Source: https://casetext.com/case/williams-v-beemiller-inc-11
Timestamp: 2020-07-06 09:16:56
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Williams v. Beemiller, Inc., 2019 N.Y. Slip Op. 3656 | Casetext Search + Citator
Full title:Daniel Williams et al., Appellants, v. Beemiller, Inc. & c., et al.…
2019 N.Y. Slip Op. 3656 (N.Y. 2019)
Daniel Williams et al., Appellants, v. Beemiller, Inc. & c., et al., Defendants, Charles Brown, Respondent.
Jonathan E. Lowy, for appellants. Scott L. Braum, for respondent. Everytown for Gun Safety; American Association for Justice, amici curiae.
Everytown for Gun Safety; American Association for Justice, amici curiae. DiFiore, Chief Judge:
Defendant Charles Brown, a federal firearm licensee, was authorized to sell handguns only in Ohio and only to Ohio residents, which he primarily accomplished through retail sales at gun shows held in various locations in Ohio. Brown did not maintain a website, had no retail store or business telephone listing, and did no advertising of any kind, except by posting a sign at his booth when participating in a gun show. In a series of transactions in 2000, Brown sold handguns to James Nigel Bostic and his associates. Prior to the transaction involving the gun at issue here, Brown consulted with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to ensure its legality. For each transaction, the necessary forms required by the ATF were properly completed and submitted, the purchaser passed the required Federal Bureau of Investigation (FBI) background check before the firearms were transferred, Brown verified that the purchaser had government-issued identification demonstrating Ohio residency, and notification of the purchases was timely sent to local law enforcement and the ATF as required by the federal Gun Control Act (see 18 USC § 922). During the transactions, Bostic indicated he was in the process of becoming a federal firearms licensee and was acquiring inventory for the eventual opening of a gun shop. Instead of opening a shop, Bostic brought the firearms to New York, illegally reselling one of the handguns to a Buffalo gang member. That gang member then used the handgun in a shooting that caused injury to plaintiff.
Brown was not a member of the criminal gun trafficking conspiracy and had no distribution agreement with Bostic and his associates, who purchased guns in separate transactions. Brown offered uncontradicted evidence that Bostic, who resided in a neighboring Ohio town, represented to Brown that he had applied for an FFL — a license that would, once acquired, permit him (like Brown) to sell handguns only in Ohio to Ohio residents. Despite Bostic's stated aspiration to open a gun shop in Buffalo, the record is devoid of evidence supporting plaintiffs' theory that, merely by selling handguns to Bostic, Brown intended to serve the New York market. Even if Bostic indicated that there was a chance that he may — at some undefined point in the future — transport the firearms to New York, Brown cannot be said to have "forged [constitutionally sufficient] ties with New York" as there is no evidence that he "took purposeful action, motivated by the entirely understandable wish to sell [his] products here" such that he availed himself "of the privilege of conducting activities within" New York (LaMarca, 95 NY2d at 216-217 [internal quotation marks and citations omitted]; see Walden, 571 US at 286). In the absence of minimum contacts, New York courts may not exercise personal jurisdiction over Brown. Plaintiffs' alternative alter ego theory of jurisdiction is also unavailing.
To the extent that plaintiffs rely on the theory that Brown knew Bostic was not a legitimate gun dealer and instead intended to sell guns illegally, the only basis in the record to conclude that Brown had any knowledge of Bostic's ties to New York were Bostic's statements that he was from Buffalo and "was planning on possibly" opening a gun shop there. Even assuming Brown possessed such a belief, knowledge that goods might end up in New York is not the equivalent of purposeful availment. Moreover, the record shows that Brown consulted the ATF prior to making the sales in question — conduct hardly consistent with the theory that Brown and Bostic had entered into an illicit distribution arrangement to sell guns on the New York black market. Although on a motion for summary judgment we must view the facts in the light most favorable to the non-moving party, this does not permit us to alter or distort the facts or draw inferences not reasonably supported by the record.
Because we agree with the Appellate Division's constitutional analysis, we do not address Brown's contention, as an alternative ground for affirmance, that the Appellate Division erred in crediting plaintiffs' interpretation of CPLR 302. Even assuming that jurisdiction could be exercised under the statute, the constitutional deficiency precludes the action from proceeding against Brown in New York.
Accordingly, the order of the Appellate Division should be affirmed, with costs. FEINMAN, J. (concurring):
Plaintiffs seek to hold defendants Beemiller, MKS, and Brown, among others, liable for the negligent sale and distribution of the firearm used in the shooting. The sole issue on this appeal is whether New York can exercise personal jurisdiction over Brown in this civil suit to recover damages for the injuries sustained by plaintiff. The Appellate Division held that, although personal jurisdiction could be obtained over Brown under this State's long-arm statute, doing so would violate Brown's federal due process rights. Plaintiffs appealed to this Court as of right (see CPLR 5601 [b] [1]).
