New Ventures Growth Corporation v. New Frontier Data, 2021 WL 5298006, Ct. of Appeals of CA for the 6th District

This unpublished decision is an appeal from a Santa Clara County, superior court which held that the defendant could not be tried in California due to lack of jurisdiction. The case is instructive based on the appellate court’s analysis and reversal holding that specific jurisdiction existed to pull the defendant, a D.C. based company, into California court.

New Ventures Growth Corporation (Ventures) entered into an agreement in 2018 with New Frontier Data (Frontier). The value of the agreement was $438,000. Ventures, a California corporation, would provide data analytics and artificial intelligence software to be used on Frontier’s market research and analytical platforms. Frontier is a Delaware Corporation with an HQ in Washington D.C.

The court found the specific jurisdiction existed in California based the facts, a choice of law provision in the Master Agreement, and California case law. To find specific jurisdiction a court must find 1) the defendant purposefully availed themselves of the forum benefits. 2) Controversy arises out of the defendant’s forum-related contacts, and 3) the court’s assertion of jurisdiction comports with fair play and substantial justice.

The Master Agreement governing the relationship between the entities provided that California law governed the agreement. Executives of both companies met multiple times in California to work out deliverables for the project. The court also relied on the following cases to find jurisdiction.

The court relied on Hall v. LaRonde (1997) 56 Cal.App.4th 1342 – where a NY resident writing software for a California company is found to have sufficient contacts with California to create minimum contacts. The contract in Hall was not a purchase of software but customized software similar to the Ventures/Frontier agreement.

Next, the court relied on Neadeau v. Foster (1983) 129 Cal.App.3d 234, where the court found jurisdiction in California. The out of state firm in Neadeau solicited a California firm to create a product creating minimum contacts.

Factual basis for jurisdiction in the present case was supported by the Frontier COO introducing the Ventures CEO as “the head of our Silicon Valley office working our big data platform”. Also, two Frontier workers were located in California  Finally, the court notes that California has a “large market share of the national cannabis business” and that regardless of the claims of the out of state contractual party that fact played a role in collaboration with a California firm and a contract connected to the California forum.

The court concluded that the number of meetings, the two Frontier workers located in California, and the amount of customization work by Ventures to the specifications of Frontier created specific jurisdiction.  

June McLaughlin
Professor & Paralegal Studies Program Director at Irvine Valley College | + posts

June McLaughlin is Professor & Paralegal Studies Program Director at Irvine Valley College in Orange County, CA. She teaches business law and paralegal studies courses.