llfll4Jl

ourts Face Challengi Legal

Thornas A. D~okerson anc Jaffrey A. Cohen

GS-24-2013

a great step for'*'vard it rt to eaefl -stat-e- to deterrninc: v;hether at.:tis.rn Is tnch.;de-d definition of Hb-ef1av~ora~ heaith treatrnent!' Furiher, Nevv York's enacted 1!avtisrn ~nStJranct::t reforrn

about its to autistic individuals. addition! there Is a ,,,v'"'"~"'"'"' the side etfe<:-is of childhood

Disatditles ii1JUPf lawsuits, m:>l'1f1f1"'''~"' publication that has

autisrn and tfteLr boom generation approaching retirement

Affordable Care Act

fron1 these

Congress March 2010, the Pat!ent Protection and Affordable Care ~as intended to "tncrease the number of Americans covered heatth insuranc"' and decrease the cost of health care."~ 'Nhile comprehensive approach this fails to what behavioral disorders are covered.

Health Can;~ t\ key of the ACA is the m<:h"1date that most P,mericans to maintain essemial" hel?l!th insurance coverage. .t;CA aimed io increase access !0 health msurance an

,,,.,,,,,.Q,.~ . .., :;f and private insurance; and order tc facWtate t.l;-e selection of health inst;rance ACA exchanges_"

5/24/20

are 2 mschanisrn fc; indh.?fdwafs and s:na!l b!Jsine.sses ar "essential health benefits''

0 genera~ categories of EHB vvas Hnvantat and substance In December 2011 the U.S.

d:eterrnine each state the discretion to select .a

rnust then m2tch_

its biueptint fQT itS State-based t><·rr'·"''"'"'"' ret>:0tved condltiona! approva! frorr: l-1HS to operate- Its state,.based ""~·rt">nn

~nsu:ance

became the 29ttJ state adopt autisrn insurance. Under New York's autism insurance tnat to be issued, renewed or modified from Nov. 20!2. forvvard

'"'''"''·"""' and treatrnent of ASDs. Wh;o;n the law lNas enacted it

exks:ts fur behavlor t\.SA; state He-ensure does not York, Thus, <.1ui:~srn advo-cat-es have taken the p-osition that the

reduce coverage -of AB~~·~ as beht.4Vior n::-:quires an insurance poifcies ~-ssued in

same.

Childhood Vacc-ines

Court's 201 against vaccine rnanufacturers. Those affected must n-ovt

createci ihe National Childhood Vaccine injury Act created i.n 1986, all claims agoinst

or deaih caused vaccine side effects~

on beMJf of individuals with ASDs, particularly children, under fne are r:ot uncommon. parents of

The Court of Appeals for the Second Circuit ruk:~d this past fal!, in a matter of first that the''"'"''""""''¥ of a student's iEP and the students free appropriate education was to be evaluated

was crea{ed ln adopting this rule, the court. in "~~~~j:=;~'c,:h "retrospective testimony aboui "''"""'""" ~

appear within the of the !EP. was

)

tMe bene-fit (.Jf parents nett ~1e-en amended

Commitment

Suprerne Court found the plaintiffs atte;rnpt to equate a diag~osfs .Autisrn D~sorder \vith Pt;rvasive U<weiiXJrne

'"r:-:edic:a! researchers cause of autism/PDD.H

cautioned

Menta! Law, can be used to a fs found autfsm, Article of the "{or:~~s Ac: is an alternative guardianship statute v;hich is limited to with developmental

,. I)H

and othet enun1erated condttfons.M' has

cum'-"'"'" tor a d~sab~ed and after that due

opera:-ed '"'·w·,,.,"",."" nec;;;sslt~ted a trBnsfer to a se-m~~secure unit

.e~,fter the rnax1rnurn period of corrunitn1ent under CPL artic!-e 730. the state flied a sex offender c!vH rr1anag.ernent petition pursuant to 1\tlental La\\f articte 1 0. The court heid that the state~s interest ln

treatment to sex offenders with mental ai:mormatilies and the from their cxmduct:· !"lygiene Law did not deprive an h!s or her right to due proc;ess

Vtcums of A.buse

other dJsabtHttes are rnore to be victims -of crimes, than the perpetrators. a 2008 ~.:.Ppei!ate d-ecision, hefd, as a matter of first that an autistic

rP('r:,rr<mn of a defendanfs conversation on behaff chUd, V':ho

·c;vas ~n fact present at the ttme of the conversation.2~ Tne c~ikrs mother had that he was home from school with

A,s. a nether basis for its lm!ding, the ccw1, not1ng that autism is defined under the Mental Law as a and tum a menta! found that there must be "a balance between important

corrsh:ieratf.ons of· protecting those 'Nith cHsa.bmtres front abuse and citizens

20·13 has on how.ASDs

' -'

Tfwm;as Dickerson Joanne Jli1athews Forbes, Pt!Nr:m:"

are sure to arise the courtroorn, cdniina! "'""':;"~"'""'''"'

to be seen 1vhat

vv:th /\SDs ate

nJJP"'"'iJ'v Dfvis·fon, Second LlepartJnenL of this tuticle

rn.ci.,,w,trm''""~"t dis-ord.ets, c~aracterized by social "~'"''"'"~"'of behavior, AuHst~c

disorder, son1e·tirnes c-aHed aut~smt is on the rnost severe end of the induda a rnilder form knov-1n as syndrome\ and c+li!rfh,nrwl n''"'n'""''~'''t"""'

disorder otherwrse referred to as varv fh character severity, occur in ail ethnic and sodoeconomlc groups, and affect every age group. Male's are four times mere

females.

"The lifetime Distribution ot the lncrernental Societal Costs of Autism," 164

Standards for

42 S.C.

D€8. 178 L.Ed.2ci t.

rr1eans :a child vvith a variety of m·,r,,Jrin"'r''" ~:t.iucat!on and reiated seflJice.s (see 20 USCA educaiion prcgrarn.

or Eciuc., 694 F 3d

19 Health Care and 11· i 52, '124 Stat in various sections of 42

U.S. 132 S.Ct 2566, 2571 (2012)

Disabilit;es Education Act, the term "child witr1 a di,satHil:t\r'' autism, v>~ho. needs

effected pursuant to an indfvklual

Cir.

CL Richmond

AD 3d S.2d 32.3 (2d Dept. 201 ) ~san

0).

Jones, L,, \lVooct. S.i Bates, G .. d!sabH~tj-es: a "''n::t,:.m.~''"'

L., and Officer. A, (20·12) ''Prevalence and '·"-''"''"'h'"'~ of observational studies.'' The Lancet

6, 855 -Sup. !-'.op.Term, 2008), lv. :o app .. denied, NY3d 851 860

VOLUME 41, NO. I FALL 2012

HOFSTRA JAW REVIEW

Personal Jurisdiction and the Marketing of Goods and Services on rhe lnternet

Thomas A. Dickerson Cheryl E. Chambers

Jeffrey A. Cohen

SCHOOL OF LAW HOFSTRA UNIVERSITY

PERSONAL JURISDICTION AND THE MARKETING OF GOODS AND SERVICES

01\ THE INTERNET

Thomas A. Dickerson, Cheryl E. Chambers & Jejfi'ey A. Cohen*

I. L'\'TRODUCTIO~ ........................ ..................................... ............... 32 A. Consumer Use of the !nzernet ............................................... 34 B. The "Solicitation-Plus "Doctrine ................................ .......... 34

ll. A TRA"\SACTIOXAL A.'\AL YSIS OF l:"TER."\ET COivNERC'F ....... ... 38 A. Burden of Proof ....... ........ .. ..................... ................ ............ .. 39 B. Passive ~Yebsites ............. ..... ............. ..................... ............... 40 C. Passive Websites Plus ....................... ........... .. ..................... .. 43 D. Interactive Websites ....... ..... ........... ....................................... 44

I. Lowest Level of lnteracti\ity ......................................... 47 2. Middle Level of [nteractivity .......................................... 48 3. Highest Level oflnteractivity .............. ........................... 49

Ill. L'\TER.'JET FORt-M SELECTIOl\ CLAUSES ..................................... 50

N. CONCLUSION: THE (t\TERNETMAY HAVF EXPAr-\DFD JURISD1CTIO.N ........................................................... 51

• Thoma' A. Dicl...:rson. Ch~l E. Chambers. ond JeJTTC) \. Coh.:n are A> ,ociat" Jusures of !he 1\c;>. Yon. State Appellate 1>1 i>ion. S<x-ond Depanment. Jusuce Dickerson ts !he author of CLI\SS AlTIONs. THE LAW OF 50 SlATFS (2013): TRAVEL LAW (2013); Article 9 of JACK B. WE~~TI 1~. IIAROID L KoR:-; & AR11fUR R. MILLeR. 'lr.w YORK ClV1L PRACTI<.r· CPLR (David L Fcr.;tendig cd .. :!01:!,, Charter QX in COMMUCIAI. LITIGATI0:-.1 IN l'liW YORK STATE COURTS

( Rob~rt L. Haig od., 3d cd. 2012). niOMAS A. DICKFRSO:-<. RODNeY R. GOUI.D & MARK P CHAWS. LITiu ... riSG NnR-..l.TI0'<-\1 TORTS IN UMrfD STATES COURIS (2013): and over~{)() nrticl~s and pap.:rs on con.umer llm. clas.-; actions, ;ravel law, ond ta"' c~·moran tssu~ m:llly of wh!ch arc 8\'3tlable at hup: · \\W,~.courts.state.ny.us/coum;;ad1/justicc_dickcrson.shtml.

31

HOFSTRA L·l II' REI '/Err [Vol. 41:31

I. L'ITRODUCTIO:-.:

Cases involving copyright infringement. 1 pateot aod trademark infringement.' dcfamation.

1 and dcfecti\'C or misrepresented goods and

.5<!1! l'.g .• Mavtix Photo. Inc. v. Brand lechs .• Inc., 647 F.3d 1218, 1221. 1229. 12~:! (9th C1r. 2111 1), D~1 Sol, L.C. v. Caribongo L.L.C .. \fo. 2:11CV5730AK, 2012 WL 530093, at "I. •4.5 (D lltah Feb. I 7. 2012): Fmserside lP L.L.C' \ Hnmmy ~ledia, ltd .. '-lo. Cll 3025 MWB, 2012 WL 1::!4'\78 at • 1. •7. •to (N.D. lowa Jan 17. 201::!): Penguin Grp. (USA) Inc.'· Am. Buddhn. 946 '\ F 2d 59. 160, 165 C'-I.Y. 2011 ). L'l ,\/tn·r~t. the coun found speCJfic personal junsd1c11on. c"'plaintnll:

We conclude that Brand exp~l) aimed at the forum state .. . • On we one hand. w'l:

have made cl~ar that maintenance of o p:b>l\ c wchsllc n!one cannot sausfy the express :timing prong .••. On t!J~ othe-r. we ha,·.: hdc! that operating even a pass1vc wcosite m ~OnJtm.:uon \\1th <o:nething more conduct directly tar£eling the forum - i, >Unicient •.•• In dctmnining ''hethcr a oonrc,idcnt th:f~.:ndant has done somcthmg more, "'" ha' e curt.idc>red '~'~rnl fuctors. includtng the intcrnctivity of the defendant's '~cbsac: :he gcopraph1cal '<COpe of the dcfcndam's comm~rcial ambinons: and whether the defendant md1v1duaUy targeted a p!amufTlmown to be a forum rcsidenL

Mavri.t, b47 F.3d nt 1229 (citation.~ omitt.:d) (in tcmnl quotation rnarlc.s omitted). The court tn D£'1 Sol also lilun,J p.:rsonal juri.>dicuon. ~xplaming:

l'anhongo 's site provides a retail lin~ that seamlcssly allows a USc'l' to pureha~e l'anbongo prodccu. on the Tarpon Springs wcb~ite. . . The purchase proccs:; nllo"" ft

user 10 create an account or proceed a.~ a guc,t{.] . a !lows an established wbolcs:tlL'I' to complete and submit purchase order,; and has 3 contnct page that allows inquiries r<:g:mimg orders .... C:mbongo has pu:po,.;et\:Uy s:t up a \\ebsitc provid:ng a hig.IJ level of intcracunty. which encourages c:u5lomm to acce"~ It$ websiTe to purchase producb.

Del Sol. 1011 Wl. 530093. a1 •4 However. in Fra.<.:rml.: IP, the court did not find personal j um.d1c1ion hccauo,c:

xJ lam>l.:r provide> its website to mtcmcl usen. throu,;hout the United Srotcs and oflers them the option of viewing aduh films m htAfl defimtion. or dO\\nloadmg the films . . . . xf-Jams!er's website ... j, vi~i te.l daily by over 1.500,000 intcmc.:t usen; worldwide with roughly 20 percent of the site 's visitors being from tl1e United States • [H)owcver {the plnintifi) htt' pr.:~ent~'\l no evidence of any !own r,:,;idcnt • . . ,;siting !he '"'cil.site.

Fru.um,l.: IP. 201:! WL l243iil, at•i. In Pengum Group. the cour. obsero;ed that: the role of the Internet in ca.'<!S allegmg the uploading of cop>Tlghted books distmguishes th.:m from trJditioO:!I COIIl!!lm:ial ton ca..;cs where courts have gener.11ly linked the IDJWY to th.: plate where sales or customers :trc lost. The location of the mfringcmcnt in onhnc cnsc:s i.' of lm1c tmpon masmuch :ts the prim:ll) aim of the i:1fringer is to make the \\OrK~ availnbk to anyone \\1th :tc~ t\1 an Inte-rnet connection, including computer us~'TS m '\ew York. .•. [WJe conc'udc that the allcg~'<l injury in this case occurred in ~ew York for purposes ofCPLR 30:!(a)(J)(1i).

Pcngum Gtp .. 946 :-<.E.::!d at 165 (footnote omllted). ~ Sf!(! t>.g. Chloe v. Qut:tn Bee of l3cvcrly llills. LLC. 616 F.3d 158. 161. 165 (2d Cir

20101 (finding that "the sing!.: act ofan . employee shippmg [a handbag] mto New York. combined with [employer's) extens1ve busm~ss aett\lly 111 New York. giVes nsc to personal ;urisdKtion over the employee"): EnnroCarc Tcchs .. LLC. v. Simanovs!..')'. No. 11-CV-34511 (JS)IETB). :!012 \\ol. ::!0014-!3. at '" I (F.O.:'-. .'\ June 4, :!012) (finding personal jurisdiction over Qn,g,,n f'<'.;idrnl' opcnning ··an ·intemct store' called :'\"\\ Class. . . [w!ucb] IS not a phys1cal store or even an md.:pc'!ldent ''ebsitc. Rather. clbtome!"; access tt through 'storefront;,· hosted by :'\m:lwn.com and cBny.corn. As of October 3. 2011. :'\W Clnss h:m 40.31::! I'C\-;cwcd uans.."Ctions on .:Bay.com and 5.65S tr:msactions on Amazrut.C<>m" (Citations omitted)): Bright lmpmal Ltd. \ RT

201:.?] PERSO.VAL JURISDICTION AND THE hVTER/\'1!7' 33

services- frequently arise from communications or transactions

MeJ1aSoh.1llO.,~. .R.O. :-=o. 1.11-1:'··935-LO-TRJ, :.?012 WL 1831536, at •t (E.D. Va :-1ay IS, ~0121 (findmg personal JU:isdiction based on acri\1t:cs of adult com.mt \\ebs1h:); <;unace Preparation Tcchs. '· J:unaco Indus. LLC, :-Jo. 1:11-CV-1978, 2012 \\il 1192068, a1 •J. •4, M.D. P;:. Apr. 10. 2012) (tinding no pc~Wna! juri~iction): Piano Wellness. LLC v. W1lhanh. No. 11-1601 (NLH) (Al\fD), 2011 WL 67:!2520. nt • 1. •5-6 (D.:--:.J Dec. 2!. 2011): ClcarPrJ~tic.:. Ll.C v. Nimble. LLC, R19 F. Supp. 2d 892. 893. 896 (F..O. \1o. 20 11 ) (finding no p~rsona1 jurisd1Cllon, smcc "[t]hc viewer [of the wcbslle] can , .. ~change information with Nimble, but cannot make purcha~e~. >hare files or perform business with :-limb1e"); Original Creations. Inc. v. Ready AJn., ln~ .. lU6 I· Supp. 2d ill, 712-IJ (">.D. Ill. 2011) (finding personal jurisdiction. smc~ "[ ifci-Gear opernt~s o website thnt Utinots rcstdcnts cnn ncccss and thtough which Ulmois n:stdl!llts can purehnse the allegediy infringing prcxh.:cll.'') In Smfoc£' Preparation Tedmolo.~te.r. t.hc coun c:xplain~'\1 t.h:u:

[fjir.;t. "something more" than <timply h:l\ing a wcbs11e accessible to mdi\1duah m the forum >llltc mUSI be shov.n. Something more can be established if a plamu IT cnn show 3 dcfend:mt hed "non-imernet contact< (v.ith the fo!Ut:l smte). adv.:rus[ed] m local pubhcations. (or bad] busines.~ records of :;ales m the SUite ... A website that h:ss only infonnation and 11 generic conJ.act infornuuon mput form falls at the pas3ive end of the Zippo scale .... fF]or web site:> in the ·•interactive" category. it muSl be sho\\11 "n web ~ttc IIU'gcts a particular remote Jurisdtction."

Smfar<' Pn•paration Techs .. 2012 \Vl 1192068, nt •4 (alterations in original) (citatiom, omitted). In Plano Wt·llness. the coun f01md that:

[tjo the cxtem Pl3!ntifi' bnses jurisd1ction on Defendant's op.:muon of n website. th.: Court finds that such conduct does not provtdc the Court \\~th personal junsdtction over Defendant. . [T]he "'-.:bsite is not interactive .. >:or is there any C\ idence that :"\cw Jerse} indi"1duals have \iolled Defendant's website.

Pr,too U"~llness. 2011 WL 67:15~0. at •s.o . .>. .'><'< e.g .. O.:cr Consumer ?rods, Inc. \ Lm!e. r\o. 65~3 ':!0!1. 2012 WL 5!!98052. t!t

• 5 (~ Y Sup. C1. >:o'. 15. :o i2) ·-~ to CPLR 302(s)(' ), :he Coun has alr.:ady ruled that th.: po.ting <>f the def:un:uory reporu on th.: web:;ue doc~ Dot constinue "tr.lllsacung bu.sincss · m :-=.:.,. York."): D<.'Cr Consumer Pnxi.~ .• Inc. \. Ltnle. 918 N.Y.S.2d 767. 771, 778 (Sup. Ct :!0!2) ( .. [Tihcrc 1) no indication that Little's internet postmgs on these wehlstte~. wh1ch nre merely acccsstble to anyon~~m New York and in t.he entire world -were expr-essly J.argetcd at anyone in 1\cw York." (altcrotion ommed)); Gnry Null & Al>socs., Inc. v. Phillips. 906 N. Y.S.2d 449. 4.52 (Sup. C't. 2010) C"Thc case at bar involves developing issues ofNew York long-nrntjurisdiction in a ddamation nction bal><.:d on statement$ appearing on an imernct website'') Relying on Be.~r fun l.tnt..s. Inc ,. Walker. 490 F.3d 239 (2d C'ir. 2007). the ,\'ull court found th:u "'(tJhe nnturc of [!Xfcndant"s] commcnlS on h~ personal website d~ not suggest Wl they were sp..-cificnJ!y targeted to :-."cw York viewers. as opposed ton nationwide audience." Sull. 906 1\.Y.S.:!d st 454 (citing B"'' Van Lmes. 490 F.3d at :!53).

4. Su. t-.g.. Enderby '· Secrch Maroma Beach Riviera Car.cun. 1'<>. 10-CV-1015 (JHH(WOW). 20!1 \\1. 601022~. at •1 -2. •1~ (E.OS.Y Dec. I. 2011) (finding no jwi-.dictitm in action mvolving a slip and fnll acctdent a1 Mexican hotel) (alternuons in ongmall (cuauons omitted)): Grimaldi v. Guinn. 895 N.Y.S.2d 156, 158, 166-67 (App. Div 2010) (finding pe.-c;onal Jurisdiction in case mvol\'ing a '1. Y resident purchasing over the Internet "a dntage Chevrolet ·em~'-rnm· manifold and carburetor assembly ... from Rick's Fnst Genemuon Cnmaro. located in \thcns, Georgia" even though t.he website was found to be passtvc m nature); 1\.nloycva , .. Apple V:1canons. 866 N.Y.S.2d 488. ~89. 493 (Civ. Ct. 2008) (finding personal juri:.diction over a )1:~.,, kn~cy·b~sed tour operator, m n case invol•ing an advenisemenL through an inteructivc w"bsitc. of 11 Dominican Republic resort as ba\lng "\\ hitc sandy beaches, crysml cle:~r water. fresh ti'h :md a ~upcrb int.;matio:u~l cuisine[.)" but in fact "the watCTS were murky. the be.1ch was swarming with insects. th~ hotel room'l wen: mfeMcd \\1th bed bugs. and th~ rcstaurnm·, food mnde (p!ntnllfl) til with intcstirull poisoning"). In Endaby. the coun explaineJ that:

HOFSTRA U W REVIEW [Voi.4U!

conducted over the Internet. The increasing use of the Internet for the transaction of business. especially invohing the marketing and sale of goods and services, has raised important issues regarding the assertion of personal jurisdiction over foreign companies. This Idea discusses the assertion of personal jurisdiction within the context of the marketing and sale of travel services over the Internet.

A. Consumer Use (~(the internet

Consumer use of the Internet to make travel an·angements has risen dramatically in recent years. While consumers remain cautious about the reliability of information, the prospect ofhidden fees, and insecure credit card transactions, travel shopping on the web is increasing, particularly as travel suppliers. for example, hotels and air carriers and travel sellers, including Cheap Tickets, Expedia, One Travel. Tra,·elocity, TravclNow. and Orbitz. offer exclusive fares on their own websitcs with twenty-four hour accessibility. Retailers continue to develop creative \vays to sell travel services by use of the Internet. for example, Priceline and Travelociry's '·last-minute'' travel packages.''5

B. The "Solicitation-Plus" DocErine

If a foreign travel supplier, for example, a hotel or an air carrier. conducts business through an agent, 6 a wholly ov. ned subsidiary,~

["]hen $Oiicitation in.-olvcs :1 websit.:, "the fnct that a fol'\:lgn corponuion b.os o website nc.;esstble to New York is tnsufticient to confer jurisdicllon under C.P.L.R. § 301." A ~.:ourt must "e.'(amine th~ natun· and quality of the uctivity" on the website, which may range from "passive wcbsites that display but do not pcmll! an exchange of infonnation" to "interactive (website<:]. which pcnntt the exchange of mfonnation between the defendant and (website] viewers." to "cases in which the defendant clearly does business over the internet ...

F.nd,,rby. :!Oil WL 6010224, :u *l:! talterotioos m ongmal) (cll:uion.~ omtttcd). 5. See PRtCf.Lil'r., http:. 1www.pricclme.com,promtvl~suninutl!l (lO!st 1'i~itcd Feb. 7. :!0 13):

TK.\\'l-.'l.Oem·, http: 1\'Ww.r:ravelocity.comrrrnvcl-D~llls (lnq ,;sited Feb. 7. 2013). 6. Sl!e, e.g .. Bro"n '·Grand Hotel Eden, "lo. 00 Ci1 73.o6{"lRB). 2003 WL 21-496756. at •5

(S.D.:-.' Y. June 30. 2003) ("[A] hotel is subject to the general Jwisd!cuon of the New York couns . [where] iuU confinruuion powers [have been grnntcd]to their ;\ew Yori agents .... "); In rt' Skt Tram Fire in Kaprun, Austritl on November II. ::!000. 230 F. Supp. 2d 376.384 (S.DS.Y. ::00::!) (!inding thai the pres.:nce of a o;ubsidi:!.fy in the forum v.'3S '<llfficicnt I() confer general Juri:>dkuon over the foreign pMent); Cummin~ v. Ch!b Medit.:rra.nec, S.A.. '-o. OIC6455, :!00:! \\'L 13"91:!l:l. 31 •2. •s (N.D. nJ. June 25. :!00:!) (findmg solicitation through truvel agen~ in the torum ;;uffictcnt b:!sis for j:msdicuon over principal); S:lnl.."ar:ln v. Club \lediterrancc. S.A.. "lo. 97 C11' ~3l3(RPP). 1998 WL 433i80, at •4 (S.D.!\. Y. July 31. 199S}(~Oefendants' acuvitie.s through their agents al<a suffice to shO\• that they have cstablisho..'CI the n:quisttc contact.s "nb Ne" York .•.. "): Pa1ia v. Ctub Med. Inc .. l'o. CIVA3:9"'C~08 (AW'O, !998 WL :!29912. at •3-4 (D l onn. \lar 30. 1998) (finding c;olicttation through travel agents m the forum by 11gcm ~uffictcnt b..tsis for jurisdlcrion over principal); Catalano v. BRJ, Inc., 724 F. Supp. 1580, 1582-83 CE.D. Mich.

:ot~J PERS0.\:4l.Jl.!RJSD!CTIO.V A.VD TilE !ST£RSI:T 35

a parent corporation,~ or joint venturer,9 or maintains an office with staff. a bank account. and a local telephone number, tht:n the assertion of personal jurisdiction would, generally, be appropriate. ln the absence of such indicia of physical presence in the forum, however, the assertion of personal jurisdiction is more problematic. For example, a foreign travel supplier or travel seller rna) conduct business through an independent contracmr. '0 travel agent. 1 tour operator, 11 or the Internet. Under these

19!i9) (finding thst ;\olichig;m had pensOIUII jurisdiction over Las Vegas hotel based upon conducung ou.>incss through an agent ,,,th offic~ tn Michigan)

7 s~~- e.g. :>.kier '· St;;~ lnt'l Hotel.,. Ltd., 288 F.3d 1264. 1272-7~. 1276 lith C1t. 2002) (tindmp Jlnisdiction over foreign parent corporatton based upon activities ofsubsHliary corporatiom tn th.: forum); Conlc;· v MLT. Inc .. No. 11-11205.2012 WL 1893509. nt•t. •3-4 (b.D. Mich. May 2J. ~01 ~) (fmding juri,dicrion over pacem ofa Mextcan borel): Hersey v. Lonrho, lnr .. 807 A.2d 1009. 1013. IOJo ICoM :\pp. Ct. 2002) (fmding no JUrisdiction over parent hotel ~sed cpor. .olknat:on of ~ub~diary :n the fon:m); Lom,·ersaJ C:uibbeen Estnblishmcm v. Bllrd. 543 So. 2d 4.:'!

.;.;7-lt¢ (Fla. Dt~t. Ct App. 19891 (fmding jurisdtcnon based upon acrivtries of subsidiary corporation~ m the tomm); Taca lnt'l Airlines, S.A. v. Rolls-Royce of Eng., Ltd .. 204 N.E.2d 329. 329-31 ('\.Y. 1965) In Conlf!J.·. tb~ court did not find jurisdiction where a gue.>t nt a hot.:! m MC:l\JCI

wa,. scriou-;ly tniured v;h~ one of the mpport pob of the hammock upon witich he was b}ing broke. caustng him to fall and sufter serious head injuries[,] .. _ frnctur(ing) his skull and was subsequently airlifted from Cozumel. Mexico to Bro-..'afd County. Florida where he underwent emergency <rurgery . ... The Sixth Circuit hns adopted an niter-ego theory of pcrsotul Jurisdicuon. This theory provicl~ that a non-resident p:lrC!lt corporar!on i~ dmen:tble to ~w1 in the forum state ifth..- parent comp:my l'Xerb so much comrol over the ~ub,idiary th:tt the two do not exist as separate entiues but ore one: and

the same for purposes of juri.~dtcllon .... [The] factors to detcnninc whether the alter­ego theory of p~rsonal junsdiction eppli~ [arej: (I) sharing the ~arne employee> and curpomte officers: (2) engaging m the same busmess enterprise: (3) having the sam~ addre,._, and phone line,; (.!) u.~ing the same llSSCts; {5) completmg the same Job~. (6) not "'.intaming M."P:mue books. ox 1\!tums and linancial st<~tcments; and(") acrung control O\Cr the daily afTatrs of another corporation.

Cnnlc1·, 20L! WL 1893509, nt *1. • 3-4 (internal quotuuon marks omincd). S. S<?.: t.g.. mtennor '· Walt Di~ncy Co., :!50 F Supp. 2d 116. 119-120 !l. DS.Y. 2003)

lfimhng the presence of Walt Disn.:yCompa..'ly in "ew Yorl; insu.ffie1ent to impose juri K!tction over ,ub,idi31) theme p3rl.: m Florida): DorfllU!n v. Mamon [nt'l Hotels, Inc. '{o. 99 CIV 10496(CSH). 1002 \\.1. 14363. at "3, "II (S.D.:'ol Y. Jan 3. 2002) (finding jurisdiction over a Hungnnan elevator company. on the ba~r- thnt it is a mere dcpnnment of a U.S. elevator company): Wcintrnub v. \Volt Disnc} World Co .. 1\:!'i F Supp. -,,7, -20-:!1 (E.D Pa. 1993) (fmding Pennsylvarua jurisdictioo ow~ Flonda resort. Walt Dime) World. based upon connectioos of parent corpor:~tton Walt Di<n~y

Co. t.o P..!lmsylv:mt:~l: Gnll '· Walt Disney Co .. 683 f Supp. 66. 69 (S.D.X.Y 19R!l) ("There is notlung m the record which sugge.,t~ tbat Disney Co. nets as agent for Dtsney World Co .. o r th:u Disnc} World Co. 1s rncrcl} a deparuncnt of Disney Co. Accordingly. the presence of the p:wnl company in :-lew York does not confer JUn>dictfon over. _ Disney World Co.").