Neither defendant MKS or Beemiller contested jurisdiction under New York's long-arm statute; the action against those defendants is still pending.
"To determine whether a non-domiciliary may be sued in New York, we first determine whether our long-arm statute (CPLR 302) confers jurisdiction over it in light of its contacts with this State" (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 214 [2000] [emphasis added]). If the requirements of CPLR 302 are not met, our inquiry ends (see Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, CPLR 302:11). However, if personal jurisdiction can be established under the statute, we must ensure that it would not violate the non-domiciliary's federal due process rights (see LaMarca, 95 NY2d at 214; Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, CPLR 302:11).
Although I would dispose of this appeal under our state's long-arm statute, five of my colleagues reach federal due process to resolve the case. Because I agree that exercising personal jurisdiction over Brown would also violate his federal due process rights, I concur in the majority's due process analysis.
CPLR 302 (a) (3) was enacted in 1966 after this Court's decision in Feathers v McLucas, which held that non-residents could not be subjected to jurisdiction under our long-arm statute for an "out-of-state tortious act" (15 NY2d 443, 460 [1965]; Mem in Support, L 1966, ch 590 at 17-18). In Feathers, we noted that "[a]ny plea for further expansion of [the long-arm statute's] scope . . . is a matter for the Legislature rather than the courts" (id. at 464). To aid the legislature in amending the long-arm statute, a study was conducted by the Judicial Conference on the necessary revisions to CPLR 302 (11th Ann Report of NY Jud Conf, at 132-139; 12th Ann Report of NY Jud Conf, at 339-344). The new provision was designed to be "well within constitutional bounds" (12th Ann Report of NY Jud Conf, at 341 [emphasis added]), and subparagraphs (i) and (ii) of CPLR 302 (a) (3) "were deliberately inserted" to achieve that goal (Ingraham v Carroll, 90 NY2d 592, 596-597 [1997]). Hence, "[t]he purpose of sub[paragraphs] (i) and (ii) is to ensure the fairness of asserting jurisdiction over nondomiciliaries whose out of state acts cause local injuries" (Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, 302:3).
In Feathers, this Court highlighted the "reformulated" standard of personal jurisdiction ushered in by the Supreme Court's decisions International Shoe Co. v State of Wash. and Hanson v Denckla: " The unilateral activity of those who claim some relationship with a nonresident defendant', the court concluded, cannot satisfy the requirement of contact with the forum State . . . . [I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws'" (Feathers, 15 NY2d at 451-452 [emphasis added], quoting International Shoe, 326 US 310, 316 [1945]; Denckla, 357 US 235, 253 [1958]).
This difference in focus does not mean, however, that the volitional requirement that the non-resident engage in some "ongoing activity" within the State disappears under the substantial revenue clause (see Ingraham, 90 NY2d at 597). Unlike the dissent's approach here, courts applying that clause have understood as much. Jurisdiction under the substantial revenue clause has been tied to purposeful activity by the defendant in New York, usually direct sales by the defendant to New York-based customers or usage of New York distributors (see Reynolds v Aircraft Leasing, Inc., 194 Misc 2d 550, 552 [Sup Ct, Queens County 2002]; Tonns v Spiegel's, 90 AD2d 548, 549 [2d Dept 1982]; Allen, 65 AD2d at 41). Where those intentional relationships are absent, courts have been hesitant to exercise jurisdiction over a non-domiciliary under the substantial revenue clause—especially when the non-domiciliary's goods are used or consumed in New York due to the unilateral activity of third parties (see e.g. Stephan v Babysport, LLC, 499 F Supp 2d 279, 289 [EDNY 2007] [declining to "attribute[] to Defendants" sales made in New York by "an unrelated entity in the final chain of distribution"]).
In short, text, precedent, and legislative intent all compel the conclusion that the substantial revenue clause of CPLR 302 (a) (3) (i) requires evidence that the non-domiciliary not just derive revenue from New York State, but intend to derive revenue from this State. There is no evidence that Brown intended to derive such revenue here. Brown never contracted to provide services within New York, nor advertised or solicited business in New York, nor sent representatives or agents into New York, nor enticed New York residents or firearm distributors to come to Ohio to purchase firearms from him (see e.g. Ingraham, 90 NY2d at 598 [declining to exercise jurisdiction pursuant to CPLR 302 (a) (3) (i) because "it is undisputed that respondent practices only in Vermont . . . . [h]e neither treated decedent in New York, nor contracted to provide services in New York or solicited business in New York"]). To be sure, Bostic's illicit gun trafficking from Ohio and subsequent sales in New York constitute a regular course of conduct within New York, such that Bostic could be said to have derived substantial revenue from this State. However, his nebulous remarks to Brown, that he was "planning on possibly opening" or "wouldn't mind having" a store in New York at some unspecified point in the future, are not enough to attribute this regular course of conduct to Brown (see e.g. Birmingham Fire Ins. Co. of Pennsylvania v KOA Fire & Marine Ins. Co., 572 F Supp 962, 968 [SDNY 1983]). To exercise long-arm jurisdiction over Brown based only on his Ohio sales to Bostic and his associates, all Ohio residents, would contravene the emphasis placed on fairness to the non-domiciliary when subparagraph (i) was crafted (see 12th Ann Report of NY Jud Conf, at 341 [subparagraph (i) is meant to cover "those non-domiciliaries who have sufficient contacts with this state so that it is not unfair to require them to answer in this state for injuries they cause here by acts done"] [emphasis added]). Put simply, Brown does not have sufficient contacts with this State to make it reasonable to subject him to jurisdiction under the substantial revenue clause of CPLR 302 (a) (3) (i) (see Siegel & Connors, NY Prac § 88 [6th ed]).
