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New Son Yeng Produce, LLC v. A&S Produce

August 19, 2009

NEW SON YENG PRODUCE, LLC, PLAINTIFF,
v.
A&S PRODUCE, INC., DEFENDANT.



The opinion of the court was delivered by: Kiyo A. Matsumoto United States District Judge Eastern District of New York

MEMORANDUM & ORDER

MATSUMOTO, United States District Judge

Plaintiff New Son Yeng Produce, LLC ("NSY" or "plaintiff") commenced this action alleging violations of the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a ("PACA") based on defendant's alleged failure to pay for $254,917.07 worth of produce allegedly sold and delivered to defendant A&S Produce, Inc. ("A&S" or "defendant") by NSY. Currently before the court is defendant's motion to dismiss for lack of personal jurisdiction and improper venue, or, in the alternative, to transfer the action to the Central District of California. For the following reasons, defendant's motion is granted in part and the action is transferred to the Central District of California.

BACKGROUND

Defendant A&S is a California corporation engaged in selling and buying produce on the West Coast as well as other states. A&S does not have an office, bank accounts, real property or employees in New York. (Chun Aff. ¶ 27-29.) For approximately five years, A&S has had a business relationship with plaintiff NSY. (Chun Aff. ¶ 13; Yin Aff. ¶ 7.) NSY is a New York corporation located in Brooklyn, New York.

There is significant dispute between the parties about the facts giving rise to this lawsuit. Plaintiff alleges that, pursuant to an agreement entered into between defendant A&S, represented by its president, Ha Yun Chun, and plaintiff NSY, represented by Jimmy Sithol Yin, it delivered garlic to the defendant for which defendant only paid $50,000 of the $254,917.07 allegedly owed to NSY. (Yin Aff. ¶ 11.) Plaintiff alleges that "[t]he formation of the agreement was in the State of New York" and that the $50,000 received from defendant's principal Ha Yun Chun, was a down-payment for the garlic and was personally delivered by Mr. Chun to Mr. Yin in New York in March 2007. (Yin Aff. ¶ 12, Exh. B.)

Defendant asserts that it does not owe NSY payment for the garlic because it was not a party to the agreement. (Chun Aff. ¶ 4.) Defendant proffers that it merely facilitated an introduction and agreement into which plaintiff entered with a separate corporation, Mama Cuisine, Inc., for the sale of garlic. (Chun Aff. ¶ 6.) Mama Cuisine is a California corporation, located in Los Angeles, California, engaged in importing from Pacific Rim countries and selling international agricultural produce in the United States. (Lee Aff. ¶ 8-9.) Mama Cuisine does business with A&S; however, there is no ownership relationship between them. (Lee Aff. ¶ 12.) According to defendant, Mr. Chun of A&S introduced Mr. Yin of NSY to Jae Kwon Lee, the president of Mama Cuisine, Inc., at a lunch meeting in California because Mr. Yin expressed interest in entering the garlic importing business on the West Coast. (Lee Aff. ¶ 15.)

Mr. Lee of Mama Cuisine allegedly agreed to help NSY import garlic, to buy some garlic from NSY in California, and to help distribute garlic on the West Coast, if it was of adequate quality and met the standards of the United States and California. (Lee Aff. ¶ 18.) According to Mr. Lee, he traveled to New York with Mr. Chun in March 2007 and gave NSY $50,000 toward the garlic Mama Cuisine intended to purchase. (Lee Aff. ¶ 22.) The garlic arrived in California from China with quality problems and it was rejected by a distributor upon delivery. (Lee Aff. ¶ 23-24.) Mr. Lee informed NSY of the problems with the garlic. (Lee Aff. ¶ 26.) NSY informed Mr. Lee that they would sell the garlic to other buyers. (Lee Aff. ¶ 27.)

Ultimately, Mr. Lee allegedly assisted NSY in selling the garlic to distributors in Los Angeles, California. (Lee Aff. ¶ 43.)

In his affidavit, Mr. Lee indicated that, in addition to himself, several of Mama Cuisine's employees have information about NSY and the garlic transaction at issue in this action. (Lee Aff. ¶ 49.) Among these individuals are 1) Peter Chong, who was responsible for handling Mama Cuisine's business relations with NSY, 2) Jody Lee, Mama Cuisine's accounting staff, 3) Paul Paik, Mama Cuisine's salesperson, and 4) Yong Park, a Mama Cuisine manager. (Lee Aff. ¶ 52.)

In October 2007, NSY commenced the instant action against A&S alleging violations of the PACA based on defendant's alleged failure to pay for $254,917.07 worth of garlic allegedly sold and delivered to A&S by NSY. A&S brought the instant motion to dismiss this action for lack of personal jurisdiction and improper venue pursuant to Fed. R. Civ. P. 12(b)(2) and 12(b)(3). Alternatively, A&S moves for an order transferring this case to the Central District of California pursuant to 28 U.S.C. § 1404. A&S argues that this case is more appropriately litigated in California where the underlying transactions occurred and where several witnesses, including Mama Cuisine's officers and employees, are located.

DISCUSSION

"The question of personal jurisdiction, which goes to the court's power to exercise control over the parties, is typically decided in advance of venue, which is primarily a matter of choosing a convenient forum." Leroy v. Great Western United Corp., 443 U.S. 173, 180 (1979). Since, however, "neither personal jurisdiction nor venue is fundamentally preliminary in the sense that subject matter is . . . when there is a sound prudential justification for doing so, . . . a court may reverse the normal order of considering personal jurisdiction and venue." Id.

The defendant's motion presents questions with regard to personal jurisdiction in New York because A&S has conducted some business in New York, but it is not immediately apparent from the affidavits and pleadings that A&S does sufficient business in New York to establish "presence" pursuant to New York's long-arm statute, N.Y. C.P.L.R. § 301. Similarly, it is far from clear that defendant's business with plaintiff is sufficient to give rise to personal jurisdiction under N.Y. C.P.L.R. § 302. In contrast, a transfer of venue of this action is clearly justified. Thus, this case presents an instance of "sound prudential justification" for considering the issue of venue before that of personal jurisdiction. Accordingly, the court addresses ...


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