Background

Plaintiff, Flamel Technologies S.A.,a French corporation, brings this action against defendant, Gerard Soula, a French citizen. Plaintiff seeks, among other things, a declaratory judgment that defendant, plaintiff's former president, must turn over proprietary technologies which he allegedly misappropriated when he left plaintiff's employ in or about June 2005. Plaintiff became authorized to do business in New York on or about December 27, [*2]2006, the date when this action was commenced (Affirmation of Mark D. Lebow, Esq. in Support of Motion [Lebow Aff.], Ex. B). The complaint is drafted entirely in French and was served on defendant in France in or about March 2007. Defendant moves to dismiss the complaint for lack of personal jurisdiction, pursuant to CPLR 302 (a) (2) and (3), or, in the alternative, on the grounds of forum non conveniens, pursuant to CPLR 327. For the reasons set forth below, defendant's motion is granted, as plaintiff has failed to establish a basis for personal jurisdiction over defendant in New York.

Discussion

On a motion to dismiss for lack of personal jurisdiction, plaintiff bears the burden of establishing a prima facie case that a non-resident defendant, in this case Soula, is amenable to personal jurisdiction in New York (see A.I. Trade Fin., Inc. v Petra Bank, 989 F2d 76, 79 [2d Cir 1993]). Further, the Court must view the jurisdictional allegations in a light most favorable to plaintiffs, the parties seeking to establish jurisdiction (see Ed Moore Adv. Agency, Inc. v I.H.R., Inc., 114 AD2d 484, 486 [2d Dept 1985]).

The general standard for personal jurisdiction, based upon the constitutional due process clause, over a foreign citizen, like defendant, requires "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice" (International Shoe Co. v State of Washington, Office of Unemployment Compensation and Placement, 326 U.S. 310, 316 [1945] [parenthetical supplied]; World-Wide Volkswagen Corp. v Woodson, 444 U.S. 286, 291-292 [1980]).

1. Long-Arm Jurisdiction Pursuant to CPLR 302 (a) (1)

Plaintiff asserts that personal jurisdiction exists in New York over defendant pursuant to CPLR 302 (a) (1), New York's long-arm statute, which provides, in pertinent part:

"(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:

1. Transacts any business within the state or contracts anywhere to supply goods or services in the state ..."

In order to be subject to personal jurisdiction pursuant to CPLR 302 (a) (1), a defendant must engage in purposeful business activities or transactions in New York and there must be a substantial relationship between the defendant's business activities or transactions in this State and the claims asserted in the complaint (see Deutsche Bank Sec., Inc. v Montana Bd. of Invs., 7 NY3d 65, 71 [2006]; Kreutter v McFadden Oil Corp., 71 NY2d 460, 467 [1988]; Courtroom Television Network v Focus Media, Inc., 264 AD2d 351, 352 [1st Dept 1999]). Personal jurisdiction can be based upon a single transaction by a defendant in New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claims asserted (see Kreutter v McFadden Oil Corp., 71 NY2d at 467; Parke-Bernet Galleries, Inc. v Franklyn, 26 NY2d 13, 16 [1969]).

In this case, both plaintiff and defendants are citizens of a foreign country, France, and defendant's non-competition commitment with plaintiff, his former employer, was negotiated in France in 1990 (Affidavit of Stephen H. Willard [Willard Aff.], in Opposition, at ¶ 11). Plaintiff asserts that it is entitled to the proprietary technologies it developed pursuant to French law. Although plaintiff asserts that defendant had meetings and conducted business activities in New York, including sales of securities and licensing agreements with American companies, it has failed to demonstrate a substantial relationship between these business transactions and the allegations against defendant in the complaint (see Kreutter v McFadden Oil Corp., 71 NY2d at 467; Parke-Bernet Galleries, Inc, v Franklyn, 26 NY2d at 16; Holness v Maritime Overseas Corp., 251 AD2d 220, 224 [1st Dept 1998]). Accordingly, plaintiff has failed to sustain its burden to establish personal jurisdiction in New York over defendant based upon the "transacting [*3]business" provision of New York's long-arm statute. Further, in view of defendant's lack of minimum contacts with New York, extending personal jurisdiction over him in this State would violate due process, as maintaining this suit would "offend traditional notions of fair play and substantial justice" (see International Shoe Co. v State of Washington, 326 U.S. at 316; World-Wide Volkswagen Corp. v Woodson, 444 U.S. at 291-292).

