Opinion
03 Civ. 495 (GEL).
April 23, 2003
Isaac Stengel, pro se.
David P. Stich, Solomon Pearl Blum Heymann Stich LLP, New York, NY, for defendant Bradford Black.
OPINION AND ORDER
In this diversity action, plaintiff Isaac Stengel alleges that he is the true owner of a certain diamond now in the possession of defendant Bradford Black, who allegedly purchased the diamond from a third party, one David Rosenthal, knowing that Rosenthal was not the true owner. Stengel seeks damages or, in the alternative, return of the diamond. Black, an Ohio resident, moves to dismiss for lack of personal jurisdiction. Because plaintiff has not made a prima facie showing that this Court may assert jurisdiction over Black under New York's long-arm statute, the motion will be granted.
DISCUSSION
"In assessing whether personal jurisdiction is authorized, 'the court must look first to the long-arm statute of the forum state,'" and then, if the statutory requirements are met, determine whether the exercise of jurisdiction is consistent with due process. Whitaker v. American Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001). Stengel cannot get past the first stage of this inquiry, since he has failed to allege facts that would support a finding that New York's long-arm statute authorizes jurisdiction here.
The burden is on the plaintiff to show that the court has jurisdiction over the defendant. Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999). Where the court, as here, must rely solely on pleadings and supporting affidavits, the plaintiff "need only make a prima facie showing of jurisdiction." Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). Stengel's pro se complaint states that Black "was and still is a resident of the State of Ohio" (Compl. ¶ 2), and makes no allegation that Black has any systematic or continuous contact with New York that would justify general jurisdiction over him. It further alleges that "defendant had financial dealings with one David Rosenthal from the year 2000 through November, 2002," without specifying whether those dealings related to the diamond or where they took place. (Compl. ¶ 4.) The complaint also alleges that "defendant enlisted the services of the FBI . . . in connection with his prior dealings with David Rosenthal," and that defendant "told plaintiff that he had acquired a judgment against David Rosenthal for the money that he had given to David Rosenthal." (Compl. ¶¶ 6, 11.) The complaint does not allege that Black acquired the diamond in New York or that the transaction was otherwise connected to this state.
Black has responded to the complaint by filing a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), along with an attached affidavit. In the affidavit, Black avers that he has "no connection with the State of New York," that he is a urologist licensed to practice only in Ohio, that he has no business other than his Ohio medical practice, that he has never treated patients or had any kind of office in New York. and that he has no interest in an property located in New York. (Black Affid. ¶¶ 1, 8-13.) More importantly, he states that he negotiated the terms of his purchase of the diamond from Rosenthal on May 26, 2000, "by telephone from Ohio," that the diamond was delivered to him in Ohio, that he remitted payment for the diamond from an Ohio bank, and that his lawsuit against Rosenthal was filed in Ohio. (Id. ¶¶ 2, 5.) Although his affidavit does not mention the fact, Black concedes in the memorandum of law accompanying his motion that Rosenthal was located in New York at that time. (D. Mem. at 11.) These statements are not necessarily inconsistent with the complaint's allegation that "defendant had financial dealings with one David Rosenthal from the year 2000 through November, 2002" (Compl. ¶ 4), but neither Stengel nor Black refer to any specific dealings with Rosenthal other than the telephonic negotiations for the purchase of the diamond.
Stengel, misapprehending Black's motion as one for summary judgment, responds only by making the general claim that "there are factual issues and issues which require discovery proceedings." (P. Opp. at 2.) However, Black has not moved for summary judgment; rather, he has moved for immediate dismissal because, as an Ohio resident who has never done business in New York, he is not subject to this court's jurisdiction. Factual discovery, even on the limited issue of personal jurisdiction, is not necessarily called for, since Stengel could defeat Black's motion to dismiss simply by "pleading in good faith . . . legally sufficient allegations of jurisdiction." Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990).
The question at this stage of the proceedings, then, is whether the facts pled by plaintiff or conceded by defendant, specifically, telephonic negotiations by a person outside New York to purchase property from a seller in New York, provides in personam jurisdiction over the purchaser under the New York long-arm statute, N.Y. C.P.L.R. § 302(a)(1), on claims related to the property purchased in that transaction. The New York case law makes clear that it does not.
