Klutz v. Yagoozon Inc.

MOTION to Dismiss for Lack of Jurisdiction and Memorandum of Law. Document

S.D.N.Y.July 25, 2016

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------X : KLUTZ : : Plaintiff, : : -against- : Case No. 16-cv-4538 (JSR) : YAGOOZON INC. : NOTICE OF MOTION : TO DISMISS PURSUANT Defendant. : TO FRCP 12(b)(2) : --------------------------------------------------------------X Pursuant to F.R.C.P. 12(b)(2), defendant Yagoozon Inc. (“Yagoozon”) moves to dismiss the Amended Complaint in this action on the grounds that this Court lacks personal jurisdiction over Yagooozon. As grounds for this Motion, Yagoozon relies on the Memorandum of Law submitted herewith. WHEREFORE, Yagoozon respectfully requests that this Court dismiss the Amended Complaint. Respectfully Submitted, /s/ Jeffrey L. Levy Jeffrey L. Levy LEVY & BLACKMAN LLP 469 Angell Street, Suite 2 Providence, Rhode Island 02906 Phone: (401)437-6900 Fax: (401)632-4695 jlevy@levyblackman.com July 25, 2016 Case 1:16-cv-04538-JSR Document 16 Filed 07/25/16 Page 1 of 2 2 CERTIFICATE OF SERVICE I hereby certify that this document filed through the ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF) on July 25, 2016. /s/ Jeffrey L. Levy Case 1:16-cv-04538-JSR Document 16 Filed 07/25/16 Page 2 of 2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------X : KLUTZ : : Plaintiff, : : -against- : Case No. 16-cv-4538 (JSR) : YAGOOZON INC. : MEMORANDUM OF LAW : IN SUPPORT OF Defendant. : MOTION TO DISMISS : --------------------------------------------------------------X This is an action by a New York seller of goods, seeking payment of invoices issued to an out-of-state purchaser. The Amended Complaint does not allege any basis for this Court’s exercise of personal jurisdiction over the defendant other than the defendant’s purchase of goods from the plaintiff. However, it is well established that a transaction between a New York seller and a foreign buyer does not expose the buyer to long-arm jurisdiction in New York. For this reason, the Amended Complaint should be dismissed. FACTS For the purpose of deciding this Motion to Dismiss, the Court may take the facts alleged in the Amended Complaint as true. The Amended Complaint alleges that plaintiff Klutz is a California corporation with its principal place of business in New York. Amended Complaint, ¶4. It further alleges that defendant Yagoozon, Inc. (“Yagoozon”) is a Rhode Island corporation with its principal place of business in Florida. Amended Complaint, ¶5. According to the Amended Case 1:16-cv-04538-JSR Document 16-1 Filed 07/25/16 Page 1 of 5 2 Complaint, “The Court has personal jurisdiction over Defendant because Defendant does business in New York.” Amended Complaint, ¶7. According to the Amended Complaint, Yagoozon ordered merchandise from Klutz, accepted delivery of the merchandise, but failed to pay Klutz’s invoice in the amount of $80,854.80. Amended Complaint, ¶15-20. The Amended Complaint does not allege that Yagoozon conducted any business in New York other than purchasing goods from Klutz for retail sale on the internet. Amended Complaint, ¶10. The Amended Complaint does not allege any other contacts between Yagoozon and New York. ARGUMENT It is, of course, the plaintiff’s burden to make a prima facie showing that personal jurisdiction exists. Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir.2006). In determining whether the plaintiff has met its burden, the Court may construe the pleadings in the light most favorable to the plaintiff, but cannot “draw argumentative inferences in the plaintiff’s favor.” DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir.2001); Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59-60 (2d Cir. 2012). This Court follows New York law in determining whether it can exercise personal jurisdiction. See Stroud v. Tyson Foods, Inc., et al., 91 F.Supp.3d 381, 385 (E.D.N.Y. 2015). Under New York law, the plaintiff must make a prima facie showing of either general jurisdiction