Sonera Holding B.V. v. ¸cukurova Holding A.S

• Decision Date: 25 April 2014
• Docket Number: Docket Nos. 12–4280–CV (L), 13–73–CV, 13–1880–CV.
• Citation: 750 F.3d 221
• Court: U.S. Court of Appeals — Second Circuit
• Parties: SONERA HOLDING B.V., Petitioner–Appellee, v. ¸CUKUROVA HOLDING A.S., Respondent–Appellant.

750 F.3d 221

SONERA HOLDING B.V., Petitioner–Appellee,

v.¸CUKUROVA HOLDING A.S., Respondent–Appellant.^*

Docket Nos. 12–4280–CV (L), 13–73–CV, 13–1880–CV.

United States Court of Appeals, Second Circuit.

Argued: Aug. 22, 2013.

Decided: April 25, 2014.

Richard J. Holwell (Michael Shuster, Dorit Ungar Black, Karen Andrea Grus, on the brief), Holwell Shuster & Goldberg LLP, New York, NY, for Respondent–Appellant.

Pieter Van Tol (Andrew M. Behrman, Erin Marie Meyer, on the brief), Hogan Lovells U.S. LLP, New York, NY, for Petitioner–Appellee.

Before: WINTER, WESLEY, and CARNEY, Circuit Judges.

PER CURIAM:

Appeal from orders of the United States District Court for the Southern District of New York (Denise L. Cote, Judge ) dated September 21, 2012; December 21, 2012; April 18, 2013; and May 10, 2013. The district court held that it had personal jurisdiction over Çukurova based primarily on the New York contacts of several companies with which Çukurova is affiliated. The Supreme Court's decision in Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), reaffirms that general jurisdiction extends beyond an entity's state of incorporation and principal place of business only in the exceptional case where its contacts with another forum are so substantial as to render it “at home” in that state. For the reasons stated below, even assuming the activities of Çukurova's affiliates can be ascribed to it for the purposes of a general jurisdictional analysis, Çukurova lacks sufficient contacts with New York to render it “at home” there. We therefore REVERSE the district court's judgment denying Çukurova's motion to dismiss for lack of personal jurisdiction, VACATE the subsequent judgments of the district court, REMAND the case to the district court, and direct the court to DISMISS the action for lack of personal jurisdiction.

BACKGROUND

Sonera Holding B.V. (“Sonera”), a Dutch holding corporation, brought suit in the United States District Court for the Southern District of New York to enforce a final arbitration award against Çukurova Holding A.S. (“Çukurova”), the parent company of a large Turkish conglomerate. The parties' underlying dispute arose out of negotiations for Çukurova's sale to Sonera of shares in Turkcell Holding A.S. (“Turkcell Holding”), a Turkish joint stock company that owns a controlling stake in Turkey's largest mobile phone operator. Following failed negotiations and a protracted proceeding before an arbitral tribunal in Geneva, Switzerland, the tribunal found that the parties concluded a share purchase agreement and ordered Çukurova to pay Sonera $932 million in damages for its failure to deliver the shares.

Sonera filed applications for enforcement in jurisdictions across the world, including the British Virgin Islands, Switzerland, the Netherlands, and, as relevant here, the Southern District of New York.

Rejecting Çukurova's contention that New York lacked personal jurisdiction over it, the district court issued four orders, from which Çukurova now appeals, confirming the arbitration award in favor of Sonera; denying a motion to reconsider; issuing a preliminary injunction preventing Çukurova from engaging in transactions to shield its assets; and denying dissolution of the preliminary injunction.¹

Çukurova is a Turkish holding company with its registered office in Istanbul, Turkey. It holds investments in other companies and has no operations and owns no property in New York or any of the United States. Sonera asserts that Çukurova is nonetheless subject to general jurisdiction in New York based on Çukurova's own actions and the actions of Çukurova's affiliates, which, according to Sonera, should be imputed to Çukurova.

The actions on which Sonera predicates its assertion of general jurisdiction include (1) negotiations by Çukurova or one of its affiliates (which occurred outside the United States and were ultimately unsuccessful) to sell an interest in Show TV, a Turkish television broadcaster, to two New York—based private equity funds; (2) Çukurova's sale of American Depository Shares (“ADS”) in Turkcell to an underwriter in London, which subsequently offered the ADS for sale on the New York Stock Exchange; (3) the agreement of Digiturk,a Turkish Çukurova affiliate, to provide digital television content to a U.S.-based company; (4) use of a New York office used by Baytur Insaat Taahhüt A.S. (“Baytur”) and Equipment and Parts Export, Inc. (“EPE”), two Turkish companies affiliated with Çukurova; and (5) statements on EPE's website describing itself as having been “[f]ounded in New York City in 1979” and as Çukurova's “gateway to the Americas.”

