TechSource Intl., Inc. v McCue Corp.

[*1] TechSource Intl., Inc. v McCue Corp. 2007 NY Slip Op 51592(U) [16 Misc 3d 1127(A)] Decided on July 30, 2007 Supreme Court, Queens County Hart, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 30, 2007
Supreme Court, Queens County

TechSource International, Inc.

against

McCue Corp., Defendant.



26813 2006



Goodwin Procter LLP

Albert J. Solecki, Jr.

Daniel J. Doron

Attorneys for Defendant

599 Lexington Avenue

New York, NY 10022

212 813 8800

James Scott Yoh

Attorney for Plaintiff

525 Northern Blvd.

Great Neck, NY 11201

516 466-5700

Duane A. Hart, J.

Defendant, a foreign corporation incorporated under the laws of the Commonwealth of Massachusetts with its principal place of business in Salem, Massachusetts, asserts that it is not subject to personal jurisdiction in the courts of New York under CPLR 301 or CPLR 302. Assuming, arguendo, that defendant's activities in New York were sufficient to constitute the transaction of business within the state for the purposes of long-arm jurisdiction under CPLR 302(a)(1), this action did not arise from said activities but from two transactions for the sale of goods that occurred entirely within Massachusetts. Thus, jurisdiction over defendant [*2]cannot be based on CPLR 302(a)(1). (See, Allojet PLC v Vantage Assocs., 2005 US Dist LEXIS 4006 [SD NY, Mar. 15, 2005]; see generally, Kreutter v McFadden Oil Corp., 71 NY2d 460, 466-467 [1988]; Alden Personnel, Inc. v David, 38 AD3d 697 [2007].)

However, plaintiff has made a sufficient start toward showing jurisdiction under CPLR 301 to warrant allowing limited discovery as to the facts that relate to such jurisdiction. (See, Allojet PLC v Vantage Assocs., supra.) A foreign corporation is subject to personal jurisdiction in New York under CPLR 301 if it is "doing business" here in such a continuous and systematic manner as to warrant a finding of its "presence" in the state. (See, Laufer v Ostrow, 55 NY2d 305, 309-310 [1982]; Frummer v Hilton Hotels Intl., 19 NY2d 533 [1967].) The test for "doing business" is both simple and pragmatic, varying in its application depending on the particular facts of the case. (See, Landoil Resources Corp. v Alexander & Alexander Servs., 77 NY2d 28, 33 [1990].) A corporation is doing business in New York and, therefore, amenable to personal jurisdiction with respect to any cause of action, related or unrelated to the New York contacts, if it does business in the state "not occasionally or casually, but with a fair measure of permanence and continuity." (Tauza v Susquehanna Coal Co., 220 NY 259, 267 [1917]; see, Landoil Resources Corp. v Alexander & Alexander Servs., supra.)

While the conclusory affidavit of defendant's vice-president denies the existence of certain traditional indicia of doing business in New York, such as having an office, telephone, employees or representatives in the state, defendant has not addressed certain other contacts considered in determining whether a corporation is present in the state, including whether it has any bank accounts or other property in New York and whether it solicits business in the state. (See, Landoil Resources Corp. v Alexander & Alexander Servs., 918 F2d 1039, 1043 [2d Cir 1990]; Laufer v Ostrow, supra, at 310-311; Frummer v Hilton Hotels Intl., supra, at 537.) In addition, a statement in the vice-president's affidavit acknowledges the possibility that defendant makes sales to customers in New York, though claiming that any such sales would be handled from its Massachusetts office.

In its opposition papers, plaintiff has demonstrated that defendant operates a website that not only is accessible within New York but is interactive, permitting the exchange of information between defendant and website viewers, and permitting customers to make purchases through the website. (Cf., Zipper v Nichtern, 2007 US Dist LEXIS 24761 [ED NY, Mar. 30, 2007]; MedPay Systems v MedPay USA, 2007 US Dist LEXIS 30201 [ED NY, Mar. 29, 2007]; Yanouskiy v Eldorado Logistics Sys., 2006 US Dist LEXIS 76604 [ED NY, Oct. 19, 2006].) Plaintiff has also shown that defendant's customers include major retailers that have stores in New York. Defendant has not refuted these assertions, and has not provided any information concerning the revenues it derives from New York customers. (Cf., Zipper v Nichtern, supra; Yanouskiy v Eldorado Logistics Sys., supra.) On this record, plaintiff will be allowed limited discovery to ascertain evidence as to whether plaintiff's interactive website solicitation of business, in-state sales and shipments into New York are substantial and continuous, and whether defendant has any other contacts in New York. (See, Allojet PLC v Vantage Assocs., supra; Schottenstein v Schottenstein, 2004 US Dist LEXIS 22648 [SD NY, Nov. 5, 2004]; see also, Hollins v United States Tennis Assn., 469 F Supp 2d 67 [ED NY 2006]; see generally, [*3]Deutsche Bank Sec. v Montana Board of Invs., 7 NY3d 65, 72 n 2 [2006].)

The issue of forum non conveniens will not be addressed until the threshold jurisdictional issue is resolved.

Dated: July 30, 2007

J.S.C.