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NOREX V. BLAVATNIK—HOW THE COURT OF APPEALS
“BORROWED” FIRST AND “SAVED” LATER
Peter McGowan* & Isaac S. Greaney**
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 to resolve whether or not six state law
claims, pled for the very first time nearly nine years after the
original action was commenced, ought to proceed to a final
determination on the merits.3
Since the opinion seeks to resolve an open question of law in New
York civil practice, at the outset of its opinion, the Court of Appeals
* Peter McGowan is the Managing Attorney at Sidley Austin LLP in New York. Mr.
McGowan serves as a board member for the New York Managing Attorneys and Clerks
Association (MACA) where he is a regular contributor to MACA’s bi-monthly newsletter,
writing on subjects related to New York Civil Practice and Federal Rules of Civil Procedure.
In addition, he is a member of the New York State Bar Association’s Committee on New York
Civil Practice Law and Rules. Mr. McGowan graduated from Fordham University and
received a J.D. from Brooklyn Law School.
** Isaac Greaney is a complex commercial litigation partner with the firm of Sidley Austin
LLP. Mr. Greaney is a member of the American Bar Association’s Litigation Section, the New
York State Bar Association as a member of the Committee on Securities Litigation and
Arbitration, and the New York City Bar Association. He also is a Sustaining Member of the
Federal Bar Council and SIFMA’s Compliance & Legal Division. Mr. Greaney graduated
from the University of Chicago and received a J.D. from Fordham University School of Law.
1 Norex Petroleum Ltd. v. Blavatinik, 23 N.Y.3d 665, 16 N.E.3d 561, 992 N.Y.S.2d 503
(2014).
2 Id. at 668, 16 N.E.3d at 563, 992 N.Y.S.2d at 505 (emphasis added).
3 See id. at 671–72, 679–80, 16 N.E.3d at 565–66, 571–72, 992 N.Y.S.2d at 507–08, 513–14.
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provided a review of the twelve-year procedural history of this case,
which is essential to 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 to 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 to assert claims for tortious interference and unjust
enrichment under Russian law.7 Defendants again moved to
dismiss for lack of subject matter jurisdiction.8 On September 24,
2007, the court granted the motion to dismiss.9 Norex appealed to
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 savings statute, Norex moved to stay the mandate “to
avoid potentially triggering the running of relevant ‘savings action
statutes’” so that it would have time to 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 to 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 to determine the timeliness of Norex’s new action, the
court set out to address the interplay between two CPLR provisions,
sections 202 and 205(a), which are New York State’s borrowing and
Id. at 669, 16 N.E.3d at 564, 992 N.Y.S.2d at 506.
Id.
6 Id. (citing Norex Petroleum Ltd. v. Access Indus., 304 F. Supp. 2d 570, 584 (S.D.N.Y.
2004)).
7 Norex, 23 N.Y.3d at 669, 16 N.E.3d at 564, 992 N.Y.S.2d at 506.
8 Id.
9 Id.
10 Id. at 670, 16 N.E.3d at 564, 992 N.Y.S.2d at 506.
11 Id. at 671, 16 N.E.3d at 565, 992 N.Y.S.2d at 507.
12 Id. (internal quotation marks omitted).
13 See id.
14 Id.
15 See id. at 671–72, 16 N.E.3d at 565–66, 992 N.Y.S.2d at 507–08.
4
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saving statutes, respectively.16 While discussed in greater detail
below, a brief introduction to both the borrowing and savings
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 to 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.”20
Although only one sentence long, CPLR section 202 can also play an
Id. at 668, 16 N.E.3d at 563, 992 N.Y.S.2d at 505. CPLR section 202 provides that:
An action based upon a cause of action accruing without the state cannot be commenced
after the expiration of the time limited by the laws of either the state or the place
without the state where the cause of action accrued, except that where the cause of
action accrued in favor of a resident of the state the time limited by the laws of the state
shall apply.
N.Y. C.P.L.R. 202 (McKinney 2014). CPLR section 205(a) allows for an action to be refiled if
it was “terminated in any other manner than by a voluntary discontinuance, a failure to
obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to
prosecute the action, or a final judgment upon the merits . . . .” C.P.L.R. 205(a).
17 Norex, 23 N.Y.3d at 668, 16 N.E.3d at 563, 992 N.Y.S.2d at 505.
18 Id.
19 Id. In Federal Practice, 28 U.S.C. §1367(d) is also a “savings” statute and reads:
The period of limitations for any claim asserted under subsection (a), and for any other
claim in the same action that is voluntarily dismissed at the same time as or after the
dismissal of the claim under subsection (a), shall be tolled while the claim is pending and
for a period of 30 days after it is dismissed unless State law provides for a longer tolling
period.
28 U.S.C. § 1367(d) (2013). Despite the fact that the lower courts’ opinions regarding this
statute “evoked interest in legal academic circles,” the court in Norex determined that once
the plaintiff’s suit was not time bared under CPLR section 202, there was no need to
“consider whether Norex’s claims were timely filed in state court pursuant to 28 U.S.C.
1367(d)." Norex, 23 N.Y.3d at 679–80, 16 N.E.3d at 571–72, 992 N.Y.S.2d at 513–14.
