# Bailey v. Recreational Equipment, Inc.

> District Court, E.D. New York · September 23, 2023

URL: https://www.frixlaw.com/law-library/cases/10310460

## Case

- **Court:** District Court, E.D. New York
- **Decided:** September 23, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10310460

## How later opinions describe it (automated extraction)

- noting that control cannot be presumed and must be established by allegations of specific actions

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------x

MATTHEW JAMES BAILEY,

Plaintiff, MEMORANDUM & ORDER
22-CV-1211(EK)(CLP)

-against-

RECREATIONAL EQUIPMENT, INC. a/k/a
R.E.I. d/b/a REI CO-OP, ERIC ARTZ,
Individually, and ANTHONY TRUESDALE,
Individually,

Defendants.

------------------------------------x
ERIC KOMITEE, United States District Judge:
Plaintiff Matthew Bailey brings this products
liability action against retailer Recreational Equipment, Inc.
(“REI”). He also sued two individual defendants: Eric Artz,
REI’s CEO; and Anthony Truesdale, a member of REI’s board of
directors. Bailey alleges that on October 11, 2021, while
hiking in New York’s Catskill Mountains, his REI trekking poles
bent and gave way, causing him to fall. Bailey suffered broken
bones and required surgery. The complaint seeks monetary
relief.
Artz and Truesdale now move to dismiss Bailey’s claims
for lack of personal jurisdiction and failure to state a claim,
pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of
Civil Procedure, respectively. As set forth below, Bailey’s
claims against Artz and Truesdale are dismissed under Rule
12(b)(2). Given that conclusion, there is no need to reach the
question of whether Bailey has stated a claim for purposes of

Rule 12(b)(6).
Background

The facts herein are taken from the complaint and the
declarations submitted in support of (and opposition to) the
Rule 12(b)(2) motion. See Brady v. Basic Research, LLC, 101 F.
Supp. 3d 217, 229 (E.D.N.Y. 2015) (“In considering a motion to
dismiss for lack of personal jurisdiction, a court may rely on
materials beyond the pleadings.”); see also Phillips v. Reed
Group, Ltd., 955 F. Supp. 2d 201, 225 (S.D.N.Y. 2013) (when
considering a Rule 12(b)(2) motion, a court may consider
“affidavits and other supporting materials submitted in relation
to the motion”).
On or about April 29, 2021, Bailey’s spouse purchased
REI’s Trailbreak 7075T6 Trekking Poles via the company’s
website.1 The poles were subsequently shipped to Bailey’s
residence in Queens County, New York. Am. Compl. ¶ 1, ECF No.
17 (Bailey resides in Queens); id. ¶ 23 (poles were shipped to
Bailey’s residence). On or about October 11, 2021, Bailey used

1 While the operative complaint does not state explicitly whether
Bailey’s spouse, Daniel Iliescu, purchased the poles through REI’s website or
that of a third-party, Iliescu stated in a declaration that he purchased the
poles via REI’s website. See Decl. of Daniel Iliescu ¶ 3, ECF No. 28-1.
the poles while hiking in the Catskill Mountains in Shandaken,
New York. Id. ¶¶ 24-25. During the hike, the poles “suddenly
bent and gave way,” causing Bailey to “f[a]ll hard on the rocky
grounds.” Id. ¶ 25. As a result of his fall, Bailey suffered
“serious injuries,” including “shoulder arm fractures.” Id.

Bailey required unspecified “surgery procedures” and physical
therapy. Id. ¶ 24.
Bailey’s allegations concerning the actual conduct of
Artz and Truesdale are high-level, generic, and repetitive. He
asserts that the two executives “participated [in] and directed
the online marketing, selling and distribution” of REI’s
products, including the trekking poles at issue, id. ¶ 14; that
they were “responsible for the staffing and supervision of the
employees and / or agents” of REI, id.; that each “caused or
directed” REI “employees and staff to act as his agent in the
marketing, selling and distribution” of the trekking poles, id.

¶¶ 15-16; and that the “named defendants herein” — including
Artz and Truesdale — “manufactured” the trekking poles “or
caused [them] to be manufactured.” Id. ¶ 20.
Legal Standard
To survive a motion to dismiss for lack of personal
jurisdiction under Rule 12(b)(2), “the plaintiff bears the
burden of showing that the court has jurisdiction over the
defendant[s].” Metropolitan Life Ins. Co. v. Robertson-Ceco
Corp., 84 F.3d 560, 566 (2d Cir. 1996).2 Evidentiary hearings
are not generally required. Credit Lyonnais Sec. (USA), Inc. v.
Alcantara, 183 F.3d 151, 153 (2d Cir. 1999). When a court

