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KLINGHOFFER v. S.N.C. ACHILLE LAURO

March 29, 1993

ILSA KLINGHOFFER and LISA KLINGHOFFER ARBITTER, as Co-Executrixes of the Estates of LEON and MARILYN KLINGHOFFER, Plaintiffs,
v.
S.N.C. ACHILLE LAURO ED ALTRI-GESTIONE MOTONAVE ACHILLE LAURO IN AMMINISTRAZIONE STRAORDINARIA; COMMISSARIO OF THE FLOTA ACHILLE LAURO IN AMMINISTRAZIONE STRAORDINARIA; CHANDRIS (ITALY) INC.; PORT OF GENOA, ITALY; CLUB ABC TOURS, INC.; and CROWN TRAVEL SERVICE, INC., d/b/a, RONA TRAVEL and/or, CLUB ABC TOURS, Defendants. SOPHIE CHASSER, et al., Plaintiffs, v. ACHILLE LAURO LINES, et al., Defendants. VIOLA MESKIN, et al., Plaintiffs, v. ACHILLE LAURO LINES, et al., Defendants. DONALD SAIRE, et al., Plaintiffs, v. ACHILLE LAURO ED ALTRI-GESTIONE M/N ACHILLE LAURO S.N.C., et al., Defendants.


STANTON


The opinion of the court was delivered by: LOUIS L. STANTON

Third party plaintiff Crown Travel Service, Inc. ("Crown") moves for an order pursuant to N.Y. C.P.L.R. § 308 confirming the propriety of service of process on third party defendant the Palestine Liberation Organization (the "PLO"), or directing substituted process.

 Background

 The original defendants in this case, including Crown, filed third-party claims against the PLO, alleging its involvement in the 1985 hijacking of the vessel "Achille Lauro" in the Mediterranean Sea. Crown's amended third-party complaint names as defendants "John Doe #1, as Treasurer of and John Doe #2, as president of the Palestine Liberation Organization, an Unincorporated Association; and the Palestine Liberation Organization." Zehdi Terzi, the PLO's Permanent Observer to the United Nations, was served personally in New York. The PLO challenged the adequacy of that service and the court's jurisdiction over it.

 By Opinion and Order dated June 7, 1990, this court rejected the PLO's contention that it is a sovereign state and thus immune from this suit. The court held that the definition of a "state" "does not fit the PLO closely enough to justify treating it as a foreign sovereign or state in this litigation," but rather, "for present purposes, it may be treated as an unincorporated association." Klinghoffer v. S.N.C. Achille Lauro, 739 F. Supp. 854, 858 (S.D.N.Y. 1990). The court also held that the PLO's activities in New York, including its United Nations-related activities, were sufficient to subject the PLO to personal jurisdiction in New York.

 Holding that even if foreign substantive law applied to the case, "it will be because federal law requires its use," the court found that the Federal Rules of Civil Procedure governed the PLO's capacity to be sued and the manner of service upon it. 739 F. Supp. at 866. It followed that the PLO could be sued in its own name by serving Mr. Terzi (who could be treated as a managing or general agent) pursuant to Fed. R. Civ. P. 17(b) *fn1" and 4(d)(3), rather than under the New York rule which requires naming and serving the president or treasurer of an unincorporated association. 739 F. Supp. at 866-67.

 The Court of Appeals agreed that the PLO could be treated as an unincorporated association, but held that this court improperly considered the PLO's United Nations activities in finding the PLO subject to personal jurisdiction, and disagreed with the analysis of the choice of law and service of process issue. The Court of Appeals held that if choice of law analysis under Lauritzen v. Larsen, 345 U.S. 571, 73 S. Ct. 921, 97 L. Ed. 1254 (1953), requires application of Italian law to this case,

 
no federal right would be involved, and Rule 17(b) would require the application of New York law with respect to the method of bringing suit against an unincorporated association. Thus, because New York law mandates serving the PLO's president or treasurer, service of process on the Permanent Observer would be inadequate, and the complaints would have to be dismissed.

 Klinghoffer v. S.N.C. Achille Lauro, 937 F.2d 44, 54 (2d Cir. 1991). Of course, such dismissal would be without prejudice. Ibid. Accordingly, the Court of Appeals remanded the case with instructions to determine whether the court has personal jurisdiction over the PLO and, if so, whether service of process on Mr. Terzi was sufficient.

 On remand, this court found that the PLO was doing sufficient non-United Nations-related business within the state to make it "present" for purposes of New York long-arm jurisdiction when the cases brought before 1988 were filed, but those filed thereafter made no such showing and were dismissed. Klinghoffer v. S.N.C. Achille Lauro, 795 F. Supp. 112, 114-15 (S.D.N.Y. 1992). This court also found that Italian law applies to the claims against the PLO, and followed the Court of Appeals, holding that accordingly, "the service thus far made upon it is ineffective." 795 F. Supp. at 116. The claims against the PLO were therefore dismissed without prejudice for lack of jurisdiction, because of ineffective service of process. Ibid.

 Crown now moves for an order either "confirming the propriety" of service on Mr. Terzi as a method of serving the PLO's president or treasurer, or directing alternative means of service.

 In deciding that the service previously made on the PLO was ineffective, neither this court nor the Court of Appeals has considered or addressed Crown's present assertion that New York law permits alternative methods of service upon the president or treasurer of an unincorporated association, as natural persons, if ordered by the court. Accordingly, it is examined afresh.

 Discussion

 Section 13 of the New York General Associations Law provides that "an action or special proceeding may be maintained, against the president or treasurer of such an [unincorporated] association . . . ." The rule is for the convenience of plaintiffs, who would otherwise have to name and serve all members of the association, Martin v. Curran, 303 N.Y. 276, 101 N.E.2d 683 (Ct. App. 1951); Coleman v. Pokodner, 163 N.Y.S.2d 161, 164, 6 Misc. 2d 955 (N.Y.Sup.Ct. 1957), since an unincorporated association cannot be sued in its proper ...


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