20 DAVID D. SIEGEL, NEW YORK PRACTICE § 52, at 74 (5th ed. 2011). Professor Siegel refers
to CPLR section 205(a) as “a skyscraper on New York’s procedural skyline [because of ] . . .
the numerous cases that have refused to award [the six month extension].” Id. Professor
Siegel goes on to note that it is clear that CPLR section 205(a) will not save a lawsuit that has
either been voluntarily dismissed or if there has been a final adjudication on the merits. Id.
It becomes more difficult to determine when CPLR section 205(a) will save a lawsuit that has
been dismissed for lack of personal jurisdiction or if the case has been dismissed for failure to
prosecute. See id.
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important role in the final outcome of a lawsuit in New York by
determining the timeliness of an action.
While the scenario of a foreign plaintiff refiling a lawsuit seems to
be a simple affair with CPLR sections 202 and 205(a) providing the
procedural framework, the Norex case presented the Court of
Appeals with an opportunity to fully address how the borrowing and
savings statutes interact with each other in the context of the filing
of a new action. In particular, the court held that the statute of
limitations comparison required under CPLR section 202 occurs
when the plaintiff files its initial action and does not occur again
when the plaintiff refiles pursuant to CPLR section 205(a).21 In
reaching this conclusion, the court assumed that Norex had met all
of the requirements of CPLR section 205(a) and expressly instructed
the trial court to address the defendant’s arguments in that
regard.22
This article will review the statutory text and case law related to
CPLR section 202 and CPLR section 205(a) and analyze whether
the Court of Appeals’ decision in Norex truly resolved the “open
question of New York civil procedure involving the interplay of . . .
New York’s ‘borrowing’ statute, and . . . New York’s ‘saving’
statute.”23 This article will also address how the court’s decision
balances the need to prevent forum shopping by a foreign plaintiff
with the goal of resolving lawsuits on the merits. Finally, the
article will identify a number of issues under CPLR section 205(a)
that the Court of Appeals left unresolved, which themselves could
present additional open issues under New York procedural law.24
II. CPLR SECTION 202: CAUSE OF ACTION ACCRUING WITHOUT THE
STATE (BORROWING STATUTE)
While only one sentence in length, the text of CPLR section 202 is
surprisingly complicated. It reads:
An action based upon a cause of action accruing without the
state cannot be commenced after the expiration of the time
Norex, 23 N.Y.3d at 679, 16 N.E.3d at 571, 992 N.Y.S.2d at 513.
Id. at 668 n.3, 16 N.E.3d at 563 n.3, 992 N.Y.S.2d at 505 n.3.
23 Id. at 668, 16 N.E.3d at 563, 992 N.Y.S.2d at 505.
24 An understanding of the importance of footnote 3 in the court’s decision is critical, as the
court clearly articulates the limitations of its decision. Id. at 668 n.3, 16 N.E.3d at 563 n.3,
992 N.Y.S.2d at 505 n.3 (“Norex’s state court action, refiled pursuant to CPLR 205(a), is not
time-barred by CPLR 202; we do not address and express no opinion about whether Norex’s
lawsuit fulfills other requirements of section 205(a).”).
21
22
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limited by the laws of either the state or the place without
the state where the cause of action accrued, except that
where the cause of action accrued in favor of a resident of the
state the time limited by the laws of the state shall apply.25
Having read the statute, one is left to wonder when a nonresident
plaintiff will actually be able to benefit from CPLR section 202 and
“borrow” the statute of limitations from a foreign jurisdiction.26
This question is best answered by analyzing the purpose and
intent behind the statute. Quite simply, the main goal of CPLR
section 202 is to prevent forum shopping by a nonresident plaintiff
looking to commence an action in New York based on an out-of-state
claim.27 Under CPLR section 202, the New York State court must
look to the statute of limitations under the laws of the place where
the cause of action accrued and then “borrow” the time limitation of
the other jurisdiction only if it is shorter than New York’s.28
Contrary to the statute’s nomenclature, Professor Siegel’s
understanding of CPLR section 202 is helpful. He sees it in terms of
not necessarily borrowing anything but instead observes that “the
statute really dictates a comparison, with a ‘borrowing’ of the
foreign period only if it is the shorter of the two compared.”29
Whether one looks at the statute as a “comparison” or as a
“borrowing,” there is no doubt that CPLR section 202 is only
applicable in the following instance: when the action is commenced
by a foreign plaintiff and the cause of action accrued outside of New
York State.30 Assuming both of these criteria are present, the
statute of limitations periods are compared, with the shorter of the
two being applied.31 Still left unclear is how to determine when a
cause of action accrues “without the state.”32
N.Y. C.P.L.R. 202 (McKinney 2014).
Professor Siegel maintains that under CPLR section 202, “[i]f the claim has expired
under either the New York or foreign period . . . it’s barred.” SIEGEL, NEW YORK PRACTICE,
supra note 20, § 57, at 82.
27 Ins. Co. of N. Am. v. ABB Power Generation, 91 N.Y.2d 180, 186, 690 N.E.2d 1249, 1252,
668 N.Y.S.2d 143, 146 (1997) (“[T]he primary purpose of CPLR 202 is to prevent forum
shopping by a nonresident seeking to take advantage of a more favorable Statute of
Limitations in New York.” (citing Antone v. Gen. Motors Corp., Buick Motor Div., 64 N.Y.2d
20, 27–28, 473 N.E.2d 742, 745, 484 N.Y.S.2d 514, 517 (1984))).