chooses not to hold such a hearing, the plaintiff “need only
make a prima facie showing of personal jurisdiction.” Porina v.
Marward Shipping Co., 521 F.3d 122, 126 (2d Cir. 2008). A court
must construe the complaint and supplemental materials in the
light most favorable to the plaintiff. Id.
Discussion
A federal court in New York may exercise personal
jurisdiction over a non-resident defendant only if the defendant
has contacts with New York sufficient to satisfy both the New
York long-arm statute, N.Y. C.P.L.R. § 302, and the Due Process
Clause of the Fourteenth Amendment. See, e.g., Best Van Lines,
Inc. v. Walker, 490 F.3d 239, 242 (2d Cir. 2007). The moving

defendants contend that the exercise of personal jurisdiction
would contravene both the Due Process Clause and the New York
statute. Before considering due process, a court should first
determine whether the long-arm statute is satisfied. Id.
Bailey asserts jurisdiction over Artz and Truesdale —
who are residents of Washington State and Arizona, respectively,
Am. Compl. ¶¶ 4-5 — pursuant to N.Y. C.P.L.R. § 302(a)(1). Id.

2 Unless otherwise noted, when quoting judicial decisions this order
accepts all alterations and omits all citations, footnotes, and internal
quotation marks.
¶ 19 (citing Section 302(a)(1)); see also Pl. Mem. in Opp. to
Mot. to Dismiss (“Pl. Br.”) 13, ECF No. 27 (same). Under that
provision, a court may exercise personal jurisdiction over any

non-resident who, “in person or through an agent,” “transacts
any business within the state or contracts anywhere to supply
goods or services in the state.” N.Y. C.P.L.R. § 302(a)(1).
Despite the complaint’s allegations sounding in products
liability, Bailey does not invoke Section 302(a)(2) (relating to
the commission of “a tortious act within the state”).3
To determine whether jurisdiction exists under Section
302(a)(1), “a court must decide (1) whether the defendant
transacts any business in New York and, if so, (2) whether this
cause of action arises from such a business transaction.” Best
Van Lines, 490 F.3d at 246. A defendant transacts business in
New York when he engages in “some act by which [he] purposefully

avails [him]self of the privilege of conducting activities
within the . . . State, thus invoking the benefits and

3 Given that Bailey bears the burden to establish jurisdiction, see
Metropolitan Life, 84 F.3d at 566, the Court will not consider a basis for
jurisdiction that he does not raise. See, e.g., Infinity Consulting Grp.,
LLC v. Am. Cybersystems, Inc., No. 09-CV-1744, 2010 WL 2267470, at *3
(E.D.N.Y. May 30, 2010) (“the Court will not find jurisdiction sua sponte”);
cf. Maranga v. Vira, 386 F. Supp. 2d 299, 309–10 (S.D.N.Y. 2005) (because
plaintiffs bear the burden to establish jurisdiction, “the Court will not
find jurisdiction based [on] an argument that has not been explicitly made by
Plaintiffs”).
protections of its laws.” McKee Elec. Co. v. Rauland–Borg
Corp., 229 N.E.2d 604, 607 (N.Y. 1967).4
Artz and Truesdale submitted declarations and other

supporting materials in tandem with their motion to dismiss.
See ECF No. 26-1. Bailey also submitted declarations — his own
and his spouse’s. See ECF No. 28-1. Neither party has
requested a hearing, and the Court sees no material factual
dispute on the current record.5 Treating all of Bailey’s
assertions as true, they are inadequate to support the exercise
of personal jurisdiction over Artz or Truesdale under Section
302(a)(1). This conclusion holds when considering the
allegations of the individual defendants’ personal involvement,
allegations regarding their “agents,” and Bailey’s undeveloped
“alter-ego” theory, as discussed below.
A. Agency Theory of Personal Jurisdiction
Reading the complaint’s allegations charitably, Bailey

suggests that Artz and Truesdale both transacted business in New

4 The Second Circuit has noted the overlap between this statutory test
and the constitutional standard for due process: “New York decisions, at
least in their rhetoric, tend to conflate the long-arm statutory and
constitutional analyses by focusing on the constitutional standard: whether
the defendant’s conduct constitutes purposeful availment.” Chloe v. Queen
Bee of Beverly Hills, LLC, 616 F.3d 158, 169 (2d Cir. 2010).

