Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Joshua J. Nathan v. Morgan Stanley Renewable Development Fund

May 22, 2012


The opinion of the court was delivered by: Judge Joan H. Lefkow


Joshua Nathan filed a seven count second amended complaint*fn1 against Morgan Stanley Renewable Development Fund, LLC ("Morgan Stanley"), Third Planet Windpower, LLC ("TPW"), Loraine Windpark Project, LLC ("Loraine"), TPW Petersburg, LLC ("Petersburg"), and TPW employees James Kutey and Walter Kamp (collectively "defendants") alleging violations of state and federal law stemming from his termination as general counsel of TPW. Nathan's second amended complaint alleges seven counts: breach of contract (Count I), declaratory judgment (Count II), unjust enrichment (Count III), promissory estoppel (Count IV), promissory fraud (Count V), violation of the Illinois Wage Payment and Collection Act ("WPCA"), 820 Ill. Comp. Stat. 115/1 et seq. (Count VI), and retaliatory discharge under Title VII of the Civil Rights Act of 1964 ("Title VII"), as amended 42 U.S.C. §§ 2000e et seq. (Count VII).*fn2 Before the court is defendants' motion to dismiss the second amended complaint under Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), and 12(b)(6). (Dkt. #43.) As an alternative to dismissal under Rule 12(b)(3), defendants move to transfer venue to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a). (Id.) As set forth below, defendants' motions are granted in part and denied in part.


Joshua Nathan is an attorney who has spent much of his career serving as in-house counsel for wind energy companies. (Compl. ¶ 20.)*fn4 Nathan is a citizen of Illinois who resides in Cook County. (Id. ¶ 5.) TPW is a limited liability wind energy development and operating company organized under the laws of Delaware with its principal place of business in Florida. (Id. ¶¶ 7, 19, Dkt. #32 ¶ 2.)*fn5 Loraine and Petersburg are limited liability companies organized under the laws of Delaware with their principal places of business in Texas and Nebraska, respectively. (Compl. ¶¶ 10, 11; Dkt. #32¶¶ 3, 4.) TPW holds 100 percent of the membership interest in Loraine and Petersburg. (Dkt. #32¶¶ 3, 4.) Morgan Stanley is the parent company of TPW and owns "virtually all" of TPW. (Dkt. #32¶ 2.) Morgan Stanley is a limited liability company organized under the laws of Delaware with its principal place of business in New York; it is 100 percent directly owned by Morgan Stanley Renewables, Inc., a Delaware corporation that is not publicly held. (Compl. ¶ 6; Dkt. #32 ¶ 1.) Morgan Stanley operates and exists separately from TPW, and TPW has a separate management team that makes its day-to-day operational decisions. (Torres Aff. ¶ 8.)

In early 2008, Nathan began discussions with TPW's then-Chief Executive Officer Peter Mastic about joining the company. (Compl. ¶ 20.) After a series of meetings, Mastic invited Nathan to join TPW as its General Counsel and Vice President. (Id.) Nathan accepted the position, and the terms of his employment were memorialized in an April 11, 2008 e-mail from Mastic in Nevada to Nathan in Illinois ("employment contract"). (Kutey & Kamp Affs. ¶¶ 14--15.)*fn6 The contract states in relevant part,

[Y]ou will be eligible for annual bonuses and [to] participate in project completion bonuses of at least $20,000 per MW or $1 million per project, whichever is less. Project completion bonuses will be awarded to the project team responsible for the successful completion and operation of each qualifying project. As Vice President, General Counsel, I expect that you will be involved in most or all of our projects and most or all of our project completion bonuses. . .

As a member of TPW management and an important contributor to our success, and within thirty (30) days after your relocation to Portland, you would receive one-half (1/2 ) of one point (out of 100) of the manager's share, subject to the vesting provisions contained in the TPW Operating Agreement and Members Agreement, including time vesting over the four (4) year period ending November 9, 2010.

