Newmarkets Partners LLC v. Oppenheim

638 F.Supp.2d 394

NEWMARKETS PARTNERS LLC et al., Plaintiffs, v. Sal. OPPENHEIM Jr. & CIE et al., Defendants.

No. 08 Civ. 4213(WHP).

United States District Court, S.D. New York.

July 28, 2009.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Bernard Daskal, Esq., Lawrence G. Lee, Esq., Lynch Daskal Emery LLP, New York, NY, L. Peter Farkas, Esq., Richard S. Toikka, Esq., Farkas & Toikka LLP, Washington, DC, for Plaintiffs.

Frederick W. Reif, Esq., Biedermann, Reif, Hoenig & Ruff, New York, NY, for Defendant CAM Private Equity Consulting & Verwaltungs GmbH.

Daniel N. Arshack, Esq., Arshack, Hajek & Lehrman PLLC New York, N.Y. for Defendant BVT Beratungs-, Verwaltungsund, Treuhandgesellschaft fur Internationale Vermorgensanlagen MBH.

James P. Tallon, Esq., Sherman & Sterling, LLP, New York, NY, for Defendant Sal. Oppenheim Jr. & CIE. S.C.A.

Gary C. Adler, Esq., Roetzel & Andress, Washington, D.C., for Defendant Marie-France Mathes.

MEMORANDUM & ORDER

WILLIAM H. PAULEY III, District Judge.

Plaintiffs NewMarkets Partners LLC ("NewMarkets"), CAM NewMarkets Partners LP, and Tomoko Tatara ("Tatara") (collectively, "Plaintiffs")¹ bring this action alleging false advertising under the Lanham Act, 15 U.S.C. § 1051. et seq., along with numerous state law claims. Defendants Sal. Oppenheim Jr. & CIE. S.C.A. ("Oppenheim"), CAM Private Equity Consulting & Verwaltungs GmbH ("CAM"), and BVT Beratungs-, Verwaltungsund Treuhandgesellschaft fur Internationale Vermorgensanlagen MBH ("BVT-B") move to dismiss the First Amended Complaint under Rules 12(b)(1) and 12(b)(6). BVT-B also moves to dismiss for lack of personal jurisdiction under Rule 12(b)(2). For the following reasons, those motions are granted in part and denied in part. BVT-B is dismissed from this action for lack of personal jurisdiction. The civil conspiracy claim against Oppenheim and CAM is dismissed. The unfair competition claim against Oppenheim is dismissed. All other motions are denied.

BACKGROUND

I. The Parties

Tatara and Mathes are former employees of the World Bank where they worked on investments in emerging market economies. (First Amended Verified Complaint dated July 9, 2008 ("First Amended Complaint" or "First Amended Compl.") ¶¶ 39-42.) Oppenheim is a European private bank focused on asset management and investment banking for affluent individuals, corporations, and institutional investors. (First Amended Compl. ¶ 43.) CAM is a German investment group that makes private equity fund investments in the United States and Europe and provides administrative services for private equity funds. (First Amended Compl. ¶ 44.) Although CAM is based in Cologne, Germany, it has operations in the United States including a wholly-owned subsidiary in Connecticut. (First Amended Compl. ¶¶ 5, 44.) BVT-B is a German asset management firm. (First Amended Compl. ¶ 46.)

II. The Joint Venture

In November 2006, Tatara, and Mathes began discussions with CAM about a joint venture to manage investment funds in new private equity markets. (First Amended Compl. ¶¶ 27, 48.) In March 2007, Tatara and Mathes formed NewMarkets as the vehicle for their involvement in the joint venture with CAM. NewMarkets and CAM styled their joint venture as a partnership under the name, CAM-NewMarkets Partners LP (the "Joint Venture").² (First Amended Compl. ¶ 28.) CAM agreed to invest $3 million in the Joint Venture, while NewMarkets contributed its members' reputations, experience, investment model, and contacts in new private equity markets. (First Amended Compl. ¶ 28.)

The Joint Venture Agreement provided that: (1) shared confidential information would only be used to advance the Joint Venture; (2) investments by NewMarkets, CAM, and their affiliates in new private equity markets (i.e., private equity markets outside of Western Europe and North America) would be made exclusively through the Joint Venture; and (3) neither Joint Venturer was authorized to act as agent for the other. (First Amended Compl. ¶¶ 29, 51.) The exclusivity provision applied to CAM and NewMarkets as well as their respective "affiliates." (First Amended Compl. ¶ 51.) The Joint Venture Agreement defined "affiliate" as companies that are "controlled by, control[], or [are] under common control" by either NewMarkets or CAM. (First Amended Compl. Ex. A: Joint Venture Agreement dated Mar. 14, 2007, at 1.) "Control" was defined as "the possession, directly or indirectly, of power to direct . . . management or policies (. . . through ownership of securities . . .). . . ." (Joint Venture Agreement at 1.)

The Joint Venture planned to establish an investment fund, known as the CANewMarkets Partners Fund I (the "Core Fund"). (First Amended Compl. ¶¶ 28-30, 54-60.) While the Joint Venture prepared a prospectus embodying Plaintiffs' proprietary investment model, the Core Fund never received any investments. (First Amended Compl. ¶ 113.)

