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Gelfand v. Tanner Motor Tours

decided: November 13, 1967.

NETTIE GELFAND AND PHILLIP GELFAND, PLAINTIFFS-APPELLANTS,
v.
TANNER MOTOR TOURS, LTD. (CALIFORNIA CORPORATION), TANNER MOTOR TOURS OF NEVADA, LTD. (NEVADA CORPORATION), TANNER MOTOR TOURS CORPORATION, LIMITED (A NEVADA CORPORATION), TANNER MOTOR TOURS, LTD. (A NEVADA CORPORATION), TANNER MOTOR TOURS, LTD. OF CALIFORNIA (A CALIFORNIA CORPORATION) AND LUCKY CAB CO. (A NEVADA CORPORATION), DEFENDANTS-APPELLEES



Lumbard, Chief Judge, and Smith and Feinberg, Circuit Judges.

Author: Lumbard

LUMBARD, Chief Judge:

The sole question on this appeal is whether defendant corporations are doing business in New York through their promotional representative, Herbert J. DeGraff, so as to give the district court personal jurisdiction over them under traditional principles of New York law as preserved by ยง 301 of New York Civil Practice Law and Rules. All other grounds for in personam jurisdiction over defendants were considered and rejected in an earlier opinion of this court, 339 F.2d 317 (2 Cir. 1964) when we remanded the case for further findings on the issue now before us. On remand, the district court again found that defendants' activities in New York were not sufficient to warrant a finding that they were doing business in New York. Upon the additional evidence now before us and in light of a New York opinion written after the decision below, we reverse.

The plaintiffs, New York residents, brought suit for injuries sustained on May 4, 1962 when a wheel broke off a Gray Line bus in which they were riding in Arizona en route from Las Vegas to the Grand Canyon. Mr. and Mrs. Gelfand sued six corporate defendants. Three defendants have moved to dismiss the complaint. Although the other three named defendants did not appear the district court dismissed the action against all six defendants. The three moving defendants are Tanner Motor Tours, Ltd. (California), Tanner Motor Tours of Nevada, Ltd. and Lucky Cab Co. Tanner (California) operates sightseeing and charter bus services in Southern California and also performs interstate services for Tanner (Nevada). That corporation operates sightseeing and charter bus service in Clark County, Nevada, and also operates a car rental agency. The district court assumed, but did not make a finding, that Tanner (Nevada) operated the Grand Canyon tour. The record leaves open the possibility that Tanner (California) operated some or all of the tour buses. Lucky Cab Co. operates a taxicab service in Las Vegas and Clark County, Nevada. Defendants are related companies under common ownership. The parent company is Tanner Motor Livery, Ltd., not named as defendant in this suit.

The moving defendants also are members of Gray Line Sight-Seeing Companies Associated, Inc., a non-profit membership corporation organized under Mayland law. As such they are licensed to use the words "Gray Line" in promoting their tours. Gray Line Associated does not operate any sightseeing or tour services of its own. Its expenses are met from dues paid by more than 90 members. The Tanner companies account for approximately 14 or 15% of the total sightseeing business of the Gray Line companies.

Gray Line Associated conducts national advertising programs and public relations campaigns and contacts travel agents to induce them to use its members' facilities. It has a contract with Herbert J. DeGraff Associated, Inc. to act as its sales service representative. In New York, Gray Line Associated is listed at an office maintained by DeGraff Associated, Inc. at 501 Madison Avenue. Mr. Herbert J. DeGraff holds the title of Vice President of Sales for the Eastern Region of Gray Line Associated. However that position imposes no duties on him beyond those provided in the contract between Gray Line Associated and his organization. In consideration of an annual fee of $23,500, DeGraff Associated, Inc. agreed:

"A. To represent Gray Line as travel representative and agent in the Eastern portion of the United States as specified by Executive Committee directives;

"B. To familiarize itself fully with all services and facilities offered by Gray Line members;

"C. To contact and fraternize with travel forwarders situated in the Eastern portion of the United States;

"D. To take letters for folders and other printed material prepared for distribution by Gray Line and Gray Line members;

"E. To gather all available information on specialized group movements and forward such advice to interested Gray Line members;

"F. To compile data on all conventions which will occur in cities where there are interested Gray Line members and forward such reports to such members;

"G. To advise interested Gray Line members of all travel movements and to solicit such business for Gray Line members;

"H. To maintain an office in New York properly staffed to run the above services and assist in ...


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