A Primer on The Components of Personal Jurisdiction

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Posted on: Oct 30 2024

In Emirates Islamic Bank PJSC v. NeoPharma LLC, 2024 N.Y. Slip Op. 51461(U) (Sup. Ct., N.Y. County Oct. 4, 2024) (here), Justice Gerald Lebovits addressed an interesting question concerning personal jurisdiction against them that caught our eye. The jurisdictional issue in Emirates Islamic Bank concerned whether personal jurisdiction over the defendants was necessary in order to enforce a foreign-country judgment through a CPLR 3213 motion.[1] To exercise personal jurisdiction over a defendant, two components of such jurisdiction have to be met: (1) service of process on the defendant, which implicates the due process requirements of notice and opportunity to be heard; and (2) the exercise of the court’s power over the person, i.e., the power, or reach, of a court over a party, so as to enforce judicial decrees. As discussed below, Justice Lebovits held that the first component was not satisfied in Emirates Islamic Bank.

Emirates Islamic Bank concerned a motion for summary judgment in lieu of complaint brought by plaintiff, Emirates Islamic Bank PJSC, to enforce a foreign-country judgment entered against defendants. The court denied the motion, and dismissed the action for lack of personal jurisdiction, because plaintiff set a return date that was one day earlier than defendants’ earliest possible deadline to appear and respond under CPLR 320(a).[2]

Plaintiff moved for leave to reargue the decision and order, arguing that the court overlooked post-Bhanti precedent of the Appellate Division, Second Department, undermining the court’s reliance on that case in dismissing the action. The court agreed that granting leave to reargue was warranted to consider the implications of the more recent case authority on which plaintiff relied. On reargument, the court adhered to its original decision.

As an initial matter, the court addressed plaintiff’s argument that the court misapprehended the law concerning the exercise of personal jurisdiction over a defendant to enforce a foreign-country judgment through a CPLR 3213 motion.[3] The court held that it did not do so. In so holding, the court noted that “personal jurisdiction has two constitutionally required components.”[4]

One component involves service of process, which implicates due process requirements of notice and opportunity to be heard. The other component “involves the power, or reach, of a court over a party, so as to enforce judicial decrees.”[5]

The court noted that the foregoing components are distinct:

Service of process on a defendant cannot alone grant the court adjudicatory authority over a defendant where it is lacking, “however flawless that service may be.” And improper service on a defendant deprives the court of personal jurisdiction, even if the court could otherwise properly exercise its authority over that defendant.[6]

“Crucially,” said the court, “the principle that a court need not have personal jurisdiction over defendants for judgment-enforcement purposes relates to the issue of a court’s reach over a party—whether plaintiff must provide a basis ‘to justify defendant’s being subject to the New York court’s power.’”[7] The court agreed with plaintiff “that absent assertion of ‘colorable, nonfrivolous ground for denying the judgment recognition’—which ha[d] not occurred [in the case]—it need not satisfy that element of personal jurisdiction.”[8] “But,” explained the court, “enjoying this additional leeway does not free plaintiff from the service-based element of personal jurisdiction, to afford defendant adequate notice and opportunity to be heard on the judgment-enforcement issue.”[9] For that reason, said the court, the Second Department “has held that even absent the need to inquire further into whether a sufficient basis exists to give recognition to an out-of-state judgment, a plaintiff moving under CPLR 3213 still must properly serve defendants with the summons and motion papers.”[10]

Based upon the foregoing, the court concluded that it “properly considered on the prior motion whether plaintiff had given defendants sufficient notice of its judgment-enforcement motion” and that the court’s previous conclusion that notice was insufficient was correct.[11]

The court next turned its attention to plaintiffs’ argument that post-Bhanti decisions required a finding that the court had jurisdiction over defendants. Plaintiff looked at, among other cases, the Second Department’s decision in Blue Lagoon, LLC v. Reisman, 214 A.D.3d 938 (2d Dept 2023), in advancing its argument.[12]