5 Bailey notes the Court may order discovery or hold a hearing, see Pl.
Br. 15-16, but he has not actually requested either.
York personally and through (unnamed) agents.6 See Am. Compl.
¶ 15 (Artz “participated [in] and caused or directed the
defendant REI Co-op employees and staff to act as his agent in
the marketing, selling and distribution” of the poles); id. ¶ 16

(same for Truesdale).
A court may impute corporate acts undertaken by others
to an individual defendant under an agency theory where “(1) the
[agent] engages in purposeful activity in the forum state that
relates to the transaction underlying the lawsuit, (2) the
[agent]’s activity was taken for the benefit of and with the
knowledge and consent of the defendant, and (3) the defendant
exercised some control over the [agent’s] purposeful activity.”
Jonas v. Est. of Leven, 116 F. Supp. 3d 314, 328 (S.D.N.Y. 2015)
(citing Kreutter v. McFadden Oil Corp., 522 N.E.2d 40, 44 (N.Y.
1988)). Here, Bailey does not name any particular in-state

agent upon whose actions he relies, let alone specify what in-
state business they transacted. It should go without saying
that under those circumstances, he has not adequately pleaded an
agency theory. See First Cap. Asset Mgmt., Inc. v.
Brickellbush, Inc., 218 F. Supp. 2d 369, 395 (S.D.N.Y. 2002)

6 Bailey’s only seeming mention of a particular “agent” comes by way of
an oblique reference to employees at REI’s Manhattan store. See Pl. Br. 14-
15 (discussing the exercise of jurisdiction over a “nondomiciliary defendant
of a non-domiciliary corporation with agents in New York, (as the defendants
herein do in having a New York store location)”) (typos in original). But
Bailey levels no allegation that any store employee participated in the
transaction from which his injuries arise. See N.Y. C.P.L.R. § 302(a)
(stating the “arising from” requirement).
(granting Rule 12(b)(2) motion where plaintiffs advanced only
“the most conclusory” assertions of control by defendant over
putative agent without any support of “specific factual
allegations”); Merck & Co., Inc. v. Mediplan Health Consulting,
Inc., 425 F. Supp. 2d 402, 420 (S.D.N.Y. 2006) (noting

that control cannot be presumed and must be established by
allegations of specific actions).7
In addition to these shortfalls, Bailey has not
adequately alleged that the individual defendants exercised the
requisite control over any agent’s acts in respect of the
transaction at issue. To satisfy the control element, the
complaint “must sufficiently detail the defendant’s conduct so
as to persuade a court that the defendant was a primary actor in
the specific matter in question.” Jonas, 116 F. Supp. at 328;
see also Retail Software Servs., Inc. v. Lashlee, 854 F.2d 18,

22 (2d Cir. 1988) (long-arm statute satisfied where defendants
were “primary actors” in the New York transaction that was the
source of the litigation).
In other words, a plaintiff cannot show control based
merely on the individual defendant’s position on the

7 Bailey cites United States v. Montreal Trust Co., 358 F.2d 239 (2d
Cir. 1966), several times in his opposition brief, see, e.g., Pl. Br. 15-16,
but that case stands merely for the proposition that a court sitting in New
York may exercise personal jurisdiction over a nondomiciliary defendant based
on the acts of his agents in New York. See id. at 243-44. That proposition
is not in dispute here.
corporation’s organizational chart. Jones, 116 F. Supp. 3d at
328; see also Ontel Prods., Inc. v. Project Strategies Corp.,
899 F. Supp. 1144, 1149 (S.D.N.Y. 1995) (personal jurisdiction

over CEO lacking where plaintiff “presented no evidence, nor
even made any allegations, concerning [the CEO’s] personal
involvement with the activities giving rise to this suit”).
Bailey’s complaint says nothing concrete about what the
individual defendants actually did, apart from the conclusory
statement that each “participated [in] and caused or directed
the defendant REI Co-op employees and staff to act as his agent
in the marketing, selling and distribution of the defendant REI
defective trekking poles.” Am. Compl. ¶¶ 15-16. Bailey also
asserts that Artz and Truesdale “directed or caused . . . the
transactions of online business to supply goods or products in
the State of New York,” id. ¶¶ 12-13, but once again he says

nothing about how or when.
This is a classic instance of legal conclusions being
couched as factual allegations, and it is well established that
such conclusions need not be credited. See Wolo Mfg. Corp. v.
ABC Corp., 349 F. Supp. 3d 176, 196 (E.D.N.Y. 2018) (“conclusory
non-fact-specific jurisdictional allegations or a legal
conclusion couched as a factual allegation will not establish a
prima facie showing of jurisdiction”); ADP Inv. Commc’n Servs.,
Inc. v. In House Att’y Servs., Inc., 390 F. Supp. 2d 212, 219
(E.D.N.Y. 2005) (same).
Nor is it sufficient, as noted above, to rely on the

