Lyons v. Rienzi & Sons, Inc., No. 09-CV-4253 (E.D.N.Y. Apr. 11, 2012) (memorandum and order)
In August 2008, Plaintiff, a ship captain, was injured after slipping and falling while working aboard a 65-foot yacht owned by Defendant Rienzi & Sons, Inc. ("Rienzi"). Plaintiff sued Rienzi, alleging negligence, and Rienzi in turn brought claims for indemnification against a number of third-party defendants, including the Italian company that designed the yacht, Nuvolari-Lenard Naval Design ("Nuvolari"). Plaintiff later brought claims directly against Nuvolari and the other third-party defendants, as well.
Nuvolari moved, pursuant to Federal Rule of Civil Procedure 12(b)(2), to dismiss Plaintiff's and Rienzi's claims for lack of personal jurisdiction. Following jurisdictional discovery, the district court granted Nuvolari's motion, finding Nuvolari's contacts with New York insufficient to support jurisdiction under New York’s long-arm statute and the Due Process Clause of the U.S. Constitution.
As the court explained, Nuvolari is a small company with a single mailing address in Italy; it carries out all of its design work in its Italian design center; its telephone and fax numbers allow it to be contacted only in Italy; the company's website was created in Italy and is updated there, and consumers cannot purchase or request the provision of services through the website; it does not retain bank accounts or agents in the United States; and it is has never requested authorization to do business in, nor is it registered to do business in, any state. The court acknowledged that Nuvolari has a Facebook page that is accessible to Facebook users in the state of New York. Yet the court found that this did not change the fact that Nuvolari's contacts with New York were too insignificant to support the conclusion that Nuvolari was "doing business in" New York, as is required under Rule 301 of the New York Civil Practice Rules ("CPLR") for the court to assume general jurisdiction.
The court also found no basis for asserting jurisdiction under CPLR 302(a)(1), which requires that Nuvolari "transact[ed] business" within New York and the claim arose from that transaction. The court found that the evidence showed, at most, that Nuvolari received approximately $30,000 for its design (in Italy) of the yacht, which was manufactured in another state (Wisconsin) before being transported to New York, where it was ultimately sold to Rienzi by one of the other third-party defendants. This, the court concluded, was insufficient to support CPLR 302(a)(1) jurisdiction.
Finally, the court found no grounds for exercising jurisdiction under either CPLR 302(a)(2) or (a)(3). CPLR 302(a)(2) authorizes jurisdiction over a party who commits a tortious act within the state of New York. Nuvolari's acts, however, occurred entirely in Italy, and thus jurisdiction was not appropriate under that section. Under CPLR 302(a)(3), a court may exercise jurisdiction over a person who commits a tortious act outside of New York causing injury to someone within New York, but only if that person also "derives substantial revenue from goods used . . . in [New York]" or "should reasonably expect the act to have consequences in [New York] and derives substantial revenue from interstate or international commerce." As to the second basis for exercising jurisdiction under this section, the court found no evidence that Nuvolari either knew, or should reasonably have expected, that its design of a yacht in Italy would have consequences in New York. Indeed, the court took judicial notice of the fact that a vessel manufactured in Wisconsin can have access to the “seven seas” without passing through New York. With regard to the first ground for asserting jurisdiction under CPLR 302(a)(3), the court found that it need not analyze this issue: it concluded that, even if the approximately $30,000 Nuvolari received for its design of the yacht constituted "substantial revenue" under the statute, constitutional guarantees of Due Process would prohibit the exercise of jurisdiction on that basis in any event.