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Purposeful availment found where foreign corporation solicited business beginning two year relationship
Universal Leather, LLC v. Koro AR, S.A.
Available at: http://caselaw.findlaw.com/us-4th-circuit/1685878.html
In 2009, Universal Leather, LLC (“Universal”), a North Carolina leather wholesaler, was approached by representatives from Koro AR, S.A.(“Koro”), an Argentine company selling finished leather goods. As a result of in-person solicitations at Universal’s office in North Carolina, Universal and Koro began transacting millions of dollars in business over the course of the next two years. In 2011, the relationship faltered, and Universal brought suit against Koro in the North Carolina State Court alleging breaches of contract for late deliveries, nonpayment of certain shipping costs, impermissible price increases and defective products.
Koro removed the action to Federal Court and filed a Motion to Dismiss for lack of personal jurisdiction, including affidavits of its employees stating that Koro did not have offices, property or businesses in the United States, that it had never sent representatives to the United States, and that all the work under the contracts were performed in Argentina. The goods were all sent “F.O.B.,” requiring acceptance of the goods in Argentina. Universal opposed the motion with affidavits stating that Koro had sent representatives to Universal’s offices in April 2010, and one of the representatives returned at least six (6) times between 2009 and 2010 for the purpose of soliciting business from Universal. Universal also maintained that Universal and Koro were in regular email contact and had transacted over $5 Million in business.
The Magistrate Judge, in reviewing the conflicting affidavits, found that Koro had not purposefully availed itself of North Carolina jurisdiction, noting that no contract was entered while Koro’s employees were in North Carolina, the contracts were all performed in Argentina and the terms of the shipments declined responsibility for the goods outside of Argentina. The email communications did not satisfy the necessary minimum contacts, and the representatives’ in-state contacts were not automatically sufficient. The Court agreed with the Magistrate Judge’s conclusions and dismissed the case. Universal appealed the dismissal.
Universal, __ F.3d at 3. North Carolina’s long arm statute permits jurisdiction to the extent permitted by due process under the Constitution, so the Court was only required to conduct one analysis. N.C. G.S. § 1-75.4(1)(d). The Court also observed that Universal had claimed that jurisdiction was based on “specific jurisdiction,” and stated
Universal, __ F.3d at 4 (internal citations removed). The Court observed that the trial court had only conducted analysis as to the first prong and limited its own analysis accordingly. The Court noted that the minimum contacts analysis was case specific and in the business context the court looked at eight (8) factors:
Id. Typically, a foreign defendant has been found to have purposely availed itself of the jurisdiction when these factors have demonstrated that the defendant substantially collaborated with the resident and that venture is the basis for the dispute.
In finding that Universal had met its prima facie burden of demonstrating purposeful availment, the Court held that Universal was entitled to the benefit of the inferences on contested facts, since there had been no evidentiary hearing prior to the grant of the motion to dismiss. The Court held that the facts proffered by Universal, when considered as a whole, including the allegations that Koro initiated the contacts and repeatedly reached into the forum to transact business, were sufficient to demonstrate purposeful availment. The Appellate Court expressly refused to address the remaining two prongs of the personal jurisdiction analysis and remanded the matter with instructions for the trial court to complete the analysis.
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