By: Scott Hobson
On May 15th the Wall Street Journal reported on pending legislation which would give New York courts broad “general jurisdiction” over lawsuits against any corporation registered to do business in the state.
This is at odds with a recent unanimous ruling by the U.S. Supreme Court, which held that litigation must have a distinct connection with the venue where it is being litigated – for example, the alleged negligence occurred there, or it is the plaintiff or defendant’s residence or place of incorporation.
The enactment of this legislation would invite “litigation tourists” from around the world to avail themselves of our notoriously plaintiff-friendly courts.
The Wall Street Journal notes that many groups have expressed concern with the legislation.
“This is a particularly unfriendly bill to foreign business,” said Lanier Saperstein, a New York-based partner at Dorsey & Whitney LLP who represents foreign banks. The New York City Bar and the Business Council of New York State also oppose the legislation.
The dispute reflects foreign companies’ aversion to litigation in American courts, where legal rules allow for a broad pretrial exchange of evidence between parties-a process known as discovery-that has grown so costly in the digital age that some companies settle cases just to avoid it.”
The bill, A.6714, passed the Assembly this afternoon. The Senate companion, S.4846, is currently on the floor calendar.