Integrity International, Inc. v. HP, Inc.
1:17-cv-00794
N.D.N.Y.Nov 1, 2017Background
- Plaintiff Integrity International, a Texas corporation based in Houston, provided services to Compaq/HP under written contracts from 1994; disputes arose after defendants allegedly began late payment practices around 2010.
- Integrity asserts defendants changed payment terms in 2011, continued late payments, forced audits (costing Integrity over $100,000), canceled or failed to renew contracts, and by mid-2016 had terminated all work, leaving unpaid late fees.
- Plaintiff sued HP, Inc. and Hewlett Packard Enterprise (both Delaware corporations) in the Northern District of New York for breach of contract; the contract pleads a mandatory forum-selection clause referring to "the ordinary courts of New York."
- Defendants moved under Fed. R. Civ. P. 12(b)(2) and 12(b)(3) to dismiss for lack of personal jurisdiction and improper venue (and alternatively sought transfer under 28 U.S.C. § 1406(a) to the Southern District of Texas, Houston Division).
- Plaintiff filed a one-paragraph letter stating it did not oppose dismissal of its complaint (but reserved objections); it did not meaningfully oppose defendants’ jurisdictional and venue arguments.
- The court found the complaint contained no factual allegations tying the conduct underlying the claims to New York, concluded the forum-selection clause as pleaded referred only to state courts, and dismissed the complaint for lack of personal jurisdiction and improper venue; it declined to transfer under § 1406(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction | Integrity relied on forum-selection clause and pleaded defendants do business in NY | No sufficient contacts with NY; lack of conduct giving rise to suit in NY | Dismissed for lack of personal jurisdiction — complaint lacks prima facie basis for jurisdiction |
| Venue (forum-selection clause) | Clause requires litigation in "the ordinary courts of New York" — supports venue in this federal forum | Clause is a reference to state-court sovereignty and does not establish federal venue; venue improper under § 1391(b) | Dismissed for improper venue; clause as pleaded does not create federal venue |
| Transfer under 28 U.S.C. § 1406(a) | Plaintiff did not oppose dismissal; suggested New York forum clause might apply | Defendants asked transfer to SDTX (Houston) as proper forum and more convenient | Transfer denied as not clearly in interest of justice; court exercised caution given plaintiff's terse position and chose dismissal instead of transfer |
| Effect of plaintiff’s failure to contest | Plaintiff’s sparse submission asked dismissal but reserved objections | Defendants argued waiver of forum clause and sought transfer, not dismissal | Court treated plaintiff’s failure to meaningfully oppose as supporting dismissal; declined to find waiver and dismissed case |
Key Cases Cited
- Daimler AG v. Bauman, 134 S. Ct. 746 (U.S. 2014) (distinguishes general and specific personal jurisdiction standards)
- Brown v. Lockheed Martin Corp., 814 F.3d 619 (2d Cir. 2016) (discusses specific vs. general jurisdiction and forum-state law for jurisdictional questions)
- International Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (due process limits on personal jurisdiction)
- Gulf Insurance Co. v. Glasbrenner, 417 F.3d 353 (2d Cir. 2005) (venue/jurisdiction motion standard and comparison to Rule 12(b)(3))
- Metro. Life Ins. Co. v. Robertson–Ceco Corp., 84 F.3d 560 (2d Cir. 1996) (plaintiff bears burden to show jurisdiction on Rule 12(b)(2) motion)
- Dorchester Financial Securities, Inc. v. Banco BRJ, S.A., 722 F.3d 81 (2d Cir. 2013) (court may consider materials beyond the pleadings on jurisdictional motions)
- Minnette v. Time Warner, 997 F.2d 1023 (2d Cir. 1993) (dismissal vs. transfer under § 1406(a) is within court's discretion)
- Gibbons v. Fronton, 661 F. Supp. 2d 429 (S.D.N.Y. 2009) (factors for whether transfer under § 1406(a) is in interest of justice)
- Leviton Mfg. Co., Inc. v. Reeve, 942 F. Supp. 2d 244 (E.D.N.Y. 2013) (forum-selection clauses can constitute consent to personal jurisdiction)
