Lyons v. Rienzi & Sons, Inc.
Filing
142
AMENDED MEMORANDUM AND ORDER: Nuvolari's motion to dismiss the claims of Lyons and Rienzi against it for lack of personal jurisdiction is granted. The result is not entirely satisfying to a plaintiff seeking relief in a liability suit based upon allegations of defects in a product designed, produced, and sold in different states and nations. See, e.g., Paul Schiff Berman, Global Legal Pluralism: A Jurisprudence of Law Beyond Borders 324 (2012). But for the moment it is based upon applicable law in this state and nation. Costs and disbursements to Nuvolari. Ordered by Senior Judge Jack B. Weinstein, on 4/23/2012. (Barrett, C)
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FILED
U
INClERK'S
.S. DISTRICT OFFICE
COURT E.D.N.Y
* APR 2 3 2012 *
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
BROOKLYN OFFICE
KELLY M. LYONS,
AMENDED
MEMORANDUM
AND ORDER
Plaintiff,
- against-
09-CV-4253
RIENZI & SONS, INC.,
Defendant.
RIENZI & SONS, INC.,
Third-Party Plaintiff,
- againstSTATEN ISLAND YACHT SALES, INC.,
GE~MAR YACHT GROUP LLC, f/d/b/a CARVER
BOAT CORPORATION LLC, MARQUIS
YACHTS, LLC, CARVER BOAT CORPORATION
LLC, DONALD L. BLOUNT & ASSOCIATES,
NUVOLARI-LENARD NAVAL DESIGN, and
DOES 1 through 5,
Third-Party Defendants.
Appearances:
for the Plaintiff:
Paul T. Hofmann
Hofmann & Schweitzer
NewYork, NY
For the Third-Party Plaintiff:
John F. Karpousis
Susan Lee
Freehill Hogan & Mahar LLP
New York, NY
1
I
For Third-Party Defendant Nuvolari-Lenard S.R.L.:
Christopher R. Nolan
K. Blythe Daly
Holland & Knight LLP
New York, NY
Table of Contents
I.
Introduction and Summary of Procedural History .......................................................................................... 2
II.
Facts ............................................................................................................................................................... .4
III.
Law ................................................................................................................................................................. 5
A.
B.
Rule l2(b)(2) Standard After Jurisdictional Discovery ............................................................................... 5
Personal Jurisdiction Analysis Pursuant to Forum Law ............................................................................... 5
I.
2.
Long-Arm Statute and Specific Jurisdiction-New York CPLR § 302 .................................................. 6
3.
C.
IV.
A.
B.
V.
General Jurisdiction-New York CPLR § 301 ....................................................................................... 6
Due Process Requirements ...................................................................................................................... 8
Rule 4(k)(2) of the Federal Rules of Civil Procedure .................................................................................. 9
Application of Law to Facts .......................................................................................................................... 10
New York Long-Arm Statute and Due Process Clause ............................................................................. 10
Rule 4(k)(2) of the Federal Rules of Civil Procedure ................................................................................ 12
Conclusion .................................................................................................................................................... 12
JACK B. WEINSTEIN, Senior United States District Judge:
I.
Introduction and Summary of Procedural History
A yacht designer, resident abroad, whose work was done in Europe, was sued after a
seafarer was injured on a vessel, allegedly because of faulty naval architecture. It asserts lack of
personal jurisdiction. As indicated below, there is no personal jurisdiction. It should also be
noted that the movant's mere possession of an account on Facebook is not, in the context of this
case, a sufficient predicate for hauling it into a court in New York.
This memorandum and order should be read in conjunction with the memorandum and
order to be filed shortly granting summary judgment in favor ofthird-party defendant Marquis
Yachts, LLC ("Marquis").
2
Kelly Lyons sued defendant Rienzi & Sons, Inc. ("Rienzi"). He alleged that he was
employed by Rienzi as the captain (and sole crew member) of a 65-foot yacht-the Briannaowned by defendant, and that, in August 2008, he was injured after slipping and falling while
working aboard the vessel. He claims that his injuries were caused by Rienzi's negligence in
providing a slippery deck surface. See generally Complaint, Lyons v. Rienzi & Sons, Inc., No.
09-CV-4253 (E.D.N.Y. Oct. 2, 2009), CMlECF No. I.
Rienzi later brought a third-party complaint, pursuant to Rule 14 of the Federal Rules of
Civil Procedure, against the manufacturer of the Brianna and its putative successor, an
intermediate seller, and the designer of the yacht, third-party defendant and present movant
Nuvolari-Lenard S.R.L. ("Nuvolari"), who Rienzi sued as Nuvolari-Lenard Naval Design.
