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Exam Question for Civil Procedure

Dan Yankee, a life-long resident of New York, comes to New Orleans for a Shriner’s convention. One night while imbibing in the Devil’s Brew, he tasted a local whiskey, Raging Cajun. Liking what he tasted, he bought a case of Raging Cajun to take back to New York. Upon his return to New York, Dan gave a bottle of Raging Cajun to his boss, Ben Bunkley, a citizen of New York. After work that evening, Bunkley decided to try the Raging Cajun and prepared himself a cocktail consisting of Raging Cajun and water. After three or four sips of his cocktail, Bunkley’s throat and stomach began having a severe burning sensation. He called his doctor who advised him to come to the hospital and bring the bottle of Raging Cajun with him. At the hospital it was determined that the bottle of Raging Cajun contained a high percent of acid. Bunkley was treated accordingly. He survived, but had to have part of his stomach removed and will talk in a law raspy voice the rest of his life. Bunkley’s doctor and hospital bills were in excess of $25,000. Raging Cajun is a product distilled by the Acadia Whiskey Company, a Louisiana corporation with its principal place of business in Louisiana. It has been licensed to do business in Alabama and has a warehouse for its products in that state. It distributes its products in Louisiana, Alabama and Mississippi. You learn that about 25 per cent of Raging Cajun’s $1 million in annual sales is made to New Yorkers who either buy it in New Orleans and take the product back to their home state or who buy it from Acadia’s web site. In addition, Acadia Whiskey Company has $500,000 on deposit in a New York bank. Can a state court in New York exercise personal jurisdiction over Acadia Whiskey Company (AWC)?

Assume that the New York State has passed the following statute:

The courts of this state shall have personal jurisdiction over an individual, corporation or other entity who, in person or through an agent:

(1) transacts business within the state; or

(2) commits a tortious act within the state; or

(3) is personally served within the state; or
(4) owns property within the state.

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