| Darrow v Hetronic Deutschland |
| 2014 NY Slip Op 05239 [119 AD3d 1142] |
| July 10, 2014 |
| Appellate Division, Third Department |
[*1]
| 1 Robert W. Darrow et al., Respondents, v HetronicDeutschland et al., Appellants, et al., Defendants. |
Wilson Elser Moskowitz Edelman & Dicker, LLP, New York City (Patrick J.Lawless of counsel), for appellants.
Martin, Harding & Mazzotti, LLP, Niskayuna (Craig A. Cushing of counsel),for respondents.
Stein, J. Appeal from an order of the Supreme Court (Krogmann, J.), entered May17, 2013 in Washington County, which denied a motion by defendant HetronicDeutschland to dismiss the complaint against it.
Defendant Hetronic Deutschland (hereinafter defendant) is a limited liabilitycompany registered in Germany that specializes in the manufacture of radio remotecontrols. During the relevant time period, Hetronic USA, Inc. (hereinafter H-USA) wasthe exclusive distributor for defendant in the United States.[FN1] In March 2008, plaintiff Robert W.Darrow was operating a boom with a radio remote control manufactured by defendantwhen the boom inadvertently [*2]engaged and crushedDarrow against the ground, resulting in serious injuries. Consequently, Darrow and hiswife, derivatively, commenced this action seeking to recover damages for his injuriesasserting, among other things, claims based upon negligent design and manufacture, andstrict products liability. Prior to serving its answer, defendant moved to dismiss thecomplaint as against it for lack of personal jurisdiction. Upon plaintiffs' cross motion,Supreme Court stayed the motion to dismiss in order to allow the parties to conductlimited discovery on the jurisdictional issue. After the completion of such discovery,Supreme Court denied defendant's motion, finding that the exercise of long-armjurisdiction over it was compatible with both CPLR 302 and due process. Defendant nowappeals and we affirm.[FN2]
In deciding whether an action may be maintained in New York against anondomiciliary defendant, the court must first determine whether jurisdiction existsunder New York's long-arm statute (see CPLR 302) based upon the defendant'scontacts with this state; and, if it does, the court then determines "whether the exercise ofjurisdiction comports with due process" (LaMarca v Pak-Mor Mfg. Co., 95NY2d 210, 214 [2000]; seeAndrew Greenberg, Inc. v Sirtech Can., Ltd., 79 AD3d 1419, 1420 [2010]). Theultimate burden is on the plaintiff to demonstrate that such requirements have been met(see Goel v Ramachandran,111 AD3d 783, 788 [2013]; Paterno v Laser Spine Inst., 112 AD3d 34, 39 [2013]).
Here, plaintiffs assert that defendant's conduct falls within the provisions of CPLR302 (a) (3) (ii), which confers jurisdiction when a defendant commits a tortious actoutside New York that causes injury to a person or property within the state and thedefendant "expects or should reasonably expect the act to have consequences in the Stateand derives substantial revenue from interstate or international commerce" (Carpino vNational Store Fixtures, 275 AD2d 580, 581 [2000], lv denied 95 NY2d 769[2000]). Inasmuch as defendant has not refuted the evidence presented by plaintiffsdemonstrating that defendant derives half of its revenue from exportsales—including over million in exports to the United States in 1997,when the remote control at issue was sold—the decisive issue here is whetherplaintiffs met their burden of establishing that defendant should have reasonably foreseenthat a defect in the manufacture of its radio remote controls would have consequences inNew York, an inquiry designed to ensure that there is some link that would make itreasonable to require defendant to come to this state to answer for its tortious conduct(see LaMarca v Pak-Mor Mfg. Co., 95 NY2d at 215).
The record reflects that defendant maintained an exclusive agreement with H-USA todistribute its products to various locations in the United States, including New York.Significantly, unchallenged evidence submitted by plaintiffs demonstrated that H-USAaffected distribution to certain states in this country through a network of regionaldistributors, one of which was designated to serve the New York market. Moreover, thewebsite for defendant and other Hetronic companies, along with the interrelationship ofthe entities involved, demonstrates defendant's awareness of this network. In view ofsuch purposeful distribution arrangement, we agree with Supreme Court's conclusion thatdefendant sought to indirectly market its product in New York and, thus, should havereasonably expected a manufacturing defect to have consequences in this state (seegenerally Kernan v Kurz-Hastings, Inc., 175 F3d 236, 242 [2d Cir [*3]1999]; Adams v Bodum Inc., 208 AD2d 450, 451[1994]; compare J. McIntyre Mach., Ltd. v Nicastro, 564 US &mdash, 131 S Ct2780, 2792 [2011, Breyer, J., concurring] [no evidence of "something more" than simplyplacing a product in the stream of commerce]; Schaadt v T.W. Kutter, Inc., 169AD2d 969, 970 [1991] [no evidence in the record of a discernible effort on behalf of thedefendant to directly or indirectly serve the New York market]).
Based on the record before us, we likewise find that the exercise of jurisdiction overdefendant is compatible with federal due process standards. Generally, "a State mayconstitutionally exercise jurisdiction over non-domiciliary defendants, provided they hadcertain minimum contacts with [the forum State] such that the maintenance of the suitdoes not offend traditional notions of fair play and substantial justice" (LaMarca vPak-Mor Mfg. Co., 95 NY2d at 216 [internal quotation marks and citations omitted];see International Shoe Co. v Washington, 326 US 310, 316 [1945]; Perkow v Frank W. Winne &Sons, Inc., 36 AD3d 1189, 1190 [2007]; Allen v Marais, S.A., 307AD2d 613, 614 [2003]). The relevant inquiry is whether a defendant "purposefullyavai[led] itself of the privilege of conducting activities within [New York], thus invokingthe benefits and protections of its laws" (J. McIntyre Mach., Ltd. v Nicastro, 131S Ct at 2788 [internal quotation marks and citation omitted]). Under the circumstanceshere, inasmuch as defendant targeted New York consumers through a network ofdistributors that rendered it likely that its products would be sold in New York, "it is notunreasonable to subject it to suit in [this state] if its allegedly defective merchandise has. . . been the source of injury to [a New York resident]" (World-WideVolkswagen Corp. v Woodson, 444 US 286, 297 [1980]; accord LaMarca vPak-Mor Mfg. Co., 95 NY2d at 216; see Allen v Marais, S.A., 307 AD2d at614). Defendant's remaining contentions have been examined and, to the extent they areproperly before us, are found to be without merit.
Peters, P.J., Rose and Egan Jr., JJ., concur. Ordered that the order is affirmed, withcosts.
Footnote 1:According to MaxHeckl, who served on the Board of Directors of both defendant and H-USA, thoseentities were "sister companies" which, at some point after the radio remote control atissue was sold, became wholly owned subsidiaries of defendant Hetronic International,Inc. and, later, of defendant Hetronic Holding, LLC.
Footnote 2:Defendant was formerlyknown as defendant Hetronic Steuersysteme and, at some point, affected a change inname only. Hetronic Steuersysteme is also named as an appellant on the notice of appeal.