Client Advisory

In a recent unpublished opinion from the New Jersey Appellate Division, the court emphasized the procedural requirements governing jurisdictional discovery when defendants move to dismiss a complaint for lack of personal jurisdiction.

In Llauger v. Klein Products Inc., the plaintiff alleged the court had personal jurisdiction over the defendants under a stream of commerce theory. The defendants moved to dismiss the plaintiff’s complaint for lack of jurisdiction. The court denied the motion, and the parties consented to a period of jurisdictional discovery, after which the defendants again moved to dismiss. The plaintiff cross-moved to compel discovery, arguing the defendants’ discovery responses were incomplete. The plaintiff alleged the defendants objected to providing information related to the identity of their “middlemen,” who sold the defendants’ equipment in New Jersey. According to the plaintiff, this information could have uncovered further links between the defendants and New Jersey. The court denied the defendants’ motion, extended jurisdictional discovery, and ordered the defendants provide complete discovery responses.

After jurisdictional discovery ended, although the defendants had not provided the identities of their “middlemen,” they again moved to dismiss for lack of personal jurisdiction. The trial court granted the defendants’ motion, finding the record incomplete as to determine whether it could exercise personal jurisdiction over the defendants. The plaintiff appealed.

The Appellate Division reversed, concluding the trial court erred in granting the defendants’ motion. Because the defendants failed to respond to some of plaintiff’s jurisdictional discovery demands, which may have revealed sufficient ties between the defendants and New Jersey, the court could not properly ascertain whether it had personal jurisdiction over the defendants. As such, since fact discovery was not set to close for another five months, the plaintiff was permitted to continue engaging in discovery or to file a motion to compel discovery.

Key takeaway: Where jurisdictional discovery is permitted to resolve issues raised by a motion to dismiss on personal jurisdiction grounds, defendant should ensure the completeness of discovery before renewing the motion. To address the issue before renewing the motion, consider seeking written confirmation from plaintiff as to completeness of discovery or allow a motion to proceed so the court can rule on the issue.