A New York payment processor successfully defended one personal jurisdiction challenge, but lost the other in the Northern District of Texas.  The case represents an attempt by TransFirst Group, Inc. to collect a $4.5 million judgment it obtained against Dominic “Nick” Magliarditi in 2013 related to the group’s purchase of Magliarditi’s payment processing company, Payment Resources International.  Magliarditi and other entities were found guilty of RICO violations after a three-week bench trial in 2009.  The Northern District of Texas further found that Magliarditi, who is a licensed attorney, lied under oath in his interrogatory responses in affidavits.  The Fifth Circuit affirmed the judgment.

Since then, TransFirst has repeatedly sought to enforce the judgment in Texas, as well as in California and Nevada, to no avail.  TransFirst again filed suit in the Northern District of Texas in 2016, this time against Magliarditi, his wife Francine, and a number of companies and trusts that were not parties to the 2013 judgment.  According to TransFirst, Magliarditi fraudulently transferred assets to the new defendants, which it characterizes as shell companies, in an effort to shield his assets from collection.  TransFirst argues that Magliarditi has paid a mere $62 toward the judgment, while intentionally evading service, refusing to answer subpoenas, and ignoring requests to have his deposition taken.  Magliarditi and the other defendants challenged the suit, arguing that the court could not exercise personal jurisdiction over them because all of the defendants live or are incorporated in Nevada and California.

The court concluded otherwise, finding that the new action to collect on the judgment was merely a continuation of the earlier case in which Magliarditi was found liable.  Because the court could exercise personal jurisdiction over Magliarditi, it also was able to exercise personal jurisdiction over his alter ego companies.  “As alleged alter egos of Mr. Magliarditi, over whom the court has personal jurisdiction, and in light of plaintiffs’ demonstrated inability to collect on the judgment notwithstanding several years of post-judgment discovery and proceedings,” Judge Sam A. Lindsay wrote, “the court concludes that this is not one of those rare cases in which the court’s exercise of personal jurisdiction over the entity defendants would offend ‘traditional notions of fair play and substantial justice.’”  However, in a later opinion, the court found that it could not exercise personal jurisdiction over Francine Magliarditi. 

The case continues in the District of Nevada, where the Magliarditis live.