In Personam Jurisdiction | Release of Party | Vaccinations

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Canadian Company’s New York Contacts Do Not Support Jurisdiction in Trademark Dispute

Canadian Company’s New York Contacts Do Not Support Jurisdiction in Trademark DisputeIn F.TV Ltd. v. Bell Media Inc. plaintiff (“FTV”) sued Canadian media firm Bell Media Inc. – a successor-in-interest to Chum Limited and Bigfoot Entertainment Inc. – seeking to hold them liable for false advertising, tortious interference and trade libel. FTV claimed its right to use the “Fashion Television” trademark was resolved by prior litigation, whose results were binding on Bigfoot and its subsidiary Fashion Television International Ltd. Bell’s contacts with New York are limited to it being the successor to Chum – which initiated litigation against FTV in New York in 1998 – and that shares of its corporate parent BCE Corp. are listed on the New York Stock Exchange.

On motion, the Court was faced with, among other things, a fundamental jurisdictional “due process” issue under the United States Constitution; the Latin phrase is “in personam,” meaning “directed toward a particular person.” This issue is sometimes referred to as “personal jurisdiction.” In personam refers to a court’s power to adjudicate matters directed against a party, as distinguished from in-rem proceedings over disputed property.

A court with jurisdiction in a particular location may exercise in personam jurisdiction over a person or entity who resides, maintains connections, or is served notice of legal proceedings in that location. It may also exercise jurisdiction over a person or entity who consents to be subject to it. For example, under our Constitution, a New York resident who has never been to Iowa, and has absolutely no connections to that State, cannot be hauled into a court in that State to answer a complaint against her – it’s just not fundamentally fair.

In deciding the motion to dismiss, the Court recognized that “[i]n addition to finding a statutory basis for jurisdiction, a court must determine ‘whether the district court’s exercise of personal jurisdiction over a foreign defendant comports with due process protections established under the United States Constitution.’ To determine whether the Court’s exercise of jurisdiction over a foreign defendant comports with due process protections, the Court considers first whether ‘a defendant purposefully established minimum contacts within the forum State,’ and second ‘whether the assertion of personal jurisdiction would comport with fair play and substantial justice’ – that is, whether it would be reasonable.”

The Court was guided by a five factor test for this “reasonableness” analysis: “(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff’s interest in obtaining convenient and effective relief; (4) the interstate judicial system’s interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies.”

Applying these factors, the Court granted Bell dismissal for lack of personal jurisdiction. The evidence supported its claims that it is a Canadian firm that licenses programming entirely unrelated to the instant litigation from certain entities and sells advertising to its programming through an agent based in New York. None of this had any nexus to the instant litigation to support specific jurisdiction. The record further supported Bell’s claim that, as a Canadian firm that does not regularly do business in New York, litigation in New York would be burdensome.

I Thought I Was Just Releasing My Opponent

I Thought I Was Just Releasing My OpponentIn prior articles, we have discussed the importance of each word included in a stipulation of settlement and release. Again, a recent decision of the Appellate Division First Department, Long v. O’Neill, reinforces that truth. 126 A.D.3d 404 (1st Dept. 2015).

There, the plaintiff and defendants were former directors of a Cayman Islands investment fund known as CMIA China Fund II Ltd. (the “Fund”). Another entity called CMIA Capital Partners, PTE, was given the title of Investment Manager (the “Fund Manager”). A third entity called “KOM Capital Management LLC (“KOM”) was appointed as the Investment Sub-Manager. The two director defendants in this action, were also the sole members of KOM.

In 2009, the six Fund directors discovered that the Fund Manager had fraudulently misrepresented the profitability of certain transactions, which resulted in significant losses. The Fund directors sought to terminate the Fund Manager, but realized that the Fund’s operating documents did not grant them that authority. Thus, certain litigations were commenced. The first was brought by the Fund directors seeking to terminate the Fund Manager — brought in Singapore. The other two were brought by the Fund Manager seeking: (1) fees owed and (2) a derivative action claiming waste and breach of fiduciary duties for bringing the Singapore suit against the Fund Manager. Both plaintiff and defendants herein were named as defendants in the Fund Manger’s lawsuits.

