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Campbell v. CGM, LLC

United States District Court, D. New Hampshire

July 20, 2015

Christopher Campbell,
v.
CGM, LLC Opinion No. 2015 DNH 143.

ORDER

JOSEPH DiCLERICO, Jr., District Judge.

The plaintiff, Christopher Campbell, brings this action against the defendant, CGM, LLC ("CGM"), asserting claims for (1) breach of contract; (2) fraud, deceit and misrepresentation;

(3) violation of the New Hampshire Consumer Protection Statute, N.H. Rev. Stat. Ann. § 358-A ("Section 358-A"); and (4) unpaid wages. CGM moves to dismiss for lack of personal jurisdiction and improper venue, or, in the alternative, to transfer the case to the United States District Court for the Northern District of Georgia. Christopher Campbell objects.[1]

Background[2]

Christopher Campbell is an electrical engineer who, since 1995, has lived and worked in New Hampshire. In the 1990s, Christopher Campbell founded a telecommunications company called Intellinet, Inc. ("Intellinet"). Intellinet was successful, and served clients in New England and New York.

In 2000, Intellinet began doing contract work for CGM, a Georgia telecommunications firm co-owned by Charles Campbell and Kevin Murphy. As noted above, Charles Campbell is Christopher Campbell's twin brother. Shortly thereafter, Christopher Campbell and Charles Campbell began discussing a prospective arrangement in which Christopher Campbell would become an employee of CGM, but would continue to live and work in New Hampshire. The negotiations regarding Christopher Campbell's employment apparently took place largely by telephone, while Christopher Campbell was in New Hampshire, and Charles Campbell and Murphy were in Georgia. The record also suggests that the parties may have met in person in Massachusetts to discuss the arrangement.

These discussions culminated in CGM offering Christopher Campbell an employment agreement. The agreement provided that Christopher Campbell would receive annually a salary of $170, 000 and a bonus consisting of 10% of CGM's annual earnings. Based on financial representations allegedly made by CGM during the negotiations, Christopher Campbell expected that his bonus would be approximately $66, 000 in the first year and would increase each year thereafter. The employment agreement contained a choice of law provision, which provided as follows:

This Agreement shall be deemed to be made in and shall in all respects be interpreted, construed and governed by and in accordance with the laws of the State of Georgia (without giving effect to the conflict of law principles thereof).

Employment Agreement (doc. no. 11-3) at 7.

Christopher Campbell signed and returned the employment agreement in May of 2001, and began work as a CGM employee in June. Christopher Campbell remained a CGM employee until his employment was terminated on January 31, 2015.

The parties dispute several aspects of the employment relationship between Christopher Campbell and CGM. As an initial matter, the parties dispute whether CGM maintained offices in New Hampshire during Christopher Campbell's tenure. In support of its motion to dismiss, CGM submitted a written declaration by Kevin Murphy, in which he denies that CGM ever rented or maintained office space in New Hampshire.

For his part, Christopher Campbell claims that, from 2001 to 2006, he worked out of an office in Windham, New Hampshire; from 2006 to 2011, he worked primarily from his home in New Hampshire; and from 2011 until 2015, he worked out of an office located in Salem, New Hampshire. In an affidavit accompanying his objection to the motion to dismiss, Christopher Campbell states that CGM paid the rent on the Windham and Salem offices. Christopher Campbell has also produced financial records and email correspondence showing that CGM leased and paid for the office in Salem from 2011 to 2015.

The parties also dispute the nature and scope of the work that Christopher Campbell performed on behalf of New Hampshirebased clients. Christopher Campbell alleges that when he began working for CGM, he redirected to CGM client payments that had previously gone to Intellinet, including revenues from a lucrative contract that Intellinet had secured with Verizon Communications ("Verizon"). At the time, Verizon had an agreement with the State of New Hampshire to provide certain state offices with telecommunications services. Verizon employed CGM to perform these services, and as a result, Christopher Campbell worked directly with both Verizon and State of New Hampshire employees.

After FairPoint Communications ("FairPoint") purchased Verizon in 2008, Christopher Campbell negotiated a series of contracts with FairPoint. As a result of these contracts, CGM performed work for FairPoint clients, including some twenty New Hampshire businesses and the State of New Hampshire. Christopher Campbell alleges that Murphy traveled on numerous occasions to Concord, New Hampshire to meet with New Hampshire officials regarding work that CGM was performing for the state.

CGM denies ever having had clients in New Hampshire. CGM asserts that the work Christopher Campbell performed in New Hampshire was performed directly for Verizon and FairPoint, which have their headquarters in Massachusetts and New York, and in Maine, respectively.

