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Posted: September 16, 2020

Consent to Jurisdiction In New York State Does Not Mean Consent to Venue in Any County in the State

On September 8, 2020, Justice Borrok of the New York County Commercial Division issued a decision in Frequency Elecs., Inc. v Bloch, 2020 NY Slip Op. 51036(U), holding that consent to jurisdiction in New York state does not mean consent to venue in any county in New York state, explaining:

CPLR §7502(a) governs venue of special proceedings related to arbitration and provides:

(a) Applications to the court; venue. A special proceeding shall be used to bring before a court the first application arising out of an arbitrable controversy which is not made by motion in a pending action. (i) The proceeding shall be brought in the court and county specified in the agreement. If the name of the county is not specified, proceedings to stay or bar arbitration shall be brought in the county where the party seeking arbitration resides or is doing business, and other proceedings affecting arbitration are to be brought in the county where at least one of the parties resides or is doing business or where the arbitration was held or is pending.

As discussed above, neither the 1980 Agreement nor the 2013 Agreement contain a provision specifying a county where a proceeding relating to arbitration shall be brought. In their opposition papers, FEI argues that the Jurisdiction Clause, which authorizes a lawsuit to be brought in any federal or state court in New York, specifies a county for CPLR § 7502(a)(1) purposes. Put another way, FEI argues that the absence to specify any county means that the parties specified every single county. The argument fails as nothing more than a nuanced attempt to conflate jurisdiction and venue. The Jurisdiction Clause is a consent to jurisdiction provision, nothing more. Neither the 1980 Agreement nor the 2013 Agreement specify a county where an action staying arbitration must be brought and neither agreement provides that any objection to venue is deemed waived for CPLR § 7502(a)(1) purposes or otherwise. Taken to its logical conclusion, under FEI’s interpretation of the Jurisdiction Clause, venue would be “specified” in Dutchess County, Erie County, Westchester County and every single other county in the State of New York.

. . .

Here, based on CPLR § 7502, Mr. Bloch objects to venue being fixed in New York County and his objection makes sense given that CPLR § 7502(a)(1)’s default provision (i.e., absent an agreement specifying a county) requires suit to be brought in the county in which the person seeking arbitration resides (i.e., Nassau County), he is 84 years old, the company is located in Nassau County, and the 2013 Agreement required him to bring suit in Nassau County to have an arbitrator appointed when FEI failed to appoint their arbitrator (i.e., to the extent a county is specified in an agreement for arbitration related lawsuits, Nassau County, not New York County, was specified).

Stated differently, as no specific county for venue has been specified in the agreements at issue in this action (and as the agreements at issue contain no waiver of objections to venue), CPLR § 7502(a)(1) requires that this action be brought in Nassau County where Mr. Bloch resides, where he was employed by FEI until January of 2020, and where the two other related actions are currently pending.

(Internal citations omitted).

New York procedural law dictates which county an action can be brought in. The rules are flexible, but as this decision shows, it is possible to run afoul of them and have a lawsuit transferred to a county you did not want to be in. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure where in New York an action may properly be brought.

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Posted in Commercial, Venue
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