9 . See. ~.g .. /Jor;mnn. 2002 WI 14363. at •3. * II (imolvmg JOWl venture between Hung;ui::-'1 and Umted States elevator companies).

10. See. e.g .. Gdfand v. Tanner Motor Tours, Ltd., 385 F.2d 1!6. 119, 121 !2d Cir. 1967)· Gu1lc v. Sen Island Co .. 66 N.Y.S.2d 467.468 (Sup. Ct. 19,.6). ajf'd. 71 N.Y.S .2d 911 (App. Div 1947).

II .Yl'. t>g . \ffierbaeh '·Cunard Line. Ltd., 14 F Supp. 2d 1260. 126:! (D. Wyo. 1998): Pcr.ia. 1998 WL :!29912, at "3-l (finding <olicit:ttion through tra\e) ngcnrs in the forum by agent

HOFSTRA !A W REVIEW [\'ol. 41:31

circumstances, ~.Y. courts have found personal jurisdiction if there was activl.! solicitarion of businc ·s plus ··some financial or commercial deahngs in 1\cw York or (the foreign company] holds itself out as operating in ~cw York·'P andlor contract fomlation occurs in New York.'· This concept. known as the ··solicitation-plus·· doctrine. is still follov .. ed, with some exceptions, 1( by many U.S. courts.'b

~uflicrcnt busis for jurisdiction over pnncrpal): Romero v. Aerolincil~ Argentina~. 834 F. Supp. 673. !>711 (!).N.J. 199J): Savoleo 1·. Couples Hotel, 524 ~.Y.S.2d 52,52 (App.Drv 1988).

P Sa <'.g .. Wilson v. Humpb.rcy10 (CIIymnn) Lt.d., 916 F.2d 1239. 1.1-11 (7th Crr. 1990): Hugh~.-, 1 Cabanas del Cmbe Hotel. 74J £·. Supp 788. 791 (E.D. Mich. 1990).

l.l. lmermor, 250 F. Supp. :!d :tl I 19.

t.: S<·e. e.~ .. Ora/.i v. Htiton Hotel' Corp .• :-;o. 09-cv-05959 . .1010 ~'L -175 I 7:!!1, at •.! (E. D. P11. S<>v. :!:!. :!0 10). In Ora::i. the coun C'\pl:tincd thlw

?l:unnfis' agency cl:t:ms rest prirn:ip:dly on the alleg:nion thai Allen Stac~ ha< authorizl::d Hilton 10 make bindini ~m·atiolb on tl\ beh3lf. They rely on a ~l'Ti<:s of hotel rc,~·rv:uion S<."l"Vlte C3SCS applying '=c"' York Ia"'· v.l!erein the m-!<ta:e rcs..-f'\auon service's uuthorit)' to make and confum r•"<:rvations "'ithout consulting the: non-resrdl"!lt dd".:nd:mt that is. th<.: abi lty to bind th~ dcfend:mt was a dctcmnnath·e taetor m the eouns· linding of agency. C'ou~ m this Circun likewise appear to ploce w~rght un the agent's autbori!). or lack thereof. to commit the non-resident to a reservation .... ]T]his C'oun ngrec~ that where n foruw->tatc resc:rvation service has the power to no I only make n.-.o.:r~arions on behalf of a non-resident defendant but also to c:onf1rrn thcm\\ithout need tor funh;:r authonz:mon from the defo:ndnm. the rest:nanon .;erv·tcc .Jets a~ non­rc'ld~m·, (i;_!Cl\l. Such n relaUQn<hip .ati~tic:-. the: tmditional element' of agency.

!cl at •.; 1 foomote. ommee ). 15. 5t·· ·.g. Wi!son ''· Hump11r~'5 r\a\'11tanJ Ltd., 916 F.2d at 1:2.!-l (finding ad\.:msmg and

co:n;~.-t, 1111h .ocal t~ operators sufticrent for JUnsdictton): 0~< v. Club Mcdncrranec. S.A.. ~" OICM-'5. ::001 \\'L !3791::!!. a: •J.-5 (:-:.D. Ill. June ~5. :!002) (finding <olicitation throul!h ua\el ago:nlli m the foruo sufficient ba.o;~' for JUri<oclaction); Edwards \'. Radventum.. Inc .. '64 F. S•·:'P 1d 190, 195 (0. ~tass. 2()(11, (linding solicitation ~ufficient basis for jurisdrt"tioo); Sigros v. \\'~It I>isncy \\'or!d Co .. 129 F Supp. 2d 56. 1'>4·65 (D. ~1ass. 2001) (finding adwrtisint: >ufficient basts lor juri<diction); Smf:trowrcz v. Gottcrup. 68 F. Supp. 2d 38, -11-42 (0. \1a..s. 1999) (cxplnming that Mas~ehu~ctto. may ha\e juri!>diction over Cnymnn Island diving con1p~n} if a si!fni !icnnt amount ofbusin.::s• was done in the t;nued States): MaUon v. Walt Drsney World Co .• 42 F. Supp. 2d 143. 144-45 (D. Conn. 1998) (expl~1ning that continuous and extensive adverttsing m the torum, wtthout contract formt~tion. is suflicieot to establish jurisdiction owr forergn reson); San.knmn , .• Club \iediterranee, S.A .. l"o. 97 Ci\ 8318(R.PP). 1998 \\.1.4337/lO. nt •3-4 IS.D.~.Y. July 11. !<)<)!<) (finding so!Jcitation through tra\el agen:s in the forum sufficio:nt basis for jun..Jiction); P,n:z.a, 1998 WI. :!29912. at •3-4 (finding solicnation through tra,o:l n~o:enr,. in the forum sufficie:n basis !or junsdicuon '· R:tficry v Blake·~ \\lldemess Outpost Camps. 950 F Supp. 196. 19S-9Q (E. D. ~licll. I C)<)~) (findi:lg ;..dvenbing sufficient for jl!mweuon): 'lo.,.,ak' Tak llo·., lnv l.td .. 899 F. Supp. 25. 31tD Mas>. 1995); Begley'· :"vf~o Ba~ Camp ... lnc .. l!50 F. Supp. 172. 174· "5 (F.. D."\. Y. 199.:) (finding JUri.,diclion ba~ed upon newspaper ads and contact 1:1 New Yort Cuy): W.:mtrnub v. Wah Disney World Co .. 825 F. Supp. 717. i20-2l (E.D. Pa. 199J) (finding tM! advcnrsm~. ~tufiing, and customer rclnuons actrvrucs sufficient to support JUri~drctinn ): K~rvin v Rl·d Rrv..:r Ski ATe<l. Inc .. 711 F. Supp. 13!13. 1387-88. 1391-92 (E.O. Tex. 19ll9) llinding ,oJicituuon of business sufficient for JUrisdiction); Gavigan v. Walt Oisno:y World, In~ .. I,..U, 1'. Supp. 7Xti, 7l!tl. - 90 (E.D. Pa. 1986) (findingJurisdicuon based upon ongoing promotionalncllli!lc;. m the tonnn): St~won '. Alr Jamajca llolding> Ltd .. 1\o. CV 990589438. 2000 WL 6~'1 1"4. at •6 (C,mn. Supt.'T. Ct May~- :!0001 (finding no jun~iction ''ncrc pl!lmnff fat led to pro".: ~ultcuatio:t of

bu~me" "1 Cunr.I!Ctkm '·

2012] PERSO.\: lL JI.JRJSVICT/O.V .•L'VD THE fNTJ::RNHT 31

16. S..•i.", e.g., R:linlxm £ra,cl Sen .. In, ' · H1lton Hotcls Corp .. l!'J6 F 2d !~.U. : .:W (l Oth l1r. : 'IQ\l 1 f!r.Jmg Jl!Tisdicuon bas.:d upon sol :c:CIUon ..ad coz:trect fomuuon m ~he forum): ln<krb~ ' Sl!\:reh :'>l:!roma Bc.~ch R1viero1 (.arcun, l\o. 10-C\'-iOI:' (JF!l)(WDW 1011 \\1 . t•OlO.::~.:. at •12-!~ (E.D:'\.Y. O.:c:. I . ~Ol l. Ruady' \\'ilmo; :'>-1ountam. lr.c ~o 10 C 072!9.

20! l WI. 35s+;!K. ~: • 3 (~.D. Ill Aug 1.2 . .20 I); Brown' · Grnnd H01cl EdL'll. J\.'l. 00 Civ. 73-lt'I'<RBl. 200~ \\'L 21496756. at "3 ($ D.'N.Y JUI1c 30. 2003 ): P.:an;oo v. Whut> Ski Co .. ln.: .. .2~1\ I· Supp Jd -os. 709 (E. D. \a 2002) (linding 'olicn:uion through &lverusmg and lntcmL'! m the fc•mm in~ufiicient to establi~h jurisdicuon in the absence of a connection bcmecn ad\'crtising and the IOJUI)' ~usmincd): Ciarcia '·Venetian Rc5ort Hotel Casino, No. 01 CIV 4245(R0). 2002 WL 265160. Jt "I (S.D.::-I.Y. Feb. 25. 20021 ("[M]cn: solicitlltion by mailmg~ nnd tdc:phon.: colls does not confer ~'l'Sonal Ju:riscliction .. "): Muo;c: v Vagabond Inn Hotel, "11• 01-(\'.JOI!{FBl .2002 \\I 15~03. nt ·~ (E.D.N.Y Jan. 7, 2002) (tinding :;o!iciuuion of busines. through toll-rh:c tdql• <~ne number insuffiCient tor ~>c::-tion of jurisd1cnon); Dorfinan , .. Mamou lnt ' I l!oteb. Inc .• ''' •N \1\' 10496(C'SH '· 2002 \\'L. 1·1311.\ 12, •15 (S.D.!'. Y Jan .. < • .200.:! ) (finJmg no JUn~icuon O\'C: \lnrriott Hon:l \11 BadJ~'l>t. Hungary <M' ~larriou lmc:mational llnteb, Inc b:l~ upon -olic!l:mon without contr:lCI form!l!:on Ullhc forum, when: re--.-n-ation' contnlct~ wen! entered mil' m -.:ebi"3Sku at v.vr!dv.id~ n; .• mo.tu>n' system): Dresden v. Tre:lSill'c Island, LLC .. ~o. 00 C c•I S< • .:001 WI 1002518. :n •4-6 t:-:.o. Ill. Aug. 31. 2001)(finding ind;.rcct advcru.smg in !he forum insutiic1ent con Lac; for Jurisdiction): Hio~ch '. Outngger Hotels Haw .. I S.l F. Supp. 2J 209. 212 13 IE.D.\i.Y 2001) tfmding thai the placement of an ad in a publication i~ insufficient for n~s;:rtwn of _1uri:-drction), lnzillo \. Com'l Plaza. l\·o. 3:99-C\ -0100. :woo \\-1.. 17.521:!1. Jl •3 (M.D. Pa. 1\ov. 27, 2000) llinding advcnising and selhng hotel accommodations through trnvd ng1:11ts und toll-free number in.ufticicnt basis for jurisdrcuon): Andrc1 \. DHC Hotels & Resorts. Inc .. Xo. 99 Ctv. 2555tTPGl. 2000 WI.. 3437 73. at •.; (S.D -.:.Y. Mar. 31. 2000) (finding m~.:rc: M>hCrtJtion ofbusines.' nL,utlick-nt lor jurisdiction), Feldm3n ' S1lvcrle:lf ResoltS. Inc .. l-.o. 9li-C\ -4566. 2000 \\1. 15541~30, ~t •J (E.DS.Y Ja1L 31. 2000) (c~plaining that solicnauon. "rcgardlc:,, of ho\\ sub<t3nual(.! t> in:-"Ufficicnt'' to establish jurisdiction (internal quotm:JOn nurk.., ommcd 1); Poteau'· \\at: Dhney World Co., '>:o. (I\' -\ 99..('\'-l\43. I 'JqQ WL 619640. at •; (r..D. Pu. 1\ug. 16. 1099) (lind:ng <ohcita:ion oibu5mcs.> through travel a~ts insufficic::t: to CSlnbh.>h JUri:;dictionl: $\<1n<!dl '· Hu. E. (\>!lSI Ry. Co .. .::;~ Supp ::!d 3:?0, 3~::!-:!3 !S.D.l\.Y. 1999) (boldml! !hat railroad ticket 'a'"' by tr.l\el agents a:1d c:mployc,·s 111 \Cplmtcl) O\\liCd train statrOJh imullicient 10 estabh~ JUns<l:<·nun ); Romero'· Holiday Inn. :-\o. Civ . .\. 9!1 :!192. 1998\\1 96\11>-l. at •2-J (E.D. Pa Dec. 15. I '19111 t finding advertising through frunchi~or's Worldwidt' Directory and milkinl! ro:scn'llnons lhr<>UF;h toll-tr..-e phone number msuttictcnt ror jurisdiction); .4/Jlcrbarh, 14 r. Supp. 2d nt 12o6 C lindm~; nntionalndvertL<mg and selling tour;. through tra' el agents insufficicm contact for personal juri .;diction}: Rosich v. Circu:; & C"trcu:; Enter:;., Inc. J F. Supp. 2d J.tS. 149 (D. P.R. 1998) (finding mlvcm,mg through travel guide and brochures msuffictent contact); Denham v. Samp,on ln•~ .. QQ-

Supp. !WI. 8.:3 (E.D. Mich. 1998) (finding sending brochu:res to forum and r..-• ..-r.·mg room> at ~ute" insutlici1:11t con bet to cstabh • .Jt JUrt~dictlon l: Clark '. Cit) of St. Augustme. Fin .. 'lTl F. Supp. 541. 544 (D. \Ia.<;;;. 1997) (tind:n;,l adv~"rtising in forum msufficient conta.:t): WcmbL'fg ' Club \BC Tours. Inc .. 1'\o. 96 CV :;;29. 1997 \\1 , :no.;:, at •3 (E.D.I\) hn. 21. 1997) (finding the sule o: a ucke< insufficient to coofcr junsdiction): l..un:l '· Cor:lJl!lllia Panamen3 de Av1acion. SA, 851 F Supp. 8~6. 829. ~34 (S.D rc~ . 1994) tfinding solicttnuon of busmc,s .md toll-free telephone numb.!r msuffictent to C>tahh~h JUri-diction); Laoe '. Vacation~ Chartcl'. l.td. "50 F. Supp I ~0. 124, 126 (S.D.:-<. Y. 1990) (lindrng advertisement> and roU-frcc teleplwne number tru.ufficicnt contact to confer jurisdiction): Srlk Air (Sing.) Pvt.. Ltd. v. Superior Court. No. BI599M. 2003 WL 40818, nt •3 (Cnl. Ct. App. Jan. 6, 2003) ("It is true thnt case ltll\ holds jurisdicuon cannot be assumed over n lbreign C(>rpormion b:1sed solely upon sales b) irtt.lcp.mdent .• un·c~clusive agent~."): H..-n.cy ' Lonrho, Inc .• S07 A 2d 1009. 1013-15 (Conn. App. Ct. 2002): Stein v. Rio Pari~min:t Lodge. 69' N.l::.2d 518, 522-:!4 (Ill. App. CL 199S) (finding trunsu~tion of biL,tno.'ss through t.rn\el agcm. msufficicnt conl!lct): K!l<hl3 v. Cun3J'd Line>. Ltd .. 5~9 !\.f .2d !102. SIO 1111 \pp. Ct. 1<19:!) !findmg solicuauon ofbu~mcss in the forum msunicu:nt conWc!l. Saltg '· Okcn10 \hmtain. 61:! :'1. Y.S.~d t:H3. 6-!4 (,\pp. 01\. 1994) (finding m::re >oh.:itnuon msa!Trc1.:nt):

HOFSTRA l.AW REI'IEW (Vol. -11:31

ll. A TR.A.'\SACTIO:-:Al A:-:AL YSIS OF TNTI::R'\ET COMMERCF

Several courts have recently addressed the extent to which an Internet website confl.!rs personal jurisdiction in the fontm in which the consumer's computer is located.1

; A useful jurisdictional analysis appears in Zippo Manufacturing Co. v. Zippo Dot Com. Inc .. '~ a trademark infringement action brought by the manufacturer of ·'Zippo'' lighters against a computer news service using the lntemct domain name of "zippo.com.'' 1

q In Zippo. the defcndanr was a California-based news scrv1ce \\ith '·an interactive Web site through which it exchanges information \\ ith Pennsylvania residents in hopes of using that information for commercial gain latcr.'-2° The defendant had entered into news service contracts "with 3,000 [Pennsylvania residents] and ... seven contracts with Internet access providers to furnish its sen ices to their customer~ in Pennsylvania.'':' Since it was the

M.G.M. G!llllJ f!ote:, Inc: . , ., Castro. !> S.W.1d 403. 410 (Te~ App. 1999) (exp13ining r.hl! "soh~n:l!ion·p•us" doetnne followed in Texas).

In Ruddy. the coun explained thnt: Wilmot'., website pcmtits anyone, not just Illinois rcstdents, willing to lr3v~l to Wi<consin to purcba.~e ~.l>On p:u..¢-;. hft uek.:t:.. J.!ift c.:ni6cat~ nnd sign up for rental>. The o:1ly poruon of the website that ts directed towards lllinob resident.\ is a page tllat provid•'l- links to Google !\.1aps directions to \\ ilmot from four fllinoi' ctncs. . Provtding din:cnons to the sld resort from illinois is simply a component of advt>rtmng .. (\lutually all of defendant's comacb \llith Illinois involve the :.o!icitauon ofbusmes:;. lll:nois court.' coru.is:cntly I'C]eet m~ ~olicttation of busin~ a.. a ~b for the exe:x.:.c of gcncr:tl personal jurisdiction.

Ruddy, 2011 WI 3584411!. at •3. (N.D. Ill. Aug. 12. 2011). The Southern DistriCI of~cw Yor~ in Brown also rejected mere solicitntion ns 3 basts for jurisdiction because:

there LS well-<ievelopcd law addrc'-:lmg Jurisdtcuon o•-er forcagn hotel-. If a ~ew York ~gent po .. scsses independent authonty to make and confinn rcser\':mons on behalf ot 3 hotd, the hotel i.~ constdered present ... , m~e!y solicitmg bustncss from prospective customers in New York does not Sttf'fice to establish jurisdiction

Brmw. 2003 WL ::!1496-56. at•~. l-. S..·, <' J: .. !Jro>.-r.. Z003 \\1. ~ 1496 756. at •4-5: Bro1m, ::: 1-l F. Supp. 2d 111 339: Amsgu '.

lmpc'ial Palac.:. Inc., 252 I' Supp. 2d Jl)O. 3~4-87 (S.D. Tex. 2003). Snyder v. Dolphin Encounters l.td .. 135 F. Supp. 2d 433. 44041 (E.D. Pa. 2002): Pearson. 22R F. Supp. 2d nt 709; hnundo \. P.xono Pabce. Inc .. 'lo 0 1 807(WGB). 2002 \\1. ~1006145. at •4 (D.~J. Aug. 1.!, 20021: In re Skt Tm:n hn: m Knprun. ,\~tria on Xo,·emt= II. 2000. 230 F Supp. 2d 391 ..100 (S.O'\'.Y. ~00~): Smttll \ Ba.in Park llotel Inc .• 178 F. Supp :!d 1225. 1235 (N.D. Okla. 2001): Beil '· Imperial Palace Hotci!Cnsmo, Inc .. 200 F Supp. 2d I 082, I 087 ·8R ( I:.D. Mo. 200 I); Rodnguez v. Ctrcus Cin:u" Casinos. Inc .. No 00 Ci\. 6559{GEL). 2001 WL 212..;4, at •2.3 CS.DXY Jan. 9. 2001): D<:ck.:r v. Ctrcus CtrcUO> llmel • .J9 F Supp. 2d "43, ~-li-48 (0.'1. 1999). Romero. ,Qog \\'L

~o!Jb-. aJ 0 3. \\'cbcr ' Jolly Hotds. 9"7 F. Supp. 32i, 333 34 (DSJ 1997): Ccrv:mtc' v. Rampans. Inc .. 1\o. A09!1642, 2003 WL 257770, at*:! .J (Cnl. Ct. App. Feb. 7. 2003); Silk 4/r, 2003 WL -10818. at •3.

Ill. 95.2 F. Supp. 1119 (\\.D. P.J. 19971. ~'l. !d. at 1121. 20. ld at 1121. 1125. :!1. S('l' ul. at 1121, 1126. The court held:

PERSO."·:,n Jl'RJSDICTIOX A.\'D TifF. 1.\'TF.RXET 39

defendant·:; ··conscious choice to conduct business·· in Pennsylvania, the court asserted personal jurisdiction based upon the folJowing analysis:

At one end of the spectrum arc situations where a defendant clearly docs business O\·cr the Internet. If the defendant enters into contracts with resident.S of a foreign jurisdiction that involve the knowing and repeated transmission of computer files o\er the lmernet. personal JUnsdtcuon is proper. '\t the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible rousers in foreign jurisdictioru.. A passive Web site that does little more than make infonnation available to those who an.: interested in it is not grounds for the exercise (of] personal jurisdiction. The middle ground IS occupied by interacuve Web sites where a user can exchange information with the host computer. In these cases, the exerc1se of jurisdiction is determined by examining the level of intcractiviry and COD1!Jlcrcial nature ofthe exchange of information that occurs on the Web site.1:

Implicit in the Zippo analysis and those cases which have followed it is some form of continuous transaction of business. This is not to say, howc,·cr. that a single Internet transaction imohing the sale of goods or s~rviccs may not be sufficient to establish personal jurisdiction.=1

A. Burden of Proof

In addition. plaintiffs carry the burden of establishing, in detail, a level of Internet acti\ity sufficient to warrant the assertion of personal jurisdicuon. For example. the court in Matthews v. Ker.:ner International Ltd..2• a case involving a gue::.t's accident caused by an allegedly defective water slide. noted that:

[7tppo] DOl Com's Web ~lie contain[ed] information about the company, advcrttSi.'lllCnts and an appltc:.tion for tt• lr.temct news sen-ice .... A customer who want[~.-dJ to ,ubscribe . fillledl out an on-line applicnrion... l'llyment [\•as] made by credit card over the Internet or the: telC"lhon~. The applicattm [wast !hen JllOCe<Sc:d lll1d the su!J,rn'ber is assigned a password wbich penmt{ed] the subscn~ 10 view and 'or download Internet newsgroup mess:lges lh:u [were] ~tom.! on the Dcf.mdam', :.m·cr in Calitbmia.

!d. Ill !!11. /.2. ld nt 112.!. 1126 (ciwtions omiucd). 23 Cnmpare Hinners v. Robey, 336 S.W.3d 891. 901-02 (Ky. :?Oll) (holding a stnglc sa le of

n car over the Internet through an cBny tran.'>l!ction insuffictcnt to t."tabli;h personal junsdiction). n·uh Grimn!at v. Gcinn. 895 :-. Y.S.2d 156. ISS. 166-67 (App DIY. 2010) Cfmdmg that a :--1.1. resident .,..ho Uf!rL"-'<i \\1L'J a'\ Y I'C!>t<lcm to rebuild the ~ev. Yori;cr·, \'intage car m 1\.:\~ Jct'i.:y wns noneth.:l.:.- .,ubjectw New Yoo:'s long-annJUnSdkuon. -..here the 1-'J. resid.:m not onlyopcrotcJ a pa.~s:ve. non-mternct:ve websit.: on the lntemeL bu: :~cm·eJy put"ued and •olidted the plamtiffs busin;•ss m l"C\\ York by mC:Ills of phone calls. faxes. e-mail. and regular mail).

:!4. :--Jo. 1:1! CV 417.2011 WL 51::!2641 (1-:.D. Ohio Oct. 17,1011 ).

40 HOFSTRA Li II RJ::f7F.W [Vol. 4 1:31

whtlc some couns ha\'C exercised general jurisdiction on the basts of .. virtual stores" and other online activity approximating physical presence in the fontm state, Plaintiff presents only a blanket assertion that "Defendants:· collectively, do business through W\vw.atlantis.com, and fails to present facts concerning the nature. quality, and volume of activity through the site and its nexus to Ohio. Whtle the coun 1:.

sensiuve to the fact that Plaintiff seeh redress for his injuries 10 a convenient forum. Plumtiff must newrtheless present some facts from which the court can make a good-thith and well-reasoned decision conccmmg the issue of jurisdiction. ~s

And in J1lilson l'. RIU Hotels & Resorts (Riusa II, S.A.)/6 a hotel guest slipped and fell in a bathtub/shower injuring herself but failed to establish personal jurisdiction over the hotel although she booked the tour through a travel agency. Apple Vacation's, wcbsitc.27 The court noted that '·maintenance of a website which allows users to reserve accommodations at Dcfcnd."lnt's resortS docs not demonstrate that Riusa II [hotel] has had systematic and continuous contact with Pennsylvania. General jurisdiction requires more than a recognition that a nonresident corporation has an interactive web sitc."'28

B. Passi\·e Websites

lf the foreign company maintains an informational website accessible to the general public. but which cannot be used for making reservations then most.· but not all, ;o courts would find it unreasonable

25 ld ;ll *5-6 (~itations omitted). 26. i'<o. 10 7144. 201 I WL 324 1386 (E.D. Pa. July 29, 2011). 27 /tl Ut 0 1. *3. 28 /.1 m ·~ (internal quotation m:~rks omitted). 29. S<'<' r.JC .• GTE'-:.:"" 'vtedia Sen'S. l:!c. \". Scllsouth Co:-p., 199 F.3d 1343. 1.350 (D.C. Ctr.

