Norex V. Blavatnik - How the Court of Appeals "Borrowed" First and "Saved" Later

I. INTRODUCTION In a case of first impression, Norex Petroleum Limited v. Blavatnik, (1) the New York State Court of Appeals decided whether a nonresident plaintiff who filed a timely action in a New York federal court may refile claims arising from the same transaction in state court within six months of the federal action's non-merits termination, even though the suit would be untimely in the out-of-state jurisdiction where the claims accrued. (2) In a unanimous decision reversing the appellate division, which had previously upheld the trial court's dismissal of the action, the Court of Appeals held that such a suit is not time barred and instructed the trial court resolve whether or not six state law claims, pled for the very first time nearly nine years after the original action was commenced, ought proceed a final determination on the merits. (3) Since the opinion seeks resolve an open question of law in New York civil practice, at the outset of its opinion, the Court of Appeals provided a review of the twelve-year procedural history of this case, which is essential understand how the court reached its decision. The plaintiff initially commenced an action in federal court on February 26, 2002, alleging various federal causes of action under the Racketeer Influenced and Corrupt Organizations Act (RICO). (4) Defendants moved dismiss on numerous grounds including forum non conveniens. (5) On February 18, 2004, the federal district court dismissed the action finding that the relevant factors favored a Russian venue. (6) On December 21, 2004, the plaintiff amended its complaint assert claims for tortious interference and unjust enrichment under Russian law. (7) Defendants again moved dismiss for lack of subject matter jurisdiction. (8) On September 24, 2007, the court granted the motion dismiss. (9) Norex appealed the U.S. Court of Appeals for the Second Circuit, which affirmed the dismissal on September 28, 2010. (10) Norex next sought a hearing en banc before the Second Circuit, and on January 18, 2011, the court denied Norex's petition. (11) Identifying CPLR section 205(a) as a potential statute, Norex moved stay the mandate to avoid potentially triggering the running of relevant 'savings action statutes' so that it would have time submit a petition for certiorari in the U.S. Supreme Court. (12) On March 7, 2011, Norex commenced a new action in New York State Supreme Court asserting several claims under Russian law. (13) Finally, on June 23, 2011, nearly eight years into litigation, Norex amended its complaint add six New York state law claims that it had not previously asserted. (14) The New York trial court's dismissal of Norex's amended complaint is the subject of the appeal. (15) In order determine the timeliness of Norex's new action, the court set out address the interplay between two CPLR provisions, sections 202 and 205(a), which are New York State's borrowing and statutes, respectively. (16) While discussed in greater detail below, a brief introduction both the borrowing and statutes is worthwhile. When filing a new action under CPLR section 202, a foreign plaintiff must borrow the statute of limitations from the jurisdiction where the claim arose if such time period is shorter than New York's. (17) Additionally, CPLR section 205(a) provides that if such a lawsuit was timely in the foreign jurisdiction, it will also be timely in New York under the savings statute. (18) The nonresident plaintiff who borrows from the foreign jurisdiction is permitted refile the lawsuit in New York State court within six months after the action has been dismissed on nonsubstantive grounds, thus saving his cause of action. (19) Both of these statutes, standing alone, can greatly affect the outcome of a lawsuit. Individually, the potential impact of CPLR section 205(a) should never be underestimated, especially as Professor Siegel describes it as a skyscraper on New York's procedural skyline. …