On November 4, 2020, Ed O’Toole published “SDNY Ruling Affords Forum, Arbitration Clause Drafting Tips” in Law360. The following is an excerpt:
In CleanSpark Inc. v. Discover Growth Fund LLC, a Sept. 9 decision from the U.S. District Court for the Southern District of New York, U.S. District Judge Jed Rakoff dismissed a contract dispute between a software company and a venture investor on personal jurisdiction grounds after reconciling two seemingly conflicting provisions — an arbitration clause and a forum selection clause — in two different but related agreements.
In so doing, Judge Rakoff raised a yellow caution flag for corporate drafters of these provisions and seemingly narrowed the "transacts any business within the state" requirement for personal jurisdiction under New York Civil Practice Law and Rules Section 302(a)(1).
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