Albino v. Global Equipment USA, Ltd.

Filing 114

DECISION AND ORDER granting 109 Motion to Vacate 107 ORDER resolving 98 Motion to Quash. Signed by Hon. Michael A. Telesca on 7/24/17. (AFB)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

ALEXANDER ALBINO,
Plaintiff,
-vs-

DECISION and ORDER
No. 6:14-cv-06519(MAT)

GLOBAL EQUIPMENT USA, LTD.,
Defendant.

GLOBAL EQUIPMENT USA, LTD.,
Defendant/Third-Party Plaintiff,
-vsH. P. NEUN COMPANY, INC., ISOWA
AMERICA, INC. and ISOWA CORPORATION,
Third-Party Defendants.

INTRODUCTION
Following this Court’s February 28, 2017, Decision and Order,
the

parties

have

been

conducting

jurisdictional

discovery.

Defendant and third-party plaintiff Global Equipment USA, LTD.
(“Global”) served, inter alia, deposition notices on third-party
defendants ISOWA Corp. (“IC”) and ISOWA America, Inc. (“IAI”).
After IC and IAI objected to the notices as overbroad, Global sent
revised notices, which IC and IAI moved to quash.

U.S. Magistrate

Judge Jonathan W. Feldman Judge Feldman heard oral argument on the
motion to quash and resolved most of the parties’ disputes on the
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record.
Following the parties’ submission of post-argument briefing on
the outstanding issues, Judge Feldman issued an Order on June 28,
2017 (Dkt #107) (“the Discovery Order”), delineating the scope of
the upcoming

deposition

of

IC/IAI’s

corporate

representative.

Global then filed a motion to rescind, in part, the Discovery
Order. Specifically, Global objects to the following restriction in
the Discovery Order:
Global may depose IC/IAI’s representative on the topic of
“jurisdiction pursuant to [New York Civil Practice Law
and Rules] § 302(a),” New York’s long-arm jurisdiction
statute, which will include IC/IAI’s respective business
and course of conduct in New York prior to the accident
at issue in this case. . . .
(Dkt #107, p. 2 of 4) (emphasis in original). Global contends that
IC’s and IAI’s contacts with HP Neun in New York subsequent to the
accident are relevant to show that jurisdiction under New York’s
long-arm statute, New York Civil Practice Law and Rule (“C.P.L.R.”)
§ 302(a), is proper. IC and IAI filed a joint memorandum of law in
opposition (Dkt #111) to Global’s motion, and Global filed a reply
(Dkt #113). Global also moved for an expedited hearing on the
motion to rescind, since the deposition at issue is to be held on
July 27, 2017, at the U.S. Consulate in Osaka, Japan. This Court
granted the request.
For the reasons discussed herein, Global’s motion is granted.
STANDARD OF REVIEW
A district judge may review, and set aside, a magistrate
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judge’s decision on a non-dispositive matter such as a discovery
issue if it is clearly erroneous or contrary to law. See FED. R.
CIV. P. 72(a); 28 U.S.C. 636(b)(A) et seq.
DISCUSSION
I.

General Legal Principles and Burdens of Proof
The

Federal

Rules

of

Civil

Procedure

(“F.R.C.P.”)

allow

examination of a deponent concerning “any matter, not privileged,
which is relevant to the subject matter involved in the pending
action.” FED. R. CIV. P. 26(b). Relevance “has been construed broadly
to encompass any matter that bears on, or that reasonably could
lead to other matter that could bear on any issue that is or may be
in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351
(1978); see also Maresco v. Evans Chemetics, Div. of W.R. Grace &
Co., 964 F.2d 106, 114 (2d Cir. 1992) (“[T]he scope of discovery
under Fed. R. Civ. P. 26(b) is very broad. . . .”) (citations
omitted).
Generally, pursuant to F.R.C.P. 30(a)(1), “any party may take
the testimony of any person, including a party. . . .” When a party
subpoenas a corporation pursuant to F.R.C.P. 30(b)(6), the notice
of deposition “must describe with reasonable particularity the
matters for examination” of the individual designated to testify on
behalf of the corporation. “The party issuing the subpoena must
demonstrate that the information sought is relevant and material to
the allegations and claims at issue in the proceedings.” Night Hawk

