Justice Joel M. Cohen

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A recent decision from the Manhattan Commercial Division reminds us that even substantial and high-profile transactions tied to the state may not be enough to establish personal jurisdiction over an out-of-state defendant. In Zeng v HH Fairchild Holdings, LLC, the court held that a multimillion-dollar sale of surgical gowns to the City of New York during the height of the COVID-19 pandemic was not enough to maintain a breach of contract lawsuit in New York. In short, without a strong legal nexus to the state, long-arm jurisdiction will not reach as far as some plaintiffs might hope.

In Zeng, an out-of-state plaintiff—who had contracted to assist a New Hampshire limited liability company (the “NH Company”) in securing personal protective equipment (PPE) manufactured in China—brought a breach of contract suit against NH Company in New York. The PPE, consisting of 10 million surgical gowns, was ultimately sold by the NH Company to the City of New York. The NH Company moved to dismiss, arguing that the court lacked personal jurisdiction under New York’s long-arm statute.Continue Reading Out-of-State, Out of Luck: Commercial Division Justice Dismisses PPE Suit for Lack of Jurisdiction

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It’s been a minute since our last installment of our “Check the Rules” series here on New York Commercial Division Practice, in which we occasionally highlight decisions from Commercial Division judges holding litigants and practitioners to account for noncompliance with either the Rules of the Commercial Division or the individual practice rules…

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Whether in employment agreements or business transactions, drafters often include certain clauses within these documents to protect their client if litigation arises (e.g., arbitration clauses, forum- selection clauses). However, when not clearly drafted, these clauses can lead to a battle over where the case may proceed. Recently, Manhattan Commercial Division Justice Joel M. Cohen handed…

Parties to a contract generally can include in their agreement a provision preventing assignment of the agreement’s rights and remedies without the consent of both parties.  Because a party’s assignment of rights under a contract to a third party may have serious implications for both sides in the performance of that agreement, anti-assignment clauses protect the contracting parties by ensuring that no transfer of the agreement’s rights occurs without the consent of all involved.  Dance with the date you brought.  And absent fraud, unconscionability, or some other reason to invalidate the contract, courts generally enforce those anti-assignment clauses.

In the insurance context, however, the enforcement of anti-assignment clauses is more complicated.  Because insurers—like any contractual party—have a legitimate interest in protecting themselves from insureds’ assignment of the insurance agreement to a different, perhaps more risky party, anti-assignment clauses in insurance agreements are enforceable against assignments that occur prior to a covered loss.  Arrowood Indem. Co. v. Atlantic Mut. Ins. Co., 96 AD3d 693, 694 [1st Dept 2012].  But in circumstances where the assignment occurs after the covered loss, New York courts are more critical of anti-assignment clauses.  In those circumstances, courts reason, there is no increased risk to the insured; the loss already occurred, and the only thing that changes as a result of the assignment is who the insurer will need to pay for that loss.

In Certain Underwriters At Lloyd’s, London v AT&T, Corp., 2021 N.Y. Slip Op. 31740[U], a recent decision by New York Commercial Division Justice Cohen, the Court explores the exceptions to the general rules regarding anti-assignment clauses in insurance policies.  Ultimately, the case underscores the difficulties insurers face in disclaiming coverage by enforcement of an anti-assignment clause in the policy.Continue Reading Can You Assign Your Rights Under an Insurance Contract that Prohibits Assignment? Only for Prior, Fixed Losses

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Ordinarily, a defendant will not actively try to help the plaintiff prove her case. But even this fundamental principle of the adversarial litigation process has limits. For example, in the criminal context, a defendant may cooperate with the prosecution in exchange for immunity or preferential sentencing. Thus, the internet’s recent fascination with the overeager Tekashi…

Know the Rules

As readers of this blog know by now, we here at New York Commercial Division Practice frequently post on new, proposed, and/or amended rules of practice in the Commercial Division.  Just last month, for example, my colleague Viktoriya Liberchuk posted on the Advisory Council’s recent proposal to amend ComDiv Rule 6 (“Form of Papers”) to…