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GELINEAU v. NEW YORK UNIV. HOSP.

May 1, 1974

Roy G. GELINEAU and Mary Gelineau, his wife, Plaintiffs,
v.
NEW YORK UNIVERSITY HOSPITAL et al., Defendants


Stern, District Judge.


The opinion of the court was delivered by: STERN

This is a diversity action wherein plaintiffs, a married couple residing in New Jersey, sue three corporate defendants, all having their principal places of business in the State of New York. The plaintiff, Roy Gelineau, at the behest of his local New Jersey physician, traveled to New York City to seek treatment for an aneurism by a physician licensed to practice in the State of New York. Subsequent to the diagnostic confirmation, Gelineau was admitted to New York University Hospital, a defendant here, for surgical treatment of his malady. In the course of this treatment Gelineau received blood transfusions. After his discharge from the hospital, Gelineau returned to his residence in New Jersey. Subsequently he was diagnosed as suffering from infectious hepatitis.

 Gelineau sues here for damages sustained as a result of that disease. His wife sues for the resultant loss of his services and consortium. The complaint alleges that defendant, New York University Hospital, was negligent in administering and furnishing suitable blood to Gelineau and that the defendants, Pfizer, Inc. and Ipco Hospital Supply Corporation, *fn1" as suppliers of blood to New York University Hospital, were negligent in collection, processing, treating and storage of the blood injected into Gelineau. As a result of this negligence, it is accused, Gelineau contracted infectious hepatitis, the symptoms of which first appeared on his return to New Jersey. Plaintiffs also base their complaint on the theories of product liability and breach of warranty of merchantability as to all defendants.

 Pursuant to Rule 4(e) of the Federal Rules of Civil Procedure, service was effected by use of New Jersey Rule 4:4-4(c) (1), the New Jersey "long arm" statute, which permits service of summons upon a foreign corporation by mail.

 Defendant New York University Hospital makes substantial objection to the service herein. It claims that Rule 4:4-4(c) (1) does not allow, and indeed the due process clause of the United States Constitution prohibits jurisdiction, as here, where the defendant is a corporation which maintains no facilities or agents within New Jersey, which has never done any business within this State, whose sole state contacts lie in the fact that some of its employees reside here, and that it admits, as patients, persons who reside in New Jersey as well as various other states of the United States and countries of the world, who travel from these residences to seek treatment at the hospital in New York.

 Rule 4(e) of the Federal Rules of Civil Procedure permits service of process and the obtaining of "in personam" jurisdiction in any manner permitted by state rule or statute, and it is well settled that a United States Court, deciding the validity of that service, must test validity first by determining whether the state courts would hold it valid under state law, and, if they would, whether as a matter of federal law the scope of permissible service under state law is within the parameters of fundamental fairness as defined by the due process clause of the United States Constitution. Partin v. Michaels Art Bronze Co., 202 F.2d 541, 542 (3rd Cir. 1953); Pulson v. American Rolling Mill Co., 170 F.2d 193, 194 (1st Cir. 1948); Keckler v. Brookwood Country Club, 248 F. Supp. 645, 646 (N.D. Ill., 1964); and Elkhart Engineering Corp. v. Dornier Werke, 343 F.2d 861, 863 (5th Cir. 1965). *fn2"

 In recognition of the fundamental transformation of our national economy over the years and the modern advances in transportation and communication that have alleviated the burden for a party sued to defend himself in a foreign jurisdiction where he engages in economic activity, the permissibility of "in personam" jurisdiction over non-residents by state courts has been expanded by the United States Supreme Court. McGee v. International Life Insurance Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957).

 The parameter of "in personam" jurisdiction as limited by due process has been outlined in two major decisions of the Supreme Court: International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), and McGee v. International Life Insurance Co., supra. If a foreign corporation is not actually present in the forum state ( Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565 (1877)), then two types of situations arise in which such a corporation is deemed amenable to suit.

 The International Shoe situation deals with a foreign corporation that, although not present within the forum through agents or facilities actually there, has "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." 326 U.S. at 316.

 The analysis as to the extent of the activities of the foreign corporation in the forum state must establish sufficient contacts or ties with that state to permit a finding that the corporation has availed itself of the benefits and protection of the laws of that state, whether or not it maintains permanent agents, assets or offices there. If this test is met, then under our traditional concepts of fair play and substantial justice, the corporation may be sued in that forum for all purposes, to the full extent that it may be sued in the state of its incorporation or the state of its principal place of business. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S. Ct. 413, 96 L. Ed. 485 (1952). *fn3"

 In McGee, a nonresident insurance company mailed a reinsurance certificate to petitioner's son, a California resident, and offered to continue his insurance. The California resident accepted the offer and paid the premiums by mail from his California home to the respondent in Texas. Petitioner, beneficiary and mother of the insured, thereafter sent proofs of her son's death to the respondent, but the insurance company refused to pay the claim. A unanimous Supreme Court held, upon these facts, that the suit in California to collect the insurance proceeds was "based on a contract which had substantial connection with that state." Although the insurance company was not actually then present in California, and had no contacts with California other than this one contract, the Supreme Court held that due process was not offended by making the insurance company amenable to California "in personam" jurisdiction, and requiring it either to appear in the forum state or default. Mcgee, supra, at 223.

 McGee has not extinguished all restrictions on the personal jurisdiction of state courts. The Supreme Court has reiterated the need for fundamental fairness when a state subjects a non-resident to the jurisdiction of its courts. In Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958), Chief Justice Warren warned:

 
. . . it is a mistake to assume that this trend [McGee] heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. See Vanderbilt v. Vanderbilt, 354 U.S. 416, 418, 77 S. Ct. 1360, 1362, 1 L. Ed. 2d 1456. Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States. However minimal the burden of defending in a foreign tribunal, a defendant may not be called ...

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