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Ltd. v. Briarpatch Ltd, LP, 03 Civ. 1382(RWS), 2003 WL 23018833 at
*8 (S.D.N.Y. Dec. 23, 2003) (citing Salvatore Studios Int’l v.
Mako’s Inc., 01 Civ. 4430(BSJ)(DF), 2001 WL 913945 at *1 (S.D.N.Y.
Aug. 14, 2001) (“Rule 26(b)(1) of the Federal Rules of Civil
Procedure restricts discovery to matters relevant to the claims and
defenses of the parties. Here, the burden is on Mako’s [who issued
the subpoena] to demonstrate relevance.”)).
II.

Global Fulfilled Its Burden of Showing Relevance
IC/IAI’s motion to quash pursuant to Rule 26(b) asserted, as

the basis for relief, that “Global’s [F.R.C.P.] 30(b)(6) deposition
notices

fail

to

identify

the

matters

for

examination

with

reasonable particularity . . . [and] are overly broad in that they
are not limited to the allegations set forth in the proposed
amended third party complaint.” Contrary to IC/IAI’s suggestion,
whether Global has established specific jurisdiction under C.P.L.R.
302(a) is not the issue at this juncture. Rather, the issues are
whether Global’s deposition notices specified topics relevant, and
whether IC/IAI fulfilled its burden of demonstrating that the
notices were overly broad. See Kingsway Fin. Servs., Inc. v.
Pricewaterhouse-Coopers LLP, No. 03 CIV. 5560(RMB)HBP, 2008 WL
4452134, at *4 (S.D.N.Y. Oct. 2, 2008) (“Once the party issuing the
subpoena has demonstrated the relevance of the requested documents,
the party seeking to quash the subpoena bears the burden of
demonstrating that the subpoena is over-broad, duplicative, or

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unduly burdensome.”) (citing Tow Int’l, Inc. v. Pontin, 246 F.R.D.
421, 424 (E.D.N.Y. 2007) (“The burden of persuasion in a motion to
quash a subpoena . . . is borne by the movant.”); other citation
omitted).
The key point of contention is whether Global should be
permitted to explore events that post-date the accident, including
a 2015 service call by IAI regarding the machine at issue in this
case. The Discovery Order stated that Global has “offered no theory
under which [P]laintiff’s injury could have arisen out of IAI’s
post-dated servicing of the machine.” (Dkt #107, p. 3 of 4). The
Discovery Order noted that although Global argued generally that
IC/IAI had sufficient contacts with New York at the time of the
suit, this argument, and the sufficiency of individual contacts
with

the

state,

jurisdiction

under

is

misplaced

CPLR

§

in

302(a).”

a

discussion

(Id.,

p.

3-4

of
of

specific
4).

The

Discovery Order concluded by noting that to fall within the ambit
of N.Y. C.P.L.R. § 302(a), “the transaction must be directly
related to the cause of action. . . .” (Id., p. 4 of 4) (emphasis
in original).
As discussed further below, the Court finds that the temporal
restriction in the Discovery Order is based on a misinterpretation
of the relevant inquiry under C.P.L.R. § 302(a)(3), which “permits
a court to exercise personal jurisdiction over a nondomiciliary
who: ‘3. commits a tortious act without the state causing injury to

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person or property within the state . . . 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 consumed
or services rendered, in the state, or (ii) expects or should
reasonably expect the act to have consequences in the state and
derives

substantial

commerce[.]”

revenue

Ingraham

v.

from

Carroll,

interstate
90

N.Y.2d

or

international

592,

596

(1997)