or specific jurisdiction. See Reich v. Lopez, 38 F.Supp.3d 436, 454 (S.D.N.Y. 2014). For general jurisdiction to apply, the plaintiff must at least allege that “the defendant was present and doing business in New York within the meaning of C.P.L.R. §301.” Id. There is no such Case 1:16-cv-04538-JSR Document 16-1 Filed 07/25/16 Page 2 of 5 3 allegation in the Amended Complaint, and the plaintiff does not even attempt to allege that this Court may exercise general personal jurisdiction over Yagoozon. Moreover, any exercise of general jurisdiction must satisfy the requirements of the Due Process Clause. See Pablo Star Ltd. v. The Welsh Gov’t, et al., 2016 WL 1056590 (S.D.N.Y. 2016) (Oetken, J.) (Noting that New York’s “doing business” standard for general jurisdiction may no longer be viable in light of the Supreme Court’s decision in Daimler AG v. Bauman, 134 S.Ct. 746 (2014)). “[G]eneral jurisdiction extends beyond an entity’s state of incorporation and principal place of business only in the exceptional case where its contacts with another forum are so substantial as to render it ‘at home’ in that state.” Pablo Star, Id., quoting Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 223 (2d Cir.2014). On the basis of the allegations in the Amended Complaint, this Court cannot exercise general jurisdiction over Yagoozon. Specific jurisdiction permits the Court to exercise jurisdiction over a non-resident who transacts business within New York, if the cause of action arises from that transaction. N.Y. C.P.L.R. §302(a). “A defendant transacts business in New York if it has ‘purposely availed [it]self of the privilege of conducting activities within New York and thereby invoked the benefits and protections of its law.’” Stroud v. Tyson Foods, Inc., et al., 91 F.Supp.3d 381, 389 (E.D.N.Y. 2015), quoting D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 104 (2d Cir. 2006). However, the law in New York is crystal clear: “[T]he purchase and sale transaction, whereby this in-state plaintiff shipped goods to the out-of-state defendants, who then failed to fully pay for the goods, is “[t]he classic instance in which personal jurisdiction is found not to Case 1:16-cv-04538-JSR Document 16-1 Filed 07/25/16 Page 3 of 5 4 exist” Cotia (USA) Ltd. V. Lynn Steel Corp., 134 A.D.3d 483, 484, 21 N.Y.S.3d 231 (1st Dept. 2015), quoting Spencer Laminating Corp. v. Denby, 5 Misc. 3d 200, 202 (Civ. Ct., NY County 2004, Engoron, J). See also Pacamor Bearings, Inc. v. Molon Motors & Coil, Inc., 102 A.D.2d 355, 356, 477 N.Y.S.2d 856, 857 (1984) (“The fact that plaintiff is a New York seller, and defendant a foreign buyer who sends an order to plaintiff by mail without more, does not expose defendant to long-arm jurisdiction under this provision”). In the instant case, Klutz has alleged personal jurisdiction over Yagoozon solely on the basis of their relationship as a New York seller and foreign buyer of goods. The Amended Complaint does not include any other allegations that would support this Court’s exercise of personal jurisdiction over Yagoozon. As in the Cotia case, cited supra, this is the “classic instance in which personal jurisdiction is found not to exist.” CONCLUSION Taking the facts alleged in the Complaint as true, and construing them in the light most favorable to the plaintiff, there is no basis for this Court to exercise personal jurisdiction over Yagoozon. As a result, the Amended Complaint should be dismissed pursuant to F.R.C.P. 12(b)(2). Respectfully Submitted, /s/ Jeffrey L. Levy Jeffrey L. Levy LEVY & BLACKMAN LLP 469 Angell Street, Suite 2 Providence, Rhode Island 02906 Phone: (401)437-6900 Case 1:16-cv-04538-JSR Document 16-1 Filed 07/25/16 Page 4 of 5 5 Fax: (401)632-4695 jlevy@levyblackman.com July 25, 2016 CERTIFICATE OF SERVICE I hereby certify that this document filed through the ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF) on July 25, 2016. /s/ Jeffrey L. Levy Case 1:16-cv-04538-JSR Document 16-1 Filed 07/25/16 Page 5 of 5