On March 30, 2010, the United States Court of Appeals for
the Second Circuit affirmed a District Court order to dismiss an action for
lack of personal jurisdiction even though the defendant’s website stated that
the defendant operates a business in all 48 contiguous states of the United States.
Li v. Hock & SMP, 2010 WL 1193446
(2nd Cir. March 30, 2010).
The defendant in the matter was
SMP, Inc. (“SMP”), a Pennsylvania corporation
with its principal place of business in New
Jersey. The
wife of Xiu Feng Li brought this action on behalf of Mr. Li after Mr. Li passed
away when one of SMP’s trucks collided with a vehicle in which Mr. Li was a
passenger. Hock was the driver of that
truck.
The United States District
Court for the Eastern District of New York entered an order granting
defendants’ motion to dismiss for lack of personal jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2).
On such a motion, the plaintiff carries the burden of demonstrating that
jurisdiction exists. Robinson v. Overseas Military Sales Corp.,
21 F.3d 502, 507 (2d Cir. 1994). Li
argued that personal jurisdiction in New York
existed under N.Y. C.P.L.R. § 301, which permits a court to exercise personal
jurisdiction over a foreign defendant that is “doing business” in New
York. Wiwa v. Royal Dutch Petroleum Co., 226
F.3d 88, 95 (2d Cir. 2000) (emphasis added).
New York courts have set forth several factors to determine
whether a company is “doing business” in the state, including “the existence of
an office in New York; the solicitation of business in New York; the presence
of bank accounts or other property in New York; and the presence of employees
or agents in New York.” Landois Res. Corp. v. Alexander &
Alexander Serv. Inc., 918 F.2d 1039 (2d Cir. 1990). However, “[s]olicitation of business alone
will not justify a finding of corporate presence in New York with respect to a foreign
manufacturer or purveyor of services.” Laufer v. Ostrow, 55 N.Y.2d 305, 310
(1982).
Here, SMP’s website stated that SMP operates “a trucking
business in all 48 contiguous States of the United States and in all Canadian
Provinces.” Plaintiff alleged other
facts relevant to whether SMP was “doing business” in New York: 1) Li argued
that Hock, during his employment at SMP, made 20-50 deliveries to companies
within New York State in the year and a half before the accident; and 2) Li
argued that presumably other drivers working for SMP also made deliveries into
New York.
The district court concluded, and the circuit court
affirmed, that these facts taken together do not demonstrate that SMP was
“doing business” in New York
under Section 301 of the New York Code.
There was no evidence that SMP maintains an office in New
York, has back accounts or other property in New
York, has a New York telephone
listing, performs public relations work in New York,
or has any employees located in New
York. The
court held that the fact that SMP transported goods into New
York was not dispositive that SMP was “doing business” in New York.
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