Malek v. Chef's Roll, Inc.

DAVID MALEK, Plaintiff, v. CHEF'S ROLL, INC., Defendant.

Civil Action No. 2:18-cv-03205-BRM-SCM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

August 15, 2019

NOT FOR PUBLICATION

OPINION

MARTINOTTI, DISTRICT JUDGE

Before this Court is Defendant Chef's Roll, Inc.'s ("Chef's Roll" or "Defendant") Renewed Motion to Dismiss Plaintiff David Malek's ("Plaintiff") Complaint in its entirety pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) and Plaintiff's fraud claim (Count IV) pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 37.) Defendant moves in the alternative to transfer this action to the Southern District of California pursuant to 28 U.S.C. § 1404(a). (Id.) Plaintiff opposes the Motion (ECF No. 38), and Chef's Roll filed a Reply to Plaintiff's Opposition (ECF No. 39).¹ Having reviewed the filings submitted in connection with the motion and having declined to hold oral argument pursuant to Federal Rule of Civil Procedure78(b), for the reasons below, Defendant's Renewed Motion to Dismiss is GRANTED in part and DENIED in part.

I. BACKGROUND²

For the purposes of this Motion to Dismiss, the Court accepts the factual allegations in the Amended Complaint as true and draws all inferences in the light most favorable to Plaintiff. See Phillips v. Cty. of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). Furthermore, the Court also considers any "document integral to or explicitly relied upon in the complaint." In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (quoting Shaw v. Dig. Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)).

Plaintiff David Malek, a New Jersey resident, is owner and chief executive officer of Gunter Wilhelm Cutlery & Cookware ("Gunter Wilhelm"), located in New Jersey. (ECF No. 1 ¶ 2.) Thomas Keslinke and Frans van der Lee are the co-founders of Defendant Chef's Roll, Inc., a Delaware corporation with principal offices in California. (Id. ¶¶ 3, 5.) Chef's Roll operates a social media website for culinary professionals. (Id. ¶ 3.) Keslinke and van der Lee reside in Texas and California, respectively. (Id. ¶ 4.)

Plaintiff claims that Defendant and he entered into an agreement under which Plaintiff promised to assist in the promotion of Chef's Roll in exchange for Defendant's promises "to (1) make Gunter Wilhelm the exclusive cutlery and cookware vendor/manufacturer promoted on [Defendant's] website and (2) to provide [Plaintiff] with equity in Chef's Roll." (Id. ¶ 9.) Plaintiff also became an early investor in Chef's Roll in exchange for future equity in the company and a position on its board of advisors. (Id. ¶¶ 14-16, 20.) Plaintiff alleges that he fully performed hisobligations under the agreement, which included, inter alia, securing positions at trade shows for Defendant and personally promoting Defendant's brand to industry insiders. (Id. ¶¶ 10, 27.) Plaintiff alleges, however, that Defendant has not fulfilled its obligations under the agreement. (Id. ¶ 27.) Defendant has not furnished Plaintiff with the stock that he was promised. (Id. ¶ 32.) Defendant removed Gunter Wilhelm from the Chef's Roll website and stopped promoting Gunter Wilhelm. (Id. ¶ 24.) Indeed, Plaintiff alleges that Defendant even began marketing itself with one of Gunter Wilhelm's competitors. (Id.) Plaintiff further alleges that Defendant, through Keslinke and others, made material misrepresentations to Plaintiff regarding Defendant's financial prospects and willingness to issue Plaintiff stock in exchange for his investments. (Id. ¶ 51.) According to Plaintiff, Defendant is now valued at over $30 million—growth attributable in part to Plaintiff's efforts and expense. (Id. ¶¶ 27-28.)

