On May 13, 2022, Justice Cohen of the New York County Commercial Division issued a decision in V6CO LLC v. Business Advocate Law PLLC, 2022 NY Slip Op. 31579(U), holding that the use of a New York bank was an insufficient basis for asserting personal jurisdiction in New York, explaining:
A court in New York may exercise personal jurisdiction over a non-domiciliary defendant where (i) the court has long-arm jurisdiction over the defendant under CPLR 302, and (ii) the exercise of such jurisdiction comports with due process. Plaintiff failed to establish that Defendant transacts business or committed a tort in New York under CPLR 302 or that exercising jurisdiction over Bariault would comply with due process.
Defendant is a Seattle-based lawyer. He submitted evidence showing that his Washington IOLTA Trust Account was opened in Washington. Although Plaintiff concedes that it had no communication with Bariault, Plaintiff argues that Bariault represented in an escrow agreement (to which Plaintiff was not a party) that he had a bank account in New York. While the escrow agreement (governed by Colorado law and providing for exclusive jurisdiction in Colorado) does list a New York address for Bank of America wire transfers, that does not mean that this out-of-state lawyer’s IOLTA account (subject to regulation under Washington law) itself was opened or located in New York and there is no evidence to suggest it was. It is well established that indirect use of the New York banking system does not constitute the transaction of business in New York pursuant to CPLR 302 (a) (1). Nor does it constitute the commission of a tort within New York pursuant to CPLR 302 (a) (2).
Indeed, if the Court were to hold otherwise, every wire transfer made through a Bank of America account opened anywhere in the United States (or perhaps the world) that is effected by the bank in New York would confer jurisdiction upon this Court. Exercising personal jurisdiction in such circumstances “would not satisfy the well-established principles of due process, which require that defendants could reasonably foresee facing suit in the forum.
(Internal quotations and citations omitted).