Additional Jurisdictional Discovery Ordered Against India and Hong Kong Defendants on Copyright Infringement and Unfair Competition Claims

The World in U.S. Courts: Winter 2015 - Personal Jurisdiction

International Diamond Importers Inc. d/b/a Meira T. Designs v. Oriental Gemco (NY), Inc. et al., U.S. District Court for the Southern District of New York, November 24, 2014

Plaintiff Meira T. Designs, a jewelry manufacturer and seller, sued defendants Oriental Gemco HK Co., located in Hong Kong, Oriental Gemco Pvt. Ltd., located in India, and Oriental Gemco (NY), Inc., located in New York, asserting claims including copyright infringement and federal and state law unfair competition. The non-U.S. defendants moved to dismiss the suit for lack of personal jurisdiction, and plaintiff cross-moved for jurisdictional discovery.

The Court noted that the relationship between the various defendant entities was unclear. Plaintiff asserted the three companies made up one organization with manufacturing in Hong Kong and India and its sales office in New York, while defendants claimed that the Oriental Gemco companies were three separate companies which sold jewelry in different countries, and thus that jurisdiction over each must be assessed individually.

The Court first analyzed general jurisdiction, explaining that a non-U.S. corporation is subjected to general jurisdiction in New York if it is doing business in the state and its contacts are so continuous and systematic as to render it essentially “at home” there. New York Courts may also assert general jurisdiction over a non-U.S. parent company if it has a domestic "agent" that renders services of sufficient importance to the non-U.S. parent in the state. Finally, New York Courts may assert general jurisdiction over a non-U.S. company when its in-state domestic affiliate is so dominated by the defendant as to be its “alter ego.”

The Court found that the "doing business" standard was not satisfied, as plaintiffs did not allege that the defendants’ operations in New York were "so substantial and of such a nature as to render the corporation at home in that State." The agency standard could not be applied, as even if Oriental NY could be characterized as the non-U.S. defendants' domestic agent, its activities in the New York were insufficient to overcome the due process concerns posed by haling non-U.S. companies into an American Court. However, the Court acknowledged the possibility that plaintiff might demonstrate jurisdiction under an alter-ego theory, and ordered discovery to determine how the Oriental Gemco companies were in fact interrelated.

The Court then examined specific jurisdiction. It explained that in order to establish specific jurisdiction, the plaintiff must demonstrate that its claim arises out of, or relates to, the defendant's contacts with the forum and the exercise of jurisdiction must comport with the Due Process Clause of the U.S. Constitution. The Court stated that the reasonableness inquiry required that it consider (1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies.

The Court concluded that, to establish specific personal jurisdiction, Plaintiff Meira T. would need to show either the that the non-U.S. Oriental Gemco companies or their agents committed tortious acts in New York or that Oriental NY committed tortious acts in New York as the non-U.S. defendants’ agent. Meira T. alleged that the non-U.S. Defendants "attend trade shows in New York, Las Vegas and Hong Kong at least four times a year,” and the Court granted jurisdictional discovery to establish whether those contacts involved the commission of tortious acts in New York.

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