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Need a Hand? How to Sue or Defend a Foreign Manufacturer (NY)

May 13, 2021

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<p style="text-align: justify;"><em><a href="https://www.wcmlaw.com/wp-content/uploads/2021/05/Arkadiusz-Piotrowicz-v.-Techtronic-Indus.-North-Am.-Inc..pdf">Arkadiusz Piotrowicz v. Techtronic Indus. North Am., Inc.</a>,</em> 19 Civ. 11522 (KPF) (SDNY Apr. 30, 2021) is a federal diversity action, wherein Plaintiff seeks damages against numerous defendants for injuries sustained while using a Ryobi-brand miter saw that was purchased from a Home Depot in New York City. Plaintiff allegedly severed his left hand while operating the saw, which was reattached but has caused serious complications. Plaintiff’s suit sounded in strict products liability, negligence, and breach of warranty. The instant Rule 12(b)(2) motion to dismiss was brought by Defendant P&amp;F Brother Industrial Corp. (“P&amp;F”), which argued it was not subject to the Court’s personal jurisdiction, since its principal place of business and headquarters are located in Taiwan.</p>
<p style="text-align: justify;">It is well established that exercising personal jurisdiction over a foreign corporation in a federal diversity action is determined in accordance with: (1) the laws of the state where the federal court sits; and (2) the Due Process clause of the United States Constitution. CPLR § 302(a) is New York’s applicable long arm statute, which is satisfied if a tortfeasor or its agent commits a tortious act outside of New York that injures someone in New York and either: (i) the tortfeasor regularly does or solicits business, engages in another persistent course of conduct, or derives substantial revenue from goods used, consumed, or services rendered in New York; or (ii) the tortfeasor expects (or should reasonably expect) the act to have consequences in New York and derives substantial revenue from interstate or international commerce. Once satisfied, the Court determines if personal jurisdiction comports with constitutional due process – <em>i.e.</em>, whether the defendant maintained “minimum contacts” with New York, and whether personal jurisdiction comports with “traditional notions of fair play and substantial justice.” When a Plaintiff alleges facts supporting a colorable claim of jurisdiction, district courts have considerable discretion in how to handle jurisdictional questions and may permit limited discovery with respect to the jurisdictional issue.</p>
<p style="text-align: justify;">Here, P&amp;F’s motion was supported by a declaration, which essentially denied all contacts with New York by stating, <em>inter alia</em>, P&amp;F: is a company headquartered in Taiwan, which is organized and existing under Taiwan’s laws; is not registered to do business in New York; does not transact business or have an office, bank account, or employees in New York; does not solicit business in New York; does not sell or ship products directly to purchasers in New York; and did not enter into any contracts in New York or with other co-defendants to deliver Ryobi-brand saws in New York. Plaintiff responded by pointing to allegations that P&amp;F knowingly participated in a chain of commercial manufacturing and distribution, which resulted in the sale of tens of thousands of saws in the United States, with some of those sales occurring in New York – including the subject saw ultimately sold to Plaintiff at the Home Depot in NYC. Plaintiff’s position was supported with the pleadings and Rule 26 disclosures of other parties, which indicated the subject saw was indeed manufactured by P&amp;F in Taiwan, and that through a chain of distribution, Home Depot sold over 41,000 units of the saw’s model in the United States during 2007. Ultimately, the Court concluded Plaintiff’s allegations and these other revelations were sufficient to permit limited discovery, for purposes of resolving whether personal jurisdiction may be exercised over P&amp;F.</p>
<p style="text-align: justify;">The main takeaways from<em> Piotrowicz </em>are threefold: (1) establishing personal jurisdiction over foreign corporations requires carefully pleaded allegations; (2) defending a foreign corporation and its holding companies against personal jurisdiction maintains its own set of landmines; and (3) federal courts may be more inclined to grant limited discovery to resolve these murky jurisdictional issues, rather than issuing a dispositive adjudication that could be ripe for appellate review (and would make for a confusing law school final examination).</p>
<p style="text-align: justify;">Thanks to John Amato for his contribution to this post.  If you have any questions or comments, please contact <a href="mailto:chayes@wcmlaw.com">Colleen Hayes</a>.</p>

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