28 SIEGEL, NEW YORK PRACTICE, supra note 20, § 57, at 82.
29 Id.
30 See id.
31 Id.
32 Professor Siegel has observed as much, noting that “[t]he question of where . . . [an]
action ‘accrued’ can be a sticky one, especially in this age of more sophisticated choice of law
principles.” Id.
25
26
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The Court of Appeals answered that question in Global Financial
Corp. v. Triarc Corp.33 by finding that when an injury is economic
the alleged cause of action will accrue “where the plaintiff resides
and sustains the economic impact of the loss.”34 Prior to Global
Financial, courts had used the “most significant contacts” test in
order to decide which state’s substantive law would control “where”
a cause of action accrued under CPLR section 202.35 This doctrine
was clearly articulated in 1963 by the New York State Court of
Appeals in Babcock v. Jackson.36 In Babcock, the court determined
that it would no longer strictly apply the traditional choice of law
rule, -- “that the substantive rights and liabilities arising out of a
tortious occurrence are determinable by the law of the place of the
tort.”37 Instead, the court found that
[w]here the issue involves standards of conduct, it is more
than likely that it is the law of the place of the tort which
will be controlling but the disposition of other issues must
turn, as does the issue of the standard of conduct itself, on
the law of the jurisdiction which has the strongest interest in
the resolution of the particular issue presented.38
The cases involving CPLR section 202 traditionally have focused
on where the alleged injury took place and, once that was
established, whether the action would have been timely in the
foreign jurisdiction so that the borrowing statute could be applied.39
The facts in Norex left no doubt that the situs of the alleged injuries
was Alberta, Canada, since the plaintiff was an Alberta resident
and the alleged economic injury had occurred in Canada.40 Because
33 Global Fin. Corp. v. Triarc Corp., 93 N.Y.2d 525, 715 N.E.2d 482, 693 N.Y.S.2d 479
(1999).
34 Id. at 529, 715 N.E.2d at 485, 693 N.Y.S.2d at 482 (citing Smith Barney, Harris Upham
& Co. v. Luckie, 85 N.Y.2d 193, 207, 647 N.E.2d 1308, 1316, 623 N.Y.S.2d 800, 808 (1995)).
35 See SIEGEL, NEW YORK PRACTICE, supra note 20, § 57, at 82–83.
36 Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963).
37 Id. at 477, 191 N.E.2d at 281, 240 N.Y.S.2d at 746.
38 Id. at 484, 191 N.E.2d at 285, 240 N.Y.S.2d at 752. In re Estate of McLaughlin provides
further insight into the situs of the alleged injury and how CPLR section 202 would be
applied. The cause of action in McLaughlin sounded in replevin and the Third Department
refused to borrow California’s statute of limitations and went on to apply the shorter New
York period. In re Estate of McLaughlin, 78 A.D.3d 1304, 1305–06, 910 N.Y.S.2d 252, 254
(App. Div. 3d Dep’t 2010). The court held that the place of injury in such a case would be the
location of the chattel in dispute, noting that the “alleged injury occurred when petitioner
refused to hand over the property—essentially effectuating a conversion of the property—
which undoubtedly occurred in New York.” Id. at 1306, 910 N.Y.S.2d at 254.
39 See SIEGEL, NEW YORK PRACTICE, supra note 20, § 57, at 82–84.
40 Norex Petroleum Ltd. v. Blavatnik, 23 N.Y.3d 665, 671, 16 N.E.3d 561, 565, 992
N.Y.S.2d 503, 507 (2014).
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of these factors, the plaintiff would be subject to any applicable
Canadian statute of limitations.41 The novel procedural question in
Norex that the court had to decide was whether or not the refiled
action was timely under Alberta law even though Alberta lacked
any tolling provisions akin to CPLR section 205(a).42 To resolve this
question, the Norex court chose to “borrow” under CPLR section 202
only once—at the time of the original filing in federal court—thus
concluding that the absence of any foreign tolling provision was of
no moment since the original action was timely in Alberta at the
time it was filed in New York federal court.43 Further, once
satisfied that the goal of CPLR section 202—the prevention of forum
shopping by a foreign plaintiff—was also met, the court allowed
Norex, as a foreign plaintiff, an opportunity to “save” its lawsuit for
a final adjudication on the merits under CPLR section 205(a).44
III. CPLR SECTION 205: TERMINATION OF AN ACTION (SAVINGS
STATUTE)
CPLR section 205(a) states, in part, that the plaintiff, in a prior
action that was dismissed, may commence a new lawsuit only if the
original action was “terminated in any other manner than by a
voluntary discontinuance, a failure to obtain personal jurisdiction
over the defendant, a dismissal of the complaint for neglect to
prosecute the action, or a final judgment upon the merits . . . .”45
Further, this “new action” must be based “upon the same
transaction or occurrence or series of transactions or occurrences” as
the previous action and must be commenced “within six months
after the termination [of the original action] provided that the new
action would have been timely commenced at the time of
commencement of the prior action and that service upon defendant
41 See N.Y. C.P.L.R. 202 (McKinney 2014); Norex, 23 N.Y.3d at 671, 16 N.E.3d at 565, 992
N.Y.S.2d at 507. The court has also recognized that under CPLR section 202, the out-of-state
plaintiffs are subject to the statute of limitations of the place where the injury occurred, but
that when borrowing the foreign statute, “[a]ll the extensions and tolls applied in the foreign
state must be imported with the foreign statutory period, so that the entire foreign statute of
limitations . . . applie[s], and not merely its period.” Smith Barney, Harris Upham & Co. v.
