Summary
In Bluewaters, the First Department determined that there were not sufficient connections with New York to support personal jurisdiction over non-resident defendants based upon using New York banks to pay a bribe.
Summary of this case from Norex Petroleum Ltd. v. BlavatnikOpinion
2014-11-6
BLUEWATERS COMMUNICATIONS HOLDINGS, LLC, Plaintiff–Appellant, v. Bernard ECCLESTONE, et al., Defendants–Respondents, Gerhard Gribkowsky, Defendant.
Arnold & Porter LLP, New York (Kent A. Yalowitz of counsel), for appellant. LeClairRyan, A Professional Corporation, New York (Thomas E. Butler of counsel), for Bernard Ecclestone, respondent.
Arnold & Porter LLP, New York (Kent A. Yalowitz of counsel), for appellant. LeClairRyan, A Professional Corporation, New York (Thomas E. Butler of counsel), for Bernard Ecclestone, respondent.
Edwards Wildman Palmer LLP, New York (Anthony J. Viola of counsel), for Bambino Holdings, Ltd., respondent.
Freshfields Bruckhaus Deringer U.S. LLP, New York (Cheryl Howard of counsel), for CVC Capitol Partners Ltd., Alpha Prema U.K. Ltd., Alpha Topco Ltd., and Delta Topco Ltd., respondents.
Reed Smith LLP, New York (Jordan W. Siev of counsel), for Bayerische Landesbank Anstalt Des Offentlichen Rechts, respondent.
SWEENY, J.P., ANDRIAS, SAXE, RICHTER, FEINMAN, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered January 21, 2014, which granted defendants-respondents' motions to dismiss the complaint as against them, unanimously affirmed, with costs.
New York courts do not have jurisdiction over defendants Bernard Ecclestone (an Englishman), Alpha Prema U.K. Ltd. (an English company), and Alpha Topco Ltd., Delta Topco Ltd., and Bambino Holdings, Ltd. (Jersey [Channel Islands] companies) (the personal jurisdiction defendants) pursuant to CPLR 302(a)(1), (2), or (3)(ii).
Plaintiff maintains that the personal jurisdiction defendants committed a tort outside the state that caused injury within the state ( seeCPLR 302 [a][3][ii] ), i.e., its loss of New York-based customers, nonparties Apollo Management, L.P. and King Street Capital Management, L.L.C. However, the complaint does not refer to Apollo and King Street as plaintiff's customers; rather, it refers to them as plaintiff's financiers. Contrary to plaintiff's argument, the complaint does not allege tortious interference with plaintiff's economic relations with Apollo and King Street.
In any event, the event that gave rise to the injury did not occur in New York ( see CRT Invs., Ltd. v. BDO Seidman, LLP, 85 A.D.3d 470, 471–472, 925 N.Y.S.2d 439 [1st Dept.2011] ). That event occurred when Ecclestone persuaded defendant Gerhard Gribkowsky (a German), via the promise of money, to steer the sale by defendant Bayerische Landesbank Anstalt des Öffentlichen Rechts (BLB) (a German bank) of its shares of nonparty Speed Investments Limited (a Jersey company) to defendant CVC Capital Partners Ltd. (an English company) instead of plaintiff's predecessor in interest (a Jersey company with offices in Jersey and London).
Plaintiff argues that the personal jurisdiction defendants are subject to New York jurisdiction because they conspired with CVC, which transacted business in the state ( seeCPLR 302[a][1] ) by buying the Speed shares owned by nonparty Lehman Commercial Paper, Inc., which had an office in New York. However, plaintiff does not meet the requirements for establishing conspiracy jurisdiction ( see e.g. Lawati v. Montague Morgan Slade Ltd., 102 A.D.3d 427, 961 N.Y.S.2d 5 [1st Dept.2013] ). For example, CVC's purchase of Lehman's Speed shares was not a tort, and the complaint does not allege that CVC bought those shares at the direction, under the control, at the request, or on behalf of the personal jurisdiction defendants. “[T]he mere conclusory claim that an activity is a conspiracy does not make it so” (Pramer S.C.A. v. Abaplus Intl. Corp., 76 A.D.3d 89, 97, 907 N.Y.S.2d 154 [1st Dept.2010]; see also e.g. Wyser–Pratte Mgt. Co., Inc. v. Babcock Borsig AG, 23 A.D.3d 269, 270, 808 N.Y.S.2d 3 [1st Dept.2005] ).
