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July 29, 1975

Arthur J. FREEMAN and Geraldine Penovich, Plaintiffs,
GORDON AND BREACH, SCIENCE PUBLISHERS, INC. and Gordon and Breach, Science Publishers, Ltd., Defendants

The opinion of the court was delivered by: CANNELLA


 CANNELLA, District Judge.

 Gordon and Breach Science Publishers, Ltd. (G&B Ltd.), one of the defendants herein, has moved this Court pursuant to Fed.R.Civ.P. 12(b)(1) and (2) for the entry of an order dismissing this diversity of citizenship action as against it for lack of subject matter and in personam jurisdiction. For the reasons expressed herein, we find that G&B Ltd. is doing business in New York and, thus, is subject to the personam jurisdiction of this court pursuant to CPLR 301. We further find that plaintiff Freeman has properly invoked our diversity jurisdiction, but that no subject matter competence exists with regard to plaintiff Penovich's claim. Therefore, the motion is granted in part and denied in part.

 On motions of the instant nature, the plaintiffs have the burden of sustaining their assertion of both personam and subject matter jurisdiction. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S. Ct. 780, 80 L. Ed. 1135 (1936). With regard to motions addressed to personal jurisdiction, "it is proper for the Court to rely on affidavits to establish jurisdictional facts." Lynn v. Cohen, 359 F. Supp. 565, 566 (S.D.N.Y.1973), and in so proceeding, "we must consider the pleadings and affidavits in the light most favorable to the plaintiffs, who are the nonmoving [parties]." Oxford First Corp. v. PNC Liquidating Corp., 372 F. Supp. 191, 192-93 (E.D.Pa.1974). Of course, "the amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state where the court sits, with 'federal law' entering the picture only for the purpose of deciding whether a state's assertion of jurisdiction contravenes a constitutional guarantee." Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2 Cir. 1963) (en banc).

 Personal Jurisdiction

 In 1969, plaintiff Freeman entered into a contract with Gordon and Breach Science Publishers, Inc. (G&B Inc.), pursuant to which G&B Inc. was to publish, and Dr. Freeman was to edit a periodical known as the "International Journal of Magnetism". Plaintiff Penovich was subsequently retained by Dr. Freeman to serve as an editorial assistant for the Journal. In 1970, G&B Inc. apparently assigned its rights under the contract to the moving defendant, G&B Ltd. In 1974, the plaintiffs commenced this action to establish certain of their contract rights in the "International Journal of Magnetism" and to recover monies (royalties, expenses and legal fees) which are allegedly due them thereunder.

 On the instant motion, plaintiffs assert that G&B Ltd. is subject to our jurisdiction either because it is "doing business" here, CPLR 301, or because it has transacted business in New York within the meaning of the long-arm statute, CPLR 302(a)(1). As we find that G&B Ltd. is, indeed, doing business in New York, we do not reach the question of CPLR 302(a)(1) jurisdiction.

 As a "doing business" case, the instant matter is somewhat removed from the mainstream. Under more usual circumstances, the conduct of a New York subsidiary is sought to be imputed to a foreign parent with the goal of subjecting the parent to the jurisdiction of our courts. Here, a reverse set of facts pertains. G&B Ltd., a British corporation with its principal place of business in London, "is a wholly owned subsidiary of Gordon and Breach Science Publishers, Inc. [G&B Inc.]" (Adam Affidavit of Feb. 21, 1975 para. 3), a New York corporation with its principal place of business in New York City (G&B Inc. Answer para. 1). While the presence of the parent corporation in New York is not alone sufficient basis for asserting personal jurisdiction over the subsidiary, cf., Baird v. Day & Zimmerman, Inc., 390 F. Supp. 883 (S.D.N.Y.1974), aff'd mem., 510 F.2d 968 (2 Cir. 1975), we believe that the rules developed by the New York courts for application in the converse (subsidiary rendering parent present) situation apply equally to the matter at bar.

