State v. Reservation Services International, Inc.

State of Connecticut v. Reservation Services International, Inc. et al

No. HHDCV166071791S

Superior Court of Connecticut, Judicial District of Hartford, Hartford

November 2, 2017

UNPUBLISHED OPINION

MEMORANDUM OF DECISION RE MOTION FOR ORDER (#125)

Kevin G. Dubay, J.

The present action arises from a dispute between the plaintiff the State of Connecticut, and the defendants, Reservation Services International, Inc. (RSI), Reservation Services Group, LLC (RSG), Reservation Services Intervals, LLC (Intervals), SI Holdings, LLC (Holdings), VIP Executives LLC, doing business as Travel Deals (Travel Deals), Sky Group, Inc., doing business as Travel Smart (Travel Smart) and Vacation Smart International, Inc. (Vacation Smart) regarding alleged violations of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. Currently pending before the court is a motion for order that was filed by the plaintiff. Specifically, the plaintiff seeks an order that (I) establishes a schedule under which RSI, RSG, Intervals, and Holdings (collectively, Reservation defendants) must comply with the plaintiff's requests for jurisdictional discovery, ^[1] (II) overrules the Reservation defendants' objections to the plaintiff's jurisdictional discovery requests, and (III) prescribes an evidentiary hearing on the issue of whether the court has personal jurisdiction over the Reservation defendants. For the reasons set forth subsequently in this memorandum, the plaintiff's motion for order is granted in part and denied in part without prejudice.

DISCUSSION

I

The plaintiff first claims that the court should enter an order that establishes a schedule under which the Reservation defendants must comply with the plaintiff's requests for jurisdictional discovery.

Our Supreme Court's decision in Standard Tallow Corp. v Jowdy, 190 Conn. 48, 56-60, 459 A.2d 503 (1983), governs jurisdictional discovery. There, the court held that, in light of Practice Book (1978-97) § 218 (now § 13-2), ^[2] " discovery may be had to establish facts pertaining to personal jurisdiction." Id., 57; see also id., 57 n.7 (" The court may even apply sanctions for failure to obey a discovery order intended to establish or to refute jurisdiction"). Our Supreme Court further held that the granting or denial of a request for jurisdictional discovery rests in the sound discretion of the trial court. See id., 57. " That discretion is limited, however, by the provisions of the rules [of practice] pertaining to discovery; Practice Book § § 217-21 [now § § 13-2 through 13-5]; especially the mandatory provision that discovery shall be permitted if the disclosure sought would be of assistance in the prosecution or defense of the action." (Emphasis in original; footnote omitted; internal quotation marks omitted.) Id., 57-59; see footnote 2 of this memorandum.

In the present case, as a part of its jurisdictional discovery requests, the plaintiff seeks information regarding (1) descriptions of RSI's products that have been offered for sale to Connecticut consumers, (2) the Reservation defendants' relationships with " certain named entities, " including Travel Deals, Travel Smart, and Vacation Smart, (3) " the number of Connecticut consumers who purchased travel club memberships, " (4) " the identity of [the] Connecticut consumers [who purchased travel club memberships], " (5) " communications between the [Reservation] [d]efendants and Connecticut consumers, " (6) " the registration of domain names for travel club memberships sold to Connecticut consumers, " (7) " total revenue from Connecticut consumers from the travel club memberships and related purchases, " (8) " cancellations by Connecticut consumers of their memberships, " and (9) " related litigation and arbitration . . ." The disclosure of such information would assist the plaintiff in establishing the court's personal jurisdiction over each of the Reservation defendants. See General Statutes § 33-929(f) (making or performing a contract in Connecticut, repeatedly soliciting business in Connecticut, distributing goods, and committing tortious conduct in Connecticut are bases for exercising long-arm jurisdiction); General Statutes 52-59b(a) (transacting business in Connecticut is a basis for exercising long-arm jurisdiction); ^[3] Daimler AG v. Bauman, 571 U.S. ___, n.13, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (" Agency relationships . . . may be relevant to the existence of specific jurisdiction." [emphasis in original]); Divicino v. Polaris Industries, 129 F.Supp.2d 425, 433 (D.Conn. 2001) (explaining that " [advertising] in [a] forum" and " [establishing] channels for providing information for customers within [a] forum." are relevant factors in establishing personal jurisdiction); see also Rios v. Fergusan, 51 Conn.Supp. 212, 225, 978 A.2d 592 (2008) [46 Conn.L.Rptr. 731] (on-line presence can be pertinent to establishing personal jurisdiction); Edberg v. Neogen Corp., 17 F.Supp.2d 104, 115 (D.Conn. 1998) (same). Thus, the court must permit such discovery. See Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 57-58. Accordingly, the court grants the plaintiff's motion for an order that establishes a schedule under which the Reservation defendants must comply with the plaintiff's jurisdictional discovery requests.

