The New York Law Blog: Suing Overseas Companies In New York - Understanding The "Long Arm" Statute
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Friday, August 26, 2016

Suing Overseas Companies In New York - Understanding The "Long Arm" Statute

NY Civil Procedure, Long Arm Statute
A recent decision highlights the importance of understanding New York's "Long-Arm" Statute when considering to sue an overseas business.

A New York court ruled that a flight attendant claiming that a defectively designed jump seat on an Airbus made in France caused her injury on a flight from Boston to Washington D.C. could not sue for damages in New York because she had failed to fulfill the requirements of New York's "long arm" statute contained in CPLR 302(a).

To sue an entity in New York under the "long arm" statute, you must be able to prove that the other party:
  1. transacts any business within the state or contracts anywhere to supply goods or services in the state;  or

  2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act;  or

  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;  or

  4. owns, uses or possesses any real property situated within the state.
When determining if a party "transacts business" in New York, it is necessary to establish that the defendant’s activities within New York are purposeful and that there is a substantial relationship, or "nexus" between the transaction of business and the claim asserted.  Facts that would establish such a "nexus" are:
  • whether the defendant has an on-going contractual relationship with a New York plaintiff; 

  • whether the contract at issue was negotiated or executed in New York and whether, after executing the contract, the defendant visited New York for the purpose of meeting the parties to the contract regarding the relationship; 

  • the choice-of-law clause in the contract; 

  • whether the contract required the defendant to send notices and payments into the forum state or subjected them to supervision by a corporation in the forum state. 
Airbus argued that it leased this particular aircraft to the flight attendant's employer, United, in France and that therefore the flight attendant could not establish a "substantial nexus" between the business Airbus transacts in New York and the flight attendant's injuries.

The judge agreed, holding that the flight attendant, who failed to allege where her cause of action arose "failed to demonstrate any relationship between her alleged injuries and the state of New York."

This raises an important lesson for potential litigants dealing with potential out-of-state defendants. Whether your claim involves personal injury, contracts or any other business concerns, it is critical that you review all relevant New York contacts and the factors we noted here before commencing litigation to ensure that you can obtain jurisdiction over that party before filing anything.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.