Plaintiff therefore brings this action asserting claims for breach of contract, unjust enrichment, quantum meruit, and fraud. (Id. ¶¶ 29-56). In May 2018, Defendant moved to dismiss the Complaint for lack of personal jurisdiction and improper venue, or in the alternative, to transfer the action to the Southern District of California. (ECF No. 7.) In July 2018, the Court preliminarily found that it lacked general personal jurisdiction over Defendant. (ECF No. 13 at 7). The Court reserved judgment on whether specific personal jurisdiction existed, denied the Motion without prejudice, and ordered the parties to engage in jurisdictional discovery. (Id. at 10.) Defendant now renews its Motion to Dismiss and its Alternative Motion to Transfer. (See id.)

II. LEGAL STANDARDS

A. Rule 12(b)(6) Standard

In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court is "required to accept as true all factual allegations in the complaint and draw allinferences in the facts alleged in the light most favorable to the [plaintiff]." Phillips, 515 F.3d at 228. "[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). However, the 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." Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). A court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan, 478 U.S. at 286. Instead, assuming the factual allegations in the complaint are true, those "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 570). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for misconduct alleged." Id. This "plausibility standard" requires that the complaint allege "more than a sheer possibility that a defendant has acted unlawfully," but it "is not akin to a probability requirement.'" Id. (quoting Twombly, 550 U.S. at 556). "Detailed factual allegations" are not required, but "more than an unadorned, the defendant-harmed-me accusation" must be pleaded; it must include "factual enhancements" and not just conclusory statements or a recitation of the elements of a cause of action. Id. (citing Twombly, 550 U.S. at 555, 557).

"Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. "[W]here 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'show[n]'—'that the pleader is entitled to relief.'" Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). However, courts are "not compelled to accept 'unsupported conclusions and unwarranted inferences,'" Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (quoting Schuylkill Energy Res. Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997)), nor "a legal conclusion couched as a factual allegation." Papasan, 478 U.S. at 286.

While, as a general rule, the court may not consider anything beyond the four corners of the complaint on a motion to dismiss pursuant to Rule 12(b)(6), the Third Circuit has held that "a court may consider certain narrowly defined types of material without converting the motion to dismiss [to one for summary judgment pursuant to Rule 56]." In re Rockefeller Ctr. Props. Sec. Litig., 184 F.3d 280, 287 (3d Cir. 1999). Specifically, courts may consider any "'document integral to or explicitly relied upon in the complaint.'" Burlington Coat Factory, 114 F.3d at 1426 (quoting Shaw, 82 F.3d at 1220).

B. Rule 12(b)(2) Standard

A plaintiff bears "the burden of demonstrating facts that establish[] personal jurisdiction." Fatouros v. Lambrakis, 627 F. App'x 84, 86-87 (3d Cir. 2015) (citing Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009) (quoting Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 368 (3d Cir. 2002)). A court "must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff." Pinker, 292 F.3d at 368 (quoting Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992)). Pursuant to Federal Rule of Civil Procedure 4(e), a district court may exercise personal jurisdiction according to the law of the state where it sits. "New Jersey's long-arm statute provides for jurisdiction coextensive with the due process requirements of the United States Constitution." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 95 (3d Cir. 2004) (citing N.J. Court Rule 4:4-4(c)). In other words, this Court's jurisdiction is"constrained, under New Jersey's long-arm rule, only by the 'traditional notions of fair play and substantial justice,' inhering in the Due Process Clause of the Constitution." Carteret Sav. Bank, 954 F.2d at 145 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). "Thus, parties who have constitutionally sufficient 'minimum contacts' with New Jersey are subject to suit there." Miller Yacht Sales, 384 F.3d at 96 (citing Carteret Sav. Bank, 954 F.2d at 149).

The Supreme Court has defined two categories of personal jurisdiction: specific jurisdiction and general jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 119 (2014) (citing Int'l Shoe Co., 326 U.S. at 317); see also Metcalfe, 566 F.3d at 334 ("Minimum contacts can be analyzed in the context of general jurisdiction or specific jurisdiction."). Specific jurisdiction exists when the defendant's activities in the forum state: (1) were "continuous and systematic" and (2) gave rise to the plaintiff's claims. Daimler, 571 U.S. at 119. General jurisdiction requires only continuous and systematic contacts, and...