assert that there is no jurisdiction over the defendants because, due to a breach, the goods were not shipped, is to contravene the very basis for the reach section 302(a)(1). The defendant UK Optical intentionally and knowingly contracted and intended to send the eye-glass frames into New York, for sale and redistribution in the New York area and throughout the continental United States. That purposeful activity directed at New York is sufficient to confer personal jurisdiction pursuant to the statute.
Although the plaintiff has offered evidence, which the Court must accept as true when deciding a motion to dismiss under Rule 12(b), that several orders of eye glass frames were shipped into New York, the fact that the goods may not have been shipped to New York does not defeat personal jurisdiction. Lupton Associates, 482 N.Y.S.2d at 650. Accordingly, the Court has personal jurisdiction over the defendant UK Optical pursuant to CPLR § 302(a)(1).
B. Long-Arm Jurisdiction must comply with Due Process Concerns.
To meet the demands of due process, a defendant's contacts with the forum state must be such that maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Melendez v. Professional Machine & Tool Company, Ltd., 190 A.D.2d 657, 593 N.Y.S.2d 258 (2d Dept. 1993) (quoting International Shoe, supra, 326 U.S at 316, 66 S. Ct. at 158). When a foreign corporation "purposefully avails itself of the privilege of conducting activities in the forum state, it can reasonably anticipate being subject to suit there." Meledez, 593 N.Y.S.2d at 259 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 567, 62 L. Ed. 2d 490 (1986)). The drafters of the 1979 changes to the CPLR amendment of section 302(a)(1) deemed the shipment of goods into the state "to be an act by which a non-domiciliary avails itself of the privilege of conducting activities in the State." Island Wholesale Wood Supplies, Inc. v. Blanchard Inds., Inc., 101 A.D.2d 878, 476 N.Y.S.2d 192, 194 (2d Dept. 1984); Melendez, 593 N.Y.S.2d at 259.
The plaintiff alleges in the Complaint that UK Optical shipped eye-glass frames pursuant to the distribution agreement to New York. The plaintiff also alleges that negotiations between the parties over the distribution agreement were conducted in New York, at arms length and by telephone. Finally, the plaintiff alleges that UK Optical's Director of Frame Business came to New York four times to discuss the contract, and brought the final version of the agreement to New York for execution. The defendant denies or explains each of these allegations, except that UK Optical admits that (1) some negotiations were conducted by facsimilie transmissions into New York, (2) two of the orders on invoices dated after July, 1992 were actually shipped to New York, though one order contained promotional goods, while the other contained an order placed just prior to the execution of the agreement, and (3) UK Optical's Director of Frame Business did come to New York with the final version of the agreement for execution, though that was not his sole purpose in coming to New York at that time.
The Court again reiterates that on a motion to dismiss pursuant to Rule 12(b), the allegations in the complaint, and any doubts, must be construed in favor of the plaintiff. CutCo Industries, supra, 806 F.2d at 365. Based on the allegations in the Complaint, the plaintiff has made a prima facie showing that personal jurisdiction over UK Optical comports with traditional due process concerns of "notice and fair play." Therefore, personal jurisdiction over the defendant is warranted under CPLR § 302(a)(1).
However, the Court notes that, even if the defendant's contentions and explanations are taken into consideration, the defendant does not contest that some negotiations were conducted by facsimilie transmissions into New York, that some goods -- be they only promotional -- were shipped under the contract to New York, and that the Director of Frame Business for UK Optical did come to New York with the purpose, though not the sole purpose, of executing the final version of the distribution agreement. These three uncontested facts are enough for the Court to conclude that the totality of UK Optical's contacts with New York demonstrate that UK Optical purposefully availed itself of the privileges of this forum, and could have expected to have been hailed into the forum's courts on account of the contract. See Lupton Associates, supra, 482 N.Y.S.2d at 650 (citing examples of "single acts" by defendants which have conferred personal jurisdiction over them in New York).
