What Happens in Vegas Stays in Vegas: Asserting a Tort Claim in New York Courts against a Foreign Corporation Arising from a New Yorker's Out-of-State Accident Post-Daimler

By Hutter, Michael J.; Powers, Mark L. | Albany Law Review, Summer 2019 | Go to article overview

What Happens in Vegas Stays in Vegas: Asserting a Tort Claim in New York Courts against a Foreign Corporation Arising from a New Yorker's Out-of-State Accident Post-Daimler


Hutter, Michael J., Powers, Mark L., Albany Law Review


I. INTRODUCTION

A New York resident seeks legal representation regarding personal injuries she sustained in an accident or incident that occurred in another state or country. (1) The prospective defendant is a readily recognizable large national/international corporation, not incorporated in New York, that conducts business in multiple states, including New York. The first question to the attorney contacted is most likely to be: "Can I sue in New York?" She obviously does not want to have to take repeated trips to a faraway state, find a local attorney in that state, and manage an action against the defendant from afar. To respond to that inquiry, the attorney will have to determine initially whether the corporation is subject to personal jurisdiction in New York.

The existence of personal jurisdiction over a defendant in New York is a threshold inquiry since a New York court cannot render a valid and binding judgment, enforceable in New York pursuant to New York Civil Practice Law and Rules ("CPLR") Articles 51 and 52 (2) and in other states pursuant to the Full Faith and Credit Clause, (3) in the absence of personal jurisdiction. (4) The concept of personal jurisdiction is derived from the Due Process Clause of the Fourteenth Amendment which, as construed by the United States Supreme Court, limits the power of a state court to render a valid judgment. (5) As stated by the Supreme Court: "[T]hose who live or operate primarily outside a state have a due process right not to be subjected to judgment in its courts as a general matter." (6) In this regard, a court may exercise personal jurisdiction over a defendant only if the defendant has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" (7)

Prior to January 2014 when the United States Supreme Court decided Daimler AG v. Bauman, (8) the rules for exercising personal jurisdiction over a foreign corporation with respect to that corporation's conduct vis-a-vis a New Yorker occurring outside New York were relatively straightforward, easy to apply, and provided broad bases for asserting personal jurisdiction. (9) CPLR 302 provided the necessary statutory basis for the exercise of personal jurisdiction over a foreign corporation in a New York court for a cause of action arising out of activities in another state that harms a New Yorker in that state. (10) Pursuant to CPLR 301, personal jurisdiction over a foreign corporation could be exercised under a "doing business" in New York standard (11) or by consent to jurisdiction established by the corporation's acquisition of authority to do business in New York. (12) Most importantly, where personal jurisdiction existed under either basis, the dictates of the Due Process Clause were satisfied. (13) However, the decision in Daimler sent these jurisdictional standards "careening into the abyss." (14) While the Supreme Court did not per se invalidate these standards, its articulated due process analysis renders the doing business standard constitutionally impermissible as a basis for personal jurisdiction in most cases (15) and gives rise to an argument as to the unconstitutionality as well of the consent standard as a basis for personal jurisdiction. (16)

This Article will examine the opportunities for asserting personal jurisdiction in a New York court over a foreign corporation for a tort claim arising from a New Yorker's out-of-state accident post-Daimler. It will discuss initially CPLR 301's "doing business" and "consent" bases as applied to foreign corporations. The article will next examine Daimler itself. It will then discuss Daimler's impact upon the two bases and what, if anything, is left under CPLR 301 as a means to assert personal jurisdiction. As an alternative statutory basis to CPLR 301, the Article will discuss CPLR 302(a)(1)'s "transaction of business in New York" basis and examine whether it can in fact be utilized to fill the CPLR 301 void left by Daimler with respect to tortious activity occurring outside New York to a New Yorker. …

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