Chadbourne & Parke LLP v Remote Solution Co., Ltd.
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Chadbourne & Parke LLP v Remote Solution Co., Ltd. 2005 NY Slip Op 30486(U) June 27, 2005 Sup Ct, NY County Docket Number: 603037/04 Judge: Carol R. Edmead Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK YORK COUNTY / HON. CAROL EDMEAD PRESENT: 3s PART L . Index Number : 603037/2004 CHADBOURNE & PARKE LLP INDEX NO. 41 9 /a< vs REMOTE SOLUTION CO., LTD. MOTION DATE Sequence Number : 1 MOTION SEQ. NO. DISMISS ACTION MOTION CAL. NO. 00 I The following papers, numbered 1 to were read on thls motlon to/for PAPMI$ NUMBERED Notice of Motion/ Order to Show Cause - Affidavits - Exhibits Answering Affidavits - ... Exhibits Replying Affldavita Cross-Motion: Yes 0 No Upon the foregoing papere, It Is ordered that this motion CQ In accordance with the ORDERED that the motion by defendant Remote Solutions Co., Ltd. to dismiss is granted, and the cross-motion by plaintiff is denied; and it is M e r ORDERED that no sooner than five days after service of a copy of this order with notice of entry and a proposed judgment upon plaintiff, the clerk shall enter judgment accordingly upon the presentation of appropriate papers. This decision constitutes the order of the court. &= A ' Dated: n HON. CAROL EDMEAD FINAL DISPOSITION Check one: Check if appropriate: .. . - . . .. . ..-. n DONOTPOST J. S.C. NON-FINAL DISPOSITION u REFERENCE. . . . .. . . ... . .. [* 2] CHADBOURNE & PARKE LLP. MEMORANQUM DECISION Plaintiff, -against- Index No. 603037/04 Mot. Seq. No. 001 FEMOTE SOLUTION CO., LTD. F N A HANG0 ELECTRONICS CO., LTD., Defendant. CAROL R. EDMEAD, J.: In this action to collect legal fees, defendant Remote Solutions Co., Ltd. ( Remote ), moves to dismiss for lack of personal jurisdiction, and plaintiff Chadbourne & Parke LLP ( Chadbourne ), cross-moves for leave to conduct jurisdictional discovery in connection with the motion to dismiss. Factual Background Defendant Remote is a Korean corporation that manufactures remote control units. Chadbourne, a law fr headquartered in New York, alleges it was retained on January 6,2003 im to represent it in defense of a patent infringement lawsuit filed in the United States District Court for the District of Delaware by Philips Electronic North America Corp. ( Philips ). Remote discharged Chadbourne about one month later, in late January or early February of 2003 (Lawrence Goodwin affirmation [ Goodwin aff 1, para. 7; Suk-Kyu Park affidavit [ Park aff. ], [* 3] para. 10; David Finger affidavit [ Finger aff ], paras. 3-4) Thereafter, Chadbourne sent a bill for legal fees and disbursements in the amount of $1 12,968.56 (Goodwin aff., para. 7). Defendant presents evidence that, upon being served with the papers commencing the im lawsuit in December 2002, it retained a Korean law f r ,Do & Partners, which associated itself with another Korean f r , i m Koreana Patent Firm ( Koreana ). Chadboume was retained to represent Remote pursuant to e-mail correspondence between Koreana and a Chadbourne attorney located in its Washington D.C. office (Finger affidavit, exhibit B), who asserted in later correspondence that the e-mail satisfied the requirements of the DC Bar rules as an engagement letter (motion, exhibit B, Kim e-mail dated December 12,2003). Remote s director avers that Remote was informed by its Korean attorney, Mr. Do, that Chadbourne had been retained to appear in the Delaware action and that, in order to avoid a default, it would need to receive a $25,000 retainer (Park aff., para. 7). After being retained, Chadbourne prepared a motion to dismiss the Delaware action on jurisdictional grounds, which was filed on January 24,2003 (see Goodwin aff., exhibit D, p. 2). Remote notes that Chadbourne was not licensed to practice in Delaware, and was obliged to im retain yet another fr to act as local counsel (Finger aff., para: 3). Chadbome asserts that, during the course of its representation, Chadboume lawyers in New York communicated with Remote s attorneys in Korea by e-mail, letter, fax, and telephone call to the New York office ) (Goodwin aff., para. 4 . The federal court in Delaware eventually denied Remote s motion by order dated March Plaintiffs Memorandum states, without citation, that Chadboume s representation of Remote lasted over a year (p. 2). The assertion is inconsistent with defendant s evidentiary showing and