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E.APPROACH v. INSTITUTE OF MANAGEMENT ACCOUNTANTS

United States District Court, S.D. New York


June 23, 2004.

e.Approach, Plaintiff,
v.
Institute of Management Accountants, Defendant.

The opinion of the court was delivered by: ROBERT PATTERSON, Senior District Judge

OPINION AND ORDER

This is a diversity case arising from a contract dispute between Plaintiff, e.Approach, Inc. ("EAI"), a New York corporation with its principal place of business on Long Island, and Defendant, Institute of Management Accountants ("IMA"), a non-profit corporation incorporated in the State of New Jersey. Defendant moves to dismiss pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure, arguing that venue is improper in the Southern District of New York ("S.D.N.Y.") because Defendant is a New Jersey corporation and none of the transactions relating to the contract occurred in the S.D.N.Y. Defendant points out that under 28 U.S.C. § 1391(a)(1) & (2) there is no nexus to make venue proper in the S.D.N.Y. Plaintiff counters that venue is proper because of the activities of Defendant and its local New York chapter in the S.D.N.Y. pursuant to 28 U.S.C. § 1391(c).

After hearing argument on Defendant's motion to dismiss for improper venue, or, in the alternative, to transfer to the District of New Jersey pursuant to 28 U.S.C. § 1404(a), the Court determines that venue in the S.D.N.Y. is proper under 28 U.S.C. § 1391(a)(1) & (c) and denies the Defendant's motion.

  According to statements made by Padraig S. Hare, the Vice President of IMA, at the argument on June 21, 2004, IMA conducts seminars in the S.D.N.Y. two or three times a year and, through its interactive website, sells goods and services which it causes to be delivered to the S.D.N.Y. Such activity is sufficient to satisfy the minimum contacts standard appropriate to determine personal jurisdiction under federal law for the purpose of determining venue under 28 U.S.C. § 1391(a)(1) & (c).*fn1 See Helicopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 414-16 (1984); Int'l Shoe Co. v. Washington, 326 U.S. 310, 313-14, 320 (1945). Defendant's minimum contacts demonstrate that Defendant is subject to personal jurisdiction in this district because the Defendant intentionally availed itself of the privilege of conducting activities (conducting seminars and selling goods) within this district, thus invoking the benefits and protections of its laws. Burger King v. Rudzewicz, 471 U.S. 462, 475-76 (1985). By invoking the benefits and protections of the law of this district, the Defendant consented to be subject to them, and therefore could reasonably have anticipated being haled into court here. Id.

  28 U.S.C. § 1391(a)(1) states in pertinent part that in diversity cases venue is proper "only in a judicial district where any defendant resides." 28 U.S.C. § 1391(a)(1). 28 U.S.C. § 1391(c) states in pertinent part, "for purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c). In Sterling Television Presentations, Inc. v. Shintron Co., Judge Broderick pointed out that the test to determine personal jurisdiction for a corporate defendant for the purpose of venue is not the same as the general test to determine personal jurisdiction in a diversity case. 454 F. Supp. 183, 189-90 (S.D.N.Y. 1978). The test for venue is a question of federal law. Robert Diaz Assocs. Enters. v. Elete, Inc., 03 Civ. 7758, 2004 WL 1087468, at *8 (S.D.N.Y. May 14, 2004) (Eaton, Magistrate J.); Smehlik v. Athletes & Artists, Inc., 861 F. Supp. 1162, 1169 (W.D.N.Y. 1994); Bicicletas Windsor, S.A. v. Bicycle Corp. of Am., 783 F. Supp. 781, 786 (S.D.N.Y. 1992). Thus, in order to determine if venue is proper in a federal case involving a defendant corporation, the Court must determine if the corporation is subject to personal jurisdiction in the federal district in which the suit has been brought. In order to determine if a defendant corporation is subject to personal jurisdiction under federal law, a court should use the minimum contacts analysis articulated in International Shoe Co. v. Washington, 326 U.S. 310 (1945), and its progeny. Bicicletas Windsor, S.A., 783 F. Supp. at 786.

  Mr. Hare of IMA also acknowledged that local chapters of IMA (including the New York chapter) are voluntary "fraternal" associations, not independently incorporated, and therefore not independent from IMA. Thus, the activities of the local chapter are an additional basis under International Shoe Co. for determining personal jurisdiction over IMA and thus for determining venue in this district under 28 U.S.C. § 1391(a)(1) & (c). Cf. Acad. of Ambulatory Foot Surgery v. Am. Podiatry Assoc., 516 F. Supp. 378, 381 (S.D.N.Y. 1981) (finding venue inappropriate in the S.D.N.Y. because the activities of the separately incorporated New York chapter could not be attributed to the national organization located in Washington, D.C.).

  IMA is subject to personal jurisdiction in the S.D.N.Y. under federal law, and therefore venue is proper in the S.D.N.Y. pursuant to 28 U.S.C. § 1391(a)(1) & (c). Defendant's motion is denied.

  IT IS SO ORDERED.


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