DANIEL WILLIAMS AND EDWARD WILLIAMS, PLAINTIFFS-RESPONDENTS, v BEEMILLER, INC., DOING BUSINESS AS HI-POINT, ET AL., DEFENDANTS, AND CHARLES BROWN, DEFENDANT-APPELLANT.
1438 CA 17-00501
Supreme Court of the State of New York, Appellate Division, Fourth Judicial Department
February 9, 2018
2018 NY Slip Op 00939
PRESENT: PERADOTTO, J.P., CARNI, DEJOSEPH, AND WINSLOW, JJ.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.
BRADY CENTER TO PREVENT GUN VIOLENCE, LEGAL ACTION PROJECT, WASHINGTON, D.C. (JONATHAN E. LOWY, OF THE WASHINGTON, D.C. BAR, ADMITTED PRO HAC VICE, OF COUNSEL), AND CONNORS & VILARDO, BUFFALO, FOR PLAINTIFFS-RESPONDENTS.
Peradotto
Appeal from an order of the Supreme Court, Erie County (Diane Y. Devlin, J.), entered July 20, 2016. The order denied the motion of defendant Charles Brown for summary judgment dismissing the first amended complaint against him.
It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted, and the first amended complaint is dismissed against defendant Charles Brown.
Opinion by Peradotto, J.P.:
In this appeal, we must determine whether defendant Charles Brown, an out-of-state seller of firearms who sold a gun that was transported to New York and used in a shooting, is subject to personal jurisdiction in this state. We hold that the exercise of personal jurisdiction under New York‘s long-arm statute does not comport with federal due process under the circumstances of this case.
I
As we explained when this case was previously before us in the context of motions to dismiss by three defendants (Williams v Beemiller, Inc., 100 AD3d 143 [4th Dept 2012], amended on rearg 103 AD3d 1191 [4th Dept 2013]), plaintiffs commenced this action seeking damages for injuries sustained by Daniel Williams (plaintiff) in an August 2003 shooting in Buffalo. Plaintiff, a high school student, was shot in the abdomen by defendant Cornell Caldwell, who apparently misidentified plaintiff as a rival gang member. The gun used to shoot plaintiff was identified as a Hi-Point 9mm semiautomatic pistol manufactured by defendant Beemiller, Inc., doing business as Hi-Point (Beemiller), an Ohio corporation and a federally licensed firearms manufacturer. Beemiller sold the gun to defendant MKS Supply, Inc. (MKS), an Ohio corporation and a federally licensed wholesale distributor of firearms. MKS then sold the gun to Brown, who held a federal firearms license (FFL) in Ohio and sold guns at retail as Great Lakes Products (Great Lakes).
During several sales at Ohio gun shows in 2000, Brown sold 181 guns, including the gun at issue, to defendants James Nigel
In the first amended complaint (hereafter, complaint), plaintiffs alleged, inter alia, that Beemiller, MKS, and Brown (collectively, defendants) “negligently distributed and sold the Hi-Point handgun in a manner that caused it to be obtained by Caldwell, an illegal and malicious gun user and possessor, and then to be used to shoot [plaintiff].” According to plaintiffs, Beemiller and MKS intentionally supplied handguns to irresponsible dealers, including Brown, because they profited from sales to the criminal gun market. Brown, in turn, sold numerous handguns, including the subject gun, to Bostic and Upshaw, even though he knew or should have known that they “intended to sell these multiple guns on the criminal handgun market, to supply prohibited persons and criminals such as Caldwell with handguns.” Plaintiffs alleged six causes of action against defendants.
In lieu of answering, defendants each moved to dismiss the complaint against them and, in his motion, Brown asserted, inter alia, that he was not subject to personal jurisdiction in New York (see id. at 152). Supreme Court dismissed the action against Brown for lack of jurisdiction, but we reversed on appeal, holding in relevant part that plaintiffs made a sufficient start to warrant further disclosure on the issue whether personal jurisdiction could be established over Brown (see id. at 152-154.1).
In his subsequent answer, Brown asserted various affirmative defenses, including that the court lacked personal jurisdiction over him. Following jurisdictional discovery, Brown moved for summary judgment dismissing the complaint against him. In its bench decision, the court concluded that plaintiffs had established the requisite elements for the exercise of long-arm personal jurisdiction over Brown under
II
It is well established that “the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact” (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Thus, “[a] party moving for summary judgment must demonstrate that ‘the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment’ in the moving party‘s favor” (Jacobsen v New York City Health & Hosps. Corp., 22 NY3d 824, 833 [2014], quoting
In determining whether the exercise of personal jurisdiction over a nondomiciliary defendant is proper, a court must assess whether the requirements of New York‘s long-arm statute have been met and, if so, whether a finding of personal jurisdiction comports with federal due process (see LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210, 216 [2000]).
“who in person or through an agent . . . commits a tortious act without the state causing injury to person or property within the state . . . if he [or she] (i) . . . derives substantial revenue from goods used or consumed . . . in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.”
