14 N.Y.2d 281 (1964)
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A statute expanding personal jurisdiction over non-residents does not retroactively validate jurisdictionally defective service of process made before the statute’s effective date, unless the legislature clearly expresses such intent.
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Summary
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This case concerns whether New York’s CPLR 302, which broadened the scope of personal jurisdiction over non-residents, applied retroactively to an action commenced before its enactment. The plaintiff sued the defendant, an Arizona corporation, for breach of contract, alleging the contract was made in New York. Service was made on a director in New York. The defendant argued lack of jurisdiction. The court held that CPLR 302 did not retroactively validate the service of process, emphasizing the absence of a clear legislative intent for such retroactive application and the potential unfairness to parties who relied on prior law. The court affirmed the dismissal of the complaint.
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Facts
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The plaintiff, a Connecticut resident (formerly of New York), sued International Bank, an Arizona corporation, for breach of a joint venture agreement allegedly made in New York in 1955.r
The lawsuit was initiated in New York in 1960. Service of process was effected on a director of International Bank in New York.r
International Bank asserted it had no office or business activity in New York and moved to dismiss the complaint for lack of personal jurisdiction.r
The plaintiff merely alleged the contract was “made” in New York, without providing supporting factual evidence.r
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Procedural History
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The Supreme Court granted the defendant’s motion to dismiss in August 1960.r
The Appellate Division affirmed the Supreme Court’s order in March 1962.r
The New York Court of Appeals granted leave to appeal in May 1963.r
The CPLR 302, expanding long-arm jurisdiction, became effective on September 1, 1963, after all the lower court decisions but before the Court of Appeals decision.r
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Issue(s)
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Whether CPLR 302, which expands the basis for personal jurisdiction over foreign corporations and nonresident persons, applies retroactively to actions instituted before its effective date, so as to validate an otherwise jurisdictionally defective service of process.
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Holding
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No, because the legislature did not express a clear intent for retroactive application to validate prior defective service; CPLR 302 applies to actions commenced after its effective date or to subsequent proceedings in pending actions, but does not reach backward to cure previously defective service.
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Court’s Reasoning
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The court acknowledged the expansion of jurisdictional power following International Shoe Co. v. Washington and McGee v. International Life Ins. Co., but noted the legislature had not acted upon this expansion until the CPLR.r
It declined to modify prior decisional law retroactively, preferring to defer to legislative action, especially when formulating new rules could result in unfairness to those who relied on prior law. The court stated, “it is preferable to defer to legislative action where the fashioning of a new rule would require “consideration of a variety of possible remedies” or, perhaps, result in unfairness to persons who have justifiably relied on a prior rule of long standing.”r
CPLR 302, modeled after the Illinois Civil Practice Act, replaced the “doing business” test with “transacting any business.”r
The court stated, “[W]hile procedural changes are, in the absence of words of exclusion, deemed applicable to “subsequent proceedings in pending actions” (Lazarus v. Metropolitan El. Ry. Co., 145 N. Y. 581, 585), it takes “a clear expression of the legislative purpose to justify” a retrospective application of even a procedural statute so as to affect proceedings previously taken in such actions.”r
The statute explicitly applies to actions