Single, Pre-Contract, Meeting and Telephone and E-mail Communications Insufficient to Establish Personal Jurisdiction in New York

On March 18, 2019, Justice Scarpulla of the New York County Commercial Division issued a decision in AM Pitt Hotel, LLC v. 400 5th Ave., L.P., 2019 NY Slip Op. 30665(U), holding that a single, pre-contract meeting and telephone and e-mail communications were insufficient to create personal jurisdiction in New York, explaining:

Plaintiff does not assert general jurisdiction exists over defendant, a Pennsylvania limited partnership with its principal place of business in Pennsylvania. Instead, plaintiff asserts that long arm jurisdiction exists over defendant, pursuant to CPLR 302(a)(l), because defendant solicited an investor in New York and thereafter communicated via phone and email with plaintiff located in New York.

Under CPLR 302(a)(l), the relevant inquiry is whether defendant purposefully availed itself of the privilege of conducting activities in the state by transacting business in New York. As relevant here, purposeful availment occurs when the non-domiciliary 'seeks out and initiates contact with New York, solicits business in New York, and establishes a continuing relationship.

Here, plaintiff has failed to demonstrate that defendant transacted business in New York. Defendant's single initial meeting at a restaurant in New York does not suffice to constitute transaction of business in New York where ( 1) defendant never returned to New York to negotiate the Sale Agreement; (2) defendant executed the Sale Agreement and subsequent amendments in Pennsylvania; (3) plaintiff traveled to Pennsylvania in connection with construction delays; and (4) the parties' contractual relationship is centered in Pennsylvania.

Neither do defendant's telephone and email communications with plaintiff, concerning the negotiation and performance of the Sale Agreement, suffice to constitute the transaction of business in New York. Such communications relate to ongoing business in Pennsylvania rather than this forum and, in any event, plaintiffs assertion of jurisdiction based on its own New York activities cannot be attributed to defendants. Therefore, plaintiff failed to demonstrate that defendant transacted business here to subject defendant to long-arm jurisdiction.

(Internal quotations and citations omitted).

This decision illustrates an issue that often arises in commercial litigation in New York. Whether the defendant is located on the other side of the world or across the Hudson in New Jersey, a New York court cannot assert jurisdiction over the defendant (that is, hear a case against it) unless there is a proper connection between the defendant and New York. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure whether there is jurisdiction over you, or over a party with which you are having a dispute, in New York.