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The Business Court Tackles Jurisdiction and Forum Non Conveniens Issues

The Tennessee Business Court found occasion to deal with personal jurisdiction and forum non conveniens issues through its recent written opinion in Nissan North America, Inc. v. Tustin Import Auto Sales, LLC, et al, Case No. 16-117-BNC, filed 6/8/16.

In sound-byte fashion, the facts involve alleged submission of false and fabricated warranty claims by the defendants to plaintiff, a California corporation, at its Tennessee corporate headquarters. The defendants were “not from around here,” actually being located in California.

The Business Court applied Tennessee law to resolve the defendants’ motions to dismiss for lack of personal jurisdiction. It did take note of the choice of forum provisions in the contract documents specifying California, as well as the California New Motor Vehicle Board as an available means for dispute resolution, concerning the warranty claims in question.

As to the defendant LLC, the Business Court conducted an in-depth review of the relevant facts to discern the presence of “minimum contacts” by the LLC in promulgating allegedly false warranty claims into the State of Tennessee. The Court found that “fraud,” not contract, was at the core of the claims; it allowed the plaintiff to establish “minimum contacts” consistent with the Tennessee Long Arm Statute and the Constitution concerning the alleged tort claims. The Business Court, noting ease of travel and communication, found that Tennessee’s exercise of jurisdiction over the California based defendant LLC was neither unreasonable or unfair. The Court effectively analyzed and digested the reported Tennessee decisions on these issues.

The Business Court refused to apply the drastic remedy of forum non conveniens at the defendant LLC’s request. “Unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should be rarely disturbed.” (citations omitted.)

The Business Court required further factual inquiry into the issues as they affected the individual defendant.

William R. O'Bryan, Jr.

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