Green Earth Enterprise LLC v. Sana Benefits, Inc.

Background

Green Earth Enterprise, LLC brought a breach-of-contract action against Sana Benefits, Inc. Green Earth is described as a commercial printing business located in New York. Sana Benefits contacted Green Earth in or around December 2020 about printing and mailing services, and the parties then entered into agreements under which Sana Benefits used those services from 2021 through 2023.

In early 2023, Sana Benefits selected an arrangement requiring it to order and pay for 35,000 custom printed packages over one year at a specified rate. Sana Benefits allegedly ordered only 10,581 packages before stating in December 2023 that it was terminating the contract because of a downturn in its business. Green Earth filed this action on March 12, 2024.

Sana Benefits initially moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and Rule 12(b)(6) for failure to state a claim. After Green Earth amended its complaint, Sana Benefits withdrew the Rule 12(b)(6) portion of its motion and continued to rely on the personal-jurisdiction argument.

Personal Jurisdiction Under New York Law

The court applied New York’s long-arm statute, which permits specific personal jurisdiction over an out-of-state defendant that transacts business in New York when the claim arises from that business activity. The court explained that the relevant inquiry asks both whether the defendant conducted sufficient business activity in New York and whether the claim arose from that activity.

The court found that Green Earth had made the required initial showing. Sana Benefits reached out to Green Earth, a New York printing operation; entered into agreements with it; maintained an ongoing business relationship over several years; negotiated pricing; and received goods and services from the New York operation. The court stated that physical presence in New York was not required. Although there was insufficient information to evaluate some additional factors, the court treated those factors as neutral.

The court also found that the contract claim arose directly from Sana Benefits’s New York contacts. The claim concerned the agreement under which Sana Benefits ordered physical packages and mailing services to be performed by Green Earth in New York.

Constitutional Due Process

The court separately considered whether exercising jurisdiction would satisfy constitutional due process. Due process requires sufficient “minimum contacts” with the forum and requires that exercising jurisdiction be consistent with fair play and substantial justice.

The court concluded that Sana Benefits had minimum contacts with New York because it purposefully contacted Green Earth there, negotiated and entered into commercial agreements with the company, and benefited from its New York-based services. The court rejected Sana Benefits’s reliance on a case involving a defendant whose conduct occurred entirely outside the forum state, explaining that Sana Benefits itself had purposefully directed activity toward New York. The court also found no showing that exercising jurisdiction would be unreasonable.

Disposition

Judge Garnett concluded that Green Earth had established personal jurisdiction over Sana Benefits. The court DENIED Sana Benefits’s motion to dismiss and directed the Clerk of Court to terminate Docket Number 17. The opinion did not decide whether Sana Benefits breached the contract.