Stines v. Sanchez
1:21-cv-07884
S.D.N.Y.May 16, 2023Background
- Plaintiff Kimberly Stines alleges she was sexually abused as a teenager in the 1970s–80s by coach Joseph Bernal and sued Bernal, Fordham University, the AAU, and several Bernal-affiliated swim clubs, including Bernal's Gator Swim Club of New England, Inc. (Bernal's New England) and Baystate Gator Swim Club, LLC (Baystate).
- Bernal's New England and Baystate (the "Moving Defendants") are Massachusetts-based and have no alleged New York contacts; Stines instead argues the court has personal jurisdiction because they are successors-in-interest to Bernal's New York, the New York club where the abuse occurred.
- Under New York law, successor liability can arise by formal assumption of liabilities, de facto merger, mere continuation, or a fraudulent transfer to escape obligations (Schumacher standard).
- Stines pleaded that Bernal repeatedly changed entity names to avoid liability, that Bernal’s Gator clubs operated continuously since the 1970s, that Baystate is the latest iteration, and that an asset purchase transferred location, equipment, employees, management, and goodwill to Baystate.
- The court held Stines made a prima facie showing of successor status and jurisdiction at the pre-discovery stage, so the Rule 12(b)(2) motions to dismiss for lack of personal jurisdiction were denied without prejudice to later challenge after discovery or on summary judgment.
- The court also denied the Rule 12(b)(6) motions without prejudice, reasoning successor entities can inherit predecessor tort liabilities even if they did not exist at the time of the tort; the Moving Defendants must answer the amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court has personal jurisdiction over Bernal's New England and Baystate via successor-in-interest to Bernal's New York | Stines: Moving Defendants are successors (de facto mergers / mere continuation) of Bernal's New York based on continuity of name, operations, assets, employees, location, and known history of abuse | Moving Defendants: No New York contacts; they are separate Massachusetts entities and deny successor liability | Court: Denied 12(b)(2) without prejudice — Stines made a prima facie showing of successor status and jurisdiction at this pre-discovery stage; defendants may renew after discovery or on summary judgment |
| Whether claims should be dismissed under Rule 12(b)(6) because defendants did not exist at time of abuse | Stines: Even if entities formed later, they may inherit predecessor tort liabilities if successor liability applies | Moving Defendants: Cannot be liable for torts that occurred before their existence | Court: Denied 12(b)(6) without prejudice — successor liability could make them liable; plausible negligence claim against predecessor survives |
| Proper pleading standard for jurisdictional showing at pre-discovery stage | Stines: Prima facie showing suffices; allegations must be accepted as true for jurisdictional inquiry | Moving Defendants: Require stronger proof now | Court: Applied Jazini standard — prima facie factual showing is sufficient pre-discovery; factual disputes can be resolved after jurisdictional discovery |
Key Cases Cited
- Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (2021) (distinguishing general and specific personal jurisdiction requirements)
- Jazini v. Nissan Motor Co., 148 F.3d 181 (2d Cir. 1998) (prima facie pleading standard for personal jurisdiction at pre-discovery stage)
- Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41 (2d Cir. 2003) (successor liability and jurisdiction principles under New York law)
- Schumacher v. Richards Shear Co., 451 N.E.2d 195 (N.Y. 1983) (establishing New York tests for successor liability: formal assumption, de facto merger, mere continuation, fraudulent transfer)
- Krumme v. WestPoint Stevens, 238 F.3d 133 (2d Cir. 2000) (implied consent can establish choice of law)
- Martin Hilti Family Trust v. Knoedler Gallery, LLC, 137 F. Supp. 3d 430 (S.D.N.Y. 2015) (discussion of de facto merger and mere continuation standards under New York law)
- Phillips v. Reed Group, Ltd., 955 F. Supp. 2d 201 (S.D.N.Y. 2013) (example of pleading successor liability based on detailed continuity allegations)