Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc.

• Decision Date: 27 May 1965
• Docket Number: LONGINES-WITTNAUER
• Citation: 261 N.Y.S.2d 8,15 N.Y.2d 443
• Court: New York Court of Appeals Court of Appeals
• Parties: , 209 N.E.2d 68, 24 A.L.R.3d 508 WATCH CO., Inc., Respondent, v. BARNES & REINECKE, INCORPORATED, Appellant. John FEATHERS et al., Respondents, v. Elizabeth McLUCAS, as Administratrix of the Estate of Robert J. McLucas, Deceased, et al., Defendants, and Darby Corporation, Appellant. Frederick F. SINGER, Individually and as Guardian ad Litem of Michael Singer, an Infant, Respondent, v. Alan WALKER, Doing Business as Walker's Minerals, Defendant, and Estwing Manufacturing Co., Inc., Also Known as Estwing Manufacturing Company, Appellant.

Page 8

261 N.Y.S.2d 8

15 N.Y.2d 443, 209 N.E.2d 68, 24

A.L.R.3d 508

LONGINES-WITTNAUER WATCH CO., Inc., Respondent, v. BARNES & REINECKE, INCORPORATED, Appellant.

John FEATHERS et al., Respondents, v. Elizabeth McLUCAS, as Administratrix of the Estate of Robert

J. McLucas, Deceased, et al., Defendants, and

Darby Corporation, Appellant.

Frederick F. SINGER, Individually and as Guardian ad Litem of Michael Singer, an Infant, Respondent, v. Alan WALKER, Doing Business as Walker's Minerals, Defendant, and Estwing Manufacturing Co., Inc., Also Known as

Estwing Manufacturing Company, Appellant.

Court of Appeals of New York.

May 27, 1965.

Chester Bordeau, New York City, for appellant in the first above-entitled action.

Henry P. Poole, New York City, for respondent in the first above-entitled action.

William J. Pentak and Ernest P. Lyons, Albany, for appellant in the second above-entitled action.

William H. Ivimey, Hoosick Falls, for respondents in the second above-entitled action.

Abraham Burstein and Nathan E. Zelby, New York City, for appellant in the third above-entitled action.

Harry L. Koenig, New York City, for respondents in the third above-entitled action.

Walter Herzfeld, Cecelia H. Goetz and Bernard J. Wald, New York City, for Chemie Gruenenthal G.m.b.H., amicus curiae.

FULD, Judge.

In the three cases under review one sounding in contract and two in tort we are called upon to decide whether the courts of this State acquired personal jurisdiction, under our 'long-arm' statute (CPLR 302), over foreign corporations not 'doing business' here in the traditional sense. Since there are several questions of law common to all three cases, we discuss such questions generally, at the outset, before undertaking a more particularized consideration of the cases themselves.

It is exceedingly clear that common-law principles of jurisdiction were early imported into the jurisprudence of the several states and have since taken on constitutional character by virtue of Supreme Court rulings that the improper exercise of jurisdiction by state courts infringes due process guarantees. (See, e. g., Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Riverside & Dan River Cotton Mills v. Menefee, 237 U.S. 189, 35 S.Ct. 579, 59 L.Ed. 510.) The traditional foundation of judicial jurisdiction is physical power (see McDonald v. Mabee, 243 U.S. 90, 91, 37 S.Ct. 343, 61 L.Ed. 608), and in the case of foreign corporations, with which we are here mainly concerned, unless they have voluntarily submitted to jurisdiction, such power is assertable solely on the basis of the activities of the corporations within the forum state.

The standard for assessing the irreducible minimum forum activities constitutionally requisite to subject foreign corporations and nonresident individuals to personal jurisdiction was reformulated in the cases of International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 and McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223. By those decisions, the Supreme Court opened a broad and previously unavailable although still largely undefined area for state exercise of jurisdiction over such parties. In place of the former rigid tests of 'residence' and 'doing business', the Supreme Court, in International Shoe, substituted the flexible requirement that a nonresident defendant, against whom a judgment in personam is sought in the forum state, be shown merely to 'have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice" (326 U.S., at p. 316, 66 S.Ct., at p. 158). And, in McGee, the court upheld the power of a state to subject a foreign corporation to suit in its courts on the basis simply of an isolated insurance contract 'which had substantial connection with that State' (355 U.S., at p. 223, 78 S.Ct., at p. 201). ¹

But this does not mean, the Supreme Court made clear in the later case of Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, that all restrictions on a state court's exercise of personal jurisdiction over foreign corporations have come to an end. Restating its view that 'progress in communications and transportation' has occasioned a relaxation of 'the rigid rule in Pennoyer v. Neff' and an evolution to 'the flexible standard of International Shoe', the court went on to caution that 'it is mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts' (357 U.S., at p. 251, 78 S.Ct., at p. 1238). 'The unilateral activity of those who claim some relationship with a nonresident defendant', the court concluded, 'cannot satisfy the requirement of contact with the forum State. * * * (I)t is essential in each case that there 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' (357 U.S., at p. 253, 78 S.Ct., at p. 1239).

