Defendants moved to dismiss the complaint under CPLR 3211(a)(2) for
lack of subject matter jurisdiction and under CPLR 3211(a)(7) for
failure to state a cause of action. The motion court agreed that it
lacked subject matter jurisdiction over plaintiff's claims under the
NYCHRL and NYSHRL, holding as a matter of law that the impact of
defendants' alleged misconduct was not felt inside either New York City
or New York State, as required by Shah v Wilco Sys., Inc. (27 AD3d 169 [2005], lv dismissed in part, denied in part 7 NY3d 859 [2006]).
We conclude that the complaint should not have been dismissed on
a CPLR 3211 motion. The so-called "impact" rule as expressed in Shah should not be applied so broadly as to preclude a discrimination action where the allegations support the assertion that the act of discrimination, the discriminatory decision, was made in this state.
The New York State and New York City Human Rights Laws were
enacted to combat discrimination within this state and city
respectively (see Executive Law § 296[1][a] [NYSHRL]; Administrative Code of City of NY § 8-107[1][a] [NYCHRL]). The issue of subject matter [*3]jurisdiction arises where the alleged discrimination occurs in more than one state.
The assertion of this Court in Shah, that the NYCHRL is
"limited to acts occurring within the boundaries of New York" (27 AD3d
at 175), remains true in its essence, but does not resolve the question
of subject matter jurisdiction in the case of acts occurring in this as
well as other jurisdictions. To add a complication to the issue, I note
that the NYSHRL by its terms may be applied to acts committed outside
New York State if committed against a New York State resident (see Executive Law § 298-a[1]) — although this provision is inapplicable in this instance, since plaintiff is a non-resident.
The issue here is how we define the concept of "acts occurring
within [] New York." Under what, if any, circumstances may a
non-resident be entitled to the coverage of the NYSHRL?
"When a non-resident seeks to invoke the coverage of the New
York City and State human rights laws, he or she must show that the
alleged discrimination occurred within New York City and New York State
respectively" (Rylott-Rooney v Alitalia-Linee Aeree Italiane-Societa Per Azioni,
549 F Supp 2d 549, 551 [SD NY 2008]). Application of logic and common
sense alone would dictate that if an employer located in New York made
discriminatory hiring or firing decisions, those decisions would be
properly viewed as discriminatory acts occurring within the boundaries
of New York. In fact, early case law from this Court supports that
view.
…
After consideration of the Shah decision and the federal case law it cites in support, we decline to apply that portion of the Shah
decision as the settled law of this State. Initially, we observe that
the quoted language is not necessary to the holding, and therefore
constitutes obiter dictum. As the Shah Court acknowledged, the plaintiff in that case, like the plaintiff in Iwankow, did not even "allege that the decision to terminate her was made in New York City" (id. at 175, citing Iwankow v Mobil Corp., supra).
The Shah Court's grant of summary judgment dismissing the
discrimination claim for lack of subject matter jurisdiction relied on
the facts pointing exclusively to New Jersey events. Shah resided in
New Jersey, and was working for a client located in New Jersey, was
informed of her termination at that New Jersey office, and the reasons
she was given for her termination -— insubordination, poor or
inappropriate attitude, and inability to work in a team environment -—
concerned her conduct at that New Jersey office. Indeed, the Court
asserted that it could be "fairly inferred" from Shah's own account
that the explanation for her termination was based upon her conduct at
the New Jersey site; in fact, the majority explicitly rejected the
dissenting Justice's suggestion that there were allegations from which
it could be inferred that the termination decision was made in New York
City (27 AD3d at 176).
Accordingly, we do not take issue with the result in Shah,
insofar as it says it is based on facts exclusively pointing not only
to an impact in New Jersey but also to a termination decision made in
New Jersey, and the absence of an allegation that a discriminatory
employment decision was made in New York. However, we view that portion
of the ShahRylott-Rooney v Alitalia-Linee Aeree Italiane-Societa Per Azioni (549 F Supp 2d 549, [*5]551-552 [SD NY 2008]), in which the court pointed out that the aspect of Shah
precluding subject matter jurisdiction unless the impact was within
this jurisdiction was dictum, and that prior New York case law had
turned on whether it was alleged that a discriminatory act occurred in
New York.
decision that asserts that "the locus of the
decision to terminate her is of no moment," as overbroad and
unnecessary, lacking sufficient support in prior case law. We adopt and
employ the reasoning of the District Court in
Examination of the Southern District Court case relied upon in Shah,
as well as other federal cases employing a similar "impact" rule, fails
to disclose any convincing reason to support adoption of a rule that a
New York court does not have subject matter jurisdiction where a
discriminatory decision was made here, but the impact may be said to
have been felt elsewhere. Indeed, the reasoning of those federal cases
has been convincingly challenged elsewhere.
While the Shah decision provided no direct citation for
its assertions that "the locus of the decision to terminate [the
plaintiff] is of no moment" and that "[w]hat is important is where the
impact is felt," that aspect of its discussion ended with a citation to
Wahlstrom v Metro-North Commuter RR Co. (89 F Supp 2d 506 [SD NY 2000]).
…
Finally, we observe that it would be contrary to the purpose of both
statutes to leave it to the courts of other jurisdictions to
appropriately respond to acts of discrimination that occurred here.
Since for purposes of this motion pursuant to CPLR 3211 we must
accept as true the allegations that the decision to terminate
plaintiff's employment was made in New York City and that the
economic reasons given by the employer for the decision to terminate
him were a pretext for discrimination on the basis of his age (see Sokoloff v Harriman Estates Dev. Corp.,
96 NY2d 409, 414 [2001]), we cannot reject as a matter of law at this
juncture plaintiff's claim that a New York City and State employer made
a discriminatory decision here. If that assertion is ultimately
established, it will be enough to demonstrate that the New York court
has subject matter jurisdiction over his claims.
Accordingly, the appeal from the order of the Supreme Court,
New York County (Martin Shulman, J.), entered July 7, 2008, which
granted defendants' motion to dismiss the complaint, is deemed to be an
appeal from the judgment, same court and Justice, entered July 24, 2008
(CPLR 5501[c]), dismissing the complaint, and, the appeal so
considered, the judgment should be reversed, on the law, without costs,
and the complaint reinstated.
Appeal from order, Supreme Court, New York County (Martin Shulman,
J.), entered July 7, 2008, deemed to be an appeal from the judgment,
same court and Justice, entered July 24, 2008, and so considered, said
judgment reversed, on the law, without costs, and the complaint
reinstated
The bold is mine.
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