Appendix — Gillespie v. Schwartz

IN THE

Supreme Court of the United States

October Term, 1978

LuKke GILLESPIE,

Petitioner,

—against—

Guorta Scawartz, WiLLiam ScHWaRTZ,

and Boston HospiraL ror WoMEN,

Respondents.

Surertior Moror Express, Earnuarpt Lumser Co.

and the Estate of KennetnH Epwarp BENTLEY,

Petitioners,

—against—

Fontrx1 Kortsonts, individually and as Administratrix of

the Estate of Papras Korson1s,

Respondent.

APPENDIX

Smwney A. ScHWARTZ

Attorney for Petitioner

801 Second Avenue

New York, New York 10017

(212) 986-9505

—_

, oe

i=

Index to Appendix

PAGE

Order and Judgment of Circuit Court of Appeals,

Second Cireuit dated June 12, 1978 22... aia

Opinion of Cireuit Court of Appeals, Second Cireuit ... 3a

Endorsement Order of Judge Morris E. Lasker dated

ipetewer Fi, IIT. «...........:. APRA lle a, CR ee Ore Per 29a

Memorandum and Order of Judge Eugene H. Nicker-

ee OS by i Se ne ee ee ee ree 3la

Order and Judgment of Circuit Court of Appeals,

Second Circuit dated June 12, 1978

INITED STATES COURT OF APPEALS

Present:

For tHe Seconp Crrcvit

At a Stated Term of the United States Court

of Appeals, in and for the Second Circuit,

held at the United States Courthouse in

the City of New York, on the twelfth day

of June one thousand nine hundred and

seventy-eight.

Hon. Henry J. Friennry,

Hox. Murray I. Gurrer,

Hox. Tuomas J. Mrsxmu,

Circuit Judaes.

78-7050—78-7051

Marcvuerite T. O'Connor, as Administratrix of the Goods,

Chattels and Credits of Danier J. O’ Connor, Deceased,

Plaintiff-A ppellee,

v.

Ler-Hy Pavinc Corp. and Davis E. Ciem,

Defendants-Appellants.

78-7058

Fontixt Kotsonts, individually and as Administratrix of

the Estate of Paptas Korsonis,

Plaintiff-Respondent-A ppellee,

Ve

Superior Motor Express, Earnuarpt LuMmser Co.,

and the Estate of Kexxeru Epwarp BeEnTLey,

Defendants-Petitioners-A ppellants,.

la

Ja

Order and Judgment of Circuit Court of Appeals,

Second Circuit dated June 12, 1978

78-7076—78-7044

Giortia Scuwartz and WiiuiamM ScHwartTZ,

Plaintiff s-Appellees,

v.

Boston Hosprrat ror Women, also known as

Boston Lying In Hospital, and Luxe GILispIE,

Defendants-Appellants.

78-7047

Vincent J. Ferrvzzo,

Plaintiff-Appellee,

Vv.

Brisut Treckixe Inc., Joe E. Larson and

Lanpy or Wisconsin, Inc.,

Defendants-A ppellants.

Appeal from the United States District Court for the

Southern District of New York.

This cause came on to be heard on the transcript of

record from the United States District Court for the

Southern District of New York, and was argued by counsel.

Ox Coxswweration Wuereor, it is now hereby ordered,

adjudged, and deereed that the Orders of said District

Court be and they hereby are affirmed in accordance with

the opinion of this court with costs to be taxed against

the appellants.

A. Dante Fvusano,

Clerk

By /s/ Martin HELLER

Deputy Clerk

3a

Opinion of U.S. Court of Appeals, Second Circuit

UNITED STATES COURT OF APPEALS

For tHE Seconp Circvir

1

a

Nos. 845, 846, 849, 851, 878, 879—September Term, 1977.

(Argued April 12, 1978 Decided June 12, 1978.)

Docket Nos. 78-7044, 78-7047, 78-7050, 78-7051,

78-7058, 78-7076

ewe

-<?,

Marcvuenite T. O’Connor, as Administratrix of the Goods,

Chattels and Credits of Danrex J. O’Connor, Deceased,

Plaintiff-A ppellee,

Vv.

a Pa ’ rst ‘ ‘

Lre-Hy Pavine Corp. and Davis E. CLeM,

Defendants-A ppellants.

4

7

y

Vincent J. Ferrvzzo,

Plaintiff-A ppellee,

v.

Bricut Trucxine Inc., Jor E. Larsox and

Lanby or Wisconstn, Inc.,

Defendants-Appellants.

4

@

7

Fai

Opinion of US. Court of aLppeals, Second Circuit

Foxtist Korsonts, individually and as Administratrix

of the Estate of Papras KorsonIs,

Plaintiff-A ppellee,

v.

Surertor Moror Expiess, Earnaarpt Lumeer Co.

and the Estate of Kenneta Epwarp BENTLEY,

Defendants-A ppellants.

Giorta Scuwartz and WiiL1am ScHwartTz,

Plaintiff s-Appellees,

We

3oston HospritaL ror Women, also known as Boston

Lyixnc wy HosprraLt, and Luxe Gr.uespIs,

Defendants-A ppellants.

4

+

7

Before:

F’rrenpLy, Gurrern and MeskiILu,

Circuit Judges.

_—_—

Appeals pursuant to 28 U.S.C. §1292(b), from orders

of the Distriet Courts for the Eastern and Southern

Disiricts of New York. Dooling, Lasker, Nickerson and

Sifton, Judges, sustaiuimg jurisdiction in negligence ac-

tions against non-resident defendants for wrongful death

or personal injury caused by an out-of-state accident to

New York residents, wherein jurisdiction was obtained

by the attachment of a liability policy issued to the defen-

dants by an insurer doing business in New York, and from

un order of the District Court for the Eastern District

5a

Opinion of U.S. Court of Appeals, Second Circuit

of New York, Dooling, Judge, in one of these eases hold-

ing that liability was determinable by New York rather

than Virginia law.

Affirmed.

~~

a

Wuitney NortH Seymour, Esq., New York,

N.Y. (Roy L. Reardon, Esq., Thomas M.

Bistline, Esq., and Simpson Thacher &

Bartlett, Esqs., New York, N.Y., of Coun-

sel), for Appellants Lee-Hy Paving Corp.

and Davis E. Clem.

Cyrus M. Dramonp, Esq., New York, N.Y.

(Abraham Fuchsberg, Esq., Henry H.

Foster, Jr., Esq., and Fuchsberg & Fuchs-

berg, Esqs., New York, N.Y., of Counsel),

for Appellee, Marguerite T. O’Connor, ete.

Leonarp A. Rusvsro, Esq., New York, N.Y.

(John J. Langan, Esq., New York, N.Y.,

ot Counsel), for Appellants Bright Truck-

ing Inc., Joe E. Larson and Landy of

Wisconsin, Inc.

Marvin L. Scuwartz, Esq., New York, N.Y.

(Elias, Schewel & Schwartz, Esqs., New

York, N.Y., of Counsel), for Appellee Vin-

cent J. Ferruzzo,

Smney A. Scnuwartz, Esq., New York, N.Y.

(William Paul Last, Esq., and Alexander,

Ash, Schwartz & Cohen, Esqs., of Counsel),

for Appellants Superior Motor Express,

Earnhardt Lumber Co, and the Estate of

of Kenneth Edward Bentley.

