personal jurisdiction

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According to the Federal Circuit, twenty-two communications with a party over the course of three months may be enough to force a defendant to defend itself in the state where the party is located.  But three letters sent over that same time period is not enough.

In a recently published opinion, Trimble, Inc. v. PerDiemCo LLC, the Federal Circuit reversed a district court’s dismissal of a declaratory judgment noninfringement action for lack of personal jurisdiction.  PerDiemCo, a Texas LLC and the defendant in the action, had communicated with Trimble twenty-two times over the course of three months.  The communications began with a demand letter from PerDiemCo’s sole owner to Trimble’s subsidiary seeking to have Trimble pay for a non-exclusive license to practice PerDiemCo’s allegedly infringed patents.  The parties attempted to negotiate over the next three months via letters, emails, and telephone calls until Trimble filed a declaratory judgment noninfringement action in the Northern District of California, where Trimble is headquartered.

A sharply divided New York Court of Appeals recently held that defendants who allegedly made intentional and repeated use of New York correspondent bank accounts for money laundering thereby purposefully transacted business related to the plaintiffs’ claims, and thus were subject to the personal jurisdiction of the New York courts. According to the three-judge dissent, the decision, Rushaid v. Pictet & Cie, broke with 40 years of precedent, expanding the reach of the state’s long arm statute to encompass individuals who performed no acts directed at New York. Because correspondent bank accounts enable foreign banks to facilitate transactions in U.S. currency and the U.S. market, and New York is the home of many correspondent banks, any expansion of personal jurisdiction in New York based on correspondent banking relationships could have a significant impact. Courts and practitioners may have to reconsider their assumptions about personal jurisdiction in future cases.