12‐4280‐cv(L)
Sonera Holding B.V. v. Cukurova Holdings A.S.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
______________
August Term, 2013
(Argued: August 22, 2013 Decided: April 25, 2014)
Docket Nos. 12‐4280‐cv(L), 13‐73‐cv(CON), 13‐1880‐cv(CON)
____________
SONERA HOLDING B.V.,
Petitioner‐Appellee,
–v.–
ҪUKUROVA HOLDING A.Ș.,
Respondent‐Appellant.*
______________
Before:
WINTER, WESLEY, and CARNEY, Circuit Judges.
______________
Appeal from orders of the United States District Court for the Southern
District of New York (Denise L. Cote, Judge) dated September 21, 2012; December
21, 2012; April 18, 2013; and May 10, 2013. The district court held that it had
personal jurisdiction over Ҫukurova based primarily on the New York contacts
* The Clerk of the Court is directed to amend the official caption as noted above.
of several companies with which Ҫukurova is affiliated. The Supreme Court’s
decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), reaffirms that general
jurisdiction extends beyond an entity’s state of incorporation and principal place
of business only in the exceptional case where its contacts with another forum
are so substantial as to render it “at home” in that state. For the reasons stated
below, even assuming the activities of Ҫukurova’s affiliates can be ascribed to it
for the purposes of a general jurisdictional analysis, Ҫukurova lacks sufficient
contacts with New York to render it “at home” there. We therefore REVERSE the
district court’s judgment denying Ҫukurova’s motion to dismiss for lack of
personal jurisdiction, VACATE the subsequent judgments of the district court,
REMAND the case to the district court, and direct the court to DISMISS the
action for lack of personal jurisdiction.
RICHARD J. HOLWELL (Michael Shuster, Dorit Ungar
Black, Karen Andrea Grus, on the brief), Holwell Shuster
& Goldberg LLP, New York, NY, for Respondent‐
Appellant.
PIETER VAN TOL (Andrew M. Behrman, Erin Marie
Meyer, on the brief), Hogan Lovells US LLP, New York,
NY, for Petitioner‐Appellee.
______________
PER CURIAM:
Appeal from orders of the United States District Court for the Southern
District of New York (Denise L. Cote, Judge) dated September 21, 2012; December
21, 2012; April 18, 2013; and May 10, 2013. The district court held that it had
personal jurisdiction over Ҫukurova based primarily on the New York contacts
of several companies with which Ҫukurova is affiliated. The Supreme Court’s
decision in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), reaffirms that general
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jurisdiction extends beyond an entity’s state of incorporation and principal place
of business only in the exceptional case where its contacts with another forum
are so substantial as to render it “at home” in that state. For the reasons stated
below, even assuming the activities of Ҫukurova’s affiliates can be ascribed to it
for the purposes of a general jurisdictional analysis, Ҫukurova lacks sufficient
contacts with New York to render it “at home” there. We therefore REVERSE the
district court’s judgment denying Ҫukurova’s motion to dismiss for lack of
personal jurisdiction, VACATE the subsequent judgments of the district court,
REMAND the case to the district court, and direct the court to DISMISS the
action for lack of personal jurisdiction.
BACKGROUND
Sonera Holding B.V. (“Sonera”), a Dutch holding corporation, brought suit
in the United States District Court for the Southern District of New York to
enforce a final arbitration award against Ҫukurova Holding A.Ș. (“Ҫukurova”),
the parent company of a large Turkish conglomerate. The parties’ underlying
dispute arose out of negotiations for Ҫukurova’s sale to Sonera of shares in
Turkcell Holding A.Ș. (“Turkcell Holding”), a Turkish joint stock company that
owns a controlling stake in Turkey’s largest mobile phone operator. Following
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failed negotiations and a protracted proceeding before an arbitral tribunal in
Geneva, Switzerland, the tribunal found that the parties concluded a share
purchase agreement and ordered Ҫukurova to pay Sonera $932 million in
damages for its failure to deliver the shares.
Sonera filed applications for enforcement in jurisdictions across the world,
including the British Virgin Islands, Switzerland, the Netherlands, and, as
relevant here, the Southern District of New York.