Depending on our success in creating value for the TPW platform, this equity position could be worth $250,000 to $750,000 or more. (Compl. Ex. A.) TPW offered Nathan the equity position to induce him to accept a compromised severance package,*fn7 and during the negotiations that immediately proceeded the contract Mastic told Nathan that "the fact that you would be getting an equity position that is already 40% vested and that is expected to be fully vested [by] November 9, 2010 or sooner, should moderate the need for severance." (Compl. ¶ 23.) Although the contract required Nathan to relocate to TPW's Portland office, the company later opened a Chicago office as a personal accommodation to Nathan based on his desire to remain in Illinois. (Kutey & Kamp Affs. ¶ 17.) TPW leased office space in Chicago from which Nathan worked. (Id.)

During his tenure, Nathan devoted a substantial amount of time to three wind farm projects, the Loraine I and II projects in Texas and the Petersburg project in Nebraska. (Compl. ¶ 25.) The Loraine I project achieved commercial operation in December 2009; the Loraine II and Petersburg projects are still incomplete. (Id. ¶¶ 27, 68.)

In early 2010, Mastic departed TPW and two Florida residents were promoted to leadership positions; James Kutey became Chief Development Officer and Walter Kamp became Chief Executive Officer. (Id. ¶ 28.) Jerry Johnson, who is based in TPW's California office, was in charge of all personnel matters. (Kutey & Kamp Aff. ¶ 11.) Almost immediately after Kutey and Kamp were promoted, the sole female member of the TPW management team began complaining of abusive conduct perpetrated by Kutey and Kamp, which she believed was directed at her. (Compl. ¶ 29.) She relayed her concerns to Nathan, informing him that Kutey and Kamp had verbally berated her, treated her unprofessionally, and cut off communications with her on numerous occasions to the point that her ability to execute her job functions was significantly impeded. (Id. ¶ 30.) Nathan investigated her claims and consulted outside employment counsel, who confirmed that the allegations required immediate attention. (Id. ¶¶ 33, 34.)

Nathan decided to confront Kutey and Kamp and requested to meet with them when they were scheduled to be in Chicago on other business. (Id. ¶ 35.) After "practically begging" Kutey and Kamp to meet with him, the three men met in Chicago on August 17, 2010. (Id. ¶ 36.) Nathan relayed the female manager's complaints and explained the liability risk that Kutey and Kamp's behavior posed to TPW. (Id.) A series of conference calls and meetings took place the following week, including legal consultation with outside counsel and Morgan Stanley. (Id.) Thereafter, Kutey and Kamp's behavior towards Nathan became openly hostile. (Id. ¶ 38.) For the first time, the two men began raising performance issues about Nathan's work, despite having rated his work as excellent as recently as May 2010. (Id. ¶¶ 37, 38.) This retaliatory conduct culminated in February 2011 when Nathan was terminated from TPW. (Id. ¶ 39.) Two months later, Nathan filed the instant lawsuit.

Nathan claims that defendants unlawfully refused to (1) release his equity shares; (2) pay him a project completion bonus for the Loraine I project, which was complete; (3) consider his eligibility for an annual bonus; and (4) award him a project completion bonus for the Loraine II and Petersburg projects if and when those projects reach completion. (Id. ¶¶ 46--49.) According to Nathan, TPW, Kutey and Kamp did not act alone; rather, Morgan Stanley, TPW's parent company, was a direct participant in the misconduct and was aware of and sanctioned each wrongful act directed at Nathan. (Id. ¶ 54.) With respect to the Loraine I project completion bonus, Kutey and Kamp told Nathan that Morgan Stanley "made the decision" that only those who worked at the Loraine I project site would receive a project completion bonus. (Id. ¶ 55.) Martin Torres, a Morgan Stanley employee and member of TPW's board, also told Nathan that he "discussed [Nathan's] situation with [Kutey and Kamp] and supports their position." (Id. ¶ 56.) Finally, as to Loraine and Petersburg, Nathan claims that Loraine and Petersburg (1) were solely influenced, governed and controlled by TPW; (2) were intentionally undercapitalized; and (3) commingled their funds with those of TPW. (Compl. ¶¶ 51--52.) As such, Nathan seeks to hold each defendant liable for multiple claims.


