 415, 418 (E.D. Pa. 2005). Plaintiff may do so through affidavits or competent evidence that show sufficient contacts with the forum state to establish personal jurisdiction. De Lage Landen Fin. Servs., Inc. v. Rasa Floors, LP, No. CIV.A.08-0533, 2008 WL 4822033, at *3 (E.D. Pa. Nov. 4, 2008). Such contacts must be established with "reasonable particularity," but need only amount to a prima facie case in favor of personal jurisdiction. Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992) (quoting Provident, 819 F.2d at 437). If the plaintiff meets this burden, the defendant must then establish the presence of other considerations that would render jurisdiction unreasonable. DeLage, 2008 WL 4822033, at *3 (citing Carteret Sav. Bank v. Shushan, 954 F.2d 141, 150 (3d Cir. 1992)).

B. Rule 12(b)(6)

Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), the United States Supreme Court recognized that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. It emphasized that it would not require a "heightened fact pleading of specifics," but only "enough facts to state a claim to relief that is plausible on its face." Id. at 570.

Following the basic precepts of Twombly, the Supreme Court, in the subsequent case of Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009), enunciated two fundamental principles applicable to a court's review of a motion to dismiss for failure to state a claim. First, it noted that "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 1949. Thus, although "[Federal] Rule [of Civil Procedure] 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era . . . it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 1950. Second, the Supreme Court emphasized that "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id.

"Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. The Supreme Court explained:

The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'"

Id. at 1949 (citing Twombly, 550 U.S. at 556-57).

Expanding on the Twombly/Iqbal standards, the United States Court of Appeals for the Third Circuit succinctly summarized the two-prong analysis to be undertaken by district courts during a Rule 12(b)(6) review:

[A]fter Iqbal, when presented with a motion to dismiss for failure to state a claim, district courts should conduct a two-part analysis. First, the factual and legal elements of a claim should be separated. The district court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Second, a district court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a "plausible claim for relief." In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to show such an entitlement with its facts. As the Supreme Court instructed in Iqbal, where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not shown -- that the pleader is entitled to relief. This plausibility requirement will be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.

Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (internal citations omitted).

Notwithstanding the foregoing, nothing in Twombly, Iqbal, or Fowler has altered some of the fundamental underpinnings of the Rule 12(b)(6) standard of review. Arner v. PGT Trucking, Inc., No. CIV.A.09-565, 2010 WL 1052953, at *2 (W.D. Pa. Mar. 22, 2010); Spence v. Brownsville Area Sch. Dist., No. CIV.A.08-626, 2008 WL 2779079, at *2 (W.D. Pa. Jul. 15, 2008). Federal Rule of Civil Procedure 8 still requires only a short and plain statement of the claim showing that the pleader is entitled to relief and need not contain detailed factual allegations. FED. R. CIV. P. 8; Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Further, the court must "accept all factual allegations in the complaint as true and view them in the light most favorable to the plaintiff." Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the court must "determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Pinkerton v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002).

III. DEFENDANT TOLA'S MOTION TO DISMISS UNDER RULE 12(b)(2)

Under Federal Rule of Civil Procedure 4(k)(1)(A), a federal court may exercise personal jurisdiction over a non-resident defendant to the extent provided by the law of the state in which the federal court sits. FED. R. CIV. P. 4(k)(1)(A); see also Martin v. Citizens Fin. Group, Inc., No. CIV.A.10-260, 2010 WL 3239187, at *3 (E.D. Pa. Aug. 13, 2010). In this case, the forum state is Pennsylvania, thus necessitating the application of Pennsylvania's long-arm statute. Under this statute, personal jurisdiction of Pennsylvania courts over nonresident defendants is permitted "to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States." 42 PA. CONS. STAT. § 5322(b); see Mellon Bank, 960 F.2d at 1221 ("The Pennsylvania statute permits the courts of that state to exercise personal jurisdiction over nonresident defendants to the constitutional limits of the due process clause of the fourteenth amendment."). Therefore, a court's inquiry is solely whether the exercise of personal jurisdiction over the defendant would be constitutional under the Due Process Clause. Mellon Bank, 960 F.2d at 1221. Pursuant to these constitutional considerations, physical presence within the forum is not required to establish personal jurisdiction over a nonresident defendant. IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir.1998). Instead, personal jurisdiction may be based on either a defendant's general contacts or his specific contacts with the forum. Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001).

In the present case, Plaintiffs allege that the Court has both general and specific jurisdiction over Defendant Tola. The Court addresses each argument individually.

A. General Jurisdiction

"General jurisdiction depends on a defendant having maintained 'continuous and systematic contacts' with the forum state." D'Jamoos es rel. Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 107 (3d Cir. 2009) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984)). Proof of such contact requires a showing of "extensive and pervasive" activity in the forum state. See Reliance Steel Prods. Co. v. Watson, Ess, Marshall, & Engass, 675 F.2d 587, 589 (3d Cir. 1982) (quotations omitted). The defendant's contacts need not be related to the cause of action being litigated. McMullen v. European Adoption Consultants, Inc., 109 F. Supp. 2d 417, 418 (W.D. Pa. 2000). If the foreign defendant "maintains 'continuous and systematic' contacts with a state, the state has general personal jurisdiction over the party, and the non-resident may be sued in that state on any claim." Wilmington Fin., Inc. v. Moonis, No. CIV.A.08-2365, 2008 WL 4661033, at *3 (E.D. Pa. Oct. 21, 2008) (quotations omitted).

