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United States District Court, N.D. New York

March 24, 2004.


The opinion of the court was delivered by: FREDERICK SCULLIN, Chief Judge, District



  On February 19, 2002, Plaintiff filed a personal injury suit in this Court enumerating causes of action in negligence, breach of warranty and strict products liability against Defendant, an Italian corporation with its principal place of business in Italy.

  Presently before the Court is Defendant's renewed motion for dismissal of the complaint under Federal Rule of Civil Procedure 56(c) and Plaintiff's request for an order pursuant to Page 2 Federal Rule of Civil Procedure 37.


  According to Plaintiff, during March, 1999, he was an employee at American Tissue Corporation ("ATC") at its mill in Greenwich, New York. While at work, Plaintiff was walking along the floor of a dump station of the Tissue Slitter Rewinder ("rewinder"), a machine which Defendant designed, manufactured, and distributed. Plaintiff contends that he stepped into a depression in the machine, fell forward, and trapped his right hand and arm in the rewinder. He sustained permanent and severe personal injuries. Plaintiff contends that his injury resulted from Defendant's improper design, manufacture, and installation of the machine.

  On September 30, 2002, Defendant moved to dismiss the complaint on the grounds that this Court lacks personal jurisdiction over Defendant, or, alternatively, on the grounds of'forum non conveniens. See Dkt. No. 12. On December 5, 2002, the Court denied the motion to dismiss without prejudice and with leave to renew and issued a Memorandum-Decision and Order permitting Plaintiff to engage in limited discovery*fn1 in order to determine whether the Court had Page 3 personal jurisdiction over Defendant under New York's long arm statute, N.Y. C.P.L.R. § 302(a)(1) or § 302(a)(3)(ii).*fn2 See Dkt. No. 19. The Court also denied the motion for dismissal on the grounds of forum non conveniens.

  Defendant renewed its motion to dismiss for lack of personal jurisdiction on June 27, 2003. Plaintiff opposes the motion and requests sanctions pursuant to Rule 37 of the Federal Rules of Civil Procedure, contending that this Court has personal jurisdiction over Defendant and that Defendant failed to answer several of the interrogatories Plaintiff sent pursuant to the Court's December 5, 2002 Order. Page 4


 A. Personal jurisdiction under New York's long-arm statute

  Section 302(a)(1) of New York's long-arm statute "has two prongs, either of which can form a basis for the exercise of personal jurisdiction over a non-domiciliary." Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 786 (2d Cir. 1999) (citations omitted); see also N.Y. C.P.L.R. § 302(a)(1). Under the transaction-of-business prong, a "party need not be physically present in the state at the time of service." Id. at 787 (citation omitted). Rather, the statute extends the jurisdiction of New York state courts to a nonresident who "`purposely availed [himself] of the privilege of conducting activities within New York and thereby invoked the benefits and protections of its laws . . . Id. (quotation omitted).'" [A] `single transaction would be sufficient to fulfill this requirement,'". . . so long as the relevant cause of action also arises from that transaction." Id. (citation and footnote omitted). To determine whether a non-domiciliary has transacted business in New York within the meaning of § 302(a)(1), "the court must consider the totality of the circumstances surrounding the contract action." Great Northern Ins. Co. v. Constab Polymer-Chemie GMBH & Co., No. 5:01-CV-882, 2002 WL 31084727, *4 (N.D.N.Y. Sept. 17, 2002) (citation omitted).

  The second prong of § 302(a)(1) "captures cases where there are minimal contacts in New York, and, for example, a contract is made elsewhere for goods to be delivered or services to be performed in New York." Bank Brussels Lambert, 171 F.3d at 789 (citation omitted). In applying this provision,

  courts may consider whether the purchase orders and other documents provide for shipment to New York; whether the defendant collected New York sales tax in connection with the Page 5 transaction; whether the defendant solicited the contract in New York; whether the defendant entered New York for the purposes of performing the contract; and any other factor showing that defendant voluntarily and purposefully availed itself of the privilege of transacting business in New York.

