In case anyone was wondering, yes, you may be haled** into a New York Court for your actions outside of New York, relating to subject matter outside New York.
For example, if a New York resident purchases a condo outside of the United States by flying to the location of the condo and purchasing it (i.e. signing the contract) at that location, the New York resident may still be able to sue in New York. Unless the contract specifically provides for a venue (for example, expressly stating all lawsuits arising from the purchase or sale will be brought in a specific jurisdiction outside New York) the developer or operator of the condo-hotel property may be sued in New York, even if the developer and operator do not consider themselves to be conducting any business activity in New York.
New York cases on this point are all over the map. Unlike other states in which the long-arm statute expressly allows jurisdiction to the extent constitutionally permissible (like California, for example), the New York long-arm statute is narrower than the due process clause of the United States Consitution. Personal jurisdiciton cases in New York (including most cases in the four federal district courts in New York, see FRCP 4(k)) generally focus upon whether the exercise of jurisdiciton is allowed by NY CPLR 302. If jurisdiction is not consistent with that provision, then a New York court cannot exercise jurisdiction over a defendant even if doing so would be consistent with the due process clause. Correspondingly, if the exercise of jurisdiction is consistent with CPLR 302, then the due process clause, being broader than that section, will necessarily be satisfied. Accordingly, most New York cases focus on whether the developer/operator was doing business in New York or transacted business in New York sufficient under the CPLR 302 to justify haling** the developer and/or operator into a New York Court. At this point the facts (and sympathies) take over because New York case law may recognize internet activity (for example) and other business practices to be sufficient to satisfy the New York long-arm statute.
To illustrate, if the developer or operator employed a real estate broker who marketed the condo in such a way as to target the New York market (i.e. potential condo purchasers who live in New York), a New York Court may find that it has jurisdiction over these defendants. In short, if they availed themselves of the market, a New York Court may find that they should be prepared to defend actions in New York arising out of their marketing activities.
On the other hand, if the developer or operator can convince the Court that there is no material connection to New York other than the fact that the condo purchaser resides there (when not residing in condos purchased outside the United States), some New York Courts will tell a plaintiff that they have "made their bed, now lie in it" requiring the plaintiff to bring suit in the jurisdiction where the plaintiff purchased the condo property instead of New York.
Keep watching SDNY Local Counsel as we analyze the "Case of the Resort Condo" by collecting and comparing recent cases that match the fact pattern.
* Special thanks to Prof. Robert Pfeffer, Visiting Associate Professor at University of Alabama School of Law, who has helped me update this blog entry. See later blog postings for news on SDNY Local Counsel's collaboration with Prof. Pfeffer.
** For you philologists (i.e. word-o-philes): a person is "haled" into a court reluctantly, a NYC Yellow Taxi is "hailed," and cargo is "hauled."
