Swindell v. Florida East Coast Ry. Co.

• Decision Date: 26 March 1999
• Docket Number: No. 98 Civ. 6440 (WCC).,98 Civ. 6440 (WCC).
• Citation: 42 F.Supp.2d 320
• Parties: Edward Leroy SWINDELL, Plaintiff, v. FLORIDA EAST COAST RAILWAY COMPANY, Defendant.
• Court: U.S. District Court — Southern District of New York

42 F.Supp.2d 320

Edward Leroy SWINDELL, Plaintiff, v. FLORIDA EAST COAST RAILWAY COMPANY, Defendant.

No. 98 Civ. 6440 (WCC).

United States District Court, S.D. New York.

March 26, 1999.

COPYRIGHT MATERIAL OMITTED

Edward Leroy Swindell, Millbrook, New York, plaintiff pro se.

Barry N. Gutterman & Associates, New York City (of counsel), for defendant, Ilene J. Feldman.

OPINION AND ORDER

WILLIAM C. CONNER, Senior District Judge.

This action for personal injuries is before the Court on defendant's motion to dismiss for lack of personal jurisdiction, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. For the reasons stated hereinafter, the motion is granted.

BACKGROUND

Plaintiff, Edward LeRoy Swindell ("plaintiff"), a resident of New York, brings this action against the defendant, Florida East Coast Railway ("defendant"), for injuries sustained while employed by defendant. Swindell worked as a laborer for defendant from 1939 to 1952, working exclusively in the state of Florida. Plaintiff claims that while employed by defendant, his work caused him to be exposed to asbestos and other toxic substances, causing him permanent physical and emotional injury. Plaintiff claims that the extent of these injuries was not discovered until 1997. This action seeks compensatory and punitive damages for such injuries.

Defendant asserts and plaintiff does not contest the following relevant facts. Defendant is a railway company and has its headquarters in St. Augustine, Florida. Defendant is a corporation duly established pursuant to the laws of the state of Florida; it is not incorporated under New York law nor registered to do business in the state of New York. Defendant does not have in the state of New York any office or place of business, mailing address, telephone, or bank accounts.

Plaintiff contends, however, that defendant is responsible for transporting persons and goods in and out of New York. He further argues that defendant previously maintained both freight and passenger agents in New York. Thus, for example, a passenger could go to a travel agent or train station in New York and purchase a ticket for passage on defendant's trains. Finally, plaintiff alleges that defendant retains legal counsel in New York.

DISCUSSION

I. Introduction

The plaintiff bears the ultimate burden of proving the court's jurisdiction. See Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996); Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981); Lehigh Valley Industries, Inc. v. Birenbaum, 527 F.2d 87, 92 (2d Cir.1975). However, when the issue is decided initially on the pleadings and without discovery, the plaintiff must only make a prima facie showing of personal jurisdiction to survive a motion to dismiss. A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79 (2d Cir.1993); Volkswagenwerk Aktiengesellschaft v. Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir.1984). All allegations must be construed in the light most favorable to the non-moving party, the plaintiff, and all doubts resolved in his favor. A.I. Trade Finance, 989 F.2d at 79-80. Personal jurisdiction will ultimately have to be established by a preponderance of the evidence, either at an evidentiary hearing or at trial.

Personal jurisdiction over a defendant in a diversity action in the United States District Court for the Southern District of New York is determined by reference to the relevant jurisdictional statutes of the state of New York. See United States v. First Nat'l City Bank, 379 U.S. 378, 381-82, 85 S.Ct. 528, 13 L.Ed.2d 365 (1965); Beacon Enters. v. Menzies, 715 F.2d 757, 762 (2d Cir.1983). We turn to an examination of the only jurisdictional bases alleged by plaintiff — § 301, § 302(a)(1), and § 302(a)(3) of the New York Civil Practice Law (hereafter "§ 301" and "§ 302").

II. N.Y.Civ.Prac.Law & 301: "Doing Business"

Under the New York courts' interpretation of § 301, a non-domiciliary corporation subjects itself to personal jurisdiction in New York with respect to any cause of action if it 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, 200 N.E.2d 427, 429, 251 N.Y.S.2d 433, 436 (1964) (internal quotations omitted). The non-domiciliary must be "doing business" in New York "`not occasionally or casually, but with a fair measure of permanence and continuity.'" Laufer v. Ostrow, 55 N.Y.2d 305, 310, 434 N.E.2d 692, 694, 449 N.Y.S.2d 456, 458 (1982) (quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267, 115 N.E. 915, 917 (1917)); see also Katz Communications, Inc. v. Evening News Ass'n, 705 F.2d 20, 23 (2d Cir.1983).