Accordingly, the Court finds that, as a matter of law, the plaintiff has sufficiently alleged facts according it personal jurisdiction over the defendant UK Optical, pursuant to CPLR § 302(a)(1), and that the constitutional demands of due process are met.
2. En Vogue's Claim Under the Robinson-Patman Act.
En Vogue's second cause of action alleges that, by selling to the defendant British Optical, at a lower price, designer eye-glass frames that are similar to the ones covered by the distribution agreement between En Vogue and UK Optical, UK Optical violated the provisions of the Robinson-Patman Act, 15 U.S.C. § 13. That Act forbids price discrimination among purchasers of similar commodities in interstate commerce.
The relevant provision of the Robinson-Patman Act states that:
(a) It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality . . . where such commodities are sold for . . . resale within the United States . . . and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them.
15 U.S.C. § 13(a).
In order to state a claim under section 13(a), the plaintiff must show that the defendants' actions would tend either to result in a substantial lessening of competition or to create a monopoly in any line of interstate commerce. Retail Service Assoc. v. Conagra Pet Products, 759 F. Supp. 976, 980-81 (D.Conn. 1991) (citing Interstate Cigar Co., Inc. v. Sterling Drug, Inc., 655 F.2d 29, 31 (2d Cir. 1981)).
En Vogue has pleaded in its complaint that it and the defendant British Optical are engaged in the business of distributing optical frames in interstate commerce; that En Vogue and British Optical are in direct competition for market share in the optical industry; that En Vogue and British Optical distribute products of like grade and quality; that En Vogue has lost profits and customers due to U.K. Optical's discriminatory pricing; and that such discriminatory pricing has caused En Vogue competitive injury, and hampered its ability to effectively compete with British Optical for market share in the United States.
The Court notes that on a motion to dismiss for failure to state a claim, "the court should not dismiss the complaint pursuant to Rule 12(b)(6) unless it appears 'beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir. 1985) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)). Moreover, in assessing the sufficiency of a pleading on a motion to dismiss, it is well settled that "all factual allegations in the complaint must be taken as true," La Bounty v. Adler, 933 F.2d 121, 123 (2d Cir. 1991), and all reasonable inferences must be construed in favor of the plaintiff, Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1099 (2d Cir. 1988), cert. denied sub nom. Soifer v. Bankers Trust Co., 490 U.S. 1007, 104 L. Ed. 2d 158, 109 S. Ct. 1642 (1989).
En Vogue has pleaded a cause of action for price discrimination under section 13(a) that is sufficient to withstand a motion to dismiss under Rule 12(b)(6). The facts of this case are distinguishable from those in Congra Pet Products, supra, where the court dismissed a claim under section 13(a) pursuant to Rule 12(b)(6), because the complaint did nothing more than allege that the plaintiff had lost one account for distribution, and there was "no indication that any action by either defendant has had or is likely to have an injurious effect on commerce or competition in any relevant market." Id. 759 F. Supp. at 981. In this case, the Court can reasonably infer from En Vogue's allegations that "the defendants' actions would result in a substantial lessening of competition" in the relevant market of designer eye-glass frames, and that such actions were committed in the course of interstate commerce.
The defendant UK Optical argues that the requirements of the section 13(a) are not met in this case, because there were no actual sales by UK Optical to En Vogue under the distribution agreement. According to UK Optical, in order to state a claim for price discrimination under section 13(a), there must be actual sales to purchasers. See Package Closure Corp. v. Sealright Co., 141 F.2d 972, 979-80 (2d Cir. 1944); Jones v. Metzger Dairies, Inc., 334 F.2d 919, 924-25 (5th Cir. 1964).
The Court disagrees with UK Optical's contention for two reasons. First, as already explained in the discussion of personal jurisdiction, above, UK Optical admits that two of the orders on invoices dated after July, 1992 were actually shipped to New York, although it explains these shipments away by alleging that one order contained promotional goods, while the other contained an order placed just prior to the execution of the agreement. Thus, the Court has a basis in fact to infer that actual sales pursuant to the contract did occur.