6a

Opinion of US. Court of Appeals, Second Circuit

J. Steven Lone, Esq., Staten Island, N.Y.

(James TI’. Murphy, Esq., and Decker &

Lone, Esqs., Staten Island; N.Y., of Coun-

sel), for Appellee Fontini Kotsonis, ete.

Stipney A. Scuwartz, Esq., New York, N.Y.

(William Paul Last, Esq., and Alexander,

Ash, Sehwartz & Cohen, Esqs.), for Appel-

lant Luke Gillespie.

Sotomon M. Cueser, Esq., New York, N.Y.

(Tell, Cheser, Breitbart & Lefkowitz, Esqs.,

New York, N.Y., of Counsel), for Appellant

Boston Hospital for Women.

(Cyrus M. Dtamonp, Esq., New York, N.Y.

(Abraham Fuechsherg, Ksq., and Fuchsbere

& Fuchsberg, Esqs., New York, N.Y., of

Counsel), for Appellees Gloria Schwartz

and William Schwarte.

a oO

Frenpiy, Circuit Judge:

We have before us four interlocutory appeals, pursuant

to 28 U.S.C. §1292(b). whieh raise the question whether

Seider v. Roth, 17 N.Y. 2d 111, 269 N.Y.S.2d 99 (1966),

sanctioning a procedure for obtaining jurisdiction in a

negligence action by a New York resident against a non-

resident defendant for wrongful death or personal injury

in an out-of-state aceident through attachment of a polieyv

of liability insurance issued by an insurer doing business

in New York, the constitutionality of which was upheld by

this court in Winichiello v. Rosenberg, 410 F.2d 106 (1968),

adhered io en banc, 410 F.2d 117, cert. denied, 396 U.S.

844 (1969), has been undermined by Shaffer v. Heitner,

33 U.S. 186 (1977). A fifth interlocutory appeal pursuant

7a

Opinion of US. Court of Appeals, Second Circuit

to 28 U.S.C. §¢1292(b) in one of these cases raises an in-

dependent question whether the district court was correct

in holding that the liability of the defendant was deter-

minable not by Virginia Jaw, under which allegedly no

liability could exist, but rather by New York law, under

which it could if negligence was established. All four ac-

tions were brought by New York resident plaintiffs against

non-resident defendants, and federal jurisdiction rested on

28 U.S.C. § 1332.

In each of the four cases the district courts denied mo-

tions of the defendants to vacate the attachment of their

insurance policies and dismiss tiie actions. Sinee the cases

are similar so far as the legal question is concerned and

the courts in Schwartz, Kotsonis, and Ferruzzo expressly

followed the lead of Judge Dooling’s opinion in O’Connor

v. Lee-Hy Paving Corp., we will state in text only the facts

of O’Connor and will summarize the three other cases in

the margin.’

] In Sehwarts v. Desto Hospital for Women, Docket Nos. 78-7041,

7076 (deeided Oct. 21, 1977), Gloria Sclwartz and her hushand hrought

suit in the District Court for the Southern Distriet of New York against

the Boston Ilospital and Dr. Lobe Gillespie for medical malpractice

alleged to have ovcurred in Massachusetts when Mrs. Schwartz was at

the hospital and under the care of Dr, Gillespie. The Boston Tospital

is a Mussachusetts corporation and Dr. Gillespie a Massachusetts res

ident. Jurisdiction over defendants was obtained by attaching the con

tractual obligations of St. Paul Fire & Marine Insurance Co. and Lum

hermen’s Mutual Casualty Co., both of which maintain offices in New

York, to defend and indemnify the respective Jefendants under toe:

instrvance policies. Although defendants alleye that their ease is dis

tinguishable from the others Lefore us on the basis that the plaintiffs

were not New York residents at the time of the alleged malnractice,

Judge Lasker had exrlier found that plaintiffs were New York domi

ciliavies at that time. Scherarts v. Boston Hospital for Women. 71 Civ,

1582 (Sentember 29, 1975), at 2-3. We sustain that conclusion.

The plaintiff in Notsonis v. Superior Motor Express, Docket No,

78-7058 (decided Dee. 6, 1977). sued in the Distriet Court for the East

ern Distriet of New York, individually and as administratrix of the

estate of her hushand, Patias Kotsonis. for damages resulting from a

g

aeeident in Marvland in whieh the Cecedent’s truck was struck lwo

Sa

Opinion of U.S. Court of Appeals, Second Circuit

Mrs. Marguerite O’Connor, administratrix of the estate -

of her husband, Daniel J. O’Connor, sues for personal in-

juries to and the wrongful death of her husband which

occurred in an industrial accident at the construction site

of the Regeney Square Shopping Center near Richmond,

Virginia. Plaintiff alleges that her husband was struck

and killed by a motor grader owned by defendant Lee-Hy

Paving Corp. and negligently operated by defendant Davis

E. Clem, an employee of Lee-ITy. O’Connor was a New

York resident and was employed by L. Farber & Co., a

New York proprietorship. His duties with Farber included

supervising construction of the Regeney Square Shopping

Center, which took him to the construction site at least

one day a week, and frequently three or four times a week.

vehicle owned by Superior Motor Express, which was towing a trailer

owned by Earnhardt Lumber Co. end was driven by Kenneth Bentley,

an employee of Earnhardt. Kotsenis was a New York resident. All of

the defendants are residents of North Carolina and do not transact

business in New York. Plaintiff obtained an order. of attachment of

the contractual obligation of Kemper Insurance Co. to defend and in

demnify the defendants. Kemper «does business in the state of New

York. Judge Nickerson denied the defendants’ motions to vacate both

the service of process and the order of attachment, or alternatively to

dismiss or transfer the case on the ground of forym non conveiiens.

Only the former ruling is hefore us.

The plaintiff in Ferruzso v. Bright Trucking Inc., Docket No. 78-7047

(decided Dec. 22, 1977), sustained injuries in a collision in Indiana

asa result of the alleved!y negligent operation of a tractor-trailer owned

hy Landy of Wisconsin, Inec., a Wiseonsin corporation, leased by Bright

Trucking. Ine., 2 Minnesota corroration, and driven hy Josenh Larson,

an emplovee of Landy and a resident of Wisconsin. Plaintiff is a res

ident of New York and is emnloved by a New York firm for whieh

he was transporting inventory ot the time of the accident. He hroucht

suit in the Distriet Court for the Eastern District of New York and

obtained jnrsdiction over defendants Landy and Larson hy attaching

the obligation of Hartford Accident & Indemnity Co., which does bnsi-

ness in New York, to defend and indemnify them pursuant to its in-

svrance policy with Landy. Plaintiff moved to confirm the order and

defendant cross-moved to vacate it or in the alternative to transfer

venne to Indiana. Jndge Sifton of the Fastern District vranted the

plaintiff’s motion and denied the defendants’.

9a

Opinion of U.S. Court of Appeals, Second Circuit

Ile was on an overnight visit when he was killed on Sep-

tember 25, 1975. Defendant Lee-Hy, is a Virginia cor-

poration which transacts no business in New York. De-

fendant Clem is an employee of Lee-Hy and a resident of

Virginia, who has no contacts with New York.

Plaintiff filed her complaint in the Distriet Court for

the Eastern District of New York on November 6, 1975 and

thereafter moved for an order pursuant to New York Civil

Practice Law and Rules § 6201 to attach the contractual

obligations of Roval-Globe Insurance Co. and Continental

Casuaity Co. to defend and indemnify Lee-Hy under its

insurance policies. Both insurance companies do business

in New York and have offices in the state, but neither lists

New York as its principal place of business.

