Frummer v. Hilton Hotels International, Inc. - Case Summary

Legal Case Summary

Facts

Frummer, a New York resident, was a guest at Hilton Hotel in Portugal owned by a British subsidiary and sustained personal injuries when he fell out of a swiveling chair. Upon his return to New York, he commenced an action against Hilton Hotels International, Inc. (the 'parent').

The parent company was incorporated in Delaware and had its principal place of business in New York but did not own, operate, manage, or lease any hotel in Portugal. It did own and control a British subsidiary which operated the Hilton Hotel in Portugal. Furthermore, the parent company participated in the booking of reservations for its subsidiary; advertised and publicised in its behalf and rendered further services. The parent and the subsidiary had even used the same trade-name 'Hilton' and styled their premises in the same distinctive manner. Moreover, customers staying at one Hilton were given preferential treatment at other Hilton Hotels wherever they might be located in the world.

Issues

The main issue in the case was whether the parent company was 'doing business' in New York, in such a manner and to such an extent as to justify the State's jurisdiction in the lawsuit. The court was asked to determine if the activities of Hilton's subsidiary in Portugal were attributable to the parent company for jurisdictional purposes.

Analysis

In Frummer v. Hilton, the court determined that the activities of a subsidiary operating in a foreign country could be attributed to the parent company if those activities were integral to the operation of the parent company's business. This case has added implications to the legal understanding of 'doing business' for personal jurisdiction purposes. However, it also shows the reach of corporate law beyond geographical boundaries within certain constraints. The Frummer v. Hilton case has set an invaluable precedent and is regularly cited in cases related to jurisdictional issues.

Decision

The Court of Appeals of New York held in favour of Frummer. It was ruled that the parent company was 'doing business' in the state. The court reasoned that in deciding whether the subsidiary's business was mainly transacted or done in New York, the test was whether the subsidiary, although physically apart, was not a separate and distinct entity, but was, instead, an integral part of the parent's business.

References

• Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533, 281 N.Y.S.2d 41, 227 N.E.2d 851 (1967)

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Journalist Brief

In simple terms, a man named Frummer who lived in New York, suffered injuries while staying at a Hilton hotel in Portugal. He sued the parent company of Hilton when he returned to New York. Even though the hotel was operated by a British subsidiary of the Hilton, the New York court found the parent company responsible, concluding that the activities done by the subsidiary were actually an integral part of the parent company's business, hence they were essentially 'doing business' in New York.

FAQs

What did the Frummer v. Hilton case establish?

Answer: The case established criteria for 'doing business' for the purpose of personal jurisdiction over foreign companies.

Why did the court decide in favor of Frummer?

Answer: The court determined that the parent company was 'doing business' in the state, therefore they could be held responsible for the injury suffered by Frummer.

Has the Frummer v. Hilton case had an impact on other cases?

Answer: Yes, Frummer v. Hilton set precedent and is regularly cited in cases related to jurisdictional issues.