844 F. Supp. 2d 366
S.D.N.Y.2012Background
- Yoku Energy Technology Ltd. is headquartered in Hong Kong and operates a China plant; its batteries are distributed worldwide including the U.S.
- NCS Power, Inc. acted as Yoku’s agent/sales representative in North America under a written Agreement requiring Yoku approval for each order.
- NCS solicited New York customers; UTC Fire & Security Americas Corp. placed orders for custom-designed lithium-ion batteries via NCS; UTC delivered batteries to Salem, Oregon, for distribution.
- In 2009, 21 UTC ActiveKEY batteries malfunctioned; UTC incurred costs to replace about 35,000 batteries and implement a firmware solution; UTC alleges $8 million in remedial costs.
- NCS/UTC filed suit in this Court; Yoku moved for summary judgment asserting lack of personal jurisdiction; the Court denied Yoku’s motion after evaluating general and specific jurisdiction and due process.
- The case proceeds on third-party claims asserting breach of contract, negligence, and related theories against Yoku, with the court focusing on jurisdictional questions under New York law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court has general jurisdiction under CPLR § 301 | NCS argues Yoku’s New York solicitation and presence suffice | Yoku contends lack of domicile, property, or permanent NY presence | No general jurisdiction under § 301 |
| Whether the Court has specific jurisdiction under CPLR § 302(a)(1) | NCS argues NY contracts and foreseeability of NY entry support jurisdiction | Yoku contends no nexus between NY contracts and the dispute | No specific jurisdiction under § 302(a)(1) |
| Whether the Court has specific jurisdiction under CPLR § 302(a)(3) | NCS alleges injury in New York from defective batteries and substantial NY revenues | Yoku disputes injury in NY and argues stream-of-commerce concerns | Yes, under § 302(a)(3) despite not having general jurisdiction |
| Whether exercising jurisdiction comports with due process | Minimum contacts through NY sales and large distribution show availment | Yoku challenges purposeful availment in NY | Yes, jurisdiction is constitutional under due process |
| What is the appropriate standard for resolution of jurisdiction on summary judgment | Prima facie showing suffices pre-discovery | No sufficient showing of jurisdiction | Plaintiff prima facie showing accepted; summary judgment denied on jurisdictional question. |
Key Cases Cited
- Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779 (2d Cir. 1999) (long-arm due process and minimum contacts analysis)
- Johnson v. Ward, 4 N.Y.3d 516 (2005) (requirement that cause of action arise from in-state transaction for CPLR 302(a)(1))
- Landoil Resources Corp. v. Alexander & Alexander Svcs., Inc., 918 F.2d 1039 (2d Cir. 1990) (solicitation-plus and in-state presence indicia for general jurisdiction)
- McGowan v. Smith, 52 N.Y.2d 268 (1981) (test for general jurisdiction requires permanence and continuity)