~0001 (finding Y clio\\ Pl<g.:s W\:bsllc accessibtlny msuflict<!IIt for e.~cn:isc 01 long rum JUri.<diction): Soma Mcd. lnt"l v Standard Chartered Bank. 196 F.3d 1292, 1299 (lOth Cir 1999) (findtng no jurisdiction based on website that on ly provided information): Mmk v AAAA Dev. LLC. 190 F.3d 333, 33t>-37 t5th Cir. 1999) (finding no long ann JUrisdiction based upon printable mail-in order form. toll-free number, and e-mail address); Cybersell. Inc. v. Cybcrsell. Inc .. 130 F.3d 414.419-20 (9th Cir. 1997) (fmding no JUrisdiction ov<!r Defendant. which -conducted no commercial acti,ity "'""'"the Internet in AriLona All that !! did was po~t an essentially passi\"C: home pase on the web""\; P:ano \\"ellne<:s. LLC '· \\ illiams. :'\o. 11-1601 (1\LHXAMD), 2011 WI. 6722520. 3t "5-6 (D.N J. :)ec. ~1. 2011 ); Enderby v. Sccrcl!i '1.1:uoma Beach Riviera Cancun. No. 10-CV-1015 (JFB)(WDW), ~011 WL 60 10224. at •12-13 ([".D.N.Y. Dec. I, 201 1 ); ClearPractice, LLC v. Nimble, LLC, &19 F. Supp. ~d 892. R93. 896 (E.D Mo 201 I) ( finding no per<ioual jurisdiction in trude.mnrk infrinl!cmcnt cas.: bc:causc: ~ "'viewer [of the website) can exchange information uith "'imble. but c:mnot ntake purch3S<.-s, shll"C Iiles or perform bcsmess ""ith l"imble""): Robbin:,' Fhgh~'lar. Inc .. >lo. 2:09-CV­-35. ::!011 \\ L 61.!!9. at •3 (0. Utah. Ja.'l. -. 2011 I (findmg no pt:rwnal jurisdiction .. Amazon Tours, Inc.' \\et-A-Line Tour;. LLC, -:-=o. 3..()1.('\'-1433-R., 2002 WL 2~0895, at •3 (N.D. Tex Jan. 31. 2002) (describing a tour operntor"s website that "'provides infonnntion abo111 vnrious tour

2012] PERSOSAL JURISDICTION AND THE /NTERl•iET 41

paclroges oftered by the company[.) . . . a bulletin board that allows customers to post messages ... , n fishing repon .... land) a fonn to request a brochure .... ff a user wanLS further infonnation ... , he or she must contact the company ar its offices iu Georgia"): MJC-A World of Quality. Inc. v. Wishpets Co., Ltd .. 'lo. 00 C 6803. 2001 WL CJS7890. at *7 (N.D. m. Aug. 27, 2001) (findmg a rmssive \\cbsite and the s:tle of niJ1ety toys in~-uflic!ent ba'>is for jurisdiction); i\m. lnfo. Corp.\', Am. lnfomenics. Inc .• 139 F. Supp. 2d 696,698, 702-03 (D. Md. 2001) (involving a website where ·'[a] visitor may not enter into o comract. purchase goods or scrY!ccs, or transact business on the Web site"): First Fin. Res. v. First Fin. Res .. Corp., No. 00 C 3365, 2000 wt !693973. at •3 (1'--.D. UJ. No~. 8. 2000) ("[Wcbsnc] does not accept orders or request:. for iinancinl pltUJning services and does not provide any m::thod by which a customer could place an order or request for financml plnnning over the site. Further [Defendant] docs no\ enter intl) contracts on the site"); Lofton v. Turbine Design, Inc .. 100 F. Supp. 2d ~04. 410-11 (N.D. Miss. 2000) ("[T]he pnmary purpose of ll-tc v•cbsite is for advertismg. The website does not contain a price list for services. contract for engagement of SCf\·ices. or order form. It tS not suited for shopping or ordering online."); Roche\', Worldwide Medta, Inc .. 90 F. Supp. 2d 714, 718-19 (E.D. Va. 2000) (finding thot a ··pomographic web sit~: can only be characterized as ·passive'"); Nutrinon PhysiolO!,'Y Corp. v. Envi.ros Ltd., S7 F. Supp. 2d ~8. 654 {KD. Te.~ 2000) (holding that a pas,ive website docs not confer junsdicrion): Bailey v. Turbine ~sign, lnc., 86 F. Supp. 2d 790, 795-96 (W.D. Tenn. 2000) ("[T]herc is no indication whatsoever thnt TDf's website is anything other thnn wholly passive.''); JB Oxford Holdings. !nc. v. Net Tmde, lnc., 76 F. Supp. 2d 1363. 1366-67 (S.D. Flu. 1999) (holding that a website providing connections to lnrcmct. listing of national toll fi-<:e telephone: number, and a pending application to do business in Florida provided insufficient comacrs with Floridn to pennit exercise of personal junsdiction}: Molnlyckc Health Care AB v. Dumex Mt.xl. Surgical Prods. Ltd., 64 F. Supp. 2d 448. 452, 455 (E.D. Pa. 1999) (finding a passive website doe~ not confer jurisdiction); Broussard v. Deauville Hotel R<!SOrtS.. Tnc., ~o. CIV. A. 98-3157, 1999 WL 621527. at •2-3 ('E. D. La. Aug. 13. !999) (finding of no long arm Jurisdiction based upon passive website); Remick v. Matlfredy. 51 F. Supp. 2d 452, 458 (E. D. Pa. 1999) (invoking a passive website offering general mfonnmion and odvCIIlsing. whtch were insufficient contact with the forum); Mid City Bowling LMes & Sports Palace. Inc. v. lverercst, Inc., 35 F. Supp. 2d 507. 512 (E.D. L1. 1999) (finding no personal jurisdic.tion based upon a passive webs ite); ESAB Grp .. Inc. v. Ceolrictll, LLC. 3-l F. Supp. 2d 323, 327 (D.S.C. 1999) (holding that a web page which provides infonnation but requtrc~ customer to pine~ an order through a toll-free telephone number is insufficient for ass<lrtion of pcrsolllll junsdiction): Milletmium Enters. v. 'vlillcnnium Music, LP, 33 F. Supp. 2d 907. 920, 92~ (D. Or. I 'l99) (.:oncluding that personal jurisdiction doe.\ not exist where "dcfcndams jdo] notbutg more than publish an interactive Web sitc''l: Grutkowski v. Steamboat Lnkc Guides & Outfitters, Inc .. 1\o. Civ.i\. 98-!453. 1998 WL 96204:!, at *4-5 (E.D Pa. Dec. 28. 1998) (involving a websJte contaimng infonuarion. photographs, map, and e-mail connection wh:O're reservation~ could not be made oo the website): Am. Homecare Fcd'n, Inc. v. Paragon Scicntilk Corp., 27 F. Supp.2d 109. 114 (D. Conn. 1998) ("The Website does not list ... products which arc sold nor doe.~ it pro~idt nny process lor ordering . .. . l\o sales . . occur th rough the Website and till individual accessing the site cannot order .... It does not provide anyone with files to download, nor docs it link to anyou~ else's Website."): Edberg v. ~oogcn Corp .• 17 F. Supp. 2d 104, 114-15 (D. Conn. 1998) ("(T]bcre is no evidence that any user in Connecticut acccsse.d Neogen's Web site or purchased productS based upon the Web site ndvcniscmem ... . Internet users could not order products directly from U1e Web site. . . [1]1 required tbem 10 call nn ·soo· number in Michigan or write Ncogcn in Mi.chigan or K~'Dtucb.')'."); 1\.lnllinc.krodt Mcd., l.nc. v. Sonus Phann .. Inc .. 989 F. Supp. 265. 272 (D.D.C. 1998) (finding thm "[tjhe net of posting a message on an AOL electronic bullctm board which certain AOL subscribers may or may not choose to access'' is not sufficient forpcrsonaljurisd1ction"); SP Hotel Co .. L.P. v. Enert,ry ln\':; .• !nc .. 985 F. Supp. 1032. 1035-36 (D. Kan. 1997) ("Boto's ad\'crtisement m a trade publil'.ation appears on the 1mcm.:l. Bolo did nOt <:omract to seU Bn)' good.-. or services .. . o,·er the Internet site.'· (internal quotation maci:s omitted)); Hearst Corp.~. Goldberger, No. 96 Civ. 3620 IPKLXAJP). !997 WL 97097, ar 0 8(S.D.N.Y. Feb. 26. 1997) (involving uo lnlernc.t webs!tc with e-mail contact) : Bensusan Rest. Corp. v. King. 937 F.

/'l.R.\0\ II 11 R/Sfll< T/Ci\ t\/J /!It" 1\TER\I I II

p.1d:ng,..., <>!l<'r<'J h~ th,· .-u~p~rt), j ~ ru!l.:lln b.1.11"d thai .:1lluw,, <'li'H'nl~l"- Ill p<iSI m<"'llg•"· ~ li.J:;ng ""P•'I1 . ::ll•J ia l~1m11<> rt'l.jU<'SI :s bn><:huu: It' a u,_.r "~:II' lmtl1,•r mlorr.l~!!Ort h~ l't •h• mu-1 CO!!Ud lh~ Clllltph:J)' :.1 !I< off:.;,.., Ill (i~'\JTj;ID"I: \IJC·A \\\dd of

l,lualir'. In;,- \ \\t<hp~h l\' .. ! t.!.. '" 00 t" j,S(J,l , ,?()(II \\'1. 'l\" <;9(1, :11 •• t!'\ () Ill \!!!' 1-. ~Oil!) tliudm_~ J pa-.,\l" \\.:f\,11,· JnJ 1!11: ,Jf,• ul 11111<'1) ~~')' tChiltlkt<'nl h:N' ll•r JUn><kH .. nl: Am. Int .. t"mp ' .'\m. lnil•mctrl<''·'nc: N F "urp ~d 1•'~~~. 11<1~. 70~-cn cD \ltl . .:0011 (ln\l>hutg a \\Cb~ite wh~.!r..: .. (~JJ \l,itur rna) nol c:nter tl\tll \1 i.'tlnlf~•..:t, ('Htrcha''-' gt)4,~1 , Ill 'c" li.'t..·:.. or rran~a'-·l bthin~, •Ill th.: \\'.:h loit•·"); FiN Fm. lh·;. ' hr<r Fu• R ........ l o>rp • :'\u. 00 t" 1 lt.' . 20011 \\'1 Jh<H473, a: •; t'\ [),Ill :>.1>\' !'., .:•JIII.II ("1 \\d>S.I<'I J,,,., not it<-."f'l<liJ.:r- ur !<'<(U•"'" :or finatK"tal pl~tMU1_:! ~~nh:"' und '"h'~' ~u~t p.C\.i\.~1:: ~~) nh."lhod h) \\h.~h a t,:u:.t\JI;~C"r tou1d pb~i.!' an ,lrd-..~r or r.:quc~: lor rinan.:.al pl.uuunl' \1\<"f lhi." ,,t,·. h:nh,·r {O.·!c"fld:mt] do.."• nor 1:1111:1 IIIIi• .:ontr.u:ls on thl' •IIC'-). t.oft••n \ T.ut>m<" lj_,·if!n. Inc .. JI M!'" ;..llpp • .!d .:(4 . ..;to-ll ~~ n. \ll<s. 1tiiK11 l"'fTih.: prtll':t!) P'-''1'"'~ of th<' \\l.'r>ll,' IS ti•r aJ,,·ni'lng J'hc \\<:h•l:,- J,...,, nut .:unt:m• .t ('r:cc h;;t for 'l't\ ac~ ..... \!t.'ntr-Jd t~'r ... ·ng;.t:;:,"·m~:nl v;- ... .,:n l\. ;.'' .11 oHh·r l~mn. It ~~nul -.;mh.-d fiH ... h~'rpm,l.! ,lf tlrt.h::w,g t)nhn.:."i; Rt\l.'h~ I \\ .. rld.\ldc 1\l,'tJIJ. "'' •Ill r :\••PI' 2..! ~t.:. 7)!\ 1'1 II· I) \ 'a :!•IIJUI lfindmg tl!.ll a "p<•111•'!!f:<phh: 1\<M "'~ .:nn onl~ he ch.ll'<td<'fl/~d a> 'p.to'>l\~'"); "utnlll'll f'l')'iolu~) Corp. \ I 111 1r," I rJ. !<~ I· .;l,r" .:'d r,.;l;, o~-l I 1\ [) l "' ~~~KII lholdtng th;JI a 11·'"" 1: ""h'-!11.' <In,·, n .. r .:onter )Un, .. h::III'Jl' H.uk,.' lur!'<:n.: () ...... t:,:n. "" Sl·l· "crp ~.! "•l!J, -qs_.,.,, (\\ n 1~'111. ~IJIHII

l"'lllh~~..- 1• ,..., mdr<.tl on .. ,harso.:••-= rh:tt 11Jr, 11:h,:1"" :m~thwg otb .. r rh:~n \1 1t!lll~· pJ!·-1\C "):

JB lhibnl Hold:ng'. hr. ' :-\~1 l'r.1d~. lr. •.. ·r:o 1·. ~lipp ~d I :63. i '""·"· (..; l> ll.t J•l</4) (lwlt.!tn~ tlhll a llt:b•il:: pru\l<hng ,onnc..::rm>- t.>lr;:;'!ld. h~llnf! ofn..,llv:l!lltolllrcc rel.-rhone numlx'l wtd a J'l'Rdm.~ :lpphc::IIOO "' d I llet'l~<""' Ill rr.,nda JlfO\'hk<i m,llfliCICIH n>n~IS Wllh Florida to penmr ~~~r~~-~ of p.:rs;;or.,ll Jlln,.li<tinn 1. :'>lnln!) rk•· lkalth C:rr.: \B \ Dulll~\ M~'tl S•tr!-!"Jl Pr,>Js. Lid.

(14 I. Supp. ~d ~41\, -l'i:', .;.;~ tl n. !':!. 1 11'i'IJ (timlme J pa""'' l<CihiiL' Joe, 11<>1 •·•ntcr juri-.lic11un): Hwu,,~rJ \, DcaU\111<' H<>td R•·•nn,, ln.: .. -.:o.l'l\ .\ •JS •. lJ:'I. lll'l'l \VI. 1>~ 152~. :11 •:: . . > (f.D. L:l. Aug. 13. I•I•N) llinJrn<.? <1: 11<> !on~ DrtllJtln...JtCIWII h.c..t:J Up<lfiJ';l'>SI\l' \lt•!'>slleJ; F<'mit:l. ,. i\l~ntrcdy. S~ F. Supp. ~d -l5~. ~-\ (f P Pa 19'1•1) IIIIIUI\:Hg pl"t\.: "'1:>~11~ oitenrr~,;

t;~"tlcral mforma:1on an.J a.h :.-.ll•lnl!. wh:.:h \\err I!'Suffic:t:'t!l .:umact \\ llh l111: iurum). \htl C"ll} Il<mhn.: !..nne-.,\: :-pon' Pnlnc<". In::. 1. (\,•rcrc:-1. Inc. \5 I' S~;pp ~d •o-. 51:: (I .D. L .. . JQ<N)

1 li•:c!mll no p;.'T"C·u:tl JUn,dtnon "3'-'J ::pon 3 pa,,jH• \\cb,Jicl: E!' \B <l:p . Inc ' ( mllt.:UI. lll >4 I" Supp. 2d 1:.<. ~2i •Ll:O..l l'f\}01 tlwlding th;,t n \h:b r:•l!~ »hli'h pt<•ltJ.:, mformatu>n <Jttl r .. ·qlllf>.'' rusl!•:ncr ro ~~J~'c ;u ord.:r lhf('Ui!h a 11•11-tn·•· tdephonc numbe-r· j, ,,,,ultki<'P li•r "-"e11tnn <It' "''"''""l JUfl,diCI!Pn J: )l.lrllcnmum Fntcc,. \ MdlcnniU111 \IU>!C, I P. 1 \ r. Supp ~d IJ()' '120. Ql.J Ill Or. ~·N'l) '""ndudml' lh~t p.:r"··n~l jun"ltNJ<>n c;,,,,. nul .:\isr ~>h.:-r.: "<k•<•r><l. nl [•I•> ) n01hmg rnor~ th31l pub(j,h nn rnt.:r:~.:uve \ 1• cl:> MI<,.'J. (ir.n~O\\·,~i \ St.::11rrlx>:ll l :tl.c l.iuld .. ·s & Oullitlcr .... lnc _ :-<o (IV.\ 9li-l~q. )QCJ:-< \\'1. 'lr-.:().12 •• 11 •.: ~ (f- D l'a.!Xc. !S. J99l-) rrmohrn~

1 \\-.:b:-.~~ .. ~t'1fltttnt:1~ '!lfL"'nr::t~ion. j'h,~~~'i"h'~ n1:1p • .md e-m3il 1,.·on:1C'l.::Jon \\h.:n.· r"~ .. ::r.nuons u•uld nm t>e m:ulc- ••n the \\CJ:>,rr.:•; .\m. llum<'<'nr<: h:cfn Inc- 1 f'ola~:on s,·,cnnlic Curr .. ~· I· 'upp :J !09. I P If) ( oon 1'''-'1 t"H,· \\ clN:,· d,..:, no1 t.~· .. pr.>d:J<"l' 11l>1~h dT<' s.•ld IJ.lfll>~' •' pro\lJ~ an~ p1L\CC'll' fur • rdcnr:~ :O..o •·•k' <K<'IIr lhrr>u!!lr till'\\ co'''" ,,,Jan mJ \tdll.:l .1\.:\'l.!,.._ln~ th" ~lh.' C.UiJU'II t'rd:.•r, ft t!c.h.:' lllll f'lld'.ldt.• .tnyPI"t: WU}; fih,-... (u dl)\\'flltl;tJ IHll" t.hlt:-. 1l

hnk ru an~un" d,c·, \\,·1>-11<'"1. ['Jb.:rl! 1 ,, • .,~~nt \•rp .. I" F '\urp 2d 111·1. J(.; I' 1D (\mn. p;ll:-o;J c·r qh~..·:-t!' , ... no ~,.·,rd~,.·n~ ... • that a11' 1-.cr tn t ,,nnl·~ucu1 ~u.:.:c,~~.·d ~t..·,.,tcn"" \\ ~"' ,uc u1 run.:hJ~~..J p!"<Jot.!Ucl~~~; b.h~..·d up1.•n the ".\ ... ·h '-th: ~h-·h-cTtt.,\.'Jl:"nl fntl'ntc• u-.~ cnnid uot pnfer

l'm<l::.-'l< dt:t-cll~ fmrn till' \\<."h •lk [l;t rcqu:rcJ tlu~m 10 ~.-all a1 ')(110 r.urnher m ;\IJ~hl{r.lll or \Hit.: ''"';:cr tl \lrch1~m N 1-:,·;•!r:d .. ~."l; \lalhnckn>dr MeJ .. In•. \ :'-<'lltt' Phan~ .. In<. 'l~H F. 'UPJ'· :65. :~ 2 I[) IH I •ICl~' oinJmg rhJI "[!lh~ 3CI ul I'• ,,trn;; a 1r.~--.::·~ "" au \I 11 ,·:,":rum(

hulltllll boar.! \\h1d1 t:.:rlDm \01 , .. h .... r,hc~< ma\' or ma) ""' d''""l" lu u .. ·cc""" "''' ,utlictc"fll ft•r p"r;nnal jun,,i!ctiun"t. <;J llt>tl'! l'.• .. I P ' ht<·I~Y l11~>. In,· .. ·~~~ I S:~rr 11112. 111~5 '£•tl> f.:.m. 14•1'1 ( "Flnlu·~ .ldl<:lll"'m~nl 1n o lr:td,· !•uhJi,·ut•nn .lpp .. -.u, n11 rht: Jltl,•rn,·: Bur.> did '"'' ..-... ur.t.:ltt• -..:II ·'"} !!<><><.!'or'"~'~ i.-,., . '" cr 1h" hllcm.·r ,u,·." (lnlnn;~ILJU<•I:~tron m:ut, nmlllo..'tlll. II"JI"-t t".'rp.' (,>ldlx-rg<T. ' '" 91> ( 1\, lt>~(l rPI-:1.11 \)l'l. l<~'l~ WI •J"Il<l". ul •I\ ,,.1} :-..; Y. F·d'

~6. t·N-) Cfr:\OJ\mg t:~rJ lni~!"Tl(·! \\~!'ht!O: "t•h c-r.~ tl ~ •nuu:t). Bc:l ... U'an t(~ .. l ( \ :-p \ ·,tng. •n...,. F

' ·- /lUI- \TRrl/ i H Rf I li- W [ \ "' -II 'I

'I w .1:-.~~rt p~r~onal iuristfl·tion. For c.xalt"llc. in ll'cb, · • /~1 II ' ·/ . · a ~.J. rc:;idcm pun.:ha:-.cd a tour pach.a)!e from a \lassachus~l!s t ·a\d a gem ll<ll an ~.\.dll!>h e :-.dling. agent \\ h1d1 t~atun:d UCLOillmOtiation:-. at ~• Sicilian hotel owned hy an Italian corpor:nion. ltajolly C'ompagnia haliana Dei Joll) l lotels r ·Jul ly l lotels"). ~ .Jolly llotrls did nnt conduct bus t•e::.s a \.C\\ Jc.:rst!~ but had .t sub:-.tdiary that (1\\'lll'd :.. hrtcl i1 :'\c\~ Yo 1\. ( ll) tha1 "acccpt[ cd] rl':.~.:nntiuns for all of [Jolly llutd<s] hotcb in IWI)-.'' 11 The plainuff ,u .. ;taincd in,Jllrics at the dd~nd Ill':- s.~.·ilit.'l hntd .111d brought sUit agaH'SI JoJI)- Jfoh . .'b 111 \Jl'\\' J~:rscy. 4 Jolf) lin ds maimaincd a w~bsite. ,tcce:-.stblc in ~C\\ Jersey. which pnwided "plhlll'graphs of hotel rooms. Jcscripti~•ns of hotd faci'itics inlonnation ah\tlll numb~rs of rooms and telephone numbers.'';~ Tht· website could not bc used Ill make r~scrvations ttl any o!' Joll)- r h td .. ;'" lo;,:ations.'(• Finding 11 ... : webs h.: to o~ pa~-.1\~ in nature, the coun condudcd that it

:-;, " .!95. ;!Q", .~01 IS.~>S.Y (o.;9h), .1/;'.1. i:!6 r Jd 25 (.~d (.a;. 19'1'1 (1 \U!Vltlf! \hsSoiUP

n !!htdub', pa"1'.: "''h'll<'). \k();omlugh \' bllon ~td:Jh.r,:<•ll. In''· · :-,, Cl\'. QS-~0.\7, I•J•)(, \\ [ - <.~•1'1[, dl *\ /'- ll ( ,d ,\UI.!. 5, l<)<l")!"(Tjh~ fo,t thai [.!cf,"ll,(nntj 114., 3 \\ch "lC u-cJ 0~ [f;IIUII!

~wr.- r~"uen"l car.nm '"' ~bbh JUrtsctt ... :1on b) nscl[~l: Jc" j .. 'J fkf Orr,:. InC' •. Si.!p.'Tio:- (. out1, II' ( tl. Rplr ;!,1611 , 1•.!1 tCt \pp [Q<N)thol.hn~ thai n P·''""' \\chsitc ddah·rinf: onh •nti•nnauun ., lll<ll'f<·l~nl C:<1111:tcl \\tlh J lorum fu J<....,t11tlll uf r~r-,lJIOII JUri"<h<ll<>lll, Ragn'l<"SC \ Rus.:nt.·lu. '].:! A..:J \Nt. 119(-CJ(o ('\ J '\upcr ( 1 b-. Da\ 19'lSJ (huiJm·• :hat a fur<:IJ.'Tl .air wrnrr·, .,a,.iw wd"ll<'" 111\Uffi,·:rot f<H pn,Ji~tl<>n); '\'all<>n\\ u.l~ Jn,. ( " ' llulld~y tun, ....; Y l J • Jan.~-• .!00('. Jl ~~ (\:."Y". "oup. ( 1. Jat~ .!1>. 21111111 (•·xpbnung a Jc<'l>ll•n thallhurh! a p;a"iw "~r.,u~ J!hl l<ill·lre.: ldt!'J'hun.: numb.:: msutf:cao.'nt fo: ;un.;J:.-thml: l:TUJ<!II« •if 'Pu.nlw' """ .~II• 1m l'n.>duct~ /Jo.•.< "or Suf>lt'tl Ct~mpam t<>Jurudi<t.nn, 1\.Y. l J .• F .. ·h. 14. ~UOO.a1 2 frC]k>rttng on the IinJing• ot tht: ,·nun 1n If,•.•'"''' \', ( <•IW thai 3 pJs>~vc '""'"'itc pm\tum~ mti>nnntJOil '' .111 m•ullicrcm ha•l$ lor :!>><:f11<KI ol per-on:il )tm•dh:ti,'!!) In Rohbm.1, lh~ .:uut1 r'ou:-.d no person:~l;urisJt=tJllll hccau§C

A~rpl:mc·, \\'"":'s \\cl>-.llc tits squ.srel} "ithm 1h~ "1'·1"·'"- c3t~g~. J>crhar· 111 .1ntlt'!pblltln ,,, 'u~h a linJmg. Platnlilh ~d· ;,n~:c~f the 1101d argunwnt bclo1c the wuil thai tht' ... u~'ClJU<:lll .:c•rlllit..ml."allllr.• I>~·~ ccn 1hc t"'' parll<:l' Jt.,li'SIIlg .rnd ulnmatd} contr.n:um: t.>r 1h.: Dlljli:!n.: actetl as a .1t silt::. for tho: typiCal ··,horrifll! can~ lt'3turc,

11\ZJ>:tn~ :he f'l'l'I:<'~S suffici~nll} int~ra.:ll~ c li.•r Jllll'<.hctwnal ptnpo~~ ;-.u,h ,111 argumcnl IIIUS; h..-n:j,'\:t<:tli>c(.IUSC II ,c;:k, lo d~tnb'C lhe ll:!IIITC oftht• \\.:h•ilt',

Re~l>blll.s. ~011 \\ l.li! ll<'i. ut '3 111 Sc',, <' ~, Boch:u1 ' L• h•r.tam.-. t>R F 'upp. ~d (••>2. 1•94·''~. 1>1l'l If I) \'a t'I•Fll

tliraltllg pi•,l!n!: ,f hl>~lous llli:>'.l.l!~' till lht> Internet P) Tcxa• ol l>U :'\.:" 11.-iC\ICll re~;idt'llh 'lillil'IC11l

~rounJ, lo: the ol.«cntO!l<•f ;'t:N 1131 JUri ..Jiruoo "· Virgmia wh,·~ \\CO>Hl: WJ~ D~IX ... «.-dJ: llc:ro<:>. Inc ' IJ.,roo ~uunc .. 9~8 1- Supp. I.'·.' !O.fH' (Q%) !finding )urisdtclavn ba...ro on \\'I:O.,Ic. 1<•11-fn:~ tekpht~nl.' munl>,·r .• md l<1cal n~w,papcr ad1 .:rll•.cm.:nll: POIIdVI, .. >fl lnrl. I I' ' f<•,·rr,·n '1'1~ f SUflfl ll(l>, f,(tl, 11:!1 t ( f) (:!1 (•l<lh) (findilll! jurisdit.1!llll 03St'd Uprc \\Cb<-il<' C<lfii,ICf

:tlon.:), !:~~: ')' . L'l~ , ln .. 'n•.:tlon S~l.ln, <1)~ r: "\urr t11l. 164 CD Conn l\196JtiiaJmg th:u .ll..hC"rU .. tng \ t.Q tlJ~ Jntc:nt..:l :"\ "'oltfh. Jl.tla)ll of •1 ,Uffii.·IC''ll r-\.')l-.:tlll\t." IJ.Jtttr~·· Jnr J'U1tpU~c!'\ nfJllli~•,Jnll

JUrl<th<'liOn I

~I .,..., ~ ' upp 1~- ({)' J IW-1. \.': I I. ~ 1~'1· 1[, ~' II ;11 \ .. ,, ~ t~

~... /,t .tl ~1U

J'' 1.1 ;u ~:: • r lnlt'f'l.tl <p,.;;,t..•n m.1rk' onm~ 1

~h \~·~'Ill._· ~;~

rnml.\.1/ JURISDICTION ;VD Tilt: 1.\'Tf.R.\l:T

did not han: p~r:.l)naljurisdiction o,·er ddendant and transferred the case to 'lc\\ \ t>rk. because 1kfcndam·s "ubsidiary's NC\\ York City hotel could make re:-en at ions at all Jolly Hotels locations.1

•

( ·. Passin• Websitcs Plm

!fO\h'\'Cf. passive wchsitcs combined with other busmess activit). for cxarnpk. the at.:ti' itics of sub:.idiary corporations in the torum:" prO\ iding tralllcrs to a company doing blL';incss in the forum~"' entering inw a l1<.:cnsing agreemenl with a company in the forum and sdling 10

th ree cumpanies in the forum; 41 cnkring into a contract with a cornpan;; in the torum, \\ hich contained a forum selection clause and multiple c­maiJ t.:omrnunications to the forum:41 e-mail. fax. and telephone commumcations;4~ contracts and various cotTcspondcncc surrounding those contracts;4

_; various suppon services incident to sales:+~ e-mail, fax. telephone. and rt:gular mail communications:~5 twel\'e saks in the lbrum and plans to sell morc;Jt. mortgage loan applications printed out and chats online with mortgage representatives;~; fielding e-mail questions about products and sending infonnation nbout orders:~s and where .. the \veb site contains several interactive pages \.,.hich allow customers to rake and score performance tests, download product demos. and order product~ online: [and] ... provides a registration form whereby cu:>tomcrs may obtain product brochures. test demonstration diskettes. or

,, ldatlq

<x s,.,. 'l.lctcn. Sun Infl Hou:h Ltd .. ~SR F. 3d 12N. 1~7-l. 1:!76 (II th Cu .!110~).

3'1. Sn·l!~bru. Inc'. \lu.;- Computin~:. Inc, IJ'l.J. F. Supp. J.j, 37·3~ . .w. 4b (0. il.b". 1997) . .!tl. s,.,. Dt!;.'lt.tl Equtp. Corp. v. Alta' istn Tech .. Inc .. 960 F. Supp . .J.5t1 . .JM (D Ma,s. 19'1-, .!I. S.-.-l'ompu~o:rvc.lnc." Patterson. S9 F.3d 125'. l264tothCir. !CJ9o). 4~. \'c, 1:01. \~ <:ohwore lnt'I. I..L.C.' BASIS lnt'l Ltd .. 9-17 F. Supp. -113 . .l.:!~ m \n/

I •l')f,J.

~.>. See LatJI>ll<: ( umhihllotl <. nq1. '. Vapor lxtractton Tech .. Inc .• "'' nn.~5fl-FT. ~0< 10 \\ L ll.2.1.2.l5. :1t •4 n.(' !Wi'<. U App Au;: ),, 2tlOIJ)

.!~ .\,·,• \mazon lours, Inc. ' \\et-A-Line Tour.;, LLC :>Jo. 3..()J .. (."\'.f.IJ3-R . .21lll2 \\l ~)O~<l5. at "~.1 1\I.D. J'cx Jan. 1!. .200.2) (finding pre;;ctu:r: ,,f bookmg ~g~nt 10 ih,· fururt who h,• .. l..c-'<1 no toun; in the f<>mm in~utlktcnt contact to establish Jllrt'idtcl ton), Am. I· ycl\<:ar. Inc . '. Pccp~-r·, '-;tmglo"C' & .\cc.·,<oric!>. Inc .. l&• 1- Supp. ~d S'/5.1)1)1 IN D. Tex. ~OOIJJ

-15 ~·,.f Kcsu"<:llallon Tec-h-<. In~. ,. Cont'l He:11lh l·ur.: Corp .. No. IP ')IJ-l-15-.(..M.·:-.. IW7 \\'L I .!X~(l".at ·~ ·f'l'>.l> lnd. fl.lar ~.:. fQq7J.

-Ill S,· <•al)· S.:mllnfl, In~ ' · Ramudi. %1 F. Supp iiJ. 716. - I 'I tD. \Ja,s. 1'1'1'' 1.

