Thomas A. Moore and Matthew Gaier ()
It has been 12 years since this column last addressed in personam jurisdiction in the New York courts over out-of-state health care providers. During that time, New Yorkers have been subject to an onslaught of television, radio and print advertisements by hospitals and other medical caregivers from other states. Additionally, there has been expanded use of the Internet for both advertising and as a tool to establish and maintain relationships with patients. Over the same period, there have been several significant decisions addressing the issue of long-arm jurisdiction in the context of medical malpractice actions. This month’s column examines these decisions.
We first discussed personal jurisdiction over out-of-state health care providers in June 1998, and revisited it in August 2002.1 Before turning to recent developments, it is helpful to recall the controlling statutory provisions and how they have been applied in the medical malpractice actions.
New York’s long-arm statute is CPLR 302. Unlike the statutes of many other states, it does not extend New York’s jurisdiction to the limits permitted by the due process clause of the U.S. Constitution. Eherenfeld v. Bin Mahfouz, 9 N.Y.3d 501, 512 (2007). Instead, it specifies four bases under which New York’s jurisdiction may be extended to non-domiciliaries: CPLR 302(a)(1)—transaction of any business within the state or contracting anywhere to supply goods or services in the state; CPLR 302(a)(2)—commission of a tortious act within the state; CPLR 302(a)(3)(i)—commission of a tortious act outside the state causing injury to person or property in the state, if the non-domiciliary regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state; or, CPLR 302(a)(3)(ii)—commission of a tortious act other than defamation outside the state causing injury to person or property in the state, if the non-domiciliary expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.
Applying the Statute
The leading Court of Appeals decision discussing the application of this statute in a medical malpractice action is Ingraham v. Carroll, 90 N.Y.2d 592 (1997). At issue in that case was whether New York had jurisdiction over a Vermont doctor who evaluated the plaintiff’s decedent in Vermont on several occasions by virtue of a referral from her New York doctors. The referring physicians were under contract with the plaintiff’s HMO and the Vermont doctor was not, but the latter was frequently referred patients who were members of the HMO.
The court held that there was no jurisdiction over the Vermont doctor under CPLR 302(a)(3)(ii), because a physician treating patients in his home state provides a service that is inherently personal and local in nature, and does not derive substantial revenue from interstate commerce. The court did not reach the issue of whether the out-of-state malpractice caused “injury in New York” for the purpose of 302(a)(3). However, prior Appellate Division decisions applied the rule that the injury is deemed to have occurred in the state where the malpractice occurred, not where the damage resulted. See Carte v. Parkoff, 152 A.D.2d 615 (2d Dept. 1989); Hermann v. Sharon Hospital, 135 A.D.2d 682, 683 (2d Dept. 1987).
The Appellate Division decisions subsequent to Ingraham have continued to apply this rule. In O’Brien v. Hackensack Univ. Med. Ctr., 305 A.D.2d 199 (1st Dept. 2003), the First Department found no jurisdiction over a New Jersey hospital under either CPLR 302(a)(1) or 302(a)(3). The plaintiff’s decedent was a Bronx resident who received cancer treatment at the New Jersey facility. The court noted that the defendant’s principal place of business was in New Jersey, it was not licensed to do business in New York, it maintained no office or other place of business in New York, had no New York mailing address or telephone number, had no agents or representatives in New York, had no bank accounts in New York, paid no New York taxes and had no real estate holdings in New York.
The plaintiff nevertheless maintained that jurisdiction should lie because the defendant solicited New York residents, including the decedent, as patients, and because it had an affiliation with a New York hospital for the purpose of making referrals to New York doctors for lab work and examinations. The plaintiff also alleged that the defendant participated in studies involving New York residents. The plaintiff alleged that in this case, the decedent was prescribed chemotherapy by one of the defendant’s doctors which was administered at the affiliated New York hospital, and that the treatment continued via telephone calls, mail and faxes between the doctors in New Jersey and those in New York.
With regard to CPLR 302(a)(1), jurisdiction based upon the transaction of business within the state, the court observed the rule that the connection between the activity and the state must be “purposeful.” It noted that a single transaction may suffice as long as there is a substantial relationship between the transaction and the alleged injury, and that cumulative minor activities may also suffice if the cumulative effect is to create a significant presence within the state. Mere solicitation of business within the state, however, does not qualify “unless the solicitation in New York is supplemented by business transactions occurring in the state…or the solicitation is accompanied by a fair measure of the defendant’s permanence and continuity in New York which establishes a New York presence.”
The Appellate Division found this lacking, commenting that the purported solicitation, “even accompanied by what really amounts to treatment of New York residents in New Jersey,” does not establish that the defendant transacted business in New York. The court also concluded that CPLR 302(a)(3) did not apply based upon the rule that the situs of the injury is the location where the medical malpractice took place.
