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Int'l Flavors & Fragrances Inc. v. Van Eeghen Int'l B.V.

July 6, 2006

INTERNATIONAL FLAVORS & FRAGRANCES INC., PLAINTIFF,
v.
VAN EEGHEN INTERNATIONAL B.V. AND DEFRANCESCO & SONS, INC., DEFENDANTS.



The opinion of the court was delivered by: John F. Keenan, United States District Judge

OPINION and ORDER

Plaintiff International Flavors & Fragrances, Inc. ("IFF") has filed this action in order to recoup losses arising out of its use of noncompliant onion powder. Defendant Van Eeghen International, B.V. ("Van Eeghen") moves pursuant to Fed. R. Civ. P. 12 (b)(2) and 12(b)(3), respectively, to dismiss for lack of personal jurisdiction and improper venue. Defendant DeFrancesco & Sons, Inc. ("DeFrancesco") moves to dismiss for improper venue or, alternatively, to transfer the action to the United States District Court for the Eastern District of California under 28 U.S.C. §§ 1404(a) or 1406(a), or on forum non conveniens grounds.*fn1 Van Eeghen opposes a transfer. The Court finds that: (i) Van Eeghen is not subject to personal jurisdiction in New York, (ii) venue is improper in the Southern District of New York, and (iii) IFF could have brought this action in the Eastern District of California. Accordingly, the motions to dismiss are denied, and the action is transferred to the Eastern District of California under 28 U.S.C. § 1406(a).

BACKGROUND

The following facts are derived from IFF's Complaint and from the affidavits submitted on the motions. The Court construes these documents in the light most favorable to IFF, the plaintiff, and resolves all doubts in IFF's favor. See CutCo Indus. Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986).

IFF is a New York corporation with its principal place of business in Manhattan. (Compl. ¶ 1.) IFF manufactures and supplies flavors and fragrances to producers of food and beverage products, toiletries, soaps and other household products. (Compl. ¶ 6.) One of IFF's affiliates is International Flavors & Fragrances I.F.F. (Nederland) B.V. ("IFF Nederland"), which operates in Holland. (Dunsdon Aff. ¶ 5.) Van Eeghen is a Dutch limited liability company with its principal place of business in Amsterdam. (Bakalor Aff. ¶ 7.) Van Eeghen trades, among other things, in food ingredients, including herbs, spices and dried agriculture products. (Van Eeghen Aff. ¶ 6.) DeFrancesco is a California corporation with its principal place of business in Firebaugh, California. (DeFrancesco Aff. ¶ 3.) DeFrancesco manufactured and performed the initial processing of the onion powder at issue in this litigation. (DeFrancesco Aff. ¶ 5.)

Van Eeghen has supplied dehydrated vegetable products to IFF since before 1980. (Compl. ¶ 9.) Since the mid-1990s, IFF has specified that Van Eeghen obtain certain of these products, including onion powder, from DeFrancesco. (Compl. ¶ 10.) On February 26, 2000, Van Eeghen executed an IFF Product Questionnaire for onion powder in which Van Eeghen represented that its onion powder was "100% natural" and contained no "restricted materials" or "processing aids." (Compl. ¶ 11.)

Effective October 1, 2003 and January 1, 2005, IFF and Van Eeghen entered into Memoranda of Agreements ("Agreements") pursuant to which Van Eeghen agreed to supply, inter alia, onion powder to IFF for one year periods. (Compl. ¶ 14.) The Agreements specified that the onion powder be "non-treated" and that it come from DeFrancesco (Compl. ¶¶ 18-19.) IFF says that the Agreements were prepared, authorized and executed in New York. (Dunsdon Aff. ¶ 9.) The Van Eeghen employee who signed the Agreements claims that they were sent not from New York, but from IFF Nederland in Holland. (Keijzer Aff. ¶ 2.) Van Eeghen's employees contend that all negotiations were with IFF Nederland, without any contact with IFF in New York. (Van Eeghen Aff. ¶ 18; Keijzer Aff. ¶¶ 3-4.)