I. Subject Matter Jurisdiction*fn8

The court has federal question jurisdiction over Nathan's Title VII claim (Count VII against TPW and Morgan Stanley)*fn9 under 28 U.S.C. § 2000e-5(f)(3). Under 28 U.S.C. § 1367(a), the court may exercise supplemental jurisdiction over Nathan's state law claims against TPW and Morgan Stanley provided that "the state and federal claims derive from a common nucleus of operative facts." Ammerman v. Sween, 54 F.3d 423, 424 (7th Cir. 1995). "A loose factual connection between the claims is generally sufficient." Id.

Nathan alleges that he was terminated in retaliation for raising concerns about Kutey and Kamp's treatment of a female employee, and denied an equity position and bonuses in violation of his employment contract upon his termination. Because the facts surrounding Nathan's termination are relevant to his Title VII claim and to his state law claims, supplemental jurisdiction over Nathan's state law claims against TPW and Morgan Stanley is proper. See Nieman v. Nationwide Mut. Ins. Co., No. 09-3304, 2009 WL 4928014, at *2 (C.D. Ill. Dec. 11, 2009) (exercising supplemental jurisdiction over plaintiff's state law claims because "[a]ll of his claims, state and federal, are based on the circumstances surrounding his termination from [defendant]"); Parker v. Rockford Park Dist., No. 99 C 50073, 2001 WL 114405, at *1 (N.D. Ill. Feb. 2, 2001) (finding that the court possessed original jurisdiction over plaintiff's Title VII discrimination claim and supplemental jurisdiction over his state law breach of contract claim). Moreover, because Nathan's federal and state law claims derive from a common nucleus of operative fact, the court may exercise pendent party jurisdiction over the remaining defendants under § 1367(a). See Mazurek v. Cook Cnty., No. 02 C 4897, 2003 WL 21266712, at *1 (N.D. Ill. May 30, 2003); Bartoli v. Applebee's Rest., No. 00 C 5954, 2001 WL 40798, at *2 (N.D. Ill. Jan. 17, 2001). Federal subject matter jurisdiction is therefore proper.

II. Personal Jurisdiction

Defendants move to dismiss the claims against Kutey, Kamp, Morgan Stanley, Loraine and Petersburg for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Nathan bears the burden of establishing that personal jurisdiction exists. See Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). When the court rules on a defendant's Rule 12(b)(2) motion based solely on the submission of written materials, "the plaintiff need only make out a prima facie case of personal jurisdiction." Purdue Research Found. v. SanofiSynthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (internal quotation marks and citations omitted). In this situation, "[t]he allegations in [the plaintiff's] complaint are to be taken as true unless controverted by the defendants' affidavits; and any conflicts in the affidavits are to be resolved in [the plaintiff's] favor." Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987), superceded by statute on other grounds. "[O]nce the defendant has submitted affidavits or other evidence in opposition to the exercise of jurisdiction," however, "the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction." Purdue Research Found., 338 F.3dat 783; see generally 4 Charles Alan Wright et al., Federal Practice and Procedure Civil § 1067.6 (3d ed.).

A defendant is amenable to process under Rule 4(k) if (1) a federal statute authorizes service of process on him, or (2) he "is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located." Fed. R. Civ. P. 4(k)(1)(A) & (C). Title VII does not provide for nationwide service of process, see 42 U.S.C. § 2000e-5(f)(3), and as such, personal jurisdiction in this case is governed by the law of Illinois. Under the "catch all" provision of the Illinois long-arm statute, the court may exercise jurisdiction to the full extent permitted by United States and Illinois Constitutions. 735 Ill. Comp. Stat. 5/2-209(c). "Thus, if the contacts between a defendant and Illinois are sufficient to satisfy both federal and state due process concerns, the requirements of Illinois' long-arm statute have been met, and no other inquiry is necessary." Kostal v. Pinkus Dermatopathology Lab., P.C., 827 N.E.2d 1031, 1036, 357 Ill. App. 3d 381, 293 Ill. Dec. 150 (2005). The Seventh Circuit has held that "there is no operative difference between the limits imposed by the Illinois Constitution and the federal limitations on personal jurisdiction." Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 715 (7th Cir. 2002). As such, "the state statutory and federal constitutional inquiries merge" and Nathan need only demonstrate that federal due process requirements have been met. Tamburo, 601 F.3d at 700.