The New York statute asserts jurisdiction over a non-domiciliary who "transacts any business within the state or contracts anywhere to supply goods or services in the state" for "a cause of action arising from" that transaction. Id. Courts in New York have had frequent occasion to address whether a purchaser of goods outside the state who negotiates by telephone with a seller in New York "transacts . . . business within" New York within the meaning of this statute. The New York Court of Appeals has ruled that "there is no transaction of business in New York where an offer placed outside the State by telephone is received and accepted in New York." Glassman v. Hyder, 23 N.Y.2d 354, 363 (1968). The Second Circuit has found, in the case of an out-of-state defendant whose only contact with New York was a telephone order placed to the New York plaintiff, Beekman Paper Co., Inc. v. National Paper Products, Dkt. No. 88 Civ. 7173 (TPG), 1989 WL 99822, at *1 (S.D.N.Y. Aug. 22, 1989), that "It is inconceivable that [C.P.L.R. § 302(a)], however liberally construed, could confer jurisdiction over parties for whom the record reveals, and Beekman's complaint pleads, absolutely no relevant contacts with New York." Beekman Paper Co., Inc. v. National Paper Products, 909 F.2d 67, 69 (2d Cir. 1990). Even in the case of more extensive negotiations, such as those perhaps alleged in the complaint, courts have found that jurisdiction is not established where the defendant conducted those negotiations from outside the state exclusively by telephone. facsimile transmissions, or mail See, e.g., Whitaker v. Fresno Telsat, Inc., 87 F. Supp.2d 227, 230 (S.D.N.Y. 1999), aff'd, 261 F.3d 196 (2d Cir. 2001); Worldwide Futgol Assocs. v. Event Entertainment, Inc., 983 F. Supp. 173, 177 (E.D.N.Y. 1997) (citing numerous state-court cases)).
Even absent any pronouncements by the New York courts, the language of § 302(a)(1) itself casts doubt on the possibility of in personam jurisdiction based solely on the purchase by an out-of-state defendant of goods from a New York seller. By expressly providing jurisdiction over a defendant who "contracts anywhere to supply goods or services in the state," the statute would appear to rule out the possibility that "transacting business within the state" was intended to encompass those who contract to purchase goods from a New York supplier.
Under "rare" circumstances, jurisdiction can be based exclusively on telephone calls placed from outside the state — but only if the defendant "'projects' itself into New York events," Worldwide Futgol, 983 F. Supp. at 177, where it can be said to have "engage[d] in extensive purposeful activity" in New York by virtue of the calls. Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 17 (1970). In Parke-Bernet, the Court of Appeals found that the California defendant, by requesting an open telephone line to permit him to participate in bidding during an auction in New York, became subject to suit in the New York courts. The case, the Court explained, "falls between the situation where a defendant was physically present at the time the contract was made — the clearest sort of case in which our courts would have [§] 302 jurisdiction . . . — and the situation where a defendant merely telephones a single order from outside the State — a case in which our courts would not have such jurisdiction." Id. In effect, the actions of the defendant in Parke-Bernet were tantamount to his physical presence at the auction. Nothing of the sort is alleged by plaintiff here.
Because Stengel is acting without the assistance of counsel, the Court recognizes that he may not have appreciated the importance of alleging sufficient jurisdictional facts, either in his complaint or in responding to Black's motion to dismiss. Indeed, Stengel seems to have misunderstood Black's motion as one for summary judgment on the merits. Accordingly, it is appropriate to grant Stengel leave to replead, in order that he may supplement his complaint with any relevant facts concerning either Black's contacts with Rosenthal, or other activities by Black in New York, that might support this Court's jurisdiction over him. If he alleged any such facts, Stengel might be entitled to discovery about them, so that the Court could determine, for example, the nature of Black's allegedly prolonged "financial dealings" with Rosenthal, and whether Black has reached out to New York to do business with Rosenthal in a manner that would support a claim of "purposeful activity" in New York. So far, however, Stengel has not alleged facts that would support any such determinations, and therefore Black cannot be made to proceed further in a New York court.
For the sake of the pro se plaintiff, we spell out what is obvious to lawyers and judges. The dismissal of Stengel's complaint is not a judgment on the merits of his lawsuit. It does not preclude re-filing the complaint in Ohio, where the courts would clearly have jurisdiction over the person of the defendant, or indeed here, if the plaintiff can plead facts that demonstrate that Black purposefully did business in New York. Nor is this dismissal the result of a mere legal technicality. As the Supreme Court has held, and reaffirmed on numerous occasions, it would be unfair to require someone to travel to a distant state to defend a lawsuit when there is no indication that he has in any way "purposefully avail[ed] [himself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws."Hanson v. Denckla, 357 U.S. 235, 253 (1958).
CONCLUSION
Accordingly, the complaint is dismissed for lack of personal jurisdiction over defendant, without prejudice to re-filing in a court that has such jurisdiction. Plaintiff is granted leave to file an amended complaint on or before May 16, 2003, if he is able to allege additional facts warranting the exercise of jurisdiction over defendant by this Court.
SO ORDERED.