Jurisdiction–Suing a Foreign Corporation

How can you sue a foreign corporation, such as a hotel in a New York court?  One way is by ascertaining whether the local hotel is an agent of a larger subsidiary which has significant business contacts in New York.  However, getting jurisdiction is tough because the hotel must have minimum contacts with the State of New York.  “It is settled that a finding of agency for jurisdictional purposes cannot be inferred from the mere existence of a parent-subsidiary relationship (Frummer v. Hilton Hotels Intl., 19 N.Y.2d 533, 538 cert denied 389 U.S. 923.)  Control over a subsidiaries activities must be so complete  that the subsidiary is, merely a department of the parent. (Delagi v. Volkswagenwek AG of Wolfsburg, Germany, 29 N.Y.2d 426, 432.)

Note: Many hotels and resort chains are including forum selection clauses in their contracts.  The U.S. Supreme Court has upheld such clauses, unless the clause was intended to discourage vacationers from pursuing legitimate claims against it.  See also, Paragon Holmes Inc v. Carter, 56 Misc.2d 463, aff’d 30 A.D.2d 1052 (2d Dep’t 1968.)

Forum Selection Clauses

Forum selection clauses are prima facie valid and will not be set aside except for fraud or overreaching or if enforcement would be so unreasonable and unjust as to make a trial in the selected forum ‘so gravely difficult and inconvenient that the challenging party would, for all practical purposes, be deprived of his or her day in court.’ (British W. Indies Guar. Trust Co. v. Banque Internationale, 172 A.D.2d 234.)