The requested order was granted on December 9, 1975.

On July 22, 1977, a month after the Shaffer decision, de-

fendants made the motion ,here at issue, which Judge

Dooling denied in a carefully considered opinion on Sep-

tember 27, 1977, 487 F.Supp. 994. On October 14, 1977, he

certified interlocutory appeals from his decision and also

from an earlier order coneerning the choice of law issue

indicated above. This court granted defendants’ netition

for leave to appeal both orders on January 23, 1978. This

appeal followed.*

2 There have heen a numer oj decisions on the jurisdictional issue other

than those before us. In Emahciner v. Callahan, No. 76 © 325 (ELD.

N.Y., Oct. 19, 1977), Judge Pratt raised the issue of the continued

viability of Scicer after Shoffer. Both counsel avreed that Judge Dool-

ius’s Opinion in the O'Connor ease had resolved the issue, and Jude

Pratt entered an order asecordingly.

One month later, in Torres ¥. Towmotor Division of Caterpillar, Inc.,

Civ, No. 77 C 1810 (E.D.N.Y., Nov. 18, 1977), Judge Bramwell denied

the plaintiffs’ inotion for an attachment order on the ground that Sei?er

Vv. Roth, supra, 17 N.Y.2d 111, 269 N.Y.S.2d 99, had been undermined

hy Shaffer, Torres was a products liability action hy a New York res-

ident against the manufacturer and distributor of a forklift whieh

injured him in the course of his employment in New Jersey. The plain-

tiff sought to obtain jurisdiction in New York over the distributor. a

10a

Opinion of US. Court of Appeals, Second Circuit

i

Appellants’ attack on the decisions below is simple and

straightforward. In their view, Shaffer conditions the ex-

ercise of what has been called quasi in rem jurisdiction,

more particularly the exercise of jurisdiction where the

New Jersey corporation, by attaching its insurer’s obligation to defend

and indemnify the corporation. After reviewing the development of the

Seider line of cases and our opinions upholding the constitutionality of

Seider, Judge Bramwell ruled that the Seider procedure was not a direct

action against the insurer and did not fulfill the minimum contacts re-

quirement of Shaffer and concluded that Harris v. Balk, 198 U.S. 215

(1905),

was the seed from which Seider evolved and it provided the roots

through which Seider was nourished. Thus, since this seed has heen

pulled and its roots have been severed from the fertile field of

legai precedent by Shaffer, Seider’s viability has likewise been

quashed.

Torres, supra at 386, For reasons not known to us, this decision has

not been appealed. -Jndge Sifton in Ferruzzo and Judge Nickerson in

Kotsonis had both the O’Connor and the Torres opinions before them

in rendering their decisions upholding the constitutionality of Seider

in December, 1977.

A numbe: of New York state vourts have also considered the ques-

tion. The Fourth Department of the Appellate Division upheld the

constitutionality of Scider and its progeny in Alford v. McGaw, No.

48/1978 (March 1, 1978). There, New York plaintiffs who were injured

in Ontario, Canada when their car was struck by the defendant’s car

brought an action for damages in New York, Plaintiffs obtained juris-

diction over the defendant, » xesident of Ontario, by attaching the

obligation of the Hartford Fire Insurance Co., which does business in

the state of New York, to defend and indemnify him. The Appellate

Division upheld the trial court’s refusal to vacate the attachment be-

cause the relationship of the insurance company’s debt to the cause of

action and the company’s central role in the litigation satisfied the min-

imum contacts test prescribed hy Shaffer.

Lower courts in New York have come out on both sides of the ques-

tion, Compare Rodrique: Vv. Wolye, N.Y.L.J., 2/6/78, p. 15, col. 1;

Nelson v. Warner Bros. Jungle Habitat, N.Y.L.J., 3/17/78, p. 7, col. 1;

Smith v. Krafteo Corp., N.Y.L.)., 3/24/78, p. 12, col. 3, upholding

Seider: with Kennedy v. Deroker, 398 N.Y.S.2d 628 (1977); Katz v.

Umansky, 299 N.Y.S.2d 412 (1977); Wallace v. Target Store, Ine.,

400 N.Y.S.2d 478 (1977); Hutchinson v. Hayes Bros., Ine., N.Y.U.9.,

3/17/78, p. 4, col. 2; Schoen v. Berotti, N.Y.L.J., 3/17/78, p. 7, col. 3,

finding Seider attachment unconstitutienal,

lla

Opinion of U.S. Court of Appeals, Second Circuit

ownership of property within the state is used to subject

the defendant to its courts,’ on the existence of at least

some other “contacts” between the defendant and the state.

In these four cases there are admittedly no contacts be-

tween the named defendants and New York. Although ap-

pellants consider this argument alone to be dispositive,

they add other makeweights. They contend that in sus-

taining the constitutionality of Scider, both the New York

Court of Appeals in Simpson v. Loehman, 21 N.Y.2d 305,

310, 287 N.Y.S.2d 633, 636 (1967), motion for reargument

denied, 21 N.Y.2d 990, 290 N.Y.S.2d 914 (1968), and this

court in Minichiello v. Rosenberg, supra, 410 F.2d at 117-18,

rested squarely on /larris v. Balk, supra, 198 U.S. 215.

Since Shaffer clearly overruled Harris on its own facts,

433 U.S. at 208-09, Seider, they say, must fall with it. By

way of minimizing the Court of Appeals’ determination

in Simpson that Scider comports with the International

Shoe fairness standard, they point to Chief Judge Fuld’s

remark in that case inviting the New York Law Revision

Commission and the Advisory Committee of the Judicial

Conference “to conduct studies in depth and make reecom-

mendations with respect to the impact of in rem jurisdie-

tion on not only litigants in personal injury cases and the

insurance industry but also our citizenry generally.” 21

N.Y.2d at 312, 287 N.Y.S.2d at 638. This task, they sug-

gest, has now been performed by a still more august body,

the Supreme Court of the United States.‘

3 The Restatement of Judgments 2d, $11, calls this “attachment juris-

diction”. (Tent. Draft No. 5, March 10, 1978). This description is

useful since, unlike the more general term “quasi in rem jurisdiction,”

it differentiates the cases with which we are concerned from those where

“claims to the property itself are the source of the underlying contro.

versy between the plaintiff and the defendant,” Shaffer, supra, 433 U.S.

aut 207, and we shall use it.

t It is diffieult to fathom how a Supreme Court decision which man-

dates the very type of inquiry in which the Court of Appeals engaged

12a

Opinton of U.S. Court of Appeals, Second Circuit

If the plaintiffs in these cases had “attached” the debt _

to defendants of a debtor only transitorily in New York, as

in Harris v. Balk, or even bank accounts maintained by

them in New York, we would readily agree that attach-

ment jurisdiction could not be sustained when, as here,

the defendants had no other “contacts” with New York.

