Rosenberg Bros. & Co. v. Curtis Brown Co.
Headline: Court affirms that briefly serving an out-of-state retailer’s president in New York does not let New York courts sue the company when its only New York activity is buying goods there, limiting such suits.
Holding: The Court held that the Oklahoma retailer was not doing business in New York, so serving its president while temporarily in New York did not make the company subject to suit there.
- Stops suits based solely on an executive’s brief visit to buy merchandise.
- Out-of-state retailers that only purchase goods in New York won’t be subject to New York lawsuits.
- Reinforces requirement for a business presence, license, or regular local operations before suing there.
Summary
Background
A New York clothing wholesaler sued an Oklahoma retail store after serving a summons on the store’s president while he was temporarily in New York. The Oklahoma company moved to quash the summons on the ground it was not found in New York. The case was removed to federal court, which granted the motion and treated the order as a final judgment for review.
Reasoning
The central question was whether the Oklahoma retailer was doing business in New York so that it could be sued there. The Court described the company as a small Tulsa retail dealer that never got a New York license, had no office, property, resident officer, agent, or shareholder in New York, and did not regularly carry on business there. Its only ties were buying merchandise in New York sometimes by mail and sometimes by brief visits of officers. The Court held that buying goods, even with repeated visits by corporate officers, did not make the company present in the State and therefore did not subject it to suit there. The decision affirmed the lower court’s finding for the Oklahoma company.
Real world impact
The ruling means that companies are not automatically subject to suit in a State just because executives briefly visit to purchase goods. Plaintiffs cannot rely only on an officer’s temporary presence or routine buying trips to bring a lawsuit against a foreign corporation in that State. The decision upholds the requirement of a more established business presence before a State’s courts can proceed.
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