.!7 So'r' Cllik'l'OUp Inc. ' Cny Holdmg Co. Q7 F. Supp. :'d 549. 51>5-l>ll I ~.D '\ Y. ::o001 -11\. s,.,. T) In<'. '· Clark. '\o. ~~ (' 553::!, .!000 WL 51t!l6. at "-1 (\.[) Ill. Jan l.l. 2tlllfll

i lindlllf! no IUI1,dtclwn. h-:c·~u": although deiCndam> '\!o not nan .t complete!)' pa.,,n·c• \\Ch

,,tLi.] .. 111 the -.a me um~. the dctendanl' do not clear!:. do busint:"-' over the1r ""f, ''I.:. ftor the~ dn n111 t:;kl' ord<:r' nor ,·mer mt, contrncts U\Cr the "cb sue"l.

/ltJF.\7R•IIAH'RI I 1!.11

:tn!m a~ to qu~stions:·~" may all provide a rt:a!-.~mahk· basts for thl.' <h~~rtl m or pt:r-;onal jurisdiction.

If th.: wch-.ill: pn.l\ Ilk~ inli.•rmation, 1.'-m• II ~·~ mmunic:Hinn. dt::-aihcs th<.! gliOlb or s~n ict:s ll!'l~l'l'li. downJonds a pnntcd order l(.mn. l'l' al11nh t'nlinc: saiL's'" \\ ith thl' u:-c of a L'rcdit card and sak~ an.:, in t:tct, maJ~· 111 thi-. 111ann~·r 10 the.: lomm 1 particular!~ h) 1 hi.' injured C'<)ll'>U\111.'1'.' • tht:ll '>l>llk' C:l•UI1:-.. but 1101 aJJ.'~ h:l\'1.' found the USSt:rtion of

.:•, , .... p.,,,rk ..;,,lutlO:l>. In,·. ' 1\'llpk '-olut<•n,. 1:1.:. ~" C1\ \ ''l<l-< \ -::!> ''~·1- ~uno

\\I Ill 11~>! • • . 11 •1 1' I> 1 ~\ Jniy .?'. 20IHII

'U Sc,·. •'>! .;11111h' HNn P.1r~ ll,•td. lmc .. PI'. I. Supp. ~d 1~1~. 1~.1.' 1~ D 0~1.1 .:!001 1 1 limhng no b.l.'" fur J"fi~H:Ilo!l, '"'""u'~ '[tjhe v.d'hlle m.:rdy p~rnm' 11 u'.:r to ,uhonir ;u1

,·m~ l .. r<-qu,-..ung res.·:-. 1tton mlbmJSti011 1\o Tl"c:n~tion " ,·,mlinnC\l mer the v.dhih:''). \ndr.:1 , {)If( lf,•tcLs ,~;. Rc:,on,, Inc. !\o 9'1 \1\ ~555!11'(ol. ~000 \\ l ~-Hi>~. at "1-::!

1S J)' Y Mar H. ::()(l(•l (lindin~ no Jun.;dicti<m 01.r Aru~J hot.:l "hcrc the t<~umt tr.Jur.-d o&t :he hotel ma.!c- rt'•Cr>.ltiul' thmuj,:h \m,·rk·"'' ,\lflm,-s', \\Cbs,t.: out .:.:tual ho:d rc-.:nauon, \\C'f<' .X>:tli'll~~il \\ h<'ll I<IUT opcroh>r Go<J•> rolll'o <'Uilt:cted I h.: Aruba hotel)

'I Si:<, q: .. J>J ·, R<k ~ r•ed. \taruu. In<' ·, Jmr,·ri~l F ... m1..X Jn,ulaw>ll \lfg. Co .. ::\1>. lll· -113'~·1\R. 20~12 l'<; I>"' 11·.\IS l.~-1711. at '1~. •I<• tD Kan. Jun~ 111. :!Oil~J afindmg no Jlln~dl.ti•>D \I her•: '( \\ h.o> haJ n••3•'lual JIH~m,·t·ht•~,'\1 ,,,nt.Jt.'t' \lith r.:,Jd~lll' ••I Kansas: no o;a).•,.

no inqmri<:'. :1(\ r.-quc~ts for \jt:ok·,. no c:tn.ul~. nt>r nn~ ph<•ne .:alb. kllc:n< ''r ~··mt .. ch <11J:tnatmg ln>m lh<' \\~b ~I!C IIIIOrtiUltiOCl. • • C\\ ha$ IIC\ ~ m.1olC ~ S.llc to a !Un-.:t> rc•Hl~ll~l; Srmth. 17~ f­.;urp .!d ru 121~ ( Thm·r~ no o:;rd~r:c-~ th:l: a.'l~ .:cmrn,n.:;al tr.:m.<::cuon.' ar~ l!<tual!y •••mple:,'\l en HPII', '""'a..- '·' r .... en':!:,on '' rt'nlimtt'<l CH't 1!:: "~h,itt' "): 0.1!=6!(' 1 Plar!! Hotc:l ·' \ .. I': 1- ..:upp :::!J 211. 2JS (0 l" fl 2000)(pro• tdmg lh~:. ~lthoutJh hNd h~,t rntenKIJ\~ rt'><-nalums \\Ch>H~. P'di!''lll r~ led,.., ,h.m tr.~t.l!l) rc.-m"II.JII~ \\C:rt.' •• ..:tu;Jii) mad\' U\lllj; the \\l.'b,Uc); I lurk) ' t 3'l.ull f'Jl,.J Oa"' lm'r livid, . ...;,,. (" '\ '~'' '"-l. 1'1'19 \\'l 71~~';6, ,1t •1 (l:.D. l'a ,\ug. ~I I '"~l l 1 pn" ,,!:n~ that. :~lth<~uc:h ~ \k~ll·:m h<•td'' u<"rgw lx-oking Jg..:nl h~<l " lnll·frc-.: i ~tcph<>li"

nu •.her JliJ •ntt~r.lctl\t' r~"''' .lll<>n' "'d'IS'i\.'. phuntllf u"J nell her ~nd laokd I<• 'h""' th3t '"'Y .. ,·tual rc~·!'\utrc.nl..' \\.,:"t\: mnJ~ u.. ... .tn~ \\ ~,. .. t-,..,lli.*' J~

52 s.,., .... ._ lldl ' 1-!·p.:na' l'il!:l.:e H·n~l t'a,mt•. lm'. :011 i Supp :J !OS2.. 10.\X II:' ll \i,• ~1111! I II •• "' R<><ln~uct' ( 1r.u' Cu,·u> ( U\IIIOli, I"' '\., (I(} Cl\ 6:'~\ltGH ), ~OJ \\'I : 1 ~ .. - . ·'' •: '> ()') J>~ •1. ~()oJ; ~. onrr,r Cl'd\\cll \ l h,';lpt':mbt..~~n.l,lln Inc. 'c'. 2 (ll)-1.'\·

, ~~'''·1·lltl \\, lt>lh ")( :11 •, II· ) \;Kh. S;:pt ~. 21llU).

In Ht ;,, tl ,. ll>\.:1 ~'plnm,! lh~l

l)hc ,,·rtl.tlrc.o'<>ll llh> pl..11111fls f:ulli• "'Lihl,,h th<· IIC\:•'''"1)' 111111111\Uill ,·nnt;c,·t, ll•r

-r<..:ili< I'" """'"'II. ltu'-H'H'r. "l•c<.:allsc rhc) ha\1.' 1a1kJ to J~mun-lrJI" thaith<:n· ..:au._,. l'fUdll>n ha.' Jll)' ld:CIIIm (u J·nr>.:cl"l l'aiJ<:C', ·,:,nll.l, t\' WHh \h,'<l\lrl, rrom i h~ r~cord

"'=1-•r: :1-c C !>un. th. d~!<.'lltl.m:·, ••Ill) n>nlac: \\Hil \hw.•un '' ,, \lt'b'n~ tl::tt •~ .... ,.,. __ ,hk· tu rn1Jrnt> 111 \hs,•cn. Tht- <nh;ec:t m~ncr of plamutrs 'u': ''a -hp :uul flll J,cLknt tl>at ~C\.rred on th~.· hotel prcm·-.:• 111 I.:~• \'<";!J>. lh:n CH'nl " •'lll•rd·. uardat..-d to tho:- dct.::rd3nf• \\~bsuc \'. htle the Court " nu 'u;;~'""llll;; that 1h·,~ fau­\Wul<l "'"'""""II chanf~ tl:c ,mal""· th1.· pi~~ uft, do nut m.ai111:.in thai th<1 usc·.; tl~<• '·' ~r.suc t,, 1n:1~" rC'<'T\ Jll<•ll' \\!th llw fmpcnul )>;II at'<'. 1h:H 1hctr 1111\ tl :•g,·m mcd th~

\\Ch,ltt: h• "'~'"i."UlC th~ll (~'\C:l\ .ltlPII'. ~'T I hal thl"V \\l.'"ft: C'nik1..•d f'l~ lhlo." \\t."~:0.1lt.' ttl \IS11 thl'

l·np••nal "aiJ.:" in la.:t thC';>' ,ln "''' claun ,,, bw ,., t:r \'lt:w~d thc """'"c pn.•r '•1tl~t.-ir \I'll to the dcl~n.I.,!'J ~ hmd The t 'ourt ~an ,;c nn c.•u,lll lmk or <~'IIIIC:.:IIt>n hc:t\\e~u j'll.unc;tr ·; ·'"''dent and •h.:- "''' fon11n l.'<lftlJ<I b) lmpc:n.1l Pab<.'l.'. 11' \\ch,u.:

/'f/1.\0.\ ~I .1{ R/.\fl/1 'flO\ 1\/l lllf I\ IFR\FI

Bdl. 2011 I St;pp. ~d at lUN:O.. l"h: .:oun tn l<o~dngll<': ol">,~n.:d th<~t: ~\1.'11 tf pLunun; l~a, maJ~ his h<•t..-1 r6<.'r.llll"n' ,w~r jdd~nJ~m·,l \\.:<hit,· .md rt ,,

110! al!egc-d til<JI h.- did the p<·rson:ll IIIJUfll"S <If fh,· h.:ar! l>f lhj, ~~\\'1111 Jrth.: !f .11 ;til. fmm lhl• alkg<•tJl: O<"ghttt.>DI l'tllldl.icl vf the dclcnd.UIIs Ill :'\~\3J;J t,llhl.'l lh<lll ftVlll th.: m;~kmg (lf a hmd f'C"'.{.~n·alt\m ...-\b-rt"nt tht.! fl'~UI,H\." n~·,us. thi.:'rc i~ rw ha..,, ... ft'r long.-ann tun.-dtcll"n '''"r l•ldi:nd.mtj.

Rt~dn.<.:tt.:·. ~0(11 \\ L 21~~- at •J. ll'"'"'cr. Ill c,,/d1td/ ... ltlh.: ( 1•un fl~>undj th.i! th<" tnlcr"di\<: ""bsit<· [":s.'J Mrflkt<'lll ''' <'>tabh>h pcr,onal JUri,diction V\t'r th.: tldcnd:tnh. 1:\<'11 thou~h the Ctldwd!, did n<•t U)<.: !h~ mtcr.11:tiv<: katur~ of th" wc>bsnc and theretorc'. a- ''' rh.:m. th~.· \\Cbs ito: tirn.:ttoncJ us~ ra"i'" """'itc pr<wiJtn!l inlorm:!IIVII .. l :tlu1t ,•//. ::!01 f) \\I .lt>IH 7iS. at ....

-\1 s,,. e~. \la'nx Photo. Inc.'· nr~nd h'<'h> .. Inc .. 1>47 1- IJ 1~1:-.. 12~4-~~ f'~th Ctr ~ll! I 1: (l,>rman '· Amentr~d<! Holdm)! l'orp .. ~<1'\ F. ;.f 50h. ~I fl. 5 J< IIH • t'11 2flfl21 flindm:: counnuuth ~ud >Y't.:m:mc .ale <> I "·cunth!> o.>n an llll~niL'I V.<!b>ll~ ~utliuclll i>:.-r' 1i1r p.:rs.>nal Jllnsdtcllon ): Ll.:-1 Sol. L.l. , .• C ~ribungo L.LC. .. ~o. :!:I !L'\'5~10.\.J<.. 21112 \\1. ~'\otl4:l, :•t "-1-~ 1D Utah F..:h. li, ~'1!2): l'nck Som·,s~t;•n Omtittcr:,.lnc v.Cnci~Sam 'Army '-a') Ourlitt<'l'>· \Janh~nan. Inc .. 9n F. Supp. ~.! 'lJ'l, 'l~ .~-"5 tf- .D .. \In ~li<XI) cfimlmt: m<•p~r.1bk mtt:JJ<tl\c w.;hsttc still unJcr ~·mstructinn msuftki<·nt fnr JUri,tli<:ti<>n): Stump. ln..: • '~":0, l LC. r.l 1:. Supp. 2J w-~. Hn; &. r..7 It .D. Cal. !'Nil) f!indin!-! that3 1\~h,it<' ti.m<:l>l>llc<l as J "11nual '>ton.''

whcr~ '"[cjlln>um.:r, [.:"IIIJJ \11!\1' ,k..,.:nptiOIJS. pncc-. anJ pl\·run:' ,,f 'ar'''"' pmdu.:t' [:md .:mdJj .tdtl 1tcrn' "' thctr vinual shoppmg ..:an and chcci-. out b) pr~>\'tdlll[! ~rc.itl c.ml :>~td ,IJtppmg :ntonnal>on" !mt.:;-n;~l quot.llion tUJJ'\;, llflllrt..-d)J: Ongin !nstnii11Cnt' ('orp 1 .-\d;tptive I •'tnpUt<.'r -;,, .. )'.o ~IV A. 39"("'\"~595-L !'1•19 \\'L -679-l. at ._..) 'i.D. !'l'x. Fchnwry J. ! 1N9t11indtng n•> !Un>dt.:uon ba"-'ll upm~ Pl~innff, f.1t!urc tn sho\\ ,ak, m ti•rum through •nt..·racun· "ebsll<"l: F<;,\B <•rp .. Inc.' Ccmr•cut. II .C. '~F. Supp. ~d '23. :'\~7 . .333-3-1 tD.S (. IY'I'IJ flindtnJ! \\~l-'ltl: th;n pro, ides intbrmJtwn. hut requir<-s c:u,tnmers t<' cJII a toll·frcc 1dcphcmc numhcr ~l<>r;:- piJctng :m ord~r online. msuflic1cnt tn l."onf<-r tunsdtclron 1: ~lillennium f'ntcr>. '. :..lillcnmum \fusic. l_!' .. ~' r: Supp :u 907, IJ.!O-~! iD Or. 1<199): Hlumenthal ' Dnrd11e. 1lll2 l· Supp. 4~. 5t>-5X (U.U.C !99!(): Par\; Inn, lnt'l. Inc 1. Pac. Pl.:v.a Hotcb. Inc .. 5 F 'iupp . .!d 76:. "1>4-{,() (D. \r11 !•WS) ( ftndmg jurisdiction whl!r~ intcracliH!' w~bsitc acc..:prcd ~t\'CJ1 hott..~I rc,l"n auons from ru"h'tth . .,. ... in th.: furumt: Th<>mpson \' Ha111b-Lopc1'. Inc: .. 'l'IS F Supp. ''S. 74~--1-1 tW.D. Tc~ 11/'IX) (h<>J.iin;; corporation subject to penonal JUri>dicuon tll Tcx3s b:•~cd liJ><)O crn~nntt tttt\1 ~<>ntmcts 111 play t::OSIIIO J:!;lll'll:S \\ith fc,a:, t:i tilCll~); ~1i..-c7kt1\hkl \ , !\la,co Corp .. <)<17 ~ Sup] 1S1, /l<7-Si; tL.U. Tex. 1'.19ht: Am "<!twork. Inc ' Access Am Connt·ct Atlanw. lm: .• '17'i F ~upt'. -19-l. -N'I :\01 t<;.D.'\ Y. 19CJ7) Oindingjuri~dictil>n ha.,.:d on sut>>-.:ripti(>n~ 1\>r Intern~\ '~n· 1 n"S ,r.ld tv ~u,tomcr'

rn the ( >n:m thn>u¢1 contract' ~ntct~d tnlt> nll tt wcb>tt~l: 7Jppo Mfg. Co. v. 7ipr<' T>m ( <>m. Inc. Q.):! I Surp. I! 111. I 1~5-~i !W.D. Pa. I <Nil: Gate;.'· R,,yal Palace Hotel. )'.o. CV 1>1'ibt>51J5S. J<NK WI CJ51!~12 . .tl •.:. •(t IConn. Super. Ct De: 'U. 1'19!<) !finding jun-tli,tr.•n b:..cd llp<>n cunccnlraled ~tl-.-nismg. i>ookings thm11gh travd agent' anti "in' 1tation 111 Cunnt-.:!ll:ut cuuc:ns h>

make r...'t.l" ;ttiun' am! (fthcr arrJng<'mcnt' drrcctly thmu!!h the lnt.:mcf't In 8/umt·mh,ll. the cnun found thnt:

Ill~ Drud:,!~ Rcpon·~ ''d> 'lie i!llo~o~' l>rowscrs ••• to dtrL-.:tl:v ..:-mat! ddi:ndam • thus ::lllm mg an c'o:hangc ,,f rnlhrmallt•n . [t{jru\\>1:" wh<• ao.:cc>s th~ wc~it<' m;•~ r~'iu,~t <ub".-nptil>n' to the DruJgc RL·port, agam I'" tlirc<"ll) '-'-m:ulm£! thctr r,·,l""'" tn Drud!:: ' h"'' <'urnputo.:r IT ,he DnrdJ.!C RcpMt " ~.:nt . It> ,., ~r' c·tn~ll . ~th.l~<.·" tlf: h1~ \tlh~npllon llhllllllf! fl,l rh.: ~~un,t.m1 :''\Ch.mgc ol iulf.,nll.J1!\ln ,lflf..l Jin.,·f

d'OH:lunu.:ata~n . . ,., th~o.· cpllt!JlH,: 1tf\\eh 'lh: tnh:ra~'tl\.~1~.

8!tun~•tJtha!, 1N.::! I· Supp .. u .t.n. Ilh: ~""'Un in .\fl,,._;t. nt,,l\1 ~xpLJin~o.'\1 th~Jl

•J..:r\.·nt.l.m1"" \\ch 'a'-" hst.. \JnOll!-r. c..·ate~onc..~:'l. throul!h '' lw.·h , :ndt\tJ'JJJ, ~,.:111 \.~~'

·" "· ,.,, "' pn('l" mr'( .. nn,Hwu1.} .:1n order 1\lnH c:Jn be ~,nnt~. .. -d l!)l) Jh.l: \ll'h•r"J~o."l ~ • IW) I dt'-'(l.. llw ... tmu .. ,)f 1h~1r pun;.:h.l'c'i.l [iJnhtrmatlnl' ,, ;1l'n ;tvaibhlt" rq;:..trtllu}:! 11co1,gh! ~o:-,b (andt ~ll"'h"mcr' c.m C<lOHnuni~~·~~ t.hn.;.;th '' ith ·,,n.ftne.. ..;ale" n.·pn.·,~nt.ut i \ ~,......, ...

lfOF:>lP I L..l II IU.IIf:W

personal jtu·isdtctwn r~..·asonabk. In addition. snm~ court:- may r~..·quin: that the t!lll'tacth·ity be couph:d \\ ith the transaction or substantial bu:-incss in th~..· tl'rum ~~ or '"target:- :l particular rcmotc Jttrbdi~..·twn:·'"

lltc'C:k•·"~; •1<1- 1- Supp. a: 71>7 :;.; Se,•Ru<hh\,\\tlm••t\lounlam,ln.: .. \ln O( 07~!~.:!011 WI l~h-l-ll~ ... t•.~(~D.Ill

,\ug. L!. ~011): Butkr \', H~~r ·\cross Am .• l\1 I· Supp. :!d 1261. 121>1'1 c~.ll t\b :ZOOU! f"Bc-er ,\aus' ,\mcnca'.; 'lie: lf1>~s nut C\eO anucipatc.: th~ fCj'Uf:lr <::>.Chilli!!-~ uf mfimr.alh>ll anoss th~ !nt.:mct ... Ruth~r. 1t i' d<hcr I<> an ~k.:trooac \Cr,iun ol ~ P<'>llll rcpl~ .:ard:·,.

55. S,·e. e.g, fochl ,. :-;o!.\ldi::. S.,\. ~o. C 10 0')()(\ I:~ IC. :mt~ WI l6~~e>.:. Jl · '·''flo.; D. Cat J:~r «. ~~ ~)~ M~:hc:-.,-s' M!:-aJ.:rlnl'l Ltd., '>o 1:1! t.Y -l!', :!Oil \\L .!f '11>5• ,. •t I" D C 'L > S~· '. :!Ol!) ('',\t!:mus dO<.'S bu.-m::,;s thr.:n:~ fns] weh--IIC'I•J TI1C"S: .. ,d, •IlL" ,nnw

IN:r' t<1 B<• ~ ,,," • ,cJ,•,·t !11!\d d:n..,.,. ~ek.:l a numb,·r Jf lrd\tl~r,, chou<~ a mum, add d•nm,: pia:~,. ch<><h~ Il•l,lhls, ch<kh: shuul~ tran~f.er. .md .:<>ntinn rL-smatums. Us~r' pro,i..!c coma<.:t mfonnau,,n, cr,oJn ~anb. :md r.:caive e-mo1l nou tkatlt•n~ of A.tlantt' trow! pa\'ka~._.,_- tc•t:uit>n.; <>111lth:Jll. on rc·,·•m.<t.!a.uwn1011 \.\'L 51:!2/WI. at •51' D. Ohio Oct. 27. 20111 /"While Plaintiff ts>.:n, :hat [Dd~nd.lnt) -end' e-mail~ to t<•rm~r <'ll't >mer' Wid allm'~ cuwlm~r; to bvok trip' and 'la)> :ll tb: .\tlantt<. P!luml!' r':lll> to pro,id~ t:t;:li :11at[O.:icndllm] 5J>".:itk'3lly targl.'l' :llhcrti,m~; tu th.: O!w m:t:ia::."): Chan'· Rt',on(}l:c,;; Pa.rl.: Cit:. llC. ~o. CJ\'. S·l !~:?0 FCD. :Oll WI. 3555t;l.!. :U •_; (I·.!) Cal. ,\1!~. ! I. lOll I 1-IJ]n C:! C> m\olvmg rnwa.:me "d'sik-.... ,·uun, t:lU'l

llllll~L.: L'l:.- 'th.: le•.c:l of int<-r::~tJ\ it) :md COint!lC'fCI~l n:ttur.: nf th~ .!.\,·hang.: of mfomutlun lha: o.;, 1r, ,,n •he \\eh '11.:· to detmnine tht·ir jUrbdi.:tJ.lllal eftc.:t."}; :\f~nlr) '· Atr Can .. 7H I· Supp 2d 551. SSi n2 <E.DS C. 20101 /"Thl' 1s nut to say that a Ct>un \t>uiJ nul cxerd'" p.:n.11nal JUnsdi.:tu>n ba.-~o-d 110 imcmct <ale~. but Mthc-r that something mnn: Thull th~o• d,• r111mmw

<:ik> prc"'llll:d here \\olll<l he nc,"'' "'l') tn -at1o;f) th.: n~or' of ~onstilmionul ,!u.: prucc-<' ... (dtatll'n

<'mind II: OmLi" Hilum llmcls Corp .• :"o. 09-.:v-05'159. ~010 WI. 47517.'!1', at •-; (l D. Pa ~o' ;:;:, ~ti!O).

In F•~< .. :. the coon "'Pbt:led :hat

lwJh:!c \b. i-~hl po:nt~ oul that hundred~ olthouS3nd' oiC'alifr~'1ua r;:std~nr- b:l\< 111

fac1 ac..:o;S..OO th..: "ei'hll<! for one to l\\0 milhCin pa;:e '.cws. 'he ha, t .. llcJ to ,-xplam

"hy tho'e n1.1mb..:r- h:tve an~ rc:t.l ~lt;niticancc :1h~I!Tlt an mdicanon th;H, ,. J.! . :>\1 "a·' targclln<! a C'.1hfumi:: :mdicncc with iL' "cb,itc (l' oppos<.'tl to an tnh:m.uional """· •"P~>c.:lall) gi,cn the nmc l.mgu.1ge. a\·ailabl<.: on th.: ~»cb~ltc) or thut th<' mtcrac!J\'t wchsitl! proJ".-cd a >ulhtantial poruon of ll' rc' clllh:. [Tjhc numhcr of hookm11> [vJ;. h.: into:r...:t!'o.: ·o~.:b>II~J IS nN that ~igmlicanl ~;-pro,mutel~ ·~.()()(1 each )<'ar

Focht, :w:2 WL l6:!5t>-:,at •<: {elUtions <>mitt~-d) • ..,1m1lanty. tilc .:vun m Oro:-:t tounJ th;,t:

the "men: C·j>.:l'llUCin of a <:t>rnmcrc1all~ mter.u:II\C \\<!b "11~" thnt IS .c~<cs'lhk m th" toru~ " tn,-uffi~l.:nt t(> d~~onstr.ltc the w~-bsll~ 11pernlt>r purp<-.xtull) d•re.:t,•J 11, al!tl\lt.ie, a1 th<' forum. !he: d~fendam must als<' enher 'Jmcntionally t.1rg.:tl]1hc '1l<: to the rorum. -:at.: nnd or knm1 mgl~ conduct II hta-in~s. ~»llh forum st:Jk rc,nknts 1m th.: 'lie' "' 'ausl) the purp • .-enJ!nv:ulmcnt rcqUJr<'men t.

rJm:<. ::!010 WL 475t7:s. ar *7 (,1lteration~ m onginJ)) ( lontnute' umittcd). '" .<il·,• -;urlacc Prcf>Jmttun Tc>chs v. Jnm,,,,, lndu, .. I.! C. :"11 1:11·<"\-li)'X. :!OJ~ \\I

I !•1,!(1(-l\, at "-1 (\I[) 1':1. ,\pr JO 201~) /intcrnal<j\J<>l.lll<>n rnarJ,, Ulllii!Nl: S<'•', c•g., ConiC) I,

:O.IL l',lru:. '\o. ll·ll:!ll5, 2111:! \\l i>\9~509. a1•7 (h.!>. 1-hch. \l~y ~3 . .!012). Collazo' l:ntcr. lloldm~>. lr..:. -'~3 I· :-.upr .!d xr--:;. \6~ c:-\ 0 lnd ::'0111. \\'1bon v Rfll llutcl' .'\, R,~.n-. '\ • 10--1.!.!, :011 \\'I '.!.:Jl~l>. ~: 't• f.D. Pa. Jul~ :!9, ~OJ I).

In rani,-,. th.: coun c\pl;un~ that D.:li.'J1J3nl,· 1\ch,u,· ts ~ t\111~ mtci1!C(J\'\: .me m which ''lbl<>lll.::rs nr tr.11d agent- rna)

b'"'k sta)' at tl1c varivu.; hotels and rc"'"' O\\n,·J b; Ddendant' In t:tet, from :oo7 to ~Ult1. 15:' gu~,ts ''t th ;\ti ... hrgan :Kidn:, ...... , btt(lk:t.•d hotd {lr r~'ort r..: .. <.·nalwn' frc•zn Dd.:nd:rll',· "eb•llo.' rhcrc IS no Ji>putc th~t £>dendant- ,·nt~r~d lllltl C<•r.ll':l..:ls \\t!h \l!c·h:~a~ r~tdrnt- 1:srng th~1r ~».:t.,,:c. ,\,1Jm,>~.a1J,, PL!1nlllf• •u!'>ml!lcJ <,gmtic-J.!ll

l't.RS0\.11 .fl RN>Jl T/0\ I \/lTJit: JNTFR\'1:'1' .p

Th1s se~m:-. to be th~ m:nd for th~ suk of goods and servu:cs that arc dcliv..-r~d atler the~ are ordered b)- the ~:onsumcr ou h1~ or her hom~ computer. As noted abt)\ c. howcH'r. at kast one court has made :m unwarranted distinction between placing lntcmet orders for the 1mmcdw£L• Jcli,·cr~· of goods and sen ices and making rc.;...:n at ions fbr deh' cry 111 hold accommm.lation:-. some time 111 the future. \!though Lh!~ area of the kl\\ b develc,ping. it is tair. at this pt)int, to make the follo'' ing condu!:-iion:-..

I. I ('1\\'CSt LC\ cl or lntcractivil;. Fir-,L. thl' lowest Jc, cl of tran.~l \Vcbsite inlcracll\ 1ty, invoh ing e­

mail communications which allo,,· travelers w request information but not make reservations. would be an insufficient basis for jurisdiction. 5x

c\ld~nc~ that Tkfen.huth directly fo<:u<eJ m3rketing eftorb row~rd 1\.h.:hrgnn l'l'$1Uems Allegro r<.!prc-.:ntull\ "'' an.:nJ annual trad<.' 'how, in Michrgan :.md unJ;.I!'<: in Ju-.xl m.1il and c·mJrl solkitauons to Michi~.1n-bascd travel agen~rcs ami tour Uf'<'rator> . l)ef.:nd:mrs ha\c cntercd inhl roo~rativc \.larketing Ag:re<"mem' '~lth

l>d'endant Ml T. tl rour op<.'r.nor based om ot Minncl>C'ta . These ugrttmenL' dc'l<cnbc !)d·end;mt;' rnarkcnng eftons rn ddail. and -pc<;itically pro"idc !o1 .:mall. direcr muil. ond rodw ud•.cnJ>1ng m 1\,lrchi~an.

