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Diamond Crystal Brands, Inc. v. Food Movers Int'l - 593 F.3d 1249 (11th Cir. 2010)

Rule:

In specific jurisdiction cases, the fair warning requirement is satisfied if a defendant has purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities. Put differently, the defendant must have "purposefully availed" itself of the privilege of conducting activities--that is, purposefully establishing contacts--in the forum state and there must be a sufficient nexus between those contacts and the litigation. Once this showing is made, a defendant must make a compelling case that the exercise of jurisdiction would violate traditional notions of fair play and substantial justice. 

Facts:

This action was brought by Diamond Crystal Brands, Inc. and Diamond Crystal Sales, LLC (Plaintiffs) against defendant Food Movers International, Inc. alleging nonpayment for two shipments of Splenda Brand sweetener. Diamond Crystal Brands, Inc., an international seller of sugar and other sweetening products, is a Delaware corporation that maintains a facility in Savannah, Georgia. Diamond Crystal Sales, LLC is a Delaware limited liability sales company qualified to do business in Georgia and is under common ownership with Diamond Crystal Brands. Defendant Food Movers is a food distribution company that purchases bulk food products from manufacturers for immediate resale to retail and other distributor customers. It is a California corporation with its sole place of business in Benicia, California. Food Movers has no offices, distribution centers, or personnel outside the state of California, and its employees do not travel outside of California to conduct business.

Issue:

Did the district court err when it failed to dismiss the action on the basis of lack of personal jurisdiction in the person of defendant corporation?

Answer:

No

Conclusion:

The nonresident corporation transacted business in Georgia by sending purchase orders to the manufacturer in Georgia, requesting delivery by customer pickup at the manufacturer's plant in Georgia, directing third parties to accept delivery of the goods in Georgia, taking legal title to the goods in Georgia, and promising to pay money into Georgia on the two shipments in question. Thus, personal jurisdiction was appropriate under the long-arm statute, O.C.G.A. § 9-10-91(1). The nonresident corporation also purposefully established sufficient minimum contacts with Georgia and should have anticipated defending a suit there. It established a substantial and ongoing relationship with the manufacturer by engaging in 14 transactions in six months, each of which involved contacts with Georgia. Each purchase order specified delivery by customer pickup, and the nonresident corporation allowed its customers to take delivery of the goods in Georgia. Because the nonresident corporation did not pay for two of the shipments its customers picked up, it caused foreseeable injury to the manufacturer in the forum. Thus, exercise of jurisdiction satisfied the Fourteenth Amendment's Due Process Clause. The judgment of the district court denying the nonresident corporation's motion to dismiss for lack of personal jurisdiction was affirmed.

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