On January 17, 2024, the New Jersey Appellate Division issued a decision in Allure Pet Prod., LLC v. Donnelly Mktg. & Dev. LLC, in which it found that the trial court had appropriately exercised personal jurisdiction over a Utah-based company and its owner. The Utah based company had entered into a contract with the plaintiff, a pet product supplier from New Jersey to reserve exhibition space at a biannual trade show in Germany scheduled for 2020. The trade show was then postponed because to the COVID-19 pandemic. However, the company and its owner refused to refund the payment made by the plaintiff or apply it to the rescheduled show in 2022.
The defendants claimed that the New Jersey courts could not exercise jurisdiction over them to hear the case because they did not have the necessary "minimum contacts" to be sued in New Jersey. They emphasized that the plaintiff had initially initiated their business relationship in 2011 by requesting the defendant company to arrange space at a previous trade show in 2012. Additionally, the defendants contended that compelling them to litigate this civil case in a state as distant from Utah as New Jersey would violate constitutional principles of fair play and substantial justice.
The plaintiff, trial court, and ultimately, the Appellate Division disagreed with the defendants. Although it was undisputed that the New Jersey courts could not exercise general jurisdiction over the defendants because such jurisdiction could only be exercised when a defendant has such “continuous and systematic" affiliations with the forum state as essentially render the non-resident defendant “at home in the forum state,” the trial court and the Appellate Division found that the New Jersey courts could exercise specific jurisdiction over the defendants.
In its decision, the Appellate Division explained that the existence of specific jurisdiction hinges on the connection between the defendant, the forum, and the litigation. For specific jurisdiction to exist the legal dispute must arise from or relate to the defendant’s contacts the state. In other words, there must be “minimum contacts” stemming from the defendant's purposeful conduct, not the plaintiff's unilateral activities. The court noted that even a single act can establish jurisdiction if the defendant forms a “substantial connection” with the forum state.
The appellate court explained that courts must analyze whether the defendant should reasonably anticipate being brought to court in the forum state when determining the issue specific jurisdiction. This often requires a fact-sensitive analysis that ensure that the extension of jurisdiction is reasonable and aligns with "traditional notions of fair play and substantial justice.” Courts must consider the burden on the defendant, the interests of the forum state, and the plaintiff's interest in obtaining relief. Additionally, courts must weigh the interstate judicial system's interest in efficiently resolving controversies and the shared interest of multiple states in advancing fundamental substantive social policies.
The Appellate Division applied these principles and found that the defendants had a sufficient minimum level of contacts with the plaintiff and other New Jersey customers to support specific jurisdiction in New Jersey, even though it had been the New Jersey plaintiff that had first initiated the business relationship. The defendants had engaged in repetitive actions in soliciting and re-soliciting the plaintiff to renew trade show business every two years for at least eight years. As such, the defendants "purposefully availed" themselves of the benefits of that commercial relationship.
The court further noted that the defendants knew they were dealing with a repeat customer located in New Jersey and that they had not included a forum selection clause in their form contract, which could have required disputes to be litigated in Utah or some other designated venue.