The Out-of-State Parts Seller and the Single Contract
Plaintiff, a State A corporation with its only office in State A, contracted by email and telephone with Defendant, a State B LLC, to buy 500 custom-machined brackets for $62,500. Defendant has no office, employees, property, or bank account in State A. It operates a website that lists products and permits orders, but it does not advertise in State A or target State A customers. Over two years, however, it has made 12 sales to State A customers totaling $85,000, including the sale to Plaintiff. The parties negotiated by email and phone; Defendant manufactured the brackets in State B and shipped them FOB State B. After Defendant delivered nonconforming brackets, Plaintiff sued in federal court in State A for breach of contract. State A's long-arm statute reaches the constitutional limit. Plaintiff also sued a member of the LLC individually; that member never communicated with Plaintiff and has never visited State A. Defendant and the member move to dismiss for lack of personal jurisdiction.
1. May the federal court in State A constitutionally exercise specific personal jurisdiction over Defendant LLC on the breach-of-contract claim? Explain.
Read the worked answer
No, on these facts. General jurisdiction is absent because Defendant is at home only in State B, where it is incorporated and has its principal place of business; 12 sales into State A do not make it essentially at home there.
Specific jurisdiction requires purposeful availment, relatedness, and reasonableness. Defendant's website is informational and order-taking but not specifically directed at State A; there is no State A advertising, office, employee, or property. The 12 sales and $85,000 over two years show isolated or sporadic activity, not systematic targeting. The claim also does not arise from forum-directed conduct: the contract was negotiated by email and phone, the brackets were manufactured in State B, and delivery was FOB State B. Plaintiff's residence in State A and its payment from State A are not enough by themselves. Under the relatedness requirement, the claim must arise out of or relate to Defendant's forum contacts; a plaintiff cannot create jurisdiction merely by choosing to reside in the forum. Even if minimum contacts were arguable, the reasonableness factors would be weak because the forum has little interest in an out-of-state manufacture and delivery dispute. The motion should be granted as to the LLC.
2. Assume the court finds personal jurisdiction over the LLC. Is venue proper in the federal district where Plaintiff resides?
Read the worked answer
Probably not. Under 28 U.S.C. § 1391(b)(1), venue is proper where any defendant resides, and Defendant resides in State B. Under § 1391(b)(2), venue is proper where a substantial part of the events giving rise to the claim occurred. The breach here is delivery of nonconforming brackets manufactured in State B and shipped FOB State B. Plaintiff's residence and payment in State A do not by themselves make State A a substantial part of the events. Contract negotiations by email and phone may create some forum contacts, but the place of performance and the place of breach are in State B. Section 1391(b)(3) is a fallback only if no district satisfies (b)(1) or (b)(2); a State B district is available. Plaintiff's residence alone does not establish venue. If the court has personal jurisdiction but venue is improper, the case should be transferred or dismissed, not kept in Plaintiff's home district merely because Plaintiff chose it.
3. Does the court have personal jurisdiction over the individual LLC member?
Read the worked answer
No. Personal jurisdiction over an LLC does not automatically extend to its members. The member never communicated with Plaintiff, never visited State A, and has no office, property, or business in State A. Plaintiff has not shown that the member purposefully directed any activity at State A or that the member used the LLC as a sham to avoid jurisdiction. The member's mere status as a member is not a contact with the forum. Even if the LLC's 12 sales were attributed to the member, Plaintiff would still need to show that the member himself purposefully availed himself of State A and that the claim relates to those contacts. The complaint alleges no such facts. The individual motion to dismiss should be granted.