In Blue Lagoon, the plaintiff set an initial return date that was too early, given the timing of personal service on the defendants relative to when the motion was filed. The return date was, however, adjourned three times, pushing the return date until well after the defendant’s CPLR 320 deadline to appear and respond. Additionally, after the third adjournment, the plaintiff filed an amended notice of motion expressly setting the last of the three adjourned dates as the motion return date. The Second Department held that given the adjournments, and the filing of an amended notice of motion, “plaintiff’s failure to provide an adequate return date on its original notice of motion was not a fatal defect” depriving the court of personal jurisdiction.[13]

The court found that “[t]he facts of Blue Lagoon [were] … materially different from those present here,” noting that the “original motion return date was not adjourned” and the plaintiff did not “amend its original notice of motion to set a later return date.”[14]

“In short,” concluded the court, “this court sees no basis to depart from its prior conclusion that Bhanti supplies the procedural rule governing this case. And under that rule, this court lacks personal jurisdiction as a result of plaintiff’s short service.”[15]

Finally, the court rejected plaintiff’s fairness argument, finding that plaintiff had the ability to protect itself but did not do so:

Plaintiff contends, in essence, that a dismissal due to short service would be unfair because plaintiff acted diligently to serve uncooperative overseas defendants [] and could not reasonably have predicted when setting the return date that service would take as long as it did. But, as noted above, it was clear well in advance of the return date that serving defendants would be difficult—as shown by plaintiff’s (successful) motion for leave to employ alternate means of service … Plaintiff could have (whether then or later on) protected itself against potential notice problems by amending its notice of motion to extend the return date. Plaintiff did not do so.[16]

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.

[1] Under CPLR 3213, a plaintiff may seek summary judgment in lieu of a complaint “[w]hen [the] action is based upon an instrument for the payment of money only.” See HSBC Bank USA v. Community Parking Inc., 108 A.D.3d 487 (1st Dept. 2013). The purpose of the statute “is to provide an accelerated procedure where liability for a certain sum is clearly established by the instrument itself.” G.O.V. Jewelry, Inc. v. United Parcel Serv., 181 A.D.2d 517, 517 (1st Dept. 1992). This Blog has written about this procedural tool on numerous occasions. E.g., here, here, here, and here.

[2] Slip Op. at *1 (citing Bhanti v. Jha, 140 A.D.3d 685, 686 (2d Dept. 2016)). This Blog wrote about the timing issues associated with bringing a motion for summary judgment in lieu of complaint, here.

[3] Id.

[4] Id. at *2 (orig’l emphasis) (citing Keane v. Kamin, 94 N.Y.2d 263 (1999)).

[5] Id. (quoting Keane, 94 N.Y.2d at 265).

[6] Id. (quoting Miller v. 21st Century Fox Am., Inc., 180 A.D.3d 608,608 (1st Dept. 2020)).

[7] Id. (quoting Emaar Rak F.Z.E. v. Rak Tourism Inv. F.Z.C., 177 A.D.3d 538, 539 (1st Dept. 2019)) (orig’l emphasis).

[8] Id. (quoting id.).

[9] Id.

[10] Id. (citing TCA Global Credit Master Fund, L.P. v. Puresafe Water Sys., Inc., 151 A.D.3d 1098, 1100 (2d Dept. 2017)).

[11] Id.

[12] This Blog analyzed Blue Lagoon, here.

[13] Id. (quoting Blue Lagoon, 214 A.D.3d at 942) (emphasis added).

[14] Slip Op. at *3. The court also distinguished plaintiff’s reliance on Article 78 cases. In those cases, which predated Bhanti, the courts held that the failure to afford a respondent the statutorily mandated time to respond to the petition was a mere irregularity, rather than a jurisdictional defect. Id. (discussing Matter of Tennessee Gas Pipeline Co. v. Town of Chatham Bd. of Assessors, 213 A.D.2d 103, 106 (3d Dept. 1995)).

[15] Id. (footnote omitted).

[16] Id. at *4 (citation to record omitted).