9 N.Y.3d 375 (2007)

A non-domiciliary transacts business within New York under CPLR 302(a)(1) when they purposefully solicit a New York attorney, establish an ongoing attorney-client relationship, and frequently communicate with the attorney in New York regarding the matter.

Summary

This case addresses whether New York courts can exercise personal jurisdiction over a California resident and corporation who hired a New York attorney to represent them in an Oregon lawsuit. The New York Court of Appeals held that the defendants transacted business in New York by purposefully seeking out the attorney, establishing a continuing attorney-client relationship, and engaging in frequent communication with him in New York via phone, email, and fax. This was sufficient to establish jurisdiction under CPLR 302(a)(1) because the suit for unpaid legal fees directly arose from these New York contacts.

Facts

Suzanne Bell-Doucet, a California resident and president of Only New Age Music, Inc. (ONAM), contacted Gabriel Fischbarg, a New York attorney, to discuss representing ONAM in a lawsuit in Oregon. Bell-Doucet sent a letter to Fischbarg in New York confirming the contingency fee arrangement and included relevant case documents. Fischbarg and the defendants entered into a retainer agreement via telephone, with Fischbarg working on the Oregon case from his New York office. Over nine months, defendants regularly communicated with Fischbarg in New York via phone, email, and fax. A dispute arose regarding the retainer agreement, and Fischbarg resigned. After the Oregon action settled, Fischbarg sued in New York to recover unpaid legal fees.

Procedural History

Fischbarg sued Doucet and ONAM in New York seeking damages for breach of contract and unjust enrichment. The defendants moved to dismiss for lack of personal jurisdiction. The Supreme Court denied the motion, holding that jurisdiction was proper under CPLR 302(a)(1). The Appellate Division affirmed. The Appellate Division granted leave to appeal to the New York Court of Appeals.

Issue(s)

Whether a non-domiciliary transacts business in New York under CPLR 302(a)(1) when they retain a New York attorney and engage in ongoing communications with that attorney in New York related to the representation.

Holding

Yes, because the defendants purposefully availed themselves of the privilege of conducting activities within New York by soliciting the attorney’s services, establishing a continuing relationship, and repeatedly communicating with the attorney in New York.

Court’s Reasoning

The court reasoned that CPLR 302(a)(1) allows jurisdiction over a non-domiciliary who transacts business within New York, even without physical presence, if their activities are purposeful and substantially related to the claim. “Purposeful activities are those with which a defendant, through volitional acts, ‘avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws’.” The court distinguished this case from those involving limited contacts, such as a single phone order or a consultant’s communications with a New York physician. The court emphasized the “quality” of the defendants’ contacts, noting that they “sought out plaintiff in New York and established an ongoing attorney-client relationship with him.” This “sustained and substantial transaction of business” (quoting Parke-Bernet Galleries v. Franklyn) subjected them to New York jurisdiction. The court found that the lawsuit arose directly from the defendants’ transaction of business in New York. The court distinguished Haar v. Armendaris Corp., where jurisdiction was lacking because the defendant’s contacts were with the attorney in Massachusetts, not New York. Here, the defendants directly solicited and communicated with the attorney in New York, thus projecting themselves into New York’s legal services market.