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Posted: December 27, 2014

Personal Jurisdiction Adequately Alleged Where There Was a Factual Showing that Out-of-State Defendants Conspired with In-State Defendant

On December 15, 2014, Justice Friedman of the New York County Commercial Division issued a decision in BGC Partners, Inc. v. Avison Young (Canada) Inc., 2014 NY Slip Op. 51774(U), holding that a plaintiff had adequately alleged personal jurisdiction over out-of-state defendants based on the in-state actions of co-conspirators.

In BGC Partners, the plaintiffs sued the defendants in connection with the defendants’ acquisition of plaintiffs. Among the arguments that all the defendants except the one located in New York made was that the court lacked personal jurisdiction over them. While the court agreed that it did not have jurisdiction based on the actions of those defendants, it held that the plaintiffs had sufficiently alleged that it had jurisdiction over two of the out-of-state defendants based on their alleged status as co-conspirators with the New York-based defendant, explaining:

CPLR 302(a)(2) provides: “As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent: . . . 2. commits a tortious act within the state . . . .”

The bland assertion of conspiracy or agency is insufficient to establish jurisdiction for the purposes of section 302(a)(2). Plaintiffs must make a prima facie factual showing of a conspiracy and allege specific facts warranting the inference that the defendant was a member of the conspiracy. A valid cause of action for conspiracy under New York includes allegations of a primary tort and four additional elements: (a) a corrupt agreement between two or more persons, (b) an overt act in furtherance of the agreement, (c) the parties’ intentional participation in the furtherance of a plan or purpose, and (d) the resulting damage or injury. Once plaintiffs make a prima facie factual showing of conspiracy, plaintiffs must also show that (a) the defendant had an awareness of the effects in New York of its activity; (b) the activity of the co-conspirators in New York was to the benefit of the out-of-state conspirators; and (c) the co-conspirators acting in New York acted at the direction or under the control, or at the request of or on behalf of the out-of-state defendant.

(Internal quotations and citations omitted) (emphasis added). The Court went on to hold that the plaintiffs had sufficiently alleged a conspiracy involving two of the defendants and the New York-based defendant, but not with respect to the other defendants because there was no facts plead showing that the New York-based defendant was acting on their behalf.

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