(quoting N.Y. Civ. Prac. L. & R. § 302(a)(3); emphases omitted).
Under this provision, the plaintiff “must show both that an injury
occurred within the state, and that the elements of either clause
(I) or (ii) have been satisfied.” Id. (emphasis omitted); see also
Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d
779, 784 n.2 (2d Cir. 1999) (“Brussels Lambert I”). The caselaw in
this Circuit supports a finding that conduct or transactions on the
part of IC/IAI that post-date the tortious act may be relevant to
determining whether IC/IAI regularly does or solicits business in
New York, or engages in any other persistent course of conduct in
New York,

or

derives

substantial

revenue from

goods

used

or

consumed or services rendered in New York, for purposes of C.P.L.R.
§ 302(a)(3)(i); or derives substantial revenues from interstate or
international commerce for purposes of C.P.L.R. § 302(a)(3)(ii).
For instance, in Bank Brussels Lambert v. Fiddler Gonzalez &
Rodriguez, 305 F.3d 120 (2d Cir. 2002) (“Brussels Lambert II”), the
Second Circuit considered the exercise of personal jurisdiction

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under C.P.L.R. § 302(a)(3)(i). The plaintiff, a Belgian bank with
a New York branch, sued its Puerto Rican law firm for legal
malpractice and other torts, in connection with the law firm’s
failure to disclose information about a borrower to the bank. The
district court found that subsection C.P.L.R. § 302(a)(3)(i) had
been satisfied by the law firm’s “persistent course of conduct” in
New York of renting of an apartment during an eight-year period
that preceded the filing of the motion to dismiss and occurred
subsequently to the law firm’s alleged tortious activity. Lambert
v. Fiddler Gonzalez & Rodriguez, No. 96 CIV. 7233(LMM), 2001 WL
893362, at *3 (S.D.N.Y. Aug. 8, 2001), vacated sub nom. Bank
Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120 (2d
Cir. 2002). This apartment was available for the use of the firm’s
partners, and, while it had apparently been largely used for
vacations, it sometimes was used for firm business and was claimed
as

a

business

long-term

expense.

apartment

The

rental

Second
was

Circuit

sufficient

agreed
to

that

this

constitute

a

persistent course of conduct by the firm. It thus was not necessary
for the apartment rental to be related to the plaintiff’s, i.e.,
legal malpractice and other business torts, to be relevant to the
“persistent course of conduct” aspect of C.P.L.R. § 302(a)(3)(i).
IC/IAI cites LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210
(2000), as support for the proposition that the 2015 service call
is irrelevant because under “CPLR 302(3). . . the relevant period

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by which to measure IAI’s contacts is the year of the accident.”
(Dkt #11, p. 9 of 19) (citing LaMarca v. Pak–Mor Mfg. Co., 95
N.Y.2d 210, 213 (2000) (noting that “[i]n the year of the accident,
Pak-Mor’s total sales revenue was $18,245,292, $514,490 of which
was derived from New York”)). However, in LaMarca, the New York
Court of Appeals did not specifically address the question of the
relevant time period for evaluating the substantiality of the
defendant’s
proposition

revenue.
urged

Thus,
by

LaMarca

IC/IAI.

does

not

stand

for

Furthermore,

after

the

finding

jurisdiction proper under C.P.L.R. § 302(a)(3)(ii), the Court of
Appeals did not address C.P.L.R. § 302(a)(3)(i), and therefore
LaMarca does not speak to that subsection.
It thus appears that the relevant time period for

C.P.L.R. §

302(a)(3) is an open question in this Circuit. Contrary to IC/IAI’s
suggestion, courts have not uniformly determined that the year of
the accident or other tort is the only relevant year to consider.
In Ball v. Metallurgie Hoboken–Overpelt, S.A., 902 F.2d 194 (2d
Cir. 1990) (“Ball II”), the issue was whether the defendant was
amenable to personal jurisdiction under C.P.L.R. § 302(a)(3)(i),
which provides for personal jurisdiction over an entity that
“‘derives substantial revenue from goods used or consumed or
services rendered, in the state . . . .’” Ball II, 902 F.2d at 199
n. 5 (quotation omitted). The Second Circuit held that the district
court

was

correct

in

concluding

-8-

that

the

plaintiff

had

not

established that the defendant derived substantial revenue from New
York sources. See id. at 200. The Second Circuit also noted with
approval the district court’s ruling that the year the complaint
was

filed

was

the

proper

point

in

time

for

assessing

the

substantiality of the defendant’s New York revenue. See id. at 199.
However, the dispute before the district court “was not over the
length of the period to be considered in assessing substantial
revenue but whether the court should generally focus on the time of
the alleged injury or the time that the complaint was filed.”
Justus

v.