Asserting various claims against Nuvolari in its third-party complaint, Rienzi contended that if it
were held liable to Lyons, the third-party defendants, including Nuvolari, should contribute to
any judgment or indemnify it entirely. See Third-Party Complaint, Lyons v. Rienzi & Sons, Inc.,
No. 09-CV-4253 (E.D.N.Y. Jan. 7, 2011), CMlECF No. 14. Lyons, the original plaintiff, then
brought his own claims against the third-party defendants pursuant to Rule 14(a)(3) ofthe
Federal Rules of Civil Procedure. See Plaintiffs Rule 14(a) Claims Against Third-Party
Defendants, Lyons v. Rienzi & Sons, Inc., No. 09-CV-4253 (E.D.N.Y. June 10,2011), CMIECF
No. 42.
In November 2011, Nuvolari filed a motion pursuant to Rule 12(b)(2) of the Federal
Rules of Civil Procedure, arguing that Lyons and Rienzi's claims against it should be dismissed
for lack of personal jurisdiction. Opposing, Lyons and Rienzi contended that they were entitled
to jurisdictional discovery. Jurisdictional discovery was completed in March 2012. Nuvolari has
now renewed its motion to dismiss. For the reasons stated below, the motion is granted.
3
II.
Facts
Nuvolari was founded in 1992 by Carlo Nuvolari-Duodo and Dan Lenard. It remains a
small company; Nuvolari has six full-time employees and four who work part-time. See Supp.
Decl. of Carlo Nuvolari-Duodo in Support of Renewed Motion to Dismiss for Lack of Personal
Jurisdiction ("Nuvolari-Duodo Supp. Decl.") ~ 6, Lyons v. Rienzi & Sons, Inc., No. 09-CV-42S3
(E.D.N.Y. Mar. 12,2012), CMlECF No. 109. All ofNuvolari's design work is carried out at its
Italian design center, where the company has a single mailing address. Its telephone and fax
numbers allow it to be contacted only in Italy. See id.
~~
7-8. The company's website was
created in Italy and is updated there; consumers cannot purchase or request the provision of
services through the website. See id.
~
9. Nuvolari has not sought authorization to do business
in-and is not registered to do business in-any state in the United States. See id.
company does not retain bank accounts or agents in this country. See id.
~
~
II. The
10. The company
does maintain, however, a Facebook page; it can be accessed by United States users ofthe site.
See Ex. 26 to Affirmation of Susan Lee in Opposition to Motion to Dismiss Filed by Nuvolari-
Lenard S.R.L., Lyons v. Rienzi & Sons, Inc., No. 09-CV-42S3 (E.D.N.Y. Mar. 26, 2012),
CMlECFNo.123-6.
Nuvolari-Duodo and Lenard have traveled to the United States numerous times on the
company's behalf. Most of these trips were taken for the purpose of attending boat shows in
Florida. See Nuvolari-Duodo Supp. Decl. ~~ 31-32. Many of the others were taken for the
purpose ofreviewing the construction in Wisconsin of vessels, designed by Nuvolari, for thirdparty defendants Carver Boat Corporation LLC ("Carver") and Marquis. See id.
~
33. Carver
later changed its name to Genmar Yacht Group LLC ("Genmar"); Genmar has been named as a
third-party defendant in this case.
4
In February 2002, Nuvolari agreed to provide yacht designs to Carver in exchange for
royalty payments. See id. ml13, 15. Nuvolari-Duodo, the company's CEO and senior partner,
signed an agreement to that effect in Italy. See id.
~
14. Over the last eight years, its earnings
only from yachts it designed that were manufactured in shipyards in Wisconsin amounted to
approximately $9 million. See April 10, 2012 Hr'g Tr. 4. Nuvolari appears to have received
some $30,000 for the design of the Brianna, which was designed in Italy, manufactured in
Wisconsin, and ultimately transported to New York, where it was sold to Rienzi in that state by
third-party defendant Staten Island Yacht Sales, Inc. See Affirmation of Susan Lee in
Opposition to Motion to Dismiss Filed by Nuvolari-Lenard S.R.L. ("Lee Aff.") mlS-9, 35-36,
Lyons v. Rienzi & Sons, Inc., No. 09-CV-4253 (E.D.N.Y. Mar. 26, 2012), CMIECF No . 122.
III.
Law
A. Rule 12(b)(2) Standard After Jurisdictional Discovery
"On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiffbears
the burden of showing that the court has jurisdiction over the defendant." Metro. Life Ins. Co. v.
