Ingraham v. Carroll
90 N.Y.2d 592, 687 N.E.2d 1293, 665 N.Y.S.2d 10 (1997)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Providing local medical services to out-of-state patients, without more, does not constitute deriving substantial revenue from interstate commerce under New York's long-arm statute, CPLR 302(a)(3)(ii), as such services are inherently local in nature.
Facts:
- Dr. Frederick Loy, a vascular surgeon, practiced exclusively in Bennington, Vermont, though he was also licensed in New York.
- Alison S. Ingraham, a New York resident, was a patient of Community Health Plan (CHP), a New York-based HMO.
- Ingraham's New York CHP physicians referred her to Dr. Loy in Vermont for consultations on three occasions between March 1994 and March 1995.
- Dr. Loy did not have a formal contract with CHP but frequently saw its patients on a fee-for-service basis.
- Following the first two consultations for nodules, Dr. Loy communicated with Ingraham's New York physicians, recommending observation rather than invasive procedures.
- On the third visit, Dr. Loy performed surgery on Ingraham in Vermont and discovered she had metastatic malignant melanoma.
- Ingraham subsequently died, allegedly due to the delayed diagnosis resulting from Dr. Loy's recommendations to her New York doctors.
Procedural Posture:
- Appellant, acting for the estate of Alison S. Ingraham, filed a wrongful death and medical malpractice suit against Dr. Loy in New York Supreme Court (trial court).
- Dr. Loy moved to dismiss the complaint for lack of personal jurisdiction.
- The Supreme Court granted Dr. Loy's motion to dismiss, ruling that the injury occurred in Vermont, not New York.
- Appellant appealed to the Appellate Division (intermediate appellate court), which affirmed the trial court's dismissal on the same grounds.
- The New York Court of Appeals (highest state court) granted Appellant leave to appeal.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a Vermont physician who provides medical services exclusively in Vermont to New York patients, referred by a New York HMO on an ad hoc, fee-for-service basis, derive 'substantial revenue from interstate commerce' sufficient to subject him to personal jurisdiction in New York under CPLR 302(a)(3)(ii) for an alleged tort committed in Vermont?
Opinions:
Majority - Levine, J.
No. A physician who renders medical services wholly within his own state cannot be said to be engaging in interstate commerce for jurisdictional purposes under CPLR 302(a)(3)(ii). The court analyzed the two-prong test of CPLR 302(a)(3)(ii), which requires that a defendant (1) reasonably expect their act to have consequences in the state and (2) derive substantial revenue from interstate commerce. While the court found the first prong was satisfied because Dr. Loy knew his recommendations would affect Ingraham's care in New York, it held the second prong was not met. The 'interstate commerce' requirement is a 'bigness requirement' intended to exclude defendants whose business operations are of a local character. Unlike a manufacturer who places goods into the stream of commerce, a physician provides an inherently personal and local service, and the patient's state of residence does not convert this local practice into an interstate commercial enterprise. Thus, all of Dr. Loy's revenue was derived from local services provided in Vermont, and New York courts lack personal jurisdiction.
Dissenting - Bellacosa, J.
Yes. The doctor's regularized referral relationship with a New York HMO constituted engagement in interstate commerce sufficient to establish personal jurisdiction under CPLR 302(a)(3)(ii). The dissent argued that modern healthcare, especially involving HMOs and specialist referrals, is a 'managed care commercial enterprise' that is not inherently local. Dr. Loy's practice involved a continuous stream of New York patients referred through a New York HMO, from which he derived financial benefits. This course of conduct and regular dealing, even without a formal contract, was sufficient to show he engaged in an interstate, cross-border medical services 'arrangement'. By encouraging and profiting from this arrangement, he voluntarily subjected himself to New York's jurisdiction, and it is unfair to force the New York plaintiff to sue in Vermont.
Analysis:
This decision significantly narrows the application of New York's long-arm statute to out-of-state medical providers, establishing a clear distinction between providing local services to non-residents and engaging in interstate commerce. It protects physicians in border communities from being haled into court in their patients' home states based solely on the patients having traveled for care. The ruling forces future litigants to demonstrate a more substantial and purposeful commercial connection to New York, such as a formal business contract or in-state solicitation, rather than just an informal referral practice, to establish jurisdiction over a non-resident physician.