When claiming general personal jurisdiction over Tola, Plaintiffs argue, without further elaboration, that "[t]he 'bread and butter' of Tola's business is selling insurance products. He and the other Defendants have sold such products to individuals within Pennsylvania, which, because their business is regional, is a market from which defendants derive a significant portion of their total revenue." (Pls.' Resp. Tola Mot. Dismiss 18.) This bald statement, however, fails to establish the extensive and pervasive activity necessary for a finding of general jurisdiction. According to the affidavit submitted by Defendant, Tola is a citizen and resident of New Jersey. (Def. Tola's Mot. Dismiss, Ex. A, Aff. of Ryan Tola ¶¶ 1-2 (Sep. 2, 2010) ("Tola Aff.").) He has never lived in Pennsylvania, owns no property in Pennsylvania, worked for Grinspec, Inc., which is a New Jersey corporation with offices located solely in New Jersey, and is not aware of any Grinspec customers or business done by Grinspec in Pennsylvania. (Tola Aff. ¶¶ 4-11.) Plaintiffs' mere speculation that Tola may have sold products to individuals within Pennsylvania does not satisfy general jurisdiction's high threshold.See 4 CHARLES ALAN WRIGHT AND ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1067.5 (3d ed. 2008) ("As many of the illustrative federal cases . . . indicate, the defendant must be engaged in longstanding business in the forum state, such as marketing or shipping products, or performing services or maintaining one or more offices there; activities that are less extensive than that will not qualify for general in personam jurisdiction.").Indeed, nothing in any pleading or exhibit before the Court shows any contacts by Tola with Pennsylvania that could be classified as "continuous and systematic."*fn2

Consequently, the Court declines to exercise general personal jurisdiction over Tola.

B. Specific Jurisdiction

In the absence of "continuous and systematic" contacts, a plaintiff may rely on "specific jurisdiction" where the cause of action is related to or arises out of the defendant's contacts with the forum. IMO Indus., 155 F.3d at 259 (citing Helicopteros, 466 U.S. at 414 n.8). To properly exercise specific jurisdiction under the Due Process Clause, a plaintiff must satisfy a three-part test. Louis A. Grant, Inc. v. Hurricane Equip., Inc., No. CIV.A.07-438, 2008 WL 892152, at *3 (W.D. Pa. Apr. 2, 2008). First, the plaintiff must show that the defendant has "constitutionally sufficient 'minimum contacts' with the forum." IMO Indus, 155 F.3d at 259 (citingBurger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)). Second, the plaintiff's claim must "arise out of or relate to those activities." Helicopteros, 466 U.S. at 414. Third, the reviewing court may consider additional factors to ensure that the exercise of jurisdiction otherwise "comport[s] with 'fair play and substantial justice.'" Burger King, 471 U.S. at 476 (quoting Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. and Placement, 326 U.S. 310, 320 (1945)); see also O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 317 (3d Cir. 2007) (enumerating the three elements of specific jurisdiction).

To satisfy the first component of the specific jurisdiction test, the acts identified by plaintiff must be "such that [the defendant] should reasonably anticipate being haled into court [in the forum state]." World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 266, 297 (1980). It has long been recognized that minimum contacts necessary to support specific jurisdiction exist only where the defendant "has purposefully directed its activities toward the residents of the forum state . . . or otherwise 'purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" IMO Indus,, 155 F.3d at 259 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958) (other internal quotations omitted)). "This test is intended to protect a non-resident defendant from jurisdiction based on contacts that are 'random, fortuitous,' or 'attenuated,' or that result from the unilateral activity of another party or a third person." Pullman Fin. Corp. v. Hotaling, No. CIV.A.07-1703, 2008 WL 2563372, at *4 (W.D. Pa. June 24, 2008) (quoting Burger King, 471 U.S. at 475).

With respect to the second component, "[t]he animating principle behind the relatedness requirement is the notion of a tacit quid pro quo that makes litigation in the forum reasonably foreseeable." O'Connor, 496 F.3d at 322. "Out-of-state residents who 'exercise[ ] the privilege of conducting activities within a state . . . enjoy[ ] the benefits and protection of' the state's laws; in exchange, they must submit to jurisdiction over claims that arise from or relate to those activities." Id. (citingInt'l Shoe, 326 U.S. at 319; Burger King, 471 U.S. at 475-76). As noted by the Third Circuit, "in the course of this necessarily fact-sensitive inquiry, the analysis should hew closely to the reciprocity principle upon which specific jurisdiction rests. . . . With each purposeful contact by an out-of-state resident, the forum state's laws will extend certain benefits and impose certain obligations." O'Connor, 496 F.3d at 323 (internal citations omitted).

In the case of an intentional tort claim, the first and second factors are replaced by the "effects" test articulated by the United States Supreme Court in Calder v. Jones, 465 U.S. 783 (1984). See IMO Indus., 155 F.3d at 265 (adopting Calder "effects" test). "Under the effects test, a court may exercise personal jurisdiction over a nonresident defendant who acts outside the forum state to cause an effect upon the plaintiff within the forum state." Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 148 (3d Cir. 1992). To establish personal jurisdiction under the Calder "effects" test, a plaintiff must show that: (1) the defendant committed an intentional tort; (2) the plaintiff felt the brunt of the harm in the forum such that the forum can be said to be the focal point of the resulting harm; and (3) the defendant expressly aimed its tortious conduct at the forum such that the forum can be said to be the focal point of the tortious activity. SeeIMO Indus., 155 F.3d at 265-66. If all three factors are met, a court will find personal jurisdiction. Id. The Third Circuit has recognized, however, that Calder did not "carve out a special intentional torts exception to the traditional specific jurisdiction analysis, so that a plaintiff could always sue in his or her home ...


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