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TOP FORM MILLS v. SOCIEDAD NATIONALE INDUSTRIA APP

March 16, 1977.

TOP FORM MILLS, INC., Plaintiff,
v.
SOCIEDAD NATIONALE INDUSTRIA APPLICAZIONI VISCOSA, d/b/a Snia Viscosa, et al., S.S. LINDO her engines, boilers, etc. and S.S. MARITIME CHAMP her engines, boilers, etc., Defendants.



The opinion of the court was delivered by: GAGLIARDI

MEMORANDUM DECISION

GAGLIARDI, District Judge.

This lawsuit arises out of the allegedly defective shipment of approximately twenty-three tons of Italian knit fabric received by the purchaser, plaintiff Top Form Mills, Inc., in early 1974. The plaintiff has named as defendants all parties involved in the manufacture and delivery of the fabric. Presently before this court are motions by two foreign defendants, Societa Nazionale Industria Applicazioni Viscosa and Fratelli Avandero S.A.S., to dismiss the complaint as against each pursuant to Rule 12(b)(2), Fed.R.Civ.P., for lack of personal jurisdiction. Fratelli Avandero S.A.S. has also moved for dismissal for insufficiency of service of process pursuant to Rule 12(b)(5) and, alternatively, on the ground of forum non conveniens, citing 28 U.S.C. § 1404(a). For the reasons which follow, all motions are denied.

 The preliminary facts establishing the background of this dispute and the roles of the parties involved are as follows. Top Form Mills, Inc. ("Top Form"), is a New York corporation which purchases fiber and fabric from manufacturers both in the United States and abroad for refinishing by its mills into consumer products. In November of 1973, Mr. Manny Kay, president of Top Form, contracted to purchase over one hundred tons of knit fabrics from defendant Societa Nazionale Industria Applicazioni Viscosa ("Societa"), an Italian manufacturer and vendor of fabric located in Milan. In accordance with the contract, which was entirely negotiated and signed by the parties in Italy, the first of several scheduled shipments of the fabric was prepared by Societa in January, 1974.

 In early February, 1974, pursuant to an agreement entered into with Top Form, defendant Fratelli Avandero S.A.S. ("Avandero"), an Italian freight forwarding agency with its principal place of business in Biella, Italy, undertook to deliver the first installment of fabric to the United States. Avandero received the goods from Societa at Avandero's Milan warehouse, stored them in three containers and transported them to Antwerp, Belgium. There, the containers were delivered to defendant Maritime Container Lines, Ltd., which in turn stowed them aboard its vessels, the S. S. Lindo and the S. S. Maritime Champ, for shipment to the United States. The Maritime Champ reached Portsmouth, Virginia, on March 28, 1974 and the Lindo arrived April 5, whereupon Top Form was notified that the fabric had been delivered in a substantially damaged condition.

 Shortly thereafter, Top Form instituted this lawsuit. *fn1" Personal service of the complaint and summons addressed to defendant Societa was made October 24, 1975 on Mr. Robert Oelbaum, assistant secretary of Snia Viscosa, Inc., a New York corporation which is a wholly-owned subsidiary of Societa. Personal service addressed to defendant Avandero was made October 10, 1975 on Ms. Lise Curry, secretary to Mr. Ivan Mandukich, then Avandero's New York sales representative. *fn2"

 Having set out these introductory details, the court now turns to the motions before it.

 Societa

 Rule 12(b)(2)

 On the present motions to dismiss pursuant to Rule 12(b)(2), Fed.R.Civ.P., made on behalf of Societa and Avandero, this court must look to the law of New York in order to determine whether it has jurisdiction over the person of either of these foreign business organizations. *fn3" Arrowsmith v. United Press International, 320 F.2d 219 (2d Cir. 1963) (en banc). The burden of proof is on plaintiff Top Form to sustain its assertion of jurisdiction by a preponderance of the evidence. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S. Ct. 780, 80 L. Ed. 1135 (1936); Evans v. Eric, 370 F. Supp. 1123 (S.D.N.Y.1973). However, on these motions it is proper for this court to examine affidavits and depositions to establish the jurisdictional facts, H. L. Moore Drug Exchange, Inc. v. Smith, Kline & French Laboratories, 384 F.2d 97 (2d Cir. 1967) (per curiam); Lynn v. Cohen, 359 F. Supp. 565, 566 (S.D.N.Y.1973), and in so doing the court "must consider the pleadings and affidavits in the light most favorable to the [plaintiff], who [is] the non-moving party." Ghazoul v. International Management Services, Inc., 398 F. Supp. 307, 309 (S.D.N.Y.1975), quoting Oxford First Corp. v. PNC Liquidating Corp., 372 F. Supp. 191, 192-93 (E.D.Pa.1974); see also Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1326, 1330 (2d Cir. 1972). *fn4"

 In opposition to Societa's motion to dismiss Top Form asserts that Societa is subject to this court's jurisdiction because it is "doing business" in New York sufficient to satisfy the jurisdictional requirements of Section 301 of the New York Civil Practice Law and Rules (McKinney 1963) ("CPLR"). *fn5" As set forth below, this court finds that Societa is in fact doing business in New York by virtue of the activities of its subsidiary, Snia Viscosa, Inc.

 As its fundamental explication of the "doing business" principle by which a foreign corporation may be subjected to in personam jurisdiction in New York, the New York Court of Appeals has held that while "there is no precise test of the nature or extent of the business that must be done" by the foreign defendant, it must conduct business activities here "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 the foreign defendant is found to be doing business here, it is present and subject to in personam jurisdiction for all purposes, for "jurisdiction does not fail because the cause of action has no relation in its origin to the business [here] transacted." Id., at 268, 115 N.E., at 918.