On appeal, Çukurova (1) challenges the district court's denial of its motions to dismiss for lack of personal jurisdiction and for forum non conveniens; (2) seeks reversal of the district court's decision deferring to the jurisdictional determinations of the arbitral tribunal; and (3) challenges the district court's refusal, on Çukurova's motion to vacate, to reconsider its finding of personal jurisdiction. Because we find Çukurova's contacts with New York insufficient to subject it to general jurisdiction and accordingly reverse the district court's judgment denying Çukurova's motion to dismiss for lack of personal jurisdiction, there is no need to reach Çukurova's remaining arguments.

DISCUSSION

A. Personal Jurisdiction

Personal jurisdiction over a foreign defendant in a federal-question case requires a two-step inquiry. Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 168 (2d Cir.2013). First, we determine whether the defendant is subject to jurisdiction under the law of the forum state—here, New York. Second, we consider whether the exercise of personal jurisdiction over the defendant comports with the Due Process Clause of the United States Constitution. Id.

Sonera asserts that Çukurova is subject to general jurisdiction in New York pursuant to N.Y. C.P.L.R. 301, which confers jurisdiction where a company “has engaged in such a continuous and systematic course of ‘doing business' [in New York] that a finding of its ‘presence’ [in New York] is warranted.” Landoil Res. Corp. v. Alexander & Alexander Servs., 77 N.Y.2d 28, 33, 563 N.Y.S.2d 739, 565 N.E.2d 488 (1990) (citations omitted). In Wiwa v. Royal Dutch Petroleum Co., we reasoned that the continuous course of “doing business” in New York “do[es] not necessarily need to be conducted by the foreign corporation itself.” 226 F.3d 88, 95 (2d. Cir.2000). Rather, we interpreted New York law to include an agency theory of jurisdiction that subjects a corporation to general jurisdiction when it relies on a New York representative entity to render services on its behalf “that go beyond mere solicitation and are sufficiently important to the foreign entity that the corporation itself would perform equivalent services if no agent were available.” Id.

According to Sonera, even if Çukurova's own contacts with New York are insufficient for general jurisdiction, the contacts of Digiturk, Baytur, and EPE should be imputed to Çukurova, and these combined contacts with New York render Çukurova subject to the general jurisdiction of New York. Çukurova contends that New York law does not permit personal jurisdiction on these facts and that even if it did, the agency theory of personal jurisdiction is incompatible with due process.

B. Due Process

In light of the Supreme Court's decision in Daimler AG v. Bauman, –––U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), we need not determine whether the district court correctly found Çukurova subject to its general jurisdiction under New York law.² Whatever the purported scope of N.Y. C.P.L.R. 301 and the agency-based theory of jurisdiction articulated in Wiwa, Daimler confirmed that subjecting Çukurova to general jurisdiction in New York would be incompatible with due process.

In the area of personal jurisdiction, “[t]he canonical opinion ... remains International Shoe, in which [the Supreme Court] held that a State may authorize its courts to exercise personal jurisdiction over an out-of-state defendant if the defendant has ‘certain minimum contacts with [the State] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.’ ” Goodyear Dunlop Tires Operations, S.A. v. Brown, ––– U.S. ––––, 131 S.Ct. 2846, 2853, 180 L.Ed.2d 796 (2011) (second alteration in original) (internal quotation marks omitted) (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).

There are two types of personal jurisdiction: specific and general. Specific or conduct-linked jurisdiction, which Sonera does not assert, “depends on an affiliation[n] between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum state and is therefore subject to the State's regulation.” Id. at 2851 (alteration in original) (internal quotation marks omitted). By contrast, general jurisdiction exists only when a corporation's contacts with a state are “so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” Id. A court with general jurisdiction over a corporation may adjudicate all claims against that corporation—even those entirely unrelated to the defendant's contacts with the state.

The natural result of general jurisdiction's “at home” requirement is that “only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there.” Daimler, 134 S.Ct. at 760. “A corporation that operates in many places can scarcely be deemed at home in all of them.” Id. at 762 n. 20. The paradigm forum for general jurisdiction over an individual is the individual's domicile, his home. For a corporation, it is an equivalent place, with the place of incorporation and the principal place of business being the paradigm bases. “Those affiliations have the virtue of being unique—that...