Robertson-Ceca Corp., S4 F.3d 560, 566 (2d Cir. 1996). "Before discovery, a plaintiff may
defeat such a motion with legally sufficient allegations of jurisdiction. Where the parties have
conducted jurisdictional discovery but have not held an evidentiary hearing, the plaintiff must
allege facts that, if credited, would suffice to establishjurisdiction over the defendant." Chaiken
v. VV Publ'g Corp., 119 F.3d 10 IS, 1025 (2d Cir. 1997) (citation, ellipses, and internal quotation
marks omitted). But see Landoil Res. Corp. v. Alexander & Alexander Servs., Inc., 91S F.2d
1039,1043 (2d Cir. 1990) (stating that "[s]ince the district court allowed the parties to conduct
discovery on the jurisdictional issue, [plaintiff] bears the burden of proving by a preponderance
of the evidence that personal jurisdiction exists").
B. Personal Jurisdiction Analysis Pursuant to Forum Law
5
,
"District courts resolving issues of personal jurisdiction must engage in a two-part
analysis." Grand River Enters. Six Nations, Ltd v. Pryor, 425 F.3d 158, 165 (2d Cir. 2005)
(internal quotation marks and ellipses omitted). "First, a district court must determine whether,
under the laws of the forum state ... , there is jurisdiction over the defendant. Second, it must
determine whether an exercise of jurisdiction under these laws is consistent with federal due
process requirements." Id (citation, internal quotation marks, and bracketing omitted); see, e.g.,
Chloe v. Queen Bee a/Beverly Hills, LLC, 616 F.3d 158, 163-64 (2d Cir. 2010).
1. General Jurisdiction-New York CPLR § 301
"Under New York law, a foreign corporation is subject to general personal jurisdiction in
New York ifit is 'doing business' in the state." Wiwa v. Royal Dutch Petroleum Co., 226 F.3d
88, 95 (2d Cir. 2000) (citing N.Y.C.P.L.R. § 301). "A corporation is 'doing business' and is
therefore 'present' in New York and subject to personal jurisdiction with respect to any cause of
action, related or unrelated to the New York contacts, if it does business in New York not
occasionally or casually, but with a fair measure of permanence and continuity." Id (internal
quotation marks and bracketing omitted). " In order to establish that this standard is met, a
plaintiff must show that a defendant engaged in continuous, permanent, and substantial activity
in New York." Id (internal quotation marks omitted).
2. Long-Arm Statute and Specific Jurisdiction-New York CPLR § 302
New York's long-arm statute, allowing in limited instances for the exercise of personal
jurisdiction over nondomiciliaries whose actions have a substantial impact within the state-if
the claim asserted is based upon that conduct-provides in relevant part that:
(a) Acts which are the basis ofjurisdiction. 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 .. . who in person or through an agent:
6
(1) transacts any business within the state or contracts anywhere to supply goods
or services within the state; or
(2) commits a tortious act within the state, except as to a cause of action for
defamation of character arising from the act; or
(3) commits a tortious act without the state causing injury to person or property
within the state, except as to a cause of action for defamation of character arising
from the act, if he
(i) regularly does or solicits business or engages in any other persistent course of
conduct, or derives substantial revenue from goods used or services rendered, in
the state, or
(ii) expects or should reasonably expect the act to have consequences in the state
and derives substantial revenue from interstate or international commerce ....
N.Y.C.P.L.R. § 302(a).
"New York courts evaluating ... jurisdiction under section 302(a)(I) look to both the
language of the statute and the relation between the alleged conduct and the cause of action. To
determine the existence of jurisdiction under section 302(a)(I), a court must decide (1) whether
the defendant transacts any business in New York and, if so, (2) whether th[ e1cause of action
arises from such a business transaction." Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d
Cir. 2007) (internal quotation marks and bracketing omitted). "Courts look to the totality of the
defendant's activities within the forum to determine whether a defendant has transacted business
in such a way that it constitutes purposeful activity satisfying the first part of the test." Id.
(internal quotation marks, citation, and bracketing omitted). "As for the second part of the test, a
suit will be deemed to have arisen out of a party's activities in New York if there is an articulable
nexus, or a substantial relationship, between the claim asserted and the actions that occurred in
New York." Id. (internal quotation marks and bracketing omitted).
The ambit of section 302(a)(2) is more limited. It "reaches only tortious acts performed
by a defendant who was physically present in New York when he performed the wrongful act."
Bensusan Rest. Corp. v. King, 126 F.3d 25, 28 (2d Cir. 1997).
