Cate v. PSEG, Inc., et a l . 06-CV-200-SM 08/23/07 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Brendon A. Cate. Plaintiff

v. Civil No. 06-CV-200-SM Opinion No.

Public Service Enterprise Group. Inc.. and Aerotek. Inc.. Defendants

O R D E R

Brendon A. Cate brings this suit against Public Service

Enterprise Group, Inc. ("PSEG") and Aerotek, Inc. ("Aerotek")

claiming that he was improperly terminated from his position at

PSEG. Specifically, Cate asserts claims of breach of contract

(Count I), wrongful termination (Counts II and III), as well as

violations of his due process and free speech rights guaranteed

under both the state and federal constitutions (Counts IV-IX).1

Aerotek moves to dismiss the claims asserted against it. Cate

objects. For the reasons set forth below, Aerotek's motion is

granted.

1 Of the nine counts in the complaint, only two (Counts V and VIII) assert claims against Aerotek. The Legal Standard

A claim is subject to dismissal under F e d . R. C i v . P.

12(b)(6) when the plaintiff "fail[s] to state a claim upon which

relief can be granted." The inquiry under Rule 12(b)(6) is

limited, focusing not on "whether a plaintiff will ultimately

prevail but whether the claimant is entitled to offer evidence to

support the claims." Scheuer v. Rhodes.

(1974). All facts pled in the complaint are accepted as true and

inferences are drawn in the light most favorable to the

plaintiff. See, e.g.. Citibank v. Grupo Cupev, Inc..

(1st Cir. 2004) (quoting TAG/ICIB Servs.. Inc. v. Pan Am.

Grain C o ..

(1st Cir. 2000)). But, claims

consisting of "bald assertions" or "unsupportable conclusions"

will be rejected. United States ex rel. Karvelas v. Melrose-

Wakefield Hosp.,

(1st Cir. 2004) (quoting

Arruda v. Sears. Roebuck & Co..

(1st Cir. 2002)).

"A district court may grant a 12(b)(6) motion to dismiss for

failure to state a claim upon which relief can be granted only if

'it clearly appears, according to the facts alleged, that the

plaintiff cannot recover on any viable theory.'" Pomerleau v. W.

Springfield Pub. Sch.,

(1st Cir. 2004) (quoting

Correa-Martinez v. Arrillaqa-Belendez,

(1st Cir.

1990) ) .

2 When considering a motion to dismiss for lack of personal

jurisdiction under F e d . R. C i v . P. 12(b)(2), the court takes the

facts pleaded in the complaint as true, and construes them "in

the light most congenial to the plaintiff's jurisdictional

claim." Negron-Torres v. Verizon Commc'ns, Inc..

, 23

(1st Cir. 2007) (citing Mass. Sch. of Law at Andover. Inc. v. Am.

Bar Ass'n.,

(1st Cir. 1998)). The court also

considers uncontradicted facts put forth by the defendant, but

does not "credit conclusory allegations or draw farfetched

inferences." I d . (citations and quotation marks omitted).

Background

The facts, taken from the pleadings and construed in the

light most favorable to Cate are as follows.

Aerotek is a staffing contractor which provides personnel

services to PSEG.2 In July of 2002, Aerotek hired Cate, a

professional engineer, to work on a temporary basis as the civil

construction supervisor for PSEG's new power plant construction

project in Albany, New York. Cate signed an employment contract

2 Although Aerotek is the named defendant in this case, the company previously operated under the name Onsite Energy Services, Inc., which was the company's name at the time of Cate's employment.

3 with Aerotek which specified that the employment relationship was

"at-will" and that Aerotek could terminate Cate's employment at

any time and without cause. The contract also provided that Cate

was subject to the rules, regulations, and policies of both

Aerotek and PSEG. Because Cate resides in Plymouth, New

Hampshire, he expected to commute to the job site in New York on

a weekly basis, and Aerotek agreed to reimburse him for commuting

expenses, subject to PSEG's approval.

Cate began work at the PSEG site on July 8, 2002. He was

advised that, provided his job performance was satisfactory, the

job would likely last for the duration of the construction

project, which was expected to be about two years. To facilitate

PSEG's reimbursement of his expenses, Cate submitted receipts

along with his reimbursement requests. During the fifth week of

his employment, Cate received an e-mail from Cynthia Ross, an

employee with PSEG's corporate headquarters in Newark, New

Jersey, requesting that he send his receipts directly to her.

