Commercial Division Holds Personal Jurisdiction Is Not Proper Where Defendant’s Only Contact with New York Was Performance of Some Contracted Services at Plaintiff’s Request

In Black Diamond Aviation Group LLC v. Spirit Avionics, Ltd.,[1] the Commercial Division held that it would be inappropriate for a New York court to exercise personal jurisdiction over an aircraft maintenance and refurbishing company that had no presence or ties to New York other than turning over an aircraft to be serviced to the care of a New York airport at the plaintiff’s request.

Black Diamond involved three key parties: (1) plaintiff Black Diamond Aviation Group, LLC (“Black Diamond”), an airplane charterer organized in Delaware with its principal place of business in Connecticut; (2) defendant Spirit Avionics Ltd. (“Spirit”), an aircraft maintenance and refurbishing company organized and based in Ohio; and (3) Aircraft Engineering Solutions LLC (“ASES”), an aircraft engineering subcontractor.[2]

In January 2019, Black Diamond and Spirit signed an agreement for Spirit to upgrade one of Black Diamond’s private jets.  Spirit decided to use ASES as a subcontractor on the upgrade project.  Work on the project started in Columbus, Ohio, but it became apparent that some work would need to be performed at Long Island Islip MacArthur Airport in New York.  So with Black Diamond’s assent, Spirit flew the jet to Long Island and released its care to the airport, where ASES completed the upgrade project over the course of several months.[3]

In October 2019, Black Diamond approached Spirit about having additional work done on the private jet, and Spirit told Black Diamond to engage ASES directly.  ASES provided Black Diamond with a cost estimate invoice that included both the prior upgrade work it had performed for Spirit and the additional work requested by Black Diamond.  Later, when ASES sent Black Diamond a final invoice, Black Diamond refused to pay, arguing that Spirit was responsible for payment under the agreement for the prior upgrade work.

Black Diamond filed a lawsuit in the Suffolk County Commercial Division seeking a declaratory judgment that Spirit must pay ASES for the additional work.  Spirit moved to dismiss on several grounds, including, inter alia, lack of personal jurisdiction under New York’s long-arm statute (CPLR § 302). 

In a decision by Justice Hudson, the Commercial Division granted the motion.

The Commercial Division explained that under Daimler AG v. Bauman,[4] the corporation’s association with the forum state must be “so continuous and systematic as to render the corporation at home in the forum state,” and under Bristol-Myers Squibb Co. v. Superior Court,[5] “there must be a strong affiliation between the specific claim that is at issue in the case and the forum state.”[6] 

Here, defendant Spirit’s only connection to New York was that it agreed to release the private jet to the airport on Long Island.  Accordingly, Spirit had “no strong affiliation with the forum state” of New York, and personal jurisdiction was not appropriate.[7]

The Commercial Division also found unpersuasive Black Diamond’s argument that personal jurisdiction was proper under CPLR § 302(a)(1), which states that a New York court may exercise personal jurisdiction over a non-domiciliary who “transacts any business within the state or contracts anywhere to supply goods or services in the state.”[8] 

Because there was no evidence of Spirit engaging in a “course of dealing” in New York or “repeated use of New York facilities,” invocation of CPLR 302(a)(1) was not proper.[9]  Indeed, according to the Court, the contract at issue was negotiated and agreed upon entirely outside of New York; the contract did not contemplate any work being performed in New York; Spirit had no physical presence in New York through an office, employees, or property; Spirit did not solicit business in New York; and Spirit did not maintain a bank account or pay taxes here.[10]  In fact, Spirit’s only contact with New York occurred at Black Diamond’s request.  Because Spirit “did not avail itself [of] the protections of New York nor does it have sufficient contacts within New York,” personal jurisdiction could not “properly [be] asserted over Spirit” under the applicable precedents.[11]

The Black Diamond court held that the performance in New York of some services contemplated by a contract is insufficient on its own to establish personal jurisdiction over a defendant.  Importantly, in Black Diamond, the defendant’s only contact with New York was at the plaintiff’s request, and that contact was deemed to be insubstantial.  The decision is an important case in the litany of decisions applying the U.S. Supreme Court’s recent jurisprudence in the context of commercial disputes in New York.

By Benjamin F. Jackson and Muhammad U. Faridi