III. The German Funds

Plaintiffs allege that CAM and BVT-B improperly used Plaintiffs' draft prospectus to prepare private placement memoranda of their own to market two separate German funds (the "German Funds"), the BVT-CAM Private Equity Global Fund VI and the BVT-CAM Private Equity New Markets Fund. (First Amended Compl. ¶¶ 26, 30-32; 61-72.) These private placement memoranda falsely identified Tatara, Mathes, and NewMarkets as involved in management of the funds, used Tatara's and Mathes's names and experience without their permission, and misappropriated their fund model. (First Amended Compl. ¶¶ 30-32, 61-72.) Plaintiffs also allege that these false statements misled the investing public, violated the Joint Venture Agreement, and created numerous conflicts of interest preventing launch of the Core Fund. (First Amended Compl. ¶¶ 32, 36, 98, 100, 101, 104-105, 108-111, Ex. C: Dewey & LeBoeuf Memorandum dated Dec. 17, 2007). Plaintiffs claim misappropriation of their intellectual property and allege a conspiracy among Defendants to block Plaintiffs' entry into the market. (First Amended Compl. ¶¶ 26-27, 36, 67-72.)

IV. Oppenheim & CAM

In July 2007, Oppenheim announced a "strategic partnership" with CAM and touted the Joint Venture's expertise as a prized component that would contribute to Oppenheim's international expansion. (First Amended Compl. ¶ 45.) In October 2007, Oppenheim informed Plaintiffs that it was launching a private equity group in Hong Kong to invest in Asian funds in direct competition with the Joint Venture. (First Amended Compl. ¶¶ 95-96.) In November 2007, Oppenheim revealed that it had acquired a majority stake in CAM. (First Amended Compl. ¶ 45.) Thus, Plaintiffs contend that Oppenheim is an affiliate of CAM under the Joint Venture Agreement. (First Amended Compl. ¶ 97.)

DISCUSSION

I. Personal Jurisdiction Over BVT-B

A. Legal Standard

"On a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction, plaintiff bears the burden of showing that the court has jurisdiction over the defendant." In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir.2003); see also Landoil Res. Corp. v. Alexander & Alexander Servs., Inc., 918 F.2d 1039, 1043 (2d Cir.1991) (plaintiff "bears the burden of proving by a preponderance of the evidence that personal jurisdiction exists"). "Where plaintiff has engaged in jurisdictional discovery . . . the plaintiffs prima facie showing . . . must include an averment of facts that, if credited . . . would suffice to establish jurisdiction over the defendant." Moneygram Payment Sys., Inc. v. Consorcio Oriental, S.A., No. 05 Civ. 10773(RMB), 2007 WL 1489806, at *2 (S.D.N.Y. May 21, 2007) (quoting Magnetic Audiotape, 334 F.3d at 206 (internal quotation marks omitted)). However, all pleadings must be construed in a light most favorable to plaintiff, and all doubts resolved in plaintiffs favor. See Porina v. Marward Shipping Co., 521 F.3d 122, 126 (2d Cir.2008). A federal court's jurisdiction over non-resident defendants is governed by the law of the state in which the court sits and the requirements of due process. See Henderson v. INS, 157 F.3d 106, 123 (2d Cir.1998).

B. BVT-B's Contacts With The United States

BVT-B is a private corporation organized in Munich, Germany, (Declaration of Robert List dated Oct. 2, 2008 ("List Decl.") ¶ 3), and wholly-owned by BVT Holding GmbH & Company KG ("BVT Holding") (Declaration of Lawrence Lee dated Dec. 19, 2008 ("Lee Decl."), Ex. 48: Deposition of Robert List dated Dec. 1, 2008 ("List Depo.") at 20.) BVT Holding is owned by Harald von Scharfenberg. (List Depo. at 36.) BVT-B's principal business is selling shares of funds created and managed by BVT Holding.³ (List Depo. at 56-57.) BVT-B markets its funds primarily in Germany and Austria. (List Depo at 73; List Decl. ¶ 5.) All of the investors in the German Funds are located in Germany with the exception of four investors who are located in Switzerland, the Netherlands, Austria, and Mozambique, respectively. (List Decl. ¶ 7.) BVT-B invests in funds managed by Merrill Lynch in New York. (List Depo. at 120-21.) While BVT-B operates an interactive website accessible in New York, it neither markets nor sells products to New York residents. (List Decl. ¶¶ 3-4.) BVT-B's officers and employees visit the United States and New York from time to time. (List Depo. at 85.)

Some BVT-B's funds are invested in United States real estate owned or managed by BVT Equity Holding, Inc. of Atlanta, Georgia ("BVT Equity"). (List Depo. at 42-43, 62-65.) BVT Equity has extensive real estate holdings throughout the southeastern United States. (Lee Decl. Ex 50: Printed webpages from www. bvt.com dated Dec. 17, 2008.) The officers and employees of BVT-B contact the employees of BVT Equity from time to time in connection with those investments. (List Depo. at 38-39.) BVT Equity and BVT-B do not have a parent-subsidiary relationship. (List Decl. ¶ 3; List Depo. at 42-43.) While neither BVT-B nor Plaintiffs offer any evidence as to the exact...