Kingstown Capital Mgmt. L.P. v. CPI Prop. Grp., S.A.

• Citation: 205 A.D.3d 467,167 N.Y.S.3d 92
• Decision Date: 05 May 2022
• Docket Number: 15890,Index No. 153862/20,Case No. 2021–01696
• Parties: KINGSTOWN CAPITAL MANAGEMENT L.P., et al., Plaintiffs–Appellants, v. CPI PROPERTY GROUP, S.A., et al., Defendants–Respondents.
• Court: New York Supreme Court Appellate Division

205 A.D.3d 467

167 N.Y.S.3d 92

KINGSTOWN CAPITAL MANAGEMENT L.P., et al., Plaintiffs–Appellants,

v.CPI PROPERTY GROUP, S.A., et al., Defendants–Respondents.

15890

Index No. 153862/20

Case No. 2021–01696

Supreme Court, Appellate Division, First Department, New York.

ENTERED May 5, 2022

Boies Schiller Flexner LLP, New York (Matthew L. Schwartz of counsel), for appellants.

Hogan Lovells U.S. LLP, New York (Seth M. Cohen of counsel), for respondents.

Gische, J.P., Kern, Oing, Gonza´lez, Scarpulla, JJ.

Order, Supreme Court, New York County (Barbara Jaffe, J.), entered on or about April 6, 2021, which granted defendants’ motion to dismiss the complaint for lack of personal jurisdiction, unanimously affirmed, with costs.

In 2012, plaintiff Kingstown Capital Management L.P. acquired an interest in ORCO, a Luxemburg-based real estate development company. Plaintiffs allege that through a series of corrupt and fraudulent transactions, defendant Radovan Vitek, a Czech Republic citizen, obtained a majority stake in ORCO, which he restructured to form defendant CPI Property Group S.A. (CPIPG), and Kingstown was ultimately forced to sell its shares in ORCO at a substantial loss. As a result, plaintiffs commenced an action against defendants in the Southern District of New York. CPIPG issued a press release stating that plaintiffs had acted improperly in filing the federal action; as a result of that press release, plaintiffs commenced this action seeking damages for defamation.

Plaintiffs failed to establish personal jurisdiction over defendants under CPLR 302(a)(1), New York's long-arm statute, as they did not show that defendants engaged in purposeful activities in New York, conducted or transacted business in this state, or availed themselves of the benefits of New York law (see SPCA of Upstate N.Y., Inc. v. American Working Collie Assn., 18 N.Y.3d 400, 404, 940 N.Y.S.2d 525, 963 N.E.2d 1226 [2012] ; Copp v. Ramirez, 62 A.D.3d 23, 28, 874 N.Y.S.2d 52 [1st Dept. 2009], lv denied 12 N.Y.3d 711, 2009 WL 1543926 [2009] ). What plaintiffs describe as a press "campaign" was a single press release, which was distributed to a German newswire service, DGAP; in turn, DGAP distributed the press release to its 20 or so international outlets, including Bloomberg. Plaintiffs maintain that defendants intended the press release to reach a New York audience because they knew that, by using DGAP to distribute the press releases, Bloomberg would publish the press release in New York County. However, placing allegedly defamatory content on the internet and making it accessible to the public does not...