 In classic formulation, the "doing business" test subjects a foreign corporation to personam jurisdiction in New York when facts evidence that it conducts business affairs in this forum "not occasionally or casually, but with a fair measure of permanence and continuity." Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267, 115 N.E. 915, 917 (1917). Once a corporation is found to be doing business here it is present for "all purposes"; "jurisdiction does not fail because the cause of action has no relation in its origin to the business . . . transacted." Id. at 268, 115 N.E. at 918. See also, Gelfand v. Tanner Motor Tours, Inc., 339 F.2d 317, 320 (2 Cir. 1964). With regard to parent-subsidiary relationships vis-a-vis personam "doing business" jurisdiction, Judge Lasker has summarized the applicable principles in the following terms:

New York courts have held that a parent corporation can be present in the state because of the activities of its subsidiary. However, the activities must amount to more than the mere parent-subsidiary relationship, Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 336, 45 S. Ct. 250, 69 L. Ed. 634 (1925); Simonson v. International Bank, 16 A.D.2d 55, 225 N.Y.S.2d 392, aff'd 14 N.Y.2d 281, 251 N.Y.S.2d 433, 200 N.E.2d 427 (1962). The parent may be subject to jurisdiction where the subsidiary "performs all the business" which the parent could do "were it here by its own officials." Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533, 537, 281 N.Y.S.2d 41, 44, 227 N.E.2d 851, 854 (1967); Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116 (2d Cir. 1967). Additionally, where the subsidiary is "in fact, if not in name" a branch of the parent, the distinctions between the two fall and the parent is amenable to New York's jurisdiction. Public Administrator of County of New York v. Royal Bank of Canada, 19 N.Y.2d 127, 132, 278 N.Y.S.2d 378, 382, 224 N.E.2d 877 (1967); Taca International Airlines S.A. v. Rolls-Royce of England, Ltd., 15 N.Y.2d 97, 256 N.Y.S.2d 129, 204 N.E.2d 329 (1965).

 Tokyo Boeki (U.S.A.), Inc. v. SS Navarino, 324 F. Supp. 361, 366 (S.D.N.Y.1971). In Sunrise Toyota, Ltd. v. Toyota Motor Co., 55 F.R.D. 519, 528 (S.D.N.Y.1972), Judge Lasker rephrased the above statement in light of the subsequent decision of the New York Court of Appeals in Delagi v. Volkswagenwerk A.G. of Wolfsburg, Germany, 29 N.Y.2d 426, 328 N.Y.S.2d 653, 278 N.E.2d 895 (1972):

As restated in Delagi, there are two theories by which the . . . parent corporations here may be found to be "present" in New York: (a) if the relationship between the foreign parents and local subsidiaries gives rise to a "valid inference" of "an agency relationship"; and (b) if control by the parent of the subsidiary is "so complete that the subsidiary is, in fact, merely a department of the parent."

 See also, Baird v. Day & Zimmermann, Inc., supra; Furman v. General Dynamics Corp., 377 F. Supp. 37, 42-43 (S.D.N.Y.1974); Carbone v. Fort Erie Jockey Club, Ltd., 47 A.D.2d 337, 366 N.Y.S.2d 485 (4 Dept. 1975).

 In the present case, G&B Ltd. and G&B Inc. are commonly owned and have common directors and officers. Each corporation, in our view, apparently functions as an integral part of a united endeavor. "As Mr. Gordon put it, Ltd. does production, sales, and advertising; Inc. sells Ltd. the inventory on the contracts Inc. holds; and Ltd. uses the money to create product for Inc." (Freiman Affidavit of Jan. 22, 1975 para. 24). We could proceed in further detail, *fn1" but we need not do so as the affidavits at bar make it plain that while two separate corporate entities have been established, only one commonly owned enterprise exists which, in order to function, must rely upon the joint endeavors of each constituent part. Whether reliance is placed upon the fact that G&B Ltd. is "in fact, if not in name" a branch of G&B Inc. whose formal "independence has been scrupulously preserved," *fn2" or upon the fact that "[G&B Ltd.] is doing business in New York 'in the traditional sense' [because G&B Inc.] provides services beyond 'mere solicitation' and these services are sufficiently important to [G&B Ltd.] that if [G&B Inc.] did not . . . perform them, [G&B Ltd.'s] own officials would undertake to perform substantially similar services," ...

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