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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: November 12, 2017

Court Decides Forum Non Conveniens Motion Without Deciding Personal Jurisdiction Issues

On October 30, 2017, Justice Friedman of the New York County Commercial Division issued a decision in Estate of Kainer v. UBS AG, a Swiss Corp., 2017 NY Slip Op. 32316(U), deciding a forum non conveniens motion without first determining whether the court had jurisdiction over the moving defendant, explaining:

As a threshold matter, the parties dispute whether this court must determine the claims of lack of personal jurisdiction, asserted by defendants UBS AG, the Foundation, and Kircher, before the court entertains these defendants’ motion to dismiss on the ground of forum non conveniens. In Sinochem International Co. Ltd. v. Malaysia International Shipping Corp, . . . the Supreme Court held that a court is not required to determine whether it has personal jurisdiction over the defendant before dismissing an action based on the common law forum non conveniens doctrine, The Court reasoned that because a forum non conveniens dismissal is not a dismissal on the merits, a court may choose among threshold non-merits grounds for dismissal. The Court further held, however, that judicial economy and the consideration ordinarily accorded the plaintiff’s choice of forum favor the court’s determination of the jurisdictional issue first, if the determination can readily be made and will involve no arduous inquiry. In contrast, where personal jurisdiction is difficult to determine, and forum non conveniens considerations weigh heavily in favor of dismissal, the court properly takes the less burdensome course and may dismiss the action without a prior jurisdictional determination.

In New York, there are two long-standing, conflicting lines of authority on this threshold issue, The first holds that the court must address the jurisdictional issue before deciding whether dismissal is warranted based on the forum non conveniens doctrine because, if a court lacks jurisdiction over a defendant, it is without power to issue a binding forum non conveniens ruling as to that defendant. The second holds that a court presuming, without deciding jurisdiction, may address the issue of whether the action should be dismissed on the forum non conveniens ground.

Although the weight of appellate authority in this Department requires a court to address jurisdictional issues before undertaking a forum non conveniens analysis, the Appellate Division decisions do not discuss the reasoning of Sinochem and do not discuss the conflicting lines of authority. Based on a close reading of the cases, this court finds that the lines of authority do not appear to be reconcilable based on factual differences. The Court of Appeals has not addressed the issue, although dictum in a pre-Sinochem decision stated that the doctrine of forum non conveniens is inapplicable unless personal jurisdiction has been obtained. Absent binding authority to the contrary, the court follows the second line of cases and Sinochem, which the court finds to be
more persuasive.

(Internal quotations and citations omitted). The court went on to grant the motion to dismiss based on forum non conveniens.

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