plaintiffs allegation that its bill for services was dated February 24, 2003 (Goodwin Aff., para. 8). -2- [* 4] 11,2004 (Goodwin aff., exhibit D). Based on evidence developed in connection with jurisdictional discovery, the Delaware court determined that personal jurisdiction could be exercised over Remote in Delaware under the Delaware long-arm statute because there was a nexus between the patent infringement claim, and Remote s conduct of business in the state, in particular, by selling the allegedly infringing remote control units through an established distribution channel, resulting in a substantial number of units being present in Delaware (id., pp. 7-8). The Delaware court also determined that the exercise of jurisdiction over Remote comports with due process because sufficient minimum contacts exist, noting that Remote had entered into a manufacturing and purchase agreement with a New York corporation, Contec LP ( Contec ), in which it agreed to defend Contec in any litigation brought against it arising out of their business (id., 3-4, 8 , l l ) . pp. Legal Discussion Although plaintiff is not required to plead jurisdictional facts in the complaint, on a motion to dismiss for lack of jurisdiction, the burden is on plaintiff to demonstrate a prima facie basis for the exercise of in personam jurisdiction (Fantis Foods, Inc. v. Standard Importing Co., 49 N.Y.2d 3 17, 325 [ 19801, plaintiff has burden of showing that facts may exist to support jurisdiction under long-arm statute). Since the plaintiff ordinarily will not have access to facts necessary to make such a showing, the Court may allow discovery if the plaintiff has made a sufficient start indicating that the basis of jurisdiction was not frivolous (Peterson v. Spartan Industries, Inc., 33 N.Y.2d 463,467 [1974]). However, the court may properly exercise its discretion to deny jurisdictional discovery when the plaintiff fails to offer some tangible evidence which would constitute a sufficient start in showing that jurisdiction could exist -3- [* 5] (Mandel v. Busch Entertainment Corp., 215 A.D.2d 455 [2d Dept. 19951; see SNS Bank, N. V. v. Citibank, N A . , 7 A.D.3d 352 [la Dept. 20041). Plaintiff seeks to rely on the provision of the New York long-am statute that authorizes the exercise of personal jurisdiction over a non-domiciliary who inperson or through an agent ... transacts any business within the state or contracts anywhere to supply goods or services in the state (CPLR 302 [a][ 11). Defendant contends that its retention - via e-mail and through representatives - of a law fr with headquarters in New York to represent it in an action in im another state does not constitute transaction of business in New York sufficient to warrant assertion of personal jurisdiction. The facts, viewed in the light most favorable to plaintiff, do not support a finding that Remote transacted business within the State of New York sufficient to assert personal jurisdiction over it under CPLR 302(a)( 1). A foreign corporation s retention of a major law firm, headquartered in New York, for the purpose of representing it in defense of an action pending in another state, without anything more except alleged e-mail and telephone contacts, is plainly insufficient to subject the client to jurisdiction in New York. In Otterbourg, Steindler, Houston & Rosen, P. v. Shreve Ct Apartments Ltd., 147 A.D.2d 327 (lst C. iy Dept. 1989), the court questioned whether the single act of retaining a New York law fr in New York to provide im services in connection with legal proceedings in this State, without more, is sufficient to confer jurisdiction on the courts of this State in an action to recover legal fees. In Otterbourg, the court did not reach the issue, finding that the client s extensive communications with the New York law firm,participation in negotiations related to the New York proceedings by telephone conference calls, and settlement of aspects of the proceedings requiring payments in New York, -4- [* 6] together demonstrated their engagement in purposeful activity in this State in connection with matters involved in this lawsuit (id., 332). In contrast, in this case, defendant had even less at contact with the State of New York than the minimum transaction posited by the First Department in Otferbourg,since it did not come into New York to retain Chadboume, but im retained the fr by e-mail with a partner in its Washington