The dissent does not dispute that intent or knowledge is necessary to show an "association between the defendant and this forum" (dissenting op at 10).
In fact, it was only in 2004 that Brown made a single two-gun sale to a New York State resident, a transaction that by itself, is insufficient to establish that Brown engaged in a regular course of conduct within New York State (see 12th Ann Report of NY Jud Conf, at 341 ["a (singular) business transaction is insufficient and a regular course of conduct in the state is required"]; see also Ingraham, 90 NY2d at 597).
Here, Brown's business was decidedly local. GLP is an Ohio retail firearms store, through which Brown, pursuant to his FFL, has only sold handguns to in-state residents (compare LaMarca, 95 NY2d at 215 [stating that "Pak-Mor's business can hardly be characterized as local' . . . . (a) Texas corporation with a manufacturing facility in Virginia is inherently engaged in interstate commerce . . . . (m)oreover, the company had a New York distributor and a district representative"]). In the year 2000, when the firearm sales at issue were made to Bostic, Brown sold only 9 out of 525 firearms to out-of-state residents, accounting for less than 2% of his total sales. Such small percentages of total revenue, which Brown stated was in the thousands of dollars per year, have only been categorized as substantial when the dollar amount has been considerably greater (see Allen v Canadian General Elec. Co. Ltd., 65 AD2d 39, 42 [3d Dept 1978] [holding that while "ordinarily it would not be expected that a small percentage of 1% or 2% would equal large amounts of money", jurisdiction under the long-arm statute was warranted where 1% of sales generated nine million dollars], affd 50 NY2d 935 [1980]; compare Ingraham, 90 NY2d at 604, citing New England Laminates Co. v Murphy, 79 Misc 2d 1025, 1028 [Sup Ct, Nassau County 1974] [4% of $400,000 not "substantial" as a matter of law]).
In accordance with his federal firearms license, Brown operated a retail firearm store out of his home and sold firearms, within certain parameters, at qualifying gun shows around Ohio: Brown was allowed to sell handguns and long guns (rifles and shotguns) to other Ohio residents, long guns to out-of-state residents, handguns and long guns to licensed out-of-state gun dealers, and handguns and long guns to law enforcement agencies (see 18 USC § 922 [b] [3]; 27 CFR §§ 478.50, 478.94, 478.96, 478.99, 478.100).
In sum, in the year he sold firearms to Bostic, Brown did not engage in interstate activity from which he derived substantial revenue, let alone interstate activity from which he derived revenue from New York State. To find then that plaintiff satisfied the requirements of CPLR (a) (3) (ii) on "so attenuated a consequence of defendant's act" would "burden unfairly non-residents whose connection to the state is remote" (Fantis, 49 NY2d at 327; see 11th Ann Report of NY Jud Conf at 136 [stating that "(i)f the (non-domiciliary) had no other contact with New York, it might be thought both unfair and undesirable to subject him to the jurisdiction of New York"]).
The dissent's attempt to include Brown's sales to Bostic in its calculation of interstate revenue for purposes of exercising jurisdiction under subparagraph (ii) fails for the same reasons it failed under the analysis in subparagraph (i)—Bostic's New York sales cannot be attributed to Brown (see supra at 10-11).
Even assuming personal jurisdiction under the statute, I agree with the majority opinion that such jurisdiction would violate Brown's federal due process rights. FAHEY, J. (dissenting):
For his part, Brown sold that gun and other firearms at gun shows in Ohio in and around 2000. The gun in question was one of 182 such weapons Brown sold to Bostic and defendant Kimberly Upshaw at such shows in 2000. All of those purchases were cash transactions, and all of the guns obtained from Brown in Ohio were transported to and sold illegally in Buffalo. One of those weapons—which was part of an 85-gun bulk sale—made its way to defendant Cornell Caldwell, who used it to shoot plaintiff.
DiAnna Peterson, who is not a defendant, is another Bostic associate who purchased guns from Brown for Bostic.
