MURRAY v. STONE (2024)

Judgment, Supreme Court, New York County (Jennifer G. Schecter, J.), entered October 25, 2023, dismissing the complaint, unanimously affirmed, with costs.  Appeal from supplemental order, same court and Justice, entered on or about August 14, 2023, which granted defendants' motion to dismiss the complaint for lack of personal jurisdiction, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

New York does not have personal jurisdiction over defendants under CPLR 302(a)(3)(ii).  In the context of a commercial tort, where the damage is solely economic, the situs of a commercial injury is where the original critical events associated with the action or dispute took place, not where any financial loss or damages occurred (see Paterno v. Laser Spine Inst., 112 A.D.3d 34, 44, 973 N.Y.S.2d 681 [2d Dept. 2013], affd 24 N.Y.3d 370, 998 N.Y.S.2d 720, 23 N.E.3d 988 [2014];  see also Bangladesh Bank v. Rizal Commercial Banking Corp., 226 A.D.3d 60, 83, 208 N.Y.S.3d 2 [1st Dept. 2024];  Deutsche Bank AG v. Vik, 163 A.D.3d 414, 416, 81 N.Y.S.3d 18 [1st Dept. 2018]).  The original critical events in this case were the alleged misrepresentations involving falsification of measurements, which occurred outside the United States, not the purported loss generated by reliance on the alleged misrepresentations (see Quad Capital Portfolio A LLC v. AbbVie Inc., 201 A.D.3d 449, 450, 156 N.Y.S.3d 741 [1st Dept. 2022]).  Thus, even assuming that the alleged misrepresentations caused plaintiffs to suffer economic loss in New York, that alone does not provide a sufficient basis for personal jurisdiction in this state (see USA Sevens LLC v. World Rugby Ltd., 191 A.D.3d 620, 620–621, 143 N.Y.S.3d 335 [1st Dept. 2021]).

Bangladesh Bank, upon which plaintiffs place much reliance, does not compel the result they seek, as we made clear in that case that the original critical events took place in New York. In Bangladesh Bank, we found that hackers sent payment orders directing the transfer of nearly $1 billion from plaintiff's account at the Federal Reserve Bank of New York (N.Y. Fed) (Bangladesh Bank, 226 A.D.3d at 64, 208 N.Y.S.3d 2).  Thus, we found, “the original ․ situs of plaintiff's alleged injury was fulfilling the fraudulent payment orders in New York. That is, the very act of stealing the funds from plaintiff's N.Y. Fed account and transferring them to the ․ correspondent accounts in New York is the injury” (id. at 84, 208 N.Y.S.3d 2 [emphasis added]).

In light of plaintiffs' failure to satisfy the main prong of CPLR 302(a)(3), we need not reach whether they satisfied the additional requirements of subsection (ii) or whether the exercise of jurisdiction over defendants would comport with due process (see Williams v. Beemiller, Inc., 33 N.Y.3d 523, 528, 106 N.Y.S.3d 237, 130 N.E.3d 833 [2019]).  Furthermore, plaintiffs failed to make a sufficient showing to warrant jurisdictional discovery (see e.g. IMAX Corp. v. Essel Group, 154 A.D.3d 464, 465, 62 N.Y.S.3d 107 [1st Dept. 2017]).