Rejecting Ҫukurova’s contention that New York lacked personal
jurisdiction over it, the district court issued four orders, from which Ҫukurova
now appeals, confirming the arbitration award in favor of Sonera; denying a
motion to reconsider; issuing a preliminary injunction preventing Ҫukurova
from engaging in transactions to shield its assets; and denying dissolution of the
preliminary injunction.1
Ҫukurova is a Turkish holding company with its registered office in
Istanbul, Turkey. It holds investments in other companies and has no operations
and owns no property in New York or any of the United States. Sonera asserts
1
Sonera Holding B.V. v. Ҫukurova Holding A.Ș, 895 F. Supp. 2d 513 (S.D.N.Y. 2012); No. 11
Civ. 8909(DLC), 2012 WL 6644636 (S.D.N.Y. Dec. 21, 2012); No. 11–CV–
08909(DLC)(FM), 2013 WL 4405382 (S.D.N.Y. Apr. 18, 2013); No. 11 Civ. 8909(DLC),
2013 WL 1935325 (S.D.N.Y. May 10, 2013).
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that Ҫukurova is nonetheless subject to general jurisdiction in New York based
on Ҫukurova’s own actions and the actions of Ҫukurova’s affiliates, which,
according to Sonera, should be imputed to Ҫukurova.
The actions on which Sonera predicates its assertion of general jurisdiction
include (1) negotiations by Ҫukurova or one of its affiliates (which occurred
outside the United States and were ultimately unsuccessful) to sell an interest in
Show TV, a Turkish television broadcaster, to two New York–based private
equity funds; (2) Ҫukurova’s sale of American Depository Shares (“ADS”) in
Turkcell to an underwriter in London, which subsequently offered the ADS for
sale on the New York Stock Exchange; (3) the agreement of Digiturk, a Turkish
Ҫukurova affiliate, to provide digital television content to a U.S.‐based company;
(4) use of a New York office used by Baytur Insaat Taahhüt A.Ș. (“Baytur”) and
Equipment and Parts Export, Inc. (“EPE”), two Turkish companies affiliated with
Ҫukurova; and (5) statements on EPE’s website describing itself as having been
“[f]ounded in New York City in 1979” and as Ҫukurova’s “gateway to the
Americas.”
On appeal, Ҫukurova (1) challenges the district court’s denial of its
motions to dismiss for lack of personal jurisdiction and for forum non
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conveniens; (2) seeks reversal of the district court’s decision deferring to the
jurisdictional determinations of the arbitral tribunal; and (3) challenges the
district court’s refusal, on Ҫukurova’s motion to vacate, to reconsider its finding
of personal jurisdiction. Because we find Ҫukurova’s contacts with New York
insufficient to subject it to general jurisdiction and accordingly reverse the
district court’s judgment denying Ҫukurova’s motion to dismiss for lack of
personal jurisdiction, there is no need to reach Ҫukurova’s remaining arguments.
DISCUSSION
A. Personal Jurisdiction
Personal jurisdiction over a foreign defendant in a federal‐question case
requires a two‐step inquiry. Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732
F.3d 161, 168 (2d Cir. 2013). First, we determine whether the defendant is subject
to jurisdiction under the law of the forum state—here, New York. Second, we
consider whether the exercise of personal jurisdiction over the defendant
comports with the Due Process Clause of the United States Constitution. Id.
Sonera asserts that Ҫukurova is subject to general jurisdiction in New York
pursuant to N.Y. C.P.L.R. 301, which confers jurisdiction where a company “has
engaged in such a continuous and systematic course of ‘doing business’ [in New
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York] that a finding of its ‘presence’ [in New York] is warranted.” Landoil Res.
Corp. v. Alexander & Alexander Servs., 77 N.Y.2d 28, 33 (1990) (citations omitted).
In Wiwa v. Royal Dutch Petroleum Co., we reasoned that the continuous course of
“doing business” in New York “do[es] not necessarily need to be conducted by
the foreign corporation itself.” 226 F.3d 88, 95 (2d. Cir. 2000). Rather, we
interpreted New York law to include an agency theory of jurisdiction that
subjects a corporation to general jurisdiction when it relies on a New York
representative entity to render services on its behalf “that go beyond mere
solicitation and are sufficiently important to the foreign entity that the
corporation itself would perform equivalent services if no agent were available.”
Id.