Subsequently, during his seventh week with PSEG, Cate had a

chance encounter with Ross at the PSEG field office at the work

site in Albany. Brian Van Aken, an Account Manager with Aerotek,

was also present.

4 The following week, after he submitted his weekly time and

expense reports, Cate sent Ross an e-mail message containing

architectural drawings of the power plant construction project,

so Ross could better understand the project and what she had

observed when she visited the site the week before. Cate later

realized that the drawings files were probably too big for Ross's

e-mail inbox, which could result in computer problems for Ross.

Intent on apologizing, on September 2, 2002, Cate sent another e-

mail message to Ross which began with the salutation "My Dear

Cynthia," and explained that he was sending some pictures from a

work site photo shoot as a "sign of friendship." Cate sought

confirmation of her friendship as well, writing "[i]n other words

you are a friend, right?" Cate then wrote: "I'm home this week

so don't be bashful: [personal e-mail address and home phone

number]. I won't." See Compl. Ex. 4.

On September 4, 2002, Brian Van Aken, the Aerotek account

manager, contacted Cate and informed him that Ross had raised

concerns about the context and content of his apology e-mail.

Although Van Aken, Cate, and Ross all concluded that the

situation was merely a "misunderstanding," Compl. 5 25, on

September 5, 2002, Van Aken told Cate that PSEG had requested

that Cate no longer report to the job site. In a subsequent

5 letter to Cate, Aerotek explained that " [ p l u r s u a n t to PSEG's

'Zero Tolerance policy . . . you have been directed to no longer

report to the site, and your services are no longer required by

[Aerotek] to its client, PSEG." Compl. Ex. 5. Cate had not been

advised of the company's "zero tolerance" policy and was unaware

of the policy when he was terminated.

Believing that his termination was unlawful, Cate brought

suit against PSEG and Aerotek in this court on August 17, 2004

(Case No. 04-cv-315-PB). On September 3, 2004, however, Cate

filed a notice of voluntary dismissal, dismissing with prejudice

the claims against PSEG, and dismissing without prejudice the

claims against Aerotek (Case No. 04-cv-315-PB, document no. 3).

Cate filed this suit on May 26, 2006, using the same

complaint that was filed in the earlier case.3 On August 24,

2006, Cate filed a notice of voluntary dismissal (document no. 9)

again dismissing his claims against PSEG with prejudice, and

dismissing the claims against Aerotek without prejudice. Cate

later moved to amend the notice of voluntary dismissal.

3 Although the two are substantively identical, the complaint in the first case was signed by Cate's counsel; the complaint in this case was filed by Cate, pro se.

6 explaining that he intended only to dismiss PSEG (document no.

10). The court granted the motion on October 27, 2006 (document

n o . 12) .

Of the nine counts pleaded in the complaint,4 only two

allege conduct by Aerotek. Specifically, Cate asserts that

Aerotek violated his right to substantive due process protected

by both the federal (Count V) and state (Count VIII)

constitutions.

Discussion

Aerotek moves to dismiss both of the claims against it,

arguing first that Cate has failed to establish that this court

can properly exercise personal jurisdiction over it. Aerotek

also argues that both counts should be dismissed for failure to

state a claim, pursuant to F e d . R. C i v . P. 12(b)(6), because Cate

has failed to allege any state action to support his

constitutional claims.

4 Breach of contract (Count I), wrongful termination (Counts II and III), violation of Cate's protected right to procedural due process (Count IV), substantive due process (Count V ) , and free speech (Count VI) arising from the United States Constitution, and violation of Cate's protected right to procedural due process (Count VII), substantive due process (Count VIII), and free speech (Count IX) arising from the New Hampshire Constitution.

7 I. Personal Jurisdiction

When a defendant challenges personal jurisdiction, the

burden falls on the plaintiff "to demonstrate the existence of

every fact required to satisfy both the forum's long-arm statute

and the Due Process Clause of the Constitution." Negron-Torres.

478 F.3d at 24. Where, as here, the long-arm statute is

coextensive with the constitutional limits of due process, the

two inquiries become one, focusing solely on whether jurisdiction

comports with due process. See i d .; Computac. Inc. v. Dixie News

C o ..

(1983) (explaining that New Hampshire's

long-arm statute is "coextensive with constitutional

limitations").