Toyo

Kensetsu

Kohki

Co.,

228

F.

Supp.2d

215,

219

(N.D.N.Y. 2002) (citing Ball v. Metallurgie Hoboken–Overpelt, S.A.,
No. 87–CV–191, 1989 WL 87418, *12 (N.D.N.Y. July 31, 1989) (“Ball
I”) (alleged injury occurred in 1982, at which time defendant had
no sales in United States; in contrast, when complaint was filed in
1987, defendant had substantial sales in the United States); Bank
of California v. Smith Barney, Inc., No. 89–CV–551, 1997 WL 736529,
at *5 n. 5 (N.D.N.Y. Oct. 31, 1997) (citing Ball II, 902 F.2d at
199, for the proposition that the jurisdictional analysis should
generally focus on the time that the action was commenced, rather
than the time of the alleged injury)). In addition, “[o]ther courts
applying [C.P.L.R. §] 302(a)(3)(ii) have considered a period of
years in analyzing the substantial revenue requirement” in that
subsection. Justus, 228 F. Supp.2d at 220 (citing Barricade Books,
Inc. v. Langberg, No. 95 CIV. 8906, 2000 WL 1863764, *6 (S.D.N.Y.

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Dec.

19,

2000)

(considering

the

defendant’s

revenues

over

three-year period); Ronar, Inc. v. Wallace, 649 F. Supp. 310, 317
(S.D.N.Y.

1986)

(considering

the

defendant’s

revenues

over

four-year period); Pariente v. Scott Meredith Literary Agency,
Inc., No. 90 Civ. 0547, 1991 WL 19857, *5 (S.D.N.Y. Feb. 11, 1991)
(considering defendant’s revenues over six-year period); Schleich
v. Blumenfeld Sport Net Co., No. CIV–82–546E, 1988 WL 27576, at *1
(W.D.N.Y. Mar. 18, 1988) (considering defendant’s revenues over a
period of five years)).1
As this Court noted in its previous Decision and Order (Dkt
#76) denying Global’s motion to dismiss for lack of jurisdiction,
“[t]he first prong of subsection (ii) of CPLR 302(a)(3) is a
foreseeability

requirement.

‘The

test

of

whether

a

defendant

expects or should reasonably expect his act to have consequences
within the State is an objective rather than subjective one.’” (Dkt
#76, p. 8 of 16) (quoting Kernan v. Kurz-Hastings, Inc., 175 F.3d
236, 241 (2d Cir. 1999) (further quotation omitted)). The second
prong of subsection (ii), which relates to whether the defendant
derives

substantial

revenue

from

interstate

or

international

commerce has been described as a “bigness requirement” designed to
assure that the defendant is “economically big enough” to defend

1

As Global points out, this Court, in its application of C.P.L.R. §
302(a)(3)(ii) in connection with Global’s motion to dismiss for lack of
jurisdiction, considered Global’s website as it existed at the time of the motion
to dismiss, its revenues generated from international transactions in 2016, and
its gross revenues during the period of 2005 to 2015.

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suit in New York. (Dkt #76, p. 11 of 16) (quoting David D. Siegel,
New York Practice § 88 (5th ed. 2011)). New York courts have held
that “there need be no connection between the tortious act and the
derivation of substantial revenue.” Vecchio v. S & T Mfg. Co., 601
F.

Supp.

55,

57

(E.D.N.Y.

1984)

(citing

Gonzales

v.