The plaintiff in the current action claims that in connection with those three litigations, an agreement was reached between him and the defendant Fund directors/sole members of KOM, that plaintiff would be compensated by KOM, for his increased job duties associated with assisting the defense, prosecution and/or settlement of those litigations. Plaintiff claims that he was promised to be paid 1/3 of any fee that KOM was to receive as “Investment Sub Manager.”

The three litigations with the Fund Manager ultimately settled, with all parties thereto, including plaintiff and defendants herein, signing a release which provided that the agreement was made “in full and final settlement of all matters arising out of or in connection with the facts, matters, claims, actions and allegations” made in the lawsuits. The release went on to state that each party released “each other Party from all and/or any actions, claims, rights demands, suits . . . whether known or not now known . . . arising from or resulting from or in connection with any act or omission, event, transaction, occurrence, agreement, contract or relationship concerning [the Fund] . . . .”

Ultimately, the plaintiff was not paid his 1/3 fee, so he brought this action seeking $385,301. The defendants moved to dismiss the complaint, contending, among other things, that the release signed in connection with the settlement of the Fund Manager’s actions barred plaintiff’s suit. In opposition, plaintiff argued that because the settlement agreement was between two opposing groups, i.e., the Fund, its directors, and KOM on one side, and the Manager and its principal on the other, that the settlement agreement did not contemplate releasing claims between parties on the same side, such as between him and the director defendants. Plaintiff further argued that because his claim had not ripened at the time of the settlement, that the release could not bar it.

The Court disagreed. The Court observed that the meaning and coverage of a release “necessarily depends, as in the case of contracts generally, upon the controversy being settled and upon the purpose for which the release was actually given,” and held that the release barred plaintiff’s claim. The Court found that, although the recital in the settlement agreement stated that it was executed between two opposing sides, it defined “party” to include plaintiff and defendants; thus, the release made clear that it was meant to apply to more than the settlement of the lawsuits involving the Manager.

State Can Say “Stay Out” If Not Vaccinated

State Can Say 'Stay Out' If Not VaccinatedIn Phillips v. City of New York the U.S. Court of Appeals, Second Circuit, held that New York State’s requirement that all public school children be vaccinated does not violate the U.S. Constitution. It held that the requirement, which allows for certain medical and religious exemptions, does not violate the rights of parents under the First and Ninth Amendments, nor does it violate the guarantees of equal protection and due process. The Court also held as constitutional a State regulation allowing officials to temporarily exclude students who are exempted from the vaccination requirement when there is an outbreak of any disease preventable by vaccination.

New York’s Public Health Law §2164 states that no school official should admit a student to school for more than 14 days without a certificate of immunization but allows one exemption where a physician certifies immunization may be harmful to the child’s health and a second exemption where parents “hold genuine and sincere religious beliefs” contrary to immunization.

Two of the adult plaintiffs who sued are Catholic parents who received religious exemptions for their children who were then excluded from school during outbreaks of chicken pox in November 2011 and January 2012. A third plaintiff, Dina Check, applied for a religious exemption for her 6-year-old child, but was denied on the grounds that her objections were not based on genuine and sincere religious beliefs. Check, also a Catholic, testified at a preliminary injunction hearing before a federal magistrate judge that her daughter’s “well-being is strictly by word of God,” but that she also believed vaccination could hurt her daughter and possibly kill her. The motion for a preliminary injunction was denied on the grounds that Check’s view was not based on sincere religious beliefs.

On appeal, the Court first held the plaintiffs’ substantive due process rights claim was foreclosed by the U.S. Supreme Court more than 100 years ago in Jacobson v. Commonwealth of Massachusetts, 197 U.S. 11 (1905), which held that mandatory vaccinations were within the police power of the state.

But the plaintiffs also argued that the temporary exclusion from school burdened their free exercise of religion, an issue to which Jacobson did not apply because it was decided well before the Free Exercise Clause in the First Amendment was held to apply to the states. The Court said that in “persuasive dictum” from another case, Prince v. Massachusetts, 321 U.S. 158 (1944), the Supreme Court said, “[t]he right to practice religion freely does not include liberty to expose the community or the child to communicable disease or the latter to ill health or death.” It also noted that New York State “goes beyond what the Constitution requires” by allowing for an exemption for genuine and sincere religious beliefs.

“Because the state could bar [the parents’] children from school altogether, a fortiori, the state’s more limited exclusion during an outbreak of a vaccine-preventable disease is clearly constitutional.”

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