United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
J. Casper, United States District Judge.
Jonathan Mullane (“Mullane”) has filed this
lawsuit against Defendants Zurich American Insurance Company
(“Zurich American”) and A Medium Corporation
“Defendants”) alleging violations of federal
securities law (Counts I-IV), including 17 C.F.R. §
180.1, 15 U.S.C. §§ 77e, 77e(c) and 77q(a)-(b) (the
“Securities Act of 1933”) and 15 U.S.C.
§§ 78j(b), 78j(c)(1), 78o(a)(1), and 78t (the
“Securities Exchange Act of 1934”), and bringing
claims for promissory estoppel (Count V), fraud in the
inducement (Count VI), violation of Mass. Gen. L. c. 93A
(Count VII-VIII) and intentional infliction of emotional
distress (Count IX). Defendants have moved to dismiss. D. 10;
D. 27. For the reasons stated below, the Court ALLOWS
Standard of Review
Motion to Dismiss for Lack of Personal
the burden of establishing the Court has personal
jurisdiction under the prima facie standard, Mullane must
“demonstrate the existence of every fact required to
satisfy both the forum's long-arm statute and the Due
Process Clause of the Constitution.” United States
v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618 (1st Cir.
2001) (citing United Elec., Radio & Mach. Workers of
Am. v. 163 Pleasant St. Corp., 987 F.2d 39, 44 (1st Cir.
1993)). The Court considers the facts alleged in the
pleadings as well as the parties' supplemental filings.
See Sawtelle v. Farrell, 70 F.3d 1381, 1385 (1st
Cir. 1995). The Court will “take specific facts
affirmatively alleged by the plaintiff as true (whether or
not disputed) and construe them in the light most congenial
to the plaintiff's jurisdictional claim.” Mass.
Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142
F.3d 26, 34 (1st Cir. 1998). The Court will not “credit
conclusory allegations or draw farfetched inferences, ”
Ticketmaster-N.Y., Inc. v. Alioto, 26 F.3d 201, 203
(1st Cir. 1994), and recognizes that it is the
plaintiff's burden to “verify the facts alleged
through materials of evidentiary quality, ” Killion
v. Commonwealth Yachts, 421 F.Supp.2d 246, 252 (D. Mass.
2006) (quoting Barrett v. Lombardi, 239 F.3d 23, 27
(1st Cir. 2001)). The Court is also required to “add to
the mix facts put forward by the defendants, to the extent
that they are uncontradicted.” Mass. Sch. of
Law, 142 F.3d at 34.
otherwise noted, the facts are as alleged in the complaint,
D. 1-1. GoexPro International (“Goex”) operates a
cryptocurrency exchange business that facilitates trades
between various cryptocurrencies. D. 1-1 ¶ 41. As part
of this business, Goex solicited loans from consumers,
including Mullane, to increase its “capital
reserves” to facilitate the rapid exchange of
cryptocurrencies. Id. ¶ 42. Goex used
Medium's online publishing platform to promote its
cryptocurrency business. Id. ¶ 10; D. 1-1 at
19. Between May 21, 2018 and June 24, 2018, Mullane loaned
DASH and ETH cryptocurrencies to Goex. D. 1-1 ¶¶ 8,
34-39. When the loans matured, Goex refused to return the
principal amounts and interest owed to Mullane, causing him
to incur an “actual out-of-pocket loss” of $68,
623.84. Id. ¶ 46. Goex also blocked
Mullane's access to his online account on the Goex
website. Id. ¶ 47. On October 5, 2018, Mullane
sent Medium a demand letter asserting that Medium engaged in
“unfair and deceptive trade practice” by
allegedly failing to notify consumers that it enjoyed a
“financial relationship” with Goex and by failing
to disclose that it did not endorse Goex or guarantee the
veracity of Goex's representations purportedly in
violation of Mass. Gen. L. c. 93A. D. 10-1 at
to corporate documentation that Mullane purportedly reviewed
on Goex's website, Goex asserts that it is a subsidiary
of Zurich Investment Management AG (“Zurich
Investment”), a corporation registered in Zurich,
Switzerland. D. 1-1 ¶ 14. Mullane alleges that Zurich
Investment, in turn, is wholly owned by Zurich Insurance
Group (“Zurich Insurance”). Id. ¶
23. Mullane also alleges that Goex “forged and
digitally altered” corporate documents establishing a
relationship between Goex and Zurich Investment. Id.
complaint does not contain allegations regarding the
corporate relationship (if any) between Zurich American and
the other Zurich entities: Zurich Investment and Zurich
Insurance. Mullane nonetheless appears to allege that he sent
an email to Zurich American on or about September 29, 2018
with copies of corporate documentation in which Goex
purportedly asserts being wholly owned by Zurich Investment.
Id. ¶ 32. Mullane contends that Zurich American
should have, but refused to, publicly acknowledge Goex's
allegedly improper use of Zurich Investment's name.
Id. ¶ 33.
instituted this action in Suffolk Superior Court on November
9, 2018. D. 1-1. Medium removed it to this Court on November
19, 2018. D. 1. Medium and Zurich American then moved to
dismiss, respectively. D. 10; D. 27. The Court heard the
parties on the pending motions and took these matters under
advisement. D. 32.