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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: August 27, 2020

No Jurisdiction Over Suit Arising From Events in China

On August 24, 2020, Justice Ostrager of the New York County Commercial Division issued a decision in Beijing Pangu Inv. Co., Ltd. v. Alibaba Group, Inc., 2020 NY Slip Op. 32747(U), dismissing a claim arising from events in China for lack of personal jurisdiction, explaining:

Briefly stated, defendant BBMG is neither subject to general nor specific jurisdiction in New York. BBMG is a Chinese company neither headquartered in New York, nor with its principal place of business in New York. It is now well settled that courts may assert general jurisdiction over a foreign corporation only when the corporation’s affiliations with the State in which suit is brought are so constant and pervasive as to render it essentially at home in the forum State.

Manifestly, BBMG is not essentially at home in New York, even assuming, without deciding, that its furniture subsidiary Tiantin is at home in New York. It is equally clear that there is no basis for specific jurisdiction in New York which requires, like the New York long- arm statute CPLR Section 302, at a minimum, a substantial connection between the forum and the underlying controversy or transaction at issue.

This is a China-centric case with virtually no connection to New York. Most glaringly, plaintiff’s claim of long-arm jurisdiction pursuant to CPLR 302(a)(3) fails because, in New York, the situs of commercial injury for purposes of jurisdiction under 302(a)(3) is where the original critical events associated with the action or dispute took place, not where any financial loss or damages occurred.

(Individual 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 jlundin@schlamstone.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.

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