In Jackson v. Sanchez-Pena, 104 A.D.3d 574 (1st Dept. 2013), the same court addressed similar circumstances and again concluded that there was no jurisdiction. The plaintiff’s decedent was a New York resident who underwent two colonoscopies by the defendant physician in New Jersey. The decedent was referred to the defendant by a New York doctor. The defendant resided and practiced in New Jersey, was not licensed to practice medicine in New York, maintained no office or other place of business in New York, and paid no taxes in New York.
In finding no jurisdiction under CPLR 302(a)(1), the court found that in light of the defendant’s affidavit denying any financial arrangements to obtain referrals by New York doctors, the referrals for treatment in New Jersey on an ad hoc basis did not amount to transacting business in New York. It further noted that there was no evidence that the defendant had paid for or arranged the decedent’s transportation to and from New Jersey.
The court rejected jurisdiction under CPLR 302(a)(3), based upon the cases holding that the injury occurred where the malpractice took place. The Appellate Division also modified the Supreme Court’s order to the extent that it conditioned dismissal upon the defendant not raising the statute of limitations as an affirmative defense in any action commenced in a proper jurisdiction, noting that without jurisdiction, the court had no authority to impose a condition.
The Second Department subsequently addressed similar issues, including Internet involvement, in resolving questions concerning long-arm jurisdiction in Paterno v. Laser Spine Institute, 112 A.D.3d 34 (2d Dept. 2013). The court was split 3-2, with the majority finding no basis for jurisdiction. The facts described below have been gleaned from the allegations and evidence cited in both the majority and dissenting opinions.
The plaintiff was a New York resident and the defendant was a Florida-based entity, Laser Spine Institute (LSI). The plaintiff came across an LSI advertisement posted on AOL, his Internet provider, clicked on the ad and saw a five-minute video by a professional golfer who had been treated by LSI and touted its services. He thereafter contacted LSI by telephone and the Internet relative to treatment for his back pain, and sent them his MRI images.
The plaintiff asked his New York doctor to review the LSI website, provide an opinion about LSI and speak with an LSI doctor to discuss potential treatment. The plaintiff communicated with a person from LSI who identified himself as a patient advocate. This person sent the plaintiff insurance forms and a letter making surgical recommendations based upon an LSI physician’s review of the MRIs. The advocate subsequently informed the plaintiff that if he would travel to Florida on short notice he could have surgery in 10 days at a significant discount.
The plaintiff then completed the insurance forms LSI had sent, and contacted the patient advocate to discuss payment arrangements. The patient advocate sent the plaintiff a list of hotels that gave discounts to LSI patients. The next day, the plaintiff received a lengthy registration form from LSI via email and spoke with someone from LSI who told him he needed to send blood work. At the plaintiff’s request, an LSI physician contacted the plaintiff’s New York doctor to discuss the surgery, which was scheduled for five days later. The plaintiff also had blood work done at his family physician’s office in New York, the results of which were forwarded to LSI.
The plaintiff then underwent two surgical procedures, two days apart, at LSI’s facilities in Florida. After returning home, the plaintiff called LSI (apparently on multiple occasions) complaining of constant pain, for which an LSI physician gave prescriptions to be filled in New York. About five weeks after the surgeries, the plaintiff consulted a New York physician who spoke to an LSI representative in a conference call, after which LSI agreed to fly the plaintiff back to Florida at its own expense for revision surgery. The plaintiff claimed that during this time there were numerous telephone calls and email exchanges between himself and LSI.
The revision surgery was performed in Florida, nearly two months after the first procedure. Several weeks later the plaintiff continued to have pain. In the weeks following the revision, the plaintiff continued to have multiple communications with LSI and its physicians relative to his complaints. One of the LSI doctors ordered an MRI that was performed in New York. LSI subsequently offered to again fly him down to Florida for more surgery. The plaintiff eventually underwent further surgery in New York. The plaintiff had also alleged that LSI conducted seminars in New York, and identified one which was held after the events involved in the lawsuit.
The majority rejected CPLR 302(a)(3) as a basis for jurisdiction, deeming the injury to have occurred in Florida. With regard to 302(a)(1), the majority found that upon examining the “totality of the circumstances” in terms of the “quality” of the contacts (as opposed to the quantity), LSI had not engaged in sufficient purposeful activity in New York to impose jurisdiction. It found that LSI’s website was not sufficient, by itself, to confer jurisdiction because it was informational only and passive in nature, as differentiated from one that is interactive or includes online forms for users to fill out via the Internet.