DC office, and since the subject of the representation w s not a New York lawsuit, but an action pending in Delaware. The fact that a lawyers located in Chadboume s New York office performed legal services for the Korean client defending a suit in Delaware is insufficient to find that the client transacted any business in the State of New York in relation to the claim (see Paine Webber Inc. v. Westgate Group, Inc., 748 F. Supp. 115 [S.D.N.Y. 19901, a desire to get a big New York Investment house is not a purposeful availment of New York as a forum just as Get me a New York lawyer, without more, is not an invocation of in personam jurisdiction in the forum state of the lawyer s practice ; Amins v. Life Support Medical Equipment Corp., 373 F. Supp. 654 [S.D.N.Y. 19741, no jurisdiction found over Massachusetts client who retained a New York patent attorney in relation to patent matters involving federal law and the Patent Office located in Washington, DC; Edelman v. Taittinger, S A . , 298 A.D.2d 301, 302 [l Dept. 20021, telephone calls and letters were insufficient to show substantial relationship or nexus between transaction and claim asserted). Nor has plaintiff demonstrated a sufficient basis to pernit discovery concerning whether a basis exists for asserting general jurisdiction over Remote under CPLR 301, or whether additional facts exist supporting its allegation that Remote transacted business in New York in connection with its retention of Chadboume. A foreign corporation is amenable to suit in New -5- [* 7] York courts under CPLR 301 if it has engaged in such a continuous and systematic course of doing business here that a finding of its presence in this jurisdiction is warranted (Landoil Resources COT. v. Alexander & Alexander Services, 77 N.Y.2d 28,33 [ 19901, finding foreign corporation s underwriting of insurance policies sold in New York insufficient to constitute doing business ). The essential factual inquiry is whether the defendant has a permanent and continuous presence in the state, as opposed to merely occasional or casual contact with the state (id, 34; see Holness v. Maritime Overseas Corp.,251 A.D.2d 220 [lst Dept. 1998]), and at requires a showing of sufficient activities of substance, beyond mere solicitation of business (Laufer v. Ostrow, 55 N.Y.2d 305,310 [ 19821). The factors considered may include whether the defendant maintains in New York, on an ongoing basis, an office or other fixed facility, a bank account or other property, employees, and/or a telephone listing (Alexander, McKinney s Practice Commentaries, C301:8. Doing Business: Foreign Corporations, pp. 27-28). In this case, Chadboume has failed to produce any tangible evidence of any presence by Remote in the State of New York, while Remote has submitted evidence that it has no property, offices, employees or bank account in New York, and sells all of its products to the United States FOB Korea (Park affidavit, paras. 2-3) (see Lemme v. Wine o Japan Import, Inc., 631 F. Supp. f 456,459 [E.D.N.Y. 19861, FOB sale does not constitute performance of contract in New York). The fact that Remote entered into contractual agreements with Contec, a wholly separate entity, and its involvement in separate litigation with Contec, could not result in a finding that Remote subjected itself to New York jurisdiction by virtue of Contec s presence in New York (see Richbell Information Services, Inc. v. Jupiter Purtners, L.P., 309 A.D.2d 288, 308 [l Dept. 20031, actions of one corporate entity in New York could not subject separate entity to New York -6- [* 8] jurisdiction; Edelman v. Tuittinger, S.A., 298 A.D.2d 301 [l" Dept. 20021, showing of agency for jurisdictional purposes will not be inferred from the mere existence of a parent-subsidiary relationship; Aero-Bocker Knitting Mills, Inc. v. Allied Fabrics Corp., 54 A.D.2d 647,648 [ lgt Dept. 19761, agreement to arbitrate in New York did not subject party to jurisdiction of New York courts). Accordingly, the motion to dismiss is granted, and the cross-motion is denied. No sooner than five days after service of a copy of this order with notice of entry and a proposed judgment upon plaintiff, the clerk shall enter judgment accordingly upon the presentation of appropriate papers. This decision constitutes the order of the court. Dated: June 27,2005 / -7- Hon. Carol Edmead, JSC
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