7
Section 302(a)(3) allows for "a nondomiciliary who ' commits a tortious act without the
state causing injury . .. within the state' [to) be brought before a New York court to answer for
his conduct if he has had sufficient economic contact with the State or an active interest in
interstate or international commerce coupled with a reasonable expectation that the tortious
conduct in question could have consequences within the State." McGowan v. Smith, 419 N.E.2d
321,323-24 (N.Y. 1981) (quoting N.Y.C.P.L.R. § 302(a)(3)).
3. Due Process Requirements
If the court concludes that the exercise of personal jurisdiction is authorized by state law,
it must next be detennined whether the exercise of jurisdiction over a given defendant would
comport with the constitutional guarantee of due process. (The due process inquiry is of especial
utility when the putative lack of personal jurisdiction is raised as a defense in a case brought in
New York, since the state's "long-arm statute does not extend in all respects to the constitutional
limits established by International Shoe Co. v. Washington, 326 U.S. 310 (1945), and its
progeny." Lieci ex rei. Licci v. Lebanese Canadian Bank, SAL, No. IO-CV-1306, 2012 WL
688809, at *5 (2d Cir. Mar. 5,2012) (parallel citation omitted)).
"The required due process inquiry .. . has two parts: whether a defendant has minimum
contacts with the forum state and whether the assertion of jurisdiction comports with traditional
notions offair play and substantial justice-that is[,] whether the exercise of jurisdiction is
reasonable under the circumstances of a particular case." Wiwa v. Royal Dutch Petroleum Co.,
226 F.3d 88, 99 (2d Cir. 2000) (internal quotation marks, bracketing, and ellipses omitted).
In undertaking the minimum-contacts analysis, courts are to remember that, ''' it is
essential ... that there be some act by which the defendant purposefully avails itself of the
privilege of conducting activities within the forum State, thus invoking the benefits and
8
protections of its laws.' Such purposeful conduct provides a defendant with fair warning that he
and his property may be subject to the exercise of that forum state's power." Bensmiller v. E.I
Dupont de Nemours & Co., 47 F.3d 79, 84-85 (2d Cir. 1995) (quoting Hanson v. Denckla, 357
U.S. 235, 253 (1958» (additional internal quotation marks, emphases, and explanatory
parenthetical omitted). "The principal inquiry ... is whether the defendant's activities manifest
an intention to submit itself to the power of a sovereign .... [A]s a general rule, it is not enough
that the defendant might have predicted that its goods will reach the forum State." J. McIntyre
Mach., Ltd v. Nicastro, 131 S. Ct. 2780,2788 (2011) (plurality opinion); see also Jonathan M.
Hoffman, Personal Jurisdiction After Nicastro and Goodyear: Where Do We Stand Now?, 40
Products Safety & Liability Reporter 418, 420-22 (Apr. 9, 2012).
The determination of whether the exercise of jurisdiction is reasonable "will depend on
an evaluation of several factors. A court must consider the burden on the defendant, the interests
of the forum State, and the plaintiff s interest in obtaining relief. It must also weigh in its
determination the interstate judicial system's interest in obtaining the most efficient resolution of
controversies; and the shared interest of the several States in furthering fundamental substantive
social policies." Asahi Metal Indus. Co. v. Superior Court ofCal. , 480 U.S . 102, 113 (1987)
(internal quotation marks omitted); see also Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d
158,164-65 (2d Cir. 2010) (discussing factors to be considered during the course of the
reasonableness analysis).
C. Rule 4(k)(2) of tbe Federal Rules of Civil Procedure
Rule 4(k)(2) of the Federal Rules of Civil Procedure provides that:
(2) Federal Claim Outside State-Court Jurisdiction. For a claim that arises under
federal law, serving a summons or filing a waiver of service establishes personal
jurisdiction over a defendant if:
9
(A) the defendant is not subject to jurisdiction in any state's courts of general
jurisdiction; and
(8) exercising jurisdiction is consistent with the United States Constitution and
laws.
Fed. R. Civ. P. 4(k)(2) (emphases omitted).
"Under this provision, a defendant sued under federal law may be subject to jurisdiction
based on its contacts with the United States as a whole, when the defendant is not subject to
personal jurisdiction in any state. Rule 4(k)(2) confers personal jurisdiction over a defendant so
long as the exercise of jurisdiction comports with the Due Process Clause of the Fifth
Amendment." Dardana Ltd. v. A.a. Yugansknejiegaz, 317 F.3d 202, 207 (2d Cir. 2003)
(emphasis added).