Luckie, 85 N.Y.2d 193, 207, 647 N.E.2d 1308, 1316, 623 N.Y.S.2d 800, 808 (1995) (alterations
in original) (citation omitted) (quoting Joseph M. McLaughlin, Practice Commentaries,
C202:3, in N.Y. C.P.L.R. 202 (McKinney 1990)) (internal quotation marks omitted).
42 See Norex, 23 N.Y.3d at 671, 16 N.E.3d at 565, 992 N.Y.S.2d at 507.
43 Id. at 680, 16 N.E.3d at 569, 992 N.Y.S.2d at 511.
44 Id. at 678–79, 16 N.E.3d at 570–71, 992 N.Y.S.2d at 512–13.
45 C.P.L.R. 205(a).
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is effected within such six-month period.”46 Unlike CPLR section
202, the text of CPLR section 205(a) is rather straightforward. A
plaintiff may avail himself of the six month toll except in four
enumerated instances: when the action is terminated by (1) “a
voluntary discontinuance,” (2) lack of personal jurisdiction over the
defendant, (3) dismissal for “neglect to prosecute,” or (4) “a final
judgment upon the merits.”47
The purpose behind CPLR section 205(a) is clearly articulated in
a seminal Court of Appeals case, Reliance Insurance Co. v.
Polyvision Corp.48 In Reliance the court determined whether a
corporation may refile an action under CPLR section 205(a) when
the timely-filed prior action was commenced by a “different, related
corporate entity” and was subsequently dismissed for naming the
wrong plaintiff.49 In holding that the different, related plaintiff
could not benefit from the savings statute, the court noted that the
text of CPLR section 205(a) traces “its roots to seventeenth century
England, [and] the remedial concept embodied in CPLR 205(a) has
existed in New York law since at least 1788.”50 In turning to the
text of the statute, the court noted “that the benefit provided by the
section is explicitly, and exclusively, bestowed on ‘the plaintiff’ who
prosecuted the initial action.”51
In Norex, the parties dispute under section 205(a) centered on
whether the Federal Court dismissal constituted a final
determination on the merits. The defendants in Norex clearly
thought that the initial federal action had been dismissed on the
merits and, as such, the plaintiff’s lawsuit could not be saved under
CPLR section 205(a), while the plaintiff obviously thought
Id.
Id.
48 Reliance Ins. Co. v. Polyvision Corp., 9 N.Y.3d 52, 876 N.E.2d 898, 845 N.Y.S.2d 212
(2007).
49 Id. at 56, 876 N.E.2d at 899, 845 N.Y.S.2d at 213.
50 Id. (citing Gaines v. City of N.Y., 215 N.Y. 533, 537–38, 109 N.E. 594, 595 (1915)).
51 Reliance Ins. Co., 9 N.Y.3d at 57, 876 N.E.2d at 900, 845 N.Y.S.2d at 214. The text of
CPLR section 205(a) limits who may actually commence a new action to the following: the
original plaintiff who was a named party to the dismissed action or that person’s executor or
administrator. C.P.L.R. 205(a). This limitation should be duly noted by commercial litigators
specifically in the context of related corporations with separate legal identities. In the context
of CPLR section 205(a), the Court of Appeals, by narrowly applying the statute, and out of
concern over potentially breathing new “life into otherwise stale claims,” has held that a
“different, related corporate entity” will not qualify as the “same plaintiff” and thus cannot
save a cause of action on behalf of its corporate brethren. Reliance Ins. Co., 9 N.Y.3d at 57–
58, 876 N.E.2d at 900–01, 845 N.Y.S.2d at 214–15.
46
47
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otherwise.52 Because of this, it is important to understand if and
when there has been a final determination on the merits in order to
decide whether the court may grant the plaintiff the six-month
extension to refile the action based on CPLR section 205(a).
In 2009, when faced with this question, the Court of Appeals
“provided a robust endorsement of CPLR 205(a)’s six-month recommencement privilege.”53 In Goldstein v. New York State Urban
Development Corp.,54 the court held that a plaintiff may refile an
action in state court after the federal court dismissed the federal
causes of action on the merits.55 In Goldstein, the federal court also
chose not to exercise supplemental jurisdiction over the state law
claims and subsequently dismissed them without prejudice.56 By
way of background, the plaintiffs in Goldstein brought an action in
federal court challenging New York State’s condemnation of their
property in Brooklyn under the theory that the condemnation
violated the Public Use Clause of the Fifth Amendment to the
United States Constitution.57 Subsequent to the dismissal in
federal court, the plaintiffs brought another proceeding in state
court under Eminent Domain Procedure Law (EDPL) section 207,
arguing that the standard for taking under the New York State
Constitution was more restrictive than that of the United States
Constitution.58 Prior to reaching the merits, the court had to decide
whether the action ought to be dismissed as untimely under EDPL
section 207.59 To reach its decision on whether the action was
timely, the court analyzed whether the thirty-day time limit to seek
review under EDPL section 207 is a statute of limitations or a
condition precedent.60
In deciding that it was a statute of
52 Norex Petroleum Ltd. v. Blavatnik, 23 N.Y.3d 665, 668 n.3, 16 N.E.3d 561, 563 n.3, 992
N.Y.S.2d 503, 505 n.3 (2014) (“We appreciate that defendants contend that the termination of
Norex’s federal action constituted ‘a final judgment upon the merits’ within the meaning of
CPLR 205(a).”).
