Academic journal article Albany Law Review

Norex V. Blavatnik - How the Court of Appeals "Borrowed" First and "Saved" Later

Academic journal article Albany Law Review

Norex V. Blavatnik - How the Court of Appeals "Borrowed" First and "Saved" Later

Article excerpt


In a case of first impression, Norex Petroleum Limited v. Blavatnik, (1) the New York State Court of Appeals decided

   whether a nonresident plaintiff who filed a timely action in a
   New York federal court may refile claims arising from the
   same transaction in state court within six months of the
   federal action's non-merits termination, even though the suit
   would be untimely in the out-of-state jurisdiction where the
   claims accrued. (2)

In a unanimous decision reversing the appellate division, which had previously upheld the trial court's dismissal of the action, the Court of Appeals held that such a suit is not time barred and instructed the trial court to resolve whether or not six state law claims, pled for the very first time nearly nine years after the original action was commenced, ought to proceed to a final determination on the merits. (3)

Since the opinion seeks to resolve an open question of law in New York civil practice, at the outset of its opinion, the Court of Appeals provided a review of the twelve-year procedural history of this case, which is essential to understand how the court reached its decision. The plaintiff initially commenced an action in federal court on February 26, 2002, alleging various federal causes of action under the Racketeer Influenced and Corrupt Organizations Act (RICO). (4) Defendants moved to dismiss on numerous grounds including forum non conveniens. (5) On February 18, 2004, the federal district court dismissed the action finding that the relevant factors favored a Russian venue. (6) On December 21, 2004, the plaintiff amended its complaint to assert claims for tortious interference and unjust enrichment under Russian law. (7) Defendants again moved to dismiss for lack of subject matter jurisdiction. (8) On September 24, 2007, the court granted the motion to dismiss. (9) Norex appealed to the U.S. Court of Appeals for the Second Circuit, which affirmed the dismissal on September 28, 2010. (10) Norex next sought a hearing en banc before the Second Circuit, and on January 18, 2011, the court denied Norex's petition. (11) Identifying CPLR section 205(a) as a potential savings statute, Norex moved to stay the mandate "to avoid potentially triggering the running of relevant 'savings action statutes'" so that it would have time to submit a petition for certiorari in the U.S. Supreme Court. (12) On March 7, 2011, Norex commenced a new action in New York State Supreme Court asserting several claims under Russian law. (13) Finally, on June 23, 2011, nearly eight years into litigation, Norex amended its complaint to add six New York state law claims that it had not previously asserted. (14) The New York trial court's dismissal of Norex's amended complaint is the subject of the appeal. (15)

In order to determine the timeliness of Norex's new action, the court set out to address the interplay between two CPLR provisions, sections 202 and 205(a), which are New York State's borrowing and saving statutes, respectively. (16) While discussed in greater detail below, a brief introduction to both the borrowing and savings statutes is worthwhile. When filing a new action under CPLR section 202, a foreign plaintiff must "borrow" the statute of limitations from the jurisdiction where the claim arose if such time period is shorter than New York's. (17) Additionally, CPLR section 205(a) provides that if such a lawsuit was timely in the foreign jurisdiction, it will also be timely in New York under the "savings" statute. (18) The nonresident plaintiff who "borrows" from the foreign jurisdiction is permitted to refile the lawsuit in New York State court within six months after the action has been dismissed on nonsubstantive grounds, thus "saving" his cause of action. (19) Both of these statutes, standing alone, can greatly affect the outcome of a lawsuit. Individually, the potential impact of CPLR section 205(a) should never be underestimated, especially as Professor Siegel describes it as a "skyscraper on New York's procedural skyline. …

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