In Black Diamond Aviation Grp. LLC v. Spirit Avionics, Ltd., 70 Misc. 3d 823 (Sup. Ct. Suffolk Cnty. 2020), Justice James Hudson of the Suffolk County Commercial Division limited the reach of New York’s long-arm statute, CPLR 302, in granting a motion to dismiss for lack of personal jurisdiction where the contract at issue was negotiated via emails between Ohio and Connecticut and no business was performed in New York. The plaintiff argued that the Court had jurisdiction over defendant pursuant to CPLR 302(a)(1), which provides, in pertinent part, that a party will be subject to the jurisdiction of New York courts if it is a non-domiciliary who transacts business within New York or contracts anywhere to supply goods or services in New York. The plaintiff alleged that because the defendant’s subcontractor performed certain work in New York, the defendant was subject to jurisdiction under CPLR 302(a)(1). In rejecting this argument, the Suffolk County Commercial Division follows a familiar line of U.S. Supreme Court jurisprudence limiting a court’s jurisdictional reach where the defendant has no connection to the forum state.
Black Diamond Aviation involved a Connecticut-based plaintiff entering into a service contract with an Ohio-based defendant for the installation of certain electronic equipment into one of the plaintiff’s airplanes. The contract contemplated the use of an Illinois-based subcontractor, ASES, to assist in the contract’s performance, if necessary. The defendant initiated the installation in Ohio. When the plaintiff realized that some of the work would need to be performed by ASES at Islip MacArthur Airport in New York, the plaintiff requested that the defendant fly the airplane to that location, to which the defendant agreed. Several months after the work was completed by ASES, the plaintiff approached the defendant about additional work to be performed on the airplane that was beyond the scope of the contract. The defendant directed the plaintiff to engage the subcontractor, ASES, directly about the work. The plaintiff and ASES made payment arrangements for ASES to perform the additional work. However, the plaintiff refused to pay ASES’s final invoice on the grounds that the defendant was responsible for the payment pursuant to the contract. The plaintiff then filed suit in Suffolk County Supreme Court seeking a declaration that the contract required the defendant to pay for the additional work ASES performed.
Relying on Daimler, A.G. v. Bauman, 571 U.S. 117 (2014), and Bristol-Myers Squibb Co. v. Superior Ct., 137 S. Ct. 1773 (2017), as well as its examination of the facts, the Suffolk County Commercial Division found that the defendant had no connection to or strong affiliation with New York. In its factual examination, the court determined that the contract was negotiated in Ohio and Connecticut, the defendant’s work was performed solely in Ohio, and that its only connection to New York was that it agreed to release the aircraft from its care to MacArthur Airport. The court also relied on the New York Court of Appeals’ personal jurisdiction analysis in Licci v. Lebanese Canadian Bank, 20 N.Y.3d 327, 338 (2012), in finding there was no course of dealing or repeated use of New York facilities for the maintenance of the aircraft that would render New York’s long-arm statute applicable.
It is notable that the court also relied on an affidavit from the defendant’s chief executive officer in rendering its decision. The affidavit stated that the defendant does not have an office, employees, property, or bank account in New York. Those facts, coupled with the fact that the agreed upon work was performed in Ohio, lent themselves to the dismissal of the plaintiff’s case for lack of personal jurisdiction. This dismissal should serve as a cautionary tale to plaintiffs who rely on a defendant’s use of a subcontractor in New York as a ground for personal jurisdiction when the defendant has no other contacts or presence in New York.