Program (the "Program") which imposes certain conditions on
authorized retailers. Through the Program, Yurman controls how
and where it promotes and sells DAVID YURMAN jewelry in order to
protect "the achieved image of exclusivity and luxury." (Yurman
Decl. ¶ 12). Yurman has chosen to sell its jewelry products in
stores such as Saks Fifth Avenue, Neiman Marcus and
Bloomingdale's. Yurman has also given exclusive rights to
approximately two hundred (200) "upscale" jewelry boutiques
across the United States.
Under the Program, transshipment of DAVID YURMAN jewelry
products from one retailer to another retailer is expressly
prohibited. Authorized retailers of DAVID YURMAN jewelry products
cannot be "middlemen" or "wholesalers." To be eligible as a
participant in the Program, a retailer must, among other
requirements, agree to adhere to the advertising guidelines,
operational terms and policies established by Yurman.
Between 1991 and 1995, Morris was an authorized retailer of
Yurman merchandise. According to Morris, Yurman never complained
about its operations. However, in 1995, Yurman unilaterally
terminated Morris as an authorized retailer.
Yurman alleges that Morris has been selling DAVID YURMAN
jewelry products without authorization at its store located at
802 N. Market Street in Wilmington Delaware. Yurman maintains
that as part of its "scheme," Morris induced an unnamed
authorized retailer of DAVID YURMAN products to breach its
Authorized Retailer Agreement with the plaintiff and transship
DAVID YURMAN jewelry to Morris. Upon receiving notice of this
"scheme" from its private investigator, Michael McCloskey,
Yurman's counsel, in a letter dated July 10, 1998, requested that
Morris cease and desist from further unauthorized sale of DAVID
YURMAN products in any way. Yurman avers that Morris "blatantly
ignored" plaintiff's request. (McCloskey Decl. ¶¶ 10-11; Yurman
Decl. ¶ 21).
Morris maintains that after its termination by Yurman, it was
contacted by Cindy Earl ("Earl") of Cindy Earl Fine Jewelry, an
authorized Yurman retailer in Nashville, Tennessee. Earl asked
Albert R. Morris if he was interested in purchasing any Yurman
merchandise. Morris claims that to "limit the damage to customer
relations from having been terminated without notice by Yurman,
A.R. Morris purchased Yurman merchandise from Ms. Earl." (A.R.
Morris Decl. ¶ 7). According to Morris, Earl is the only source
from which it ever purchased any Yurman merchandise after it was
terminated by Morris. Morris' last purchase of Yurman merchandise
from Earl was in 1996, the year in which Earl was terminated as
an authorized retailer by Yurman. Morris avers that since 1996,
it has not purchased any Yurman merchandise from any source.*fn1
Further, Morris asserts that since being terminated, it has never
represented itself as an authorized Yurman retailer nor has it
run any advertisements that include the Yurman name or Yurman
merchandise. Morris contends that it is selling legitimate YURMAN
goods in an appropriate and entirely legal manner.
I. This Court Lacks Jurisdiction Over Morris
Before entering an order of preliminary injunction,
jurisdiction over the defendant must be "clearly established."
Weitzman v. Stein, 897 F.2d 653, 658-59 (2d Cir. 1990). "A prima
facie showing of jurisdiction will not suffice . . . where a
plaintiff seeks preliminary injunctive relief. A court must have
in personam jurisdiction over a party before it can validly enter
even an interlocutory injunction against him." Visual Sciences,
Inc. v. Integrated
Communications, Inc., 660 F.2d 56, 59 (2d Cir. 1981).
The plaintiff bears the ultimate burden of establishing
jurisdiction over a defendant by a preponderance of the evidence.
See Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57
(2d Cir. 1985); Levisohn, Lerner, Berger & Langsam v. Medical
Taping Systems, Inc., 10 F. Supp.2d 334, 338-39 (S.D.N.Y. 1998).
Personal jurisdiction over a non-resident defendant is determined
by the law of the jurisdiction in which the federal court sits.
See Bensusan Restaurant Corp. v. King, 126 F.3d 25, 27 (2d Cir.
1997). Accordingly, assessment of whether New York's Civil
Practice Law and Rules ("CPLR") provides for jurisdiction must be
made. See N.Y. C.P.L.R. §§ 301, 302 (McKinney 1990). A two-fold
inquiry is required. First, a determination must be made as to
whether New York law provides a basis for exercising personal
jurisdiction over the defendant. If jurisdiction is proper as a
result of this analysis, the second inquiry ascends to a
constitutional level, which requires an assessment of whether
exercising jurisdiction over the defendant would offend due
process. See International Shoe Co. v. Washington, 326 U.S. 310,
66 S.Ct. 154, 90 L.Ed. 95 (1945); see also Twine v. Levy,
746 F. Supp. 1202, 1204 (E.D.N.Y. 1990). In light of the determination
below that Morris is not subject to personal jurisdiction under
New York law, the due process analysis need not be conducted.
