Federal Court Issues Ruling on Jurisdiction in Food Packaging Dispute

A federal court in Georgia has determined that it has personal jurisdiction over a Michigan food-packaging company that was sued as a third party defendant in litigation over a recalled baby food product. IPN USA Corp. v. Nurture, Inc., No. 11-501 (N.D. Ga., decided December 12, 2011). A Food and Drug Administration investigation apparently concluded that the third-party defendant (Liquid) had violated agency regulations on the manufacture of acidified and acid food products. While the baby food manufacturer (Nurture) allegedly sustained millions in damages in the recall, it was the packaging supplier (IPN) that brought the lawsuit against Nurture for breach of contract.

According to the court, Liquid had sufficient contacts with Georgia for the
court to exercise jurisdiction over the company. For purposes of packaging
Nurture’s baby food, Liquid had purchased a machine, packaging supplies and
other equipment from IPN’s Georgia-based entity, which referred a “significant
number” of prospective customers to Liquid. The contracts between IPN and
Liquid contained Georgia choice-of-law and forum-selection clauses. Because
the “alleged failure of the packaging at issue in this case is directly related to
the cont[r]acts between Liquid and IPN,” the court concluded that Liquid has
“minimum contacts” with Georgia and that it would not offend due process to
exercise jurisdiction over the company.