Norex Petroleum Ltd. v. Access Industries, Inc., Index No. 650591/2011 (Sup. Ct. N.Y. Cnty. Aug. 25, 2015) [click for opinion]

Plaintiff asserted several tort and quasi-contract claims against Defendants in New York State court in connection with an alleged conspiracy to diminish Plaintiff’s controlling interest in a Russian oil company. Among the Defendants accused of participating in the conspiracy were OAO Tyumen Oil Company (“TNK”), TNK-BP Limited (“TNK-BP”), Alfa Group Consortium (“Alfa”) and Simon Kukes (“Kukes”) (collectively, the “Non-Resident Defendants”).

The Non-Resident Defendants asserted a multitude of defenses to Plaintiff’s claims, including an argument that the court lacked personal jurisdiction over them. The court, inter alia, accepted the Non-Resident Defendants’ personal jurisdiction arguments in granting each Non-Resident Defendant’s motion to dismiss.

First, the court granted TNK and TNK-BP’s motion to dismiss. It began its analysis of personal jurisdiction by explaining that TNK and TNK-BP lacked minimum contacts with New York. TNK and TNK-BP did not use a New York bank account to wire funds for the alleged conspiracy and never directed any action towards the New York forum. Although Plaintiff argued that TNK and TNK-BP had a connection to New York due to their relation to the tortious conduct of the other resident Defendants, this single allegation was not enough to satisfy the minimum contacts requirement.

Plaintiff also failed to adequately plead the requirements of conspiracy jurisdiction over TNK and TNK-BP. While Plaintiff appropriately alleged that the resident Defendants’ activities benefitted the Non-Resident Defendants like TNK and TNK-BP, it failed to properly allege that the Non-Resident Defendants had any awareness of any of the conspiracy’s effects in New York or that the resident Defendants acted under the control or at the request of the Non-Resident Defendants.

Conspiracy jurisdiction against TNK and TNK-BP based upon unjust enrichment was likewise inappropriate since unjust enrichment cannot be asserted as a predicate tort for jurisdiction under CPLR §§ 302(a)(2) or (a)(3). Finally, because Plaintiff did not allege any harm or benefit related to New York, Plaintiff failed to adequately plead the existence of any “substantial connection” between TNK, TNK-BP, and New York.

The court next granted Alfa’s motion to dismiss. There was no general jurisdiction over Alfa based on Alfa “doing business” in New York since Alfa was not incorporated or headquartered in New York. While Plaintiff argued that long-arm jurisdiction over Alfa arises in connection with the tortious conduct of the resident Defendants, the court reiterated its holding that Plaintiff failed to plead all of the requirements of conspiracy jurisdiction under CPLR § 302(a)(2).

Plaintiff’s argument that personal jurisdiction existed because Alfa transacts business in New York and that Plaintiff’s claims “may arise out of transactions that occurred in New York” was also rejected. Simple allegations were not enough to show that Plaintiff made a “sufficient start” in asserting jurisdiction over Alfa. In fact, Plaintiff did not present any evidence that Alfa owned or controlled any of the purportedly related entities that could be subject to New York jurisdiction.

Plaintiff’s claims against Kukes were also dismissed. After emphasizing that Plaintiff failed to plead proper conspiracy jurisdiction, the court held that there was no personal jurisdiction over Kukes, as Plaintiff did not allege that Kukes was a New York domiciliary when the instant action began.

In sum, the court granted all of the Non-Resident Defendants’ motions to dismiss based on, inter alia, their personal jurisdiction defenses.

Adam Pascarella of the New York office contributed to this summary.