 Great Northern Ins. Co., 2002 WL 31084727, at *4 (citation omitted).

  Jurisdiction under § 302(a)(3)(ii) requires that a plaintiff establish five elements: (1) "the defendant committed a tortious act outside the State," (2) "the cause of action arises from that act," (3) "the act caused injury to a person or property within the State," (4) the "defendant expected or should reasonably have expected the act to have consequences in the State," and (5) the "defendant derived substantial revenue from interstate or international commerce." LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, 214 (2000); see also N.Y. C.P.L.R. § 302(a)(3)(ii). "New York courts have looked to both the absolute amount and percentage of a defendant's interstate income in determining whether that income is substantial." Barricade Books, Inc. v. Langberg, No. 95 CIV. 8906, 2000 WL 1863764, *6 (S.D.N.Y. Dec. 19, 2000) (citations omitted); see also Vecchio v. S & T Mfg. Co., 601 F. Supp. 55, 57 (E.D.N.Y. 1984).

  Defendant contends that Plaintiff has not come forward with any evidence that Defendant transacted business in New York or had any expectation that its actions would have consequences in New York. According to Defendant, it refused to answer several of Plaintiff's interrogatories because they were outside the scope of this Court's limited discovery Order, and instead relate to the merits of the case.

  In turn, Plaintiff contends that Defendant has now admitted that from 1999 onward, it derived well over half of its revenue each year from sales outside Italy. Plaintiff argues that this Page 6 fact helps him make his prima facie showing of jurisdiction under § 302(a)(3)(ii), which requires a plaintiff to show that a defendant derived "substantial revenue from interstate or international commerce." N.Y. C.P.L.R. § 302(a)(3)(ii). Furthermore, Plaintiff contends that he was unable to obtain other facts supporting jurisdiction because of Defendant's bad faith failure to answer most of its interrogatories.

  Since the Court now has an indication that Defendant derives substantial revenue from international commerce, Plaintiff's prima facie showing of personal jurisdiction is somewhat stronger, although the question of whether Defendant "expected or should reasonably have expected the act to have consequences in the State" remains unanswered. LaMarca, 95 N.Y.2d at 214. However, the discovery that the parties conducted pursuant to the Court's Order has been deficient. Some of Defendant's objections, such as its objection to Plaintiff's request that it disclose whether it repaired the machine after its shipment to New York, are unfounded because such information would help resolve the jurisdictional issues under the fourth and fifth elements of § 302(a)(3)(ii) of the long-arm statute. On the other hand, although Defendants have been less than forthcoming in their interrogatory responses, some of Plaintiff's interrogatories are outside the scope of the Court's Order. For instance, any of Plaintiff's interrogatories about safety warnings or the design of the rewinder are improper because they seek information that goes to the merits of the case rather than to any jurisdictional issues.

  Since neither party has fully complied with its December 5, 2002 Order, the Court directs the parties to engage in further discovery as to the following issues only:

  1) whether Defendant transacted business in New York within the meaning of Page 7 § 302(a)(1);


2) whether Defendant contracted to supply goods or services to ATC in New York; and
3) information about the terms of the contract between ATC and Defendant regarding the sale and installation of the rewinder, as well as any training that Defendant was to provide to ATC employees.
  Accordingly, the Court denies Defendant's motion to dismiss with leave to renew and remands this case to Magistrate Judge Treece for this and any other pre-trial discovery matters.


  After carefully considering the file in this matter and the parties' submissions, as well as the applicable law, and for the reasons stated herein, the Court hereby

  ORDERS that Defendant's motion to dismiss is DENIED with leave to renew; and the Court further

  ORDERS that Plaintiff's motion for sanctions pursuant to Rule 37 of the Federal Rules of Civil Procedure is DENIED; and the Court further

  ORDERS that this case is remanded to Magistrate Judge Randolph J. Treece for all further pre-trial discovery matters.


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