By Cate Berenato
On February 19, 2016, in the published civil case Perdue Foods v. BRF, the Fourth Circuit affirmed the United States District Court for the District of Maryland’s dismissal of Perdue’s breach of contract claim because of a lack of personal jurisdiction of BRF. The court stated that Perdue had not alleged sufficient facts to show that BRF had the required minimum contacts for such jurisdiction.
Issue of Jurisdiction
The only issue on appeal was whether the district court had personal jurisdiction over BRF.
Dispute Between Perdue and BRF
Perdue, headquartered in Maryland, is a food producer that sells poultry under the mark “PERDUE.” BRF is an exporter of poultry, and it is headquartered in Brazil and uses the mark “PERDIX.” When Perdue was concerned about consumer confusion over the similar trademarks, it and BRF entered into an agreement in 2002. Under the agreement, Perdue agreed not to register its mark in Brazil, and BRF “agreed to abandon a version of its PERDIX mark worldwide.” Later, in 2012, Perdue purchased chicken from BRF. Perdue sent purchase orders from Maryland and BRF sent invoices to Maryland. BRF shipped this chicken from Brazil to Tanzania.
Perdue commenced this action in 2014 when it alleged that BRF breached the agreement by pursuing applications for trademark registrations in foreign countries. BRF subsequently moved to dismiss the suit for lack of specific personal jurisdiction pursuant to Fed . R. Civ. P. 12(b)(2). The lower court held that Perdue indeed lacked such jurisdiction.
A court has specific personal jurisdiction over a defendant if the defendant “purposefully established minimum contacts in the forum state” so that the defendant could reasonably anticipate being haled into court in that state. Courts consider the totality of facts to determine if the party had the requisite contacts. Specifically, courts will consider “the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the state.” To determine if a defendant has purposefully availed itself in this way, courts considers whether the defendant maintained offices, owned property, engaged in long-term business activities, or made in-person contact in the forum state. Courts also consider whether the parties agreed that the law of the forum state would govern the disputes and whether parties carried out the contract in the forum state.
BRF Did Not Have Sufficient Contacts in Maryland
In this case, though the agreement included a Maryland choice-of-law provision, BRF employed no officers in Maryland, owned no property there, did not initiate the agreement there, nor did any BRF employee travel to Maryland in connection with the agreement. BRF does not conduct business in Maryland, nor does it import products into or sell products from Maryland. The agreement did not even require Perdue to perform contractual obligations in Maryland. Finally, BRF did not engage in significant, long-term business activities in Maryland.
Though Perdue stated that specific personal jurisdiction could arise from a single contract where the defendant deliberately engaged in activities within a state, this agreement did not establish continuing contacts between BRF and Perdue in Maryland. In fact, the agreement prevented BRF from doing business in Maryland.
Thus, the Fourth Circuit affirmed the district court’s dismissal of Perdue’s claim.