Diplomatic Immunity | Foreign Business | Defamation

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A Slip and Fall of Diplomatic Immunity

A Slip and Fall of Diplomatic ImmunityRecently in Weason v. Permanent Mission of Romania, a Manhattan Supreme Court held that diplomatic immunity does not protect Romania’s Mission to the United Nations from having to repair a hole in the sidewalk in front of its property, leaving this European nation potentially liable to a woman who tripped in the hole and injured herself.

The Foreign Sovereign Immunities Act (“FSIA”) of 1976 is a United States law that establishes the limitations as to whether a foreign sovereign nation (or its political subdivisions, agencies, or instrumentalities) may be sued in U.S. courts—federal or state. The FSIA provides the exclusive basis and means to bring a lawsuit against a foreign sovereign in the United States.

Generally, a foreign state is presumptively immune from the jurisdiction of United States courts and unless a specified exception under the FSIA applies, a federal or state court lacks jurisdiction over a claim against it. A foreign state’s permanent Mission to the United Nations is considered the “embodiment” of that state, so a Mission is entitled to rely on the defense of sovereign immunity, unless an exception to the FSIA applies.

In this case, the Court recognized this tortious activity exception:

A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case… (5)… in which money damages are sought for personal injury or death, or damage to or loss of property, occurring in the United States and caused by damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to… (A) any claim based upon the exercise of performance with a failure to exercise or perform a discretionary function regardless to whether the discretionary function be abused….

According to New York City’s Administrative Code, the owners of abutting buildings bear a non-delegable duty to maintain the sidewalk adjoining their property in a reasonably safe condition. The City placed the Mission on notice of this responsibility. After the Mission received the City’s notice to repair the sidewalk, but before the injury occurred, the Mission consulted with the government of Romania in Bucharest which advised the Mission that, based on its diplomatic immunity under the Vienna Convention on Diplomatic Relations, Edinburgh, the Mission was exempt from any obligation to repair a New York City sidewalk. However, the Mission did not advise the City of New York of Romania’s position, “leaving the need and the responsibility for repair of the sidewalk abutting the Mission unaddressed,” according to the Court. Nonetheless, although the Romania defendants did not deny the hole in the sidewalk or the condition was unsafe, they alleged that based on diplomatic immunity under the FSIA, they had no duty to repair the hole.

In denying the Romania government’s immunity defense, the Court reasoned:

Here, the undisputed evidence defendant Mission presents, that Mission officials reached the decision that the Mission not assume responsibility for the sidewalk repair through the officials’ consultation with the Romanian government in Romania, leaves no question that the officials reached the decision while acting within the scope of their employment. This decision, not to undertake repair of the sidewalk hole, despite [the City’s] notice to do so, that breached defendants non-discretionary duty required by New York City Administrative Code…,tortiously caused the injury [the plaintiff] alleges.

An Out-Of-State Business May Be Able To Sue In New York

An Out - Of - State Business May Be Able To Sue In New YorkIn opposing a motion to dismiss the complaint in Frontiers Unlimited, LLC v. Greenstein, 40 Misc.3d 1239(A), 2013 WL 4822898 (Sup. Ct. Suffolk Cnty. 2013), this firm successfully argued, among other things, that our client plaintiff Homes & Land, LLC — a high end real-estate advertising publisher of two magazines in New York: Homes of the Hamptons and Homes of Eastern Long Island — had the capacity to sue in New York even though it is a Delaware company that is not registered to do business in New York and has offices in Florida.

In New York, a foreign corporation or limited liability company is required to register with the New York Secretary of State in order to be authorized to conduct business in New York. This includes being able to avail itself of our courts to sue. The term “foreign” refers to an out-of-state business, not an entity located outside the U.S. Most states have a “closed door” statute that allows a court to dismiss a lawsuit brought by a foreign entity that is not registered but is “doing business” within the state. New York has two “closed door” statutes; one applicable to foreign corporations (Business Corporation Law § 1312) and the other, to foreign limited liability companies (Limited Liability Company Law § 1004).

In its decision, the Court explained that the “doing business” standard under Business Corporation Law § 1312 and Limited Liability Company Law § 1004 requires a “greater amount of local activity” by a foreign business than otherwise needed to obtain long-arm personal jurisdiction (i.e. to sue such out-of-state entity in New York). Defendants here had to prove that Home & Lands, LLC’s business activities in New York are “not just casual or occasional, but so systematic and regular as to manifest continuity of activity in the jurisdiction” — that is, defendants were required to show that “plaintiff conducted continuous activities in New York essential to its corporate business.”

The Court found that this standard was not satisfied because Home & Land, LLC had a separate New York company, Frontiers LLC, to conduct its New York activities in connection with the publication of the two magazines. The Court also explained that, in any event, the failure by a foreign entity to register may be cured during the pendency of its action. It explained:

Contrary to defendants’ contentions, the solicitation of sales in New York by employees of Frontiers does not constitute doing business in this state within the meaning of Business Corporation Law § 1312 (a), nor does the maintenance of an office in New York. Business Corporation Law § 1312 (a) is a revenue measure designed to place foreign corporations on an equal footing with domestic corporations. It exists to regulate foreign corporations that are doing business within the state. Home & Land has a separate New York company, Frontiers, to conduct its New York activities. The defendants have failed to demonstrate how the purpose of Business Corporation Law § 1312 (a) would be furthered by having Homes & Land register as doing business in New York. In any event, noncompliance with the registration and taxation requirements of Business Corporation Law § 1312 (a) does not raise a jurisdictional bar and may be cured during the pendency of the action.