53 Vincent C. Alexander, Practice Commentaries, C205:6, in N.Y. C.P.L.R. 205 (McKinney
2010).
54 Goldstein v. N.Y. State Urban Dev. Corp., 13 N.Y.3d 511, 921 N.E.2d 164, 893 N.Y.S.2d
472 (2009).
55 Id. at 520, 921 N.E.2d at 167–68, 893 N.Y.S.2d at 475–76.
56 Id. at 518–19, 921 N.E.2d at 167, 893 N.Y.S.2d at 475.
57 Id. at 518, 921 N.E.2d at 166–67, 893 N.Y.S.2d at 474–75.
58 See id. at 519, 921 N.E.2d at 167, 893 N.Y.S.2d at 475.
59 Id. at 519–20, 921 N.E.2d at 167, 893 N.Y.S.2d at 475. EDPL section 207 imposes a
thirty-day time limit when seeking judicial review of the state’s condemnation. N.Y. EM.
DOM. PROC. LAW § 207 (McKinney 2014).
60 Goldstein, 13 N.Y.3d at 521–22, 921 N.E.2d at 169, 893 N.Y.S.2d at 477.
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limitations, the appellate division applied the CPLR 205(a) toll.61
Because the proceeding was “based upon the same transaction or
occurrence as the federal action, and was commenced within six
months after the date upon which the determination of the United
States District Court in the federal action became final, [it was]
timely.”62
As discussed in more detail below, the Norex court ultimately
chose not to rule as to whether or not there was a final
determination on the merits of the prior federal action, instead
leaving it for the trial court to decide how CPLR section 205(a)
should be applied in that case.63
IV. ANALYSIS OF NOREX DECISION
As noted above, the court had to decide the novel question of
whether or not a plaintiff may refile an action in state court alleging
new claims arising from the same transaction or occurrence even if
such claims would be untimely if filed in the jurisdiction where the
causes of action accrued. In applying CPLR section 202 when the
original action was filed, the Norex court ultimately decided that
such a suit would be timely but on much narrower grounds than
either the plaintiff or defendant argued.64 The plaintiff argued that
under both CPLR section 202 and CPLR section 205(a) such a case
is timely because its original lawsuit was timely in federal court in
2002.65 The defendant on the other hand argued that such a
lawsuit is untimely pursuant to CPLR section 202 and CPLR
section 205(a) because, under Alberta law, the refiled action in 2011
was untimely since Alberta has no savings statute.66 The court, in
reaching its decision, builds upon case law already established in a
trio of decisions, which apply the borrowing and savings statutes.67
61 Goldstein v. N.Y. State Urban Dev. Corp., 64 A.D.3d 168, 177, 879 N.Y.S.2d 524, 531
(App. Div. 2d Dep’t), aff’d, 13 N.Y.3d 511, 921 N.E.2d 164, 893 N.Y.S.2d 472 (2009).
62 Id.
63 Norex Petroleum Ltd. v. Blavatnik, 23 N.Y.3d 665, 668 n.3, 16 N.E.3d 561, 563 n.3, 992
N.Y.S.2d 503, 505 n.3 (2014).
64 See id. at 672–73, 679, 16 N.E.3d 561, 566, 571, 992 N.Y.S.2d 503, 508, 513.
65 Id. at 672–73, 16 N.E.3d at 566, 992 N.Y.S.2d at 508.
66 Id.
67 See id. at 672–75, 16 N.E.3d at 566–71, 992 N.Y.S.2d at 508–13 (citing Global Financial
Corp. v. Triarc Corp., 93 N.Y.2d 525, 715 N.E.2d 482, 693 N.Y.S.2d 479 (1999); Smith Barney,
Harris Upham & Co. v. Luckie, 85 N.Y.2d 193, 647 N.E.2d 1308, 623 N.Y.S.2d 800 (1995);
Besser v. E.R. Squibb & Sons, Inc., 146 A.D.2d 107, 539 N.Y.S.2d 734 (App. Div. 1st Dep’t
1989), aff’d, 75 N.Y.2d 847, 552 N.E.2d 171, 552 N.Y.S.2d 923 (1990)).
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These decisions, along with an analysis on forum shopping, form the
basis of the court’s opinion.
