Just passing through New York? Is your company soliciting business here? Companies often question whether engaging in these actions allow for it to be sued in a New York court. A recent New York decision reasserted that foreign companies (or non-New York companies) engaging in these types of actions are very likely not subject to the personal jurisdiction of a New York court.
Although simply passing through the State might not be enough for a New York court to assert personal jurisdiction over a company, it may be cutting it close. Indeed, New York law offers complainants attempting to demonstrate a court’s personal jurisdiction over a foreign company the “Single Act Statute” under CPLR § 302(a)(1). As the name suggests, the Single Act Statute requires proof of one transaction by a company in the State of New York for a court to invoke personal jurisdiction over it. The court will require only that the single act be purposeful and that there be a substantial relationship between the transaction and the claim asserted against the company.
Vogel v. Mount Airy #1, LLC is a recent New York case, which serves as a great example of what does not constitute a “single act” for purposes of determining a company’s corporate presence. In a personal injury action against a foreign company, Plaintiffs maintained that the foreign company Defendant “vigorously” solicited business from New York. Defendant rebuffed Plaintiffs’ assertion in supporting affidavits by pointing out that Defendant’s did not own, use or possess any real property in New York, did not operate or control offices here, had no employees nor conducted or transacted business in the state.
The Court found that even assuming the Plaintiffs demonstrated that Defendant solicited business in New York, the mere solicitation of business alone is not enough to justify a corporate presence under the Single Act Statute. Indeed, the Court specifically noted that the act of periodically sending corporate officers or employees into New York on corporate business was insufficient to predicate a finding that a foreign corporate defendant was present for jurisdictional purposes. Therefore, the Court ruled, Plaintiffs failed to show that the Defendant engaged in “activities of substance” to find personal jurisdiction. Consequently, the Court dismissed the action.
Manhattan commercial litigation attorney, Peter Moulinos, acknowledges how instructive and useful this decision is for companies with a potential presence in New York. The reach of the Single Act Statute appears daunting and Mr. Moulinos invites anyone concerned about their company’s potential “corporate presence” in New York to contact him with inquiries.
This blog post was written by Nicholas Moneta, a legal intern at Moulinos & Associates LLC and is not offered as legal advice. This case may be cited as: Vogel v. Mount Airy #1, LLC, 601610/16, NYLJ 1202770649211, at *1 (Sup., NA, Decided October 18, 2016).