First Department Reverses Denial of Valve Manufacturer’s Motion to Dismiss

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Supreme Court of New York, Appellate Division, First Department, June 7, 2022

In this asbestos case, Crosby Valve LLC (“Crosby”) appealed a June 2021 decision from the New York Supreme Court, New York County, which denied its motion to dismiss for lack of personal jurisdiction. By way of background, George Seger, III (“Plaintiff”) allegedly developed colon cancer, which he attributed to his exposure to asbestos during his naval service, specifically from working on boilers onboard the USS Hepburn. The plaintiff alleged that he worked on boilers that utilized asbestos-insulated valves manufactured by Crosby. He also alleged that Crosby sold asbestos-containing valves to non-party, Combustion Engineering, Inc. (CEI) and that, at the time Crosby sold its valves to CEI, CEI was headquartered in New York. Moreover, the plaintiff asserted that CEI sold boilers containing Crosby valves directly to the Navy, and that the Navy installed the CEI boilers directly on their ships, including the USS Hepburn.

Under New York law, there is a two-pronged jurisdictional inquiry. First, courts assess whether a defendant conducted sufficient activities to have transacted business within the state. Next, courts determine whether the plaintiff’s claims arise from these transactions. Importantly, there must be an “articulable nexus” with the defendant’s transaction within the state and the plaintiff’s claim.

Here, Crosby was incorporated and had its principal place of business in Massachusetts from 1874 to 1998. At no time in the past or present did Crosby own or maintain facilities, or have corporate operations in New York State. While there was evidence that Crosby manufactured asbestos-containing valves, the plaintiff presented no evidence that Crosby actually sold these valves to CEI. The plaintiff also failed to present evidence regarding a time frame as to when an alleged sale occurred, or that CEI maintained a principal place of business in New York at the time of this alleged sale (Plaintiffs could only show that CEI was headquarted in New York “as far back as” 1969). Though the plaintiff presented a work order from a Naval Ship Engineering Center that recommended approving alterations to ships containing “CE” boilers’ (presumably, “CEI” boilers), the work order, even if admissible, does not show that CEI actually sold boilers to the Navy, nor does it establish that any work specifically took place on a CEI boiler on the USS Hepburn.

The First Department ultimately concluded that there was no evidence that Crosby transacted business in New York State, or that the plaintiff’s claims had any nexus to activity that Crosby conducted in New York State. The First Department also pointed out that CEI should possess evidence of its own corporate status at the relevant time, and that both CEI and the Navy should have records of any transactions between them. Because the plaintiff did not provide any of this evidence or explain its failure or inability to do so, the First Department unanimously reversed the lower court decision and directed the complaint as to Crosby to be dismissed.

Read the full decision here

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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