While it is a close question, I adhere to the view that the New York Court of Appeals would conclude that the suing parties in this case have made a prima facie showing that Seatriumph was "present" in New York for purposes of section 301 jurisdiction. The opinion of the New York Court of Appeals in Landoil Resources Corp. v. Alexander & Alexander Servs. Inc., 77 N.Y.2d 28, 565 N.E.2d 488, 563 N.Y.S.2d 739 (1990), supports this conclusion. In that case, the court did not hold that a New York bank account can never ground section 301 jurisdiction. Rather, the court emphasized that the defendant could not deposit or withdraw money from the fund at issue, and that the fund's location in New York was fortuitous. 563 N.Y.S.2d at 742-43. Here, prima facie, Seatriumph had control over its money in Richmond's account in New York. In addition, Seatriumph purposefully chose New York and the New York bank account for the receipt and distribution of the revenue of its business.
Seatriumph has not offered any reason to depart from my earlier conclusion that the New York bank account was in existence at the time of the filing of the third-party complaint. Nor does Seatriumph raise any question about the constitutionality of requiring it to defend this suit in New York.
Ny earlier opinion did not discuss the other grounds advanced by Kim-Sail for personal jurisdiction over Seatriumph. I now briefly address them.
Kim-Sail contends that Kersten is an agent of Seatriumph and Kersten's conduct in negotiating charters and collecting payments from charterers of the Katia is sufficient to ground jurisdiction over Seatriumph. However, the evidence indicates that Kersten acted as an agent for Kim-Sail rather than Seatriumph. As Kim-Sail itself admits, the chartering activities of Kim-Sail were conducted exclusively in the State of New York at Kersten's office in White Plains, New York, and the commercial handling of the voyages under the charter was attended to on Kim-Sail's behalf by Kersten at its office in Manhattan. (Sondheim Aff. paras. 3-4.)
Even if Kersten acted in behalf of Seatriumph in isolated instances, Kim-Sail has failed to make a prima facie case that Kersten acted for Seatriumph on systematic and continuous basis as required for jurisdiction under section 301.
Kim-Sail also relies on the telexes of September 22 and 23, 1988, from Seatriumph's managing agent in Pireaus, as evidence that Seatriumph retained a New York agent. These documents do not explicitly identify this "New York agent." As discussed above, however, these telexes appear to refer to the Continental Bank as Seatriumph's New York agent, and thus confirm the extent to which Pierson, the bank employee in charge of the account, performed the services in behalf of Seatriumph for which an agent in New York would otherwise have been required.
The other activities pointed to by Kim-Sail, the Katia's visits to New York and the borrowing of money by Seatriumph from a New York bank, also do not rise to the level of systematic and continuous activities. Accordingly, the New York bank account provides the only basis for exercising personal jurisdiction over Seatriumph in New York under section 301.
2. CPLR § (a)(3)
Kim Sail also contends that personal jurisdiction over Seatriumph is authorized by CPLR § 302(a)(3). That section 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 non-domiciliary . . . who in person or through an agent:
. . . .
3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he
(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or
(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce . . . .
