Bruce M. Gorman, Jr.
In Tahisha Roach v. BM Motoring, LLC (077125) (A-69-15), the New Jersey Supreme Court held that a used car dealership’s knowing refusal to cooperate with plaintiffs’ arbitration demands, filed in reasonable compliance with the parties’ agreement, amounts to a material breach, barring the breaching party from later compelling arbitration.
The decision stemmed from two separate litigations involving a used car dealership’s dispute resolution agreement (“DRA”). Plaintiffs had separately purchased used cars from two used car dealerships (operating under the same name), which turned out to be lemons. Plaintiffs’ respective efforts to file an arbitration before the AAA were met by the dealer’s refusal to advance its arbitration fees, and the AAA’s subsequent dismissal of the petition. Efforts to file in court were met by motions to dismiss in favor of arbitration, which the lower courts granted. Ultimately, a joint action was filed, and the lower court directed the plaintiffs to attempt to refile before the AAA, and dismissed their complaint with prejudice. An appeal was taken, and the Appellate Division affirmed. Continue reading “Supreme Court Finds Waiver of Right to Arbitrate by Failure to Pay In Tahisha Roach v. BM Motoring, LLC”
New Jersey is home to numerous subsidiaries of foreign corporations, especially in the pharmaceutical and technology industries. In a decision, which will be welcomed by those corporations, the New Jersey Appellate Division recently reaffirmed that the foreign parent company of a wholly-owned New Jersey subsidiary is not subject to the general jurisdiction of New Jersey courts unless the plaintiff can meet the elements of piercing the corporate veil. FDASmart, Inc. v. Dishman Pharm. & Chems. Ltd., No. A-2800-15T3 (Dec. 29, 2016).
In FDASmart, the defendant Dishman Pharm. & Chems. Ltd (“DCPL”) was an Indian corporation with a principal place of business in India. In 2013, PKM, an Indian company, set up a meeting between FDASmart and DCPL to discuss the sale of a facility owned by a Chinese subsidiary of DCPL. A memorandum of understanding was entered into between PKM, FDASmart, and “Dishman Group” regarding the development of a sales strategy and ultimate sale of the facility. The name “Dishman Group” is a marketing term for DCPL and its subsidiaries. Eventually, the sale fell apart and FDASmart sued DCPL and DCPL’s wholly-owned New Jersey subsidiary, Dishman USA, in New Jersey state court. DCPL challenged that the court lacked personal jurisdiction over it but FDASmart asserted that DCPL had sufficient contacts with New Jersey because Dishman USA was a New Jersey corporation. Continue reading “Appellate Division Denies Jurisdiction over Indian Corporation with New Jersey Subsidiary”