“Speculation Is Not Jurisdiction” – The Second Circuit’s Dual Clarifications on Personal-Jurisdiction Pleading and Harmless Error Review in El Omari v. Dechert LLP

“Speculation Is Not Jurisdiction” – The Second Circuit’s Dual Clarifications on Personal-Jurisdiction Pleading and Harmless Error Review in El Omari v. Dechert LLP

1. Introduction

On 9 June 2025 the U.S. Court of Appeals for the Second Circuit issued a summary order in El Omari v. Dechert LLP, No. 24-1970-cv, affirming the dismissal of claims accusing an international law firm and two contractors of an e-mail hacking conspiracy. Although designated “non-precedential,” the order delivers two doctrinal clarifications likely to resonate in future litigation:

  • Pleading Standard for Personal Jurisdiction: bare allegations made “upon information and belief,” without factual particulars linking the defendant’s in-state contacts to the claims, are insufficient under N.Y. CPLR §302(a)(1) and constitutional due-process analysis.
  • Harmless-Error Treatment of Magistrate Review Mistakes: a district judge’s failure to conduct the required de novo review of objected portions of a magistrate’s report can be deemed harmless if the appellate court’s own de novo review shows dismissal was correct.

The plaintiff, Oussama El Omari, alleged violations of the Computer Fraud and Abuse Act (CFAA), conspiracy, and North Carolina conversion against Dechert LLP, its contractor Nicholas Paul Del Rosso, and Del Rosso’s company Vital Management Services, Inc. (“VMS”). The Southern District of New York (Kaplan, J.) adopted a magistrate’s recommendation and dismissed for lack of personal jurisdiction (Del Rosso/VMS), failure to state a claim (CFAA), and statute of limitations (conversion). El Omari appealed on both procedural and substantive grounds.

2. Summary of the Judgment

The Second Circuit unanimously affirmed:

  1. Procedural Error, But Harmless. The district judge erroneously applied “clear-error” rather than de novo review to objected portions of the magistrate’s report. Nonetheless, the Circuit conducted its own de novo review and found dismissal proper, rendering the error harmless.
  2. No Personal Jurisdiction over Del Rosso and VMS. Plaintiff’s jurisdictional allegations—particularly the boilerplate statement that Del Rosso made “numerous trips to New York” “upon information and belief”—were legally and factually deficient under CPLR §302(a)(1) and due process.
  3. CFAA Claim Against Dechert Implausible. The complaint supplied no non-conclusory facts tying Dechert to the alleged hacking or payments to the Indian firm CyberRoot.
  4. Conversion Claim Time-Barred. North Carolina’s three-year statute of limitations began running when the alleged email copying occurred in early 2017 and expired in 2020.

3. Detailed Analysis

3.1 Precedents Cited and Their Influence

  • Charles Schwab Corp. v. Bank of America Corp., 883 F.3d 68 (2d Cir. 2018) – Sets the standard for de novo review of Rule 12(b)(2) & (6) dismissals, framing the appellate court’s obligation here.
  • Ellul v. Congregation of Christian Brothers, 774 F.3d 791 (2d Cir. 2014) – Allows limitations defenses on a Rule 12 motion when the bar is apparent from the complaint; anchored conversion dismissal.
  • Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779 (2d Cir. 1999) & Best Van Lines v. Walker, 490 F.3d 239 (2d Cir. 2007) – Provide the analytical framework for CPLR §302(a)(1): purposeful availment and claim nexus.
  • Jazini v. Nissan Motor, 148 F.3d 181 (2d Cir. 1998) – Rejects jurisdiction grounded on conclusory allegations; quoted to disregard “legal conclusion couched as factual allegation.”
  • Moussaoui v. Bank of Beirut, 2024 WL 4615732 (2d Cir. 2024) – Recent summary order discarding “information and belief” pleadings; buttresses today’s ruling.
  • Stratton v. Royal Bank of Canada, 712 S.E.2d 221 (N.C. Ct. App. 2011) & Honeycutt v. Weaver, 812 S.E.2d 859 (N.C. Ct. App. 2018) – Fix statute-of-limitations accrual for conversion at the moment of unauthorized dominion, not discovery.
  • Maki v. New York, 597 F. App’x 36 (2d Cir. 2015) – Supplies the harmless-error lens for improper magistrate-review standards.
  • Ashcroft v. Iqbal, 556 U.S. 662 (2009) – Underpins plausibility pleading standards applied to the CFAA claim.

