United States District Court, S.D. New York
June 23, 2004.
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
IT IS SO ORDERED.