• Brown sold 182 of the guns in question "to Bostic and his associates between May and October 2000" (id. at 154);
• Those guns were "used and consumed," that is, they were possessed and fired, in New York State (id. [internal quotation marks omitted]);
• The sale of those 182 guns "to Bostic and his associates constituted approximately 34% of Brown's gun sales by volume in 2000" (id.) and 4.4% of his sales for the period from 1996 to 2005 (see id.);
• Those guns were sold at a discounted rate of $85 per unit (see id.);
• Brown attended various trade "shows along the I-75 corridor,' which was accessible to buyers from states in the region such as Indiana and Kentucky" (id.);
• Not including the guns sold to Bostic and his associates, "Brown sold and transferred 404 guns to out-of-state purchasers" for the period from 1996 to 2005," and "[s]uch interstate transactions constitute[d] over 9.8% of Brown's total sales by volume for that period" (id. at 155); and
• Brown's percentage of sales of such guns "would be 14.3% if the Bostic sales were included as out-of-state sales" (id.),
Under our settled case law, assessing whether a non-domiciliary is subject to personal jurisdiction in New York is a two-step inquiry. First, we must "determine whether our long-arm statute (CPLR 302) confers jurisdiction over [the defendant] in light of [the defendant's] contacts with this State" (LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 214 [2000]). "If the defendant's relationship with New York falls within the terms of CPLR 302," then we proceed to the second step of "determin[ing] whether the exercise of jurisdiction comports with due process" (LaMarca, 95 NY2d at 214). The majority elects to decide the constitutional question without any consideration of whether the long-arm statute reaches Brown. Doing so contravenes our well-established precedent, including precedents on which the majority itself relies, all of which hold that we must resolve statutory arguments (including statutory interpretation that considers constitutional avoidance) before holding a statute unconstitutional as applied (see id. at 214 ["(t)o determine whether a non-domiciliary may be sued in New York, we first determine whether our long-arm statute (CPLR 302) confers jurisdiction over it in light of its contacts with this State"] [emphasis added]; Ingraham v Carroll, 90 NY2d 592, 600 [1997] [ending inquiry after CPLR 302 (a) (3) analysis because New York could not exercise long-arm jurisdiction over non-domiciliary]; see generally McKinney's Cons Laws of NY, Book 1, Statutes § 150[a] [collecting cases]). The rule, established at least since 1833 by the United States Supreme Court (Ex parte Randolph, 20 F Cas 242 [CCD Va 1833] [Marshall, C.J.]) and adopted by this Court shortly thereafter (People ex rel. Wetmore v New York County Sup'rs, 34 How Pr 379, 379 [Ct App 1865]), that "if a case can be decided on either of two grounds, one involving a constitutional question, the other a question of statutory construction or general law, the Court will decide only the latter" (Ashwander v Tennessee Valley Auth., 297 US 288, 347 [1936] [Brandeis, J., concurring]) is foundational to the proper understanding of the judicial power—namely one that avoids placing matters entirely beyond the competence of the elected branches by handing down unnecessary constitutional rulings.
To the extent the majority suggests that we need not address CPLR 302(a) first because Brown appealed as of right pursuant to CPLR 5601 (b) (1) (see majority op at 3, 7 n 2), we respectfully disagree. This Court is not limited to reviewing Brown's constitutional arguments merely because he appealed under CPLR 5601(b)(1), and this provision contains nothing to support the majority's departure from centuries of legal principle (see Arthur Karger, Powers of the NY Court of Appeals [2d ed] § 7:2 [discussing CPLR 5601 (b) (1) and explaining "so long as such a constitutional question is directly involved, an appeal as of right will lie even though other questions may also be involved, and all questions in the case which the Court of Appeals is empowered to review will be open for consideration, whether or not they are of a constitutional nature"]).
We doubt the majority intends silently to overrule the "hornbook law that a court will not pass upon a constitutional question if the case can be disposed of in any other way" (People v Felix, 58 NY2d 156, 161 [1983]). In any event, there remains the long-standing principle that we interpret statutory provisions before reaching constitutional questions (see McBarnette v Sobol, 83 NY2d 333, 337 [1994]). If our state courts' exercise of personal jurisdiction over Brown does not meet the requirements of CPLR 302 (as the judges who concur with the majority conclude), then there is no occasion to engage in the due process analysis (in which the majority engages, and which the judges who concur with the majority gratuitously join). Either way, the majority and concurring opinions violate fundamental rules of judicial review.
As noted, and stated simply, courts are bound by what effectively is a rule of procedure providing that a statutory question (here, long-arm jurisdiction pursuant to CPLR 302) is to be decided before a constitutional question (in this case, whether the exercise of long-arm jurisdiction pursuant to CPLR 302 comports with federal constitutional due process requirements). To the extent that rule is applied here, the judges in the majority who ignore the question of statutory long-arm jurisdiction arguably have conceded that there is jurisdiction pursuant to CPLR 302 (a) (3) as a predicate to their conclusion that this is one of the rarest of cases (see D & R Glob. Selections, S.L., 29 NY3d at 299-300 [2017]; Rushaid, 28 NY3d at 330) in which statutory long-arm jurisdiction is prohibited under a federal due process analysis (cf. majority op at 1-2 ["agree(ing) with the Appellate Division that . . . jurisdiction cannot be exercised over Brown under well-established due process precedent because he lacks minimum contacts with this state"]).