In such a case, Shaffer v. IHcituer clearly forbids a state

from depriving a defendant of his property in the debt

that is owed him unless other contacts make it fair to

do so. See Intermeat, Inc, v. American Poultry tncorpo-

rated, Docket Nos. 77-7481, 7495, decided April 14, 1978,

slip opinions 2519. What sharply differentiates these cases

from those just hypothesized is that a judgment for the

plaintiff will not deprive a defendant of anything substan-

tial that would have been otherwise useful to him. He

could not recover, sell or hypothecate the covenant to in-

demnify; its utility is solely to protect him from liability

can fill the office that appellants ascribe to it. Quite clearly, what Judge

Fuld sought was information concerning the practical consequences of

the Scider attachment procedure information which significantly has not

Leen forthcoming in these proveed vas, See pp. 8489-10 infra,

Inherent in appellants’ brie?! and argument is a contention that, as

is claimed to be evidenced by Judge Breitel’s concurrence for himself

and Judge Bergan in Simpson, supre, 2) N.Y.2d at 314-16, 287 NLYLS,

2d at 640-42, hy Newman Vv. Denham, 39 N.Y.2d 999, 387 N.Y.S.2d 240

(1976), and by Donawit: \. Danek, 42 N.Y.2d 138, 141-42, 397 N.Y.S.

21 592, 594-05 (1977), the New York Court of Appeals is disenchanted

with Seider, clings to it only because of “considerations of institutional,

stability and the mandates of stare decisis,” Dancwits, supra, 42 N.Y2d

at 142. 897 N.Y.S.2d at 595, and would weleome a decision that Shaffer

has supplied the needed excuse for departing from precedent. Of course,

the Court of Appeals is entirely free to reexamine Seidcy on its merits

and conelude that, in light of the general illumination afforded hv

Shaffer or otherwise, its continned existence is undesirable as a matter

of New York Jaw. Our holding is simply that, on the basis of what

is now hefore us, we do not find the Seider aitachment procedure so

offensive to “traditional notions of fair play and substantial justice.”

Shaffer, supra, 423 V8, 203, 205, 206, 211, 212; Kulko v. Superior Court

of California, 46 U.S.1L.W. 4421 (Mav 15, 1978), as to violate the due

process clause of the Fourteenth Amendment.

13a

Opinion of U.S. Court of Appeals, Second Circuit

and in an appropriate case to allow the plaintiff to re-

cover from the insurer under §167(1)(h) of the New

York Insurance Law.’ What we said in Minichiello, supra,

nine years ago apropos of Harris y. Balk remains just as

true today:

[A]ppellants’ problem is significantly less serious than

was Balk’s in several respects. Balk had to decide

whether to hire a Maryland lawyer to protect his in-

terest in the $180 debt Harris owed him; the appel-

lants are entitled to have lawyers in New York fur-

nished by their insurers without expense. The Mary-

land judgment deprived Balk of money he could have

used for whatever purpose he willed; a Seider judg-

ment would mean simply that liability policies on

which appellants could not have realized for any pur-

pose other than to protect themselves against losses

~—to others, will be applied to the very ohjective for

which they were procured.

410 F.2d at 118 (emphasis supplied). Moreover, since the

insurance policy was purchased to protect against the

type of liability which is the subject of the lawsuit and

since the obligation to defend clearly eneompasses the

litigation, Seider does not sanction “the type of guasi in

5 It might he contended that a judgment up to the poliey limits would

exhaust the protection of the insurance policy and thereby expose the

defendant to a subsequent suit for damages in excess of those limits

in a forum where in personam jurisdiction over him eould he acquired,

However, the imposition on the defendant in this respect is not vreater

than that effected hy a direct action against the insurer, which we found

permissible in Minichiello, supra, 410 F.2d at 110, See note 7 infra,

If it he contended that the line of argument in text emphasizes the

questionability of the Seidcr holding that the insurer’s obligation of

indemnification was a “debit” attachable under New York CPLR 5201

and 6202, the answer is that this is solely a question of New York law

which the Court of Appeals has authoritatively decided. See Elmendorf

VY. Taylor, 23 U.S. (10 Wheat.) 152, 159-60 (Marshall, C./.).

l4da

Opinion of U.S. Court of Appeals, Second Circuit

rem aetion typified by Harris v. Balk and the present ,

ease [sequestration of shares in a Delaware corporation]”,

where the property which “serves as the basis for .. . juris-

diction is completely unrelated to the plaintiff's cause of

action,” Shaffer v. Heitner, supra, 443 U.S. at 208-09 (em-

phasis supplied). The fall of Harris v. Palk therefore

does not necessarily topple Seider, and it is necessary to

probe more deeply than appellants would have us do,’

6 Some of the appellants argue that the vaeating and remanding of

Savehuk v. Rush, 245 N.W.2d 624 (Minn, Sup. Ct. 1976), a case

upholding a Seider attaciment, for further consideration in light of

Shaffer, see 433 U.S, 902 (1977), indicates that the Supreme Court

believed that contacts other than those between the plaintiff and the

insurer were necessary to sustain jurisdiction, This reads too much into

the Court's action. At most, it was an affirmation of the Court's de:

clared unwillingness to determine at that time the extent to which

jurisdictional doctrines other than those before it in Shaffer were

affected by the decision. See Shaffer, supra, 433 U.S, at 208 n.30, 212

n.39. In any event, Rush is not so strong a ease for upholding juris-

diction as this one since the plaintif® there resided at the time of the

accident in the state in which the accident oceurred and only subse-

quently moved to Minnesota, The dissent in Rush argued that sustain-

ing jurisdiction under these circumstances in effect allowed the plaintiff

a choice of 50 jurisdictions in which to sue, See Farrell v. Piedmont

Aviation, 411 F.2d 812 (2 Cir.), cert. denicd, 396 U.S. 840 (1969);

Fish v. Bomb Bakers, Inc., 76 F.R.D. 511 (N.D.N.Y. 1977) (residence

in New York at time of accident necessary to sustain Seider attach-

ment).

~“

This is recognized in the Restatement of Judgments 2d at 84-86 (Tent.

Dinft No. 5, Mareh 10, 1978), Referring to the Seider problem this

states that

The jnrisdictional question would seem to le the same for both

“direct action” and attachient jurisdiction. If the cireumstances

that the plaintiff is a resident of State X and the insurance com-

pany is doing business there are sufficient to sustain in personam

jurisdiction for a “direct action” against the insurer, they shonld

also he sufficient to sustain attachment jurisdiction against the

insurer, and viee versa.

(Emphasis supplied). As develoyed below, we held in Minichieilo that

these circumstances were sufficient to sustain in personam jurisdiction

in a direct action against the insurer, 410 F.2d at 109-10, and nothing

in Shaffer reflects adversely on that conclusion,

l5da

Opinion of U.S. Court of Appeals, Second Circuit

The overriding teaching of Shaffer is that courts must

look at realities and not be led astray by fictions. Quoting

the Restatement Second of Conflict of Laws 656, intro-

ductory note, Mr. Justice Marshall explained that “{t]he

phrase ‘judicial jurisdiction over a thing, is a customary

elliptical way of referring to jurisdiction over the interests

of persons in a thing” and held in consequence that “in

order to justify an exercise of jurisdiction in rem, the

basis for jurisdiction must be sufficient to justify exercis-

ing ‘jurisdiction over the interests of persons in a thing.’ ”

$33 U.S. at 207. This need for a realistie approach had

been recognized by Chief Judge Fuld wheu he wrote in

Simpson, supra, 21 N.Y.2d at 311, 287 N.Y.S.2d at 637:

The historical limitations on both in personam and

in rem jurisdiction, with their rigid tests, are giving

way to a more realistic and reasonable evaluation of

the respective rights of plaintiffs, defendants and the

State in terms of fairness. (See e.g., International

Shoe Co. v. Washinaton, 226 U.S. 310; WeGee v. Inter-

national Life Ins. Co., 355 U.S. 220; Longines-Witt-

nauer Watch Co. v. Barnes & Reinecke, 15 N.Y.2d 443

[261 N.Y.S.2d 8, 209 N.F.2d 68}). Such an evalua-

tion requires a practical appraisal of the situation of

the various parties rather than an emphasis upon

somewhat magical and medieval concepts of presence

and power. Viewed realistically. the insurer in a ease

such as the present is in full control of the litigation;

it selects the defendant’s attorneys; it decides if and

when to settle; and it makes all procedural decisions

in connection with the litigation.*

8 Judge Dooling put the point even more foreefuliy in the O’Coanor

case, supra, 437 F. Supp. at 1093:

The emphasis in many of the cases on the supposedly contingent

nature of the insurer’s obligation appears to be misnlaced. The

oceurrence of the aerident. the plaintiff's injuries, and the insureds

l6a

Opinion of U.S. Court of Appeals. Second Circuit

Moreover, as we said in the passage from Muinichiello ,

quoted above, a plaintiff's judgment in a Seder type case

does not deprive the defendant of money; the full foree

of the judgment rests on the insurer. As Judge Dooling

stated below, 437 F.Supp. at 1602:

Seider v. Roth and Simpson are sui generis in the

field of jurisdiction. They cannot be pigeon-holed as

in rem or m persona. They ave in real terms m

personain so far as the insurer is coneerned. For the

named defendant the suit is only an oceasion of co-

operation in the defense; his active role is that of

witness. It is beside the point to test the constitu-

tionality of the procedure in terms of the named de-

fendant; his role as a party is hardly more real than

that of the casual ejector Richard Roe in common law

ejectment actions. What is at stake in the suit is the

plaintiff's claim for the payment of his alleged dam-

ages by the insurer.

Thus, we must first determine whether forcing the in-

surer to defend in New York is so unfair as to violate due

process. Nothing in Shaffer affects so much of our prior

decision in Jinichiello as holds that an insurer doing busi-

ness in New York has no justifiable ground for complaint

connection with the accident are determinative events. To he sure

there may never be 1 suit, but *he insured is under an immediate

duty to give prompt notice of the accident to the insurer. Investi-

gation usually commences at once, and the parties in interest,

potential plaintiff, insurer and insured are identified. Control of

investigation, defense and settlement are in the insured’s hands.

The prospective plaintiff's relationships are with the insurer, not

with the insured. When an action is commenced the insurer controls

the conduct of the defense, and, if the suit is in a federal court,

plaintiff may obtain diseovery of the existence and content of any

relevant insurance agreement (Rule 26(b)(2)).

See also Kirchen v. Orth, 390 F. Supp. 313, 318-16 (E.D. Wis. 1975).

7a

Opinion of U.S. Court of Appeals, Second Circuit

at New York’s asserting a jurisdiction over the insured

which, by virtue of § 167(1)(b) of the New York Insurance

- Law, may result in a judgment requiring the insurer to

pay the plaintiff up to the policy limit. Doing business

in the state continues to be a recognized basis for the

existence of in persona jurisdiction over a corporation.

See Restatement Second of Conflict of Laws, 4 47, adopted

in Restatement Second of Judgments, supra, 48a (Tent.

Draft No. 5); International Shoe Co. v. Washington, 326

U.S. 310, 317-19 (1945).° There is no point in rehashing

the arguments concerning the inconvenience to the insurer

in being obliged to try the issue of liability in a state that

may be far removed from the site of the accident. All these

considerations were fully canvassed in Minichiello, supra,

410 F.2d at 110, where we pointed out, citing Buckley v.

New York Post Corp., 373 F.2d 175, 181 (2 Cir. 1967), which

quoted von Mehren & Trautman, Jurisdiction to Adjudi-

cate: A Suggested Analysis, 79 Harv. L. Rev. 1121, 1128

(1966), that there has heen “‘ a movement away from the

bias favoring the defendant’ in matters of personal juris-

diction ‘toward permitting the plaintiff to insist that the

defendant come to him’ when there is a sufficient basis for

9 Section 47 of the Restatement Second of Conflict of Laws states:

(1) A state has power to exercise judicial jurisdiction over a for

eign corporation which does business in the state with respect to

causes of action arising from the business done in the state.

(2) A state has power to exercise judicial jurisdiction over a for

eign corporation which does business in the state with respect to

causes of action that do not arise from the business done in the

state if this business is so continuous and substantial as to make

it reasonable for the state to exercise such jurisdiction.

While there are no findings as to the substantiality or continuity of

the insurers’ business dealings in New York, appellants have not con-

tested that this is “continuous and substantial.” See Beja v. Jahangiri.

453 F.2d 959 (2 Cir, 1972), which discusses the standard for what

constitutes “doing business” in New York in order to support a Seider

attachment.

18a

Opinion of ELS. Court of Appeals, Second Ciremt

doing so.” Here the sufficient basis is furnished by the in-

surer’s maintaining an office and regularly transacting

business in New York—not to speak of the convenience

to the plaintiff in having a trial where witnesses on dam-

ages will be more readily available and the fact that in

the large proportion of these actions that are settled the

insurer usually has no particular interest in requiring the

action to be brought at the site of the accident or the

residence of the insured.’ It is plain that, on this aspect

of the problem, Sheffer has wrought no change in the law.

This, however, is not the end of the inquiry since, as

recognized in Minichiello, supra, 410 F.2d at 110-13 (panel

opinion), 117-19 (en bane opinion), we must also consider

whether sustaining Setder jurisdiction would be unfair to

the nominal defendant, the insured—even though, as Judge

Dooling noted, 437 F.Supp. at 1003, it is somewhat ironical

that “it is the insurer, the one who is responsible for the

defense of the suit and for the payment of any judgment,

and who is itself unable to deny that it is fully suable in

the state, who puts forward the plea to jurisdiction in the

name of the nominal defendant, who will not pay the judg-

ment, nor manage the defense.”

When the constitutionality of Seider was last hefore us,

our chief concern in this regard was whether a Seider

judgment, although limited in New York to the amount

of the policy, might be given collater: 1 estoppel effeet in

some other state, at least as to issues actually litigated, see

410 F.2d at 111-12. We concluded, id., that:

10 If it wpa 08 such cases the insurer may be prejudice!

by fear gf the supposedly greater liberality of New York juries. we

fail to see why this interest is superior to that of a New York resident

in having damages assessed by a jury of the state of his residence.

Certainly any such interest of the insurer is net of constitutional :nay

nitude.

19a

Opinion of U.S. Court of Appeals, Second Circuit

Whatever the right rule may be as to quasi in rem

judgments generally, we think it clear that neither

New York nor any other state could constitutionally

give collateral estoppel effect to a Seider judgment

when the whole theory behind this procedure is that

it is in effect a direct action against the insurer and

that the latter rather than the insured will conduct

the defense.

This conclusion has been reinforeed both by portions of

the Restatement Second of Judgments making numerous

exceptions to the rule of issue preclusion which would

clearly include a Seider judgment, see {68.1 (Tent. Draft

No. 4, April 15, 1977), § 88 (Tent. Draft No. 3, April 15,

1976), § 75(¢c) (Tent. Draft No. 1, March 28, 1973); see

also Reporters Note, id. at pp. 215-16 (‘[i]n some contexts

[involving attachment jurisdiction, issue] preclusion may

be inconsistent with the requirements of due process...

