Commercial Division Blog
Defendant Waived Defense of Lack of Jurisdiction By Engaging in Significant Activity in the Action
On March 27, 2019, the Second Department issued a decision in HSBC Bank USA, N.A. v. Taub, 2019 NY Slip Op. 02319, holding that a defendant waived his personal jurisdiction defense by engaging in significant activity in a lawsuit, explaining:
A defendant may waive the issue of lack of personal jurisdiction by appearing in an action, either formally or informally, without raising the defense of lack of personal jurisdiction in an answer or pre-answer motion to dismiss. Here, by opposing the plaintiff's motions, including its motion for a judgment of foreclosure and sale, and cross-moving for sanctions against the plaintiff, the defendant engaged in significant activity after his statutory time to answer had expired, which amounted to an informal appearance. The record indicates that the defendant's counsel appeared in court on at least 11 occasions without raising the jurisdictional objection. Therefore, the defendant waived any objection on the ground of lack of personal jurisdiction.
(Internal quotations and citations omitted).
This decision illustrates an issue that often arises in commercial litigation in New York. Whether the defendant is located on the other side of the world or across the Hudson in New Jersey, a New York court cannot assert jurisdiction over the defendant (that is, hear a case against it) unless there is a proper connection between the defendant and New York. Contact Schlam Stone & Dolan partner John Lundin at email@example.com if you or a client face a situation where you are unsure whether there is jurisdiction over you, or over a party with which you are having a dispute, in New York.