The two branches of this test are disjunctive, meaning that a court may exercise personal jurisdiction over a non-domiciliary in the event that either all of the criteria in romanette (i) are met or the criteria in romanette (ii) are satisfied. Viewed in the light most favorable to plaintiffs, as the nonmoving parties (Vega v Restani Corp., 18 NY3d 499, 503 [2012]), the evidence establishes that Brown is subject to personal jurisdiction under CPLR 302 (a) (3) — irrespective of which of that subdivision's romanettes our analysis proceeds.
The prism through which the evidence should be viewed — the light most favorable to plaintiffs, as the non-moving parties — is the lynchpin of our judicial inquiry, but reference to authority acknowledging that concept is inexplicably absent from both the majority and concurring opinions.
Ingraham v Carroll (90 NY2d 592 [1997]) does not provide otherwise. There, we considered the "regularly [doing] or solict[ing] business" clause of romanette (i) and concluded that, to satisfy such criterion, the party seeking to obtain jurisdiction must show "something more than the one shot' single business transaction described in CPLR 302 (a) (1)" (Ingraham, 90 NY2d at 597). Here, by contrast, "substantial revenue" does not measure the frequency of contacts between a defendant and this state, but the size of even a single association between that defendant and this forum. The fact that a defendant's conduct that generates "substantial revenue" is not continual, enduring, or repeated does not exempt that defendant from long-arm jurisdiction under CPLR 302 (a) (3) (i). Rather, where sporadic use or consumption of goods in New York State yields "substantial revenue," the legislature has provided that the beneficiary of such revenue may be subject to statutory long-arm jurisdiction — even if the income-producing activity is not "regular[]" or "persistent" (CPLR 302 [a] [3] [i]; cf. concurring op at 9). Here, because the parties do not dispute that the preliminary conditions precedent to a finding of jurisdiction (namely, a tort occurring outside the state causing injury to person or property inside the state) have been met, satisfaction of the "substantial revenue" factor alone is sufficient to establish long-arm jurisdiction pursuant to CPLR 302 (a) (3) (i).
At least one commentator has reached the same common sense conclusion. The Practice Commentaries to CPLR 302 correctly recognize that to "derive[] substantial revenue from goods used or consumed . . . in the state" (CPLR 302 [a] [3] [i]) is to establish " sufficient contacts with this state so that it is not unfair to require [defendants] to answer [here] for injuries they cause here by acts done elsewhere' " (Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, C302:12, quoting 12th Ann Report of NY Jud Conf 339, 343 [1967]).
Whatever one's conclusion under romanette (i), the facts here easily satisfy the "interstate or international commerce" prong of romanette (ii). Under the latter romanette, personal jurisdiction may be exercised over a non-domiciliary when, among other things, such party (1) "expects or should reasonably expect the act to have consequences in the state"; and (2) "derives substantial revenue from interstate or international commerce" (CPLR 302 [a] [3] [ii]). Both prongs are satisfied based on Brown's personal and active multiple sales of guns to Bostic intended for sale in New York.
Although unnecessary given the determination that there should be jurisdiction under romanette (i), the analysis of romanette (ii) is relevant for the reason that it informs the federal due process inquiry to follow in section III of this writing.
A review of the transactions in chronological order is enlightening. On May 27, 2000, according to Brown, Bostic told Brown's father-in-law that Bostic "was planning on possibly opening up a couple gun shops in the future, possibly two, one in Columbus, Ohio, and one in Buffalo. Brown met Bostic for the first time on June 24, 2000, and Brown stated that, during that meeting, Bostic "said his plans were to open up a shop in Columbus, Ohio, somewhere." At that meeting Bostic also "talked" to Brown "about being from Buffalo" and, in Brown's words, "wanting — you know, he said he wouldn't mind having a shop in Buffalo." In the same conversation, Bostic told Brown that Bostic "had been out to other retail stores and . . . was kind of looking around and seeing how they laid their stores out that type of thing." That meeting also saw Brown discuss with Bostic "a lot of different items with regard to a retail store opening," including "how many guns [Bostic] should . . . start with" and what "would be a good mix" of inventory.
Brown, of course, had every incentive to accurately describe the proposed purchase to the federal official — the point of that conversation was to get the proverbial "green light" for the sale based on what Brown told the ATF. Based on those representations Brown received approval to make the sale, and based on that approval Brown sold Upshaw 85 firearms in the aforementioned cash transaction on October 8, 2000. At bottom, the record clearly reflects that Brown "knew that [the guns were] likely to end up in New York" (see Siegel & Connors, NY Prac § 88, at 198; cf. concurring op at 13).
The gun with which Caldwell eventually shot plaintiff was sold in this transaction.
