In-State Business Activities Unrelated to Asbestos Personal Injury Claims Ruled Insufficient to Confer Personal Jurisdiction Supreme Court of New York, June 16, 2018

NEW YORK – Newly appointed NYCAL Asbestos Coordinating Judge Manuel Mendez continued the recent trend of New York trial level decisions dismissing claims for lack of personal jurisdiction following  Bristol Myers Squibb Co. v. Supreme Court of California (2017) and Daimler AG v. Bauman (2014). In the matter of Irene Grabowski, as Personal Representative of the Estate of Alex Grabowski v. A.O. Smith Corporation, the plaintiff brought suit in New York State Court against The Scotts Company LLC (Scotts), alleging exposure from using Scotts Turf Builder on his family lawn in New Jersey. Scotts, an Ohio limited liability company headquartered in Marysville, Ohio, moved to dismiss the plaintiff’s complaint arguing that the court lacked both general and specific jurisdiction over plaintiff’s claims.

The court noted that it could not exercise general jurisdiction over Scotts as it is neither incorporated in, nor has its primary place of business in New York. However, the plaintiff contended that Scotts nevertheless subjected itself to general jurisdiction because Scotts was a “wholly owned subsidiary” of ITT Company (ITT), which maintained its headquarters in New York during the alleged exposure period. Judge Mendez rejected the plaintiff’s argument by noting that the location of ITT was immaterial for jurisdictional purposes unless the plaintiff could prove that ITT’s control over Scott’s activities was so complete that it was “merely a department” of ITT or its “alter ego.” The court also reiterated that following Daimler, Scotts’ registration with the New York Secretary of State as a foreign corporation and appointment of the State Secretary as an agent for the service of process did not confer a basis for general jurisdiction.

The court next analyzed specific jurisdiction under New York’s long-arm statute, CPLR 302(a). While the plaintiff was a life-long resident of New Jersey, who purchased the Scotts Turf Builder in New Jersey, and alleged exposure exclusively in New Jersey, the plaintiff argued that Scott’s New York based R&D facilitates and call centers nevertheless provided a sufficient nexus to the plaintiff’s personal injury claims. However, Judge Mendez rejected the argument ruling that a more substantial relationship was required between Scotts’ in-state conduct and the claims asserted.

Read the full case decision here.

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