A. Global Financial, Smith Barney and Besser
In Global Financial, the court “decided where a nonresident’s
contract claims accrue for purposes of CPLR 202, not whether a new
action commenced pursuant to CPLR 205(a) may be time-barred by
CPLR 202 even though the prior action from which the new action
flows was timely.”68 Both the plaintiff and defendants in Norex
cited to Global Financial in support of their arguments.69 The
plaintiff argued that:
Global Financial plainly stands for the proposition that
CPLR 205(a) is available to non-resident plaintiffs, like
Global Financial and Norex, whose claims accrue outside
New York, even if the state laws ‘borrowed’ under CPLR 202
for purposes of determining the limitations period (Florida in
the case of Global Financial, Alberta in this case) do not
have a savings statute at all.70
The defendants argued that:
[T]he parties and the Court focused on the original filing
68 Norex, 23 N.Y.3d at 674, 16 N.E.3d at 567, 992 N.Y.S.2d at 509 (emphasis added). Since
the analysis under CPLR sections 202 and 205 are fact specific, the court spent a significant
amount of time addressing the facts of Global Financial. Id. at 673–74, 16 N.E.3d at 566–67,
992 N.Y.S.2d at 508–09. The foreign plaintiff in Global Financial initially brought an action
in federal court claiming the defendant owed it commissions and fees. Id. at 673, 16 N.E.3d
at 567, 992 N.Y.S.2d at 509. The complaint was filed nearly six years after the defendant had
refused a demand for payment. Id. Because both parties were from Delaware, the federal
court dismissed the action citing lack of subject matter jurisdiction. Id. Similar to Norex,
Global Financial next commenced an action in New York State court within the six-month
savings period. Id. The defendant argued that the state court action was time barred since it
was not brought within the time afforded by either Delaware, where the plaintiff was
incorporated, or Pennsylvania, where it had its principal place of business. Id. The plaintiff
argued that the claims accrued in New York and, as such, were timely under the six-year
statute of limitations for breach of contract as provided by New York law. Id. Because both
the Delaware and Pennsylvania periods were shorter than New York’s six years, the court
reasoned that “the claims were time-barred ‘whether one look[ed] to . . . Delaware or
Pennsylvania.’” Id. at 673–74, 16 N.E.3d at 567, 992 N.Y.S.2d at 509 (alteration in original)
(quoting Global Financial, 93 N.Y.2d at 530, 715 N.E.2d at 485, 693 N.Y.S.2d at 482).
“Consequently, the plaintiff’s federal lawsuit—the ‘prior’ action within the meaning of CPLR
205(a)—was untimely, necessarily rendering the ‘new’ action in state court untimely as well.”
Norex, 23 N.Y.3d at 674, 16 N.E.3d at 567, 992 N.Y.S.2d at 509.
69 Norex, 23 N.Y.3d at 674–75, 16 N.E.3d at 568, 992 N.Y.S.2d at 510.
70 Id. at 674, 16 N.E.3d at 568, 992 N.Y.S.2d at 510 (quoting Reply Brief for PlaintiffAppellant at 10, Norex Petroleum Ltd., 23 N.Y.3d 665, 16 N.E.3d 561, 992 N.Y.S.2d 503 (No.
2013-00263)) (internal quotation marks omitted).
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date in Global Financial merely because the plaintiff’s claim
was going to be ‘saved’ on the refiling date, if originally
timely filed, no matter which state’s law applied. As
summed up by defendants, ‘borrowing all of Delaware,
Pennsylvania, or Florida law—i.e., limitations and tolling
provisions—would have been outcome-neutral under CPLR §
202.’71
Critically, the court rejected both arguments by noting that, in its
Global Financial analysis, it never “took into account the savings
statutes (or lack thereof) in any of the relevant foreign states.”72
The court also pointed out that both parties overestimated the
importance of the reference to CPLR section 205 in a case where it
was already agreed upon “that the state court action was not timebarred by section 202 so long as the prior federal court action had
been timely filed.”73
In Smith Barney, the court had to decide two appeals that
presented the same issue—whether the timeliness of arbitration
claims pursuant to an agreement governed by the Federal
Arbitration Act was a question reserved to the arbitrators or the
courts—because each arbitration agreement contained a New York
choice of law provision and, under New York law, statute of
limitations questions are properly resolved by the courts.74 The
Norex court was unpersuaded by the defendants’ reliance on Smith
Barney for the proposition that CPLR section 202 required “Norex’s
state court action to be timely under Alberta law when filed in
March 2011, either because Alberta’s statute of limitations had not
yet expired or Norex’s claims were saved by an Alberta tolling
statute.”75 Following its reasoning in Smith Barney—that when
applying CPLR section 202 it needed to borrow not only the foreign
statute of limitations but any extensions and tolls that may be
applied76—the Norex court fully embraced this position because
the legislature enacted section 202 primarily to prevent
forum shopping; i.e., to make sure that nonresidents do not
71 Norex, 23 N.Y.3d at 675, 16 N.E.3d at 568, 992 N.Y.S.2d at 510 (quoting Joint Brief for
Defendants-Respondents at 25, Norex Petroleum Ltd., 23 N.Y.3d 665, 16 N.E.3d 561, 992
N.Y.S.2d 503 (No. APL-2013-00263)).
72 Norex, 23 N.Y.3d at 675, 16 N.E.3d at 568, 992 N.Y.S.2d at 510.
73 Id.
74 Smith Barney, Harris Upham & Co. v. Luckie, 85 N.Y.2d 193, 197, 647 N.E.2d 1308,
1310, 623 N.Y.S.2d 800, 802 (1995).