Under the federal Due Process Clause, a defendant must have sufficient "minimum contacts" with the forum state such that the maintenance of the suit "does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945) (internal quotation marks and citation omitted); see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985). To satisfy due process, a defendant's connection with the forum state must be such that it is reasonably foreseeable that he will be haled into court there. Burger King Corp., 471 U.S. at 474; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980).

The requirements for general or specific jurisdiction must also be met. Where the events that form the basis of the lawsuit do not arise out of and are not related to any activities within the forum state, the court must possess general jurisdiction-that is to say, jurisdiction stemming from the defendant's "continuous and systematic" contacts with the forum state. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). "The threshold for general jurisdiction is high; the contacts must be sufficiently extensive and pervasive to approximate physical presence," Tamburo, 601 F.3d at 701, so "the defendant could reasonably foresee being haled into court there on any matter." Int'l Med. Grp., Inc. v. Am. Arbitration Ass'n, Inc., 312 F.3d 833, 847 (7th Cir. 2002).

Specific jurisdiction, on the other hand, grows out of a defendant's particular contacts with the state and is present when "(1) the defendant has purposefully directed his activities at the forum state or purposefully availed himself of the privilege of conducting business in that state, and (2) the alleged injury arises out of the defendant's forum-related activities." Tamburo, 601 F.3d at 702; see Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 444 (7th Cir. 2010). "Personal jurisdiction in breach-of-contract actions often turns on whether the defendant 'purposefully availed' himself of the privilege of conducting business or engaging in a transaction in the forum state." Tamburo, 601 F.3d at 702.

Where the plaintiff's claims are based on intentional torts, however, "the inquiry focuses on whether the conduct underlying the claims was purposely directed at the forum state." Id.

A. Kutey and Kamp

Nathan alleges three claims against Kutey and Kamp: promissory estoppel (Count IV), promissory fraud (Count V) and violation of the WPCA (Count VI). Nathan does not allege that Kutey and Kamp maintained "continuous and systematic" contacts with Illinois; thus, Nathan must show that Kutey and Kamp purposefully directed their activities at Illinois or purposefully availed themselves of the privilege of conducting business in this state, and that Nathan's injury arises out of Kutey and Kamp's forum-related activities.

1. Kutey and Kamp's Contacts with Illinois

Kutey and Kamp both reside and work in Florida and do not own any property, bank accounts, or other interests in Illinois. (Kutey & Kamp Affs. ¶¶ 2, 8, 23.) Kutey has visited Illinois approximately seven times, for a total of about eighteen days over the past four years, and Kamp has visited Illinois approximately six times, for a total of about fifteen days over the past three years. (Id. ¶ 20.) Each trip was made solely in Kutey and Kamp's capacity as a TPW representative and for TPW's benefit. (Id.) Although both Kutey and Kamp admit making business calls and sending business letters and e-mails to Nathan in Illinois, they were not involved in negotiating his employment contract nor were they in charge of personnel matters for TPW. (Id. ¶¶ 11, 13, 22.) Rather, Nathan negotiated his employment contract with Mastic a year and a half before Kutey and Kamp obtained their current positions at TPW. (Id. ¶¶ 10, 13.)The only incident alleged to have taken place in Illinois occurred on August 17, 2010, when Kutey and Kamp met with Nathan in Chicago to discuss the liability risk associated with their treatment of a female manager. (Compl. ¶ 36.) This meeting occurred while Kutey and Kamp were in Chicago on business and only after Nathan "practically ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.