United States District Court, S.D. New York
OPINION AND ORDER
J. PAUL OETKEN, District Judge.
This diversity action arises out of a business relationship among Clopay Plastic Products Company, Inc. ("Clopay"), The Excelsior Packaging Group, Inc. ("Excelsior"), Kimberly-Clark Corporation ("K-C"), and Hogla-Kimberly Ltd. ("H-K"). Clopay has sued Excelsior for breach of contract and related claims. Excelsior has impleaded K-C and H-K. In December 2013, the Court denied K-C's motion to dismiss Excelsior's third-party complaint and Clopay's motion to sever. Now before the Court is H-K's motion to dismiss the third-party complaint against it for lack of personal jurisdiction. For the reasons that follow, the motion is granted.
A. Factual Background
The following facts are taken from the allegations in Excelsior's third-party complaint (Dkt. No. 23 ("TP Compl.")) and Clopay's complaint (Dkt. No. 1 ("Compl.")), which is incorporated by reference. Where the allegations conflict, the Court accepts as true the allegations in the third-party complaint. See, e.g., Szollosy v. Hyatt Corp., 208 F.Supp.2d 205, 207 n.2 (D. Conn. 2002); Dep't of Econ. Dev. v. Arthur Andersen & Co. (U.S.A.), 747 F.Supp. 922, 937 n.18 (S.D.N.Y. 1990). Additionally, because a motion to dismiss for lack of personal jurisdiction requires the resolution of factual issues outside the pleadings, the Court considers other relevant submissions from the parties at this stage. See Eternal Asia Supply Chain Mgmt. (USA) Corp. v. Chen, No. 12 Civ. 6390 (JPO), 2013 WL 1775440, at *1 n.1 (S.D.N.Y. Apr. 25, 2013).
1. The Parties
Clopay is a Delaware corporation with its principal place of business located in Ohio. Excelsior is a New York corporation with its principal place of business located in New York. K-C is a Delaware corporation with its principal place of business located in Texas. H-K is an Israeli joint venture controlled by K-C. K-C and H-K are referred to collectively herein as "KCC" where no distinction is made between the two in the third-party complaint.
2. The Business Arrangement
According to the third-party complaint, Excelsior, "at the express instance and request of KCC, " placed orders with Clopay for microflex embossed plastic film laminate ("the product"), pursuant to purchase orders requiring payment by Excelsior to Clopay within 30 days of delivery. After converting the product, Excelsior sold it to KCC. Excelsior used the product to imprint graphics on Huggies brand disposable diapers. (Shemesh Decl. ¶ 2.)
"Pursuant to longstanding and invariable customs and practices of the trade, " a "longstanding course of dealing between Clopay and KCC, " and "arrangements confirmed in writing by Clopay and KCC... including on or about May 1, 2010 and on or about June 28, 2010, " "[t]he parties at all times intended and agreed that increases in the costs of raw materials would be borne by KCC, not by [Excelsior]." (TP Compl. ¶¶ 9-11.) Excelsior's invoices to KCC therefore included any increased raw material costs that Excelsior had been charged by Clopay.
3. Excelsior's Failure to Pay Clopay
In January 2009, Excelsior began falling behind on its payments to Clopay. Ultimately, it failed to pay invoices for January 5, 2009 through August 25, 2009 and accrued an outstanding debt of $675, 629.01. As a result, Clopay revoked Excelsior's credit privileges.
In April 2010, Clopay resumed shipments of product to Excelsior on a cash-in-advance basis. However, because the product was cut from a roll, it was impossible to precisely match the amount of product delivered with the sum advanced by Excelsior. Consequently, a small debit or credit remained on each invoice. For invoices dated April 5, 2010 through November 17, 2010, Excelsior accrued additional debt in this manner, bringing its total debt to $692, 573.13.
Under the terms of the invoices, this debt is subject to a late charge of 1.5% per month on all invoices past due more than sixty days. At the time of the filing of this ...