Commercial Division Blog

Posted: November 23, 2014 / Categories Commercial, Jurisdiction

Out-of-State Medical Practice not Subject to Personal Jurisdiction in New York Based on Passive Website and Communications Initiated by the Plaintiff

On November 20, 2014, the Court of Appeals issued a decision in Paterno v. Laser Spine Inst., 2014 NY Slip Op. 08054, analyzing whether contacts with New York via the Internet were sufficient to create personal jurisdiction.

In Paterno, the plaintiff brought a medical malpractice action against a Florida medical provider. The court described the facts relevant to the jurisdictional analysis as follows:

In May 2008, plaintiff was suffering from severe back pain. While on the homepage of a well-known internet service provider plaintiff discovered an advertisement for LSI, a surgical facility specializing in spine surgery, with its home facility and principal place of business in Tampa, Florida. Plaintiff clicked on the LSI advertisement, and viewed a 5-minute video presentation of a testimonial from a former LSI patient and professional golfer, extolling LSI's medical services. The advertisement appeared to hold out the promise of relief for plaintiff's back problems so he communicated with LSI by telephone and internet to inquire about possible surgical procedures to alleviate his pain. These would be the first of plaintiff's several contacts with LSI, which led to his eventual decision to undergo surgical procedures by LSI medical professionals in Florida. Those surgeries are the underlying basis for plaintiff's action against defendants.

After his initial inquiries in May 2008, plaintiff sought a medical assessment of his condition by LSI, and sent to LSI's Florida facility certain magnetic resonance imaging (MRI) films of his back. LSI then sent plaintiff an e-mail letter, describing preliminary surgical treatment recommendations and orders, based on its doctors' professional evaluation of the MRI. The letter made clear the recommendations and suggested procedures were not final, and that plaintiff would be "evaluated by [LSI] surgeons upon arrival so therefore these orders will be subject to change by the surgeon while in consultation."

According to plaintiff, on May 30, 2008, the same day that he received the letter, LSI informed him that there had been a cancellation, and plaintiff could take the open spot and have the surgery performed at a significant discount due to the short notice. LSI offered a June 9, 2008 surgery date.

In preparation for his surgery plaintiff had several additional e-mail contacts with LSI from June 2nd through June 6th. These communications were intended to address registration and payment issues, and to generally facilitate plaintiff's arrival at LSI's Florida facility. For example, plaintiff sent his completed registration and private insurance forms, and engaged in correspondence with LSI related to payment arrangements to be made upon his arrival in Florida. LSI sent plaintiff a list of hotels in Tampa that offered discounted rates to LSI patients.
Apart from these administrative matters, plaintiff forwarded to LSI his blood [*3]work, which had been completed in New York. He also attempted to schedule a conference call between his New York-based doctor, Dr. Dimatteo, and LSI defendant Dr. Perry. After plaintiff was unable to reach Dr. Perry, an LSI doctor called Dr. Dimatteo the following day and briefly discussed plaintiff's scheduled surgery.

The plaintiff subsequently travelled to Florida for surgery. "Plaintiff experienced extreme pain following the surgery and complained to LSI staff who advised him that this was due to the procedure and could last for two weeks. Plaintiff underwent a second surgical procedure at LSI . . . ." After he returned to New York, the plaintiff sought the advice of New York-based doctors and then continued to communicate with LSI from New York. Ultimately, the plaintiff sued LSI in New York. The trial court dismissed the suit for lack of personal jurisdiction. The Appellate Division affirmed. In affirming the holding of the two lower courts that the New York courts did not have jurisdiction over LSI in this action, the court of Appeals explained:

Plaintiff argues that New York courts have personal jurisdiction over defendants under CPLR 302 (a) (1), based on their purposeful activity, as demonstrated by LSI's active solicitation of plaintiff to undergo surgery, and defendants' pre and post surgery contacts related to plaintiff's medical treatment, including e-mails, letters and the exchange of documents. Plaintiff also contends New York courts have personal jurisdiction over defendants under CPLR 302 (a) (3) because defendants committed a tortious act outside New York State which caused injury to him within New York.

Defendants argue that their contacts with plaintiff merely responded to his inquiries or constituted followup to the surgical procedures, and do not constitute transacting business in New York State within the meaning of the CPLR so as to confer personal jurisdiction over the defendants. Furthermore, they contend that because plaintiff's injuries occurred in Florida, his reliance on CPLR 302 (3) as an alternative basis of jurisdiction is without merit. They also argue that plaintiff failed to effectuate proper service of process over all the LSI defendants.

CPLR 302 (a) (1) provides in relevant part:

(a) Acts which are the basis of jurisdiction. 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:

1. transacts any business within the state or contracts anywhere to supply goods or services in the state ...."