75 Norex, 23 N.Y.3d at 677, 16 N.E.3d at 569, 992 N.Y.S.2d at 511.
76 Smith Barney, 85 N.Y.2d at 207, 647 N.E.2d at 1316, 623 N.Y.S.2d at 808.
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select a New York forum and burden New York’s state and
federal courts when, and perhaps precisely because, their
lawsuits are time-barred by the applicable laws of the
foreign states where the causes of action accrued.77
Finally, in Besser, the First Department had to resolve whether or
not CPLR section 202 trumped CPLR section 21478 in an action
brought by a non-New York resident plaintiff.79 The court found
that CPLR section 202 was applicable and the claims were time
barred since the legislative intent when enacting CPLR section
214(c)(2) was to “provide to New York residents only—not the entire
world—a one-year window period in which to sue for claims
otherwise barred by law.”80 The Norex defendants tried the same
approach as the plaintiff in Besser, arguing that CPLR section 202
should take precedence over CPLR section 205(a) as a savings
statute, resulting in the dismissal of the plaintiff’s claim as
untimely.81 Again the court found such an argument unavailing
and noted that both CPLR section 214(c)(2) and CPLR section
205(a) were not at all similar other than being remedial in nature.82
The court also pointed out that there is “no evident legislative
intent to limit the savings statute’s beneficial scope to resident
plaintiffs.”83 As evidenced by its analysis of the relevant case law,
the Norex court had determined that when approaching the
intersection of CPLR section 202 and CPLR section 205(a), once the
goal of CPLR section 202 was met at the time of the initial filing, it
would have no more role to play and the only issue left to resolve
was whether CPLR section 205(a) could save the plaintiff’s
lawsuit.84
77 Norex, 23 N.Y.3d at 676, 16 N.E.3d at 569, 992 N.Y.S.2d at 511 (citing Ins. Co. of N. Am.
v. ABB Power Generation, 91 N.Y.2d 180, 186–87, 690 N.E.2d 1249, 1252, 668 N.Y.S.2d 143,
146 (1997)).
78 CPLR section 214(c)(2) is a provision which revived certain causes of action that would
be otherwise time barred. Norex, 23 N.Y.3d at 677, 16 N.E.3d at 570, 992 N.Y.S.2d at 512.
Under this statute, a plaintiff was given a “one time, one year” window in which they were
able to commence an action even if the statute of limitations had expired after the discovery
of injuries resulting from an exposure to diethylstilbestrol (DES). Id.
79 Besser v. E. R. Squibb & Sons, Inc., 146 A.D.2d 107, 109–111, 539 N.Y.S.2d 734, 734–35
(App. Div. 1st Dep’t 1989), aff’d, 75 N.Y.2d 847, 552 N.E.2d 171, 552 N.Y.S.2d 923 (1990).
80 Id. at 110, 539 N.Y.S.2d at 735.
81 Norex, 23 N.Y.3d at 677–78, 16 N.E.3d at 570, 992 N.Y.S.2d at 512.
82 Id. at 678, 16 N.E.3d at 570, 992 N.Y.S.2d at 512.
83 Id.
84 Id. at 679, 16 N.E.2d at 571, 992 N.Y.S.2d at 513.
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B. Forum Shopping
As noted above, the crux of the Norex decision starts once the
court addresses the significance of whether or not Norex had
engaged in forum shopping within the context of CPLR section 202.
Because of this, it is critical to once again note that the objective of
CPLR section 202 is to prevent forum shopping by a nonresident
plaintiff suing on an injury that occurs outside the state.85 CPLR
section 202 essentially functions as a gatekeeper statute to ensure
that a foreign plaintiff cannot take advantage of the more favorable
statute of limitations in New York State.86 This analysis is fact
based and requires the court to determine whether the nonresident
plaintiff has a cause of action that accrued outside the state.87 Once
it determined that CPLR section 202 should apply based on its
factual analysis, the Norex court still had to decide at what stage of
the litigation to apply CPLR section 202.
The Norex court specifically reiterated the policy behind CPLR
section 202, stating that it prohibited a “nonresident plaintiff from
forum shopping by suing in New York courts to take advantage of a
longer statute of limitations . . . .”88 Ultimately, despite its complex
legal and procedural history, this case would turn on whether or not
the defendants could show some element of forum shopping by the
nonresident plaintiff. After analyzing the facts, the court was
satisfied that the policy of CPLR section 202 (the prevention of
forum shopping) was “fully served” because Norex filed its
complaint in New York federal court “within weeks” of the events
which led to the claims alleged in the federal lawsuit, and as such,
See supra note 27 and accompanying text.
See Portfolio Recovery Assocs. v. King, 14 N.Y.3d 410, 417–18, 927 N.E.2d 1059, 1062,
901 N.Y.S.2d 575, 578 (2010) (concluding that CPLR section 202 required the court to apply
Delaware’s three-year statute of limitations and tolling provisions). The contract at issue in
Portfolio Recovery Associates contained a standard choice of law clause stating that it would
be governed by the laws of Delaware. Id. at 415, 927 N.E.2d at 1060, 901 N.Y.S.2d at 576.
Because choice of law provisions generally apply only to substantive issues, not statute of
limitations, the court noted that “[t]he Appellate Division properly concluded that the
Delaware choice of law clause did not require the application of the Delaware three-year
statute of limitations to bar Portfolio’s claims.” Id. at 415–16, 927 N.E.2d at 1061, 901
N.Y.S.2d at 577. However, the court reasoned that the analysis should have continued, and
once the facts showed that the economic injury occurred in Delaware and the plaintiff was not
a New York resident, the court found that the appellate division should have applied CPLR
section 202 to determine whether or not Portfolio’s claims were timely. Id. at 416, 927 N.E.2d
at 1061, 901 N.Y.S.2d at 577.
