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Facing Jurisdictional Issues in a Breach of Contract Case in Georgia

Poole Huffman, LLC

There are several essential things that go into pursuing or defending a commercial lawsuit. As a plaintiff, you want to bring your case in your preferred location, but you want to take care to be certain that the law will permit you to sue that defendant in that place, lest you lose your case on jurisdictional grounds. As a defendant, it may be necessary to challenge jurisdiction in order to avoid litigation in some faraway place with which you have little to no ties. Regardless of which side you’re on, Georgia business counsel can help you deal with the jurisdictional questions in your commercial case.

A recent federal breach of contract case is an example of how the process can work. The dispute that ended up in federal court was a breach of contract case that pitted a firearms manufacturer against a sales representative. The representative brought his case in state court in Florida, but the manufacturer successfully persuaded the court that the case should be moved to federal court. There are several reasons why a case might be tried in federal court. One is if there’s an allegation of a violation of federal law, which is called “federal question” jurisdiction. Another is if the opposing parties are citizens of different states, and the amount in question exceeds $75,000, which is called “diversity jurisdiction.”

Regardless of whether a case proceeds in federal court or in state court, the court that ultimately handles the case has to have what’s called “personal jurisdiction” over the parties, which means that the parties must either have a certain degree of contact with that state or else voluntarily consent to the case proceeding in that court.

Sometimes, even if all of those criteria are met, there may be a reason that a party may be entitled to demand that the case not go forward. In the manufacturer’s case, it asserted that it was a business that was wholly owned by the national government of Israel. This would mean that suing it was essentially suing the State of Israel, and the Foreign Sovereign Immunities Act prevented such an action.

There are exceptions to the FSIA that allow cases to go forward in some situations. The representative argued that this breach of contract case should proceed because the lawsuit was based on “commercial activity carried out in the United States by the foreign state” or could also be considered “an act performed in the United States in connection with a commercial activity of the foreign state elsewhere.”

The key is that the central activity must have occurred in the United States. That was a problem for the plaintiff in this case. The 11th Circuit Court of Appeals agreed with the lower court that the exceptions to FSIA didn’t apply. The main events that provided the foundation for the plaintiff’s breach of contract claim took place in Israel and South America, rather than the United States. That meant that there was no exception, and the manufacturer was entitled to immunity.

Whether you are a plaintiff seeking to pursue a commercial litigation case in Georgia, or a defendant seeking to defend (or perhaps avoid entirely) a case in Georgia, you need skilled Georgia litigation counsel to help you pursue your desired result. The experienced Atlanta contract litigation attorneys at Poole Huffman, LLC have many years of experience effectively handling a wide variety of commercial disputes. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation.

More blog posts:

Confirmation Letters – Avoiding Potential Conflict Regarding Agreement Terms, Atlanta Business Litigation Attorneys Blog, April 5, 2016

Wrongful Foreclosure, Atlanta Business Litigation Attorneys Blog, May 16, 2013

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