Con/,y. 2012 WL I 1'')3:109, at •; (dl!ltiun-; omiUcd!. In Coll<le!:O. thl·coun ohscn·cd lh~t:

lt]hc S<!WI\Ih Circuit h:ts u~.:lincd to adopt Zippo's apprtXtch tor Cti>C> invoh•ing lnl<!rn<!l ..:nnwcr.s. rncluding b~ declining ro Jc..:idc "what lc\.:1 of ' rntcrocu\il) · i~ sutiictcnt to .:Sl.tb!i:;h p.:n;onal JUriscJkttun based on Jhc operalion of an intem.:tive \<·chs;l~ " n1c mJint<!nan~c nf u public lmcrnet web~ac. withl)lll more. wtll not e-.tabl.-h g~ncml JUThdrction .... [Tih<.> qu.:~rion ;, nm lw\\ imcrucrivc the"<~ :>itc"' al'\:. l>ut \\hcther T>cfcndant'. rhrouch those srH:,. >ome way iliJ1<<'1i!d Indiana's market.

( 'olla:o. <;;!' I Supp .~d at S"'l lcllmrons OMIItcdl. In Wilswl the court found thai •he "Pimullff n"cd[t.X!J tn d"monstrme thai [tho;: O.,rcndantl 'Pl!\:ilicall~ L'lr,;ct~-..1 this fonun, \\hr~h she has not Jone .. ( ,,J/,1:<~ . .:011 \\'L '2.11 ~:-.6 .. u •ft

s., , c:. fi,•fi. 200 1-. Supp .:d at IUX7. The cmm nor<.>d thm· \lth<>ul!h '""'~f\~Ui,>ns cun h:: mad.: (l\Cr the lnl~mct, thi' '"t'C i~ dear!;. di•tinj.'\Jish;•l>k

:n•mtho,<: wh~.'l'c g. >OJ, ma\ he 1>rdcred o\ cr the mt<!met In mremc1 Cll.'>('' m\oh Ill" rh..­soJic or ;;n•"k th~ ~nurc tr:msa.:ti,m rorc!er, p:rymcnt. and contim1atton J ,·an he complck'<l •milnc. nl<~ rc·,j.J,·nt can bnng about the trarL..mis~ron of the goods mto the Ji:>rum stat<! rhro•rgh the order dlon~.· ll<•td<. on the other hand. arc s,1JllC\\hat unique rn the Interne: c<~ntcxr :'\ertb.:r p;;rt~ .mll,·irat.:' th:u f\t">Ods. ':rvrcc·>. or miomt•Hrorl nt rnrrin>t.· \alue \\Ill b1.• tr,m,uutl<'d m pto\ldcd mth~ forum >llll' 3, a lc">ult of the- int<'m~t <'\change of rntiJm~alll'll, T•• th<: conrr.u;.. bolh pur11"" rc.:ogmzc tlral the rntcmct cxchang<' '' \llllply prcltmmal'\ rn th~ mdl\ tdualtra\dmt: <>utstdc th~ lonrm >tat<: rn u'o: th~: 'crvrcc In 1h1s r~'~"':t, t~t" C\Chang'-' of mfi•rm3tion t>\cr the rrncrncl is not unh~.: n ,,,JI.fr,oe r<''<natrotb horlinc Tit<• purp'"' of tht: mrcrnd lnlt'Tadinn '' not ndll<'\etl unul the• r.:,tJcmc·u.,tPmcr ka'e:; the f.>rum MHt~ 3.n<l ~rme, .ttrhc h••td d.:,rrnmion.

fd IC!WIIlll: Ptl'lllt•c•i)

~!. <;mnh' fl<mn Park llurd. ln.: , liS f 'iupp. ~J !2:!5-. 1:!'5 tX.D Oi..b. 20011. ( cl'\aniL..., \ R·nnpans. lr,.· -,;,,, \llqV\.12. 21\ll.~ \\1. c5T"'O. ar ::-1 ·Cal (I App rch. '·~~~I.> I It; \mull.

th~ ,,,un J~mnu rhat ahhuug.h til.- hnt~l h .• ..! a wcb>itc. 1l1crc "~' nn h~q, for <1"cntng JUn...JJc!JC<n 'liKe "lt!hcrc " no C\ltknc.: that ,m~ .:umm¢f.:IU~ trJn,.ICHon> arc <~Cnrall~ .:omplcr.:J on l th~

h,>kl''] ""f>,ilc lh: "ch"''' m~rcl) pcnnit~ J U't"r h> 'uhmar an crnal) h• [rh~ h<•r.:ll rNu~~lriiJ!

I!OFSTR I I t II Nf.J'If"ll'

"' \liddk J.c,·.:J ol Interactivity Sc~lllld. th..- miJJk C\ d or -~~- el \\ ebsllc intcracti\ ity. In\ llh in g.

the ability ttl ohtain infi.m11ation. r.:ommunicatt' hy e-mail and. in f:K·t. tmke htlh:l rcsen ~tions h:ts !!Cncr.tti.'J casr.:.~ fmJmg a suft" dent h<tsi' t~1r

. ~ - -jl:rf'.dtO:iiOll.

r~'avauott' tnlllramti<>n ''' r,·,crvati<>n '' <'•llllirm,oJ '"''' the wclhtk. Smuh. 171\ I· 'uri ~·lnl 12J5. nt.: .:nut: tn ( i.• ·-..IIJI<, .:'rl.tncd Lltat

R:mtp.!rts', mh ~;.mtim.uu,· .on!:!.:t \\lthfth" fC>P.m:) st~ is tha: it nt:unt:un.:d '' \\.:b

.>::~ "'h~<l! u' 1\\N iut,·mt'l "'cr- 111 1 .:l1fomtJ. N ~11~'\\hcr.: dse. 10 k.l!'ll about :n:d 'tnd •• m.•il '"' •he Luwr ll<•td lbt th~ R .• mp:•r" \\d> "''' pcnntn~d hmitcd m:encthll) c.l<'c, ""t .1.-un~ut>h 1l lrum m.IJIHcnann· ,,, an ··~o(f' td.:phone nuntl>cr l~n purr'"''' l'l ,-,.w!'!h.!:tnl) J:<"nerJl r.:r·,,!:cuon

( ,·nun:,• •• ~OO.l \\ L ~-~770. at 0 '-1

'·i 'It· Cim! ..... .:ot: \\1 l Q~5W. at··; ("Oo:fcD·~llll:·, "cb.,ll~ '" :1 lui) mrcra.-m.: ~·n~ in \\hh:h I:U>lNner- 01 l!'a\·.:; ol,!!<!nh m:l~ b<l<•l> ~~a~> Jt th~ ~lltl<liiS hot<:); ~nJ r,:,orl' 0\lnCII h) l).:lcnd.mt' . [I·Jmm :uu7 "' 21110. 155 guc~t> \\rth Mkh1gan .tddr~"' IJ,,,J..cd hotd or rc<<>n res-.:r\'ntJon.; thr••· 1..:Jt D.:ti:ndant,' "~!>~it~"\: ll1~rn v Qunm Hotel Pmb.a .. \ '. ~"- lf.JIJ-2~~s.

~01~ \\"l. 'l.!J-2. nt *I-~ 1S.O. lex. Fcb. 15. :!OI.Z) (linJ1ng rw J'<'rst'>n~l junsd1ctio:t bas,-J on "nn ml\:mt,·(hat.: Mh: ncuh,'T a:tl\c nor rompl~:el~ p:t"l\<!1: Bn"'"' Gr:tnd Hotel bien, ~o. 00 Ct\ ~,::J t:>.RB .!00~ \\ t. ~gQt>7~fo. at •j-5 tS.DS.Y June 3() • .!003). Hmwn '· (,r~nd H •ld hJ,·n. 11·1 F. 'iupp .!d -'~5 . . U<I tS.OS.\'. :!1101) 1 tiodiu~ that "'llukl Eden·, prcscn~c on th' Sunmut ll••td,; Wcb "tc, whkh al,t• pcnnlls rc,~l'\all ms to b.: con linn~'<! autom;ltJC'GII} supp<>n' lh~l

find1ng th~ I F.dcn is 'domg hu.<m,,..s· m 1hc 'i:,,·c ,,r :--:cw York""); [),:.:kcr \ Crr~u, Crreu.• llv::l. ;., • Sw ~d -~;. IJS ([)0\.J. l(j{)q) { "11 t L' ..:k.tr th;).t :ln~ cu,tomcr c:nn r.:>ern: a room :hruu!!b .ho '" J!C ••• [Biy 1:13kmg n.-...:rv:ttion~ :~vaikb!~ (l!J th.: lntcme1. tb,• ddcndan:. h~\C ~lk-.:rrwly pl:,.,·d thc1r hn~cl and n• $cn·ic<.-,. 1111<> an .:ndle"' ~ti'C'.llll or C<lmm.:r.:r: "t: Grutkol\\skJ \' St.::unhoall nkc Ciullb & Outlitt,•r,. ln.: .. ~P. (1\,,\. ~~~-JJ~3. l'l'l:oi \\'L %21142.:11 •4-S 11:.11. P.1. l.kl.: ,:\, l<''l·q I~Th,, ,;•e Jo..-~ nut p:nm; o r.:.Jtkr to purcha-e or n.-..crvc t\Jur- '""r I he ln:~nw .md thlh, doe> not p.:mtn[d~:i.'!llb.llt) :u 'ITltt>act bu,:;;.,.,,· o\cr the: lnt"'"ct ··).

Cases lindmg nr. ;n,·,J1icient Nh'' l<•r JUn-..ilcllon md·alc: ,\mngJJ \. lmp..-rial l'al~n·.

Jm·. ~-;~F. !'>:~pp ' ~'o . .\~h-),'t •S.D. Tex. :!UO.l) (::ndm); O\l.lllri"<itcllon N.~c<l uron :nt.-ru~tt\C t\:•o:f\atJoa' wd's'"'' 'nyd~r '·Dolphin !;;n,-,,urJter, Ltd. 2.~~ F Supp. 2<1 4.~.~- 4-+0--11 ri'.D. f'a 21lO::!t clindtng no lln'<il~llmt !'l:t>:d on n.~ 1111~J.Kll\C r~cT\ ttiu" w::hllcl~ h:rur:tl•> ' PolCC:\0<> f'.ll;~<·.:. l:tc \:,~ 11: ~0-j\\'C.iliJ. .wo: WI lfOOtiiJ'. at •.; If):-; -\, .:, :rMJlJ tfindtug m> ,,.n-.hct:<m :'.1"--.1 upon :u mt.'f,l\11\.: rcs.:n-:JII(Jil' wchStte); H,/!. ;!On F \ur•· 1d nt lOS'<, f(l'JI 92 t lim!m)! no msdtcUo" i"<a.<cd llf'llll nn mt~I"JO:Ill<' rcs.:T\·atton> \\O:b>llcl: Rttdr>l~lle/ '. Cir:u' C'tr.-us ( ''tn'"·'"". ''' (J(l ll\ h~5•lr(,l: l ). ~001 \\I ~l:':-14.ul •.' .\ t:--. 1>.:\ Y.J<1n. 'I 20(t l t(findinl! lh' jllrJ~lH,.'"l!ll!l b:t~ .. :d Url'·ll Jrt tntC..T:tCII\C: r~,cnutttl·fl~ \q,:b'll~).

In br< .. n the -'•lUlh:M l>•stnd nf 'c" York tound th:u II •r.:ll J,11 \\UhhoU-.. :rum 'U!'Ullit Ill< nghl to book uwnts alann}! tunc JX'rw<!' oi Hr•tt:l I rl~n, "'"''"'U:!,: ~nd thus '\•.nnmn, po-.•~r to r,-;..,r-..: r•><lm' '' 'uht•-ct lv t!:~ hl't~r, g1ant ul tltathPrlly \h~""·nt an ''Ulnf!hl t!rant nt' .:~Hhc .... nf) ll> "'nnii11n rc:-;,t.T\ith,llh. o.lll..tgc.·nl ts no1 '<lmn;; !'ltJ.,mcs' •n bdt:1lf ol J lwh:l '111<' Pfll~ mt~racll\lt~ I lore! h!t·n·, \\ ~~,,:,· J!!ows '' :h.: "ill"'nur.t} for u..ers tn utqua.: tnl<> f<l•)m II\ 31labi111~ l. I"'" r.:.::~\lng the<c- mij'.me,, th: hotd re-0 .. ,n<l-... thruag!: c-matl ••r f.n. \\1th ll!l o:fcT rl a ,n::.1h!e room 1< J\iltlJhk- :he .s'cr then mu'l n:spomd "' th.: hntd to .1.:c:..-j'l tho: ••Jf..-r.

Hrrn. n. ;!Otn \\'I ~: .!()6 i"it'. :11 •..:

/'fRSIJ\.11. /l 1</S/J/C/f(J\ . .J\IJ flft./,\llR\Fl

3. llighcst Level of lnh:rnctivit} Third. the highest lc' el of rrawl '' "'bsitc in tcrac.:ti\ ity. invoh ing the

purchase of trnn!l sen · ices on the website together '' tth other husin~::.~ c.:on tac.:t~ '' ith the forum. would pron de a suftic.:icnt basi::; ltlr i uri -.dict ion.'"' . Rcc\.'nt c.;a,.,es.1'

1 \ \ ith some exceptions ."~ continue to usc the 7.ipp(J

<>II. St't "·.: I· mleo. ~0 l ~ \\' l I ~'1351!'1 • .11 •·. in n· Ski li-Jh ftr..: •n K.tprun. , \ lhlri" '"' \;()\~nt~r t I. .ZUOC:. :Jtll Supp ld 1"fi. -~~-«..: tS.D."'.Y :!OO:!J; Silk Air t"Hil!.l P\1. L1d. ' Supl.'nort'oun. :-..~ £3159'lt>tl, :!00~ WI 40!-.11>. at*3 Kal ClApp. Jan h. :;uon. In /u r, Sk1 fram I' on: tlw <:llun found that.

Sicman::. ,\(i 1.'1.:>nduct- 't1hstanual :llld cvnnmtou' buson<'s in fthl' J<momj

<t"1c{ . J • ;ondu..:lm!! <ale, m \;~w York O\'er tb;;- lnremet. hemg listc·d on the '.:" \'llrk $;od rx.:hunge[.l huym!! a :'\cw \ ork compan; . . .. employ{ on)!) a press •tlllWel

here .tnd ha[vin~J ,ued m 'c:" Yor:... /11 n• Ski Tr,nn Fm· . 211!~ WL X<l35ll'l. at •;, Th~ CalililmiJ Court u! Appc.tb luund g~'lwral JUn,th.:Ul>n u\ ~r ~ t(,rcogn ntr carri~r "ba-~d upon (II Silk :\ir·, conunuing and ,ubstantidl rt:~l'nue;, in Caufi)mtn. 121 11> ad\crto-mg. on <.'!lhfomoa by m.::ans of llycrs di,tributL'ti throu.;h us parent

c·ompany'< Lt" ,\ngde< l>flkc». :md L11 its imcmcuvc mu:mct SJI-.! allm•.tn< t olilommn' 10 purchase nckct' tor !'o)!hb on it. atrhnc."" Stlk Air. ~003 \\'l. 401\ l ~. m • '\.

Ill ~,., .. ,, \1. r.,o:ht' Solllleloa. :-..A .. Xo. C lO 0906 Eil.lt'. 2012 WL i t> .~'o.j., at •s-'1 i \. ll C'a:. Jan !'I. ~~~~~ '· Endcrbj \ <;.:.::r<:b \!.1roma 13e:lch ltlvier.t Cancun. '\<• I I C\ • !1115 JFBJ(\\'0\\ 1. ~ill I \\'l 601llc 2~. at •!~-14 II:..D.:O...Y. De.:. I. ~llll1: Manic) ' .\tr Can .. " ' I' Supp 2d '\51 55- n 2 1 E.D' l. 10)(1t: Fhyyan ' . Sui \!do;;, S.A .. 'i I I· <;upp. 2d !\X6. ·100 (1\.D. lnJ 200"L Sunncn \, :\tlanm·( 11~ Showboat. lnc .. :O..u. ()747·B . .COOS \\1. l't2JI:!5. at *-< !E.D Pa. \pr :!'1. ~O<Il\J; Bake-r \, CarnJ\'31 C\)rp 1'\u. 06-2 152'-c:t\'-lll CK. 200t- WI. ~3004 1 !;. at .'\-4 !S.D. Ft.. '\o' :!0. 2006): Wi lsvn v Stmto,;pherc Corp .. \ln. Ct~.A. fi5-'IW. :!WI> \\ L I P..!~f6'), at •3 <\\ .l>. Pa. Apr 24.:!006), Hctdlc v. l'mspcct RC<'l Reson. Ltd . 3(,.1 I· Supp. 2d 312 . .11~ (\\'.DS.Y. 10051; Snown ... ~ v. llnrr.1h'~ Enun·l, Inc .. t 12 !'.3d =:1\. l1-l4 (('at. :!0115): A).'llilar \ . Honolulu Uote Operating Corp., N,>. G040737. :!009 WL 466 t ...l. .. .1 t Cal. Ct. \pp. Feb :!5, ~O!W): L>dhu<>nr ' . lmpen:!l Palac« llotcl & Clsmo. LLl. '\o. CVII7'1ll, '\.n . .zoo~ WI. .16342r.(J, at "4-" 1C•mn. Super Cl. IX:c. 4. 200i t !'\oms ' Six Flngs Theme P:trk>. Inc., 74 P.3d ~h. 3.! I Ha\\. 2003 o; 1-..;~loyc\11 \ .. \ppk Vacat ion>. ~66 '·) S.~d J SS, 492-<H (C'II· Ct :!(JW\1.

t-2. S,·<. ,. >/. \hHt.'\ Photo, Inc. \ Rmnd Tc.:h~. Inc .. (•-H F.1d 121:-. . . 2~7 (lith l"r. ~01' i: fm,a\id~ II' I L.t ' Hnmmy \kdo.•. ltd .. '\'o. CII He• '1.1\\'B. 201:! WI. t::.117X •• tt •n '" D lcmn Jan 17, 20l :: t: (',lll.m> v !·mer. H!,ldtn;.t.'. lnc .. !1:!.' r. Supp 2d !!t\5. !Wio=' IJ. Ind . .!IIIIJ, Rnhbin' '· Ftight<tar.lnc. '" :;;{)q.('\'-7>5. 2011 Wl6 1 !S9. at•~ (l).lltahJan. 7.20111.

Th<' Nimh Corcuil "'halsJ folk•wc!d 7.ippo. But L1ppo'\ ~tiding sc.alt: 1~1 "a' nn"lulatc.! m th.: ct>nt~ll.l nl a ~p.....,lli, JUri,Jil.'tiun tnquir; The level of intcroc·ti' il}' <'f n nonrcs;dcnl dcfen<J.mt'' wcb,llc pro>t<k, limot~'\1 help [m c<wblishingj :;cneruljuns.iiclmo." Mmn' Phoro. M" I· .~d J1 ~~~i

tt:llal!oiL' omm•xl• Sunilaril> (t]he fighu; ( tr<·uit Coun or Appt:al~ .:oncluded tltJt. whit<- the Lipp11 111<'<ld '' :u1 aprwpri.ll.: apprva•h wh~l1 COO>tdenns:: sp~ofk JllriWICtiOII, it IS in,unicicnl. m ;mJ nf II >elf. li>r d~tcnnoning whe1her u dd'end:uu' >contact' ar.: both ,ub~l:tnllnl unJ ~nntom.""" tor purp<'-~" ,,f ~·.:ncral Jun"'lkii<IO

Fm,.·rsJd<' IP. cOl~ \\'l t=:·BiX, ~~ 'n. 1-urthcnnore: itlho: '><:\:!nth I tr.uu hn, dcdm.:J 10 adopl L1pf~l·, appntJc'h lor t:.l<.:S on\'ol\m!( tm,•md .. ·onla..:h~ llh.."ludmg by dcdinmg tu d~cidc: ''"hat Jc\cl uf IOh:r&ctl\' ily 1~ :\Utlid~nt "' '-~.,l .. tbJt~h pcr,ou;.sl •un,..Ju.·uun b.;h\."\.1 <m the l"fl~rtltHJTl nl un nlfcr~u.~Hvc \\Cb,ne

nu..• tn.:.l111h.'t1otll~t" of J purhl' lnh:n1Ct wd>!ooltC. \\Zthnnt nl~'f~o.'. \\·In nut t:"ilahh'h !!1!1\cr.JI Jtlr:xhdlllfl [TJh~ c.;ue,t~t>r 1' not hu\\ tnt~r.o<.'tJ\e those 'II<'> .or~. bu: \\hc·th,·l Dt:h;mJ\mb. thn.mgh thtt..,·.: ,ft~"'. !-llltl~ way /tJI'gt'/c"'(/lnJwnJ ·~ n1arkcL

Sfl lfOfSfR 1/.III IU:I'/l·JI [\'t>l ·II 11

nnal) .... ls 111 Jct.:nnining 'het tl'r .md Ill what extent Interne: acuvit~ prO\ tde~ a ,ufticicnt h.tsi:-. ftlr t 1e :hscnion of pcrsonaljuri:-.diction.

Ill [:"'1 Ht'<F l !·OR I \I '-,[ I ·C. riO~ Cl. \I 'SI·S

In reduce :lw likelihood of b.:-:ng. 'ued in the rorhumer's loi:al -.ourr. f(m:igu tr:l\ .:I 'upplier:-. Jnd tra\ .:I :-.el il'rs may rely upon li.lrutll 'eleLtiun ~·l.ttl:>l.':-.. ~trhitration d,nJscs. and chnil'e of In'' clauses contame.l in thl.' Internet tran-.Jctil n documents.

!-'or in:-t;lll,·e. ilTI lntemc-t OU!-iinc-10,. rna:- w::nt 11~ tsl!rs o agr.:" that an) di ... putl' .msmg ht:t\\\.!<:11 them ~hall he r.·snlwd m thl.' couns of the Internet b ~m..:~s·~ home !>late or city. or that it ~hall be reso".c,f bclon.· :ul amitrntilm tribl!na · <~thcr th;m n cow1. or that a jl!dgc rather than a JUlY \\111 d~ide th:: .:<be' . or th:tt the law tlf n particular state \\ill l:wvern 1hc rdation,.h1p '

Thl· l'OUI1 in Decker 1·. Circus Cir('tts Hotel'~ addres~cd the enlorc.:ability of an lnt~met forum sekction tlause. In lkcAt·•·. ~ew Jer:-;cy COihl101t'i'S made rt::.cn atilm,. at a :-.!e\"ada hote' and sought to :~:.scrt personal jurisdiction based on, inter afia. the holl:l"s interactive website that nllowcd ,,,,~ customer to resef\1.' a room. ·• The intcracthe m:bs•tc displayed a r~.:sl.'r ation form. which contained a ti.lrum :-.ekction cl:n~:>e m!"onning guest:. that should they \\ish to conm1cm.:c a lawsurt against the hotel. it could only be brought in Ne,·ada.M In the Di!cker cusc. the court decided to enforce the Nc\"ada forum s~..kction clause."' 1 he court also found t; ,at th.: comhinmion of an imeractiv~.; •;cb)oit~ with a fi.)rum sdcction <.:Ia us~· ncgat<:s any intent or being hale J Ill to a local court room."·'

C ,.uu=,.,. ~:!~ 1- 'UJ111. ~d st sr-•> lena: am' omlllcdl (mk-mal q>h>!~uon m:nks nml!lru). lhc· D&s!ncl '" t tah lom;•llh:ll "\&hhou>~h h~lj'lul,. 1h.: Ztpf'•' anal~'''· I">) ihclt. j, mo:mnpl.:h: •· Rt~/1/om.<. 201 I WI 1>1 IS'~. Jl •.;.

1:1 ~ Robert ' l ~'' 1>, hlltdm~: !nu-nt<'f I 1/J.:illl"" m ln<'lli11Wti.•m !-'tJI11111>. '\ Y I .J . J'l,by 1.: 20i 2 Jl ~ I"'Such rr.:.:;t•...;&<'f" u:duJ\." f-w\ mg u-.:r- ••f (nlcm<'l S<':"\1~<" nr rr."l<!UC"h <'Til<"l 1111<> h nd: .. ? agn-nncnh bc:fore 11\lllj; tl&< •<'r·l'"' ,,, pro;!t..;h In \\ h!C"h m~y .1~1"\!.: Ill! hn\\ ~IJJ \\here Jl1\

,J 'luie 1l1~1 Jn cs "'II"" n•soiH·d "J, l•.l .l•lf. S&,,f' 2d ;.p II> 'd {<NU)

1\.;; ,, ,,, t "'..;.'··

ht•. 1.1 r.~ "' •l<- ~. d

I'Fk.\0\ 1/ .n /US/1/i 11U.\ I V/1 TIIJ. I\' lFRVrt

IV. Co:\t'U sto:>:: Till 1'\ TERJ\FT M-\ Y HA \'E E.:-..PA "-IWD

.IL RI~DICIIO:'-i

' l

The Internet may haYc changed the way in '" htch the couns ~hould decide what types of busincs~ ~·ontacb justi I) the n~:.crtion of pcr!\~o)Jla] jun~diction . Although the courts arc not yet in agreement on ''hat constitutt:s a threshold of tnleracti\ ity in the markctmg of gol>ds and sen tees over thl' lmernct 1 which i:. often coupkd "irh more traditional contacts '" ith the forum). there has been some movement towan.b a rc­C\ aluation of the :,olicitation-plus docttine as an appropnat~.· anal) ucal framework wtthm which ro rcsoh·c:: jurisdictional i:-sues.

New York Law Journal: Travel Law 2013 Summer Travel Tips

ALM Properties, Inc. Page printed from: New York Law Journal

Back to Article

Travel Law 2013: Summer Travel Tips Thomas A. Dickerson and Cheryl E. Chambers

New York Law Journal

2013-07-05 00:00:00.0

Page I of5

Going on vacation this summer? Here are a few suggestions that may help you avoid a nightmare to remember. 1

Crime, Terror and Pirates

First, determine the incidence of criminal activity,2 terrorism3 and, yes, pirates,4 at your selected destination and avoid all three.

The Fine Print

Second. read the fine print in the brochures and travel contracts that you enter into and act accordingly. Typically, this will mean determining the risks involved, responsib ilities disclaimed and the need to obtain appropriate insurance. Contractual clauses seeking to disclaim liabil ity for the torts of independent contractors5 are nothing new and unless prohibited by statute are. typically, enforced. On occasion the courts may find liability shifting warranties of safety6 and assumptions of duties in brochure language. Recently, however, there has been an explosion of new travel contract clauses, e.g., requiring mandatory arbitration of disputes, allowing the filing of lawsuits in a selected and distant forum, applying foreign Jaw. and seeking to limit recoverable damages.

Dangerous Shore Excursions

Third, be very selective in the local sports activities (e.g .. zip-lining, para-sailing. snorkeling and scuba diving) you participate in during cruise shore excursions or at foreign resorts. Typically, these services are provided by foreign companies not subject to the jurisdiction of U.S. courts/ and which may be uninsured, unlicensed, insolvent. irresponsible and, worst of all, the cruise line or resort that recommends the local service provider and earns a commission8 doing so, may disclaim allliability9 for any injuries you sustain.

Cruise Local

Fourth, if you cruise, do so on a cruise ship that touches a U.S. port since you are protected by U.S. Maritime Law10

which, inter alia, requires that each cruiseship/cruiseline be subject to The Center For Disease Control (CDC) sanitation inspections11 and must report to the FBI any incident involving "homicide, suspicious death ... kidnaping, assault with serious injury (rapes)" and shall also "furnish a written report of the incident to an Internet-based portal maintained by" the U.S. Coast Guard and accessible to consumers.12 For those who cruise elsewhere, such as those unhappy folks who sailed on the Costa Concordia 13 early last year. your rights and remedies may be governed by the Athens Convention14 or by foreign substantive15 and procedural16 1aw, not nearly as accommodating as that of the United States.

No Fly Zone

Fifth, avoid flying on foreign air carriers, intra-country. since you may not be protected by the Montreal Convention17

and your recoverable damages, if any, may be very modest, indeed.18 In addition, many foreign air carriers are on the European Union's "Biacklist"19 which you should consult before you book.

Safety Standards

Sixth, if you sustain a serious injury, avoid using the medical facilities on cruise ships (which have consistently avoided liability for the malpractice of the ship's docto,-2°). In addition. a cruise ship may involuntarily disembark you and transport you to a local medical facility with an uncertain outcome.21 Travelers may assume that when they travel

http://www .ncwyork Jawjoumal.com/Pubt\rticleFriendly NY .j sp ?id= 1202609 565944 7/3/2013

New York Law Journal: Travel Law 2013 Summer Travel Tips Page 2 of 5

abroad they are protected by the same safety standards and medical care available in the United States. The reality, however, is quite the opposite.

