Alan Schorr’s Employment Case of The Week ending December 20, 2013

Baanyan Software Services, Inc. V. Kuncha, __A.3d__ (N.J. App. Div. December 19, 2013)

This week’s Case of the Week is notable for two very good reasons. First, it is a rare case in which the Appellate Division has issued a published opinion on personal jurisdiction. Second, it is an even rarer case of a pro se employee defeating a large and highly skilled law firm at both the trial level and the Appellate Division.

Plaintiff Baanyan Software Services, Inc. is an information technology development and software consulting company with its headquarters in Edison, New Jersey. According to Baanyan’s website, it is part of a multinational corporate organization that, “[r]eaching out from its locations in [the] USA and India, is able to locate and attract the very best computing talent from all over the globe.”

Baanyan employed the defendant, Hima Bindhu Kuncha, as a computer systems analyst pursuant to a written contract. At the time the contract was signed, Ms. Kuncha was living in California. She relocated to Illinois provided services for two of Baanyan’s clients in Illinois. She left Baanyan after about four months and went to work for a competitor in Tennessee, where she still works and lives.

Baanyan sued Ms. Kuncha here in New Jersey for breach of contract, tortious interference, and a host of other business torts. Kuncha initially defaulted, but later filed a motion to dismiss for lack of personal jurisdiction. Judge Cantor of Middlesex County granted the motion to dismiss, ruling:

[D]efendant in this case has not done business or resided in New Jersey. At all pertinent times the defendant worked in Illinois for two of plaintiff’s corporate clients, both in Illinois. All contacts concerning the hiring took place while the defendant was in California. Any breach of the contract that might have taken place took place while defendant was in Illinois.

Baanyan appealed, arguing, among other things, that there was a consulting agreement with a New Jersey corporation, that Kuncha provided services for and accepted payment from a New Jersey corporation, and that even though Kuncha was never physically present in New Jersey, it would not offend traditional notions of fair play and justice, because Kuncha allegedly knew that her agreement would have substantial effects in New Jersey. The Appellate Division found Baanyan’s arguments unpersuasive.

While acknowledging that New Jersey’s long-arm jurisdiction extends “to the uttermost limits permitted by the United States Constitution,” the Court fully analyzed and concluded that Baanyan could not establish jurisdiction using specific or general jurisdiction tests, and that the defendants failed to meet the personal jurisdiction tests that have been followed since the 1945 U.S. Supreme Court case of International Shoe, Co. v. Washington. The Appellate Division concluded:

In summary, we conclude that defendant’s contacts with New Jersey are attenuated at best. They are not continuous and systematic so as to establish general jurisdiction. They are more akin to random, fortuitous contacts, rather than a purposeful availment of the benefits and privileges of New Jersey law, and hence are likewise insufficient to establish specific jurisdiction. Additionally, to allow Baanyan, an international company, to compel an individual employee to defend against a New Jersey lawsuit, where that employee was hired to work in Illinois, and never lived in, worked in, or visited New Jersey, violates principles of fair play and substantial justice. (Citations omitted)

In ruling in favor of the defendant employee, the Appellate Division affirmed that simply being employed by a New Jersey corporation and receiving pay checks from the company from a New Jersey bank is not enough to establish personal jurisdiction in New Jersey. Telephonic and e-mail communications are also not sufficient to establish personal jurisdiction. There must be some act by which the defendant purposefully avails herself of the privilege of conducting activities within the forum state, thus invoking the benefit and protection of its laws. This “purposeful availment” requirement ensures that an out-of-state defendant will not be haled into court based on “random, fortuitous, or attenuated contacts or as a result of the unilateral activity of some other party.” Baanyan at *3, internal citations omitted.

This case is a good one to file away because it is an excellent treatise on New Jersey personal jurisdiction law. It is also heartening to see a pro se employee achieve such a good result under very difficult circumstances.

Plaintiffs’ Counsel: Patrick Papalia, Leo J. Hurley, Jr., Archer & Greiner.

Defendant: Hima Bindhu Kuncha, pro se.

Trial Judge: Hon. Jane Bruskin Cantor, J.S.C., Middlesex County.

Appellate Judges: Hon. Carmen H. Alvarez, Hon. Harry G. Carroll (on the opinion), Hon. Susan L. Reisner.