Kaufman and Feinberg, Circuit Judges, and Levet, District Judge.*fn*
Dr. Joseph R. Fontanetta appeals from dismissal of his complaint by the United States District Court for the Eastern District of New York, Orrin G. Judd, J., for lack of jurisdiction over defendant American Board of Internal Medicine, 303 F. Supp. 427. The contention on appeal is that there was jurisdiction over the Board under N.Y.CPLR § 302(a) (1), part of New York's "longarm" statute. We affirm the judgment of the district court.
Plaintiff is a resident of New York where he is licensed to practice medicine. Defendant, an Iowa non-profit corporation with its principal place of business in Philadelphia, Pennsylvania,*fn1 engages in examining doctors who wish to be certified as specialists in internal medicine. A doctor seeking certification writes to defendant Board in Philadelphia; the Board requires a written resume of his education and experience. If the Board is satisfied with these qualifications, it sends the doctor an application for its examination. This is filled out and returned to Philadelphia. Thereafter, the Board advises the doctor of the time and place of a written examination, which apparently occurs simultaneously once each year in a number of cities. The doctor selects the one most convenient to him. The completed written examination is forwarded for grading and marking to the Board in Philadelphia; the doctor is then notified of the result. If he has passed, the doctor must still take an oral examination, customarily given individually at a hospital convenient for the two examining physicians.
It is the latter examination that occasioned this law suit. Starting in 1960, plaintiff has been striving to obtain certification. According to the record, he took the written examination in New York City in four successive years from 1960 to 1963, and passed on the fourth attempt.*fn2 But success in the oral has thus far eluded him. Plaintiff took the oral examination in 1965 in Philadelphia and in 1967 in St. Louis, Missouri, but failed each time.
In the spring of 1969, plaintiff brought suit against defendant in the Supreme Court of the State of New York, County of Kings. The relief sought was essentially equitable; the complaint prayed for an order which would compel the Board to disclose the reasons why plaintiff failed the oral examinations and require it to certify plaintiff as a consultant in internal medicine.*fn3 Service of the summons and complaint upon the Board was made in Philadelphia. The Board removed the suit to the federal district court and thereafter moved to dismiss on the ground that the court had no jurisdiction over it.
Before Judge Judd, the principal question was whether there was jurisdiction over the Board under CPLR § 302(a) (1), which provides:
(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nondomiciliary, * * * who in person or through an agent:
1. transacts any business within the state * * *.
The Board argued in the district court that the section does not cover non-commercial transactions and that, in any event, plaintiff did not allege that any transactions occurred in New York. Judge Judd rejected the first contention. He also appeared to have some doubt whether even the written examination in New York amounted to the transaction of business under section 302, but pointed out that, in any event, plaintiff's
claim is not based on the transaction of business in New York, where he took a written examination which he passed, but on his being failed in oral examinations administered and graded outside New York.
Accordingly, the judge held that plaintiff did not allege "a cause of action arising from" any acts performed in New York, and the court lacked jurisdiction over the Board.
The only arguments advanced on appeal concern the applicability of section 302(a) (1). The Board continues to press its point that the section does not apply to non-commercial activities. Even if its position were correct -- and we do not suggest that it is*fn4 -- it is a considerable strain to characterize the Board's activities as non-commercial. Non-profit they may be, but the certifying of practicing physicians as specialists obviously has a direct professional and financial effect upon the doctors involved. In any event, we are not required to rule upon the issue because we think that the judge's second ruling was correct.
Section 302 was enacted by the New York State legislature in 1963. It was an attempt to bring some order into the chaotic field of personal jurisdiction over nondomiciliary defendants and to expand the type of case over which the New York courts would take jurisdiction. International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), had laid down a new due process test for jurisdiction: Were the contacts with the state sufficient so that allowing a nondomiciliary defendant to be sued there did not "offend traditional notions of fair play and substantial justice"? Id. at 316, 66 S. Ct. at 158. Where such a defendant is sued on a cause of action clearly arising from its activities outside the state, the level of defendant's conduct in the state required to subject the defendant to suit there raises particularly thorny problems under this test. These have been fought out in New York under the "doing business" test, now embodied in CPLR § 301; it is clear that the activities of defendant in this case did not rise to the level of "doing business." However, the long-arm statute bases jurisdiction on a level of conduct far less than that necessary for the "doing" of business, meeting what was felt to be the requirement of due process by demanding a direct relation between ...