Accumulating all of defendant's contacts with the forum set forth in the record, we conclude that the corporation is at most only "occasionally" doing business in New York and is not "engaged in such a continuous and systematic course of `doing business'" in New York as to subject the corporation to personal jurisdiction under § 301. Laufer, 55 N.Y.2d at 310, 449 N.Y.S.2d 456, 434 N.E.2d 692. Plaintiff's most plausible basis for asserting personal jurisdiction over defendant is his cryptic reference to the presence of sales agents in New York that sell passenger and cargo space aboard defendant's trains. However, it is an oft-cited principle that "mere solicitation" of business within New York does not satisfy § 301's requirements. See, e.g., Elish v. St. Louis S.W. Ry. Co., 305 N.Y. 267, 268, 112 N.E.2d 842, 843 (1953); Laufer, 55 N.Y.2d at 311, 449 N.Y.S.2d 456, 434 N.E.2d 692. This is especially true when, as is the case regarding defendant's freight and passenger representatives, the company working in New York on behalf of the defendant is an independently-owned profit-making organization, functioning as an independent contractor. See Dunn v. Southern Charters, Inc., 506 F.Supp. 564, 567 (E.D.N.Y. 1981) (solicitation of orders for defendant's products through independent agents, brochures and trade magazines insufficient under § 301 in suit by purchaser); Miller v. Surf Properties, Inc., 4 N.Y.2d 475, 151 N.E.2d 874, 176 N.Y.S.2d 318 (1958); Elish, 305 N.Y. at 268, 112 N.E.2d 842.

Plaintiff also contends that defendant's trains transport persons and goods in and out of New York. In appropriate situations, such contact, coupled with the existence of representatives in New York to sell tickets or cargo space, has been ruled sufficient to establish personal jurisdiction. See, e.g., Scanapico v. Richmond, Fredericksburg & Potomac R.R. Co., 439 F.2d 17 (2d Cir.1970) (en banc). In these cases, however, the courts have placed heavy emphasis on the fact that the solicitation was carried out by the defendant's "own employees." Id. at 21; see also Bankhead Enters., Inc. v. Norfolk & Western Ry. Co., 642 F.2d 802 (5th Cir.1981). In contrast, plaintiff in the instant case alleges only that such solicitation was carried out by independent workers, such as travel agents or employees at separately owned train stations. In this regard, the instant case is almost identical to Wilcox v. Pennsylvania R.R. Co., 269 F.Supp. 326, 328 n. 6 (S.D.N.Y.1967), in which the court found no personal jurisdiction where the defendant's "principal contact with the state is that it owns railroad cars which from time to time are brought into New York while in the management and control of interstate trains being operated by other railroad companies."¹ In so holding, the Wilcox court expressly distinguished the situation in which a railroad company might also own office space and maintain full-time employees within New York, but found that without such additional contacts, no personal jurisdiction could be established. Id. For the same reasons, we cannot find personal jurisdiction over defendant merely because some of its railroad cars, which have been "interlined" to other railroads, may pass through New York in trains operated by other railroads, or because completely independent workers in this state, not employed directly by defendant, may sell cargo and passenger space on defendant's trains, operating outside the state.

Finally, plaintiff claims that defendant's hiring of New York counsel to contest personal jurisdiction is sufficient to establish personal jurisdiction over defendant. This argument also must fail, because it is well established that a defendant does not waive its right to contest jurisdiction simply by moving to dismiss for lack thereof. See, e.g., Martin v. New York State Dept. of Mental Hygiene, 588 F.2d 371, 373 (2d Cir.1978). This would create an untenable "Catch-22" in which no defendant could contest personal jurisdiction, because the act of contesting jurisdiction would itself establish jurisdiction. Thus, none of these "contacts" cited by plaintiff, either in isolation or in aggregate, is sufficient to establish personal jurisdiction under § 301.

III. N.Y.Civ.Prac.Law § 302

We will first analyze plaintiff's § 302(a)(1) claim and then his claim made under § 302(a)(3).²

A. 302(a)(1): "Transacting Business"

Section 302(a)(1) provides:

(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:

1. transacts any business within the state or contracts anywhere to supply goods or services in the state.

A defendant who is not "doing business" in New York within the meaning of § 301 may be sued in New York on a lesser showing of forum contacts if the cause of action arises from those contacts. To satisfy the "doing business" test under § 301, the corporation's activities in New York must be regular; if they are, the corporation is amenable to suit in the state on any claim, arising or not arising out of the New York acts. However,...