In many foreign countries the safety standards may be much lower; e.g., the plate glass in a Greek hotel lobby may be very !hin;22 the windows in a Russian hotel may be less secure;23 a gas stove in a hotel may explode.24 The quality of medical care may be much lower; e.g., a diabetic tourist may be misdiagnosed at the hotel and in a local hospital;25 a hotel guest may die from a heart attack because of a delay in calling for medical assistance.25 Best bet, use your evacuation insurance, get on a plane and fly home to the United States as fast as you can.

Keep Your Children C~vse

Seventh, think very carefully about entrusting your children to the day care centers of foreign resorts or hotels. In Flanagan v. Wyndham lnternational, 27 guests entrusted their child to the "Kids Klub day-care program at the Wyndham Sugar Bay Resort in St. Thomas" only to have her molested by an employee later convicted of sexual molestation. Taking your mother-in-law or another family member with you to watch after your children may be the best approach.

Behave Yourself

Eighth, travelers need to behave in accordance with the laws and customs of the destination country. For example. "In Singapore. which places a high value on order, prostitution is legal but careless disposal of chewing gum can invoke fines up to $500. Jaywalking and spilling result in similar fines. On the bright side. Singapore saves canings for more serious offenses, such as vandalism.

Sensitivity to another country's values is important, as Raffi Nernekian, a Lebanese tourist visiting the United Arab Emirates learned when he was arrested for wearing a skin cancer awareness T-shirt depicting Posh Spice in her birthday suit. Nernekian spent a month in jail. And Ireland, the lartd of creative invective, just passed a blasphemy law making it a 25,000-euro ($37,000) offense to say or print anything 'grossly abusive or insulting' about any subject held sacred by any religion'' 28

Forum Selection Clauses

Clearly, forum selection clauses are meant to chill the enthusiasm of injured travelers by making it expensive and problematic to sue in a distant jurisdiction. Nonetheless they have been enforced by some courts29 depending on certain considerations such as lack of notice and the incidence of cancellation penalties. 30 Just how onerous must it be to declare such a forum selection clause unenforceable?

In Madoff v. Bold Earth Teen Adventures.31 a 15-year-old boy was "swept out to sea near Kealakekua Bay, (in Hawaii) during a kayaking ant' hiking adventure tour ... [his] body has not been recovered and he is presumed dead.'' The defendant tour operator sought to enforce a "Jefferson County. Colorado" forum selection clause which the court rejected since it "will effectively deprive [the administrator] of a meaningful day in court."

Arbitration

In Lhotka v. Geographic Expeditions32 the 37-year-old hiker died while climbing Mount Kilimanjaro. The tour operator's contract disclaimed all liability, required the application of California law and limited recoverable damages to the air and sea cost of the trip. The court refused to enforce the disclaimer on the grounds of unequal bargaining power.

On the other hand in Shea v. Global Travel Marketing, 33 "the child, age 11, was killed while on safari with his mother in Botswana. He was sleeping alone in a tent at a campsite when he was dragged from his tent and mauled by hyenas." The child's mother had signed a travel contract on behalf of her son which contained a mandatory arbitration clause which the Florida court enforced. "We hold that an arbitration agreement incorporated into a commercial travel contract is enforceable against the minor or min or's estate in a tort action arising from that contract."

Thomas A. Dickerson and Cheryl E. Chambers are associate justices of the Appellate Division, Second Department. Dickerson is the author of "Travel Law" (Law Journal Press, 2013).

Endnotes:

1. Coauthor Thomas A. Dickerson has for more than 30 years wriffen about travel law and the traveler's rights and remedies. See Dickerson, Travel Law (Law Journal Press, 2013 ); Dickerson, Gould and Chalos, Litigating International Torts in United States Courts, Thomson Reuters West 2013. See also: Dickerson, 'Travel Consumer Fraud: Rip·Offs & Remedies," 28 Syra. L.R. No.4 (Fall1977); Dickerson, "The Cruise Passenger's Dilemma: Twenty­First Century Ships, Nineteenth-Century Rights," 28 Tulane Maritime L.J. No. 2 (Summer 2004); Dickerson, "Travel Abroad. Sue at Home 2012; Forum Non Conveniens and the Enforcement of Forum Selection and Mandatory Arbitration Clauses," 32 Pace L.R. No. 2 (Spring 2012); Dickerson, Chambers and Cohen, "Personal Jurisdiction and the Marketing of Goods and Services on the Internet," 41 Hofstra L. R. No. 1 (Fall 2012): The Cruise Passenger's Rights and Remedies 2013 at www.nycourts.gov/courts/9jd/taxcertatd.shtml.

2. See Linda, "Underfunded Belize Police Challenged by Crime," www.eturbonews.com (Aug. 20, 2012) ("CNN Go rated Belize City as the tenth most hated city in the world ... Between January and June 2012 there were 35 murders in Belize City"); Myers. "Caribe Noire," Travel Weekly. Jan. 11, 2010, p. 18

http://www.newyorklawjoumal.com/PubAnic!eFriendlyNY.jsp?id=l102609565944 7/3/2013

New York Law Journal: Travel Law 2013 Summer Travel Tips Page 3 of5

3. See Sengupta. "At Least 100 Dead in India Terror Attacks," The New York Times at nytimes.com, Nov. 27, 2008. See also: DiFederico v. Marriott International. 2013 WL 1811872 (4th Cir. 2013) (U.S. citizen killed in terrorist attack at Marriott Islamabad Hotel in Pakistan; forum non conveniens motion denied). See also: Steinmetz, "Top 10 places where tourists get kidnapped," www.eturbonews.com (June 19, 2013) ("Top 10 threat areas for kidnap for ransom in 2012: 1. Afghanistan, 2. Somalia, 3. Iraq, 4. Nigeria. 5. Pakistan, 6. Yemen, 7 .. Venezuela, 8. Mexico, 9. Haiti, 10. Columbia."). See also: Masod and Walsh, "Militants Ki111 0 Climbers in Himalayas of Pakistan," www.nytimes.com (June 24, 2013) ("In one of the most brazen attacks on foreigners in Pakistan in recent years, gunmen disguised as paramilitary police shot dead 10 tourists, including one American and their Pakistani guide on a mountain·climbing expedition"). See also Steinmetz, "Bloody protest against governor with terror background continues," www.eturbonews.com (June 24, 2013)(protests regarding the appointment of a governor in Luxor. Egypt, with a "strong connection to a terror group" that massacred 58 tourists a few years ago "when six attackers ... used assault weapons to systematically gun down men, women and children inside the 3,400-year-old Temple of Hatshepsut, the female pharaoh who lead Egypt around 1500 BC.")

4. See Sayare. "Frenchwoman Abducted in Kenya Dies," www.nytimes.com (Oct. 21, 2011 ); Nagourney and Gettleman, "Pirates Brutally End Yachting Dream," nytimes.com, Feb. 22, 2011.

5. See Perry v. Hal Anti/len, 2013 WL 2099499 (W.O. Wash. 2013) (shore excursion accident; discussion of relationships betwee-: ..:ruiseline, ground tour operator and subcontractor transportation providers; theories of liability); Smolnikar v. Royal Caribbean Cruises, 787 F.Supp.2d 1308 (S.D. Fla. 2011) (cruise passenger injured when slams into tree while riding a zip-line during shore excursion: review of theories of cruise ship liability); Young v. Carnival, 2011 WL 465366 (S.D. Fla. 2011) (slip and fall during shore axcursion; disclaimer of liability for misconduct of ground operator enforced) .

6. See Travel Law at §5.04[4][C].

7. See Travel Law at §1.03[3]; See also: Dickerson, Chambers and Cohen. "Personal Jurisdiction and the Marketing of Goods and Services on the Internet," 41 Hofstra L.R. No. 1 (Fall 2012). pp. 31-51.

8. For a discuss ion of how cruisesh ips market shore excursions, see Perry v. Hal Anti/len, 2013 WL 2099499 (W. D. Wash. 2013) (shore excursion accident; discussion of relationships between cruiseline, ground tour operator and subcontractor transportation providers; theories of liability); Koens v. Royal Caribbean Cruises, 774 F.Supp.2d 1215 (S.D. Fla. 2011) and Smolnikar v. Royal Caribbean Cruises, 787 F.Supp.2d 1308 (S.D. Fla. 2011 ). See also Perrin, "What I Learned Moonlighting as a Cruise Ship Trainee" www.cntraveler.com/perin-post/2013/04.

9. See Travel Law at §5.04[10].

10. See Travel Law at §§3.02(1]-(3]. See International Cruise Line Passenger Bill of Rights at www.eturbonews.com/35058/cruise·industry-adopts-passenger-bill-rights which is a beginning but falls far short of the cruise lines accepting responsibility for the medical malpractice of ship's doctors or the torts of independent contractor shore excursion ground service providers.

11 . See Stieghornt. "Federal inspectors rate 5 cruise ships unsatisfactory on issues of sanitation," Travel Weekly, May 6, 2013, p. 1.

12. See www.uscg.mil/hqlcgisiCnuiseline.asp.

13. On Jan. 13, 2012, the Costa Concordia struck a large rock and nearly sank (Higgins, "So, Just How Safe Is Your Ship?" htlp:fftravel.nj ~imes.com (Feb. 6, 2012)) leaving "a haunting image: that of the 13-story luxury liner Costa Concordia half-submerged in the Tyrrhenian Sea last January after its captain piloted the ship and its 4,252 passengers and crew into a rock off the Tuscan coast, killing 32 on board"); See also: Giglio Sub S.N. C. v. Carnival Corp., 2 012 WL 44 77504 {S.D. Fla. 2012) {a purported class of 1 ,000 "'fishermen, property owners, business owners and wage earners on Giglio Island, as well as those working in and around the island' who claim damages to their businesses stemming from the wreck of the Costa Concordia ... most, if not all, of Plaintiffs are Italian"; motion to dismiss on the grounds of forum non conveniens granted).

14. See Travel Law at §3.02[2][e]. See also Edelman, The Athens Protocol 2002 MLA Report Doc. 806 (Spring 2012) p.16881. See also Wallis v. Princess Cruises. 306 F .3d 827 (9th Cir. 2002).

15. See e.g., MacLachlin v. Marriott, New York Law Journal, Jan. 18, 1994, (N.Y. Sup. 1994) (tourist thrown from angry camel in Egypt; "an Egyptian forum which is based partially on Koranic law would be unduly harsh to plaintiff"); In re Air Crash Off Long Island, New York, 209 F.3d 200 (2d Cir. 2000) (air crash; France does not allow punitive damages); Calvo v. Sol Melia, 761 So. 2d 461 (Fla. App. 2000) (tourist struck by motor boat while swimming; Dominican Republic does not recognize product liability claims): Nowack v. Tak How lnv .. 94 F.3d 708 (1st Cir. 1996) (drowning accident: law uncertain in Hong Kong)]: Lehman v. Humphrey Cayman, 713 F.2d 339 (8th Cir. 1983) (recovery for wrongful death in Cayman Islands may not exceed $5,000).

16. See e.g., Bruemmer v. Marriott, 1991 WL 30141 (N.D. Ill. 1991) (hotel guest playing golf falls off cliff; no contingent fees in Bermuda): Doe v. Sun International Hotels. 20 F .Supp.2d 1328 (S.D. Fla. 1998) (18-year-old female guest raped at hotel: no jury trials or contingency fees in Bahamas); Gyenes v. Zionist Organization of America, 564 N.Y.S.2d 155 (1st Dept. 1991) (student drowned in Jordan River: no right to jury trial in Israel).

htt p://v.rv,;v.' .newyork lawjoumal.com/Pub Artie lcFriendly NY .j sp?id= 1202 60 9 5 65944 7/3/2013

New York Law J oumal: Travel Law 2013 Summer Travel Tips Page 4 of 5

17. See Travel Law at Chapter 2A. Note that if your air transportation in country is a "leg" of an "international flight" then you may be covered by the Montreal Convention.

18. See Barkanic v. General Administration of Civil Aviation, 923 F.2d 957 (2d Cir. 1991) (air crash; maximum recoverable damages limited to $20.000). The same concept applies to other accidents in foreign venues. See, e.g., Wendelken v. Superior Court, 671 P.2d 896 (Ariz. 1983) (en banc)(slip and fall; Mexico limits lost wage damages to 25 pesos per day); Hernandez v. Burger, 162 Cal. Rptr. 564 (Ct. App . 1980)(auto accident; Mexican law limits recovery to the amount of the injured party's medical and rehabilitative expenses and lost wages at the minimum rate).

19. See Clark, "E.U. Expands Airline 'Blacklist."' www.nytimes.com (April1, 2010) "The European Union on Tuesday banned all airlines from the Philippines and Sudan from flying into the region's airports, citing 'serious safety deficiencies' found by the United Nations and U.S. aviation authorities"). For a list of the banned airlines see http ://ec.europa.eultransportlmodes!air/safety/air-ba n/index _en. htm. See also: "Aviation Safety Commission Updates the European Safety list of airlines (Dec. 4, 2012) at http://europa.eu/rapid/press_release_IP _12_1302_en.htm.

20. See Travel Law at §3.02[6][g].

21. See Wajnstat v. Oceania Cruises, 2011 WL 465340 (S.D. Fla. 2011) {cruise passenger becomes ill and diagnosed by ship's doctor as having bleeding hemorrhoids; symptoms worsened and passenger was medically disembarked in the Ukraine and transported to a medical facility wherein more than half of his colon was removed; plaintiff claimed he received substandard medical care in Ukraine; the court dismissed a cause of action against the cruise line alleging a failure to investigate the competency of land-based medical providers).

22. See Wilson v. Best Travel. (1993) 1 AllER 353 (Tourist fell through weak plate glass window in Athens hotel; plate glass thickness standards lower in Greece than in England where traveler resided).

23. See Carley v. Theatre Development Fund, 22 F .Supp.2d 224 (S.D.N.Y. 2998)(Tourist fell through window at hotel in St. Petersburg, Russia).

24. See Cicchiello v. Reney Tours Plane Brokers, 1996 WL 278348 (Conn. Super. Ct. 1996).

25. See Gianocostas v. RIU Hotels, SA, 2005 WL 503931 {Mass. Super. 2005) (case remanded for further consideration of whether the Dominican Republic offers an adequate remedy with respect to the plaintiffs' claims); 2006 WL 2089772 (Mass. Super. 2006) (failure of hotel and local clinic to diagnose and properly treat tour participant with diabetes; negligent misrepresentation claims against tour operator dismissed).

26. See Abramson v. The Ritz-Carlton Hotel, 2010 WL 3943666 (D.N.J. 2010) (hotel guest went into cardiac arrest; staff failed to promptly contact emergency medical services; "when the hotel supervisor affempted to use an automated external defibrillator [it] malfunctioned ... and none of the hotel employees knew how to operate the device").

27. Flanagan v. Wyndham International, 231 F.R.D. 98 {D.C.D.C. 2005). See also: "Who's Minding the Kids?" Conde Nast Traveler, August 2005, pp. 61 ("More hotels and resorts are opening children's programs every day, but few parents really know what separates the good ones from the bad ... Just this past April, the issue of safety at these facilities made headlines again when the Australian press reported allegations that in recent years, two Australian children had been abused at two hotel kids' clubs in Bali.")

28. Dougherty, "The Informer. Lost in Translation," Conde Nast Traveler, p. 76.

29. See e.g., Molino v. Sagamore, 2013 WL 1632496 (2d Dept. 2013) (forum selection clause enforced); Bernstein v. Wysocki, 77 A.D. 3d 241, 249 (2d Dept. 2010) (forum selection clauses prima facie enforceable).

30. See e.g., Horberg v. Kernzner International Hotel, 744 F.Supp.2d 1284 (S.D. Fla. 2007) (four prior visits); Estate of Myhra, 695 F.3d 1233 (11th Cir. 2012) (terms and conditions of contract of passage conveyed to passenger five times); Casavant v. Norwegian Cruise Line, 2005 WL 1523886 (Mass. App. 2005); Ward v. Cross Sound Ferry, 273 F.3d 520 (2d Cir. 2001): Osborn v. Princess Tours, 1995 American Maritime Cases 2119 (S.D. Texas. 1995).

31. Madoffv. Bold Earth Teen Adventures, 2012 WL 1337337 (U .S.D.C. Hawaii 2013).

32. Lhotka v. Geographic Expeditions. 181 Cal. App. 4th 816 (Cal. App. 2010).

33. Shea v. Global Travel Marketing, 2003 WL 1916874 (Fla. App. 2003 reversed and remanded 908 So. 2d 392 {Fla. Sup. 2005).

http ://wvvw .newyork I awj ournal. com/Pub Artie le Friendly NY .j sp ?id= 1202609 5 65944 7/3/2013

1Thomas A. Dickerson is an Associate Justice of theAppellate Division, Second Department of the New York StateSupreme Court. Justice Dickerson is the author of Class Actions:The Law of 50 States (Law Journal Press 2013)(Class Actions);Travel Law (Law Journal Press 2013); Consumer Protection in 2Commercial Litigation In New York State Courts ch. 98 (Robert L.Haig et al., ed., 3d ed 2013)(Consumer Protection ); Jack M.Weinstein, Harold L. Korn & Arthur R. Miller, New York CivilPractice CPLR §§ 901-909 (David L. Ferstendig 2d. Ed. 2013);Litigating International Torts In United States Courts (co-author)(Thomson Reuters West 2013); Consumer Law 2013: TheJudges’s Guide To Federal And New York State Consumer ProtectionStatutes.

2 Daniel D. Angiolillo is an Associate Justice of theAppellate Division, Second Department of the New York StateSupreme Court. Justice Angiolillo has co-authored severalarticles on consumer law, class actions and tax certiorari andeminent domain.

3 Cheryl E. Chambers is an Associate Justice of the AppellateDivision, Second Department of the New York State Supreme Court.Justice Chambers has co-authored several articles on consumerlaw, class actions and jurisdiction.

4 Leonard B. Austin is an Associate Justice of the AppellateDivision, Second Department of the New York State Supreme Court.Justice Austin is an Adjunct Professor of Law at HofstraUniversity, School of Law and the author of many articles oncommercial law.

1

NEW YORK STATE CONSUMER LAW AND CLASS ACTIONS

2012-2013

September 26, 2013

[ Accepted For Publication By The New York State Bar Association Journal October IssueAnd May Not Be Reproduced Without The Permission Of Thomas A. Dickerson]

By Thomas A. Dickerson1, Daniel D. Angiolillo2, Cheryl E.

Chambers3 & Leonard B. Austin4

2

Recently, New York Courts have ruled on a variety of

important consumer law issues involving mortgage settlement

conferences and sanctions, educational services and law school

employment statistics, insurance overcharges and automobile

repair shop steering, medical success rates and debt collections.

In addition, the Court of Appeals, the Appellate Divisions and

several trial courts have continued to respond to the need for a

more accessible class action statute.

Mortgage Settlement Conferences & Sanctions

In 2008, “[t]he New York State Legislature endeavored to

cope with the dramatic increase in mortgage foreclosures by

enacting a variety of statutes that are known, in omnibus form,

as the Subprime Residential Loan and Foreclosure Laws”1. CPLR

3408 was enacted as part of this legislation. In November 2009,

the Legislature amended the statute to, inter alia, mandate

settlement conferences in all residential mortgage foreclosure

actions in which the defendant is a resident of the property

subject to foreclosure (CPLR 3408[a]). The amendment also, inter

alia, added the following requirement: “Both the plaintiff and

the defendant shall negotiate in good faith to reach a mutually

agreeable resolution, including a loan modification, if possible”

(CPLR 3408[f] [emphasis added]). In addition, 22 NYCRR 202.12-

3

a(4) directs the court to “ensure that each party fulfills its

obligation to negotiate in good faith.” It stands to reason that

the court cannot “ensure” compliance with CPLR 3408(f) without

the authority to impose some type of a sanction. Yet neither CPLR

3408(f) nor 22 NYCRR 202.12-a provide sufficient guidance and as

a result the Courts, inter alia, have upon a finding of a lack of

good faith, “barred them from collection of interest, legal fees

and expenses...imposed exemplary damages against them...stayed

the foreclosure proceedings...imposed a monetary sanction

pursuant to 22 NYCRR part 130...dismissed the action...and

vacated the judgment of foreclosure and sale and cancelled the

note and mortgage”2. In an effort to add clarity the Appellate

Division in Wells Fargo Bank, N.A. v. Meyers3 noted that “it is

beyond dispute that CPLR 3408 is silent as to sanctions or the

remedy to be employed where a party violates its obligation in

good faith” and “the courts must employ appropriate, permissible

and authorized remedies, tailored to the circumstances of each

case”.

Educational Services: Working For Free

In Apple v. Atlantic Yards Development Co., LLC 4 student/

trainees asserted “that in exchange for their participation in a

training program, they were promised membership in a labor union

4

and construction jobs at the Atlantic Yards construction project

in Brooklyn, New York. When they completed the program, providing

two months of unpaid construction work, the promised union

membership and jobs were not provided”. The Court found that

plaintiffs asserted a deceptive business practice covered by

General Business Law § 349 and “In addition...the Plaintiffs were

not strictly employees in the traditional sense, but consumers

(students) of a training program offered by the Defendants. (GBL)

§ 349 (has been applied) to claims brought by consumers of

educational or vocational training programs”5.

Law School Employment Statistics

In Gomez-Jimenez v. New York Law School6 law school

graduates alleged that their law school misrepresented post

graduation employment data and violated GBL § 349. The Appellate

Division found that plaintiffs adequately alleged consumer

oriented conduct but a failed to establish that the data was

sufficiently deceptive or misleading. “[A]lthough there is no

question that the type of employment information published by

defendant (and other law schools) during the relevant period

likely left some consumers with an incomplete, if not false,

impression of the school’s job placement, Supreme Court correctly

held that this statistical gamesmanship, which the ABA has since

5

repudiated in its revised disclosure guidelines, does not give

rise to a cognizable claim under (GBL) § 349"7.

Insurance Overcharges

In Partells v. Fidelity National Title Insurance Services8

(FNTIC) consumers alleged that defendant “[U]nlawfully

overcharged them and other consumers for title insurance”. In

sustaining a GBL 349 claim the Court found “that in charging the

rate that it did FNTIC implicitly represented that the rate-

which, it bears repeating is set by law-was correct....it is not

simply that FNTIC failed to disclose the correct rate, rather, it

deceived the Partels into thinking the charged rate was

correct...it is enough to conclude that a jury could find that a

reasonable consumer, while closing on a mortgage, would believe

that the rate he or she was charged for title insurance (to the

benefit of the lender) would be the lawful rate”.

Insurance: Auto Repair Steering

In North State Autobahn, Inc. v. Progressive Ins. Group9 the

Court held that GBL § 349 may be used by businesses that allege

deceptive practices which have an indirect impact upon consumers

and, hence, are consumer oriented. The Court noted the “the

6

plaintiffs alleged that they were directly injured by the

Progressive(‘s) deceptive practices in that customers were misled

into taking their vehicles... to competing repair shops that

participated in the (Progressive’s) DRP (direct repair program).

The allegedly deceptive conduct was specifically targeted

at...independent (auto repair) shops in an effort to wrest away

customers through false and misleading statements...The

plaintiffs adequately alleged that as a result of this misleading

conduct, they suffered direct business loss of customers

resulting in damages of over $5 million”.

Medical Success Rates

In Gotlin v. Lederman, M.D.10 the Court sustained a GBL 349

claim alleging “that the defendants-in their brochures, videos,

advertisements, seminars and internet sites-deceptively marketed

and advertised FRS (Fractionated Stereotactive Radiosurgery)

treatment by making unrealistic claims as to its success

rates...plaintiffs contend that defendants’ claims that FSR

treatment had ‘success rates’ of greater than 90% in treating

pancreatic cancer were materially deceptive”.

7

Debt Collections

In Midland Funding, LLC v. Giraldo11 the Court found that

debt collection procedures involving the filing of lawsuit

without proof stated a GBL 349 claim. “Addressing the first

element-‘consumer oriented’ conduct-defendant’s GBL counterclaim

is plainly sufficient...’the conduct complained of’ at its heart

involves the ‘routine filing’ of assigned debt lawsuits by

plaintiff‘despite a lack of crucial, legally admissible

information’ or ‘sufficient inquiry’ into whether the claims are

meritorious...this Court holds that deceptive conduct by a debt

buyer in the course of civil litigation may violate a consumer’s

legal rights under GBL 349. When a debt buyer seeks the courts’

aid in enforcing an assigned debt claim, the debt buyer should

not commence the action unless it can readily obtain admissible

proof that would make out a prima facie case. Such proof should

include evidence that it actually owns the debt, that the

defendant was given notice of the assignment and that underlying

debt claim is meritorious...it commences such an action without

having such readily available proof and if it turns out that such

proof is not readily available, the debt buyer may end up not

only losing the case, but may also be found liable for

substantial compensatory damages, punitive damages and attorney’s

fees to the extent allowable by law”.

8

Positive Developments In New York Class Actions

Since the publication of New York State Class Actions: Make

It Work-Fulfill The Promise12 (hereinafter Make It Work) in 2010

and the Court of Appeals gamechanger13 decision in Koch v Acker,

Merrall & Condit Co.,14 in 2012, there has been a noticeable

change in the enthusiasm of New York Courts in applying our

salutary class action statute, CPLR §§ 901-90915.

Expansive Language

In Corsello v. Verizon New York, Inc.16 the Court of Appeals

found that the owners of a building upon which the defendant

attached a box “to transmit telephone communications to and from

Verizon’s customers in other buildings” stated an inverse

condemnation cause of action. As for class certification, the

Court found that it “seems on its face well-suited to class

action treatment” in that “it would be reasonable to infer that

the case will be dominated by class-wide issues-whether Verizon’s

practice is lawful, and if not what the remedy should be” and

that “expert testimony” could be used to “support an inference”

of typicality (emphasis added)17.

9

Sua Sponte Certification

In Globe Surgical Supply v. GEICO18, a class action by

medical equipment suppliers challenging denial of their claims

under no fault because they exceeded so called prevailing rates,

the Second Department denied certification without prejudice to

reapplying for class treatment after locating an adequate class

representative. In Amer-A-Med Health Products, Inc. v. GEICO19 and

O’Brien v. GEICO20 the trial court found a proposed intervenor to

be an adequate class representative and sua sponte certified the

class noting that “It would be illogical and redundant for

plaintiff to again bring a further motion to demonstrate

the...criteria set forth in 901 and 902 when the Appellate

Division already ruled upon them”. On appeal, the Appellate

Division, Second Department approved of the concept of sua sponte

class certification but remitted for the entry of a CPLR 903

order describing the certified class21.

Stockbroker Overtime Claims

In Thomas v. Meyers Associates, L.P.22 a class of employees

of a broker-dealer in the financial industry sought monetary and

injunctive relief alleging defendants “‘engaged in a systemic

practice of failing to properly compensate stockbrokers’ in

10

violation of New York Labor Law § 650...by...failing to pay

overtime, making unlawful deductions from paychecks, failing to

pay timely and failing to pay minimum wage”. In granting

certification the Court allowed the class representative to waive

the statutory penalty of liquidated damages (with opt-out notice

to class members) thus circumventing CPLR § 901(b)23. The Court

also noted the “Plaintiff and the (class) seek to vindicate

rights accorded them by statute and regulation, and allegedly

violated by uniform policies and practices, including

(defendant’s) admitted failure to pay overtime”. Of particular

interest was the Court’s earlier denial of defendant’s motion to

compel mandatory arbitration pursuant to the rules of the

Financial Industry Regulatory Authority (FINRA)24

Rent Overcharges

In Downing v. First Lenox Terrace Associates25, a class of

tenants or former tenants of a residential complex alleged that

the owners “unlawfully deregulated their apartments under the

luxury decontrol provisions of Rent Stabilization Law

(Administrative Code of City of NY) § 26-501 et seq. (hereinafter

RSL) while receiving tax incentive benefits under the City of New

York’s J-51 program...Plaintiffs seek...a declaration that all

apartments in the complex are subject to rent stabilization,

11

injunctive relief and a money judgment”. In denying defendant’s

motion to dismiss based upon CPLR § 901(b) the Appellate

Division, First Department expanded the application of CPLR

Article 9 to allow class actions seeking actual damages

consisting of rent overcharges plus interest pursuant to RSL §

26-516(a)26.

In Casey v. Whitehouse Estates, Inc.27 wherein28 a class of

tenants alleged rent overcharges and sought reimbursement.

Evidently, the landlord sought to deregulate its apartments

pursuant to the luxury decontrol amendments under the Rent

Stabilization Law (RSL) and obtain “tax abatements and exemptions

for rehabilitative work done to” its building under the J-51

program. Allegedly the defendant landlord illegally charged

market rents violating the J-51 Program “to keep apartments rent

stabilized”29. In granting class certification the Court found

that class treatment was not prohibited under CPLR 901(b) by the

penalty provisions of the RSL because they could be waived30 and,

in any event, the penalty provisions were not triggered because

the defendant was acting in good faith. The Court noted that the

named plaintiffs and class members share a common goal to ensure

“that the landlord charges tenants...no more than the maximum

legal rent” and that they be compensated for the rent

overcharges.

