A business plan to promote vodka sales in North Carolina, with a particular focus on Duke University sports fans, was key to a North Carolina Business Court decision that GameDay Vodka had sufficient contacts with the state to be sued here over a contract dispute. In Revel XP, LLC v. Never Forget Brands, LLC, 2022 NCBC 39, the Court found that South Carolina-based GameDay’s contract with Revel, a North Carolina-based sports marketer, may well have evinced little in the way of a direct North Carolina connection. But the evolution and intended course of the parties’ relationship, the court held, justified jurisdiction over GameDay (Never Forget’s d/b/a) consistent with due process guideposts.
Under the contract, Revel was to “oversee tailgate parties at sporting events featuring GameDay products.” Id. ¶ 25. Revel had existing relationships with UNC, NC State and Wake Forest, but neither the contract nor subsequent Statements of Work “expressly called for hospitality services, activities or events to be performed or take place in North Carolina.” Indeed, no event performed under an executed SOW ever occurred in the state. Id. ¶¶ 31, 32.
Revel did not contend that GameDay was subject to the Court’s “general jurisdiction” as a result of GameDay’s “continuous” or “systematic” contacts with North Carolina. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). So, Judge Robinson examined whether GameDay had sufficient “minimum contacts” with North Carolina that arose from the events at issue in the action. See Tom Togs, Inc. v. Ben Elias Industries Corp., 318 N.C. 361, 366 (1986).
The Court acknowledged that GameDay’s contract with a North Carolina-based company did not “automatically establish sufficient minimum contacts.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985). Instead, it focused on an analysis which also included “prior negotiations and contemplated future consequences” as well as “the parties’ actual course of dealing.” Revel, ¶ 54.
In what it termed “a close case” on jurisdiction over GameDay, the Court was influenced by evidence that “GameDay hoped to establish a presence in North Carolina during the span of the Agreement and form a partnership with Duke University by 2023.” As the Court observed:
“GameDay published on its website and circulated on social media posts featuring Coach Mike Krzyzewski (“Coach K”), Duke University’s nationally known men’s basketball coach.”
GameDay’s business model, the complaint alleged, included agreements with college and sports teams to package its vodka using team colors. GameDay, the Court noted, also told Revel it intended to do business in the state. Id. ¶¶ 59, 66.
Judge Robinson found that the parties’ “actual course of dealing” evinced meaningful contacts with North Carolina. The Court noted that GameDay paid $1,175,000 in invoices that requested payment to Revel in Winston-Salem. Perhaps most significant to the Court, though, was GameDay’s direct contact with one of Revel’s North Carolina-based vendors that culminated in GameDay paying Revel-generated invoices for “multiple orders of branded goods sourced from” that vendor. “In so doing,” the Court held, “GameDay endorsed the prospect of continuing to source products from a North Carolina vendor under the Agreement.” Id. ¶¶ 37, 64.
- The Business Court, in assessing “minimum contacts” for assertion of jurisdiction, paid particular attention to the intention of a party to use a contract to facilitate entry into North Carolina for the purpose of doing business here.
- Promoting a company’s purported partnership with a legendary North Carolina sports figure is not a good first step to minimizing how its ties with the state might later be measured.
- GameDay has appealed the Court’s denial of its motion to dismiss for lack of personal jurisdiction.
Brad Risinger is a partner in the Raleigh office of Fox Rothschild LLP.