On appeal, Brown does not challenge the assertion of statutory long-arm jurisdiction on the ground that he did not commit a tortious act outside New York that caused injury to a person inside New York (see
Statutory long-arm jurisdiction thus turns on whether Brown “derives substantial revenue from goods used or consumed . . . in [New York]” (
Although “[a] uniformly dependable yardstick for what is or is not ‘substantial’ has not yet been devised,” courts have applied both a proportion test and a quantity test to determine what constitutes substantial revenue within the meaning of
Here, with respect to
The evidence submitted by plaintiffs also establishes that the 181 guns sold to Bostic and his associates constituted approximately 34% of Brown‘s gun sales by volume in 2000. In addition, even considering as accurate plaintiffs’ higher figure of over 4,100 total guns sold by Brown for the period 1996 to 2005, which includes additional retail sales and certain non-retail transfers reflected in the record that Brown does not count in his calculation, the 181 guns sold to Bostic and his associates represents 4.4% of Brown‘s total gun sales for that period (see generally Tonns, 90 AD2d at 549). As plaintiffs point out, Brown was largely unable to produce sales receipts during
In contrast to the substantial revenue requirement of
Here, even if the sales to Bostic and his associates were not counted as out-of-state sales, plaintiffs submitted evidence establishing that, from 1996 to 2005, Brown sold and transferred 404 guns to out-of-state purchasers. Such interstate transactions constitute over 9.8% of Brown‘s total sales by volume for that period, and that percentage would be 14.3% if the Bostic sales were included as out-of-state sales (see Darienzo v Wise Shoe Stores, 74 AD2d 342, 344-346 [2d Dept 1980]). In addition, even if we were to accept the admittedly incomplete figure set forth by Brown reflecting 190 out-of-state purchases during the relevant period, such interstate activity would constitute
The other prong of
IV
We agree with Brown that principles of federal due process preclude New York from exercising personal jurisdiction over him. It is well established that the “[e]xercise of personal jurisdiction under the long-arm statute must comport with federal constitutional due process requirements” (Rushaid v Pictet & Cie, 28 NY3d 316, 330 [2016], rearg denied 28 NY3d 1161 [2017], citing LaMarca, 95 NY2d at 216). First, a defendant must have “minimum contacts” with the forum state such that the defendant “should reasonably anticipate being haled into court there” (World-Wide Volkswagen Corp. v Woodson, 444 US 286, 291, 297 [1980]) and, second, the maintenance of the suit against the defendant in New York must comport with “traditional notions of fair play and substantial justice” (International Shoe Co. v Washington, 326 US 310, 316 [1945] [internal quotation marks omitted]).
Applying the foregoing principles, we conclude that Brown lacks the minimum contacts with New York that are a prerequisite to the exercise of jurisdiction over him. Brown‘s submissions established that Great Lakes was an Ohio retailer permitted to sell guns within Ohio only and, during the relevant
In seeking to establish the requisite minimum contacts with New York, plaintiffs rely upon Brown‘s testimony that Bostic mentioned being from Buffalo and discussed his purported intention or desire to open a gun store in Buffalo in addition to one in Ohio. Plaintiffs contend that Brown‘s knowledge that Bostic ostensibly planned or hoped to open a gun store in Buffalo gave Brown reason to believe that the guns would be resold in New York and indicated Brown‘s intent to serve the market there. We conclude, however, that Brown‘s knowledge that guns sold to Bostic might end up being resold in New York if Bostic‘s ostensible plan or hope came to fruition in the future is insufficient to establish the requisite minimum contacts with New York because such circumstances demonstrate, at most, Brown‘s awareness of the mere possibility that the guns could be transported to and resold in New York (see World-Wide Volkswagen Corp., 444 US at 297). The Supreme Court has long rejected the notion that a defendant‘s amenability to suit simply “travel[s] with the chattel” (id. at 296; see J. McIntyre Mach., Ltd. v Nicastro, 564 US 873, 891 [2011, Breyer, J., concurring]). In addition, plaintiffs’ proposed approach would impermissibly allow the contacts that Bostic, a third party, had with Brown and New York “to drive the jurisdictional analysis” (Walden, 134 S Ct at 1125; see J. McIntyre Mach., Ltd., 564 US at 891 [Breyer, J., concurring]). In short, Brown did not “‘purposefully avail[ himself] of the privilege of conducting activities within [New York]‘” (World-Wide Volkswagen Corp., 444 US at 297) and, therefore, he lacks the requisite minimum contacts to permit the exercise of jurisdiction over him.
Furthermore, for the foregoing reasons, although Brown may have derived substantial revenue from the sale of guns in Ohio to Bostic and his associates that were then transported to and ultimately used or consumed in New York (see
In light of our determination, we have no occasion to reach the second component of the due process inquiry, i.e., whether exercising personal jurisdiction over defendant would comport with traditional notions of fair play and substantial justice (see e.g. Carpino v National Store Fixtures, 275 AD2d 580, 582 [3d Dept 2000], lv denied 95 NY2d 769 [2000]).
V
As an alternative ground for the exercise of personal jurisdiction over Brown, plaintiffs contend that New York has jurisdiction on the theory that MKS is Brown‘s agent and alter ego, and MKS does not dispute jurisdiction. We reject that contention inasmuch as the evidence adduced during jurisdictional discovery does not support plaintiffs’ assertions.
Plaintiffs’ agency theory fails because, even if MKS acted as Brown‘s agent for purposes of distributing the subject guns to Great Lakes, the evidence establishes that MKS was not acting as Brown‘s agent in committing the tortious act in Ohio that caused injury to plaintiff in New York, i.e., improperly selling the guns to Bostic and his associates (see
Contrary to plaintiffs’ further contention, the evidentiary submissions do not establish that MKS was Brown‘s alter ego at the time of the alleged tortious conduct, i.e., the sales to Bostic and his associates between May and October 2000. Brown was hired by MKS as a salesperson in 1993 and became
VI
Accordingly, we conclude that the order should be reversed, Brown‘s motion should be granted, and the complaint against him should be dismissed.
Entered: February 9, 2018
Mark W. Bennett
Clerk of the Court