Frederick W. Gundlach v. Int’l Business Machines Corp., et al., No. 11-CV-846 (S.D.N.Y. 2012), presents a pro se plaintiff’s claims against IBM and several non-U.S. affiliates for breach of contract and various employment related claims, including claims under Japan’s Labor Law. For international practice purposes, the Court’s decision should be considered on the following issues:
First, in connection with the Court’s analysis of personal jurisdiction under New York’s Civil Practice Law and Rules Section 301, the Court stated (all citations omitted)
“Under the New York long-arm statute, general jurisdiction exists over non-residents ‘doing business’ in New York.” . . . The Court may exercise jurisdiction over an “out-of-state defendant if the defendant engages in continuous and systematic business activities within New York,” or in other words, does business “with a fair measure of permanence and continuity.” This standard is “stringent” and, “[a]t its core, . . . boils down to ‘presence.’” Factors that courts consider in determining a defendant’s presence in the state include: “the existence of an office in New York; the solicitation of business in the state; the presence of bank accounts and other property in the state; and the presence of employees of the foreign defendant in the state.”
However, although the Court held that to make a prima facie showing of presence of IBM Japan by reason of the presence of IBM itself in New York, the Court was willing to deem plausible a reverse piercing theory: attempting to show that Defendant IBM Japan is subject to jurisdiction here because it is a mere department or agent of its New York-based parent corporation. The Court found that the plaintiff “has made a showing sufficient to at least warrant limited discovery in order to determine whether personal jurisdiction over IBM Japan is proper”.
Second, the Court also found that a plaintiff need not strictly make out a prima facie case; rather the requisite showing “is committed to the sound discretion of the district court on a case-by-case basis without bright-line limits” (quoting Linde v. Arab Bank, PLC, 262 F.R.D. 136 (E.D.N.Y. 2009)).
Third, the Court denied IBM Japan’s forum non conveniens motion on the ground, perhaps surprisingly, that “IBM Japan has failed to show that an adequate alternative forum exists” (in Japan).