The opinion of the court was delivered by: LESLIE G. FOSCHIO
REPORT and RECOMMENDATION
FOSCHIO, Magistrate Judge.
This matter was referred to the undersigned by the Hon. William M. Skretny, on March 27, 1991, for determination of any non-dispositive motions and report and recommendation on Defendants' motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2).
This action, arising out of an automobile fire and explosion in Port Colborne, Ontario, Canada, was originally filed by Plaintiffs in New York State Supreme court, Erie county, on July 31, 1989 asserting causes of action under the theories of strict products liability, negligence, and breach of implied warranties. The action was removed to federal court by Defendants on September 11, 1989 based on diversity. Plaintiff Vendetti is a Vermont resident; Plaintiff Kowalick is a New York resident; Defendant Fiat Auto S.p.A. is an Italian corporation; and, Defendant Fiat Auto U.S.A., Inc. is a Delaware corporation with a principal place of business in New Jersey.
On October 13, 1989, Defendants filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), 12(b)(4), and 12(b)(5), dismissing the action for lack of personal jurisdiction, insufficiency of process, or alternatively, under the doctrine of forum non conveniens, dismissal of the action in favor of suit in the Province of Ontario, Canada. Defendants, by affidavit filed January 10, 1990, withdrew their motion for dismissal of the complaint for insufficiency of process pursuant to Fed.R.Civ.P. 12(b)(4) and (5). See, Affidavit of Francesco De Salvia, Manager, Quality Assurance Department, Fiat Auto S.p.A. (undated).
Judge Curtin, the district judge originally assigned to this case, met with counsel relative to the matter on August 17, 1990 and ordered that Plaintiffs be permitted to conduct limited discovery relating to jurisdiction only prior to the argument of the instant motion. Jurisdictional discovery was to be completed by December 14, 1990. A stipulation and order concerning confidentiality of certain discovery documents and materials was entered into by counsel on December 12, 1990.
After objections were raised by Defendants to certain of Plaintiffs' discovery requests, Plaintiffs filed a motion to compel on January 22, 1991. This court issued a Memorandum and Order on April 26, 1991, granting in part and denying in part Plaintiffs' motion to compel, and extending the time for completion of jurisdictional discovery until August 1, 1991. The discovery completion date was subsequently extended until September 13, 1991. Oral argument was heard from counsel relative to the matter on November 7, 1991.
For the reasons as stated below, I recommend that Defendants' motion to dismiss for lack of personal jurisdiction be GRANTED. Alternatively, I recommend that Defendants' motion to dismiss on the ground of forum non conveniens be DENIED.
Plaintiff Vendetti purchased the used 1977 model year 124 Fiat automobile which is the subject of this lawsuit in August, 1986 from a business establishment known as Repairs-R-Us in South Fallsburg, New York.
The vehicle was manufactured and assembled by Defendant Fiat Auto S.p.A. in Torino, Italy and imported into the United States by the predecessor of Defendant Fiat Auto U.S.A., Inc., Fiat Motors of North America, in 1976. As stated previously, Fiat Auto S.p.A. is an Italian corporation and Fiat Auto U.S.A., Inc. is a Delaware corporation with a principal place of business in New Jersey.
The vehicle was sold directly to a Fiat dealer in Florida, which in turn sold it to a customer located in Florida in May, 1977. The vehicle, presumably through used car ownership transfers, subsequently came into the possession of Repairs-R-Us, which sold the vehicle to Vendetti.
On September 1, 1986, Vendetti and his sister, Plaintiff Kowalick, left Buffalo, New York in the vehicle to spend the day at Sherkston Beach in Ontario, Canada. While Vendetti was operating the vehicle on Garrison Road in Port Colborne, Ontario, on the way to the beach, the vehicle caught fire and exploded, causing Plaintiffs serious personal injuries. Following the accident, Plaintiffs were transported back to Buffalo, New York where they were hospitalized and treated at the Burn Treatment Center of Sheehan Memorial Hospital. Plaintiffs were also subsequently treated by other physicians in the Buffalo area following their release from the hospital.
The issue before this court on Defendants' motion to dismiss is whether either or both Defendants are subject to personal jurisdiction in New York. Since limited discovery on the issue of jurisdiction has been allowed by the court, Plaintiff has the burden of proving that personal jurisdiction exists by a preponderance of the evidence. Londoil Resources v. Alexander & Alexander Services, Inc., 918 F.2d 1039 (2d Cir. 1990). However, as no hearing or trial on the merits has been heard by the court, all pleadings and affidavits must be construed in the light most favorable to Plaintiff. See, Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985).