 Because there is no single factor dispositive of the "doing business" question, "[each] case necessarily depends on its own facts." Taca International Airlines, S.A. v. Rolls-Royce of England, Ltd., 21 A.D.2d 73, 248 N.Y.S.2d 273, 275 (1st Dept. 1964), aff'd, 15 N.Y.2d 97, 256 N.Y.S.2d 129, 204 N.E.2d 329 (1965). Here the existence of the parent-subsidiary relationship between Societa and Snia Viscosa, Inc. ("Snia") necessitates a close factual scrutiny of the nature of Snia's business and of its connections with Societa. Although the parent-subsidiary relationship is not per se sufficient to establish personal jurisdiction over the foreign parent, Cannon Mfg. 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 (1st Dept.), aff'd, 14 N.Y.2d 281, 251 N.Y.S.2d 433, 200 N.E.2d 427 (1962), New York courts have regularly held that the activities of a New York subsidiary can in certain circumstances be attributed to, and thus give rise to jurisdiction over, its foreign parent.

 One such circumstance has traditionally been found where the New York subsidiary, though independent of the parent affiliate, "does all the business which [its 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); see Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116 (2d Cir. 1967). In addition, if the local subsidiary may be considered in fact a "mere department" of its foreign parent rather than "a really independent entity", personal jurisdiction over the foreign corporation will be upheld. Taca International Airlines, S.A. v. Rolls-Royce of England, Ltd., 15 N.Y.2d 97, 102, 256 N.Y.S.2d 129, 204 N.E.2d 329 (1965); Public Administrator of County of New York v. Royal Bank of Canada, 19 N.Y.2d 127, 132, 278 N.Y.S.2d 378, 224 N.E.2d 877 (1967). See Tokyo Boeki (U.S.A.) Inc. v. S.S. Navarino, 324 F. Supp. 361, 366 (S.D.N.Y.1971). These general principles were reaffirmed 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). The Court of Appeals there found that the relationship between the foreign corporate defendant and an unaffiliated New York company satisfied neither the jurisdictional rule of Frummer, supra, requiring the valid inference of an agency relationship, nor the rule set forth in Taca, supra, requiring a showing of such control by the parent that the local subsidiary is its "mere department." Delagi v. Volkswagenwerk A.G., supra, 29 N.Y.2d at 430-32, 433, 328 N.Y.S.2d 653, 278 N.E.2d 895.

 The particular facts of the instant case must now be examined in light of the foregoing principles. Snia Viscosa, Inc., ("Snia") was incorporated on January 1, 1974 as the wholly-owned New York subsidiary of Societa. Snia's directors are Mr. Samuele Azaria, Mr. Luciano Titta, and Mr. Robert Moss. Mr. Azaria, an Italian citizen residing in New York City, has been the executive vice-president of Snia since its incorporation. Prior to that time Mr. Azaria had been employed by Societa for twenty-four years, most recently as its sales manager for Eastern Europe and Asia. Mr. Titta, an Italian citizen and resident, is also an officer of Societa. Neither Mr. Titta nor Mr. Moss, an attorney practicing in New York, is active in the daily commercial management of Snia, which is the responsibility of Mr. Azaria. Societa personnel regularly visit the offices of Snia. They include Mr. Titta, a Mr. Arduino, Societa sales manager for the United States, and a Mr. Penacchi, a Societa officer who has visited Mr. Azaria on at least one occasion.

 Snia also employs certain key individuals who were managers of the Wilgreene Yarn Company ("Wilgreene"), a now-defunct New York company which was formerly Societa's exclusive New York sales agent. *fn6" Mr. Robert Oelbaum, who has been the manager, traffic controller, financial comptroller and assistant secretary of Snia since its incorporation, was employed in the same capacities by Wilgreene for several years prior to its demise. Mr. Green, formerly an officer of Wilgreene, is also now employed by Snia. *fn7" There is thus an extensive interweaving of managerial personnel between Societa and Snia and from Wilgreene to Snia.

 Snia's business consists of the purchasing and importing of yarns and fibers supplied by Societa for resale to American weavers and knitters. 80% of Snia's goods are purchased directly from Societa itself, and the rest is purchased from other suppliers, all of which are wholly or partially owned by Societa and which together with Societa comprise the "SNIA Group." *fn8" Thus, all of Snia's income derives from the sale of goods manufactured by Societa or other Societa subsidiaries. Societa has established with Snia that Societa will fill all Snia's orders for fabric as long as Snia continues to make a profit. Snia pays for goods from Societa upon physical receipt of the shipments in the United States and re-sells them at prices it sets. In response to customer complaints of defective goods either Snia or Societa will dispatch a technician in its employ to the customer's plant to investigate the claimed defect. *fn9"

 The same "SNIA" logo is used on invoices sent to customers from both Snia and Societa. On its own invoices, which also explicitly declare it to be a member of the SNIA Group, Snia is listed as New York "area representative." In the circumstances of this corporate relationship the decision to incorporate the subsidiary responsible for sales in New York under the name Snia Viscosa, Inc., employing the acronym for the parent Societa Nazionale Industria Applicazioni Viscosa already widely used by the SNIA Group, permits the inference of a deliberate decision to advertise the uniformity of product quality, the regularity of purchase and delivery procedures, and the identity of interest between the companies, for the use of this acronym "strongly [connotes] the same entity." Sunrise Toyota, Ltd. v. Toyota Motor Co., 55 F.R.D. 519, 530 (S.D.N.Y.1972). This intentional similarity in name might be without significance if the corporations were completely separate entities without common owners, directors or managers but such is not the case where, as here, commonly-owned companies maintain overlapping ...


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