But absent any constitutional constraint, it is believed that

issue preclusion is appropriate.” (emphasis supplied)),

and by the emphasis on fair play in Shaffer itself. Our

statement in Minichiello, “we cannot fairly hold that New

York has denied due process merely because of the pos-

sibility that some other state may do so”, 410 F.2d at 112,

has even greater force when, as we now see it, the “pos-

sibility” has declined to the vanishing point.

With respect to other alleged hardships on the insured

we see no oceasion to add to our discussion in J/inichiello

beyond saying two things: The first is that we find some

significance in the fact that although Seidcr has been the

law of New York since 1966, appellants, represented by

highly capable counsel, have not brought to our attention

a single instance where any of the anticipated “horribles”

—inability or refusal of the insured to appear in New York

for deposition or trial, see 410 F.2d at 112, 118, failure

20a

Opinion of US. Court of Appeals, Second Crreut

to assert a counterclaim, see 410 F.2d at 112-13, and

“multiple claims where the damages exceed the policy

limits and the insured is without funds to pay the excess”,

see 410 F.2d at 119—has occurred. The second is that we

deal only with the cases before us; in holding that applica-

tion of Seider in these cases does not offend Shaffer we

are not saying that a case where such application might

violate due process could never arise."

We therefore affirm the four orders declining to vacate

the “attachments” of the liability policies and to dismiss

the actions for want of jurisdiction.

II.

The other interlocutory appeal allowed in the O’Connor

ease raises a choice of law question. Some further state-

ment of the facts is required,

On April 16, 1974, Regency Square, Ine., a Virginia

corporation, Leonard L. Farber, and EF. Carlton Wilton, a

Virginia real estate developer, formed Quioccasin Associ-

ates as a limited partnership with Regency Square, Ine. as

the general partner. The purpose of the partnership was

‘to develop and operate a regional shopping center known

On the same

date, Quioeeasin, Regency Square, Ine, (for itself and as

””

as Regency Square Shopping Center...

general partner of Quioccasin), Leonard L. Farber of

Florida, Ine., along with Wilton Leasing, Ine., and

E. Carlton Wilton, Ine., both Virginia corporations, en-

11 Although the argument may not be articulated as such, appellants’

attack seems to rest in some measure on a general view that since Seider

was regarded in many quarters as an extreme application of attach-

ment jurisdiction, it should be among the first victims of Shaffer. See

also Leflar, American Conflicts Law §25 (3d ed. 1977). This ignores

the sui qencris nature of Seider jurisdiction as outlined by Judge Dool

ing, 437 F. Supp. at 1002, and as analyzed above.

2la

O pinto of US. Court of A ppe als, Second Cirenit

tered into an agreement providing in relevant part that

Quiocecasin would become lessee of the acreage on which

the project was to be built, develop a regional shopping

center to be called Regeney Square Shopping Center, and

engage “the services of Farber [of Flordia] as developer

and advisor” for the Regeney Square Shopping Center.

Farber was to perform its services as an independent con

tractor until construction was complete and 95% of the

leasable area had been rented or sold and was open for

business,

Lee-Hy contracted directly with Quioceasin, by the gen-

eral partner, Regency Square, Inec., to engage in grading,

paving and other specified work on the center, Lee-IIy

was brought into the project by an employee of Farber of

Florida, and its contract was negotiated by the decedent

Q’Connor. O'Connor was employed by Farber of New

York, which was not a party to the Quioceasin agreement,

hut he performed services regularly for Farber of Florida

in connection with construction of the shopping center and

was doing this at the time of the accident that caused his

death. He was covered under New York Workmen's Com

pensation Law by Farber of New York, and his widow has

received death benefits under the New York compensation

law.

After extensive diseussion of Virginia’s workmen’s com

pensation statutes, 9A Virginia Code §§ 65,1-5, -29 -35, -40

-103, and decisions of state and federal courts construing

them, the distriet judge found that Quioceasin, Farber, and

Lee-Hy were in the “same employ” for purposes of the

Virginia compensation statutes; 7e., all were engaged in

developing the Regeney Square Shopping Center, and that

under Virginia law Mrs, O’Connor’s sole remedy would be

the recovery of the benefits provided in the Virginia work-

men’s compensation statutes and no damage action would

22a

Opinion of U.S. Court of Appeals, Second Circuit

lie against Lee-Hy or Clem. It is not disputed, under

§ 29(6) of the New York Workmen’s Compensation Law,

which provides that rights under the compensation law

are exclusive “when such employee is injured or killed by

the negligence .. . of another in the same employ,” Mrs.

O’Connor would not be barred from suing Lee-Hy and

Clem for wrengful death occasioned by their negligence.

The district judge held that New York would apply its law

and consequently granted a motion by the plaintiff to strike

an affirmative defense based on the Virginia workmen’s

compensation statutes and denied a motion by defendants

for summary judgment on the saine basis.

The question we must determine is what law a New York

court seized of the O’Connor action would apply. Klaxon

Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487

(1941). Appellants do not contend that New York is con-

stitutionally required to apply Virginia law. Carroll v.

Lanza, 349 U.S. 408 (1955), which dealt with the converse

situation where the law of the state of employment barred

third party suits but the law of the state of the accident,

which was also the forum, did not, and Restatement Second

of Conflict of Laws § 183, make it plain that New York is

constitutionally free to apply its own law if it chooses.

Appellants mount a strong case that New York would—

or in any event should—apply Virginia law. Recognizing

that Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743

(1963), represented a departure from the lex loci delictus

rule, which would here dictate application of Virginia law,

they assert that Virginia’s “contacts” far outweigh New

York’s and that New York’s interest in seeing that O’Con-

not’s representatives receive adequate compensation for his

death must be harmonized with the poliey of limiting the

costs imposed on employers by industrial accidents, which

would dictate following Virginia law. They emphasize that

23a

Opinion of U.S. Court of Appeals, Second Circuit

Lee-Hy pianned its insurance program on the justifiable

assumption that all work-related accidents on the job site

would be governed by workmen’s compensation and that

allowing an action for damages would run counter to Lee-

Hy’s reasonable expectations.’? Appellants rely also on

§184 of the Restatement Second of the Conflict of Laws,

which states:

Recovery for tort or wrongful death will not be per-

mitted in any state if the defendant is declared immune

from such liability by the workmen’s compensation

statute of a state under which the defendant is required

to provide insurance against the particular risk and

under which

(a) the plaintiff has obtained an award for the injury,

or

(b) the plaintiff could obtain an award for the injury,

if this is the state (1) where the injury occurred, or

(2) where employment is principally located, or (3)

where the employer supervised the employee’s activi-

ties from a place of business in the state, or (4) whose

local law governs the contract of employment under

the rules of §§ 187-188 and 196."°

12 We do not find this argument particularly impressive since the record

shows that Lee-lIy carried insurance for liabilities other than those

covered by the workmen’s compensation statutes to a policy limit of

$2,000,000. Although the affidavit of Lee-Ily’s president is ambiguous,

we do not understand it to aver that Lee-Hy’s policies do not cover the

accident involving ©’Connor. No such defense has been asserted.

13 Appellants cite a number of New York cases, decided before Babcoch

v. Jackson, supra, also cited in the Reporter’s Note to Restatement

§ 184, which they argue apply the policies reflected in § 184. We do

not find these relevant here. In Barnhart v. Aierican Concrete Steel

Co., 227 N.Y. 531 (1920), participation in the New Jersey workmen's

compensation program was optional, and plaintiff’s decedent had elected

24a

Opinion of US. Court of Appeals, Second Circuit

Finally appellants discern in Newmeier v. Kuchner, 31 N.Y.

