New York State Court Follows Daimler, Dismisses Foreign Component Part Manufacturer for Lack of Personal Jurisdiction

Earlier this month, the New York Supreme Court (Monroe County) added to a growing list of decisions granting foreign defendants’ motions to dismiss for lack of personal jurisdiction since the U.S. Supreme Court rendered its landmark opinion, Daimler AG v. Bauman.1  In Glazer et ano. v. Socata, S.A.S.,2 a New York trial court held that plaintiff’s wrongful death action arising out of the crash of a Socata TBM 900 near Port Antonio, Jamaica could not be sustained against two of foreign component part manufacturers and their sister companies. The cause of the accident is presumed to have been progressive depressurization of the cabin, resulting in hypoxia to the pilot and his wife.

Liebherr-Aerospace Toulouse SAS (“Liebherr”), a French company, and Liebherr-Elektronik GmbH (“Liebherr-Elektronik”), a German company and Liebherr’s sister entity, manufactured the aircraft’s cabin pressurization system, also known as the Global Air System or “GAS.” Thermocoax SAS, also a French company, manufactured temperature sensors that were incorporated by Liebherr into the GAS. Thermocoax, Inc. is a Delaware company and Thermocoax SAS’s sister entity and has no relation to the temperature sensors at issue in this case or the subject aircraft generally. The Liebherr and Thermocoax defendants each successfully moved to dismiss plaintiff’s complaint for lack of general personal jurisdiction pursuant to Daimler and specific personal jurisdiction pursuant to New York’s long arm statute, CPLR § 302. In opposition to the motions, plaintiff asserted jurisdiction based upon New York’s long arm statute only, effectively conceding that none of the defendants are “at home” in New York, as that phrase has been interpreted following Daimler.3

The particular aspect of New York’s long arm statute at issue in the Glazer motions requires that the defendant transacted business or contracted to supply goods in the state and the cause of action arise from such transaction or contract. There must be an “articulable nexus or a substantial relationship” between the in-state activity and the cause of action asserted.

The court found that Thermocoax SAS did not transact any relevant business or contract to supply goods in New York. Rather, it had a contract to sell its temperature sensors to Liebherr in France. The contract was negotiated, executed and governed by the laws of France. In addition, Thermocoax SAS manufactured the sensors pursuant to Liebherr’s design, specifications and approval; the design, manufacture, testing, sale and distribution of the sensors occurred in France. That the Thermocoax SAS sensors were ultimately incorporated into the Socata TBM 900, which was sold to a New York resident, could not serve as a basis for personal jurisdiction over Thermocoax SAS. Although Thermocoax, Inc. does business in New York, none of that business was related to the aircraft, accident or plaintiff’s complaint. Therefore, personal jurisdiction against it also was lacking.

As for the Liebherr defendants, Liebherr had purchased a part for the GAS from a New York supplier.   However, since plaintiff did not allege a defect arising out of that particular part, the purchase contract could not form the basis for personal jurisdiction over Liebherr in this case. Liebherr-Elektronik manufactured a sub-component for the GAS and contracted for the sale of that sub-component to Liebherr. All of the negotiations and execution of relevant contracts took place in Germany and France. Accordingly, personal jurisdiction in New York also was lacking over Liebherr-Elektronik.

Plaintiff also argued as a basis for jurisdiction over the Liebherr defendants that the Liebherr defendants were agents for Socata based on a contractual warranty of the GAS and the provision by Liebherr of some replacement parts for the aircraft pursuant to the warranty. In rejecting plaintiff’s argument, the court pointed to the fact that the warranty was between Liebherr and Socata – not decedent – and in fact no warranty services had been provided by Liebherr to decedent directly, thus there was no nexus between the warranty and the claims asserted.

The Glazer opinion represents yet another decision strengthening the post-Daimler rule of law: doing business in a forum is insufficient to form the basis for personal jurisdiction over a foreign defendant in the forum unless that business is substantially related to the plaintiff’s causes of action. Furthermore, without some relevant contact with the forum, placing a product in the stream of commerce that ultimately carries a foreign defendant’s product to the forum is also insufficient for personal jurisdiction to be asserted over the foreign defendant.

1   – U.S. – ,  134 S. Ct. 746 (2014).

2  Index No. 2016/09655 (Sup. Ct., Monroe Cty. Oct. 2, 2017).

3 As we have reported in prior C/F Client Bulletins, Daimler held that a court may exercise general jurisdiction, i.e., the power to hear any claim against the defendant only where a defendant is domiciled, generally its principal place of business and place of incorporation.

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