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Medical Spectroscopy, Inc. v. Zamir

Superior Court of Massachusetts, Suffolk

June 13, 2016

Medical Spectroscopy, Inc. et al.
v.
Ada Zamir No. 134246

          June 14, 2016, Filed

          MEMORANDUM AND ORDER ALLOWING DEFENDANTS MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

          Kenneth W. Salinger, Justice

         This lawsuit concerns defendant Ada Zamir's participation in an Israeli company called Medical Spectroscopy Ltd (" MSL"), which in turn allegedly entered into a joint venture with plaintiffs Applied Analytics, Inc. (" AAI") and Medical Spectroscropy, Inc. (" MSI"). The plaintiffs both do business in Massachusetts and are controlled by Dr. Zamir's daughter and son-in-law. AAI and MSI claim that Dr. Zamir breached contractual and fiduciary duties that she allegedly owed them under the " Founders Agreement" that established MSL, and that in so doing she also violated G.L.c. 93A.

         Dr. Zamir, who lives and works in Israel, has moved to dismiss this action for lack of personal jurisdiction over her. For the reasons discussed below, the Court will ALLOW her motion and dismiss this action without prejudice.

         Plaintiffs have presented some evidence that, if believed, would establish the following facts. MSL was established in October 2007 by Dr. Zamir and six other individuals, including her son Dr. Gideon Zamir, her daughter Dr. Yael Barshad, and her son-in-law Dr. Yoav Barshad. At the time the Barshads lived in Massachusetts and the other four founders in MSL lived in Israel. The contract establishing MSL stated that the founders' aim was to engage in a joint venture between MSL (in Israel) and AAI (in Massachusetts) to research and develop a new method for measuring blood chemistry for human and veterinary use. This Founders Agreement specified that this project would be carried out through MSL.

         The alleged acts or omissions by Dr. Zamir that give rise to Plaintiffs' claims are as follows. In their complaint, Plaintiffs allege that: (1) in late 2009 Dr. Zamir falsely told " the shareholders of MSL" that the technology they had been trying to develop " would not work and that therefore the Project would fail and should not be pursued further"; (2) on the basis of that statement MSL ceased operating, AAI stopped working on the joint venture project, and MSI also ceased operating; (3) thereafter Dr. Zamir used confidential information belonging to MSL to help develop similar technology for competing companies. In their opposition to Dr. Zamir's motion to dismiss, Plaintiffs allege in the alternative that if Dr. Zamir's statement that MSL's technology was in fact true, then she nonetheless breached her alleged fiduciary duty to Plaintiffs by failing to disclose that information in early 2008 when she first became aware of it.

         Plaintiffs argue that the Court may exercise personal jurisdiction over Dr. Zamir under G.L. 223A, § § 3(a) and 3(c). Although Dr. Zamir is the moving party, AAI and MSI have " the burden of establishing facts to show that the ground relied on under § 3 is present." Roberts v. Legendary Marine Sales, 447 Mass. 860, 863, 857 N.E.2d 1089 (2006), quoting Tatro v. Manor Care, Inc., 416 Mass. 763, 767, 625 N.E.2d 549 (1994). Plaintiffs do not assert, and therefore have waived, any other basis under the long-arm statute for exercising jurisdiction over Dr. Zamir.

          To establish personal jurisdiction under § 3(a) or 3(c), Plaintiffs must present evidence that they have a cause of action " arising from" Dr. Zamir's " transacting business in Massachusetts" or from her " causing tortious injury by an act or omission in this commonwealth." See G.L.c. 223A, § 3 see also, generally, Fern v. Immergut, 55 Mass.App.Ct. 577, 579, 773 N.E.2d 972, rev. denied, 438 Mass. 1102, 777 N.E.2d 1264 (2002) (" When, as here, the assertion of in personam jurisdiction has been challenged under Mass.R.Civ.P. 12(b)(2), . . . a plaintiff must make a prima facie showing of evidence that, if credited, would be sufficient to support findings of all facts essential to personal jurisdiction"). Like the substantively identical " relatedness" requirement imposed by the due process clause of the Fourteenth Amendment to the United States Constitution, this requirement " is not met merely because a plaintiff's cause of action arose out of the general relationship between the parties; rather, the action must directly arise out of the specific contacts between the defendant and the forum state" (emphasis in original). Fern, supra, at 583-84, quoting Sawtelle v. Farrell, 70 F.3d 1381, 1389 (1st Cir. 1995).

         Plaintiffs have not met their burden under the long-arm statute because they have presented no evidence that their claims arise from or out of alleged misconduct by Dr. Zamir that took place in Massachusetts. Dr. Yoav Barshad asserts in his affidavit that in late 2009 Dr. Zamir " informed" him " that the technology behind the project would not work." But Plaintiffs have not presented any evidence regarding the manner in which this communication took place or that any part of it took place in Massachusetts. Although Barshad further testifies that Dr. Zamir " confirmed this" in an email dated February 11, 2010, the Complaint makes clear that the actions against Dr. Zamir arise from the alleged misrepresentation in late 2009, and not from any subsequent confirmatory email. In any case, Plaintiffs have not shown that the February 2010 email constituted the intentional transaction of business or an intentional misrepresentation within Massachusetts. Similarly, Plaintiffs have neither alleged nor presented any evidence that Dr. Zamir did anything in Massachusetts that constituted competing with MSL or using confidential information allegedly belonging to MSL.

         Nor can Plaintiffs salvage this action through their new theory that if Dr. Zamir was truthful when she said in late 2009 that MSL's technology would not work, then she breached her alleged fiduciary duty to AAI and MSI by not revealing that fact much earlier. Since Dr. Zamir was living and working in Israel, a mere alleged failure to disclose information would not constitute causing tortious injury " by an act or omission in Massachusetts, " and thus would not fall within the scope of G.L.c. 223A, § 3(c). Cf. Fern, 55 Mass.App.Ct. at 582-83 (claims arising from alleged failure to disclose by lawyers working in New York did not arise from transaction of business in Massachusetts).

         Plaintiffs focus primarily on contested evidence that Dr. Zamir was present in Massachusetts from time to time and that she participated in drafting a report on behalf of MSL while she was in Concord, Massachusetts, once inspected equipment at the AAI facility in Massachusetts, and once met in Boston with officials from the federal Food & Drug Administration regarding the MSL/AAI joint venture. This part of Plaintiffs' argument is also unavailing. None of the claims against Dr. Zamir arise from or out of any of these alleged activities in Massachusetts. As a result, none of these activities subject her to personal jurisdiction in Massachusetts courts under G.L.c. 223A, § § 3(a) or 3(c).

         ORDER

         Defendant's motion to dismiss this action for lack of personal jurisdiction is ALLOWED. Final judgment shall enter ...


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