The relationship between Christopher Campbell and CGM began to sour almost immediately after Christopher Campbell's arrival at the company in 2001. At the end of the 2001 fiscal year, CGM did not pay Christopher Campbell a bonus. When he inquired, Charles Campbell informed him that the company did not have any earnings, so Christopher Campbell was not entitled to a bonus. Christopher Campbell asked to review CGM's books, but his brother refused. Subsequently, Christopher Campbell did not receive a bonus in 2002, 2003, or 2004, and each time was told that the company had not produced any earnings. At the end of 2005, CGM paid Christopher Campbell a bonus of $5, 000, and indicated that the bonus was for earnings that the company had generated from 2001 to 2004.

In 2006, Charles Campbell informed Christopher Campbell that the company was doing poorly and that Christopher Campbell's salary would be decreased from $170, 000 to $125, 000 annually. Christopher Campbell's salary apparently remained at $125, 000 until CGM terminated his employment in January of 2015.

The claims in this case involve alleged financial improprieties committed by Charles Campbell and Kevin Murphy. Christopher Campbell alleges that he was misled about the precarious state of the company, and that CGM in fact had substantial earnings that Charles Campbell and Murphy hid from him for their own financial benefit.

Discussion

CGM has moved to dismiss for lack of personal jurisdiction and improper venue, or, in the alternative, asks that the court transfer the case to the United States District Court for the Northern District of Georgia, where CGM has its headquarters. The court will consider the issues of personal jurisdiction, venue, and transfer in turn.

A. Personal Jurisdiction

1. Standard of Review

"A district court, faced with a motion to dismiss for lack of personal jurisdiction, Fed.R.Civ.P. 12(b)(2), may choose from among several methods for determining whether the plaintiff has met [its] burden' of proving that court's personal jurisdiction over the defendant." N. Laminate Sales, Inc. v. Davis, 403 F.3d 14, 22 (1st Cir. 2005) (quoting Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50-51 (1st Cir. 2002)). The most common of these methods - and the one that the court will employ here - is the so-called prima facie standard, which requires the district court to "consider only whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction." Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992).

"To make a prima facie showing of this calibre, the plaintiff ordinarily cannot rest upon the pleadings, but is obliged to adduce evidence of specific facts." Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145 (1st Cir. 1995). "[T]he court, in a manner reminiscent of its role when a motion for summary judgment is on the table, must accept the plaintiff's (properly documented) evidentiary proffers as true for the purpose of determining the adequacy of the prima facie jurisdictional showing." Id. (citations omitted); see also Bluetarp Fin., Inc. v. Matrix Constr. Co., Inc., 709 F.3d 72, 79 (1st Cir. 2013) ("The plaintiff's properly documented evidentiary proffers are accepted as true for purposes of making the prima facie showing, and we construe these proffers in a light most favorable to plaintiff's jurisdictional claim."). "A court need not, however, credit bald allegations or unsupported conclusions." Carreras v. PMG Collins, LLC, 660 F.3d 549, 552 (1st Cir. 2011). Finally, to the extent that they are uncontradicted, the court will consider facts offered by the defendant. Mass. Sch. of Law v. Am. Bar Ass'n, 142 F.3d 26, 34 (1st Cir. 1998).

2. Due Process Analysis

As here, where subject matter jurisdiction exists based on the diversity of citizenship of the parties, personal jurisdiction over a nonresident defendant is governed by the forum state's long-arm statute and by the constitutional limitations of due process. See Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). The New Hampshire long-arm statute permits the exercise of personal jurisdiction over a nonresident defendant who, among other things, "in person or through an agent, transacts any business within this state, [or] commits a tortious act within this state...." N.H. Rev. Stat. Ann. § 510:4(I). The New Hampshire Supreme Court has interpreted the long-arm statute as affording jurisdiction over foreign defendants "to the full extent that the statutory language and due process will allow." Sawtelle, 70 F.3d at 1388 (quoting Phelps v. Kingston, 130 N.H. 166, 171 (1987)). Therefore, the court need only determine whether the application of personal jurisdiction comports with Fourteenth Amendment due process requirements. Id.

A court's personal jurisdiction over a defendant may take the form of general or specific jurisdiction. Harlow v. Children's Hosp., 432 F.3d 50, 57 (1st Cir. 2005). "For general jurisdiction the defendant must have continuous and systematic contacts with the forum state, but the particular cause of action may be unrelated to those contacts." Bluetarp Fin., 709 F.3d at 79. Specific jurisdiction, on the other hand, "exists when there is a demonstrable nexus between a plaintiff's claims and a defendant's forum-based activities...." Mass. Sch. of Law, 142 F.3d at 34. The requirements for the establishment of general jurisdiction are "considerably more stringent" than those for the establishment of specific jurisdiction. Glater v. Eli Lilly & Co., 744 F.2d 213, 216 (1st Cir. 1984).

Christopher Campbell alleges in his complaint that this court has both general and specific personal jurisdiction over CGM. Nevertheless, his opposition to the motion to dismiss seemingly abandons a general jurisdiction theory, and focuses almost exclusively on specific jurisdiction. As such, the court will consider only specific jurisdiction. See Pan v. Gonzales, 489 F.3d 80, 87 (1st Cir. 2007) ("[L]egal ...


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