The judges who concur with the majority believe that Brown's operation was completely confined to Ohio inasmuch as he did not advertise in other states, solicit business in other states, or employ distributors in other states (see concurring op at 10). However, Brown's June 24, 2000 interaction with Bostic was simply marketing to someone who sought to distribute Brown's inventory in New York State. In that meeting, which he thought to have lasted for "probably 45 minutes," Brown "share[d] [with Bostic] some of [Brown's] knowledge and experience about being a gun dealer." By Brown's own admission, Bostic told Brown that Bostic was "from Buffalo" and "wouldn't mind having a shop in Buffalo." Critically, before the sale of the weapon that was used to shoot plaintiff, Brown also knew that Upshaw and Bostic had a business link and, in Brown's words, that "they planned on opening a store . . . in Buffalo." Given that evidence, and given the large quantity of guns that Brown sold to Bostic and his associates, the only reasonable conclusion is that Brown served the New York market (see generally Darienzo v Wise Shoe Stores, 74 AD2d 342, 346 [2d Dept 1980]; Keenan v Kurz-Hastings, Inc., 175 F3d 236, 242 [2d Cir 1999]).
Remarkably, neither the majority nor the concurring writings acknowledge this statement. Those writings also avoid the elementary rule of this Court that, "[o]n a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party' " (Vega, 18 NY3d at 503, quoting Ortiz v Varsity Holdings, LLC, 18 NY3d 335, 339 [2011]).
The judges concurring with the majority note that, "[i]n the year 2000, when the firearm sales at issue were made to Bostic, Brown sold only 9 out of 525 firearms to out-of-state residents, accounting for less than 2% of his total sales" (concurring op at 13-14). That point, however, overlooks the fact that, during the same year, Brown sold 182 guns to Bostic and his associates, which constituted 34% of Brown's gun sales by volume. Although Bostic was an Ohio resident at the time of those sales, the point remains that, when those transactions were made, Brown knew of Bostic's intent to resell those weapons in New York State.
As a majority of this Court concludes today (the judges who concur with the majority and us), CPLR 302 was "designed to be well within constitutional bounds' (12th Ann Report of NY Jud Conf, at 341 [emphasis added]), and subparagraphs (i) and (ii) of CPLR 302 (a) (3) were deliberately inserted' to achieve that goal (Ingraham v Carroll, 90 NY2d 592, 596-597 [1997])" (concurring op at 5). A fortiori, if a non-domiciliary's actions satisfy CPLR 302 (a) (3) requirements, then the same conduct satisfies the federal minimum contacts test.
We have no occasion to opine whether, based on recent United States Supreme Court case law, CPLR 302 (a) (3) "must be read more narrowly than some New York cases have done" (see Oscar G. Chase & Lori Brooke Day, Re-Examining New York's Law of Personal Jurisdiction After Goodyear Dunlop Tires Operations, S.A. v. Brown and J. McIntyre Machinery, Ltd. v. Nicastro , 76 Alb L Rev 1009, 1039—1052 [2013]; see also J. McIntyre Mach., Ltd. v Nicastro, 564 US 873, 885—887 [2011] [Kennedy, J., plurality op]). It also is unnecessary in the context of this appeal to determine whether the outer boundary of section 302 (a) (3) and the minimum contacts test under the Fourteenth Amendment are doctrinally coterminous.
This Court has held that the requisite "minimum contacts exist where a defendant purposefully avails itself of the privilege of conducting activities within the forum state'" (Rushaid, 28 NY3d at 331, quoting LaMarca, 95 NY2d at 216). That test has "has come to rest on whether a defendant's conduct and connection with the forum State' are such that it should reasonably anticipate being haled into court there' " (LaMarca, 95 NY2d at 216, quoting World-Wide Volkswagen, 444 US at 297; see Rushaid, 28 NY3d at 331). "A non-domiciliary tortfeasor has minimum contacts' with the forum State—and may . . . reasonably foresee the prospect of defending a suit there—if it "purposefully avails itself of the privilege of conducting activities within the forum State" ' (LaMarca, 95 NY2d at 216, quoting World-Wide Volkswagen, 444 US at 297, itself quoting Hanson v Denckla, 357 US 235, 253 [1958]).
World-Wide Volkswagen's "no happenstance" rule applies here in support of personal jurisdiction in New York. The evidence establishes that Brown intended to serve the New York State market. Viewed, as it must be, in the light most favorable to plaintiffs (see Vega, 18 NY3d at 503), the evidence reflects that—before the subject sales—Brown knew that Bostic was "from Buffalo" and that Bostic "planned on opening a store . . . in Buffalo" (cf. majority op at 6). Indeed, Brown thought it significant to advise an ATF agent that Bostic intended to sell guns in Buffalo. Given that evidence, Brown clearly served the New York market when he sold a large quantity of guns to Bostic and his cohorts knowing that those weapons were headed for the New York market..