Personal jurisdiction comes in two varieties: specific and

general. See Negron-Torres. 478 F.3d at 24. Key to both is the

existence of "minimum contacts" between the nonresident defendant

and the forum. Id. Cate asserts that this court can exercise

personal jurisdiction over Aerotek because Aerotek "initiated,

negotiated, and finalized contractual obligations for [Cate's]

employment" by telephone, while Cate was at his home in Plymouth,

New Hampshire. Pl.'s Resp. Mot. Dismiss 5 1. A. Specific Personal Jurisdiction

Specific personal jurisdiction exists "■'where the cause of

action arises directly out of, or relates to, the defendant's

forum-based contacts.'" Negron-Torres. 478 F.3d at 24 (quoting

United Elec., Radio & Mach. Workers of Am. v. 163 Pleasant St.

Corp..

(1st Cir. 1992)). The Court of

Appeals for this circuit has explained that in considering

whether a plaintiff has alleged sufficient facts to support a

finding of specific jurisdiction, the court "■'divides the

constitutional analysis into three categories: relatedness,

purposeful availment, and reasonableness.'" I d . (quoting Flatten

v. HG Berm. Exempted Ltd..

(1st Cir. 2006)).

The reasonableness inquiry is considered in terms of certain so-

called "Gestalt factors." Sawtelle v. Farrell.

(1st Cir. 1995). "'[Ain affirmative finding on each of the

three elements of the test is required to support a finding of

specific jurisdiction.'" Negron-Torres. 478 F.3d at 24-25

(quoting Phillips Exeter Academy v. Howard Phillips Fund. 196

F .3d 284, 288 (1st Cir. 1999)).

The relatedness inquiry is "not an open door" and requires a

"material connection" between the defendant and the forum. Id.

at 25. A finding of relatedness requires that the plaintiff's

9 action arises directly "out of the specific contacts between the

defendant and the forum state." Sawtelle,

. Put

differently, for a finding of relatedness, the plaintiff's claim

must arise out of, or relate to the defendant's in-forum

activities. I d .,

(1st Cir. 1995) (citing

Ticketmaster-New York. Inc. v. Alioto,

(1st Cir.

1994)) .

The record in this case establishes that the claims against

Aerotek do not arise out of its limited activities in New

Hampshire. It is clear that the phone calls from Aerotek to

Cate, directed to his home in Plymouth, constitute contacts for

the purpose of a personal jurisdiction analysis. See i d . at

1389-90 (citing Burger King Corp. v. Rudzewicz.

(1985)). But the action for which Cate seeks redress, that is,

the allegedly improper termination of his employment, took place

entirely outside New Hampshire. Cate was terminated by Aerotek,

headquartered in Hanover, Maryland, with a field office in

Piscataway, New Jersey, from an Albany, New York, job site owned

by PSEG, a company headquartered in Newark, New Jersey. Although

the e-mail that eventually led to Cate's dismissal was sent by

Cate from his New Hampshire home, there is no allegation that the

decision to terminate Cate was made in New Hampshire. The mere

10 fact that the impact of the decision to terminate Cate was felt

by him in New Hampshire is not, without more, sufficient to

establish relatedness. See i d . at 1390.

The second prong of the specific personal jurisdiction test

requires the court to consider whether the defendant's contacts

with the forum state "■'represent a purposeful availment of the

privilege of conducting activities in the forum state.'" I d . at

1389 (quoting 163 Pleasant St. Corp..

).

Specifically, the court looks to whether the defendant "engaged

in any purposeful activity related to the forum that would make

the exercise of jurisdiction fair, just, or reasonable." I d . at

1391 (quoting Rush v. Savchuk.

(1980))

(quotation marks omitted). In this case nothing in the pleadings

suggests that Aerotek purposefully directed any of its conduct at

New Hampshire, aside from contacting Cate to negotiate an

employment arrangement. Although Cate may have signed the

employment contract while he was in New Hampshire, the contract

does not call for the application of New Hampshire law, and none

of the parties' obligations arising from the contract require a

New Hampshire presence. To the contrary, the contract is clear

that the work is to be performed at the Albany, New York, work

site. Based upon the allegations set forth in the complaint, it

11 cannot be said that Aerotek has purposefully availed itself of

the privilege of doing business in New Hampshire.

The third and final prong of the three-part specific

personal jurisdiction inquiry asks whether exercising

jurisdiction is reasonable in light of various Gestalt factors.