In a diversity case, the amenability of a defendant to personal jurisdiction is governed by state law. See, Insurance Corporation of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 711 (1982); Cargill, Inc. v. Sabine Trading and Shipping Co., 756 F.2d 224, 227 (2d Cir. 1985). Although Plaintiffs originally contended that personal jurisdiction over Defendants existed under either Sections 301 or 302 (long-arm jurisdiction) of the New York Civil Practice Laws and Rules ("CPLR"), at oral argument on this motion, Plaintiffs conceded that there was no basis for Section 302 jurisdiction over either Defendant in this case, and have concentrated their argument on their claim that CPLR § 301 applies. Defendants assert that they are not present in New York within the meaning of CPLR § 301, and that, therefore, they are not subject to jurisdiction in New York courts.
Section 301 permits a New York court to exercise jurisdiction over a foreign corporation on any cause of action if the defendant is "engaged in such a continuous and systematic course of 'doing business' here as to warrant a finding of 'presence' in this jurisdiction. Landoil Resources, supra, at 1043. See also, Tauza v. Susquehanna Coal Co., 115 N.E. 915 (N.Y. 1917) (jurisdiction may be acquired over a foreign corporation under Section 301 if it is doing business "not occasionally or casually, but with a fair measure of permanence and continuity"). In order to establish personal jurisdiction over either or both Defendants, Plaintiffs must establish that either or both Defendants have certain minimum contacts with New York such that the maintenance of this cause of action will not offend traditional notions of fair play and substantial justice so as to satisfy due process requirements. See, International Shoe v. Washington, 326 U.S. 310 (1945). Specifically, "there must be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). See also, Frummer v. Hilton Hotels International, 227 N.E.2d 851 (N.Y. 1967), cert. denied, 389 U.S. 923 (1967) (where a foreign corporation receives considerable benefits from within the forum state, it may not be heard to complain about the burdens placed on it by the forum state).
The New York courts have enumerated various factors to consider when determining if a foreign corporation has minimum contacts within the state including the existence of bank accounts, employees, ownership of leases on real property, public relations and publicity work, and sales within the state. See, Laufer v. Ostrow, 434 N.E.2d 692 (N.Y. 1982); Frummer, supra; Bryant v. Finnish National Airline, 208 N.E.2d 439 (N.Y. 1965). Jurisdiction may also be acquired over a foreign corporation if a parent-subsidiary relationship is present between a New York corporation and a foreign corporation and there is either a valid agency relationship between the two companies, or the control by the parent of the subsidiary is so complete that the subsidiary is a "mere department" of the parent. See, Saraceno v. S.C. Johnson & Son, 83 F.R.D. 65 (S.D.N.Y. 1979); Sun First Bank v. Miller, 77 F.R.D. 430 (S.D.N.Y. 1978). Also, while not sufficient in themselves, factors such as advertising within the state, conducting litigation, planning and executing business tactics and strategy, and obtaining commercial credit arrangements may, when taken together with other relevant contacts and activities, provide a basis for establishing jurisdictional presence. See, Hoffritz for Cutlery, Inc., supra; Katz Communication, inc. v. Evening News Association, 705 F.2d 20 (2d Cir. 1983); Rolls-Royce Motors v. Charles Schmitt & Co., 657 F. Supp. 1040 (S.D.N.Y. 1987); Cf., Andros Compania Martima, S.A. v. Intertanker Ltd., 714 F. Supp. 669 (S.D.N.Y. 1989). The relevant time frame for a jurisdictional inquiry under N.Y. CPLR § 301 is at the time of the summons and complaint. See, Andros Compania Martima, S.A., supra.
1. Structure and Contacts of Defendants within New York
Fiat Auto S.p.A. is a wholly owned subsidiary of a giant Italian conglomerate, Fiat S.p.A., which is the parent of numerous companies collectively known as the "Fiat Group." Fiat Auto S.p.A. was incorporated in Italy in 1978 as the auto manufacturing arm of Fiat S.p.A.
Fiat Auto U.S.A., Inc. ("FAUSA") was incorporated in 1984 and is a wholly owned subsidiary of Fiat U.S.A., Inc., a New York corporation. In 1984, the corporation which had originally imported into the United States the vehicle at issue in this case, Fiat Motors of North America, was merged into Fiat U.S.A., Inc. Fiat U.S.A. is a wholly owned subsidiary of Fiat U.S.A. Holdings, Inc., which, in turn, is a wholly owned subsidiary of ...