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Posted: September 27, 2017

Court Rejects Allegations of Conspiracy-Based Personal Jurisdiction

On September 8, 2017, Justice Emerson of the Suffolk County Commercial Division issued a decision in Katherine Sales & Sourcing, Inc. v. Fiorella, 2017 NY Slip Op. 51135(U), rejecting allegations of conspiracy-based jurisdiction, explaining:

CPLR 302(a)(2) permits the New York courts to exercise personal jurisdiction over a nondomiciliary who commits a tortious act within the State either in person or through an agent. To confer jurisdiction, court typically require that the defendant be physically present in New York while committing the tortious act. It is undisputed that Fiorella never entered the State to negotiate the agreement, to complete its performance, or for any work-related reason. However, personal jurisdiction may be conferred under this section on an out-of-state defendant based on acts taken by an agent or co-conspirator in New York. The plaintiff alleges that Fiorella and Gottschalk were co-conspirators. To allege jurisdiction under a conspiracy theory, the plaintiff must establish (1) that the out-of-state co-conspirator had an awareness of the effects of his activity in New York, (2) that the New York co-conspirator’s activity was for the benefit of the out-of-state co-conspirator, and (3) that the New York co-conspirator acted at the behest of, on behalf of, or under the control of the out-of-state co-conspirator.

The record reflects that Gottschalk was located in and worked out of New Jersey, not New York. She, therefore, was not a New York co-conspirator. Moreover, the plaintiff’s contention that she acted at the behest of, on behalf of, or under the control of Fiorella is belied by the record, which reflects that Fiorella worked for Zingarr and Gottschalk’s other companies under Gottschalk’s direction. The plaintiff alleges that it was Gottschalk who approved Fiorella’s invoice; that it was Gottschalk who decided that TGG would fill AARP’s orders for the RealPad instead of Zingarr; and that it was Gottschalk who arranged for the manufacture, production, and sale by TGG of an insect-repellant band to compete with Zingarr’s insect-repellant band. Except for approving Fiorella’s invoice, these activities benefitted Gottschalk and TGG, not Fiorella. The court finds that, under these circumstances, the plaintiff has failed to establish that Fiorella and Gottschalk were co-conspirators.

(Internal citations omitted) (emphasis added).

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