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Paventia v. Wilbert

HNT-L-118-11 (N.J. Super. Law Div. 2011) (Unpublished)

CORPORATIONS; JURISDICTION — Where a business does not maintain any of its own officers or have sales representatives in New Jersey, does not specifically target New Jersey customers, does not advertise in New Jersey media, and does not finalize contracts in the state, it is not considered as transacting business in New Jersey which would require it to maintain a certificate of authority in New Jersey.

A New Jersey nursery store placed an order with a Canadian business for wholesale garden supplies. The business filed suit against the store in New Jersey to recover for nonpayment. The store filed a motion for summary judgment, arguing the lawsuit should be dismissed on the grounds that the supplier did not have standing to sue in New Jersey because, as a foreign corporation, it did not maintain a certificate of authority to transact business in New Jersey. The policy behind this requirement is that a corporation transacting business within the state should not be permitted to take advantage of the laws of New Jersey when it has not complied with the reasonable regulatory provisions of the New Jersey Corporation Act.

The Canadian business opposed the motion, arguing that while it did not possess a certificate of authority under the Act, it had not transacted business in New Jersey, but had engaged only in the mere solicitation of orders from a world market, such that the prohibitive application of the Act could not apply to bar the lawsuit.

The lower court agreed, and denied the motion for summary judgment. It found that the Canadian business’s conduct did not amount to transacting business in New Jersey. The business did not maintain any of its own offices or have any sales representatives in New Jersey. Nor did it specifically target New Jersey customers, advertise in New Jersey media, or finalize contracts in the state. The business had a website with advertising for products, but it was not New Jersey specific. Rather, it was aimed at a world market. Lastly, the website contained links to retailers who carried the company’s products, wherever located. The business neither was local to New Jersey, nor did it specifically target New Jersey as a customer base.


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