A. "Doing Business" Pursuant to § 301
CPLR § 301 states that a New York court "may exercise
jurisdiction over persons, property, or status as might have been
exercised heretofore." The statute incorporates all grounds of
jurisdiction previously recognized at common law. See Penny v.
United Fruit Co., 869 F. Supp. 122, 125 (E.D.N.Y. 1994). Pursuant
to § 301, a foreign corporation will be subject to personal
jurisdiction in New York if it is present or is "doing business"
in the state. A corporation's activity rise to the level of
"doing business" only when it is engaged in "such a continuous
and systematic course of activity that it can be deemed present
in the state of New York." Klinghoffer v. S.N.C. Achille Lauro,
937 F.2d 44, 50-51 (2d Cir. 1991) (quoting Laufer v. Ostrow, 55
N Y2d 305, 434 N.E.2d 692, 694, 449 N.Y.S.2d 456, 458 (1982)
(citations omitted)); see Mareno v. Rowe, 910 F.2d 1043, 1046 (2d
Cir. 1990); Frummer v. Hilton Hotels Int'l, Inc., 19 N.Y.2d 533,
536, 227 N.E.2d 851, 853, 281 N.Y.S.2d 41, 43 (1967). Under § 301
of the CPLR, a corporation's presence in New York is determined
based on the time the lawsuit is filed, not when the claim arose.
Penny, 869 F. Supp. at 125.
Indeed, without any physical presence in New York, a foreign
corporation may be subjected to the jurisdiction of New York if
the corporation conducts, or purposefully directs, business "`not
occasionally or casually, but with a fair measure of permanence
and continuity.'" Landoil Resources Corp. v. Alexander &
Alexander Servs., 77 N.Y.2d 28, 34, 565 N.E.2d 488, 490, 563
N YS.2d 739, 741 (1990) (quoting Tauza v. Susquehanna Coal Co.,
220 N.Y. 259, 267, 115 N.E. 915, 917 (1917)). The test, a "simple
pragmatic one," Bryant v. Finnish Nat. Airline, 15 N.Y.2d 426,
432, 208 N.E.2d 439, 441, 260 N.Y.S.2d 625, 629 (1965), is
necessarily fact sensitive. See Landoil Resources Corp. v.
Alexander & Alexander Servs., 918 F.2d 1039, 1043 (2d Cir. 1990);
Stark Carpet Corp. v. M-Geough Robinson, Inc., 481 F. Supp. 499,
504 (S.D.N.Y. 1980) (citing Manchester Modes, Inc. v. Lilli Ann
Corp., 306 F. Supp. 622, 624 (S.D.N.Y. 1969)).
"In assessing jurisdiction under this pragmatic standard, New
York courts have generally focused on the following indicia of
jurisdiction: the existence of an office in New York; the
solicitation of business in New York; the presence of bank
accounts or other property in New York; and the presence of
agents in New York." Landoil, 918 F.2d at 1043; see Hoffritz, 763
F.2d at 58. However, "[s]olicitation of business alone will not
justify a finding of corporate presence in New York with respect
to a foreign manufacturer or purveyor of services." Laufer v.
Ostrow, 55 N.Y.2d 305, 310, 434 N.E.2d 692, 694, 449 N.Y.S.2d
456, 459 (1982); see Frummer, 19 N.Y.2d at 536, 227 N.E.2d at
853, 281 N.Y.S.2d at 43. Yet if the solicitation "is substantial
and continuous, and defendant engages in other activities of
substance in the state, then personal jurisdiction may properly
be found to exist." Landoil, 918 F.2d at 1043-44; see Beacon, 715
F.2d at 763; Aquascutum of London, Inc. v. S.S. American
Champion, 426 F.2d 205, 211 (2d Cir. 1970).
Here, Yurman does not dispute that Morris has no offices or
owns no real estate in New York, that it maintains no bank
accounts in this state, and that it was not authorized to conduct
business in New York during the relevant time period.*fn2 Morris
avers that its sole connection to New York is that one or more of
its employees, approximately twice a year, attend a jewelry trade
show there. Upon review of the entire record, Yurman has not met
its burden in establishing that Morris was "doing business" in
New York with in the meaning of § 301 in 1998. Accordingly, § 301
does not provide a basis under which this Court may exercise
jurisdiction over Morris.
B. New York State Long Arm Jurisdiction
New York's long arm statute, CPLR § 302, provides in
(a) As to a cause of action arising from any acts
enumerated in this section, a court may exercise
personal jurisdiction over any
nondomiciliary . . . who in person or through an
1. transacts any business within the state or
contracts anywhere to supply goods or services in the
2. commits a tortious act within the state . . .; or
3. commits a tortious act without the state causing
injury to person or property within the state . . .
N Y C.P.L.R. § 302(a).