Harris

Calorific Co., 315 N.Y.S.2d 51 (Sup. Ct.), aff’d, 315 N.Y.S.2d 815
(2d Dep’t. 1970)).2
Finally,

IC/IAI’s

contention

that

Global

is

asserting

arguments before this Court not raised before the Magistrate Judge
is not persuasive. This Court did not place a limit on the
subsection of C.P.L.R. § 302 that Global could explore during
jurisdictional discovery. The Discovery Order likewise did not
place

a

limit

on

which

subsection

of

C.P.L.R.

§

302(a)

was

appropriate grounds for questioning by Global. At this juncture,
Global is not required to allege a basis for personal jurisdiction
in its proposed amended complaint. See Fischbarg v. Doucet, 9
N.Y.3d 375, 385 n. 5 (2007) (rejecting as “wrong” defendants’ claim

2

The Discovery Order’s reliance on McGowan v. Smith, 52 N.Y.2d 268 (1981),
is misplaced to the extent that the New York Court of Appeals there did not
consider jurisdiction under C.P.L.R. § 302(a)(3), but instead evaluated C.P.L.R.
§ 302(a)(1), an “[e]ssential” component of which is “the existence of some
articulable nexus between the business transacted and the cause of action sued
upon[.]” Id. at 272. The Court of Appeals did not consider C.P.L.R. § 302(a)(3)
because the plaintiff’s injury did not occur in New York. See id. at 274.
Likewise, the Court finds that Jacobs v. Felix Bloch Erben Verlag fur Buhne Film
und Funk KG, 160 F. Supp.2d 722 (S.D.N.Y. 2001), is inapposite because there the
district court did not consider C.P.L.R. § 302(a)(3), but found that the
plaintiffs “have not established that any of the [d]efendants were ‘transacting
business’ in New York under [C.P.L.R.] § 302(a)(1).” Id. at 741.

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that plaintiff’s complaint was subject to dismissal because it
failed to allege a basis for personal jurisdiction) (citing Vincent
C. Alexander, Practice Commentaries, McKinney’s Cons. Laws of N.Y.,
Book 7B, C.P.L.R. C302:5 (“Nowhere in the CPLR’s rules of pleading
is

there

any

requirement

of

an

allegation

of

the

court's

jurisdiction[.]”)).
III.

Summary
In order for Global to establish jurisdiction under C.P.L.R.

§

302(a)(3),

the

preamble

to

that

section

requires

that

it

establish that IC/IAI engaged in conduct related to Plaintiff’s
injury, i.e., that it “commit[ted] a tortious act without the state
causing injury[.]” C.P.L.R. § 302(a)(3). However, as the discussion
of cases above indicates, when attempting to meet either subsection
(i) or (ii) of that C.P.L.R. § 302(a)(3), Global is not limited
temporally to conduct directly related to the accident. IC/IAI has
not fulfilled its burden of showing that Global’s proposed area of
inquiry

is

over-broad,

duplicative,

or

unduly

burdensome.

Therefore, the Court is compelled to conclude that the Discovery
Order erred as a matter of law in restricting Global’s questioning
with regard to “IC/IAI’s respective business and course of conduct
in New York” to only the period of time “prior to the accident at
issue in this case. . . .” Accordingly, that portion of the
Discovery

Order

is

vacated,

and

discovery

is

permitted

in

accordance with C.P.L.R. § 302(a) on IC/IAI’s respective business

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and course of conduct in New York, both prior to and after the
accident.
CONCLUSION
For the reasons discussed above, Global’s motion to rescind
the Discovery Order is granted to the extent that the temporal
restriction on questioning to “IC/IAI’s respective business and
course of conduct in New York prior to the accident at issue in
this case[,]” (Dkt #107) (emphasis in original), is vacated. Global
may

question

IC/IAI’s

designated

witness

regarding

“IC/IAI’s

respective business and course of conduct in New York” both before
and after the date of the accident.
SO ORDERED.

S/ Michael A. Telesca
__________________________
HON. MICHAEL A. TELESCA
United States District Judge
Dated:

July 24, 2017
Rochester, New York.

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