(CPLR 302[a][1]). Whether a non-domiciliary is transacting business within the meaning of 302(a)(1) is a fact based determination, and requires a finding that the non-domiciliary's activities were purposeful and established a substantial relationship between the transaction and the claim asserted. Purposeful activities are volitional acts by which the non-domiciliary avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. More than limited contacts are required for purposeful activities sufficient to establish that the non-domiciliary transacted business in New York.

The lack of an in-state physical presence is not dispositive of the question whether a non-domiciliary is transacting business in New York. For we have in the past recognized CPLR 302(a)(1) long-arm jurisdiction over commercial actors using electronic and telephonic means to project themselves into New York to conduct business transactions.

Regardless of whether by bricks and mortar structures, by conduct of individual actors, or by technological methods that permit business transactions and communications without the physical crossing of borders, a non-domiciliary transacts business when on his [or her] own initiative the non-domiciliary projects himself or herself into this state to engage in a sustained and substantial transaction of business. Thus, where the non-domiciliary seeks out and initiates contact with New York, solicits business in New York, and establishes a continuing relationship, a non-domiciliary can be said to transact business within the meaning of 302(a)(1).

Plaintiff contends that the totality of defendants's contacts establish that it conducted business in New York through its solicitation and several communications related to LSI's medical treatment of plaintiff. We disagree. In order to satisfy the overriding criterion necessary to establish a transaction of business within the meaning of CPLR 302(a)(1), a non-domiciliary must commit an act by which it purposefully avails itself of the privilege of conducting activities within New York. Plaintiff here admits that he was the party who sought out and initiated contact with defendants after viewing LSI's website. According to plaintiff, that website informed viewers about LSI medical services and its professional staff. However, he has not asserted that it permitted direct interaction for online registration, or that it allowed for online purchase of LSI services. Passive websites, such as the LSI website, which merely impart information without permitting a business transaction, are generally insufficient to establish personal jurisdiction. Thus, as plaintiff concedes, the mere fact that he viewed LSI's website in New York is insufficient to establish CPLR 302(a)(1) personal jurisdiction over defendants.

Plaintiff argues, however, that LSI did more than just post an online advertisement. He alleges that over months, there were several telephone calls and e-mail communications between plaintiff and LSI representatives, that he sent MRIs and blood work to LSI, and that LSI sent prescriptions to his New York-based pharmacies. To the extent plaintiff argues that by sheer volume of contacts, defendants are subject to personal jurisdiction in New York, we disagree. As we have stated it is not the quantity but the quality of the contacts that matters under our long-arm jurisdiction analysis.

Turning to the content and quality of defendants' contacts with plaintiff, it is apparent that they were responsive in nature, and not the type of interactions that demonstrate the purposeful availment necessary to confer personal jurisdiction over these out-of-state defendants. After plaintiff initially sought out LSI, LSI responded with information designed to assist plaintiff in deciding whether to arrange for LSI medical services in Florida. For example, after plaintiff sent his MRI for evaluation, LSI sent him a letter setting forth a preliminary evaluation and treatment recommendations.

Once plaintiff confirmed his interest, and the June 9, 2008 surgery date was set, he fully engaged with defendants in order to ensure that all pre-surgical matters were completed. Plaintiff filled out and returned the insurance forms and attempted to negotiate payment arrangements; he arranged for his travel and lodging; he completed and sent LSI the necessary registration forms; he ensured that his bloodwork was sent to LSI before his arrival in Florida; and he requested that an LSI doctor speak with his New York-based doctors concerning the impending surgery at the LSI facility. As part of the preparation for plaintiff's arrival, these communications served the convenience of plaintiff, and fail to establish that defendants availed themselves of the privilege of conducting activities within the forum State.

Plaintiff urges us to consider the contacts between plaintiff and LSI once he returned to New York on June 9th, after the first two Florida surgeries. Our long-arm statute requires that the cause of action arise from the non-domiciliary's actions that constitute transaction of business. There must be a substantial relationship between the transaction and the claim asserted. Here, plaintiff's claim is based on the June and August surgeries in Florida. Contacts after this date cannot be the basis to establish defendant's relationship with New York because they do not serve as the basis for the underlying medical malpractice claim. Further, defendants' contacts with New York at the behest of the plaintiff subsequent to the first two Florida surgeries but before the third cannot be used to demonstrate defendants actively projected themselves into New York. In any event, even considering the defendants' contacts following the surgeries, they are similar in kind to the pre-surgery contacts and for the same reasons do not constitute the transaction of business required by CPLR 302(a)(1).

It is no longer unusual or difficult, as it may once have been, to travel across state lines in order to obtain health care from an out-of-state provider. It is also not unusual to expect follow up for out-of-state treatment. Given this reality, to find defendants' conduct here constitutes transacting business within the meaning of CPLR 302(a)(1), based on contacts before and after the surgeries, would set a precedent for almost limitless jurisdiction over out-of-state medical providers in future cases. We do not interpret the expanse of CPLR 302(a)(1) to be boundless in application.

(Internal quotations and citations omitted).