known as the "transacting business" test. If a foreign entity
is found to be doing business in New York, it is subject to
personal jurisdiction on any cause of action whether or not it
arises out of its business done in New York. Hoffritz for
Cutlery, Inc. v. Amajac, Ltd., supra, 763 F.2d at 58.
Construing all the facts in the light most favorable to
plaintiffs, as is required, they clearly have not shown that
defendants are doing business in New York. Although plaintiffs
provide affidavits attesting that at least on occasion
defendants solicited business in New York, the mere
solicitation of business does not constitute "doing business."
Laufer v. Ostrow, 55 N.Y.2d 305, 310, 449 N.Y.S. 456, 459,
434 N.E.2d 692, 695 (1982). Although it is true that "once
solicitation is found in any substantial degree very little
more is necessary to a conclusion of 'doing business,'"
Aquascutum of London, Inc. v. S.S. American Champion,
426 F.2d 205, 211 (2d Cir. 1970), plaintiffs have not demonstrated
"substantial solicitation" carried on with a "considerable
measure of continuity and from a permanent locale within the
state." Beacon Enterprises, Inc. v. Menzies, supra, 715 F.2d at
763. At most, plaintiffs have shown that defendants have
occasionally done business in New York.
Courts have consistently found foreign corporations engaging
in far more substantial activities than the defendants not to
be "doing business" for the purposes of CPLR § 301. Liquid
Carriers Corp. v. American Marine Corp., 375 F.2d 951, 953 (2d
Cir. 1967) ("the occasional visits of [the company's
vice-president] to New York to solicit business and to
negotiate contracts for [the company] were not sufficiently
regular or extensive for the New York courts to hold that [the
company] is 'doing business' in the state."); Dunn v. Southern
Charters, Inc., 506 F. Supp. 564, 567 (E.D.N.Y. 1981) ("[The
company's] New York activities amount to advertising and
solicitation of orders, activities which New York's courts
consistently have held do not warrant a finding of 'doing
CPLR § 302(a)(1), part of New York's long-arm statute, allows
personal jurisdiction over any non-domiciliary who in person or
through an agent "transacts any business within the state or
contracts anywhere to supply goods or services in the state[.]"
CPLR § 302(a)(1), with its "transacting business" test,
provides a basis for jurisdiction over a defendant who has
insufficient presence in New York under the "doing business"
requirements of CPLR § 301.*fn7
"Transacting business" requires only a minimal quantity of
activity, provided that it is of the right nature and quality.
Lawrence Wisser and Co., Inc. v. Slender You, Inc., 695 F. Supp. 1560,
1562 (S.D.N.Y. 1988) (Sweet, J.). See also American
Edelstaal, Inc. v. Maier, 460 F. Supp. 613, 618 (S.D.N.Y. 1978)
(Griesa, J.). "No single contact or event connecting the
defendant to New York is required; rather, the totality of the
defendant's contact with the forum must indicate that the
exercise of jurisdiction is proper." Future Ways, Inc. v.
Odiorne, 697 F. Supp. 1339, 1342 (S.D.N.Y. 1988) (Leisure, J.).
There is no simple quantitative test which can be applied to
determine the propriety of jurisdiction. Looking to the context
of the situation, courts have found jurisdiction proper based
on one telephone call, Parke-Bernet Galleries, Inc. v.
Franklyn, 26 N.Y.2d 13, 18, 308 N.Y.S.2d 337, 340,
256 N.E.2d 506 (1970), and impermissible in a situation in which there
were 80 telephone calls and 30 facsimile transmissions.