The long arm statute thus requires "a strong nexus between
the plaintiff's cause of action and the defendant's in state
conduct." Welsh, 930 F. Supp. at 910; see McGowan v. Smith, 52
N Y2d 268, 272, 419 N.E.2d 321, 322-23, 437 N.Y.S.2d 643, 645
(1981) (explaining that there must be some "articulable nexus
between the business transacted and the [claim]"); see also
Beacon, 715 F.2d at 762.
Plaintiff has failed to establish the requisite connection
between Morris' alleged activity in or outside of New York state
and Yurman's injuries.
1. Transacting Business
Yurman asserts that this Court has jurisdiction over Morris
pursuant to CPLR § 302(a)(1). Under CPLR § 302(a)(1), personal
jurisdiction exists over a nondomiciliary who transacts business
in New York, as long as the cause of action arises out of the
subject matter of the business transacted. See N.Y. C.P.L.R. §
302(a)(1); McGowan, 52 N.Y.2d at 272, 419 N.E.2d at 322-23, 437
N YS.2d at 645.
The transacting business prong of § 302(a)(1) confers
jurisdiction over "a defendant who purposefully avails itself of
the privilege of conducting activities within New York, thus
invoking the benefits and protections of its laws." Viacom
Intern., Inc. v. Melvin Simon Productions, 774 F. Supp. 858, 862
(S.D.N.Y. 1991). New York courts look to the totality of
circumstances to determine whether the defendant has engaged in
some purposeful activity
in New York in connection with the matter in controversy.
Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15
N Y2d 443, 457, 209 N.E.2d 68, 75, 261 N.Y.S.2d 8, 18 (1965).
CPLR § 302(a)(1) authorizes the court to exercise
jurisdiction over nondomiciliaries for contract and tort claims
arising from a defendant's transactions of business in New York.
Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 522 N.E.2d 40, 527
N YS.2d 195 (1988). A single transaction of business is
sufficient to give rise to jurisdiction under CPLR § 302(a)(1),
even where the defendant never enters the state, if the claim
arises out of the transaction.
It [CPLR 302(a)(1)] is a "single act statute" and
proof of one transaction in New York is sufficient to
invoke jurisdiction, even though the defendant never
enters New York, so long as the defendant's
activities here were purposeful and there is a
substantial relationship between the transaction and
the claim asserted.
Kreutter, 71 N.Y.2d at 467, 522 N.E.2d at 43, 527 N.Y.S.2d at
198-99; see also Parke-Bernet Galleries, Inc. v. Franklyn, 26
N Y2d 13, 256 N.E.2d 506, 308 N.Y.S.2d 337 (1970).
New York courts have held that a § 302(a)(1) determination as
to whether defendant has transacted business "through an agent"
does not require a formal agency relationship. Rather, courts
focus on the "realities of the relationship in question" to
determine whether the agent acted in New York "for the benefit
of, and with the knowledge and consent of the non-resident
principal." Alto Products Corp. v. Ratek Industries Ltd., 1996 WL
497027 at *3 (S.D.N.Y. September 3, 1996) (citing CutCo
Industries v. Naughton, 806 F.2d 361, 366 (2d Cir. 1986));
D'Amato v. Lichine USA Co., 1993 WL 437772 at *1 (S.D.N Y
October 27, 1993).
Yurman alleges that Morris continues to transact business in
New York through its relationship with Earl, who "must maintain
a substantial and jurisdictionally significant connection to New
York as an authorized retailer." (Plaintiff's Reply Brief at 7).
Yurman avers that Morris "apparently" paid Earl a ten percent fee
in order to obtain the jewelry products from Yurman in New York.
Yurman reasons that Morris' relationship with Earl constitutes an
agency relationship for jurisdictional purposes and satisfies the
transacting business requirement of § 302(a)(1).
While New York's approach to agency under § 302(a)(1) may be
"flexible," see D'Amato 1993 WL 437772 at *1, it is not so
elastic as to encompass the instant case. The cases cited by
Yurman finding an agency relationship have involved a closer
nexus between a defendant and its purported agent than exists
here. In Alto Products, for example, there was evidence that the
overseas manufacturer challenging jurisdiction was owned and
controlled by the same New York-based distributor that sold the
infringing goods in New York. See 1996 WL 497027. In the present
case, the relationship between Morris and Earl is far more
attenuated. Yurman has not established that Earl acted in New
York for the benefit of, and with the knowledge and consent of
Morris. Yurman's allegation that Morris paid Earl a ten percent
fee in order to obtain the jewelry products from Yurman in New
York is unsupported by the record. While the receipts from Earl
to Morris do indicate a ten percent "add-on" there is no
indication as to what this refers.
Accordingly, Earl cannot be held to be an agent of Morris
under 302(a)(1), and thus is not subject to jurisdiction under
New York law.
For the reasons stated above, Yurman's motion for a
preliminary injunction is hereby denied on the grounds that this
Court does not have jurisdiction over defendant
Morris. Yurman's motion for expedited discovery is denied as
It is so ordered.