individual defendants’ job titles (about which Bailey says
precious little, in any event). See Jonas, 116 F. Supp. 3d at
328 (no personal jurisdiction over individual defendant where
“plaintiffs fail[ed] to allege even a single fact in support of
his involvement in the transaction, save for a bare allegation
that he was president and director” of a defendant corporation).8
This stands in contrast to Chloe, supra, for example, in which
the court relied on evidence (including deposition testimony and
shipping records) showing that the defendant “either physically
shipped or was responsible for the shipment of the counterfeit
handbag from California to New York.” 616 F.3d at 165.
The declarations of Artz and Truesdale only bolster

this conclusion. As Bailey acknowledges, Artz is a resident of
Washington State, while Truesdale is a resident of Arizona.
Decl. of Eric Artz (“Artz Decl.”) ¶ 1, ECF No. 26-1 at 16; Decl.
of Anthony Truesdale (“Truesdale Decl.”) ¶ 1; ECF No. 26-1 at

8 Courts have also held that claims seeking to impute liability for a
corporation’s actions to individual corporate employees solely on the basis
of their job titles cannot survive a motion to dismiss under Rule 12(b)(6).
See Krys v. Butt, 486 F. App’x 153, 156 (2d Cir. 2012); Trisvan v. Heyman,
305 F. Supp. 3d 381, 407 (E.D.N.Y. 2018). Nevertheless, this Court reads the
case law to dictate that when a plaintiff asserts personal jurisdiction based
on an analogous corporate-position argument, the claims must be dismissed
under Rule 12(b)(2) rather than 12(b)(6). See Trisvan, 305 F. Supp. 3d at
394-95.
18. Both Artz and Truesdale submit that they do not reside in;
own or conduct business in; own, use, or possess real property
in; pay taxes in; or derive revenue from New York. Artz Decl.

¶¶ 4-7; Truesdale Decl. ¶¶ 4-7. These declarations are
unnecessary to, but surely buttress, the legal conclusion that
personal jurisdiction is lacking over Artz and Truesdale
pursuant to Section 302(a)(1) on the current state of the
pleadings and record.
B. Alter-Ego Theory of Personal Jurisdiction
Bailey also alludes to the “alter ego” theory of
personal jurisdiction, contending (albeit obliquely) that Artz
and Truesdale are alter egos of REI and are thus subject to
jurisdiction for REI’s actions in New York. See Am. Compl.
¶¶ 15-16; see also Pl. Br. 17 (invoking the “alter ego theory”).
Under New York law, when an individual uses a corporation “to

accomplish his own and not the corporation’s business,” that
individual “may be held liable for the corporation’s commercial
dealings as well as for its negligent acts.” Wm. Passalacqua
Builders, Inc. v. Resnick Devs. S., Inc., 933 F.2d 131, 138
(2d Cir. 1991). This is akin to the analysis of a request to
pierce the corporate veil: the central question on the alter-ego
analysis is whether REI was essentially a “shell” for the
individual defendants to advance personal, rather than
corporate, ends. Id.
To prevail under an alter-ego theory, a plaintiff must
show that “the corporation has been so dominated by [the]
individual . . . , and its separate identity so disregarded,

that it primarily transacted the dominator’s business rather
than its own.” Id. In determining whether a plaintiff has made
the requisite showing, courts consider, among other factors,
(1) the absence of corporate formalities, (2) inadequate
capitalization, (3) the use of corporate resources for personal
purposes, and (4) the amount of discretion that the purported
alter-ego corporation exercises. See id. at 139; see also
Packer v. TDI Sys., Inc., 959 F. Supp. 192, 202 (S.D.N.Y. 1997)
(considering these factors).
Bailey’s allegations do not come close to satisfying
the factors identified by the Second Circuit. He makes only
conclusory assertions that REI is “believed to be the alter-ego”

of both Artz and Truesdale. Am. Compl. ¶¶ 12–13. He does not
allege, for example, that these defendants used REI’s corporate
funds for their own purposes, or that REI failed to observe
corporate formalities. See, e.g., In re Lyondell Chem. Co.,
543 B.R. 127, 146-47 (Bankr. S.D.N.Y. 2016). This theory, then,
provides no basis for the exercise of personal jurisdiction over
Artz and Truesdale under Section 302(a)(1).
Conclusion
For the foregoing reasons, Bailey has failed to meet
his burden to make a prima facie showing that this Court may

exercise personal jurisdiction over Artz and Truesdale under
Section 302(a)(1) of New York’s long-arm statute. Accordingly,
Bailey’s claims against these defendants are dismissed without
prejudice, pursuant to Rule 12(b)(2).
SO ORDERED.

/s/ Eric Komitee
ERIC KOMITEE
United States District Judge

Dated: September 23, 2023
Brooklyn, New York

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10310460. Public record. Not legal advice.