State of New York v. Vayu, Inc., 2

Vayu, Inc., a Delaware corporation based in Michigan, sold two unmanned aerial vehicles (UAVs) to SUNY Stony Brook in 2016; the drones were shipped directly from Michigan to Madagascar.
After delivery the UAVs malfunctioned; SUNY Stony Brook (through Dr. Peter Small) and Vayu communicated by phone and email and Vayu’s CEO traveled to New York in 2017 to meet Small and discuss resolution.
The parties agreed (by email) that Vayu would replace the drones and train staff; SUNY returned the drones to Vayu in Michigan but Vayu did not replace them or refund the purchase price.
New York commenced suit on SUNY’s behalf alleging breach of contract; Vayu moved to dismiss for lack of personal jurisdiction under CPLR 302(a)(1).
Supreme Court granted dismissal and the Appellate Division affirmed; the Court of Appeals reversed, holding Vayu purposefully transacted business in New York and that exercising jurisdiction comported with due process.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CPLR 302(a)(1) authorizes jurisdiction over Vayu ("transacts any business within the state")	Vayu purposefully availed itself of New York by soliciting and negotiating with SUNY, engaging in multi-year communications, submitting a USAID grant naming SUNY as a partner, invoicing to a NY address, accepting NY-originating payment, and sending its CEO to New York to further the relationship	The sale was negotiated and finalized outside New York, initiated by SUNY’s agent; communications were largely responsive; drones were manufactured in Michigan and sent to Madagascar—Vayu did not project itself into New York to transact business	Court of Appeals: Contacts were purposeful and of sufficient quality to satisfy CPLR 302(a)(1); Vayu transacted business in New York (motion to dismiss denied)
Whether exercising jurisdiction would satisfy federal due process (minimum contacts and fairness)	Vayu should have anticipated suit given its ongoing, targeted relationship with a NY public university, the in-state communications, and the CEO’s trip to NY; forum defense is reasonable	Litigation in NY would be unfair and burden Vayu because the contract was formed and performed outside NY and concerned goods shipped to Madagascar for non‑New Yorkers	Court of Appeals: Due-process test satisfied—Vayu had minimum contacts and defending suit in NY comported with fair play and substantial justice

Paterno v. Laser Spine Inst., 24 N.Y.3d 370 (NY 2014) (purposeful availment and quality of contacts analysis under CPLR 302(a)(1))
Fischbarg v. Doucet, 9 N.Y.3d 375 (NY 2007) (volitional acts and availing privilege test)
Licci v. Lebanese Canadian Bank, SAL, 20 N.Y.3d 327 (NY 2012) (closely examining contact quality for purposeful availment)
Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65 (NY 2006) (electronic means projecting defendant into NY marketplace supports jurisdiction)
Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13 (NY 1970) (single purposeful transaction via telephonic participation in NY auction)
George Reiner & Co. v. Schwartz, 41 N.Y.2d 648 (NY 1977) (physical presence and contract formation in NY supporting jurisdiction)
D & R Global Selections, S.L. v. Bodega Olegario Falcon Pineiro, 29 N.Y.3d 292 (NY 2017) (articulable nexus requirement between NY activities and cause of action)
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980) (anticipation of being haled into forum)
Walden v. Fiore, 571 U.S. 277 (U.S. 2014) (contacts must be defendant's own; plaintiff's forum contacts insufficient)
International Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts and traditional notions of fair play)
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (contractual relationships and purposeful availment analysis)