Allied Dynamics Corp. v. Kennametal, Inc.
2013 U.S. Dist. LEXIS 126140
E.D.N.Y2013Background
- Allied Dynamics (NY) contracted with Microfusione Stellite S.p.A. (MFS, Italy) beginning 2007 to produce complex turbine blades; Allied supplied costly tooling and paid for testing.
- Allied placed multiple purchase orders (2008–2011); MFS allegedly delayed, delivered defective parts, and failed to complete orders, causing Allied lost sales and customers.
- Allied alleges breach of contract, negligent misrepresentation, fraud, and replevin (for tools MFS allegedly retained). Kennametal later acquired MFS and became involved in communications and attempted resolutions.
- Defendants moved to dismiss for (1) lack of personal jurisdiction over MFS (Fed. R. Civ. P. 12(b)(2)), (2) improper venue/ forum non conveniens due to a Milan forum-selection clause (12(b)(3)), and (3) failure to state claims (12(b)(6)).
- The Court denied the 12(b)(2) motion as to MFS, finding a prima facie showing of long-arm jurisdiction under N.Y. C.P.L.R. § 302(a)(1) and that exercise of jurisdiction satisfies due process; it deferred resolution of venue and 12(b)(6) motions and ordered an evidentiary hearing because disputed facts exist about whether the Milan forum-selection clause was part of the parties’ contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over MFS (§ 302(a)(1)) | MFS contracted to supply goods to NY and shipped defective goods; substantial negotiations and contacts occurred in NY | MFS lacked physical presence in NY; contracts were formed/performed in Italy | Court: Denied 12(b)(2). Allied made a prima facie showing under both "contracting to supply goods" and "transacting business" prongs of § 302(a)(1) |
| Due process (minimum contacts / reasonableness) | MFS purposefully availed by negotiating in NY, shipping goods, and maintaining ongoing relationship; NY has interest; Allied’s witnesses are in NY | Forum burden on MFS (foreign defendant) | Court: Minimum contacts satisfied; reasonableness factors favor NY or are neutral; jurisdiction constitutional |
| Venue / enforceability of forum-selection clause (Milan) | Either never received clause or clause was sent after contract formation so not part of agreement | MFS sent order confirmations containing Terms & Conditions (including exclusive Milan clause) that became part of the contract | Court: Disputed facts about when/if Allied received/assented to the clause; cannot resolve on the papers; evidentiary hearing required before deciding 12(b)(3) and related forum non conveniens issues |
| Forum non conveniens alternative | N/A (focus is enforcing forum clause or litigating in NY) | If clause unenforceable, defendants argue Italy is more appropriate forum | Court: Cannot apply forum non conveniens analysis until clause validity/resolution after evidentiary hearing |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (due process: purposeful availment and contractual contacts)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980) (foreseeability and being haled into court)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. 1972) (presumption of enforceability for valid forum-selection clauses)
- Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (U.S. 1987) (reasonableness factors in jurisdiction analysis)
- Sunward Elecs., Inc. v. McDonald, 362 F.3d 17 (2d Cir. 2004) (factors for transacting business under N.Y. CPLR § 302)
- Mario Valente Collezioni, Ltd. v. Confezioni Semeraro Paolo, S.R.L., 264 F.3d 32 (2d Cir. 2001) ("contracting to supply goods" supports § 302(a)(1) jurisdiction)
- Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779 (2d Cir. 1999) (contracting to supply goods and foreseeability in jurisdiction analysis)