Plaintiff alleges that Ecclestone and Bambino bribed Gribkowsky in U.S. dollars and that the payments went from nonparties First Bridge Holding Limited (a Mauritius company) and Lewington Invest Limited (a British Virgin Islands company) to nonparty GG Consulting (an Austrian company). Plaintiff contends that, because the payments were made in U.S. dollars, they must have gone through New York banks ( see Banque Worms v. BankAmerica Intl., 77 N.Y.2d 362, 370, 568 N.Y.S.2d 541, 570 N.E.2d 189 [1991]; Mashreqbank PSC v. Ahmed Hamad Al Gosaibi & Bros. Co., 23 N.Y.3d 129, 137, 989 N.Y.S.2d 458, 12 N.E.3d 456 [2014] ). However, Ecclestone's and Bambino's indirect use of the New York banking system does not constitute the transaction of business in New York pursuant to CPLR 302(a)(1) ( see Pramer, 76 A.D.3d at 96–97, 907 N.Y.S.2d 154; see also Magwitch, L.L.C. v. Pusser's Inc., 84 A.D.3d 529, 923 N.Y.S.2d 455 [1st Dept.2011], lv. denied18 N.Y.3d 803, 2012 WL 16428 [2012] ). Nor does it constitute the commission of a tort within New York pursuant to CPLR 302(a)(2). Unlike the third-party defendants in Mashreqbank PSC v. Ahmed Hamad Al Gosaibi & Bros. Co., 2010 N.Y. Slip Op. 33909[U], *12, 2010 WL 9535130 [Sup.Ct., N.Y. County 2010], revd. on other grounds101 A.D.3d 1, 951 N.Y.S.2d 124 [1st Dept.2012], revd. on other grounds23 N.Y.3d 129, 989 N.Y.S.2d 458, 12 N.E.3d 456 [2014], Ecclestone and Bambino-the alleged payors of the bribe-did not fraudulently gain funds for their own benefit. Nor does American BankNote Corp. v. Daniele, 45 A.D.3d 338, 845 N.Y.S.2d 266 [1st Dept.2007] avail plaintiff with respect to its CPLR 302(a)(2) argument, since that case dealt with jurisdictional discovery and involved a greater connection to the New York metropolitan area than the instant action.
The motion court properly dismissed this action on the ground of forum non conveniens ( see e.g. Ghose v. CNA Reins. Co. Ltd., 43 A.D.3d 656, 841 N.Y.S.2d 519 [1st Dept.2007], lv. denied10 N.Y.3d 712, 861 N.Y.S.2d 273, 891 N.E.2d 308 [2008] ). As indicated, this case stems from the failure of a Jersey company (with offices in Jersey and London) to acquire the shares of another Jersey company from a German bank, allegedly because an Englishman bribed a German. The cause of action “lack[s] a substantial nexus with New York” (Martin v. Mieth, 35 N.Y.2d 414, 418, 362 N.Y.S.2d 853, 321 N.E.2d 777 [1974] ). All the defendants are foreign ( see Wyser–Pratte, 23 A.D.3d at 270, 808 N.Y.S.2d 3; see also Adamowicz v. Besnainou, 58 A.D.3d 546, 547, 872 N.Y.S.2d 47 [1st Dept.2009] ). Germany has already tried and convicted Gribkowsky. Germany has an interest in how BLB-a German bank-was run ( see Phat Tan Nguyen v. Banque Indosuez, 19 A.D.2d 292, 295, 797 N.Y.S.2d 89 [1st Dept.2005], lv. denied6 N.Y.3d 703, 811 N.Y.S.2d 335, 844 N.E.2d 790 [2006]; Shin–Etsu Chem. Co., Ltd. v. ICICI Bank Ltd., 9 A.D.3d 171, 178, 777 N.Y.S.2d 69 [1st Dept.2004] ). By contrast, New York's interest is minimal ( see Mashreqbank, 23 N.Y.3d at 137–138, 989 N.Y.S.2d 458, 12 N.E.3d 456). Germany, England, and Jersey are all available alternative fora ( see e.g. Sears Tooth v. Georgiou, 69 A.D.3d 464, 895 N.Y.S.2d 33 [1st Dept.2010] [England]; Wyser–Pratte, 23 A.D.3d at 270, 808 N.Y.S.2d 3 [Germany]; Chawafaty v. Chase Manhattan Bank, 288 A.D.2d 58, 733 N.Y.S.2d 12 [1st Dept.2001] [Jersey], lv. denied98 N.Y.2d 607, 746 N.Y.S.2d 691, 774 N.E.2d 756 [2002] ).