"Rule 4(k)(2) ... allows the exercise of personal jurisdiction by a federal district court
when three requirements are met: (I) the claim must arise under federal law; (2) the defendant
must not be subject to jurisdiction in any state' s courts of general jurisdiction; and (3) the
exercise of jurisdiction must be consistent with the United States Constitution and laws." Porina
v. Marward Shipping Co., Ltd., 521 F.3d 122, 127 (2d Cir. 2008)(intemal quotation marks
omitted).
IV.
Application of Law to Facts
Nuvolari's motion to dismiss for lack of personal jurisdiction is granted.
A. New York Long-Arm Statute ,a nd Due Process Clause
The exercise of personal jurisdiction on a theory of general jurisdiction is inappropriate.
See N.Y.C.P.L.R. § 301. Nuvolari does not engage in systematic and continuous activity in New
York. See Nuvolari-Duodo Supp. Decl. m\7-11. The company's Facebook page-admittedly
accessible to that site's users in New York--does not compel a different conclusion with respect
to general jurisdiction.
10
Most of the provisions of New York's long-arm statute do not provide even a colorable
basis for the exercise of personal jurisdiction over Nuvolari. Section 302(a)(I) does not allow
for the exercise of personal jurisdiction, since the company did not transact any business in New
York. The Brianna was designed in Italy, and Nuvolari's CEO and senior partner signed the
relevant design agreement in that country. See Nuvolari-Duodo Supp. Dec!. '\1'\17, 13. There is
no suggestion that Nuvolari entered into a contract to supply goods or services in New York, or
that it contemplated doing so. See N.Y.C.P.L.R. § 302(a)(I). And there is no indication that
Carver or Genmar acted as Nuvolari's agent in New York.
Nor can personal jurisdiction be premised on either Section 302(a)(2) or 302(a)(3)(ii).
The former section is unavailing because any tortious act or failure to aet on Nuvolari 's part took
place in Italy, where the boat was designed. Conduct occurring outside of New York cannot be
the basis for the exercise of personal jurisdiction under that portion of the statute. See Bensusan
Rest. Corp. v. King, 126 F.3d 25, 28 (2d Cir. 1997). And the latter section does not provide a
basis for the exercise of personal jurisdiction; Nuvolari had no reason to think that provision of a
design or design advice to a yacht manufacturer whose principal place of business was outside of
New York would have consequences in this state. See N.Y.C.P.L.R. § 302(a)(3)(ii). The court
takes judicial notice of the fact that vessels manufactured in Wisconsin-as was the Briannacan have access to the seven seas without passing through New York.
And even assuming without deciding that the exercise of personal jurisdiction over
Nuvolari would be appropriate under Section 302(a)(3)(i)-based on the allegation that Nuvolari
received some $30,000 for its design of the Brianna, see Lee Aff. '\I 36-the constitutional
guarantee of due process prohibits the exercise of personal jurisdiction on that basis. (The
derivation of revenue by Nuvolari for the design of the vessel is the only basis that might suffice
11
to allow for the exercise of personal jurisdiction under the long-arm statute; Nuvolari did not
regularly conduct business or solicit business in New York, or engage in a persistent course of
conduct in the state. See Nuvolari-Duodo Supp. Dec!. ~ 7.) Due process bars the exercise of
personal jurisdiction over Nuvolari since it did not take advantage of benefits provided by the
State of New York, nor was it contemplated that it would do so. See id
~~
7-11; see also, e.g., J.
McIntyre Mach., Ltd v. Nicastro, 131 S. Ct. 2780, 2788 (2011) (plurality opinion).
B. Rule 4(k)(2) of the Federal Rules of Civil Procedure
The exercise of personal jurisdictio/l pursuant to Federal Rule of Civil Procedure 4(k)(2)
is inappropriate in this case. Based upon the present record, it appears that Nuvolari is subject to
personal jurisdiction in Florida, since both of the company's founders have traveled to that state
numerous times with the purpose of promoting the company's designs at boat shows. NuvolariDuodo Supp. Dec!. ~ 32; see Fla. Stat. Ann. § 48.193(2).
V.
Conclusion
Nuvolari's motion to dismiss the claims of Lyons and Rienzi against it for lack of
personal jurisdiction is granted. The result is not entirely satisfying to a plaintiff seeking relief in
a liability suit based upon allegations of defects in a product designed, produced, and sold in
different states and nations. See, e.g., Paul Schiff Berman, Global Legal Pluralism: A
Jurisprudence of Law Beyond Borders 324 (2012). But for the moment it is based upon
applicable law in this state and nation.
Costs and disbursements to Nuvolari.
ck B. Weinstein
Senior United States District Judge
12
Date: April 23, 2012
Brooklyn, New York
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