Gager v. White, 53 N.Y.2d 475 (1981)

The Supreme Court’s decision in Rush v. Savchuk, which invalidated quasi in rem jurisdiction based solely on the attachment of an out-of-state defendant’s liability insurance policy, applies retroactively only when a specific jurisdictional objection was properly preserved; otherwise, the objection is waived.

Summary

This case addresses whether the Supreme Court’s decision in Rush v. Savchuk, which eliminated quasi in rem jurisdiction based solely on attaching an out-of-state insurance policy, applies retroactively. The New York Court of Appeals held that Rush applies retroactively to cases still in litigation *only* if the defendant preserved a specific objection to quasi in rem jurisdiction. Failure to raise this objection constitutes a waiver, and the court retains jurisdiction. The court reasoned that while constitutional due process limitations on jurisdiction are fundamental, the right to object to basis jurisdiction can be waived, similar to other procedural defenses.

Facts

These cases involve New York domiciliaries seeking damages for injuries sustained in out-of-state automobile accidents caused by non-resident defendants. The primary connection to New York was the ability to attach the defendant’s liability insurance policy in New York, based on the Seider v. Roth doctrine. After the Supreme Court decided Rush v. Savchuk, which invalidated this type of quasi in rem jurisdiction, defendants moved to dismiss the pending cases for lack of jurisdiction.

Procedural History

The trial courts initially denied the motions to dismiss, relying on prior New York case law supporting Seider jurisdiction. The intermediate appellate courts reversed in four out of five cases, dismissing the complaints because of Rush v. Savchuk. The New York Court of Appeals then reviewed these decisions.

Issue(s)

Whether the Supreme Court’s decision in Rush v. Savchuk, which invalidated quasi in rem jurisdiction based solely on attachment of a liability insurance policy, should be applied retroactively to pending cases.

Holding

Yes, Rush v. Savchuk applies retroactively, but *only* if the defendant preserved a specific objection to the assertion of quasi in rem jurisdiction by appropriate motion or affirmative defense. No, if the defendant failed to properly object to quasi in rem jurisdiction, the objection is waived because basis jurisdiction is waivable under CPLR 3211(e).

Court’s Reasoning

The court acknowledged the general rule that changes in decisional law are usually applied retrospectively. However, it recognized an exception when a sharp break in the law would cause significant disruption and reliance interests are at stake. While plaintiffs argued that retroactive application would foreclose actions in other jurisdictions due to statute of limitations, the court emphasized the fundamental nature of jurisdictional determinations. The court stated that a constitutional due process limitation on a state’s exercise of jurisdiction is an absolute abnegation of the state’s power to act beyond those boundaries. The court discussed the evolution of jurisdictional principles, highlighting Pennoyer v. Neff, International Shoe Co. v. Washington, and Shaffer v. Heitner, leading up to Rush v. Savchuk. The court quoted World-Wide Volkswagen Corp. v. Woodson, reminding that “[a] judgment rendered in violation of due process is *void* in the rendering State and is not entitled to full faith and credit elsewhere”. However, unlike subject matter jurisdiction, the court emphasized that basis jurisdiction is waivable under CPLR 3211(e). The court held that a defendant’s voluntary participation in litigation without properly objecting to quasi in rem jurisdiction constitutes a submission to the jurisdiction of the state’s courts. Therefore, the court distinguished between cases where a specific objection to quasi in rem jurisdiction was raised in the answer and those where it was not. In cases where the objection was properly raised, dismissal was appropriate. Where no such objection was made, jurisdiction was deemed waived, and the action could proceed.