The defendants also challenged Frontiers LLC’s capacity to sue for breach of an employment agreement because the agreement was executed with Frontiers Inc., not Frontiers LLC. On this issue, the Court, once again, sided with our client. It found that because these two entities had merged, Frontiers LLC, as the surviving entity, “acquired all of the rights, privileges, immunities, powers and purposes, as well as all of the property of Frontiers Inc,” which included the right to commence this action and seek damages for breach of the successor’s agreement.

A Common Interest Can Trump Defamation

A Common Interest Can Trump DefamationIn Hafif v. Rabinical Council, No.: 6719-2011 (Sup. Ct. Kings Cnty. 2013), the Supreme Court recently dismissed a complaint alleging defamation against the Rabbinical Council (the “Council”), and other individual Rabbis of various congregations, who are members of the Council.

Defamati on is the communication of a false statement that harms the reputation of the party who was the subject of the communication. In New York, spoken defamation is called “slander” and defamation in other media is called “libel.”

The complaint stemmed from a domestic dispute between plaintiff, Hafif, and his ex-wife, Evet. Evet had alleged acts of violence against the plaintiff, and thereafter sought to obtain a Jewish divorce — a “Get” — from various religious tribunals. In 2006, Evet obtained a secular divorce in Supreme Court; however, plaintiff would not consent to a Get. As a result, Evet petitioned the Council for a Get and the matter was referred to a religious tribunal in Israel.

The essence of the complaint is the allegation that the Council made false statements about plaintiff in referring the dispute to the Israeli tribunal. More specifically, plaintiff alleges that the Council “advised the Israeli Tribunal that plaintiff had provided forged documents and made false statements” to a [religious tribunal] . . . . Moreover, plaintiff claims that the Council has directed members of his religious community to disassociate with him . . . unless he accedes to demands (mainly, that he grant Evet a Get without imposing any condition) made by the Council and Israeli tribunal, [or] he faces “the most severe sanctions allowed under Jewish law, amounting to an ex-communication from the [religious] community.”

Hafif, at *2.

The defendants moved to dismiss the complaint, based upon three grounds: (1) lack of jurisdiction, as the alleged defamatory statements were made in the context of a body interpreting Jewish law, and the First Amendment prohibition against government entanglement with religious practices would be too easily circumvented if this Court exercised jurisdiction; (2) qualified privilege, as statements made by a religious tribunal to the clergy and worshipers in the same religious community are protected by the “common interest principle,” and plaintiff has failed to make the requisite showing of “malice” to overcome the privilege; and (3) failure to meet the heightened pleading standard under by CPLR 3016, as the allegations failed to specify to whom the alleged defamatory statements were made.

The Court agreed with the defendants and dismissed the Complaint.

Even assuming arguendo that plaintiff has alleged defamatory statements which can be evaluated solely by the application of neutral principles of law and do not implicate matters of religious doctrine and practice [and] are not barred by the Establishment Clause of the First Amendment of the United States Constitution . . . those statements are subject to a qualified privilege, since they were made by the rabbis . . . in the discharge of a private duty and in furtherance of a common interests of a religious observer.

Hafif, at *7.

The “Common Interest Principle,” as explained by the Court of Appeals in Liberman v. Gelstein, 80 N.Y.2d 429, 437 (1992), holds that one cannot be held liable for defamation, even if the statement is false, if the “communication is made by one person to another upon a subject in which both have an interest.” This privilege “has been applied, for example, to employees of an organization (see, Loughry v. Lincoln First Bank, 67 N.Y.2d at 376), members of a faculty tenure committee (Stukuls v. State of New York, 42 N.Y.2d at 272) and constituent physicians of a health insurance plan (Shapiro v.Health Ins. Plan, 7 N.Y.2d at 60-61). The rationale for applying the privilege in these circumstances is that so long as the privilege is not abused, the flow of information between persons sharing a common interest should not be impeded.” Id. Here, the court extended the privilege to the Rabbinical Council and individual Rabbis, as the statements were made only to members of the subject congregation.

Further, plaintiff failed to demonstrate any abuse of the privilege (i.e., malice), for which courts have two tests. The first, set forth by the U.S. Supreme Court in N.Y. Times Co. v. Sullivan, 376 U.S. 254 (1964), requires that the “statements [were] made with [a] high degree of awareness of their probable falsity.” The other, the common law malice, requires a demonstration that the defendant acted with “spite or ill will.” Id. Plaintiff’s complaint failed to allege sufficient facts under either standard, even if the allegations were presumed true. Therefore, the defendants’ motion to dismiss was granted.

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