When a company registered in one state incurs losses due to the fault of a company registered in another state, it may be unclear how to resolve the dispute legally. In the case of Great Vegetables, Corp. there are three possible guilty parties, two of which have not physically operated in the plaintiff’s state, which is New York State. While justice must be served, it is questionable whether the New York State court has personal jurisdiction over each defendant.
Personal jurisdiction can be helpful in cases like Great Vegetables, Corp.; however, there are special requirements for the state to have personal jurisdiction. The state court can have personal jurisdiction over the defendant if they have certain “minimum contacts” with the state (Nash, 2019, p. 512). Relevant minimum contacts include, among others, the harm experienced in the state where the court is sited (Nash, 2019). Great Vegetables, Corp. had a purchase agreement and an invoice for payment with Texas Tomatoes, Inc., a contract for the supply with the truck driver, and a shipment arrangement with the truck broker. All these arrangements can be eligible for the required minimum contacts giving New York State personal jurisdiction over each defendant. Moreover, the fact that the tomatoes were rotten was discovered when they arrived at Great Vegetables, Corp., meaning the damage was done in the state of New York. Since the time by which the tomatoes had rotten is not traced, the state can exert personal jurisdiction over all the defendants.
While “minimum contacts” is one of the conditions under which a court can have personal jurisdiction over defendants, it requires, as said in the post, “commercial activities in the state where the court is located” (Li). However, the Texas company and the truck broker did not physically operate in New York State, thus eliminating the requirements of minimum contacts. Despite the contracts between the companies, some aspects need to be considered before assuming that the state can manage the jurisdiction over the defendants.
As stated in the case, the summons on the defendants was served outside New York State. However, Fourteenth Amendment limits the court’s ability to have personal jurisdiction when the court tries to assert jurisdiction outside its territorial limits (Nash, 2019). New York State court can manage jurisdiction over neither of the defendants since none of them were served properly, and two of them were not in the state during the purchase or shipment processes.
Since all the participants of the business activity benefit from it, so does the plaintiff. Assuming that the negligence of the defendants caused the plaintiff’s losses is not fair when there is no strong evidence. Courts can have personal jurisdiction over defendants if the harm is experienced in the state where the court is sited (Nash, 2019). However, the harm, being the rotten tomatoes, could have occurred at any moment before arriving in New York State. When signing the contracts Great Vegetables, Corp. should have ensured that the quality of the tomatoes would be checked at certain points of the shipping to minimize possible losses. The company should also have sent its representatives to each location to make sure that conditions of carriage are respected. Otherwise, there is a possibility that Great Vegetables, Corp. did not take all necessary measurements for the successful shipping and might have waited to discover the harm only after the arrival. In this case, if the court has personal jurisdiction over the defendants, the plaintiff may get back its money and even receive compensation for the damage indicating that it could have happened on purpose.
Li, Y. (n.d.). Minimum contacts principle. [Online forum post].
Nash, J. R. (2019). National Personal Jurisdiction. Emory Law Journal, 68(3), 509–562.