Though New Jersey Plaintiff, Not Utah Defendant, Originated Their Business Relationship, New Jersey Still Has Personal Jurisdiction Over Defendant

Allure Pet Products, LLC v. Donnelly Marketing & Development LLC, ___ N.J. Super. ___ (App. Div. 2024). Today’s opinion by Judge Sabatino in this case dealt with the question of personal jurisdiction over defendants, a Utah company and its owner, to address the claim of the New Jersey plaintiff. In summary, the company “entered into a contract to reserve exhibition space for plaintiff, a New Jersey pet product supplier, at a biannual trade show in Germany planned for 2020. The trade show was eventually postponed because of the COVID-19 pandemic, and the company and its owner declined to refund plaintiff’s payment or apply it to the next show in 2022.”

Beyond that, the parties had a history, as “plaintiff originally initiated the parties’ relationship in 2011 by asking defendants to arrange for space at an earlier trade show in 2012. In moving to dismiss the case for lack of personal jurisdiction, defendants placed great emphasis on that fact. But Judge Sabatino detailed the fact that “the Utah defendants sought and procured renewal contracts with plaintiff for the next four biannual trade shows, including 2020. In addition, the Utah defendants repeatedly solicited new or renewal business from at least ten other New Jersey pet companies during that time frame.”

The Law Division declined to find general jurisdiction over defendants. But that court concluded that there was specific personal jurisdiction, stating “in particular, that the complaint alleges a contract involving a New Jersey company.” Defendants sought reconsideration, but the Law Division denied that relief, this time noting “plaintiff’s argument that the discovery showed defendants ‘were conducting business with New Jersey-based pet products entities over the course of [eight] years.” Defendants obtained leave to appeal, but today the Appellate Division affirmed.

Judge Sabatino provided a discussion of the general principles of personal jurisdiction, which require that a defendant have “minimum contacts” with the forum state and that jurisdiction in the forum would not violate “traditional notions of fair play and substantial justice.” The parties agreed that there was no general jurisdiction over defendants. But there was specific jurisdiction, the panel concluded. “[I]t is abundantly clear that defendants engaged in the minimum level of contacts with Allure (and with other New Jersey customers) sufficient to support specific jurisdiction in this state. By their repetitive actions in soliciting and re-soliciting Allure to renew trade show business every two years for at least eight years, defendants ‘purposefully availed’ themselves of the benefits of that commercial relationship. Defendants leveraged their role as the apparent exclusive broker of exhibition space in the United States Pavilion. They further promoted that business by extending ‘special offers’ to entice Allure and other returning customers.”

Judge Sabatino recognized that it is often the case when personal jurisdiction is found that the defendant “initiated the very first contact with the plaintiff in the forum state.” But “such first contact is not always jurisdictionally dispositive.” Nor was there any violation of fair play or substantial justice. “Defendants knew they were dealing with a repeat customer located in New Jersey. They did not include a forum selection clause in their form contract, which could have required disputes to be litigated in Utah or some other designated venue.”

Finally, there was no unfair burden on defendants. “[T]his is a non-jury case involving a modest amount of money and a limited number of witnesses.” The deposition of the defendant owner was taken remotely, and defendants had the ability to request that other depositions and/or the bench trial be conducted remotely as well, subject to the trial court’s discretion. Judge Sabatino observed that the Appellate Division was not adopting “the motion judge’s express reasoning that hinged upon the complaint’s reference to the existence of the contract,” but was affirming based on the substantial purposeful availment rationale referred to in the Law Division’s ruling on the motion for reconsideration.