Hargrave v. Oki Nursery, Inc.

636 F.2d 897 (1980)

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Nature of the Case

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Facts

P is a New York corporation and operates a vineyard in New York. D is a California corporation with its main office in Sacramento and grows and sells nursery stocks including wine grape vines. P entered into a contract to purchase vines from D. D represented that vines purchased would be healthy, free of disease, and suitable for wine production. The vines were diseased and incapable of bearing fruit of adequate quality or quantity for P's commercial wine production. P sued D for fraud in New York. D removed the action to Federal District Court on diversity and moved to dismiss for lack of personal jurisdiction as this was a breach of contract action, not a tort action for fraud. The court granted the motion. P appealed. Under state long-arm statutes, P contends that D's false representations constituted fraudulent and tortious acts committed in California and causing injury in New York and that D should reasonably have expected its fraudulent representations to have New York consequences, and derived substantial revenue from interstate commerce. D argues that no 'tortious act' has been alleged in the complaint since Ps, by applying the fraud label, may not convert a claim for breach of a contractual representation into a tort claim and that in any event no injury was 'caused' to P 'within the state.'