12

County As Class Representative

In County of Nassau v. Expedia, Inc.31, Nassau County sought

to enforce its Hotel and Motel Tax Law and other similar taxing

statutes throughout New York State on behalf of a class of 56

other local governmental agencies. “Defendants purchase blocks of

rooms from hotels and motels at discounted rates and then resell

the rooms to members of the public via the internet. The County

alleges that the tax owed under the Hotel and Motel Tax Law is

correctly calculated as a percentage of the price that occupants

pay to the defendant resellers. The County further alleges that

the online sellers collect 3% hotel tax from consumers based on

retail rooms rates but remit to the County only the portion of

the tax based on defendants’ lower ‘wholesale’ rate”. In

certifying the class action with Nassau County as the class

representative, the trial Court relied upon the Court of Appeals’

recent decision in Overstock.com v. Dept. of Taxation and

Finance32 and found a predominance of common questions despite

noting “that there is some variation in the tax rate among the

different taxing authorities. Accordingly, the court concluded

that the ‘means and manner’ of collecting the taxes is

sufficiently similar”.

13

1. See Dillon, Newly-Enacted CPLR 3408 for Easing the MortgageForeclosure Crisis: Very Good Steps, but not LegislativelyPerfect, 30 Pace L Rev 855, 856 [2010].

2. See Wells Fargo Bank, N.A. v. Meyers, 966 N.Y.S. 108, 116 (2dDept. 2013).

3. Wells Fargo Bank, N.A. v. Meyers, 108 A.D. 3d 9, 966 N.Y.S. 2d108 (2d Dept. 2013). For subsequent cases see Deutsche Bank v.Izraelov, 2013 WL 4799151 (N.Y. Sup. 2013)(failure to negotiatein good faith; remedy: tolling of interest on note and mortgage,fees and costs); U.S. Bank v. Shinaba, 2013 WL 4822396 (N.Y. Sup.2013)(failure to negotiate in good faith; remedy: interest, latefees and loan modification fees barred and/or refunded; attorneysfees application severed for independent review forreasonableness); JP Morgan Chase Bank v. Butler, 40 Misc. 3d 1205(N.Y. Sup. 2013)(failure to negotiate in good faith; remedy:interest, legal fees and expenses barred; hearing orderedpursuant to 22 NYCRR § 130-1.1 (frivolous conduct)). See also:Cole v. Baum, 11-CV-3779 (SLT) EDNY Decision July 11, 2013 (Fair Debt Collection Practices Act does not provide a remedy fora failure to negotiate in good faith under CPLR 3408).

4.. Apple v. Atlantic Yards Development Co., LLC, 2012 WL 2309028(E.D.N.Y. 2012).

5. See e.g., Drew v. Sylvan Learning Center, 16 Misc. 3d 838(N.Y. Civ. 2007); People v. McNair, 9 Misc 2d 1121 (N.Y. Sup.2005); Andre v. Pace University, 161 Misc. 2d 613 (Yonkers Cty.Ct. 1994), rev’d on other grounds 170 Misc. 2d 893 (N.Y.A.T.1996); Brown v. Hambric, 168 Misc 2d 502 (Yonkers City Court1995); Cambridge v. Telemarketing Concepts, 171 Misc. 2d 796(Yonkers City Ct 1995)).

6.. Gomez-Jimenez v. New York Law School, 36 Misc. 3d 230 (N.Y.Sup. 2012), aff’d 103 A.D. 3d 13, 956 N.Y.S. 2d 54 (1st Dept.2012). See also: Austin v. Albany Law School, 38 Misc. 3d 988(N.Y. Sup. 2013)(law school graduates allege law schoolmisrepresented post graduate employment and salary data;complaint dismissed); Bevelacqua v. Brooklyn Law School, 39 Misc.3d 1216 (N.Y. Sup. 2013)(law school graduates claim law schoolmisrepresented post graduate employment and salary data; GBL §349 claims dismissed).

ENDNOTES

14

7. Gomez-Jimenez v. New York Law School, 103 A.D. 3d 13, 956N.Y.S. 2d 54 (1st Dept. 2012).

8.. Partells v. Fidelity National Title Insurance Services, 2012WL 5288754 (W.D.N.Y. 2012).

9.. North State Autobahn, Inc. v. Progressive Ins. Group, 32 Misc.3d 798 (N.Y. Sup. 2011), aff’d 102 A.D. 3d 5 (2d Dept. 2012).

10.. Gotlin v. Lederman, M.D., 483 Fed. Appx. 582 (2d Cir. 2012).

11.. Midland Funding, LLC v. Giraldo, 2013 WL 1189163 (N.Y. Dist.Ct. 2013).

12. Dickerson, New York State Class Actions: Make It Work-FulfillThe Promise, 74 ALB. L. Rev. 711, 725-726 (2011)(hereinafter“Make It Work).

13.See Dickerson, Ruling in GBL 350 Claims Serves as GameChanger, New York Law Journal, April 19, 2012, p. 4.

14. Koch v Acker, Merrall & Condit Co., 18 N.Y. 3d 940 (2012).

15. For a complete discussion of CPLR §§ 901-902 see Dickerson,Article 9 of Weinstein Korn Miller, New York Civil Practice: CPLR(David Ferstendig,ed.) LEXIS/NEXIS (MB) 2012 (WKM).

16. Corsello v. Verizon New York, Inc., 18 N.Y. 3d 777, 967 N.E.2d 1177 (2012).

17. The purported class representative was subject to uniquedefenses such as waiver rendering his claims atypical and, byimplication, an inadequate class representative [ See GlobeSurgical Supply v. GEICO, 59 A.D. 3d 129, 143-145, 871 N.Y.S. 2d263 (2d Dept. 2008)].

18. Globe Surgical Supply v. GEICO, 59 A.D. 3d 129, 871 N.Y.S. 2d263 (2d Dept. 2008).

19. Amer-A-Med Health Products, Inc. v. GEICO, 2011 WL 1464145(N.Y. Sup. 2011).

20. O’Brien v. GEICO, Index No. 009808/04, Decision July 19, 2011(J. Phelen).

21. O’Brien v. GEICO, 2012 WL 4513107 (2d Dept. 2012).

15

22. Thomas v. Meyers Associates, L.P., 39 Misc. 3d 1217 (N.Y. Sup.2013).

23. See N.4 at § 901.28. See also: Dickerson & Austin, New YorkState Class Actions: Making It Work-Fulfilling The Promises: SomeRecent Positive Developments And CPLR § 901(b) Should Be Repealedscheduled for publication in Albany Law Review: New York Appealsin 2014.

24. ABED v. John Thomas Financial, Inc., 107 A.D. 3d 578 (1st Dept.2013)(“The arbitration agreement in the Form U-4 signed byplaintiff provides for the arbitration of disputes ‘under therules, constitutions or by-laws of [the Financial IndustryRegulatory Authority (FINRA)]’. Accordingly, under the plainterms of the agreement, ‘arbitration shall be governed by therules promulgated by FINRA’ including former FINRA rule13204(d)...which ‘prohibits arbitration of class action claims’;motion to compel arbitration of class action denied).

25. Downing v. First Lenox Terrace Associates, 107 A.D. 3d 386 (1st

Dept. 2013).

26. Id (“While plaintiffs demanded treble damages pursuant to RSL§ 26-516(a) in their amended complaint, they have since waivedthat request and seek only reimbursement of the alleged rentovercharges plus interest...However, even where a statute createsor imposes a penalty, the restriction of CPLR 901(b) isinapplicable where the class representative seeks to recover onlyactual damages and waives the penalty on behalf of the class andindividual class members are allowed to opt out of the class topursue their punitive damages claims (see Cox v. Microsoft Corp.,8 AD3d 39 [1st Dept 2004]; Pesantz v. Boyle Envtl. Servs. 251AD2d 11, 12 [1st Dept. 1998]; Ridge Meadows Homeowners’ Assn. v.Tara Dev. Co., 242 AD2d 947 [4th Dept 1997]; Super Glue Corp. v.Avis Rent A Car Sys., 132 AD2d 604, 606 [2d Dept. 1987]).

27. Casey v. Whitehouse Estates, Inc., 36 Misc. 3d 1225(A)(N.Y.Sup. 2012)

28. Casey v. Whitehouse Estates, Inc., 36 Misc. 3d 1225(A) (N.Y.Sup. 2012).

29. See Roberts v. Tishman Speyer Properties, L.P. 13 N.Y. 3d 270(2009).

16

30. See WKM at 901.28; See also: Cox v. Microsoft Corp., 8 A.D. 3d39 (1st Dept. 2004).

31. County of Nassau v. Expedia, Inc., __Misc. 3d__, 2013 WL ____(Nassau Sup. April 11, 2013)(J. Bucaria). See also: County ofNassau v. Hotels.Com, L.P., 594 F. Supp. 2d 251 (E.D.N.Y. 2007),vacated and remanded 577 F. 3d 89 (2d Cir. 2009).

32. Overstock.com v. Dept. of Taxation and Finance, 20 N.Y. 3d 586(2013).

1 Thomas A. Dickerson and Daniel D. Angiolillo are AssociateJustices of the Appellate Division, Second Department of the NewYork State Supreme Court. John Mechmann is Principal Law Clerkfor Judge David S. Zuckerman, County Court, Westchester County.

2012 SURVEY OF TAX CERTIORARI, TAX EXEMPTIONS AND EMINENT DOMAIN

JOINT APPELLATE DIVISION SEMINAR PROGRAM

[Accepted For Publication By Westchester County Bar Journal and

May Not Be Reproduced Without The Permission Of Thomas A.

Dickerson]

Revised March 28, 2013

By Thomas A. Dickerson, Daniel D. Angiolillo And John Mechmann1

2012 has been a particularly important year in the local

fiscal arena of real property tax assessments and exemptions.

Since its enactment on June 30, 2011 §3-c of General Municipal

Law, the “2% real property tax levy cap”, as predicted by

Governor Cuomo, appears to have lead to greater “discipline, a

rigor and a scrutiny to the process...it challenges the local

governments to find savings. It informs the citizens and its

working”1. The response of the State’s local taxing authorities

has generally been supportive. For example, “a vast majority of

school districts-642 of 678, or about 95 percent-stayed within

the tax cap last year”2.

2

Reactions To Tax Cap Levy

While most tax authorities have been compliant there have

been reactions and criticisms3. First, the New York State United

Teachers union recently filed a lawsuit on February 20, 2013

challenging the constitutionality of the tax cap levy asserting

“that the tax cap interferes with local control of school and

that a requirement that 60 percent of voters support any override

of the limit dilutes the voting power of those who favor

exceeding the cap”4. The union also asserts that the tax cap levy

violates “the guarantee of equal protection under the law” since

it “has a disproportionate effect on school districts in law-

income areas”.

Interest In Reassessment

Second, there has been a renewed interest by local taxing

authorities to cyclically reassess all properties5. In fact, the

State actively encourages and provides aid to municipalities

seeking to reassess at 100% of market rate6. (“To encourage

compliance with State Law, New York State provides State Aid to

municipalities that reassess at 100% of market value on a

cyclical basis...Aside from State Aid, the benefits... include

Assessment Equity for Taxpayers, Improved Bond Ratings, Few Court

3

Challenges to Assessments, Increased State Land Assessments and

Transparency”).

Home Inspections Sought

Third, there has been increased pressure on local tax

assessors to find new sources of revenue. This has manifested

itself in (1) demanding interior inspections of residential

property, (2) selective reassessment and (3) challenging existing

real property tax exemptions. All of these techniques have been

examined and rejected by the Courts.

For example, Assessors would like to inspect the interior of

the premises to search for improvements that would support a

reassessment. In Matter of Aylward v City of Buffalo7,

petitioners commenced RPTL article 7 proceedings seeking review

of their residential real property tax assessments. At trial,

the Assessor sought to inspect the premises in order to justify

the assessments. The trial court erred, however, in shifting the

burden to taxpayers to seek preclusion of such an inspection. In

reversing, he Fourth Department found that the trial Court should

not have placed the burden on petitioner to move to preclude

inspection, rather than requiring the Assessor to justify the

inspection. In addition, the Court noted that where an Assessor

seeks an inspection of a premises, for which a tax challenge has

4

been brought, the court must conduct a Fourth Amendment analysis

which balances Assessors' need for an interior inspection against

the invasion of petitioners' privacy interest that such an

inspection would entail.

This finding comports with an earlier Second Department

decision in Matter of Yee v. Town of Orangetown8, wherein three

homeowners challenged their real property tax assessment in a

SCAR proceeding. At the pretrial conference the town requested

that its representatives be permitted to inspect the homes of the

petitioners. After the petitioners refused to permit the

inspections the JHO dismissed the SCAR petitions, with prejudice,

holding that, when a homeowner files a SCAR petition, that

homeowner makes a limited and revocable waiver of a right to

privacy and consents to inspection and, upon a demand for an

inspection by the Town, must comply to avoid dismissal of the

proceeding. The Second Department reversed holding, inter alia,

that the JHO’s determination to require an inspection without the

homeowners’ permission violated Fourth Amendment principles and

petitioners’ rights against unreasonable search and seizure,

noting that “except in certain carefully defined classes of

cases, a search of private property without proper consent is

unreasonable unless it has been authorized by a valid search

warrant.”

5

Selective Reassessment9

The selective reassessment of real property is expressly

prohibited in the Second Department10. The general rule is that

in the absence of a municipality-wide re-assessment an assessor

is required to provide an explanation of both the change in

assessment on a particular piece of property and the assessment

methodology11. Based upon observations of work being done on a

house from outside the Assessor changed the assessment from

$32,900 in 2002 to $103,700 in 2003. The trial court found

selective reassessment, in that while explaining her reasoning

“namely that there were improvement, she wholly failed to justify

those changes, as required (and) do not appear...to have been

based on objective data...she appears to have consulted no

manuals, tables or any other authorities on costing”.

Challenging Tax Exemptions

Some assessors in their search for increased assessments

have put pressure on tax exempt properties to annually justify

their tax exempt status. In Matter of 471 Columbian Club of Port

Jervis v. Duryea12 the petitioner was granted a tax exemption in

6

2010 as a charitable organization pursuant to Real Property Tax

Law § 420. Thereafter the Assessor requested that the petitioner

submit an application for the same exemption

in 2011. After the petitioner refused to make application, the

Assessor removed the tax exemption for 2011 which was affirmed by

the trial court. In reversing the trial court the Second

Department noted that “‘When a municipality withdraws a tax

exemption which has been granted pursuant to RPTL § 420-a(1), it

bears the burden of demonstrating that the property is no longer

entitled to the exemption’ and held that “a corporation is not

required to complete or file any prescribed application forms to

be entitled to an exemption pursuant to RPTL § 420-a”.

Cooperative Or Homeowners Association

In Matter of W.O.R.C. Realty Corp. v. Board of Assessors13

petitioner, a not-for-profit corporation, held title to the

subject property, some 239 acres of land with 283 seasonal

cottages along with other improvements (including a marina) on

behalf of the West Oak Recreation Club and the Club's 283

members, for the purpose of providing recreational facilities for

its members. The Club members each own one of the 283 cottages on

the property, but retain only a leasehold interest in the land

7

upon which each cottage is situated. The cottages are purchased

and sold only to Club members, or to those who successfully apply

for Club membership. The Club collects dues from the members for

providing staff, common maintenance, and amenities on the

premises, and fees for the use of the boat slips at the marina,

and the petitioner pays the real property taxes from collected

membership dues. At trial, the court found that the petitioner’s

ownership of the property was more like cooperative ownership

than a homeowners' association, and that it must be valued like

other cooperatives as a rental apartment complex according to

RPTL § 581. On appeal, the Second Department agreed that the

operation of the property was more similar to that of a

cooperative than a homeowners association and found that the

subject was over-assessed.

Condemnation: Value Of Railroad Corridor

In New York Central Lines, LLC v State of New York14, a case

of first impression15, claimant, a railroad line, filed a claim

relating to a part permanent fee, part permanent easement, taking

by the State of New York to expand the Brooklyn-Queens

Expressway. At trial, claimant’s expert, supported by several

scholarly articles on rail corridor valuation, sought to value

8

the taking by utilizing comparable sales to arrive at a corridor

value for the property which not only valued the “across-the-

fence” value of the parcel but also the value of the corridor

itself. The Trial Court accepted the use of a market analysis

but rejected the proposed corridor valuation, and awarded $

12,104,106 in damages. The Second Department held, inter alia,

that the trial court’s rejection of the corridor valuation

concept was not supported by the evidence or adequately explained

and remitted for, inter alia, a determination of the proper

corridor valuation.

Condemnation: Bad Faith

In Matter of Zutt v. State16 the Second Department

considered the circumstances under which a finding of bad faith

on the part of a comdemnor would be appropriate. For more than a

decade the homeowners, the Zutts, litigated with the State to

prevent the use of their property for the draining of stormwater.

The Zutts won everytime collecting damages for trespass and

obtaining injunctive relief. In 2010, the State invoked its

powers of eminent domain and sought to condemn a portion of the

Zutts’ property for a drainage easement “we conclude that the

State has acted in bad faith...(by) violating the sprit and

9

letter of the EDPL in making an unfounded determination of the de

minimus taking, thereby avoiding the required hearing, where the

Zutts would have had the opportunity to present evidence of bad

faith in a public forum (and) the State failed to conduct any

SEQRA review...hastily prepared a superficial environmental

checklist only after faced with new litigation...and proffered a

baseless interpretation of its regulations”.

Procedural Issues

In Matter of Board of Mgrs. of Century Condominium v. Board

of Assessors17, petitioner, a condominium manager, commenced RPTL

Article 7 challenges to the assessment for its condominium

complex for several tax years. However, several of the petitions

failed to identify all of the condominium units in the complex;

petitioner sought leave to amend the defective petitions, which

motion was granted, and respondent appeared. The Court held that

amendment was proper, where petitioner had, previously, correctly

challenged assessment of all of the condominium units before

Board of Assessment review, and in tax petitions for the same

property for other tax years, but had inadvertently failed to

challenge all of the same units in its RPTL Article 7 petitions

for two of the tax years. Respondents would not be prejudiced by

10

the amendment; in fact, their appraisal had appraised the

property in its entirety.

In Matter of Ontario Square v. Assessor, Town of

Farmington18–Petitioner filed an RPTL Article 7 petition to

challenge the real property tax assessment of the parcel at

issue, but failed to timely serve the petition upon respondents.

Respondents moved to dismiss, and petitioner responded by seeking

additional time to serve. The trial court granted the motion and

the 4th Department affirmed, finding that dismissal for failure

of petitioner to timely serve under CPLR 306-b was appropriate.

While RPTL §§ 704 and 708 set forth the general requirements for

service and filing of a petition, they fail to specify the time

for service of the petition upon the respondent, requiring

reference to CPLR § 306-b. The latter section requires service

within 15 days after the expiration of the applicable statute of

limitations, in any special proceeding wherein the statute of

limitations is less than four months. Here, pursuant to RPTL §

702, petitioner was required to commence the action by filing his

petition within 30 days after the filing and completion of the

assessment roll. Pursuant to CPLR 306-b then, he had 15 days

thereafter to serve the petition upon the respondent. The trial

court also properly held that the proper remedy for failure to

timely serve was to move (or in this case, to cross-move), for an

extension of time to serve.

11

Evidentiary Issues

In Matter of Joy Bldrs., Inc. v. Conklin19, petitioner

brought an RPTL Article 7 petition to challenge the tax

assessment on a parcel. Upon petitioner’s motion to dismiss, the

trial court denied the motion and, after searching the record,

granted summary judgment to the respondent. The appellate court

agreed, summary judgment was properly denied on petitioner’s

motion for summary judgment, due to the failure of petitioner to

meet its initial burden of demonstrating that the assessment

improper. Further, the trial court properly searched the record

to grant summary judgment to respondent, where respondent’s

moving papers showed conclusively that petitioner was unable to

establish that the subject property, based on its use on the tax

status date, was overvalued.

In Matter of Matter of Rite Aid Corp. v Otis20, petitioner

is the lessee retail pharmacy. Previously, a developer had built

the nearly 14,000 square foot building on the property, and had

sold the property in 2005 to an investor for approximately $3.6

million. Petitioner subsequently brought RPTL Article 7

petitions to challenge the $3.95 million assessment for tax years

2008, 2009 and 2010. At trial, the parties stipulated that they

would limit their proof to the 2008 proceeding and that the

12

determined valuation would govern the 2009 and 2010 tax year

proceedings. Supreme Court credited petitioner's expert

appraisal proof, rather than the 2005 sale, and granted the

petitions. Respondents appealed. The Court held that the trial

determination of value was against the weight of the evidence,

where it credited petitioner’s appraisal over an arm’s length

sale of recent vintage of the subject, such sales being the best

evidence of value.

In Matter of Thomas v. Davis21, petitioners commenced RPTL

Article 7 proceedings to challenge the assessments of their

mobile home park for several tax years. At trial, the court

found that, although petitioners did demonstrate the existence of

a valid and credible dispute regarding valuation of the multi-

parcel property at issue, they nonetheless failed to meet their

burden at trial. Petitioner appealed, and the Court affirmed.

Petitioners’ appraiser, it found, had employed both a market and

an income approach, and arrived at reconciled values separate

from those disclosed in the two methods, but he was unable to

explain at trial how his reconciled values were arrived at. The

Trial Court thus found that petitioners’ appraiser violated Rule

of Court 202.59 (g) (2). The Court also found that the

petitioners’ appraiser had improperly rejected several recent

parcel sales as best evidence of the value of those parcels.

However, the Court also found that the trial court did err in

13

failing to evaluate the entire record, namely the respondents’

appraisals which constituted admissions against interest as to

the values contained therein. The Court modified, reducing the

assessments to the extent demonstrated at trial.

Exemptions: Procedural Issues

In Matter of Foundation for Chapel of Sacred Mirrors, Ltd.

v. Harkins22, petitioner not-for-profit entity, following

purchase of the subject property, timely applied for a real

property tax exemption for tax year 2009. Upon denial of the

application, and a denial of the challenge to the assessment,

petitioner sought relief under CPLR Article 78, and also pursuant

to RPTL Article 7 alleged the assessment was excessive.

Respondent moved to dismiss the Article 78 action. The trial

court transferred, pursuant to CPLR § 7804 (g), the matter to the

Appellate Division, which held that “unlawful” assessments

subject to challenge pursuant to RPTL § 706 (1), include, as

here, an entry on the taxable portion of the assessment roll of

the assessed valuation of real property, where the property is

wholly exempt from taxation. While a taxpayer may only challenge

an overassessment pursuant to RPTL Article 7, for the failure to

grant an application for an exemption pursuant to RPTL § 420-a,

14

an owner may seek judicial review pursuant to either RPTL Article

7 or CPLR Article 78.

In Matter of Circulo Housing Development Fund Corp. v.

Assessor of City of Long Beach, Nassau County23, petitioner, a

not-for-profit corporation, filed applications for real property

tax exemptions for two subject parcels, which applications were

denied. Petitioner then brought an Article 7 petition to

challenge the denials, which petition was dismissed on motion of

the respondent, the trial court finding that the entity was not

the owner of the parcels and thus lacked standing to bring the

Article 7 petition. On appeal, the Second Department noted

that, while any person aggrieved by an assessment may file an

Article 7 petition challenging said assessment, pursuant to RPTL

Article 5 only the owner of the property may file a complaint or

grievance to gain an administrative review of the assessment.

The taxpayer had demonstrated ownership of one of the parcels,

and therefore that petition was improperly dismissed by the trial

court. While the taxpayer had failed to show, in its pre-RPTL

Article 7 administrative complaint, that it was the actual owner

of the other property at issue, the trial court did err in

dismissing that Article 7 petition as well, since the entity did

demonstrate that it was an aggrieved party and thus had standing.

Nevertheless, that petition must be dismissed, due to the

taxpayer’s failure to demonstrate that the owner duly pursued a

15

timely administrative challenge to the assessment, said challenge

being a precondition to an Article 7 proceeding.

In Matter of Long Is. Community Fellowship v. Assessor of

Town of Islip24, petitioner timely filed an application with the

local assessor seeking an exemption pursuant to RPTL § 420-a.

Upon denial of that application, and the passage of the tax

status date, petitioner filed an administrative challenge,

asserting that it had actually intended to apply for an exemption

pursuant to RPTL § 462 (the “parsonage” exemption), and included

with its challenge an application for a parsonage exemption

pursuant to RPTL § 462. The challenge was denied, and petitioner

brought CPLR Article 78 and RPTL Article 7 petitions seeking

relief. The trial court granted the Article 78 petition, finding

that the municipality had violated the Religious Land Use and

Institutionalized Persons Act of 2000 (RLUIPA). On appeal, the

trial court was found to have erred in finding a RLUIPA

violation, since the taxpayer had been held to the same standard

(a timely filed application) as other, non-religious taxpayers.

Further, pursuant to RPTL § 462, an exemption from real property

taxation may be granted only upon a timely application (namely,

before the taxable status date) by the owner of the property on a

form prescribed or approved by the Commissioner of Taxation and

Finance. Petitioner had failed in both respects.

In Matter of Zen Ctr. of Syracuse, Inc. v.

16

Gamage25–Petitioner, the not-for-profit owner of a residential

and dining facility for students of Zen Buddhism and visiting

clergy, brought an Article 78 action seeking a declaratory

judgment that it was entitled to an exemption pursuant to RPTL §

420-a for said facility, which judgment was granted. Respondent

appealed, asserting that petitioner had failed to duly apply for

said exemption, and that petitioner had failed to bring an RPTL

Article 7 action to challenge the assessment. The Fourth

Department held that there is no requirement that an application

be filed to obtain an RPTL § 420-a exemption; a property owner

seeking an exemption pursuant to that section may challenge the

assessment pursuant to CPLR Article 78. In addition, a property

owner also may challenge the denial of a mandatory exemption,

pursuant to RPTL § 420-a, by either an RPTL Article 7 action, or

a CPLR Article 78 action. Here, petitioner had met its burden of

establishing that the subject property was used exclusively in

furtherance of its religious purpose.

Substantive Issues

In Matter of Vassar Bros. Hosp. v. City of Poughkeepsie26,

petitioner not-for-profit hospital was the owner of a parcel

containing an office building and a 699-car parking garage.

17

Petitioner leased the building and the parking garage to a

private entity, with the entity in turn sub-leasing the building

to private physicians, and operating the parking garage. 250

parking spaces in the garage were allocated for use of the

tenants, sub-tenants, and their visitors, with the remaining

(449) spaces allocated for hospital employees and patients;

however, of the 250 spaces, only 40 were reserved exclusively for

tenant and subtenant use, the remainder being available on a

first-come, first-served basis. Subsequently the single building

and garage parcel was divided by the municipality into two

separate tax lots; while the building was fully assessed, the

parking garage was accorded a ful exemption. Petitioner

challenged the assessment, and the valuation of the garage

parcel, and moved for summary judgment; respondent cross-moved

for summary judgment, seeking a determination that the garage was

only partly exempt. The trial court granted the hospital’s

motion and denied the cross-motion. The Court, on appeal, held

that property which is used principally or primarily for an

exempt purpose is entitled to a full exemption, including those

portions of the property that are put to uses which are

reasonably incidental to, or in furtherance, of the tax exempt

purpose. However, where portions of the property are not put to

uses reasonably incidental to, or in furtherance of, the exempt

purpose, only those portions of the property are taxable, and

18

thus the property as a whole is only entitled to a partial

exemption. Respondent, here seeking to revoke an exemption, had

the burden to prove that the property is subject to taxation,

which it met by showing that a portion of the parking garage

parcel had been used by the private physician subtenants of the

medical office building, which use of the garage is not

reasonably incidental to, or in furtherance of, the exempt

purpose of the hospital. Thus the garage was found only entitled

to a partial exemption.

In Matter of Health Ins. Plan of Greater N.Y. v. Board of

Assessors27, in a previous proceeding, the petitioner, a not-for-

profit operating as an Health Maintenance Organization (HMO), had

been determined to be eligible for a real property tax exemption

for a prior tax year. Petitioners applied for the exemption on

identical grounds, which application was denied by the

respondents. Petitioner’s motion for summary judgment was

granted on the subsequent tax years, and respondent appealed.

The Court examined RPTL § 486-a, which provides for exemptions

for HMOs, and determining that ‘exclusive” use as required

therein is the same as the “exclusive” use required under RPTL §

420-a, namely principal or primary use. Petitioner, on the

motion, had made a prima facie demonstration of entitlement to

judgment as a matter of law, and appellants failed to raise a

triable issue of fact.

19

In Matter of Matter of Ahavas Chaverim Gemilas Chesed, Inc.

v Town of Mamakating28, taxpayer, a religious congregation

seeking to operate a camp on several of improved parcels which it

owned, sought a real property tax exemption pursuant to RPTL 420-

a for those properties for several tax years, and brought CPLR

Article 78 and RPTL Article 7 actions challenging the denials.

