N.Y. judge OKs jurisdiction over S.C. asbestos company
A New York trial judge has rejected a South Carolina company’s effort to avoid jurisdiction after the plaintiff cited archived pages from the corporation’s website to establish in-state connections.
The judge apparently relied in part on information found on the website to establish facts about the company’s history, although the opinion did not mention the archived website directly.
Some of the company’s current and former employees provided testimony that also supported the finding that New York has jurisdiction over the company, according to plaintiff’s attorney Kush Shukla of Wilentz, Goldman & Spitzer.
Shukla said in an email that he is unaware of any other case in which a court relied upon facts taken from an archived version of defendant’s website that were later corroborated by sworn deposition testimony to make a jurisdictional ruling.
The case in the New York County Supreme Court involves Munaco Packing & Rubber Co., a South Carolina corporation.
The suit alleges Arthur Herlihy developed asbestos-related lung cancer from exposure to asbestos-containing products made by Munaco and other companies when he worked for Brooklyn Boiler Repair Co. in New York from 1960 until 1991, the judge’s order said.
Arthur died in 2011, and his wife, Gail, carried on the suit individually and as executor of his estate.
Munaco moved to dismiss the lawsuit for lack of personal jurisdiction.
Gail Herlihy said in an opposition memo that if Munaco’s motion were granted, it would result in “an outrageous outcome” in which a company avoids jurisdiction by merely transplanting itself to another state.
The company, which Judge Sherry Klein Heitler referred to as Munaco NY in her Jan. 2 order, was founded in the mid-1940s and was located in New York City.
It made gaskets and packing for the Brooklyn Navy Yard during World War II, according to the order.
Judge Heitler’s finding that Munaco sold items to the Navy Yard in the 1940s apparently came from information the plaintiff provided from the company’s archived website, which Munaco in South Carolina maintained, Shukla said.
Later, Munaco’s customers included Brooklyn Boiler.
According to the order, the following events, which current and former Munaco employees testified to, took place:
In 1995, under owner Dennis Cullen, the company moved to South Carolina in order to be closer to a primary customer and took nearly all of Munaco NY’s equipment to South Carolina.
Six out of eight Munaco NY employees relocated to South Carolina and continued to work for the company.
Cullen dissolved Munaco NY in 1997.
However, employee Denton Taylor purchased the right to use the Munaco name in New York and, while he founded a company called Denton Taylor Industries Inc., he filed a certificate to do business as Munaco Packing & Rubber Co.
Judge Heitler said the issue is whether Munaco SC, as she styled it, “may be deemed to have inherited the jurisdictional status of Munaco NY such that this court may adjudicate plaintiff’s claims against it.”
Herlihy supported her opposition to the dismissal motion by citing a “company overview” found in an archived 2004 version of the defendant’s website.
According to the plaintiff, the defendant “detailed its substantial history, operations, beginnings and ties to New York,” and through 2011, the website said Munaco had been “providing sealing solutions for over 60 years.”
Judge Heitler noted that jurisdiction may be imputed in cases where a company is a “mere continuation” of another corporation.
Despite Taylor’s purchase of right to use the Munaco name in New York, the judge concluded, the South Carolina company was the successor corporation.
“Munaco SC manufactured, distributed, and sold the same goods and products as Munaco NY to its same primary customer” and employed six of the New York company’s eight employees, the order said.
“Cullen simply continued his operation in South Carolina,” the judge said.
Munaco’s attorney, Steven L. Keats, said he has not yet decided what the defendant will do next.
“My office is reviewing Judge Heitler’s decision and we are considering our options,” Keats said in an email.