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Peruvian Company Subject to Personal Jurisdiction in New York, authored by Stephen Brodksy

Foreign companies — beware the long arm of New York’s long-arm statute!  You may be subject to jurisdiction in New York through any purposeful contact with the state.  Albright v. Daily Harvest, Inc., 2023 U.S. Dist. LEXIS 15178 (S.D.N.Y. Aug. 25, 2023), issued last month is a cautionary tale.

In Albright, the United States District Court for Southern District of New York held that a shipment of flour sufficed for personal jurisdiction.  While it was a personal injury action, the case involves principles that apply for commercial cases more generally.  Personal jurisdiction may arise based upon even limited contact with a United States jurisdiction, the key is the purposeful nature.

The case involved a Peruvian company whose flour was used in the end product at issue.  The defendant knew its flour would be used downstream.  It also used New York companies for the import of its flour.  However, it claimed it had had no reason to believe its products would be sold to New York consumers because its sales contract was with a Colorado company. The Southern District disagreed and held the defendant was subject to jurisdiction in New York.  The Court applied New York’s long-arm statute.  That statute, like many state jurisdictional statutes, imposes jurisdiction over a non-domiciliary that “transacts any business within the state” or “anywhere to supply goods or services in the state.” N.Y. C.P.L.R. § 302(a)(1).   Based on the chain of distribution and contract documents, the Southern District held the defendant had sufficient contact with New York to be subject to jurisdiction in the state.

This case is a cautionary tale for foreign companies.  Your products and services in United States markets may result in jurisdiction.  Your chain of distribution and contracts (even the contracts between your agents and others) may suffice.