Norex Petroleum Ltd. v. Blavatnik
16 N.E.3d 561
| NY | 2014Background
- Norex Petroleum (Alberta resident) sued defendants in SDNY alleging a RICO-based scheme to steal its interest in a Russian oil company; initial federal suit filed Feb 26, 2002.
- The district court dismissed on forum non conveniens; Second Circuit reversed; Norex amended to add BP and asserted Russian-law tort/unjust enrichment claims.
- District court later dismissed for failure to state an extraterritorial RICO claim; Second Circuit affirmed dismissal under Rule 12(b)(6) after Morrison clarified extraterritoriality doctrine; mandate issued in 2011.
- Within the CPLR 205(a) six-month savings window, Norex refiled the state-law claims in New York Supreme Court (Mar 7, 2011); defendants moved to dismiss under CPLR 202 (New York’s borrowing statute), arguing Alberta’s shorter limitations period barred the refiling.
- Supreme Court and the Appellate Division dismissed/affirmed, holding CPLR 202 required applying Alberta law to the refiling date (Alberta has a two-year limitations period and no comparable savings statute), so the state action was time-barred.
- New York Court of Appeals reversed: it held that because Norex’s prior federal action was timely under CPLR 202 when filed, the refiling under CPLR 205(a) was not barred by CPLR 202 even though Alberta lacks a savings statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a nonresident plaintiff may refile in NY under CPLR 205(a) after a prior timely NY federal action when the place-of-accrual jurisdiction (Alberta) would bar the refiling | Norex: CPLR 205(a) saves the refiling because the prior federal action was timely under CPLR 202 when commenced; CPLR 202 need not be reapplied to the refiling date | Defendants: CPLR 202 requires comparison to Alberta law at the refiling date; because Alberta has a shorter limitations period and no savings statute, the state suit is time-barred | Held for Norex: if the prior NY action was timely under CPLR 202 when filed, the subsequent CPLR 205(a) refiling is not barred by CPLR 202 even if the foreign state lacks a savings statute |
| Whether foreign tolling/savings rules imported by CPLR 202 defeat a CPLR 205(a) refiling | Norex: foreign tolling rules are irrelevant to the refiling once the prior action was timely | Defendants: CPLR 202 imports the foreign period with all tolls/extensions, so lack of foreign savings bars refiling | Held: CPLR 202 requires considering foreign tolls only to decide timeliness of the prior action; here the prior action was timely, so foreign lack of savings does not bar the CPLR 205(a) refiling |
| Whether the purpose of CPLR 202 (prevent forum-shopping) is frustrated by allowing refiling under CPLR 205(a) | Norex: forum-shopping concern satisfied because the prior federal filing was timely and not motivated by forum-shopping | Defendants: allowing refiling undermines CPLR 202’s anti-forum-shopping goal | Held: anti-forum-shopping purpose was fulfilled by the timely prior filing; allowing CPLR 205(a) refiling is consistent with statutory purposes |
| Whether 28 U.S.C. § 1367(d) tolling issue must be resolved given CPLR disposition | Norex: alternative argument that §1367(d) tolling would allow refiling; asked Court to avoid Catch-22 | Defendants: App. Div. held CPLR 205(a) longer toll precludes §1367(d) benefit | Held: Court did not decide §1367(d) because it resolved the case on CPLR 202/205(a) grounds; noted the Catch-22 concern is unlikely to recur given disposition |
Key Cases Cited
- Global Fin. Corp. v. Triarc Corp., 93 N.Y.2d 525 (1999) (place of accrual for economic injury is usually plaintiff’s residence; discussed interplay of CPLR 202 and CPLR 205(a)).
- Smith Barney, Harris Upham & Co. v. Luckie, 85 N.Y.2d 193 (1995) (when borrowing a foreign limitations period under CPLR 202, courts import the foreign period with its tolls and extensions).
- Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (federal statutes lack extraterritorial application absent clear congressional intent; replaced conduct/effects test).
- Norex Petroleum Ltd. v. Access Indus., Inc., 631 F.3d 29 (2d Cir.) (Second Circuit decision addressing extraterritorial reach of RICO and affirming dismissal on Rule 12(b)(6) grounds after Morrison).
- Insurance Co. of N. Am. v. ABB Power Generation, 91 N.Y.2d 180 (1997) (CPLR 202’s purpose is to deter forum shopping by nonresidents).
- Gaines v. City of New York, 215 N.Y. 533 (1915) (historical exposition of the savings statute’s liberal remedial purpose to allow diligent suitors a hearing on the merits).