Court Opinion

ID: 2683183
Source: CourtListenerOpinion
Date Created: 2014-07-11 21:03:54.151232+00
Date Added: 2024-06-11T13:13:13.989533
License: Public Domain

State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: July 10, 2014                     518075
________________________________

ROBERT W. DARROW et al.,
                    Respondents,
      v
                                            MEMORANDUM AND ORDER
HETRONIC DEUTSCHLAND et al.,
                    Appellants,
                    et al.,
                    Defendants.
________________________________

Calendar Date:   June 4, 2014

Before:   Peters, P.J., Stein, Rose and Egan Jr., JJ.

                             __________

      Wilson Elser Moskowitz Edelman & Dicker, LLP, New York City
(Patrick J. Lawless of counsel), for appellants.

      Martin, Harding & Mazzotti, LLP, Niskayuna (Craig A.
Cushing of counsel), for respondents.

                             __________

Stein, J.

      Appeal from an order of the Supreme Court (Krogmann, J.),
entered May 17, 2013 in Washington County, which denied a motion
by defendant Hetronic Deutschland to dismiss the complaint
against it.

      Defendant Hetronic Deutschland (hereinafter defendant) is a
limited liability company registered in Germany that specializes
in the manufacture of radio remote controls. During the relevant
time period, Hetronic USA, Inc. (hereinafter H-USA) was the
                              -2-                518075

exclusive distributor for defendant in the United States.1 In
March 2008, plaintiff Robert W. Darrow was operating a boom with
a radio remote control manufactured by defendant when the boom
inadvertently engaged and crushed Darrow against the ground,
resulting in serious injuries. Consequently, Darrow and his
wife, derivatively, commenced this action seeking to recover
damages for his injuries asserting, among other things, claims
based upon negligent design and manufacture, and strict products
liability. Prior to serving its answer, defendant moved to
dismiss the complaint as against it for lack of personal
jurisdiction. Upon plaintiffs' cross motion, Supreme Court
stayed the motion to dismiss in order to allow the parties to
conduct limited discovery on the jurisdictional issue. After the
completion of such discovery, Supreme Court denied defendant's
motion, finding that the exercise of long-arm jurisdiction over
it was compatible with both CPLR 302 and due process. Defendant
now appeals and we affirm.2

      In deciding whether an action may be maintained in New York
against a nondomiciliary defendant, the court must first
determine whether jurisdiction exists under New York's long-arm
statute (see CPLR 302) based upon the defendant's contacts with
this state; and, if it does, the court then determines "whether
the exercise of such jurisdiction comports with due process"
(LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 214 [2000]; see Andrew
Greenberg, Inc. v Sirtech Can., Ltd., 79 AD3d 1419, 1420 [2010]).
The ultimate burden is on the plaintiff to demonstrate that such
requirements have been met (see Goel v Ramachandran, 111 AD3d

    1
        According to Max Heckl, who served on the Board of
Directors of both defendant and H-USA, those entities were
"sister companies" which, at some point after the radio remote
control at issue was sold, became wholly owned subsidiaries of
defendant Hetronic International, Inc. and, later, of defendant
Hetronic Holding, LLC.
    2
        Defendant was formerly known as defendant Hetronic
Steuersysteme and, at some point, affected a change in name only.
Hetronic Steuersysteme is also named as an appellant on the
notice of appeal.
                              -3-                518075

783, 788 [2013]; Paterno v Laser Spine Inst., 112 AD3d 34, 39
[2013]).

      Here, plaintiffs assert that defendant's conduct falls
within the provisions of CPLR 302 (a) (3) (ii), which confers
jurisdiction when a defendant commits a tortious act outside New
York that causes injury to a person or property within the state
and the defendant "expects or should reasonably expect the act to
have consequences in the state and derives substantial revenue
from interstate or international commerce" (Carpino v National
Store Fixtures, 275 AD2d 580, 581 [2000], lv denied 95 NY2d 769
[2000]). Inasmuch as defendant has not refuted the evidence
presented by plaintiffs demonstrating that defendant derives half
of its revenue from export sales – including over €1 million in
exports to the United States in 1997, when the remote control at
issue was sold – the decisive issue here is whether plaintiffs
met their burden of establishing that defendant should have
reasonably foreseen that a defect in the manufacture of its radio
remote controls would have consequences in New York, an inquiry
designed to ensure that there is some link that would make it
reasonable to require defendant to come to this state to answer
for its tortious conduct (see LaMarca v Pak-Mor Mfg. Co., 95 NY2d
at 215).

      The record reflects that defendant maintained an exclusive
agreement with H-USA to distribute its products to various
locations in the United States, including New York.
Significantly, unchallenged evidence submitted by plaintiffs
demonstrated that H-USA affected distribution to certain states
in this country through a network of regional distributors, one
of which was designated to serve the New York market. Moreover,
the website for defendant and other Hetronic companies, along
with the interrelationship of the entities involved, demonstrates
defendant's awareness of this network. In view of such
purposeful distribution arrangement, we agree with Supreme
Court's conclusion that defendant sought to indirectly market its
product in New York and, thus, should have reasonably expected a
manufacturing defect to have consequences in this state (see
generally Kernan v Kurz-Hastings, Inc., 175 F3d 236, 242 [2d Cir
1999]; Adams v Bodum Inc., 208 AD2d 450, 451 [1994]; compare J.
McIntyre Machinery, Ltd. v Nicastro, 564 US ___, 131 S Ct 2780,
                              -4-                518075

2792 [2011, Breyer, J., concurring] [no evidence of "something
more" than simply placing a product in the stream of commerce];
Schaadt v T.W. Kutter, Inc., 169 AD2d 969, 970 [1991] [no
evidence in the record of a discernible effort on behalf of the
defendant to directly or indirectly serve the New York market]).

      Based on the record before us, we likewise find that the
exercise of jurisdiction over defendant is compatible with
federal due process standards. Generally, "a State may
constitutionally exercise jurisdiction over non-domiciliary
defendants, provided they had certain minimum contacts with [the
forum State] such that the maintenance of the suit does not
offend traditional notions of fair play and substantial justice"
(LaMarca v Pak-Mor Mfg. Co., 95 NY2d at 216 [internal quotation
marks and citations omitted]; see International Shoe Co. v
Washington, 326 US 310, 316 [1945]; Perkow v Frank W. Winne &
Sons, Inc., 36 AD3d 1189, 1190 [2007]; Allen v Marais, S.A., 307
AD2d 613, 614 [2003]). The relevant inquiry is whether a
defendant "purposefully avai[led] itself of the privilege of
conducting activities within [New York], thus invoking the
benefits and protections of its laws" (J. McIntyre Machinery,
Ltd. v Nicastro, 131 S Ct at 2788 [internal quotation marks and
citation omitted]). Under the circumstances here, inasmuch as
defendant targeted New York consumers through a network of
distributors that rendered it likely that its products would be
sold in New York, "it is not unreasonable to subject it to suit
in [this state] if its allegedly defective merchandise has
. . . been the source of injury to [a New York resident]"
(World-Wide Volkswagen Corp. v Woodson, 444 US 286, 297 [1980];
accord LaMarca v Pak-Mor Mfg. Co., 95 NY2d at 216; see Allen v
Marais, S.A., 307 AD2d at 614). Defendant's remaining
contentions have been examined and, to the extent they are
properly before us, are found to be without merit.

     Peters, P.J., Rose and Egan Jr., JJ., concur.
                        -5-                  518075

ORDERED that the order is affirmed, with costs.

                       ENTER:

                       Robert D. Mayberger
                       Clerk of the Court