2d 121, 128-29, 335 N.Y.S.2d 64, 70-71 (1972) and Rogers

v. U-Haul, 41 A.D.2d 834, 342 N.Y.S.2d 158 (2d Dept. 1973),

“a recent New York trend back to lex loci.”

Mrs. O’Connor’s arguments for the application of New

York law are also powerful. She stresses that the decedent

was a resident of New York, was employed in New York

by a New York proprietorship, and worked in and out of

his employer’s office in New York. It would be unjust, plain-

tiff argues, if the rights of such a person should vary from

day to day, depending on the state to which he happened to

be dispatched to carry out his New York employer’s busi-

ness.'* Plaintiff argues further that what appellants’ per-

to be covered. The Court of Appeals held that as a matter of contract

law the plaintiff was bound by the terms of the New -Tersey scheme,

which excluded ary other remedies against the employer, and therefore

could not bring a wrongful death action against the employer in New

York. Daniel O’Connor made no analogous election to be covered by

Virginia law. In Yoshi Ogino v. Black, 304 N.Y. 872 (1952), aff’g,

278 App. Div. 146, 104 N.Y.S.2d 82 (1st Dept. 1951), the appellate

division reversed a decision striking a defense based on the exclusivity

of North Carolina workmen’s compensation remedies because it found

that the North Carolina Workmen’s Compensation Board would not nec-

essarily be hound by a decision of the New York Board that plaintiff's

injury had not occurred in the course of his employment. The appellate

division concluded,

Possibly, as alleged by defendant, the North Carolina Workmen’s

Compensation Law may provide plaintift’s exclusive remedy. The

determination of this question must await an examination of North

Carolina law at such time as the merits of this defense may he

considered.

104 N.Y.S.2d at 86. The choice of law question was not considered,

doubtless lhecause New York law was still firmly ensconeed in the ler

loci delictus methodology and the accident had occurred in North Caro-

lina. Indeed, the choice of law question was not even certified to the

Court of Appeals. 304 N.Y. 872. DeRosa v. Slattery Contracting Co.,

14 A.D.2d 278, 220 N.Y.S.2d 871 (ist Dept. 1961), aff’d, 12 N.Y.2a

735, 234 N.Y.S.2d 217 (1962), was an even more straightforward appli-

cation of the ler loci doctrine and hence is no longer a viable precedent.

14 This argument also is less impressive than might appear at first blush.

O’Connor hardly engaged in estate planning on the basis that if he were

25a

Opinion of U.S. Court of Appeals, Second Ci: -uit

ceive as a recent New York trend back to ler loci ean be

discerned only in cases in which the plaintiff was not a New

York resident. She points instead to the one New York

decision most nearly on point, MacKendrick v. Newport

New Shipbuilding € Dry Dock Co., 59 Mise.2d 994, 302

N.Y.S.2d 124 (Sup. Ct. N.Y. Co. 1969), where a respected

New York judge denied, with a considerable show of rhet-

oric, a contention similar to that advanced by the defen-

dants here.*®

Our task, as noted, is to determine not what law we would

choose to apply but what law the New York courts would

apply. Although we do not pretend to full understanding

killed in the course of employment, his estate would have a claim against

any negligent third party.

15 In MacKendrick, the plaintiff's decedent was employed by a New

York firm under contract with Westinghouse to manufacture cooling

systems for submarines. Westinghouse was employed by the Navy to

install the cooling systems, and Newport News, to construct the sub-

marines, MacKendrick was sent to the defendant’s shipyards in Vir-

ginia to repair inadequacies in the cooling system, and he was killed

there in an industrial accident. The court held first that MacKendrick’s

employer was not a subcontractor »f any Newport News undertaking

within the meaning of the Virginia Workmen’s Compensation Law, and

therefore he was neither entitled to that statute’s remedies, nor, more

importantly, subject to its provisions barring wrongful death actions.

However, the court did reach the choice of law question in determining

whether to apply Virginia’s limitation of wrongful death recoveries to

$30,000. After an extensive review of the New York choice of law

decisions since Babcock, the court concluded:

Clearly the public policy of our courts is to protect New York

domiciliaries, wherever possible, from denial of a recovery in an

other jurisdiction ....

Both logic and precedent mandate a construction consistent, when-

ever possible, with the State allowing a just recovery.

302 N.Y.S.2d at 140.

Although federal courts are no longer bound by the decisions of in-

ferior state courts in the determination of state law, a decision by a

lower court state judge in the mainstream of state decisions is entitled

to respect. See Hart & Wechsler, The Federal Courts and the Federal

System 708-10 (2d ed. 1973).

26a

Opinion of US. Court of Appeals, Second Cireut

of Babcock v. Jackson, supra, and the many decisions of:

the Court of Appeals in its wake and might think that, in

the light of fifteen years of experience under Babcock, the

departure from the certainty of the lex loci delictis rule

was not such a famous victory as it first appeared to be,

see Ehrenzweig, Conflicts in a Nut Shell, 216-19 (3d ed.

1974), Cramton, Currie & Kay, Conflict of Laws 259-61 (2d

ed, 1975), we see no indication that the highest court of

New York has wavered in its determination to afford New

York tort plaintiffs the benefit of New York law more favor-

able than the law of the lex loci delictus whenever there is

a fair basis for doing so.

The line of such cases is impressive: Kilberg yv. North-

east Airlines, 9 N.Y.2d 34, 211 N.Y.S.2d 133 (1961) (refus-

ine to give effect to Massachusetts ceiling on recovery for

wroneful death of New York resident in Massachusetts

airplane crash) ;'* Babcock v. Jackson, supra, 12 N.Y.2d

473, 240 N.Y.S.2d 743 (refusing to apply guest statute of

Ontario, where accident occurred, to defeat claim of New

York passenger); Macey v. Rozbicki, 18 N.Y.2d 289, 274

N.Y.S.2d 591 (1966) (refusing to apply Ontario guest stat-

ute against New York plaintiff even though she was staving

at her relatives’ home in Canada and trip began and was

to end there); Miller v. Miller, 22 N.Y.2d 12, 290 N.Y.S.2d

16 We followed Kilberg in two other cases arising from the same Mas-

sachusetts airplane accident, Pearson v. Northeast Airlines, Inc., 309

F.2d 558 (2 Cir, 1962) (en banc), cert. denied, 372 U.S, 912 (1963),

where the facts were identical with those in Kilbera, and Gore y. North-

east Airlines, 373 F.2d 717 (2 Cir. 1967), where the plaintiff executrix

and decedent's children had removed from New York to Maryland hetore

suit was brought. More recently we followed Killbery in Rosenthal v.

Warren, 475 F.2d 438 (2 Cir.), cert. denied, 414 U.S. 856 (1975), re-

fusing to apply Massachusetts’ wrongful death limitations statute in a

malpractice suit hrought by the widow of a New York citizen against a

Bosten physician and hospital, and cited with approval the MacKendrick

decision discussed above.

27a

Opinion of US. Court of Appeals, Second Circuit

734 (1968) (refusing to apply Maine limitation on recovery

in wrongful death action where a New York resident was

killed while in a motor vehicle operated by his brother and

ywned by his sister-in-law who were Maine residents) ;

Tooker v. Lopez, 24 N.Y.2d 569, 301 N.Y.S.2d 519 (1969)

(refusing to apply Michtgan guest statute to accident in

Michigan involving New York passenger). In Reseuthal vy.

