State of New York v. Vayu, Inc.
2021 NY Slip Op 04068
N.Y. App. Div.2021Background
- SUNY Stony Brook (New York) contracted with Vayu, Inc. (Delaware corporation, Michigan principal place) to buy two unmanned aerial vehicles (UAVs) for medical deliveries in Madagascar; invoice billed to New York and payment remitted from New York to Vayu's Michigan account.
- Prior to the September 2016 sale, Vayu's CEO and a SUNY visiting research professor (founding director of SUNY's Madagascar Global Health Institute) exchanged emails/calls about developing UAVs and jointly pursued a grant for projects located outside New York.
- After delivery to Madagascar in November 2016 the UAVs allegedly performed poorly; SUNY returned them to Vayu in Michigan and sought replacement or a refund.
- The CEO traveled to New York in September 2017 to discuss the defects and allegedly agreed to replace the UAVs; subsequent communications between the parties continued.
- Vayu moved to dismiss for lack of personal jurisdiction (CPLR 3211[a][8]); Supreme Court granted the motion and the Appellate Division (majority) affirmed. Justice Egan Jr. dissented, concluding New York long-arm jurisdiction existed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New York has specific personal jurisdiction under CPLR 302(a)(1) | Vayu purposefully transacted business with a New York university: negotiated with NY-based professor, billed to NY, received payment from NY, contemplated ongoing relationship and support | Contacts relate to a single sale for use abroad; communications did not seek to develop Vayu's business in NY and therefore no purposeful availment | Majority: No specific jurisdiction — contacts insufficiently tied to New York and the sale was effectively one-time; dismissal affirmed (dissent disagreed) |
| Whether plaintiff's claims arise from Vayu's New York contacts (nexus requirement) | The breach/contract claims flow from negotiations, billing and post-sale efforts involving NY persons and payments | The sale and use occurred wholly outside NY (Madagascar); the dispute does not substantially arise from NY-directed activity | Majority: Nexus not satisfied — the activities were not substantially related to the claim in New York |
| Whether general jurisdiction exists over Vayu in New York | (Plaintiff did not press this) | Vayu is incorporated in Delaware and headquartered in Michigan, so it is not "at home" in NY | Court: No general jurisdiction — correctly found (Daimler standard) |
Key Cases Cited
- Rushaid v. Pictet & Cie, 28 N.Y.3d 316 (2016) (two-part CPLR 302(a)(1) inquiry: transact business and nexus)
- D & R Global Selections, S.L. v. Bodega Olegario Falcon Pineiro, 29 N.Y.3d 292 (2017) (purposeful availment and due-process limits on long-arm jurisdiction)
- Fischbarg v. Doucet, 9 N.Y.3d 375 (2007) (CPLR 302(a)(1) is a single-act statute; one transaction can suffice)
- Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65 (2006) (contacts evaluation in specific jurisdiction analysis)
- Paterno v. Laser Spine Inst., 24 N.Y.3d 370 (2014) (contacts that do not seek to advance business in NY weigh against jurisdiction)
- International Shoe Co. v. Washington, 326 U.S. 310 (1945) (due-process standard for personal jurisdiction)
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (standard for general jurisdiction; "at home" test)