It also found that LSI did not project itself into New York by either the email messages it sent to the plaintiff in New York or the telephone calls it had with him while he was in New York, and noted that many of those communications emanated from the plaintiff and were related to the surgeries performed in Florida. It reached the same conclusion with respect to the paperwork the plaintiff completed in New York, the blood work that was performed in New York in connection with the Florida surgeries, the prescriptions that LSI physicians called in to New York pharmacies, and the telephone conversations that LSI doctors had with the plaintiff’s New York physicians. In this regard, the majority embraced the First Department’s analysis in O’Brien, finding that solicitation of patients in New York did not combine with the fact that the decedent in that case underwent some related treatment in New York to qualify as transacting business in the state.
Nor was the majority compelled by two federal district court cases from Maine and Pennsylvania in which those states were found to have personal jurisdiction over LSI. See Henderson v. Laser Spine Inst., 815 F.Supp.2d 353 (D. Me. 2011); Bond v. Laser Spine Inst., 2010 WL 3212480 (E.D. Pa. 2010). It noted that Henderson involved “the traditional contacts” of telephone, email and faxed solicitations to the plaintiff, nationwide advertisements in traditional and in-flight magazines, and a semi-interactive website claiming to have helped tens of thousands of people from all 50 states, and that the plaintiff in Paterno made no such allegations.
The majority similarly determined that the contacts in Bond were more extensive than in Paterno, noting that “LSI took an active role” in that plaintiff’s postsurgical treatment while he was in Pennsylvania by giving advice to an emergency room technician as to what medication to prescribe. It found the facts of Paterno more analogous to Morilla v. Laser Spine Inst., LLC, 2010 WL 3258312 (D.N.J. 2010), which found that New Jersey had no jurisdiction over LSI. The majority further noted that the long-arm statutes of Maine and Pennsylvania both permit jurisdiction to the full extent of due process, while New York’s is more circumscribed.
The dissent found that under the totality of the circumstances—including the number, the nature and the timing of the contacts via telephone, email, and text messaging with the plaintiff in New York, the consultations with the plaintiff’s New York physicians, the prescriptions to New York pharmacies, the blood work and MRIs ordered in New York, and the use of LSI’s website to solicit business in New York—jurisdiction existed under 302(a)(1).
With regard to the website, the dissent found the record insufficient to determine whether it was truly passive or whether it occupied a middle ground where jurisdiction rests upon the level of interactivity and the commercial nature of the exchange of information that occurs on the site. The dissent rejected the defendant’s assertion that its contacts in New York during the time surrounding the injury but after the malpractice may not be considered in the minimum contacts analysis. The dissenting justices concluded that O’Brien and Morilla were distinguishable, while the results in Henderson and Bond were in harmony with their finding that jurisdiction should lie against LSI under 302(a)(1).
Most recently, in Waggaman v. Arauzo, ___ A.D.3d ___, 2014 WL 1798414 (2d Dept. 2014), the Second Department found that New York had no jurisdiction over a Texas physician who treated a New York resident’s mother while she resided in Texas and Florida. The plaintiff claimed that the defendant improperly prescribed drugs for his mother without directly examining or monitoring her, and that this essentially destroyed her family and economic relationships and precipitated her early demise. He sought recovery for resulting damages sustained by his mother and himself. Jurisdiction was asserted under 302(a)(3)(ii). The court found that the defendant’s acts did not cause injury in New York, and that he should not have reasonably expected them to have consequences here.
The court further found that the plaintiff failed to establish that the defendant had minimum contacts with New York for the purpose of satisfying due process. In this regard, it noted that the recent decision of the U.S. Supreme Court in Walden v. Fiore, ___ U.S. ___, 134 S.Ct. 1115 (2014), held that a plaintiff cannot be the only link between the defendant and the forum for the purpose of determining whether the defendant had the necessary connection with the state, that the contact must be based on the defendant’s own affiliation with the state, and that random, fortuitous or attenuated contacts based on persons affiliated with the state are insufficient. Under this analysis, the Second Department concluded, the defendant’s treatment of a New York resident’s mother in Texas and Florida is the type of attenuated connection that would violate due process.
As health care enterprises continue to expand their businesses regionally and nationally, they may remain beyond the reach of New York courts to answer for injuries they inflict on our residents by improper care or treatment.
Thomas A. Moore is senior partner and Matthew Gaier is a partner of Kramer, Dillof, Livingston & Moore.
1. See Moore and Gaier, “Long-Arm Jurisdiction Over Doctors and Hospitals,” Medical Malpractice, NYLJ, June 1, 1998, p.3; Moore and Gaier, “Long-Arm Jurisdiction Update,” Medical Malpractice, NYLJ, Aug. 6, 2002, p.3.