According to Sonera, even if Ҫukurova’s own contacts with New York are
insufficient for general jurisdiction, the contacts of Digiturk, Baytur, and EPE
should be imputed to Ҫukurova, and these combined contacts with New York
render Ҫukurova subject to the general jurisdiction of New York. Ҫukurova
contends that New York law does not permit personal jurisdiction on these facts
and that even if it did, the agency theory of personal jurisdiction is incompatible
with due process.
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B. Due Process
In light of the Supreme Court’s decision in Daimler AG v. Bauman, 134 S.
Ct. 746 (2014), we need not determine whether the district court correctly found
Ҫukurova subject to its general jurisdiction under New York law.2 Whatever the
purported scope of N.Y. C.P.L.R. 301 and the agency‐based theory of jurisdiction
articulated in Wiwa, Daimler confirmed that subjecting Ҫukurova to general
jurisdiction in New York would be incompatible with due process.
In the area of personal jurisdiction, “[t]he canonical opinion . . . remains
International Shoe, in which [the Supreme Court] held that a State may authorize
its courts to exercise personal jurisdiction over an out‐of‐state defendant if the
defendant has ‘certain minimum contacts with [the State] such that the
maintenance of the suit does not offend traditional notions of fair play and
substantial justice.’” Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct.
2
There is no need to address the scope of general jurisdiction under New York law
because the exercise of general jurisdiction over Ҫukurova is clearly inconsistent with
Daimler. However, we note some tension between Daimler’s “at home” requirement and
New York’s “doing business” test for corporate “presence,” which subjects a
corporation to general jurisdiction if it does business there “not occasionally or casually,
but with a fair measure of permanence and continuity.” Tauza v. Susquehanna Coal Co.,
220 N.Y. 259, 267 (1917) (Cardozo, J.) (codified along with other “doing business” case
law by N.Y. C.P.L.R. 301). Not every company that regularly “does business” in New
York is “at home” there. Daimler’s gloss on due process may lead New York courts to
revisit Judge Cardozo’s well‐known and oft‐repeated jurisdictional incantation.
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2846, 2853 (2011) (second alteration in original) (internal quotation marks
omitted) (quoting Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)).
There are two types of personal jurisdiction: specific and general. Specific
or conduct‐linked jurisdiction, which Sonera does not assert, “depends on an
affiliation[n] between the forum and the underlying controversy, principally,
activity or an occurrence that takes place in the forum state and is therefore
subject to the State’s regulation.” Id. at 2851 (alteration in original) (internal
quotation marks omitted). By contrast, general jurisdiction exists only when a
corporation’s contacts with a state are “so ‘continuous and systematic’ as to
render [it] essentially at home in the forum State.” Id. A court with general
jurisdiction over a corporation may adjudicate all claims against that
corporation—even those entirely unrelated to the defendant’s contacts with the
state.
The natural result of general jurisdiction’s “at home” requirement is that
“only a limited set of affiliations with a forum will render a defendant amenable
to all‐purpose jurisdiction there.” Daimler, 134 S. Ct. at 760. “A corporation that
operates in many places can scarcely be deemed at home in all of them.” Id. at
762 n.20. The paradigm forum for general jurisdiction over an individual is the
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individual’s domicile, his home. For a corporation, it is an equivalent place, with
the place of incorporation and the principal place of business being the paradigm
bases. “Those affiliations have the virtue of being unique—that is, each
ordinarily indicates only one place—as well as easily ascertainable.” Id. at 760.
C. Ҫukurova’s Contacts with New York
Daimler expressed doubts as to the usefulness of an agency analysis, like
that espoused in Wiwa, that focuses on a forum‐state affiliate’s importance to the
defendant rather than on whether the affiliate is so dominated by the defendant
as to be its alter ego. “[T]he inquiry into importance stacks the deck, for it will
always yield a pro‐jurisdiction answer: Anything a corporation does through [its
affiliate] is presumably something that the corporation would do ‘by other
means’ if the [affiliate] did not exist.” Id. at 759. (internal quotation marks
omitted).
For our purposes, we need not consider whether the agency principles
announced in Wiwa survive in light of Daimler. Even assuming that all of
Digiturk’s, Baytur’s, and EPE’s contacts should be imputed to Ҫukurova, the
company’s contacts with New York do not come close to making it “at home”
there.