Lawrence Wisser and Co., Inc. v. Slender You, Inc., supra, 695
F. Supp. at 1563. Similarly, the New York Court of Appeals has
found a one-day visit to New York to be sufficient to confer
jurisdiction under some circumstances, George Reiner & Co.,
Inc. v. Schwartz, 41 N.Y.2d 648,
654, 394 N.Y.S.2d 844, 848, 363 N.E.2d 551, 555 (1977)
(although defendant was only in New York one day, this was held
sufficient because the day was filled with establishing a
contractual relationship with a New York corporation), and
insufficient under others. McKee Elec. Co. v. Rauland-Borg
Corp., 20 N.Y.2d 377, 382, 283 N.Y.S.2d 34, 37, 229 N.E.2d 604,
607 (1967) (company manager's one day visit to New York to
attend meeting held insufficient to assert jurisdiction under
CPLR § 302). It has been expressly held that simply supplying
reinsurance on New York insurance policies does not give rise
to jurisdiction under the transacting business test without
some further contact. Birmingham Fire Ins. Co. v. KOA Fire &
Marine Ins., 572 F. Supp. 962, 967 (S.D.N.Y. 1983) (Carter, J.).
The only activity which plaintiffs allege is connected to
their indemnification claim against defendants is one meeting
in New York between defendants and Manhattan Life, and
follow-up letters to that meeting. These contacts are of
sufficient quantity to find that defendants were transacting
business if the meeting in New York had some substantial or
critical relationship to the matters which form the basis for
this litigation. If, on the other hand, the New York meeting
concerned matters between defendants and Manhattan Life which
are outside the scope of the transaction in question, CPLR
§ 302(a)(1) jurisdiction would be improper. Because plaintiffs
have not provided any facts regarding the subject matter of the
November 7, 1983 meeting, the court cannot find that the
defendants have transacted business within New York.
A party may be allowed to engage in discovery regarding
jurisdiction at the court's discretion. Grove Valve & Regulator
Co., Inc. v. Iranian Oil Services, 87 F.R.D. 93, 96 n. 8
(S.D.N.Y. 1980) (Weinfeld, J.). While a court should not
approve a fishing expedition when little more exists than
plaintiff's bare assertions that jurisdiction is proper, under
New York law plaintiffs are entitled to discovery regarding the
issue of personal jurisdiction if 'they have made a sufficient
start, and shown their position not to be frivolous." Peterson
v. Spartan Industries, Inc., 33 N.Y.2d 463, 467, 354 N.Y.S.2d
905, 908, 310 N.E.2d 513, 516 (1974); Singer v. Bell,
585 F. Supp. 300, 304 (S.D.N.Y. 1984) (Weinfeld, J.); Amigo Foods
Corp. v. Marine Midland Bank-N.Y., 39 N.Y.2d 391, 395, 384
N YS.2d 124, 126-27, 348 N.E.2d 581, 583-84 (1976). Contrary
to the contentions of the defendants, "[a] prima facie showing
. . . simply is not required. . . ." Grove Valve & Regulator v.
Iranian Oil Services, supra, 87 F.R.D. at 95 n. 8.
As explained above, plaintiffs have not made a prima facie
showing that the court has jurisdiction. However, they have
made a sufficient start and shown their position to be
non-frivolous. Therefore, discovery is appropriate. Plaintiffs
have provided affidavits showing that defendants solicited and
consummated some business in New York prior to this
transaction, and had at least one meeting in New York
subsequent to and allegedly concerning this transaction. This
is sufficient to allow plaintiffs the opportunity to obtain
evidence from the defendants regarding their New York
activities. While the defendants question the accuracy of the
affidavits supplied by the plaintiffs, this is not a reason to
avoid granting discovery. Under these circumstances, discovery
is an appropriate vehicle so that an ultimate determination as
to jurisdiction can be reached.
In sum, plaintiffs have not shown that the court has personal
jurisdiction over the defendants. However, their request for
discovery, limited to the issue of personal jurisdiction over
the defendants, is granted. Plaintiffs have six weeks from the
date of this opinion to complete their discovery and file any
additional papers in support of the court's jurisdiction. The
defendants will respond to plaintiffs' submission in the time
and manner provided in Rule 12, F.R. Civ.P., and Rule 3 of the
Local Civil Rules
for the Southern and Eastern Districts of New York.
IT IS SO ORDERED.