Court Opinion

ID: 5751406
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:57:52.623835+00
Date Added: 2024-06-11T08:41:17.702714
License: Public Domain

Eager, J. (dissenting).
I dissent from the determination of this court to dismiss this action. In any event, an adherence to due process requires that the matter should be remanded for a hearing.
I agree that CPLR 302 (subd. [a], par. 1) is not applicable where, as here, the cause of action did not arise from the business transacted by the defendant within the State. Nevertheless, if this defendant is “ doing business ” in the State, this court has acquired jurisdiction and this motion to dismiss the complaint for lack of jurisdiction must be denied. CPLR 301 continues the power of the courts of New York to exercise jurisdiction over a foreign corporation where it does business in the State. If it is “doing business” here, it is immaterial that the plaintiff’s cause of action did not originate from the business transacted in New York. (Perkins v. Benguet Min. Co., 342 U. S. 437; Tauza v. Susquehanna Coal Co., 220 N. Y. 259, 268; 1 Weinstein-Korn-Miller, N. Y. .Civ. Prac., par. 301.14.) “ [T]he mere fact that the action arose outside of the State is not a sufficient ground on which to rest closing of the doors *23of our courts to one of our residents (Fuss v. French Nat. R. R., 35 Misc 2d 680, 683, affd. 17 A D 2d 941.)
If a foreign corporation is here, it may he sued here. Historically, the power of a State court to assume jurisdiction to render judgment in personam against a defendant depends upon the presence of the defendant within the territorial jurisdiction of the court. (International Shoe Co. v. Washington, 326 U. S. 310, 316.) If the defendant is a foreign country corporation, its “ presence ” within a State can be manifested only by the activities which are carried on here in its behalf by its authorized agents. (International Shoe Co. v. Washington, supra, p. 316.) The test of “ presence ” is met where the foreign corporation is engaged in “doing business” here systematically and regularly, and with a fair measure of permanence and continuity (Tauza v. Susquehanna Coal Co., supra, p. 267). “ Continuity of action from a permanent locale is essential ” (Sterling Novelty Corp. v. Frank & Hirsch Distr. Co., 299 N. Y. 208, 210).
In light of the foregoing, it appears that the defendant in this action, a foreign airline corporation, has unquestionably come “here” to carry on business with a “fair measure of permanence and continuity ” from a “ permanent locale ”; or, at least, there is an issue in this regard which may only be resolved after a hearing. The defendant came into New York City, which may be properly designated as the air center of the world, to participate fully in the very substantial air travel business originating here. That it is here permanently and continually transacts business here in this connection clearly appears. It has subleased, set up and occupies an office at 10 East 40th Street, New York, New York, under the supervision of an “ agency and interline manager ” and staffed by three full-time employees and four part-time employees. This office is listed in the Manhattan telephone directory and in the defendant’s timetables issued here and abroad. The defendant locally maintains a bank account which is regularly supplied with funds from business receipts, and such funds are used here in its business affairs, namely, to pay the expenses of its local office, the salaries of employees here and the cost of advertising in the State. This office is used by the defendant in the regular and systematic promotion of business for its airline. The office serves as an “ information and publicity function ” center for the defendant, from which “ a certain amount of advertising of the Finnair European services ” is arranged and placed, and it is a focal point for reservations here for travel abroad on the defendant’s airline. While it is true that air travel tickets are not sold directly by its employees in this office, a *24prospective passenger, when making reservations, can apparently purchase the necessary tickets for use on defendant’s lines, either in the same office from the Finnish National Travel Agency or in local offices of international air carriers.
The foregoing, in my opinion, demonstrates at least prima facie that the corporate activities of the defendant here are more than “ casual or occasional, and [are] so systematic and regular as to manifest ‘ continuity of action from a permanent locale ’ ” (Elish v. St. Louis Southwestern Ry. Co., 305 N. Y. 267, 269). The defendant’s activities extend far beyond the “ occasional or casual” solicitation of reservations for airline travel on its lines. “ [Solicitation * * * plus some additional activities [here] are sufficient to render the corporation amenable to suit ”. (International Shoe Co. v. Washington, supra, p. 314.) And, recent cases in New York have required little in addition to solicitation to constitute presence here. (1 Weinstein-Korn-Miller, par. 301.16, citing cases; see, also, Jaftex Corp. v. Randolph Mills, Inc., 282 F. 2d 508, 510, citing-cases.)
There is no constitutional issue here. Upon the record, it does not appear that subjecting the defendant to suit here will offend due process requirements. “ [D]ue process requires only that in order to subject a defendant to judgment in personam * * * he have certain Trnrthrmm contacts with [the State] such that the maintenance of the suit does not offend ‘ traditional notions of fair play and substantial justice.’” (International Shoe Co. v. Washington, supra, p. 316. See, also, Simonson v. International Bank, 14 N Y 2d 281, 286.) The due process requirements are fully met if, at the time of the service of the summons, the foreign corporation was “ doing-business ” within the meaning of the tests as laid down by our decisional law. (See Simonson v. International Bank, supra; Streifer v. Cabol Enterprises, 35 Misc 2d 1049, affd. 19 A D 2d 948.) Of course, due process also requires that proper notice of the suit be given to a true agent of the defendant bearing such relationship to it as to justify the inference that notice given to the agent will be transmitted to it, but that point is not in issue- here.