The fact that Brown did not hire Bostic as his distributor is of no moment because Bostic was a de facto distributor of Brown's firearms — reselling guns in Buffalo that were sold to him by Brown with Brown's knowledge of their intended New York destination. This arrangement proved profitable time and time again, and constitutes Brown's "purposeful availment" of the New York gun market, "with the expectation that [his products would] be purchased by consumers in [this] State" (World-Wide Volkswagen, 444 US at 298).
Contrary to the majority's suggestion, we do not theorize that Brown and Bostic conspired "to sell guns on the New York black market" (majority op at 7 n 1).
The majority reaches a different conclusion, reasoning that the travel of the subject guns from Ohio into New York State was merely a "fortuitous circumstance" that arose "through no marketing or other effort of defendant" (majority op at 4 [internal quotation marks omitted]). We respectfully disagree. The evidence the parties placed before the motion court shows, in relevant part, Brown availed himself of the New York market by selling weapons to Bostic, who Brown understood would resell them in New York State. Bostic did not buy 182 identical guns for his personal use in Ohio.
Unsurprisingly, the civil personal jurisdiction jurisprudence of the United States Supreme Court and of our Court has developed solely in matters involving legitimate business enterprises (see LaMarca, 95 NY2d at 213 [manufacturer of garbage hauling equipment]; see also Burger King v Rudzewicz, 471 US 462, 464 [1985] [fast food]; World-Wide Volkswagen, 444 US at 28 [automobile manufacturer]; International Shoe, 326 US at 313 [travelling shoe salesmen]). That jurisprudence does not translate wholesale to cases in which minimum contacts, fair play, and substantial justice are applied to allegedly negligent or wrongful sales that affected the subject forum through a criminal enterprise. Although this question has not yet been litigated on the merits, if plaintiffs prove at trial that Brown knew or should have known that Bostic intended to sell guns illegally, then it would follow that Bostic specifically identified Ohio and New York as the states in which he expected to sell those guns illegally, and Brown would knowingly have supplied him the means of doing so.
To break that new ground, the majority joins the Appellate Division (see 159 AD3d at 157) in depending heavily upon Walden v Fiore (571 US 277 [2014]). Like the concurrence here, the Appellate Division concluded that Brown lacks the minimum contacts with New York based on evidence submitted by Brown that showed, among other things, that Great Lakes "was an Ohio retailer permitted to sell guns within Ohio only" (159 AD3d at 157); that "during the relevant period from 1996 to 2005 [Great Lakes] did not maintain a website, had no business telephone listing, did not advertise in New York" (id. at 157-158); and that Great Lakes "made its retail sales and transfers to customers present in Ohio" (id. at 158; see concurring op at 12-13). Like the majority here, the Appellate Division also coupled those facts with snippets from Walden (571 US 277), to the effect that the minimum contacts "must arise out of contacts that the defendant himself' creates with the forum State" (id. at 284 [emphasis added], quoting Burger King, 471 US at 475), or that Brown must have "purposefully reach[ed] out beyond' " Ohio and into New
York (Walden, 571 US at 285). "Instead," in the words of the Appellate Division, "Bostic and his associates came to Ohio [trade] shows where they purchased [the subject guns] and then unilaterally elected to transport them to Buffalo for resale on the illegal market" (159 AD3d at 158; see majority op at 6).
Here, Brown sold the subject guns to Bostic (and Upshaw) in Ohio knowing that Bostic intended to re-market those goods in Buffalo. Unlike Walden, where the non-domiciliaries lacked any contacts and without even indirect interaction with the forum, Brown "purposefully direct[ed] his activities at residents of the forum" and plaintiffs' "litigation results from alleged injuries that arise out of or relate to those activities," establishing personal jurisdiction over Brown in New York State (Burger King, 471 US at 472 [internal quotation marks omitted]). Similarly, Walden does not justify the invocation of federal due process grounds so as to suppress the interests of residents of New York in seeking recovery for personal injuries allegedly sustained as a result of the negligent distribution and sale of handguns.
The remaining authorities cited by the majority merely consider the legal standard used to answer the question whether the application of long-arm jurisdiction here comports with federal due process considerations. International Shoe (326 US 310) formulated the "minimum contacts" theory of personal jurisdiction, which provides, that among other things, for a defendant not present within the territory of the forum to be subject to a judgment therein, he must have a threshold level of association — minimum contacts — with that forum (see id. at 316; see also Milliken v Meyer, 311 US 457, 463 [1940]). International Shoe also deemed amenable to suit in the State of Washington a corporation that was headquartered in Missouri and that employed a team of salespersons in the State of Washington (see International Shoe, 326 US at 313, 320).
Those facts have no relation to those of this case, much as the facts of the other case on which the judges concurring with the majority rely have no similarity to those of this matter. WorldWide Volkswagen (444 US 286), as noted, considered a failed effort to assert longarm jurisdiction over defendants that retailed a vehicle that was sold in New York and that found its way into Oklahoma—where the accident occurred and where an action against those defendants was commenced—without any even indirect attempt of those defendants to serve that market.
