Thompson Trading Ltd. v. Allied Lyons PLC

124 F.R.D. 534, 1989 U.S. Dist. LEXIS 2411, 1989 WL 21006
District Court, D. Rhode Island·Decided March 13, 1989·No. Civ. A. No. 88-0333 L·Published·Cited by 11 cases

Opinion

MEMORANDUM AND ORDER

LAGUEUX, District Judge.

This matter is presently before the Court on defendants’ motion for reconsideration of this Court’s January 12, 1989 Opinion and Order. In that decision, this Court denied a motion to dismiss two foreign corporate defendants, Allied Lyons PLC and Hiram Walker-Gooderham & Worts, [535]*535Ltd., for lack of in personam jurisdiction. In the alternative, defendants seek certification pursuant to 28 U.S.C. § 1292(b) to make an interlocutory appeal from that decision.

Specifically, defendants claim that this Court erred in refusing to consider extra-pleading material concerning their motion to dismiss, and in founding personal jurisdiction on plaintiffs allegation that the foreign defendants engaged in a conspiracy to tortiously interfere with plaintiffs business relationships. Defendants claim that the conspiracy allegation is merely conclusory and thus "insufficient as a matter of law.”

The background of the instant matter is discussed at length in this Court’s prior Opinion and Order reported as Thompson Trading Ltd. v. Allied Lyons PLC, 123 F.R.D. 417 (D.R.I.1989). Since all the parties are familiar with the relevant events, the Court will not now launch into a long rehash of the case. Suffice it to say, this Court found that plaintiff’s allegations of tortious conduct by the foreign defendants, if true, would subject them to this forum’s specific in personam jurisdiction. The Court accepted plaintiff’s allegations as true and exercised its broad discretion in refusing to consider defendants’ extrapleading material because the relevant information is in control of the defendants and the issue of jurisdiction is inextricably intertwined with the merits of the case. Therefore, the Court ruled, it would be unfair to the plaintiff to force it to prove its claim prior to full-blown discovery.

DISCUSSION

In this Memorandum and Order the Court will first examine defendants’ motion for reconsideration. The Court will pay particular attention to the issue of what material it should have examined in deciding the motion to dismiss, and the question of what allegations are necessary to plead a valid conspiracy cause of action. In addition, this opinion will discuss the Copper-weld issue raised by defendants. Then, the Court will evaluate defendants’ request for § 1292(b), interlocutory certification.

I. Motion for Reconsideration

A. Extra-Pleading Material

This Court refused to consider defendants’ extra-pleading material and to, in effect, force plaintiff to produce evidence proving that the foreign defendants had established the requisite contacts with Rhode Island to subject them to this forum’s specific in personam jurisdiction. Instead, the Court exercised its broad discretion in relying solely on the allegations of plaintiff’s amended complaint concerning conspiratorial activity by the foreign defendants.

The United States Supreme Court has noted that “there is no statutory direction for procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court.” Gibbs v. Buck, 307 U.S. 66, 71-72, 59 S.Ct. 725, 728-29, 83 L.Ed. 1111 (1939). As is detailed in this Court’s previous ruling, a trial court has broad discretion to determine what, if any, extra-pleading material it will examine when deciding a motion to dismiss for lack of personal jurisdiction. Cf. Fed.R.Civ.P. 12(b) (concerning court discretion to consider or not consider extra-pleading material in Rule 12(b)(6) motions to dismiss). Apparently, defendants recognize that the Court has broad discretion in this area because they repeatedly assert that the Court “may” examine such material and not that the court must examine such material.

In its earlier Opinion, this Court refused to force plaintiff to produce evidence concerning the foreign defendants’ alleged conspiratorial activity. Such activity constitutes the jurisdictional contact with this forum. To put plaintiff to this task prior to discovery would be wrong for several reasons. First, the jurisdictional issue is so intertwined with the merits of the case that meaningful jurisdictional discovery, in this instance, would be equivalent to full-blown pretrial discovery. Conspiracy is an activity which by its very nature is secretive. Therefore, in many cases it is only through discovery that one can root out its existence. Second, any relevant evidence is most likely to be under defendants’ control. [536]*536Therefore, it would be unfair to plaintiff to require proof of forum contacts at this early stage.

Defendants argue that plaintiff obtained all the discovery it requested. This statement is true so far as it goes; however, defendants fail to acknowledge that when asked if it desired more jurisdictional discovery, plaintiff stated that it believed it would be able to prove the existence of the conspiracy—and thus personal jurisdiction—through normal discovery. Perhaps plaintiff, unlike defendants, recognized how inefficient it would be to conduct extensive discovery concerning the alleged conspiracy for jurisdictional purposes, when it is clear that plaintiff will pursue its action against the other defendants in any event, and will conduct discovery concerning the alleged conspiracy for trial purposes. Some duplication would be bound to occur.

In sum, this Court is satisfied with its determination to treat plaintiffs allegations as true for purposes of the defendants' motion to dismiss due to the inseparability of the jurisdictional issue from the merits of the case, and the relative positions of the parties with respect to the relevant sources of information.

B. Conspiracy

Defendants argue that plaintiff’s conspiracy claim is invalid because it contains only “a conclusory allegation of conspiracy unaccompanied by any factual allegations” purporting to show the existence of conspiratorial conduct. Therefore, defendants contend, the conspiracy charge cannot serve as a basis for the exercise of specific in personam jurisdiction. This Court finds that plaintiff has pled sufficient factual allegations in its amended complaint from which a clear inference of conspiracy may be drawn. In light of the current pre-discovery posture of the litigation and the nature of conspiracy itself, such allegations are sufficient to withstand defendants’ motion to dismiss.

As plaintiff detailed in its memorandum opposing the instant motion for reconsideration or interlocutory certification: “It does not require a leap of the imagination, upon a review of the factual allegations of plaintiff’s amended complaint, to recognize the inference of a conspiracy amongst defendants.” Plaintiff alleges that, with the consent and active involvement of one of the subsidiary defendants, Allied Breweries Overseas Trading Ltd. (“ABOT”), plaintiff signed a letter of intent on November 24, 1987 to assign its Double Diamond distribution rights to Simon Levi Company Ltd. (“Simon ' Levi”) for $275,000. However, two days later, on November 26, 1987, ABOT informed Simon Levi that its parent company, Allied Lyons PLC, had acquired a 100% interest in Hiram Walker-Gooderham & Worts, Ltd.

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Thompson Trading Ltd. v. Allied Lyons PLC, 124 F.R.D. 534, 1989 U.S. Dist. LEXIS 2411, 1989 WL 21006 (D.R.I. 1989).

124 F.R.D. 534 (Thompson Trading Ltd. v. Allied Lyons PLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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