From August 1, 2004 through April 1, 2005, IFF Nederland submitted purchase orders to Van Eeghen for "non-treated" onion powder. (Compl. ¶ 22.) Van Eeghen sent the orders to DeFrancesco by email from Holland to Firebaugh, California. (DeFrancesco Aff. ¶ 10.) DeFrancesco manufactured the powder at its Firebaugh location and, despite the "non-treated" language in the Agreements, shipped the powder to a company in Tustin, California, for irradiating. (DeFrancesco Aff. ¶¶ 5-6.) The powder then came back to Firebaugh for further processing. (DeFrancesco Aff. ¶ 7.) DeFrancesco shipped the powder to Van Eeghen in Holland, from either the Port of Oakland or the Port of Long Beach. (DeFrancesco Aff. ¶ 11.) Van Eeghen delivered the powder to IFF Nederland in Holland. (Van Eeghen Aff. ¶ 22; Fessl Aff. ¶ 15.) IFF Nederland incorporated the powder into a wide variety of flavors for multiple customers. (Dunsdon Aff. ¶ 11.)

In March 2005, one of IFF's customers complained that certain flavors sold to it through IFF Nederland had been subjected to irradiation. (Dunsdon Aff. ¶ 10.) IFF subsequently determined that the onion powder sold to IFF Nederland by Van Eeghen had been irradiated. (Dunsdon Aff. ¶ 11.) On March 30, 2005, DeFrancesco confirmed that it had shipped lots containing irradiated onion powder to Van Eeghen between July 2004 and March 2005. (Dunsdon Aff. ¶ 11.) DeFrancesco does not dispute that the powder was irradiated. (DeFrancesco Aff. ¶ 6.) In response to this problem, IFF New York was required to (a) secure non-irradiated replacement product for the affected customers, (b) provide credit or refunds to customers for flavors that had not yet made their way into the customers' food products, and (c) quarantine and destroy irradiated onion powder and flavors containing the onion powder that were still in IFF Nederland's own stock. (Dunsdon Aff. ¶ 16.)

One of IFF's large customers, The Proctor & Gamble Company ("P&G"), already had incorporated the flavors into its finished food products, which subsequently had to be recalled and destroyed. (Dunsdon Aff. ¶ 14.) IFF's representatives in New York negotiated a settlement with P&G representatives from Cincinnati. (Dunsdon Aff. ¶ 15.) On August 22, 2005, IFF wired an interim payment of $2,000,000 from its New York office to P&G in Cincinnati. (Weller Aff. ¶ 2.) IFF wired another payment of $4,437,983, again from New York, to P&G in December 2005. (Weller Aff. ¶ 3.) Over half of the latter payment arose out of the settlement of the onion powder matter. (Weller Aff. ¶ 3.)

On March 29, 2005, IFF put Van Eeghen on notice of its claim for damages relating to the irradiated onion powder. (Compl. ¶ 34.) On January 23, 2006, IFF filed its Complaint. IFF alleges seven causes of action, some sounding in contract and some in tort. The Complaint contains no personal jurisdiction allegations and only a terse venue statement. (Compl. ¶ 5.) The instant motions followed. During briefing, Van Eeghen commenced a proceeding in Holland that names IFF, DeFrancesco and IFF Nederland. (Bakalor Reply Aff. ¶ 39.) Van Eeghen hopes to litigate this dispute there and asks the Court not to transfer the action to California, even if California is an appropriate forum. (Bakalor Reply Aff. ¶ 44.) IFF contends that this parallel litigation should not dissuade the Court from exercising personal jurisdiction over both defendants, or transferring the case to California. (Letter from E. Sher, Esq., Pitney Hardin LLP, to Court (May 16, 2005).

DISCUSSION

I. PERSONAL JURISDICTION -- VAN EEGHEN

The plaintiff bears the burden of establishing the Court's personal jurisdiction over the defendant for the purposes of defeating a Rule 12(b)(2) motion. Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). In the absence of an evidentiary hearing, "the plaintiff need make only a prima facie showing of jurisdiction through its own affidavits ...


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