fiduciary shield doctrine in New York

1988In applying the fiduciary shield doctrine in this case, the Appellate Division cited to some of these decisions and also to our decision in Laufer v Ostrow ( 55 NY2d 305 ).

1986In personam jurisdiction cannot be established over Downman; he is afforded protection by the fiduciary shield doctrine (see, Laufer v Ostrow, 55 NY2d 305 ; Marine Midland Bank v Miller, 664 F2d 899).

1988The Boas and Yardis decisions appear to supply the only basis for Federal court determinations that the fiduciary shield doctrine has been accepted in New York but, remarkably, application of the doctrine has proliferated and it has been accepted by several Federal courts and by some Depart ments of the Appellate Division (see, CutCo Indus. v Naughton, 806 F2d 361, 367, supra; Sheldon v Kimberly-Clark Corp., 105 AD2d 273 [2d Dept], appeal dismissed 65 NY2d 691 ; but see, Hasbro Bradley, Inc. v Coopers & Lybrand, 121 AD2d 870 [1st Dept] [rejecting the rule]; Laurenzano v Goldman, 96 AD2d 852 [2

1986As pointed out by Special Term, no court of this State has adopted the fiduciary shield doctrine to bar CPLR 302 (a) (2) jurisdiction (but see, Sheldon v Kimberly-Clark Corp., 105 AD2d 273 ), and as noted by Judge McLaughlin, the doctrine has “little to commend it”, is a subject of disagreement among the Circuit Courts and no support can be found in the decisions of the United States Supreme Court (Supplementary Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, 1986 Pocket Part, CPLR C302:3, pp 40, 42, 44-46).

1988Some courts have also found a suggestion in Yardis Corp. v Cirami ( 76 Misc 2d 793 ) that the fiduciary shield doctrine had been adopted in this State.

1984Such acts are said merely to confer jurisdiction over the corporation on behalf of which the director serves, even where those acts are tortious (Marine Midland Bank v Miller, 664 F2d 899, supra; United States v Montreal Trust Co., 358 F2d 239; Bulova Watch Co. v Hattori & Co., 508 F Supp 1322 ; Yardis Corp. v Cirami, 76 Misc 2d 793 ).

1988Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this court pursuant to section 500.17 of the Rules of Practice of the New York State Court of Appeals (22 NYCRR 500.17), and after hearing argument by counsel for one of the parties and consideration of a brief and appendix submitted, no other parties having appeared or submitted papers, certified question not answered. * We note that the District Court’s decision preceded our discussions of the fiduciary shield doctrine in Kreutter v McFadden Oil Corp. ( 71 NY2d

1988The analysis differs somewhat from that in CPC Intl. v McKesson Corp. ( 70 NY2d 268 , supra) which construed CPLR 302 (a) (2) and involved corporate officers charged with fraudulent misrepresentations made during a meeting in New York State.

1988The Boas and Yardis decisions appear to supply the only basis for Federal court determinations that the fiduciary shield doctrine has been accepted in New York but, remarkably, application of the doctrine has proliferated and it has been accepted by several Federal courts and by some Depart ments of the Appellate Division (see, CutCo Indus. v Naughton, 806 F2d 361, 367, supra; Sheldon v Kimberly-Clark Corp., 105 AD2d 273 [2d Dept], appeal dismissed 65 NY2d 691 ; but see, Hasbro Bradley, Inc. v Coopers & Lybrand, 121 AD2d 870 [1st Dept] [rejecting the rule]; Laurenzano v Goldman, 96 AD2d 852 [2

1988In doing so the court construed our long-arm statute to require the application of the fiduciary shield doctrine based upon its reading of Boas & Assocs. v Vernier ( 22 AD2d 561 ).

1988Indeed, the Supreme Court has addressed the fiduciary shield doctrine under circumstances similar to those in the case before us and held that it is constitutionally permissible to subject an individual participating in a transaction in a foreign State to long-arm jurisdiction even though his contacts with the forum were made in a corporate capacity (Calder v Jones, 465 US 783 , supra; Keeton v Hustler Mag., 465 US 770 ; 1 Weinstein-Korn-Miller, op. cit., K 302.06a, at 3-102— 3-104).

1988Indeed, the Supreme Court has addressed the fiduciary shield doctrine under circumstances similar to those in the case before us and held that it is constitutionally permissible to subject an individual participating in a transaction in a foreign State to long-arm jurisdiction even though his contacts with the forum were made in a corporate capacity (Calder v Jones, 465 US 783 , supra; Keeton v Hustler Mag., 465 US 770 ; 1 Weinstein-Korn-Miller, op. cit., K 302.06a, at 3-102— 3-104).

1986Plaintiff, who has the burden of proving "long-arm” jurisdiction pursuant to CPLR 302 (LaMarr v Klein, 35 AD2d 248 , affd 30 NY2d 757 ), failed to allege any facts to demonstrate Downman acted in his own interest rather than in his capacity as corporate officer.

1986Plaintiff, who has the burden of proving "long-arm” jurisdiction pursuant to CPLR 302 (LaMarr v Klein, 35 AD2d 248 , affd 30 NY2d 757 ), failed to allege any facts to demonstrate Downman acted in his own interest rather than in his capacity as corporate officer.

1984Such acts are said merely to confer jurisdiction over the corporation on behalf of which the director serves, even where those acts are tortious (Marine Midland Bank v Miller, 664 F2d 899, supra; United States v Montreal Trust Co., 358 F2d 239; Bulova Watch Co. v Hattori & Co., 508 F Supp 1322 ; Yardis Corp. v Cirami, 76 Misc 2d 793 ).

1983The fiduciary shield doctrine is both equitable and flexible; where the complaint alleges a violation of fiduciary duties, the doctrine will not automatically be applied to bar the acquisition of personal jurisdiction (see Krause v Hauser, 272 F Supp 549, 552, n 3; Kinstler v Saturday Evening Post Co., 507 F Supp 113,115 ; Grove Press v Central Intelligence Agency, 483 F Supp 132, 135 , revd on other grounds sub nom.

1983The fiduciary shield doctrine is both equitable and flexible; where the complaint alleges a violation of fiduciary duties, the doctrine will not automatically be applied to bar the acquisition of personal jurisdiction (see Krause v Hauser, 272 F Supp 549, 552, n 3; Kinstler v Saturday Evening Post Co., 507 F Supp 113,115 ; Grove Press v Central Intelligence Agency, 483 F Supp 132, 135 , revd on other grounds sub nom.