Consequently, Brown's sales to Bostic (in an enterprise that flirted with the bounds of legality, as evinced by Bostic's plea of guilty to federal crimes arising from these transactions) undoubtedly benefitted Brown by expanding his market beyond local purchasers to New York distributors. Brown purposefully derived benefit from the re-sale of guns Brown sold to people whom he knew to be New York distributors (see generally id. at 473-474). Thus, Brown's conscious sale of weapons to be marketed and sold in New York satisfies the minimum contacts test.
In this case, each factor favors adjudicating plaintiffs' claims in New York. First, the burden on Brown would be essentially nothing because he is already involved in this litigation as the sole owner and chief executive of MKS, which has not contested personal jurisdiction in New York. Second, New York's interest in adjudicating this dispute is high. Plaintiffs are New York residents whose claims stem from serious injuries that occurred within New York as a result of the illegal trafficking of firearms into New York. Third, plaintiffs have a strong interest in adjudicating their claims in this state: they reside in New York and Williams was shot here. Fourth, resolving plaintiffs' claims against Brown in New York is the most efficient use of interstate judicial resources because plaintiffs have already alleged related claims against other defendants stemming from the same gun sales. Requiring them to initiate a separate parallel action in Ohio against Brown—who, irrespective of this Court's decision, will remain involved in the New York proceeding as sole owner and CEO of MKS—will waste interstate judicial resources.
In his brief to this Court, Brown addresses only the first factor, contending that it would be "an unreasonable burden on him" to face suit in New York because he "is an Ohio resident doing business exclusively in the state of Ohio." He has not contested that the remaining factors support exercise of jurisdiction.
"The crack of gunfire got louder and more frequent on Buffalo streets after [Bostic] illegally sold [the weapons he purchased at Ohio gun shows] on the city streets to any drug dealer, petty thief or gang member who wanted a cheap pistol. The weapons [were] tied to murders, assaults, robberies and kidnappings. Some were used to shoot at police. And the violence continue[d] [unchecked through at least 2005]" ( Gun by Gun: Five Years of Damage Done by Weapons James Nigel Bostic Bought from Ohio Gun Dealers, Buffalo News, June 12, 2005, available at https://buffalonews.com/2005/06/12/gun-by-gun-five-years-of-damage-done-by-weapons-james-nigel-bostic-bought-from-ohio-gundealers/ [last accessed Apr. 4, 2019]).
Such an outcome is not compelled by — and, in fact, is contrary to—our law and the requirements of federal due process. Indeed, the law of the United States Supreme Court and this Court strongly supports the application of long-arm jurisdiction where, as here, Brown at least indirectly served the marketplace in this state (see generally World-Wide Volkswagen, 444 US at 297-298) and purposefully and voluntarily derived a benefit from interstate activity (see generally Burger King, 471 US at 474, 478-479) aimed at this state (see generally Calder, 485 US 683; LaMarca, 95 NY2d at 215).
If the shoe was on the other foot here — that is, if Ohio attempted to assert long-arm jurisdiction over a New York resident who was alleged to have negligently sold and distributed a firearm to a black-market dealer whose trafficking of that gun in Ohio led to the shooting of an Ohio resident — the result would be the same. The Ohio long-arm statute allows a court to "exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's . . . [c]ausing tortious injury in [Ohio] by an act or omission outside [Ohio] if [the person] . . . derives substantial revenue from goods used or consumed or services rendered in [Ohio]" (Ohio Rev Code Ann § 2307.382).
The nature of the device in question — a gun that was one of many such devices sold by Brown to Bostic in conjunction with Bostic's announced efforts to establish a foothold in the New York State marketplace — lends even greater support to the application of personal jurisdiction in New York. Where, as here, "a defendant deals in [] inherently dangerous products a lesser showing than is ordinarily required will support jurisdiction" (City of New York v A-1 Jewelry & Pawn, Inc., 501 F Supp 2d 369, 420 [ED NY 2007]). "[A] . . . defendant who deals in handguns should expect to be held accountable on a lesser showing than one who sells something as harmless are rubber bands" given the "inherent interest" the state has in the dangerous product (id.), and it follows that federal courts have recognized that due process is satisfied and that jurisdiction can be exercised over out-of-state firearms suppliers who sold guns that are trafficked over state lines (see e.g. id.; Johnson v Bryco Arms, 304 F Supp 2d 383 [ED NY 2004]).
We should reach the same conclusion in this case. The courts of this state may exercise personal jurisdiction over Brown in this matter. The exercise of that long-arm jurisdiction comports with federal due process. There is simply no basis, in law, to deny Daniel and his father their day in court against Brown.
In view of our conclusions, we have no occasion to address plaintiffs' alternative contentions that jurisdiction should be conferred over Brown on the ground that MKS is his agent or an alter ego. --------