New York Appellate Division Resolves Key General Personal Jurisdiction Issue

New York’s Appellate Division, Second Department recently entered a decision in Aybar v. Aybar, 2019 NY Slip Op 00412 (2d Dep’t Jan. 23, 2019), ruling that parties are not subject to general personal jurisdiction in New York solely by registering to do business in the State. The Appellate Division thus resolved an issue that was previously being determined on a judge-by-judge basis since the United States Supreme Court decision in Daimler AG v. Bauman, 571 US 117 (2014). See, e.g., Kyowa Seni, Co. v. ANA Aircraft Technics Co., 2018 BL 240171 (Sup. Ct. July 5, 2018) (registration insufficient); Serov ex rel. Serova v. Kerzner Int’l Resorts, Inc., 2016 NY Slip Op 31444(U) (Sup. Ct. July 26, 2016) (registration sufficient); Aybar v. Aybar, 2016 NY Slip Op 31138(U) (Sup. Ct. May 31, 2016) (registration sufficient).

Citing Justice Cardozo’s decision for the Court of Appeals in Bagdon v. Philadelphia & Reading Coal & Iron Co., 217 N.Y. 432 (1916), the Second Department noted that there has been longstanding precedent by New York state, and federal courts interpreting New York law, that registering to do business in New York and appointing an agent for service of process constitutes consent to general personal jurisdiction. After parsing through the historical context of Bagdon and analyzing the United States Supreme Court’s reasoning in Daimler, however, the Second Department ruled that a corporation’s compliance with the existing business registration statutes does not constitute consent to the general jurisdiction of New York courts.

With Aybar being the first New York Appellate Division decision resolving the general personal jurisdiction issue, New York courts now have post-Daimler state court guidance that is consistent with recent New York federal court decisions, which have similarly held that registration alone is not sufficient to confer general personal jurisdiction. See, e.g., Famular v. Whirlpool Corp., No. 16-cv-944 (VB), 2017 WL 2470844 (S.D.N.Y. June 7, 2017); Justiniano v. First Student Mgmt. LLC, No. 16-cv-02729 (ADS); (AKT), 2017 WL 1592564 (E.D.N.Y. Apr. 26, 2017); Minholz v. Lockheed Martin Corp., 227 F.Supp.3d 249 (N.D.N.Y. 2016); Wilderness USA, Inc. v. DeAngelo Bros. LLC, 2017 WL 3635123 (W.D.N.Y. Aug. 23, 2017).

The issue now appears to be settled (unless and until, of course, the matter is otherwise resolved by the Court of Appeals, or another Department takes a different view, thus ensuring that the Court of Appeals would address the issue at some point in the near future). To keep an out-of-state corporate party in a New York lawsuit, the plaintiff will have to show more than the defendant’s business registration status (i.e., under Daimler, it will have to establish that the defendant’s affiliations with New York are so continuous and systematic as to render it essentially “at home” there).

The Aybar decision is available at:

http://www.courts.state.ny.us/reporter/3dseries/2019/2019_00412.htm

To discuss New York litigation matters with this article’s author, please contact:

Jonathan P. Vuotto, Esq.
McAndrew Vuotto, LLC
jpv@mcandrewvuotto.com

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