II

Second the plaintiff claims that the court should overrule the Reservation defendants' objections to the plaintiff's jurisdictional discovery.

As discussed previously in part I of this memorandum, a party may request jurisdictional discovery from a litigant for the purpose of establishing facts that are relevant to personal jurisdiction. See Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 57. As a corollary, " [t]he opposing party . . . likewise retains the ability to object to such requests by any number of procedural vehicles, including written objection, motion to quash, motion to limit, or motion for a protective order. See Practice Book § 13-5^[4] . . . The [trial] court, in its discretion, may grant or deny such objections as it deems appropriate." (Citation omitted; footnote added; internal quotation marks omitted.) Brody v. Brody, 153 Conn.App. 625, 638, 103 A.3d 981, cert. denied, 315 Conn. 910, 105 A.3d 901 (2014).

In the present case, the Reservation defendants object to the plaintiff's jurisdictional discovery requests on, inter alia, the following grounds: (A) jurisdictional discovery pursuant to Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 56-60, is " obsolete and improper" under Daimler AG v. Bauman, supra, 571 U.S. ___, and its progeny; (B) the Reservation defendants are not subject to the court's personal jurisdiction; (C) permitting jurisdictional discovery in the present case would violate the tenth amendment to the United States constitution; ^[5] and (D) here, permitting jurisdictional discovery would violate article first, § § 7 and 8, ^[6] of the constitution of Connecticut.^[7] The court will address the Reservation defendants' objections in turn.

A

First, the Reservation defendants object to the plaintiff's jurisdictional discovery requests on the ground that jurisdictional discovery pursuant to Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 56-60, is " obsolete and improper" under Daimler AG v. Bauman, supra, 571 U.S. ___, and its progeny. The Reservation defendants' objection lacks merit. As the United States Court of Appeals for the Second Circuit has recently noted, in Daimler AG v. Bauman, supra, " the Supreme Court [of the United States] narrowed the test for general jurisdiction . . ." Waldman v. Palestine Liberation Organization, 835 F.3d 317, 322, 326 (2d Cir. 2016). Pursuant to Daimler, " [a] court may assert general personal jurisdiction over a foreign defendant . . . only when the defendant's affiliations with the State in which suit is brought are so constant and pervasive as to render [it] essentially at home in the forum State." (Internal quotation marks omitted.) Id., 331. Thus, rather than discarding the procedural mechanism of jurisdictional discovery, the United States Supreme Court altered the standard for exercising general jurisdiction over an out-of-state defendant. This conclusion finds further support in the fact that, in Daimler, the trial court authorized the plaintiffs to procure jurisdictional discovery from the defendant; see id., (stating that trial court granted defendant's motion to dismiss for lack of personal jurisdiction " [a]fter allowing jurisdictional discovery on plaintiffs' agency allegations"); and, on appeal, the Supreme Court of the United States did not reason or conclude that the grant of jurisdictional discovery was improper.^[8] Consequently, the Reservation defendants' objection is overruled.

B

Second the Reservation defendants object to the plaintiff's jurisdictional discovery requests on the ground that they are not subject to the court's personal jurisdiction. A substantially similar argument was rejected in Standard Tallow Corp. v. Jowdy, supra, 190 Conn. 57 n.7. There our Supreme Court concluded that " [t]he contention of the defendant that to order discovery would impermissibly impose the court's jurisdiction over the defendant prior to having even made the determination as to whether the court in fact had jurisdiction over this defendant, is erroneous. A court must have jurisdiction to determine its own jurisdiction, especially where . . . the defendants have . . . put that question into issue." (Emphasis added; internal quotation marks omitted.) Id. Here, through their respective motions to dismiss, the Reservation defendants have placed into issue the court's personal jurisdiction over them. Thus, the court has jurisdiction to determine whether it has personal jurisdiction over the Reservation defendants. ...