Creative Calling Solutions Inc v. LF Beauty Ltd., No. 14-3054 (8th Cir. 2015)
Annotate this CaseCreative, an Iowa corporation, designs and sells beauty products. LF, a Hong Kong corporation, with its principal place of business in Hong Kong, provides services, including product development, shipping oversight, and production planning. LF contacted Unger, President of Creative, in Iowa, seeking to manage Creative’s operations in China and e-mailed a presentation describing proposed services. Unger traveled to Hong Kong to execute the contract. LF managed Creative’s supply chain; the companies communicated extensively electronically and by telephone for two years. As required by the contract, LF shipped pre-production and production samples (made in China by third party factories) to Iowa. LF received payments from Creative’s customers on its behalf, and sent proceeds, less deductions, to Iowa. No LF agents or employees visited Iowa and LF has no connection with Iowa outside of this business relationship. Creative filed suit in Iowa, alleging that LF breached the contract by sending samples that could not be used because they were defective. The district court dismissed for lack of personal jurisdiction. The Eighth Circuit reversed, stating that a reasonable jury could find that LF had sufficient contacts with Iowa to justify the exercise of personal jurisdiction and that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice.
Court Description: Colloton, Author, with Chief Judge Riley and Kelly, Circuit Judges] Civil Case - personal jurisdiction. Creative Calling, an Iowa corporation selling beauty products, contracted with LF Beauty in Hong Kong to manage Creative Calling's operations in China. Creative Calling's president traveled to Hong Kong; LF Beauty shipped samples and pre-production samples to Iowa. Creative Calling brought a breach of contract action in Iowa. The district court's dismissal for lack of personal jurisdiction in this breach of contract action is reversed. Creative Calling presented sufficient fact for a reasonable jury to conclude that LF Beauty established minimum contacts with Iowa to permit the exercise of personal jurisdiction: LF Beauty solicited the business relationship, negotiated the contract, communicated daily via e-mail and telephone for nearly two years; the terms of the contract required LF Beauty to send pre-production samples for approval and in fact mailed thousands of samples; and LF Beauty received payments from customers on behalf of Creative Calling. The exercise of personal jurisdiction would not offend traditional notions of fair play and substantial justice, as witnesses and evidence are in Iowa. The contract's selection of Hong Kong courts as a non-exclusive forum and its choice of Hong Kong law is not dispositive.
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