Style Stitch, Inc. v. The Avyan Group, LLC

Background

Style Stitch, an India-based apparel manufacturer, sued The Avyan Group, LLC, which the opinion describes as a New Jersey-based apparel wholesaler and a New Jersey corporation. Style Stitch asserted state-law claims for breach of contract and unjust enrichment. It alleged that, beginning in early 2022, Avyan issued purchase orders for apparel, that Style Stitch produced and shipped more than 250,000 garments, and that Avyan did not fully pay certain invoices. The products connected to those invoices were allegedly shipped to and discharged at “the port of New York.”

Avyan moved under Federal Rule of Civil Procedure 12(b)(2), which permits dismissal for lack of personal jurisdiction—the court’s power to decide claims against a defendant. Style Stitch argued that New York’s long-arm statute, Civil Practice Law and Rules § 302(a)(1), provided specific jurisdiction because Avyan conducted business in New York. The opinion separately states that Avyan was not subject to general jurisdiction in New York because its incorporation and principal place of business were in New Jersey.

Court’s Analysis

For specific jurisdiction under § 302(a)(1), the court explained that a defendant must have transacted business in New York or contracted to supply goods or services there, and the claim must arise from that activity. The court concluded that Style Stitch had plausibly alleged that Avyan transacted business in New York through its showroom, contacts with retail buyers, and other business activities. But the court found that Style Stitch had not adequately connected those New York dealings with its claims, which arose from orders placed from New Jersey between Avyan and Style Stitch.

The shipment allegation could provide the required connection. A shipment discharged at a New York port could potentially be a New York transaction substantially related to the unpaid invoices. But the parties did not identify the specific port. The Port of New York and New Jersey includes ports in both states, and the court noted that shipments discharged at a New Jersey port would not establish personal jurisdiction in New York on the same basis. The court also found that Style Stitch’s allegation concerning a possible New York bank account did not identify an actual transaction connected to the alleged nonpayment.

Jurisdictional Discovery and Disposition

The court held that Style Stitch had made a sufficient start toward establishing personal jurisdiction to justify jurisdictional discovery. It therefore permitted discovery limited to identifying the specific port where the apparel connected to the unpaid invoices was shipped and discharged.

The court denied without prejudice Avyan’s motion to dismiss the amended complaint for lack of personal jurisdiction. It ordered Style Stitch to file, within 30 days, an amended complaint properly alleging personal jurisdiction over Avyan. The court stated that the case would be dismissed for lack of personal jurisdiction if Style Stitch did not do so. The Clerk was asked to terminate docket entry 15.