Thus, Kim-Sail must make a prima facie showing that (1) Seatriumph or its agent committed a tortious act outside of New York; (2) that the tort caused injury to Kim-Sail within New York; (3) that Seatriumph should reasonably have expected the tortious act to have consequences in New York; and (4) that Seatriumph derives substantial revenue from interstate or international commerce. See America Eutectic Welding Alloys Sales Co. v. Dytron Alloys Corp., 439 F.2d 428, 432 (2d Cir. 1971)
In this case, Kim-Sail has not shown injury in New York. Kim-Sail defines its purported injury as the profits that its New York office will potentially lose from having to pay damages in this suit brought against it in New York by United Rope. Kim-Sail correctly argues that the scope of CPLR § 302(a)(3) is not limited to physical injuries, and economic harm may form the basis of a cognizable claim. But, under section 302(a)(3), an injury, even an economic one, is not deemed to have occurred in New York merely because the plaintiff is domiciled in this state. American Eutectic Welding, 439 F.2d at 433 (quoting Friedr. Zoellner (New York) Corp. v. Tex Metals Co., 396 F.2d 300, 303 (2d Cir. 1968) ("Section 302(a)(3) is not satisfied by remote or consequential injuries which occur in New York only because the plaintiff is domiciled, incorporated or doing business in the state.")); McGowan v. Smith, 52 N.Y.2d 268, 419 N.E.2d 321, 324, 437 N.Y.S.2d 643, 646 (1981) (injury not deemed to occur in New York merely because injured party resides in New York). Rather, the place of injury is where "the critical events associated with the dispute took place." Chemical Bank v. World Hockey Ass'n, 403 F. Supp. 1374, 1380 (S.D.N.Y. 1975). This usually means that the acts causing the injury must have occurred in New York, Mayer v. Josiah Wedgwood & Sons, 601 F. Supp. 1523, 1530 n.5 (S.D.N.Y. 1985), or that there was a significant loss of New York business, American Eutectic Welding, 439 F.2d at 433; Sybron Corp. v. Wetzel, 46 N.Y.2d 197, 385 N.E.2d 1055, 413 N.Y.S.2d 127, 131 (1978). Since Kim-Sail has not shown that the event leading up to the sinking of the Katia occurred in New York or that these events resulted in a loss of Kim-Sail's New York customers, the court's jurisdiction may not be predicated on section 302(a)(3).
Kim-Sail's reliance on Garbellotto v. Montelindo Compagnie Navegacion, S.A., 294 F. Supp. 487 (S.D.N.Y. 1969), is misplaced. In that case the defendant shipowner was sued after a longshoreman was physically injured in New York while unloading the owner's vessel. The defendant then impleaded the stevedore whose negligence in Georgia caused the physical injury in New York. Thus Garbellotto is distinguishable on its facts. But, in any event, the majority view is that more than a derivative loss of profits in New York must occur before a party is subject to section 302(a)(3).
Kim-Sail also fails to meet another requirement of economic injury as a basis for section 302(a)(3) jurisdiction. There is nothing in this case to suggest that Seatriumph should have expected that the loss of the Katia's cargo on its way to Wisconsin would result in a lawsuit in New York.
3. Consent to Jurisdiction
Finally, Kim-Sail's contention that Seatriumph consented to jurisdiction in New York through a forum selection clause contained in the bills of lading lacks merit. The forum selection clause provides that "any dispute arising under this Bill of Lading shall be decided in the country where the carrier has his principal place of business." (Lord Ex. 2.) Looking at the document in its entirety, however, it is clear that the clause is meant to refer to the vessel's owner, Seatriumph, and not the charterer, Kim-Sail. Since Seatriumph's principal place of business is Pireaus, Greece, the clause provides no basis for jurisdiction in New York.
4. Motion for Certification
Although Seatriumph's motion to dismiss is again denied, its alternative motion for certification of an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) is granted. A district court, in its discretion, may certify an otherwise unappealable order where the order (1) involves a controlling question of law (2) as to which there is a substantial ground for difference of opinion, and (3) where an immediate appeal may materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b); Klinghoffer v. S.N.C. Achille Lauro, 921 F.2d 21, 23 (2d Cir. 1990); Alpex Computer Corp. v. Nintendo Co., No. 86 Civ. 1749, 1991 U.S. Dist. LEXIS 17559, at *2 (S.D.N.Y. Dec. 5, 1991). The denial of a motion to dismiss on the ground of lack of in personam jurisdiction is properly certifiable pursuant to the statute. See Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326, 1330 (2d Cir. 1972); Donatelli v. National Hockey League, 893 F.2d 459, 461 (1st Cir. 1990). It is my opinion that this order which bases section 301 jurisdiction on a New York bank account satisfies the criteria of section 1292(b).
For the reasons discussed above, Seatriumph's motion to dismiss the third-party complaint for lack of personal jurisdiction is again denied, as is its motion to dismiss United Rope's amended complaint. The motion to certify this interlocutory order to the Second Circuit, pursuant to 28 U.S.C. § 1292(b), is granted.
Dated: New York, New York
February 28, 1992
MIRIAM GOLDMAN CEDARBAUM
United States District Judge