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Wickers Sportswear, Inc. v. Gentry Mills

January 23, 2006

WICKERS SPORTSWEAR, INC., PLAINTIFF,
v.
GENTRY MILLS, INC., DEFENDANT.



The opinion of the court was delivered by: Hurley, District Judge

MEMORANDUM & ORDER

INTRODUCTION

Plaintiff Wickers Sportswear, Inc., ("Plaintiff") brings the present suit against Defendant Gentry Mills, Inc., ("Defendant") alleging breach of contract, breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for the ordinary purpose, and negligence. Plaintiff asserts that this Court has personal jurisdiction over Defendant pursuant to the federal courts' diversity jurisdiction, 28 U.S.C. § 1332. Defendant challenges the Court's personal jurisdiction and venue and moves for dismissal of the Complaint pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure, or in the alternative, to transfer venue to the Western District of North Carolina. For the reasons stated below, the Court GRANTS Defendant's motion to dismiss for lack of personal jurisdiction.

FACTUAL AND PROCEDURAL SYNOPSIS

Unless otherwise indicated, the Court derives the following factual summary from the complaint and the affidavits submitted by the parties in their motions.

Plaintiff is a corporation organized under the laws of New Hampshire, with its principal place of business in Commack, New York. Plaintiff manufactures recreational sportswear at its facility in New Hampshire and its sewing contractor in Ontario, Canada. Defendant is a corporation organized under the laws of North Carolina, with its principal place of business in Albemarle, North Carolina. Defendant dyes and finishes fabrics, that it then distributes to clothing manufacturers.

In October 2002, Plaintiff and Defendant entered into a business relationship. Defendant would provide the dyed and finished fabrics to Plaintiff's facilities in New Hampshire, Tennessee, or Ontario, where these fabrics would then be used to manufacture sportswear. Defendant never shipped finished goods to Plaintiff in New York.

Over the course of the relationship, from October 2002 to August 2004, Plaintiff sent 252 purchase orders for over 354 dye lots via fax from its Commack Headquarters to Defendant. The dye lots consisted of various fabric samples that amount to approximately 1/100th of a percent of the total fabric processed by Defendant for Plaintiff. The total amount of the purchase orders was "over $400,000." (Aff. of Anthony Mazzenga, dated October 25, 2004, ¶ 9.) That figure constituted less than 3% of Defendant's annual revenue. (Aff. of Alvaro Kraizel, dated November 10, 2004 ("2d Kraizel Aff."), ¶ 25.) The dispute arose when the dyed fabrics that Defendant delivered to Plaintiff were deemed unacceptable because of excess "crocking," i.e., the dye rubbed off the fabric.

ANALYSIS

Defendant moves to dismiss for lack of personal jurisdiction under Federal Rules of Civil Procedure 12(b)(2). In the alternative, Defendant requests, pursuant to Rule 12(b)(3), to dismiss the case on the grounds that venue in the Eastern District of New York is inappropriate. Should the Court conclude to the contrary, Defendant asks that the case be transferred to the Western District of North Carolina.

I. Personal Jurisdiction

"On a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction, plaintiff bears the burden of showing that the court has jurisdiction over the defendant." In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003); see also, Grand River Enters. SixNations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir. 2005); DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001); Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999); Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996). "Where, as here, a court relies on pleadings and affidavits, rather than conducting a 'full-blown evidentiary hearing,' the plaintiff need only make a prima facie showing that the court possesses personal jurisdiction over the defendant." DiStefano, 286 F.3d at 84; see also, Grand River Enters., 425 F.3d at 165; Whitaker v. American Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001); Bank Brussels Lambert, 171 F.3d at 784; Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998); PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997); Ball v. Matallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 196-97 (2d Cir. 1990). "'[W]here the issue is addressed on affidavits, all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor . . . .'" Whitaker, 261 F.3d at 208 (quoting A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993)); see, e.g., DiStefano, 286 F.3d at 84; PDK Labs, 103 F.3d at 1108; CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986); Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985).

With exceptions not relevant here, a district court sitting in a diversity action such as this may exercise personal jurisdiction to the same extent as the courts of general jurisdiction of the state in which it sits. FED. R. CIV. P. 4(k)(1)(A). Accordingly, resolution of a motion to dismiss for lack of personal jurisdiction made in the Eastern District of New York requires a two-step analysis. First, the Court must look to the long-arm statute of the forum state, in this instance New York. See Whitaker, 261 F.3d at 208; see also, Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997); Grand River,425 F.3d at 165 ; DiStefano, 286 F.3d at 84; Bank Brussels, 171 F.3d at 784; Metropolitan Life, 84 F.3d at 567. "'If the exercise of jurisdiction is appropriate under that statute, the court must decide whether such exercise comports with the requisites of due process.'" Whitaker, 261 F.3d at 208; see also, Grand River Enters., 425 F.3d at 165; Bank Brussels, 171 F.3d at 784; Metropolitan Life, 84 F.3d at 567.

A. General Jurisdiction

CPLR ยง 301, the New York general jurisdiction statute, states that a New York court "may exercise jurisdiction over persons, property, or status as might have been exercised heretofore." The statute incorporates all bases for jurisdiction previously recognized at common law. See Penny v. United Fruit Co., 869 F. Supp. 122, 125 (E.D.N.Y. 1994). Section 301 confers jurisdiction over a non-domiciliary defendant "on causes of action wholly unrelated to acts done in New York," when the defendant is "engaged in such a continuous and systematic course of 'doing business' [in New York] as to warrant a finding of its 'presence' in the jurisdiction." Ball, 902 F.2d at 198. A corporation is "doing business," and is therefore "present" in New York and subject to personal jurisdiction, with respect to any cause of action, related or unrelated to the New ...


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