“ The essence of the issue here, at the constitutional level, is * * * one of general fairness to the corporation” (Perkins v. Benguet Min. Co., 342 U. S. 437, 445, supra). If this defendant, a foreign airline corporation, deliberately chooses to come and locate here in the ‘ ‘ air center of the world ’ ’ to promote and further its corporate airline activities, and, for that purpose, leases and establishes an office from which it conducts *25business ‘ so systematic and regular as to manifest a continuity of action from a permanent locale ”, it is not unfair or unreasonable to hold that it has subjected itself to our laws. “ [A] corporation which expends money, time, and effort extensively within a state, thereby exercising the privilege of dealing with its residents, may receive considerable economic benefit; when its activities are given protection by state law, it ill behooves the corporation to complain about appearing there to litigate.” (Blount v. Peerless Chem. [P. R.], 316 F. 2d 695, 697.) Where, as here, "the minimum contact test has been amply met * * * it would be offensive to our notions of fair play to put ” this plaintiff, an “ American citizen [s], to the expense of pursuing [her] remedy” in a foreign country. (Wahl v. Pan Amer. World Airways, 227 F. Supp. 839, 840.)
Where a foreign corporation deliberately seeks to acquire the advantages of doing business here, it should assume the burden of abiding by our laws. It subjects itself to the statutory provision that [a]n action * * * against a foreign corporation may be maintained by a resident of the state * * * for any cause of action ”. (Business Corporation Law, § 1314.) By virtue thereof, a foreign corporation may be sued here by a resident here upon a cause of action arising outside the State or country. (Matter of Banque de France v. Supreme Court, 287 N. Y. 483, 486.)
If, as the defendant claims, this suit is an unreasonable burden or obstruction to commerce forbidden by the Constitution of the United States, that is another matter. (See Matter of Banque de France v. Supreme Court, supra; Matter of Baltimore Mail S. S. Co. v. Fawcett, 269 N. Y. 379, 385; Fuss v. French National R. R., supra.) When a foreign corporation is here " with permanence and continuity ’ ’, then, to hold that the State cannot unduly burden interstate or foreign commerce " is a long way from holding that the ordinary process of the courts may not reach [it] ”. (Tauza v. Susquehanna Coal Co., supra.)
The residence of the plaintiff here is a fact of high significance ’ ’ in determining whether the undue burden doctrine should be applied. (Fuss v. French Nat. R. R., 35 Misc 2d 680, affd. 17 A D 2d 941, supra, citing International Milling Co. v. Columbia Co., 292 U. S. 511, 519, 520.) The fact that the injuries sustained by plaintiff occurred in a foreign country does not necessarily entitle this defendant to take refuge behind the defense of alleged undue burden on foreign commerce. (Fuss v. French Nat. B. B., supra.) Inasmuch as there is no proper factual showing in this record to support a claim of undue *26burden on foreign commerce, then it may be proper to remand the matter for a hearing or, in the alternative, the defendant may present such claim by means of an affirmative defense; but it is not proper to dismiss the action.
In any event, in the interests of fairness and due process, this suit should not be automatically dismissed without affording the plaintiff the benefit of a hearing upon relevant issues. Plaintiff is entitled to an opportunity to show fully: (1) The nature and extent of the air-traffic solicitation, advertising, and other business conducted by the defendant through its office here (it may very well be that a very substantial part of its airline business originates in this office, in office space shared with the Finnish Air Travel Agency or in local offices of international air carriers). (2) The nature of its relations with the Finnish Air Travel Agency from which the defendant subleases its office space (the use of such agency and local offices of international air carriers in connection with the sale of tickets for travel on defendant’s airlines will be very pertinent). (See, e.g., Berner v. United Airlines, 3 A D 2d 9; Lawson v. Pan Amer. World Airways, 30 Misc 2d 274; Wahl v. Pan Amer. World Airways, 227 F. Supp. 839, supra.) (3) The measure of permanency with which the defendant’s office is set up in the City of New York, including terms of its sublease, the terms of employment contracts, and the authority of its "full-time ” employees. In fact, to deprive the plaintiff of the opportunity to a hearing upon the relevant issues “ offends traditional notions of fair play and substantial justice ”. As noted aforesaid, a resident of this State is especially accorded by statute the right to sue the defendant here. (Business Corporation Law, § 1314.) “ One of the most important attributes of residence in this State is the availability of our courts” (Fuss v. French Nat. R. R., supra, p. 682).
The trend of decisional law reveals an “ expanding concept of local jurisdiction over foreign corporations ”. (Rondinelli v. Chicago, Rock Is. & Pacific R. R. Co., 5 A D 2d 842, citing cases.) The dismissal of this action not only disregards such trend but, in my opinion, is a step back from the broadening and liberal approach inherent in CPLR provisions relating to jurisdiction over foreign corporations.
Beeitel, J. P., Valexte and McNally, JJ., concur with Stevees, J.; Eager, J., dissents in opinion.
Order, entered on February 14, 1964, reversed, on the law, with $30 costs and disbursements to the appellant, and the motion to dismiss the complaint grated, with $10 costs,