See i d . at 1394. Specifically, the court considers "(I) the

defendant's burden of appearing; (2) the forum state's interest

in adjudicating the dispute; (3) the plaintiff's interest in

obtaining convenient and effective relief; (4) the judicial

system's interest in obtaining the most effective resolution of

the controversy; and (5) the common interests of all sovereigns

in promoting substantive social policies." I d . (quoting Burger

King.

). A weak showing on relatedness and

purposeful availment requires the defendant to show less in terms

of unreasonableness to defeat jurisdiction, while a strong

showing of reasonableness "may serve to fortify a borderline

showing of relatedness and purposefulness." See i d .

Although litigating this case in New Hampshire would be more

convenient for Cate, and the burden on Aerotek to appear in New

Hampshire is unlikely to be significantly greater than the burden

of litigating it elsewhere, there is little judicial or sovereign

12 interest in resolving the matter here. The only apparent

connection between New Hampshire and this case is that the

plaintiff happens to live here. The contract at issue does not

require the court to apply New Hampshire law, and the employment

relationship, the conduct leading to discharge, and the

subsequent alleged improper termination, all took place outside

of the state. Moreover, it is quite likely that a majority of

the key witnesses reside outside of the state as well. Taken

together, the Gestalt factors favor finding that New Hampshire is

not an appropriate forum in which to litigate this case.

Because plaintiff has failed to satisfy the relatedness and

purposeful availment tests, and because the Gestalt factors weigh

heavily against exercising personal jurisdiction over Aerotek in

this forum, the court finds that it lacks specific personal

jurisdiction over Aerotek.

B. General Personal Jurisdiction

In contrast to specific personal jurisdiction, a court may

exercise general personal jurisdiction when "■'the litigation is

not directly founded on the defendant's forum-based contacts, but

the defendant has nevertheless engaged in the continuous and

systematic activity, unrelated to the suit, in the forum state.'"

13 Negron-Torres, 478 F.3d at 25 (quoting 163 Pleasant St. Corp.,

960 F .2d at 1088 (1st Cir. 1992)).

The pleadings in this case do not contain allegations that

Aerotek engaged in any sort of continuous or systematic activity

in New Hampshire. Cate alleges only that Aerotek contacted him

in New Hampshire on several occasions to negotiate an employment

agreement. Such occasional passing contacts are insufficient to

establish general personal jurisdiction over Aerotek.

II. State Action

Because this litigation is dismissed on jurisdictional

grounds, the court need not consider Cate's constitutional

claims. It is worth noting however, that ordinarily, a

constitutional violation does not occur when a private person or

entity acts. Put differently, the state and federal

constitutions protect individuals from governmental action; they

do not, generally, restrict the conduct of private actors. See,

e.g., Yeo v. Town of Lexington,

(1st Cir.

1997) ("If there is no state action, then the court may not

impose [federal] constitutional obligations on (and thus restrict

the freedom of) private actors"); Cambridge M u t . Fire Ins. Co. v.

Crete,

(2004) ("Absent some action that may

14 fairly be attributed to the State, there can be no [state]

constitutional violation") (citing In re Dumaine,

(1991)); see also Jordan v. Verizon of New England. Inc..

(July 5, 2005) (constitutional claims against

a private employer dismissed for want of state action).

Cate does not allege that either Aerotek or PSEG is a state

actor, nor does Cate allege that either Aerotek or PSEG acted in

concert with a state actor in terminating his employment.

Instead, Cate argues that Aerotek and PSEG should be treated as

state actors because the energy industry is subject to

substantial government regulation and oversight. The law is

clear, however, that mere government regulation does not convert

a private entity into a government actor for constitutional

purposes. See Jackson v. Metro. Edison Co..

(1974) (private but regulated electricity company which

terminated service to a customer was not a state actor).

Accordingly, even if this court had personal jurisdiction over

the defendant, Cate's complaint would still warrant dismissal

because it fails to state a viable claim.

15 Conclusion

As the court lacks personal jurisdiction, Aerotek's motion

to dismiss (document no. 7) is hereby granted. The Clerk of

Court shall enter judgment in accordance with this order and

close the case.

SO ORDERED.

Steven J.kMcAuliffe Chief Judge

August 23, 2 00 7

cc: Brendon A. Cate, pro se David a. Anderson, Esq.

16