Collectively, these authorities guided the Circuit’s conclusions on jurisdiction, pleading sufficiency, and harmless procedural error.

3.2 Court’s Legal Reasoning

  1. Harmless Error Doctrine. While 28 U.S.C. §636(b)(1) and Fed. R. Civ. P. 72(b)(3) mandate de novo district-court review of objected portions of a magistrate’s report, the Circuit, citing Maki, held that failure to do so does not require reversal if the record independently justifies dismissal.
  2. Personal-Jurisdiction Pleading.
    • To satisfy CPLR §302(a)(1), plaintiff must allege (i) a defendant’s purposeful transaction of business in New York and (ii) an articulable nexus between that transaction and the cause of action.
    • Plaintiff’s “information and belief” statement that Del Rosso made “numerous” New York trips, unaccompanied by details, was deemed speculative and legally insufficient (Jazini, Moussaoui).
    • Attempt to impute jurisdiction through Del Rosso acting as Dechert’s “agent” failed; CPLR §302(a)(1) does not allow jurisdiction over an agent merely because its principal has New York contacts.
  3. CFAA Plausibility.
    • Plaintiff offered no non-conclusory facts tying Dechert to VMS payments to CyberRoot or to the alleged misuse of hacked emails.
    • Thus, no “reasonable inference” (Iqbal) could be drawn that Dechert “caused” or “directed” unauthorized computer access.
  4. Statute of Limitations on Conversion.
    • North Carolina’s three-year period accrues at the moment of wrongful possession, not discovery (Stratton).
    • Alleged email copying in January–February 2017 made a 2023 suit untimely.

3.3 Potential Impact of the Judgment

  • Pleading Precision for Personal Jurisdiction. Litigators in the Second Circuit should expect heightened scrutiny of jurisdictional allegations stated merely “on information and belief.” Concrete facts (dates, counterparties, meeting content) are essential.
  • Agency Theories Under §302(a)(1). Plaintiffs cannot shortcut jurisdiction by labeling a non-domiciliary actor the “agent” of a New York-connected principal; the agent’s own purposeful contacts remain key.
  • Magistrate-Judge Objections Strategy. Even where a district court errs by applying clear-error review, appellants must still confront the merits, as the Circuit may cure the error through de novo analysis.
  • CFAA Litigation Against Large Firms. Courts will demand specific factual bridges between alleged hackers and institutional defendants, resisting “big-pocket” inferences that fees paid to third parties equal knowledge of illegality.
  • Conversion of Digital Data. Plaintiffs asserting conversion of electronic information in North Carolina must file within three years of the unauthorized access itself, not discovery of the breach.

4. Complex Concepts Simplified

CPLR §302(a)(1)
New York’s “long-arm” provision allowing jurisdiction when a defendant transacts business in the state and the lawsuit arises from that transaction.
“Upon Information and Belief” Pleading
A statement based on suspicion rather than personal knowledge. Acceptable for matters peculiarly within the defendant’s control only when accompanied by supporting facts.
Computer Fraud and Abuse Act (CFAA)
Federal statute (18 U.S.C. §1030) criminalizing unauthorized access to “protected computers” and providing a limited private right of action for those harmed.
De novo Review
“From the beginning.” A fresh, independent look at issues without deference to previous findings.
Harmless Error
A procedural mistake that does not affect the case’s outcome; appellate courts may affirm despite the error.

5. Conclusion

Though styled as a non-precedential summary order, El Omari v. Dechert LLP sharpens two practical doctrines:

  1. A litigant cannot invoke New York jurisdiction on speculative “information and belief” allegations or on the theory that an agent’s contacts automatically anchor the agent in the forum.
  2. A district court’s failure to apply the mandated de novo standard to magistrate objections will not guarantee reversal if the record independently supports dismissal—a potent reminder that substance can eclipse procedural missteps.

Counsel drafting complaints in the Second Circuit, particularly in multi-jurisdictional cyber-related disputes, should heed the court’s insistence on factual specificity and the risks of resting on agency or speculative theories. Likewise, parties objecting to magistrate reports must marshal persuasive merits arguments; the appellate court may cure a district court’s review error but will not rescue deficient claims.

Case Details

Year: 2025
Court: Court of Appeals for the Second Circuit

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