Calzaturificio Giuseppe Garbuio v. Dartmouth Outdoor Sports

Calzaturificio Giuseppe Garbuio S.A.S. (CGG) (plaintiff) was an Italian manufacturer of ski boots. CGG entered into a contract with Dartmouth Outdoor Sports, Inc. (Dartmouth) (defendant), a New Hampshire corporation, for Dartmouth to distribute CGG’s products. The contract provided that New York law was to govern any disputes arising from the contract and that the parties agreed that the contract would be deemed to have been made in New York. In fact, however, the contract was not made in New York. Claiming that Dartmouth owed it almost $73,000, CGG sued Dartmouth in federal court in New York pursuant to the federal court’s diversity jurisdiction. Dartmouth was not subject to personal jurisdiction in New York, but CGG asserted quasi-in-rem personal jurisdiction by attaching certain New York funds that Dartmouth’s successor as CGG’s distributor owed to Dartmouth. Dartmouth moved to vacate the attachment, arguing that New York Business Corporation Law (BCL) § 1314(b) prohibited a non-New York plaintiff from suing a foreign defendant in New York except under limited circumstances. Such circumstances were not present in this case, according to Dartmouth, because, among other things, the contract was not made in New York and the parties could not manufacture New York subject-matter jurisdiction by agreeing that the contract was entered in New York even though the contract actually was made elsewhere. Dartmouth further argued that the clause calling for New York law to govern the contract did not create a sufficient nexus to New York to support subject-matter jurisdiction because that clause addressed only choice of law and did not designate New York as the litigation forum.