Taking advantage of the Supreme Court's broadening of the bases for the exercise of personal jurisdiction over nondomiciliaries, the Legislature of this State, in 1962, following a study and a recommendation by the New York Advisory Committee on Practice and Procedure, ² enacted CPLR 302. Modeled upon a provision of the Illinois Civil Practice Act (Ill. Stat.Ann., ch. 110, § 17 (Smith-Hurd, 1956)), section 302 discarded the concept of 'doing business' as the exclusive test of jurisdiction and provided, instead, insofar as here pertinent, that personal jurisdiction may be asserted over any nondomiciliary if, 'in person or through an agent', he 'transacts any business within the state' or 'commits a tortious act within the state,' as long as the particular cause of action asserted is one 'arising from' any of such acts. ³

The appellants in all three cases before us, noting that the acts on which the causes of action asserted against them are grounded occurred prior to the effective date of the statute, Sepember 1, 1963, advance the threshold contention that section 302 may not be applied retroactively to subject them to the personal jurisdiction of the New York courts. We have already expressed a contrary view. In Simonson v. International Bank, 14 N.Y.2d 281, 290, 241 N.Y.S.2d 433, 440, 200 N.E.2d 427, 432, we declared that 'CPLR § 302 has retroactive effect to the extent of embracing suits instituted after its effective date but based on previously accrued causes of action', and no reason has been shown to cause us to alter our opinion.

Whether, and to what extent, a statute is to be accorded retroactive application is normally a matter of ascertaining the legislative intent, subject to applicable constitutional limitations, and our decisions provide certain basic guidelines to that end. It is thus presumed, absent any contrary indication, that the Legislature intended '(c)hanges in the form of remedies' to be 'applicable to proceedings thereafter instituted for the redress of wrong already done.' (Matter of Berkovitz v. Arbib & Houlberg, 230 N.Y. 261, 270, 130 N.E. 288, 290; see, also, Simonson v. International Bank, 14 N.Y.2d 281, 289, supra, 251 N.Y.S.2d 433, 439, 200 N.E.2d 427, 431; Coane v. American Distilling Co., 298 N.Y. 197, 204, 81 N.E.2d 87, 88; Preston Co. v. Funkhouser, 261 N.Y. 140, 145, 184 N.E. 737, 739, 87 A.L.R. 459.) On the other hand, where the effect of the statute 'is to create a right of action' which did not previously exist, it is presumed that the statute was intended to have only prospective application. (See Jacobus v. Colgate, 217 N.Y. 235, 240-242, 111 N.E. 837, 839.)

Section 302 is clearly of a procedural and remedial nature, and that, indeed, was the characterization applied by the Supreme Court to the somewhat similar provisions of the California statute before it in the McGee case (355 U.S. 220, 78 S.Ct. 199, supra). In upholding the retroactive application of that statute, the Supreme Court observed that such legislation is 'remedial, in the purest sense of that term, and neither enlarge(s) nor impair(s) * * * substantive rights or obligations', its effect being merely to provide the plaintiff with a new 'forum to enforce whatever substantive rights' he might have against the defendant (355 U.S., at p. 224, 78 S.Ct., at p. 202). And the Illinois Supreme Court reached a like conclusion with respect to the statute from which section 302 was derived, also sustaining its retroactive application to a suit instituted subsequent to its enactment, but based on a cause of action which had previously accrued. (See Nelson v. Miller, 11 Ill.2d 378, 382-383, 143 N.E.2d 673.)

The statute involved in Jacobus v. Colgate, 217 N.Y. 235, 111 N.E. 837, supra, upon which the appellants before us rely, was of a materially different character. That statute was held, in effect, to have created a new right of action to have supplied 'a remedy by which a right for the first time (became) enforceable' (217 N.Y., at p. 242, 111 N.E., at p. 839) by converting what was previously an exclusively 'local' cause of action (for injuries to real property lying without the state) into one which was 'transitory' (p. 241, 111 N.E. p. 839). As already noted, section 302, far from creating new rights merely facilitates the enforcement locally of pre-existing rights. ⁴ Moreover, the Legislature expressly declared that the CPLR 'shall apply to all actions hereafter commenced' (CPLR 10003; emphasis supplied), thereby giving affirmative indication of its design to apply the statute to all suits instituted after its effective date, whether based on previously or subsequently accrued causes of action. (See 1 Weinstein-Korn-Miller, N.Y.Civ.Prac., par. 302.04, at p. 3-35.)

The retroactive application of provisions resembling section 302 has, as noted been upheld as constitutionally valid (see, e. g., McGee v. International Life Ins....