2. Long-Arm Jurisdiction Pursuant to CPLR 302 (a) (3)

In addition to asserting that personal jurisdiction exists in New York over Soula pursuant

to CPLR 302 (a) (1), plaintiff asserts that CPLR 302 (a) (3) (ii) provides an alternative basis for personal jurisdiction under the long-arm statute. This provision allows the New York courts to exercise personal jurisdiction over any non-domiciliary who "commits a tortious act without the state causing injury to person or property within the state ... if he... expects or should reasonably expects the act to have consequences within the state and derives substantial revenue from interstate or international commerce." Plaintiff bases the allegations of jurisdiction pursuant to this provision on the alleged false statements Soula made in France that he was the co-owner of plaintiff's technology, which caused injury to the corporation's investors in New York. Plaintiff's attempt to establish jurisdiction pursuant to CPLR 302 (a) (3) (ii) lacks merit, as the New York courts generally hold that the situs of the injury for a tort is where the events giving rise to the injury occurred, and is not based upon the fact that a party who happens to incur an indirect financial loss is domiciled in New York (see Ingraham v Carroll, 90 NY2d 592 [1997]; Fantis Foods, Inc. v Standard Importing Co., 49 NY2d 317, 326 [1980]; O'Brien v Hackensack Univ. Med. Ctr., 305 AD2d 199, 201-202 [1st Dept 2003]).

This case is distinguishable from the products liability decision cited by plaintiff, in which an out-of-state manufacturer is subject to personal jurisdiction pursuant to CPLR 302 (a) (3), in an action in which a New York defendant seeks to recover damages for injuries incurred within this State due to a product produced outside this State (see LaMarca v Pak-Mor Mfg. Co., 95 NY2d 210 [2000]). Unlike the Pak-Mor cse, this action does not involve a physical injury resulting from goods manufactured outside of New York and shipped into this state, but, rather, involves pecuniary losses allegedly incurred by plaintiff, a French corporation, due to alleged wrongful acts committed by defendant, another French citizen.

3. Forum Non Conveniens

In view of this Court's determination to dismiss the instant action for lack of personal jurisdiction, we need not reach the issue of whether New York is an inconvenient forum for this action, within the meaning of CPLR 327 (a). Nevertheless, this case closely resembles actions which were dismissed on the grounds of forum non conveniens (see, e.g. Irrigation & Indus. Dev. Corp. v Indag, S.A., 37 NY2d 522 [1975], affg 44 AD2d 543 [1st Dept 1974] [action involved contract entered into in Europe and North Africa; witnesses and documents were located in Europe]; Nguyen v Banque Indosuez, 19 AD3d 292 [1st Dept 2005] [action involved termination of Vietnamese employees of French bank]; Edelman v Taittinger, S.A., 298 AD2d 301 [1st Dept 2002] [all of alleged wrongful acts occurred in France, where all of the witnesses and documents were located]; Morley v Morley, 191 AD2d 372 [1st Dept 1993] [court correctly determined that case concerning two French residents should be litigated before a French tribunal]).

Thus, even assuming, for the sake of argument, that personal jurisdiction existed over defendant in New York, this Court would exercise its discretion to dismiss this action on the grounds of forum non conveniens, in view of the substantial hardship demonstrated by defendant in litigating this case in this forum and the availability of an alternative forum, France, in which plaintiff can litigate this matter.

Plaintiff has sought discovery pursuant to CPLR 3211 (d), asserting that facts

essential to oppose defendant's motion to dismiss for lack of personal jurisdiction may exist but cannot currently be stated. In Peterson v Spartan Indus., Inc. (33 NY2d 463 [1974]), a products liability personal injury case in which the Court of Appeals concluded that the plaintiff had made a "sufficient start" and shown that the argument that [*4]jurisdiction existed over defendant in New York was not frivolous, by revealing defendant's permission to sell and store its products in New York several years prior to the incident at issue, in order to justify discovery on the jurisdictional issues pursuant to CPLR 3211 (d) (id., at 467). In this case, by contrast, plaintiff has not made a "sufficient start" to establishing that defendant had the requisite minimum contacts with New York or purposefully engaged in business transactions within this state, in order to justify further discovery on the jurisdictional issue (see Insurance Co. of N. Am v EMCOR Group, Inc., 9 AD3d 319 [1st Dept 2004], distinguishing Peterson and declining to order further discovery on the issue as to whether personal jurisdiction existed over defendant subsidiary company, a California corporation with no minimum contacts in New York, despite the fact that insurance policy at issue in the declaratory judgment action was negotiated in New York by the subsidiary's parent company and its brokerage representative). Therefore, plaintiff's request for disclosure on the jurisdictional issue is denied.

Accordingly, it is

ORDERED that defendant's motion to dismiss this action is granted, and the Clerk is directed to enter judgment accordingly; and it is further

ORDERED that, within 30 days of entry, defendant shall serve upon plaintiff a copy of this decision and order, together with notice of entry.

This constitutes the decision and order of this Court.

Dated:ENTER:,

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