87 Id.
88 Norex, 23 N.Y.3d at 678, 16 N.E.3d at 571, 992 N.Y.S.2d at 513.
85
86
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it was timely under both Alberta and New York statutes of
limitations.89 Critically, the court ruled that once Norex “timely
commenced its federal court action in New York, the borrowing
statute’s purpose to prevent forum shopping was fulfilled, and
CPLR 202 had no more role to play.”90 The court clarified that
CPLR section 202 would be applied only once—at the outset of the
original lawsuit.91
With this subtle distinction, the court
affirmatively answered the question presented:
[W]hether 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.92
What is also critical to this forum shopping analysis is the finding
that, because Norex’s original federal action was timely, its refiled
state court action must also be timely, and “the absence of a tolling
or savings provision in Alberta law had no practical effect with
regard” to the original federal action.93 Further, once the court
found that Norex’s state court action was not time barred under
CPLR section 202, it never had to consider “whether Norex’s claims
were timely filed in state court pursuant to 28 U.S.C. 1367(d).”94 In
so holding, the court overruled the appellate division and made
clear that CPLR section 202 will be applied only once, leaving any
issues as to whether CPLR section 205(a) will save the action even
though the claims alleged in the refiled state court action had not
Id. at 678–79, 16 N.E.3d at 571, 992 N.Y.S.2d at 513.
Id. at 679, 16 N.E.3d at 571, 992 N.Y.S.2d at 513.
91 See id.
92 Id. at 668, 16 N.E.3d at 563, 992 N.Y.S.2d at 505 (emphasis added).
93 Id. at 677, 16 N.E.3d at 570, 992 N.Y.S.2d at 512.
94 Id. at 680, 16 N.E.3d at 571–72, 992 N.Y.S.2d at 513–14. For a more detailed discussion
of 28 U.S.C. § 1367, see supra note 19. This statute allows for federal courts to assert
supplemental jurisdiction over all other claims related to the federal action. 28 U.S.C. § 1367
(2013). In the event those claims are dismissed, § 1367 tolls the statute of limitations for
thirty days and permits the action to be refiled in state court. See § 1367(d). It should be
noted however, that the claims at issue in the refiled action were never asserted in the federal
court action. See Norex, 23 N.Y.3d at 671, 16 N.E.3d at 565, 992 N.Y.S.2d at 507. In a
footnote, the Norex court determined that “[f]or purposes of discussion in this opinion, we
simply assume that, within the meaning of section 205(a), Norex’s federal action was not
terminated on the merits, and Norex’s state court action alleges claims ‘upon the same
transaction or occurrence’ as its federal predecessor.” Id. at 668 n.3, 16 N.E.3d at 563 n.3,
992 N.Y.S.2d at 505 n.3.
89
90
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been pled in the original action.95
V. CONCLUSION
In Norex, the Court of Appeals did resolve “an open question of
New York civil procedure,” as promised at the outset of the court’s
opinion.96 After Norex, the limitations period comparison dictated
by CPLR section 202 takes place only upon the initial filing of a
complaint, and does not take place a second time when a terminated
action is refiled pursuant to CPLR section 205(a). However, in
resolving this narrow question, the court did not address numerous
remaining questions that the parties briefed and argued and that
the trial court will need to address (in some instances for the second
time).
Foremost, the court “simply assume[d] that, within the meaning
of section 205(a), Norex’s federal action was not terminated on the
merits, and Norex’s state court action alleges claims ‘upon the same
transaction or occurrence’ as its federal predecessor.”97 The court
instead directed the trial court to resolve whether the federal court’s
dismissal of Norex’s RICO claims (for lack of subject matter
jurisdiction) and Russian law claims (for lack of supplemental
jurisdiction) constituted “a final judgment on the merits” under
CPLR section 205(a).98 Similarly, the court did not resolve whether
CPLR section 205(a) permits a plaintiff to raise New York state law
claims, which it had not previously raised in the federal action,
simply because those claims arise from “the same transaction or
occurrence” as the claims that plaintiff did assert in the federal
action. Each of these questions regarding the application of CPLR
section 205(a) also may present “open” questions under New York
law in the circumstances of this case. Indeed, the parties had
briefed these questions extensively on appeal,99 and the appellate
division had resolved each of these questions in favor of defendants
95 The appellate division had affirmed the trial court’s ruling, holding that the federal
complaint was dismissed on the merits, “which bars plaintiff from bringing the state claims
that it alleges ‘are based upon the same transaction or occurrence or series of transactions or
occurrences it pled in its federal action.’” Norex Petroleum Ltd. v. Blavatnik, 105 A.D.3d 659,
660, 963 N.Y.S.2d 644, 645 (App. Div. 1st Dep’t 2013), rev’d, 23 N.Y.3d 665, 16 N.E.3d 561,
992 N.Y.S.2d 503.
96 Norex, 23 N.Y.3d at 668, 16 N.E.3d at 563, 992 N.Y.S.2d at 505.
97 Id. at 668 n.3, 16 N.E.3d at 563 n.3, 992 N.Y.S.2d at 505 n.3.
98 Id.
99 Reply Brief for Plaintiff-Appellant, supra note 70, at 18–20, 28–31; Joint Brief for
Defendants-Respondents, supra note 71, at 35–36.
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(albeit arguably in dicta).100
As a result, while Norex’s New York state law claims survive,
their lifespan may be short unless Norex can change the lower
courts’ opinion that Norex did not meet the requirements of CPLR
section 205(a). Either way, “[t]his dramatic and long-running
contest over control of a lucrative oil field in Western Siberia” may
present the Court of Appeals with another “open question of New
York civil procedure” under CPLR section 205(a), rather than CPLR
section 202.101
100
101
Norex, 23 N.Y.3d at 671–73, 16 N.E.3d at 565–66, 992 N.Y.S.2d at 507–08.
Id. at 668, 16 N.E.3d at 563, 992 N.Y.S.2d at 505.