The opinion of the court was delivered by: DUFFY
KEVIN THOMAS DUFFY, D.J.:
In this diversity action Peters Griffin Woodward, Inc. ("PGW") sues Roadrunner Television Limited Partnership ("Roadrunner") to recover allegedly overdue and unpaid advertising sales commissions incurred by Roadrunner for the services of PGW. The alleged commissions total $54,705.18, less accrued interest. Plaintiff, a Delaware corporation with offices in numerous cities throughout the country, maintains its principal place of business in New York. Defendant is an Arizona limited partnership which operates television station KZAZ-TV in Tuscon, Arizona. Defendant now moves to dismiss the complaint pursuant to Rules 12b(2) and (3) of the Federal Rules of Civil Procedure for lack of personal jurisdiction and improper venue, or, in the alternative, to transfer the case, pursuant to 28 U.S.C. § 1404(a)
to the District Court in Arizona.
This case arises out of a contract signed between the parties on December 5, 1979 whereby Roadrunner granted PGW exclusive rights to promote the national sale of advertising time on defendant's station KZAZ-TV. Pursuant to their agreement, PGW would seek advertisers throughout the United States, but was precluded from generating any advertising revenue within Roadrunner's home state of Arizona. In satisfaction of the contract, PGW also developed and executed a marketing and sales strategy, created and implemented an advertising rate structure, and contacted KZAZ's delinquent advertising accounts to ascertain the reason for the delinquencies. Affidavit of Dennis K. Gillespie, para. 6. In return for these services, PGW would receive a percentage commission of the net national television time sales billed to advertisers by Roadrunner. To calculate the commissions owed, Roadrunner was required to submit to PGW monthly commission reports setting forth the total advertising billing for each month.
Apparently, performance under the contract was satisfactory until July 1, 1981 when PGW informed Roadrunner by letter of its decision to consolidate its sales efforts and to serve a limited number of clients. Defendant's Exhibit B. Defendant argues that this new policy, which allegedly resulted in a drastic cut back in PGW's national offices and staff and a corresponding decrease in its national advertising revenue, constituted a breach of its contractual obligations. In August, 1982, Seltel, Inc. ("Seltel"), pursuant to a negotiated buy-out agreement, succeeded PGW as Roadrunner's national advertising sales representative. Seltel, like PGW, is a national advertising sales representative located in New York. The buy-out agreement acknowledged PGW's right to continue to collect commissions generated prior to July 26, 1981. Affidavit of Dennis K. Gillespie, Exhibit A. This lawsuit revolves around the defendant's alleged failure to pay PGW commissions accrued from February, 1981 through July 26, 1981. Roadrunner asserts in response to PGW's complaint that this court lacks in personam jurisdiction and that the Southern District of New York is an inconvenient forum.
In a diversity case a federal court looks to the law of the forum state to determine whether the court may assert jurisdiction over a non-domiciliary. Jayne v. Royal Jordanian Airlines Corp., 502 F. Supp. 848 (S.D.N.Y. 1980). To be a defendant in this court a non-domiciliary must be subject to service of process under the laws of New York, and the exercise of jurisdiction must be consistent with due process. Intermeat, Inc. v. American Poultry, Inc., 575 F.2d 1017 (2d Cir. 1978). Accordingly, the issue of whether defendant Roadrunner is subject to in personam jurisdiction must be determined in accordance with Sections 301
of the New York Civil Practice Law and Rules.
Each of these sections will be examined separately to determine if they provide a basis for jurisdiction in this action.
Section 301 bases jurisdiction on traditional notions of presence or consent. A corporation which avails itself of the benefits and protections of the laws of a state by transacting enough business within a state's boundary to be considered to be "doing business" there is subject to suit in that forum. Frummer v. Hilton Hotels Intl., Inc., 19 N.Y.2d 533, 281 N.Y.S.2d 41, 227 N.E.2d 851 (1967); see also Hanson v. Denckla, 357 U.S. 235, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958). Yet, a sufficient predicate for jurisdiction is only established under Section 301 where the foreign corporation transacts business in the state with a fair amount of permanence, regularity or continuity. See Bryant v. Finnish Nat. Airline, 15 N.Y.2d 426, 260 N.Y.S.2d 625, 208 N.E.2d 439 (1965); Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915 (1917). Plaintiff claims that Roadrunner's activities in New York properly subject the defendant to Section 301 jurisdiction.
Plaintiff argues that a foreign corporation which employs a New York sales representative to solicit and service New York accounts is conducting systematic and continuous business within the meaning of Section 301. Laufer v. Ostrow, 55 N.Y.2d 305, 449 N.Y.S.2d 456, 434 N.E.2d 692 (1982); Katz Agency, Inc. v. Evening News Association, 514 F. Supp. 423 (S.D.N.Y. 1981); see Katz Agency, Inc. v. Heftel Broadcasting Corp., 56 A.D.2d 758, 392 N.Y.S.2d 39 (1st Dep't 1977). Foreign corporations whose exclusive business involves the systematic and continuous solicitation and servicing of New York accounts through sales representatives in New York is clearly doing business within this state. Laufer, 55 N.Y.2d at 311, 449 N.Y.S.2d at 459, 434 N.E.2d at 695. The mere solicitation of business, however, is not sufficient to establish personal jurisdiction in any given forum. Because Roadrunner's business is not limited solely to the solicitation of business in New York, the plaintiff must show that the defendant has engaged in activities exceeding mere solicitation in order to invoke Section 301.
In Evening News, supra, the court was presented with a plaintiff national advertising sales representative, incorporated in Delaware and conducting its principal business in New York and a defendant television station and its parent corporation, both non-domiciliaries. Similar to the instant case, after the premature termination of their agreement, the plaintiff in Evening News was replaced by another New York based sales representative. Subsequently, the plaintiff filed suit and the defendants moved to dismiss for lack of personal jurisdiction. Plaintiff's exercise of jurisdiction was upheld. The district court concluded that the activities of defendants' former and current New York advertising representatives, coupled with periodic visits to New York by employees of the television station constituted corporate presence within the meaning of Section 301. The court found the following factors particularly telling: (1) one-third of the defendants' national advertising revenue resulted from the plaintiff's efforts; (2) plaintiff was required to help the defendants procure funds from delinquent accounts; (3) defendants empowered the plaintiff to collect and bill for all its solicited advertising; (4) close contact between the plaintiff and defendant on the development of marketing strategies, rate structures and sales techniques; (5) employees of the defendants made periodic visits to New York arranged by the plaintiff to promote the defendants' business; and (6) plaintiff's replacement continued to provide these same services for the defendants. 514 F. Supp. at 427-28.
PGW asserts that all these factors are present here and support a finding of personal jurisdiction. Defendant argues in opposition to plaintiff's contention that New York provides only a small percentage of its advertising sales revenue (25-30%); that the power to collect from delinquent accounts, present in Evening News, is absent here; that the joint development of a marketing strategy and sales strategy and techniques did not take place in New York, and that Roadrunner's employees visited PGW's New York offices infrequently and only on a social basis. Finally, although this distinction from Evening News was not specifically ...