Supreme Court granted summary judgment to respondents, and

petitioner appealed. The Court held that a taxpayer seeking a

review pursuant to RPTL Article 7 and CPLR Article 78, of the

denial of an exemption application, bears the burden of proof as

to whether it is entitled to the claimed exemption. Since

petitioner’s applications failed to establish that the property

would primarily be for a religious use, it was thus rational for

respondent to have denied petitioner’s applications for tax

exemptions for the parcels for the 2009 tax year. The Court also

noted the failure of petitioner, or the party hired to operate

the prospective camp, to have obtained a special permit for the

contemplated (camp) use. While the owner’s failure to apply for

a use permit cannot be made a prerequisite to a RPTL 420-a tax

exemption, where the applicant is taking good faith steps to

renovate a property for an intended exempt use, the actual use of

a property in contravention of local laws can be a valid basis

for denying an application for a tax exemption. Regarding the

2010 tax year, petitioner’s application had the same deficiency

20

of proof on the matter of primary religious use of the property.

While property not ready for an intended religious use may also

be exempt prior to the use, to demonstrate that improvements

(towards the use) are in "good faith contemplated", within the

meaning of RPTL 420-a, an applicant seeking an exemption must

have concrete and definite plans for utilizing and adopting the

property for exempt purposes within the reasonably foreseeable

future. Here, there was a definite failure of proof of such

plans. In addition, a contemplated secondary use of property

for non- religious purposes will not defeat an application for a

tax exemption, but only if such non-religious use is reasonably

incident to the petitioner's charitable aims. Here, petitioner

failed to demonstrate how the proposed hotel use was related to

its religious purposes. Thus denial of petitioner’s 2010

application was also proper.

In Matter of Hudson Prop. Owners' Coalition, Inc. v.

Slocum29, petitioner, a not-for-profit association of homeowners,

and individual homeowners, brought CPLR Article 78 action against

respondent assessor, alleging that tax roll was illegal since it

was not assessed at a uniform percentage of value. The petition

was dismissed by the trial court for failure to state a cause of

action. The 3rd Department affirmed, finding that, where the

petition merely asserted that the Assessor had performed a

revaluation (or reassessment) that changed the assessments of

21

approximately 90% of all real property located in the

municipality from those in the prior tax year’s tax roll, without

substantial evidence of overvaluation as related to individual

properties, such as a detailed, competent appraisal based on

standard, accepted appraisal techniques and prepared by a

qualified appraiser, the petitioner was defective..

In Matter of Paws Unlimited Foundation, Inc. v. Maloney30

petitioner, a not-for-profit animal welfare organization which

ran a shelter on the subject premises, sought an exemption

pursuant to RPTL § 420-a for the shelter and a fee based kennel

which would also be operated on the property. Upon denial of the

application, petitioner brought a challenge pursuant to CPLR

Article 78, and moved for summary judgment, which motion was

granted. The Court affirmed, finding that entities may receive

an RPTL 420-a(1)(a) tax exemption where the entity is organized

exclusively for the purposes enumerated in that section; the

property is used primarily for the furtherance of such purposes;

no pecuniary profit, apart from reasonable compensation, inures

to the benefit of any officer, member, or employee of the entity,

and the use is not a guise for profit-making operations. The

mere charging of a fee for use of a premises, it held, will not

defeat such a tax exemption, if the fee is "reasonably incident

to" the entity's charitable aims (the operation of an animal

shelter.)

22

1. “Cuomo defends ‘rigor’ of tax-levy cap; few towns plans tooverride it” at www.lohud.com (Nov. 7, 2011).

2. Kaplan, Teachers’ Union Sues Over State’s Tax Cap,www.nytimes.com (2/20/2013)(“Today we fund education at more thana billion dollars less than we did in 2008").

3. See Wilkes, Calculating New York’s Two-Percent Tax Cap,

1. http://www.nypropertytaxmonitor.com/2012/06/29/new-yorks-tax-cap-a-real-brain-teaser/

(“The greatest source of confusion among most New York State taxpayers is the suggestion thatwith the tax cap one year’s tax bill should never be more than two-percent higher than the yearbefore. This is hardly true. Rather, the cap limit refers to the total tax levy (or budget) for themunicipality or school, after application of a complex formula”)

4. Kaplan, Teachers’ Union Sues Over State’s Tax Cap,www.nytimes.com (2/20/2013)”People have a right to go to court”.Mr. Cuomo added. “God bless America. God bless our system. Ithink the property-tax cap has been one of the best things we’vedone for the State of New York”).

5. See Dickerson, The Selective Reassessment of Real Property inNew York State: Is Annual Reassessment The Solution?, IAOJournal, Vol. 48, No. 1, January 2006, p. 4

6. See Aid for Cyclical Reassessments, Office Of Real Property TaxAssessments, Publication 1028 (October 2012) at www.tax.ny.gov.

7. Matter of Aylward v City of Buffalo, 101 A.D.3d 1743 (4th Dept.2012).

8. Matter of Yee v. Town of Orangetown, 76 A.D.3d 104 (2nd Dept2010).

9.Dickerson, Real Property Selective Reassessment: Annual MethodBest?, New York Law Journal, January 5, 2006, p. 4, available athttp://www.nycourts.gov/courts/9jd/TacCert_pdfs/SELECTIVEREASSESSMENT.pdf

10. See e.g., Leone v. Town of Cornwall, 24 Misc. 3d 1218(A)(OrangeSup. 2009); Bock v. Town/Village of Scarsdale, 11 Misc. 3d

ENDNOTES

23

1052(A)(West. Sup. 2007); Young v. Assessor of the Town ofBedford, 9 Misc. 3d 1107(A) (West. Sup. 2005), aff’d 37 A.D. 3d729 (2d Dept. 2007)’ Markim v. Assessor of the Town ofOrangetown, 9 Misc. 3d 1115(A)(Rockland Sup. 2005).

11. See e.g., Leone v. Town of Cornwall, 24 Misc. 3d 1218(A)(OrangeSup. 2009); Bock v. Town/Village of Scarsdale, 11 Misc. 3d1052(A)(West. Sup. 2007); Young v. Assessor of the Town ofBedford, 9 Misc. 3d 1107(A) (West. Sup. 2005), aff’d 37 A.D. 3d729 (2d Dept. 2007)’ Markim v. Assessor of the Town ofOrangetown, 9 Misc. 3d 1115(A)(Rockland Sup. 2005).

12. Matter of 471 Columbian Club of Port Jervis v. Duryea, 2013 WL1223353 (N.Y.A.D. 2d Dept. 2013).

13. W.O.R.C. Realty Corp. v. Board of Assessors, 100 A.D.3d 75 (2nd

Dept. 2012).

14. New York Central Lines, LLC v State of New York, 2012 WL6604539 (2d Dept. 2012).

15. See Goldstein & Rikon, Corridor Valuation in Railroad LandCondemnation, New York Law Journal, February 26, 2013 p. 4(“you cannot find a reported case in New York on how justcompensation is determined where railroad lands had beencondemned. That is until the recent case of N.Y. Central Lines v.State of N.Y.”).

16. Matter of Zutt v. State, 99 A.D. 3d 85 (2d Dept. 2012).

17. Matter of Board of Mgrs. of Century Condominium v. Board ofAssessors, 96 A.D.3d 739 (2nd Dept. 2012).

18. Matter of Ontario Square v. Assessor, Town of Farmington, 2012NY Slip Op 7547 (4th Dept, 2012).

19. Matter of Joy Bldrs., Inc. v. Conklin, 96 A.D.3d 939 (2nd Dept.2012).

20. Matter of Matter of Rite Aid Corp. v Otis, 102 A.D.3d 124 (3rd

Dept. 2012).

21. Matter of Thomas v. Davis, 96 A.D.3d 1412 (4th Dept 2012).

22. Matter of Foundation for Chapel of Sacred Mirrors, Ltd. v.Harkins, 98 A.D.3d 1044 (2nd Dept. 2012).

24

23. Matter of Circulo Housing Development Fund Corp. v. Assessorof City of Long Beach, Nassau County, 96 A.D.3d 1053 (2nd Dept2012).

24. Matter of Long Is. Community Fellowship v. Assessor of Town ofIslip, 95 A.D.3d 1128 (2nd Dept. 2012).

25. Matter of Zen Ctr. of Syracuse, Inc. v. Gamage, 94 A.D.3d 1490(4th Dept. 2012).

26. Matter of Vassar Bros. Hosp. v. City of Poughkeepsie, 97A.D.3d 756 (2nd Dept, 2012).

27. Matter of Health Ins. Plan of Greater N.Y. v. Board ofAssessors, 93 A.D.3d 795 (2nd Dept. 2012).

28. Matter of Matter of Ahavas Chaverim Gemilas Chesed, Inc. vTown of Mamakating, 99 A.D.3d 1156 (3rd Dept 2012).

29. Matter of Hudson Prop. Owners' Coalition, Inc. v. Slocum, 92A.D.3d 1198 (3rd Dept. 2012).

30. Matter of Paws Unlimited Foundation, Inc. v. Maloney, 91A.D.3d 1173 (3rd Dept. 2012).

/

r;

THOMAS A. DICKERSON, an Associate Justice of the Appellate Division, Second Department of the New York State Supreme Court, is the author of, among other titles, Class Actions: The Law of 50 States (Law Journal Press 20 13); Travel Law (Law Journal Press 20 13); "Consumer Protection" in 2 Commerdal Litigation in New York State Courts ch. 98 (3d ed. 20 13); Litigating International Torts in United States Courts (co-author) (Thomson Reuters West 2013); "Consumer Law 2013: The Judges' Guide to Federal and New York State Consumer Protection Statutes," available online. DANIEL D. ANGIOULLO is an Associate Justice of the Appellate Division, Second Department of the New York State Supreme Court. Justice An.giolillo has co-authored several articles on consumer law, class actions and tax certiorari and eminent domain. CHERYL E. CHAMBERS is an Associate Justice of the Appellate Division, Second Department of the New York State Supreme CourtAustice (hambers has co-authored several articles on consumer law, class actions and jurisdiction. LEONARD B. AUSTIN .is an Associate Justice of the Appellate Division, Second Department of the New York State Supreme Court. Justice Austin is an Adjunct Professor of law at Hofstra University, School of law and the author of many articles on commercial law.

New York State Consumer Law and Class Actions: 2012-2013 By Thomas A. Dickerson, Daniel D. Angiolillo, Cheryl E. Chambers and Leonard B. Austin

lliently, New York courts have ruled on a variety

f important consumer law issues involv ing ortgage settlement conferences and sanctions,

educational services and law school employment statistics, insurance overcharges and repair-shop steering, medical success rates and debt collections.

In addition, the Court of Appeals, the Appellate Divisions and several trial courts have continued to respond to the need for a more accessible class action statute.

Mortgage Settlement Conferences and Sanctions In 2008, "[t]he New York State Legislature endeavored to cope with the dramatic increase in mortgage foreclosures by enacting a variety of s tatutes that are known, in omnibus form, as the Subprime Residential Loan and Foreclosure Laws."l CPLR 3408 was enacted as part of this

46 1 October 2013 I NYSBA Journal

legislation. In November 2009, the Legislature amended the statute to, inter alia, mandate settlement conferences in all residential mortgage foreclosure actions in which the defendant is a resident of the property subject to foreclosure.2 The amendment also, inter alia, added the following requirement: "Both the p laintiff and defendant slra/1 negotiate in good faith to reach n mutually agreeable resolution, including a loan modification, if possible."3 In addition, 22 N.Y.C.R.R. § 202.12-a(c)(4) directs the court to "ensure that each party fu lfills its obligation to negotiate in good faith." It stands to reason that the court carmot "ensure" compliance with CPLR 3408(f) without the authority to impose some type of a sanction. Yet neither CPLR 3408(f) nor 22 N.Y.C.R.R. § 202.12-a provides sufficient guidance and as a result the courts, inter alia, have upon a finding of a lack of good fai th, "barred them from collecting interest, legal fees, and expenses, imposed

ex pr 22 th nc AJ nc as p< ar ar ea

E< In tn in in cc cc cc jo' as G th se th bl pl

L< L;

St pc § a< tc OJ

tt dl

P' if Sl

g; it: C<

lr Ir (I

fc C<

ir rE

tt

exemplary damages against them, stayed the foreclosure proceedings, imposed a monetary sanction pursuant to 22 NYCRR part 130, dismissed the action, and vacated the judgment of foreclosure and sale and cancelled the note and mortgage."4 In an effort to add clarity, the Appellate Division, in Wells Fargo Bank, N.A. v. Meyers, noted that "it is beyond dispute that CPLR 3408 is silent as to sanctions or the remedy to be employed where a party violates its obligation to negotiate in good faith" and "the courts must employ appropriate, permissible, and authorized remedies, tailored to the circumstances of each given case."5

Educational Services: Working for Free In Apple v. Atlantic Yards Development Co., LLC,6 student­trainees asserted "that in exchange for their participation in the training program, they were promised membership in a labor union and construction jobs at the Atlantic Yards construction project in Brooklyn, New York." When they completed the program, providing two months of unpaid construction work, the promised union membership and jobs were not provided. The court found that the plaintiffs asserted a deceptive business practice covered by N.Y. General Business Law§ 349 (GBL), and "[i]n addition ... the Plaintiffs were not strictly employees in the traditional sense, but consumers of a training program offered by the Defendants. [GBL] § 349 [has been applied] to claims brought by consumers of educa tiona I or vocational training programs."7

l aw School Employment Statistics Law school graduates, in Gomez-Jimenez v. New York Lnw Schoof,S alleged that their law school misrepresented post-graduation employment data and violated GBL § 349. The Appellate Division found that the plaintiffs adequately alleged consumer oriented conduct but failed to establish that the data were sufficiently deceptive or misleading. "[A]lthough there is no question that the type of employment information published by defendant (and other law schools) during the relevant period likely left some consumers with an incomplete, if not false, impression of the school's job placement success, Supreme Court correctly held that this statistical gamesmanship, which the ABA has since repudiated in its revised disclosure guidelines, does not give rise to a cognizable claim under [GBL] § 349."9

Insurance Overcharges In Partells v. Fidelity National Title Insurance Services, JO (FNTIC), consumers alleged that the defendant "unlawfully overcharged them and other consumers for title insurance." In sustaining a GBL § 349 claim, the court found "that in charging the rate that it did FNTIC implicitly represented that the rate - which, it bears repeating is set by law - was correct. ... [I]t is not simply that FNTIC failed to disclose the correct rate, rather, it

deceived the Partells into ... thinking the charged rate was correct . . .. [I]t is enough to conclude that a jury could find that a reasonable consumer, while closing on a mortgage, would beHeve that the rate he or she was charged for title insurance (to the benefit of the lender) would be the lawful rate."ll

Insurance: Auto Repair Steering In North State Autobahn, Inc. v. Progressive Insurance Group,l2 the court held that GBL § 349 may be used by businesses that allege deceptive practices which have an indirect impact upon consumers and, hence, are consumer oriented. The court noted, .• .

[The] plaintiffs sufficiehtly alleged that they were directly injured by [Progressive's) deceptive practices in that customers were misled into taking their vehicles ... to competing repair shops that participated in the [Progressive's DRP (direct repair program)]. The allegedly deceptive conduct was specifically targeted at ... independent [auto repair) shops in an effort to wrest away customers through false and misleading statements .... Thus, plaintiffs adequately alleged that as a result of defendant's misleading conduct, they suffered direct business loss of customers resulting in damages of over $5 million.l3

Medical Success Rates The court, in Got/in ex rei. County of Richmond v. Leder­man,t4 sustained a GBL § 349 claim alleging "that the defendants - in their brochures, videos, advertisements, seminars, and internet sites - deceptively marketed and advertised FSR [Fractionated Stereotactive Radiosurgery] treatment by making unrealistic claims as to its success rates ... plaintiffs contend that defendants' claims that FSR treatment had 'success rates' of greater than 90% in treating pancreatic cancer were materially deceptive."

Debt Collections In Midland Funding, LLC v. Girnldo,J5 the court found that debt collection procedures involving the filing of a lawsuit without proof stated a GBL § 349 claim.

Addressing the first element - "consumer oriented" conduct - defendant's General Business Law counterclaim is plainly sufficient ... "the conduct complained of" at its heart involves the "routine filing" of assigned debt lawsuits by plaintiff "despite a lack of crucial, legally admissible information" or "sufficient inquiry" into whether the claims are meritorious.

[T]his court holds that deceptive conduct by a debt buyer in the course of civil litigation may violate a consumer's legal rights under [GBL] § 349. When a debt buyer seeks the court's aid in enforcing an assigned debt claim, the debt buyer should not

NYSBA Journal 1 October 2013 I 47

commence the action unless it can readily obtain admissible proof that would make out a prima facie case. Such proof should include evidence that it

actually owns the debt, that the defendant was given notice of the assignment, and that underlying debt claim is meritorious. It commences such an action without having such readily available proof, and if it turns out that such proof is not readily available, the debt buyer may end up not only losing the case, but may also be found liable for substantial compensatory damages, punitive damages, and attorney's fees to the extent allowed by law.16

GBL § 349 may be used to allege deceptive practices

which have an indirect impact upon consumers.

Positive Developments in New York Class Actions Since the publication of New York State Class Actions: Make It Work- Fulfill The Promisei7 (Make it Work) in 2010 and the Court of Appeals's game-changing decision in Koch v. Acker, Merrall & Condit Co.I8 in 2012, there has been a noticeable change in the enthusiasm of New York courts in applying our salutary class action statute, CPLR 901- 909.19

Expansive Language [n Corsello v. Verizon New York, Tnc.,2o the Court of Appeals found that the owners of a building upon which the defendant attached a box "to transmit telephone communications to and from Verizon's customers in other buildings"2l stated an inverse condenmation cause of action. As for class certification, the Court found that it "seems on its face well-suited to class action treatment" in that "it would be reasonable to infer that the case will be dominated by class-wide issues - whetlter Verizon's practice is lawful, and if not what the remedy should be" and that "expert testimony" could be used to "support an inference" of typicality.22

Sua Sponte Certification The Second Department, in Globe Surgical Supply v. G£IC0,23 a class action by medical equipment suppliers challenging denial of their claims under no fault because they exceeded so-called prevailing rates, denied certification without prejud ice to reapplying for class treatment after locating an adequate class representative. In Amer-A-Med Health Products, Inc. v. GEICQ24 and O'Brien v. GETC0,25 the trial court found a proposed intervenor to be an adequate class representative and sua sponte certified the class noting that "[i]t would be illogical and redundant for plaintiff to again bring a

48 I October 2013 I NYSSA Journal

further motion to demonstrate the ... criteria set forth in 901 and 902 when the Appellate Division already ruled upon them." On appeal, the Appellate Division, Second Department approved of the concept of sua sponte class certification but remitted for the entry of a CPLR 903 order describing the certified class.26

Stockbroker Overtime Claims In Thomas v. Meyers Associates, L.P.,27 a class of employees of a broker-dealer in the financial industry sought monetary and injunctive relief alleging defendants '"engaged in a systemic practice of failing to properly compensate stockbrokers' in violation of the New York Labor Law § 650 et seq . ... by ... failing tO pay overtime, making unlawful deductions from paychecks, failing to pay timely and failing to pay minimum wage."28 In granting certification, the court allowed the class representative to waive the statutory penalty of liquidated damages (with opt-out notice to class members) thus circumventing CPLR 901(b).29 The court also noted that the "[p]laintiff and the [class] seek to vindicate rights accorded them by statute and regulation, and allegedly violated by uniform policies and practices, including ... [defendant's] admitted failure to pay overtime." Of particular interest was the court's earlier denial of defendant's motion to compel mandatory arbitration pursuant to the rules of the Financial Industry Regulatory Authority (FINRA).30

Rent Overcharges In Downing v. First Lenox Terrace Associates,31 a class of tenants or former tenants of a residential complex alleged that the owners "unJawfully deregulated their apartments under the luxury decontrol provisions of the Rent Stabilization Law (Administrative Code of City of NY) § 26-501 et seq.) [RSL] while receiving tax incentive benefits under the City of New York's J-51 program. Plaintiffs seek ... a declaration that all apartments in the complex are subject to rent stabilization, injunctive relief and a money judgment."32 In denying the defendant's motion to dismiss based upon CPLR 901(b) the Appellate Division, First Department expanded the application of CPLR Article 9 to allow class actions seeking actual damages consisting of rent overcha rges plus interest pursuant to RSL § 26-516(a).33

In Casey v. Whitehouse Estates, lnc.,34 a class of tenants alleged rent overcharges and sought reimbursement. Evi­dently, the landlord sought to deregulate its apartments, pursuant to the luxury decontrol amendments under the RSL, and to obtain, under the J-51 program, "tax abate­ments and exemptions for rehabilitative work done to" its building. Allegedly the defendant landlord illegally charged market rents, violating the J-51 program.35 In granting class certification, the court found that class treatment was not prohibited under CPLR 901(b) by the penalty provisions of the RSL because they could be waived36 and, in any event, the penalty provisions were

n f;

(

~

s s t '·

1 F (

not triggered because the defendant was acting in good faith. The court noted that the named plaintiffs and class members share a common goal to ensure "that the land­lord charges tenants .. . no more than the maximum legal rent" and that the tenants be compensated for the rent overcharges.

County as Class Representative assau County, in County of Nassau v. Expedin, lnc.,37

sought to enforce its Hotel and Motel Tax Law and other similar taxing statutes throughout ew York State on behalf of a class of 56 other local governmental agencies. "Defendants purchase blocks of rooms from hotels and motels at discounted rates and then resell the rooms to members of the public via the internet. The County alleges that the tax owed under the Hotel and Motel Tax Law is correctly calculated as a percentage of the price that occupants pay to the defendant resellers. The County further alleges that the online sellers collect the 3% hotel tax from consumers based on retail room rates but remit to the County only the portion of the tax based on defendants' lower 'wholesale' rate." In certifying the class action with Nassau County as the class representative, the trial Court relied upon the Court of Appeals's recent decision in Overstock.com v. Department of Taxation and Finance38 and found a predominance of common questions despite noting "that there is some variation in the tax rate among the d ifferent taxing authorities." Accordingly, the court concluded that the '"means and manner' of collecting the taxes is sufficiently similar." •

1. SI'C Mark C. Dillon, Newly-Enncted CPLR 3408 for Easing the Mortgage Foreclosure Crisis: Very Good Steps, But Not Legislntiwly Perfect, 30 Pace L Rev 855, 856 (2010}.

2. CPLR 3408(a).

3. CPLR 3408(f) (emphasis added).

4. Wells Fnrgo Bnnk, N.A. v. Meyers, 108 A.D.3d 9, 20 (2d Dep't 2013) (cita tions omitted).

5. /d. at 23. For subsequent cases see Deutsche Bnnk Nat'/ Trust Co. v. lzraelov, 2013 WL 4799151 (Sup. Ct., N.Y. Co. 2013) (failure to negotiate in good faith; remedy: tolling of interest on note and mortgage, fees and costs); U.S. Bank N.A. v. Shinnba, 2013 WL4822396 (Sup. Ct., .Y. Co. 2013) (failure to negotiate in good faith; remedy: interest, late fees and lo..m modification fees barred and /or refunded; attorney fees application severed for independent review for reasonableness); ]P Morgan Chase Bank v. Buller, 40 Misc. 3d 1205 (Sup. Ct., Kings Co. 2013) (failure to negotiate in good faith; remedy: inter~'St, legal fees and expenses barred; hearing ordered pursuant to 22 N.Y.C.R.R. § 130-1 .1 (frivolous conduct)).

6 . 2012 WL 2309028, •1 (E.D.N.Y. 2012).

7. /d. at •5. See, e.g., Drew v. Sylvan Lenming Ctr., 16 Misc. 3d 836 (Civ. Ct., Kings Co. 2007); People v. McNair, 9 Misc. 3d 1121(A) (Sup. Ct., N.Y. Co. 2005); Andre v. Pnce Univ., 161 Misc. 2d 613 (Yonkers Ci ty Ct. 1994), rev'd on otlter grotmds, 170 Misc. 2d 893 (App. Term, 2d Dep't 1996); Brown v. Hnmbric, 168 Misc. 2d 502 (Yonkers City Ct. 1995); Cambridge v. Telemarketing Concepts, 171 Misc. 2d 796 (Yonkers City Ct. 1995).

8. 36 Misc. 3d 230 (Sup. Ct., N .Y. Co.), ajfd, 103 A.D.3d 13 (1st Dep' t2012). Sl'l' tllso Austin v. Albany Law Sch., 38 Misc. 3d 988 (Sup. Ct., Albany Co. 2013) (law school graduates allege law school misrepresented post-graduate employment and salary data; complaint dismissed); Bevelacqun v. Brooklyn l.mu Sell., 39 Misc. 3d 1216 (Sup. Ct., Kings Co. 2013) (law school graduates cla im

law school misrepresented post graduate employment and salary data; GBL § 349 claims dismissed).

9. G<Jmez·]imenez, 103 A.0.3d at 17.

10. 2012 Wl5288754, •t (W.D.N.Y. Oct. 24, 2012).

11. /d. at •6.

12. 32 Misc. 3d 798 (Sup. Ct., Westchester Co. 2011), nffd, 102 A.D.3d 5 (2d Dep't 2012).

13. North Star Autobalm, 102 A.D.3d at £r7.

14. 483 Fed. App'x 583, 588 (2d Cir. 2012).

15. 39 Misc. 3d 936 (Dist. Ct., Nassau Co. 2013).

\6. /d. at 945-46, 950-51 (citations omitted).

17. Thomas A. Dickerson, New York State Class Actions: Make II Work - fulfill the Promise, 74 Alb. L. Rev. 711, 725-26 (2011) (Make It Work).

18. 18 N.Y.3d 940 (2012). See Thomas A. Dickerson, Ruling in GBL 350 Claims Serves as Game Changer, N.Y.L.J. (Apr. 19, 2012), p. 4.

1·9. For a complete d iscussion of CPLR 901-902 see Thomas A. Dickerson, Article 9 of Weinstein Korn Miller, New York Civil Practice: CPLR (David Ferstendjg, ed., Lcxis/Nexis 2012) (WKM).

20. 18 N.Y.3d 777 (2012).

21. /d. at 781-82.

22. /d. at 791 (emphasis added). The purported class representative was subject to uniq1,1e defenses such as waiver rendering his claims atypical and, by implication, an inadequate class representative. See Globe Surgical Supjlly v. GEICO, 59 A.D.3d 129, 143-45 (2d Dep' t 2008).

23. Globe Surgical Supply, 59 A.0.3d 129.

24. 2011 WL 1464145 (N.Y. Sup. 2011 ).

25. Index No. 009808/04, Decis ion Ju ly 19, 2011 u. Phelan).

26. O'Brien v. GEJCO, 99 A.D.3d 683 {2d Dep't 2012).

27. 39 Misc. 3d 1217(A) (Sup. Ct., N .Y. Co. 2013).

28. /d. at •1 .

29. SI'C WKM at§ 901.28. See alro Thomas A. Dickerson & Leonard B. Austin, New York Stale Clnss Actions: Making It Work- Fulfilling the Promises: Some Recent Positiw Developments and CPLR § 901(b) Should Be Repealed scheduled for publication in Albany Law Review: 'ew York Appeals in 2014..

30. Thomas, 39 Misc. 3d at ' 10. Ste Alml v. john n1omas Fin., Inc., 107 A.D.3d 578, 578 (1st Dep' t 2013) ("The arbitration agreement in the Form U4 signed by plaintiff provides for the arbi tration of disputes 'under the rules, constitu tions or by-laws of [the Financia l industry Regula tory Au thority (FJNRA)]'. Accordingly, w1der the plain terms uf the agreement, 'arbitration shall be govemed by the rules promulgated by FINRA' including former FJNRA rule 13204(d) .. . wh ich 'proh ibits arbitration of class action claims"'; motion to compel arbitration of class action denied).

31. 107 A.D.3d 86 (1st Dep't 2013).

32. /d. at 88.

33. /d. at 88-89 ("While plaintiffs demanded treble damages pursuant to Rent Stabilization Law§ 26-516(a) in their amended complaint, they have since waived that request and seek only reimbursement of the alleged rent overcharges plus interest. . . . However, even where a statute creates or imposes a penalty, the restriction of CPLR 901(b) is inapplicable where the class representative seeks to r&over on ly actual damages and waives the penalty on behalf of the class and i.nd ividual class members are allowed to opt out of the class to pursue their punitive damages claims (see Cox v. Microsoft Corp., 8 A.D.3d 39 (1st Dep' t 2004); Pesnntez v. Boyle Envtl. Servs., 251 A.D.2d 11, 12 (1st Dep' t 1998); Ridge Meadows Homeowners' Ass'n v. Tarn Oev. Co., 242 A.D.2d 947 (4th Dep' t1997); Super Glue Corp. v. Avis Re11t A Car Sys., 132 A.D.2d 604, 606 (2d Dcp' t l987))."

34. 36 Misc. 3d 1225(A) (Sup. Ct., N.Y. Co. 2012).

35. See Roberts v. TisJrma11 Speyer Props., L.P., 13 T.Y.3d 270 (2009).

36. See WKM at§ 901.28; SI'C nlso Cox v. Microsoft Corp., 8 A.D.3d 39 (1st Ocp' t 2004).

37. Cnty. ofNassnu v. Expedin, Inc., No. 013818/2011 (Sup. Ct., Nassau Co. 2013) Q. Bucaria).

38. 20 N.Y.3d 586 (2013).

NYSSA Journal I October 2013 I 49