Second, actual sales to En Vogue are not necessary in order for the plaintiff to properly plead a cause of action under section 13(a) in this case. In Aluminum Company of America v. Tandet, 235 F. Supp. 111 (D. Conn. 1964), the court considered the very same argument presently before this Court: whether there has to be an actual sale to a purchaser in order to have a claim under section 13(a). In Tandet, the parties entered into an agreement, whereby the plaintiff would sell aluminum products to the defendant over a five year period. The defendant placed an order under the contract, but the plaintiff refused to ship the order because of a dispute over price. The plaintiff sued for breach of contract, and the defendant counterclaimed by alleging price discrimination under section 13(a), because the plaintiff was selling aluminum to the defendant at a higher price than it was charging other purchasers. The plaintiff argued that the counterclaim should be dismissed as a matter of law, because there was no actual sale to the defendant under the contract.
The Tandet court held that an actual sale was not necessary in order for the defendant to state a claim under section 13(a), because under the terms of the contract the parties were in the relationship of a seller and buyer. That contractual relationship already contemplated a completed transaction, pursuant to which the defendant was a purchaser, even if an actual sale had not been made. The Tandet Court distinguished Package Closure, supra, and other cases holding that an actual sale to the purchaser is necessary in order to plead a claim under section 13(a), on the ground that these cases involved companies with no contractual relationships, where the alleged price discriminator refused to deal at all with the prospective purchaser. See Tandet, 235 F. Supp. at 114.
In this case, the parties have a contractual relationship that, similar to the relationship in Tandet, contemplated a completed transaction of minimum purchases, based on En Vogue's ordering invoices as the exclusive distributor. As such, En Vogue was a purchaser within the meaning of section 13(a), and can rightfully allege a cause of action for price discrimination, even if there was no actual sale. Accord, Harper Plastics, Inc. v. Amoco Chemicals Corp., 617 F.2d 468, 471 (7th Cir. 1980) (in considering "purchaser" within meaning of section 13(e), court held: "[A] consummated transaction in the sense of a fully executed contract is not required. A complaining party may become a 'purchaser' . . . solely by entering into a contract for the purchase of goods for resale.").
As a matter of policy, the Court notes that if it were to hold otherwise and require an actual sale in order for a party to state a claim under section 13(a), then a manufacturer could sell to a distributor's competitors at a lower price, and be immune from the distributors' price discrimination claim because the distributor was unwilling to proceed with any purchases requiring payment of the higher price. This result would leave a distributor with only a breach of contract remedy, allow the manufacturer to discriminate in pricing with impunity, and undercut the very strength and purpose of the Robinson-Patman Act. In this Court's view, Congress did not intend this type of outcome when it enacted the Robinson-Patman Act.
Accordingly, as a matter of law, the Court holds that the plaintiff has sufficiently pleaded a cause of action for price discrimination under section 13(a). The defendants' motion to dismiss the cause of action under the Robinson-Patman Act is denied.
The defendant UK Optical's motion to dismiss the complaint as against it for lack of personal jurisdiction, and to dismiss the second cause of action in the Complaint alleging violation of the Robinson-Patman Act, is denied. The Court finds that, as a matter of law, as alleged in the Complaint personal jurisdiction over the defendant UK Optical is appropriate, pursuant to CPLR § 302(a)(1), and the constitutional demands of due process are met. Additionally, the Court holds that, as a matter of law, the plaintiff has sufficiently pleaded a cause of action for price discrimination under 15 U.S.C. § 13(a).
UK Optical also seeks a protective order governing certain discovery requests pursuant to Fed. R. Civ. P. 26(c). This aspect of its motion is referred for determination to United States Magistrate Judge Michael L. Orenstein.
Dated: Uniondale, New York
February 14, 1994
ARTHUR D. SPATT
United States District Judge
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