Warren, supra, 475 F.2d at 443, we reviewed these cases

and found, as did the court in MacKendrick, see note 15

supra, that they left us with:

the overwhelming conclusion that, except for a federal

ease which relied heavily on a discredited state case,

the strong New York public policy against damage

limitations has triumphed over the contrary policies of

sister states in every case where a New York domi-

ciliary has brought suit. This conclusion is particularly

striking in wrongful death actions where the New York

policy, embedded in a state constitutional prohibition

against damage limitations, has without exception been

applied in suits brought for New York decedents since

Kilberg.

Here the basis for applying the more favorable New York

law rather than the law of the lex loci to O’Connor is at

least as great as in the cases cited. Appellants have failed

to furnish us with persuasive reasons to believe that, if

confronted with the problem here presented, the New York

Court of Appeals would turn away from the path it has

consistently followed since Kilberg and subject a New York

resident, employed in New York by a New York employer

and based in New York, to Virginia law which prevents

him or his estate from suing for negligence a non-employer

alleged to have negligently injured or killed him at the

2da

Opinion of U.S. Court of Appeals, Second Circuit

worksite.'” Accordingly we uphold the ruling of the district

judge."® :

All orders affirmed.

17 If it be said that the Virginia rule here at issue is less unreasonable

than a limitation on recovery for wrongful death, which New York is

prohibited from enacting by its Constitution, Art. I, $16, or guest

statutes, we find nothing to indicate either that this enters significantly

into the choice of law determinations of the Court of Appeals or that it

would not consider Virginia’s restriction on the right to sue third parties

for negligence at the we ‘ksite as being quite as unreasonable as a guest

statute.

18 Appellants could argue that thus subjecting the insurer to New

York’s choice of law, which is more favorable to a plaintiff than Vir-

ginia’s, demonstrates a hardship visited by Seider on the insurer and,

because of an effect on future ratings, on the insured. However, exactly

the same consequences would ensue if New York had authorized in

terms a direct action on behalf of New York residents against insurers

doing business in New York, and nothing in Sheffer affects our holding

in Minichiello, supra, 410 F.2d at 110, that this would be constitutional.

29a

Endorsement Order of Judge Morris E. Lasker

dated October 21, 1977

71 Civ. 1562

Groria Scuwartz and Winuiam Scuwartz,

Plaintiffs,

v.

Boston Hospitau ror Women,

a/k/a Boston Ly1ne In Hosprrat, and

LuKe GILLespIr,

Defendants.

Lasker, D.J.

These motions to vacate and set aside the order of at-

tachment on which jurisdiction is predicated and to dismiss

the complaint for lack of jurisdiction under Rule 56 of the

Federal Rules of Civil Procedure, raise the same question

decided by Judge Dooling in his thorough and thoughtful

opinion in O’Connor v. Lee-Hy Paving Corp. and Davis F.

Clem, 7) C. 1853 (E.D.N.Y, September 27, 1977).

For the reasons stated in Judge Dooling’s opinion of

September 27, 1977, the motions to dismiss are denied.

However, for the reasons which Judge Dooling stated in

his Memorandum and Certification of October 14, 1977,

defendants’ motions to certify the orders under 28 U.S.C.

§1292(h) are granted because the dismissal of these cases

involves a controlling question of law whether the United

States Supreme Court’s decision in Shaffer v. Heitner, 1977,

45 LW 4849, 97 S.Ct. 2569, invalidates the jurisdictional

theory of Seider v. Roth, 17 N.¥.2d 111 (1966) and Simp-

30a

Endorsement Order cf Judge Morris EF. Lasker

dated October 21, 1977

son v. Loehmann, 21 N.Y.2d 305 (1967) and 21 N.Y.2d 990

(1968), and an immediate appeal from the order mav

materially advance the determination of the litigation.

It is so ordered.

/s/ Morets E. Lasker

Morris BK. Lasker

U.S.D.J.

Dated: New York, New York

October 21, 1977.

Sla

Memorandum and Order of

Judge Eugene H. Nickerson, dated December 6, 1977

UNITED STATES DISTRICT COURT

Eastern District or New York

76 C 1916

Fontixt Kotsonis, individually and as Administratrix of

the Estate of Paptas Korsonts,

Plaintiff,

—against—

Superior Motor Express, Eannuarpt Lumser Co.

and the Estate of KexnernH Epwarp Bentuey,

Defendants.

Appearances :

Decker & Lona, Esa.

Attorneys for Plaintiff

1610 Richmond Road

Staten Island, New York 16304

ALEXANDER, AsH, Scuwartz & CoHEN

Attorneys for Defendants

801 Second Avenue

New York, New York 10017

Nickerson, District Judge:

In this action the claim is for pain, suffering and wrone-

ful death due to a collision between plaintiff’s intestate’s

motor vehicle and a tractor-trailer in Maryland. Jurisdic-

tion is invoked o nthe ground of diversity of citizenship.

32a

Memorandum and Order of Judge Eugene H. Nickerson,

dated December 6, 1977

Plaintiff, the widow of the deceased, is a resident of New

York State. Joined as defendants are Superior Motor

Express, a North Carolina Corporation and the owner of

the tractor and Earnhardt Lumber Co., a North Carolina

partnership, the owner of the trailer, neither of which

maintains an office or does business in New York. Also

joined as a defendant is the estate of the operator of the

tractor-trailer.

An order of attachment was signed by Judge Costantino

and served upon the Kemper Insurance Companies, the

automobile publie liability insurance carrier for the de-

fendants. Defendants were also purportedly served per-

sonally in North Carolina.

Defendants have moved to vacate the order of attach-

ment and to vacate the purported personal service. In

the alternative defendants ask the court to dismiss the

complaint on the ground of forum non conventens or to

transfer the action to the Distriet Court in North Carolina

or Maryland.

Both Judge Dooling in O’Connor v. Lee-Hy Paving Corp.,

-—— F. Supp. (E.D.N.Y. decided September 27, 1977),

and Judge Bramwell in Torres v. Townmotor Division of

Caterpillar Inc., —— F. Supp. (E.D.N.Y. decided

November 18, 1977), have written at length on the question

of whether Seider v. Roth, 17 N.Y. 2d 111 (1966) survives

Shaffer v. Heitner, U.S. ——, 97 S.Ct. 2569 (1977).

They have reached inconsistent conclusions. I find the

reasoning of Judge Dooling persuasive and therefore deny

the motion to vacate the attachment. However, the pur-

ported personal service on the defendants should be set

aside.

The motion to dismiss on the ground of forum non con-

veniens or to transfer is denied, Since I accept Judge

Bar|

Memorandum and Order of Judge Eugene H. Nickerson,

dated December 6, 1977

Dooling’s reasoning and since the plaintiff, who will be a

witness. is a resident of New York and the insurance com-

pany does business here, the action should remain in this

district,

Under 28 U.S.C. §1292(b) Judge Dooling has certified

the order in O’Connor v. Lee-Hu Paving Corp. determining

the attachment valid. I do the same in this ease. T am of

the opinion that my order determining the attachment valid

involves a controlling question of law as to which there is

substantial ground for difference of opinion, and an im-

mediate appeal from the order may materially advance the

ultimate termination of the litigation. So ordered.

Dated: Brooklyn, New York

December 6, 1977

/s/ Evoenr H. Nickerson

Eugene H. Nickerson, U.S.D..J.