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As noted above, Sonera would predicate general jurisdiction on (1)
Ҫukurova’s unsuccessful negotiations to sell a portion of Show TV to two New
York–based private equity funds; (2) Ҫukurova’s sale of ADS in Turkcell to an
underwriter in London, which subsequently offered the ADS for sale on the New
York Stock Exchange; (3) Digiturk’s agreement with a U.S.‐based company to
provide digital television content; (4) a New York office location used by Baytur
and EPE; and (5) statements on EPE’s website promoting it as Ҫukurova’s
connection to the United States.
Ҫukurova is organized under the laws of the Republic of Turkey, with
operations, properties, and assets predominantly located in Turkey. New York is
neither Ҫukurova’s place of incorporation nor its primary place of business. Even
assuming Digiturk’s, Baytur’s, and EPE’s New York contacts should be imputed
to Ҫukurova, they do not shift the company’s primary place of business (or place
of incorporation) away from Turkey. And although Daimler and Goodyear “d[o]
not hold that a corporation may be subject to general jurisdiction only in a forum
where it is incorporated or has its principal place of business,”Daimler, 134 S. Ct.
at 760, those cases make clear that even a company’s “engage[ment] in a
substantial, continuous, and systematic course of business” is alone insufficient
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to render it at home in a forum, id. at 761. Ҫukurova’s contacts fall short of those
required to render it at home in New York. To subject it to all‐purpose general
jurisdiction in that state would deny it due process.
D. Contractual Consent to Personal Jurisdiction
Lastly, Sonera argues that even if Ҫukurova’s contacts with New York are
insufficient to support personal jurisdiction, we should still affirm the District
Court’s decision because Ҫukurova expressly consented to the forum’s
jurisdiction.
In March 2005, Sonera and Ҫukurova entered into an agreement (the
“Letter Agreement”) that required the parties to make good faith efforts to
execute a final share purchase agreement allowing Sonera to purchase
Ҫukurova’s interests in Turkcell Holding. The Letter Agreement specifies that
any disputes arising out of it are to be settled by arbitration under the rules of the
International Chamber of Commerce in Geneva, Switzerland, and that any
award of the tribunal shall be final and binding on the parties. As relevant here,
Article 5.4(e) of the Letter Agreement further provides as follows:
Any award of the arbitral tribunal may be enforced by judgment or
otherwise in any court having jurisdiction over the award or over
the person or the assets of the owing Party or Parties. Applications
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may be made to such court for judicial recognition of the award
and/or an order for enforcement, as the case may be.
Sonera reads this provision as an implicit agreement to waive any defense based
on lack of personal jurisdiction and to consent to the jurisdiction of any court in
any country in the world with subject matter jurisdiction over enforcement
actions brought pursuant to the 1958 United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards—including, under 9
U.S.C. § 203, the United States District Court for the Southern District of New
York.
We do not read the provision so broadly. Article 5.4(e) appears to be a
standard entry‐of‐judgment clause designed to clarify that, following any
arbitration award, a court of the arbitral venue or in any jurisdiction in which the
parties’ persons or assets are located would have jurisdiction to enter judgment
on that award.3 Article 5.4(e) does not speak to personal jurisdiction, and we
3 Although a jurisdictional stipulation to entry of judgment in international arbitration
contracts is technically unnecessary given 9 U.S.C. § 203’s conferral on U.S. district
courts of original subject matter jurisdiction over Convention awards, consent to entry
of judgment is required, under 9 U.S.C. § 9, for enforcement of domestic arbitration
awards, and authorities on international arbitration recommend such clauses be
included even in international agreements out of an abundance of caution. See, e.g., R.
Doak Bishop, Drafting the ICC Arbitral Clause, in Transnational Litigation § 41:8 (J. Fellas
ed., Westlaw 2014).
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decline to interpret the provision as Ҫukurova’s consent to personal jurisdiction
in New York.
CONCLUSION
We have considered all of Sonera’s arguments in support of jurisdiction
and find them to be without merit. We therefore REVERSE the district court’s
judgment denying Ҫukurova’s motion to dismiss for lack of personal
jurisdiction, VACATE the subsequent judgments of the district court, REMAND
the case to the district court, and direct the court to DISMISS the action for lack of
personal jurisdiction.
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