McGowan v. Smith

• Decision Date: 19 February 1981
• Citation: 437 N.Y.S.2d 643,52 N.Y.2d 268,419 N.E.2d 321
• Court: New York Court of Appeals Court of Appeals
• Parties: , 419 N.E.2d 321 Gerard F. McGOWAN, Individually and as Parent and Natural Guardian of Gerard A. McGowan, an Infant, Respondent, v. Elton SMITH et al., Respondents, and Adam Meldrum & Anderson Co., Inc., Defendant-Appellant and Third-Party Plaintiff-Appellant. Frederick Atkins, Inc. et al., Third-Party Defendants-Respondents.

Page 643

437 N.Y.S.2d 643

52 N.Y.2d 268, 419 N.E.2d 321

Gerard F. McGOWAN, Individually and as Parent and Natural Guardian of Gerard A. McGowan, an Infant, Respondent, v. Elton SMITH et al., Respondents and Adam Meldrum & Anderson Co., Inc., Defendant-Appellant and Third-Party Plaintiff-Appellant Frederick Atkins, Inc. et al., Third-Party Defendants-Respondents.

Court of Appeals of New York.

Feb. 19, 1981.

James D. Gauthier, Buffalo and Sheldon Hurwitz, Buffalo, for defendant-appellant and third-party plaintiff-appellant

Andrew D. Merrick, Buffalo, for Mogi Trading Co., third-party defendant-respondent.

OPINION OF THE COURT

GABRIELLI, Judge.

The infant plaintiff, a New York resident, was injured while visiting with friends in Ontario, Canada. The injuries allegedly were caused by the malfunctioning of a fondue pot, which had been shipped from Japan by Mogi Trading Co., a Japanese exporter, and purchased at a department store in Buffalo, New York. After having been served with process in the instant action, the defendant department store attempted to implead Mogi Trading Co. as a third-party defendant, citing C PLR 302 (subd. (a), par. 1) and C PLR 302 (subd. (a), par. 3) as alternative predicates for the exercise of in personam jurisdiction. Special Term denied Mogi's motion to dismiss the third-party complaint but the Appellate Division reversed, 72 A.D.2d 75, 423 N.Y.S.2d 90, finding that neither of these two provisions supported the exercise of in personam jurisdiction over the nonresident third-party defendant. We agree with the conclusion reached by the Appellate Division and, accordingly, hold that the dismissal of the complaints against Mogi by that court ¹ was entirely proper.

Under CPLR 302 (subd. (a), par. 1), the courts of this State are authorized to exercise in personam jurisdiction over a nondomiciliary if the cause of action at issue arose out of the transaction of business within the State. It is well established however, that the long-arm authority conferred by this subdivision does not extend to nondomiciliaries who merely ship goods into the State without ever crossing its borders (Kramer v. Vogl, 17 N.Y.2d 27, 267 N.Y.S.2d 900, 215 N.E.2d 159; see McLaughlin, Practice Commentaries, McKinney's Cons.Laws of N.Y., Book 7B, C302:13, p. 80). ² In addition to the shipment of goods into the State there must have been some "purposeful activities" within the State that would justify bringing the nondomiciliary defendant before the New York courts (Reiner & Co. v. Schwartz, 41 N.Y.2d 648, 394 N.Y.S.2d 844, 363 N.E.2d 551; Hi Fashion Wigs v. Hammond Adv., 32 N.Y.2d 583, 347 N.Y.S.2d 47, 300 N.E.2d 421; Parke-Bernet Galleries v. Franklyn, 26 N.Y.2d 13, 308 N.Y.S.2d 337, 256 N.E.2d 506; compare Longines-Wittnauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68, supra, with McKee Elec. Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 283 N.Y.S.2d 34, 229 N.E.2d 604).

In an effort to establish the existence of such "purposeful activities" in this case, the third-party plaintiff department store relies upon several visits which representatives of Mogi Trading Co. made to New York for the purpose of doing general marketing research and ascertaining what type of products might be salable in New York. While these visits certainly may be characterized as "purposeful", they cannot form the predicate for the exercise of in personam jurisdiction under CPLR 302 (subd. (a), par. 1) for the simple reason that they have not been shown to bear a substantial relationship to the transaction out of which the instant cause of action arose. Absent such a showing, the occurrence of these visits serves merely to establish Mogi's transitory physical presence within the State. And, as we noted in Presidential Realty Corp. v. Michael Sq. West (44 N.Y.2d 672, 673, 405 N.Y.S.2d 37, 376 N.E.2d 198), "physical presence alone cannot talismanically transform any and all business dealings into business transactions under CPLR 302 (subd. (a), par. (1))".

Essential to the maintenance of a suit against a nondomiciliary under CPLR 302 (subd. (a), par. 1) is the existence of some articulable nexus between the business transacted and the cause of action sued upon (but cf. Singer v. Walker, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68). Indeed, it is this basic requirement that differentiates the long-arm authority conferred by CPLR 302 (subd. (a), par. 1) from the more traditional authority of the New York courts under CPLR 301 to exercise in personam jurisdiction over foreign defendants who are "present" within the State by virtue of their "doing business" here. Where jurisdiction is predicated upon the provisions of CPLR 301, there is no need to establish a connection between the cause of action in issue and the foreign defendant's business activities within the State, because the authority of the New York courts is based solely upon the fact that the defendant is "engaged in such a continuous and systematic course of 'doing business' here as to warrant a finding of its 'presence' in this jurisdiction" (Simonson v. International Bank, 14 N.Y.2d 281, 285, 251 N.Y.S.2d 433, 200 N.E.2d 427, supra ; accord Frummer v. Hilton Hotels Int., 19 N.Y.2d 533, 281 N.Y.S.2d 41, 227 N.E.2d 851). Where the plaintiff's proof falls short of establishing such a "systematic course of 'doing business' ", however, our statutory scheme permits him to bring the foreign defendant within the power of the New York courts upon a lesser showing of some business contacts within the State only if he demonstrates that his cause of action arose out of those business contacts.

Here, although it has been demonstrated that third-party defendant Mogi transacted some business within the State, there has been no proof to establish either that Mogi was engaged in a "systematic course of 'doing business' " in New York or that the transitory business actually transacted here was sufficiently related to the subject matter of the lawsuit to justify the exercise of in personam jurisdiction under CPLR 302 (subd. (a), par. 1). Absent such proof, the bare fact that third-party defendant Mogi had some "purposeful" business contact with the State through its efforts to conduct general marketing research within its borders cannot furnish an adequate predicate for bringing the Japanese exporting firm within the power of the New York courts.

Nor may long-arm jurisdiction be premised in this case upon the provisions of CPLR 302 (subd. (a), par. 3). Under that subdivision, a nondomiciliary who "commits a tortious act without the state causing injury * * * within the state" may be brought before a New York court to answer for his conduct if he has had sufficient economic contact with the State or an active interest in interstate or international commerce coupled with a reasonable expectation that the tortious conduct in question could have consequences within the State. ³ Although most of the criteria set forth in this statute have been satisfied here, it is obvious that the provision is inapplicable, since there has been no allegation that the tortious conduct in question caused injury in New York. Indeed, the allegations in the pleadings clearly indicate that the situs of the injury was Ontario, Canada, where the accident involving the purportedly...