As illustrated in a decision by the New York Supreme Court in Five Star Logistics LLC v. Innovasian Cuisine Enters. Inc., Index No. 653357/2022 (N.Y. Sup. Ct. Nov. 22, 2022), a New York choice of law provision, standing alone, will not confer personal jurisdiction over a defendant.
In Five Star Logistics LLC, plaintiff, a Florida logistics company, brought a breach of contract action in New York against defendant, a Washington-based corporation that sells Asian food products to grocery and convenience stores, based on the New York choice of law provision in the parties’ contract. Defendant, in turn, moved to dismiss, arguing that, absent a forum selection clause, it lacked sufficient contacts to New York to be compelled to litigate in New York. The court agreed and dismissed the action.
This case underscores that a choice of law clause is not equivalent to a forum selection clause. It cannot be used as implicit consent to litigate in the forum whose laws are being relied upon for adjudication. Standing alone, a choice of law provision is insufficient to warrant the exercise of New York’s long-arm jurisdiction, and, here, the court noted that plaintiff did not even attempt to demonstrate the nexus between defendant’s alleged breach and New York.
Although plaintiff in Five Star Logistics LLC may be correct that New York courts are best suited to handle an action involving New York law, that fact is not sufficient to compel a defendant without minimum contacts to litigate in New York.
If you have any questions about personal jurisdiction issues, please contact Michael C. Rakower or Melissa Yang.
Five Star Logistics (Archival)