77 F.4th 110
2d Cir.2023Background
- Eighteen U.S. citizens injured by 2006 Hezbollah rocket attacks sued Bank Saderat PLC (BSPLC) under the Antiterrorism Act (ATA) in D.D.C. in 2010, alleging BSPLC materially supported the attacks.
- BSPLC appeared and moved to dismiss, contesting personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2) (nationwide contacts), but the D.D.C. initially dismissed on merits grounds; the D.C. Circuit later vacated and remanded, directing the D.D.C. to address jurisdiction first.
- Plaintiffs conceded venue was improper in D.D.C., moved (unopposed by BSPLC) to sever and transfer ATA claims to the Eastern District of New York (E.D.N.Y.) pursuant to 28 U.S.C. § 1631; Judge Lamberth granted transfer because New York plausibly could exercise jurisdiction.
- Shortly after transfer, BSPLC’s counsel withdrew, BSPLC declined to substitute counsel and default was entered; Plaintiffs moved for default judgment in E.D.N.Y., which the district court denied and dismissed for lack of personal jurisdiction.
- The district court ruled BSPLC had not forfeited its jurisdictional defense upon default because, it concluded, BSPLC had prevailed on a jurisdictional challenge in D.D.C. — a factual finding the Second Circuit held was clearly erroneous.
- The Second Circuit vacated and remanded, instructing the district court to reconsider whether BSPLC forfeited its personal‑jurisdiction defense (including the relevance of pre-transfer conduct) and to address how § 1631 transfer principles affect that analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Forfeiture by default/withdrawal | Plaintiffs: BSPLC forfeited personal‑jurisdiction defense by willfully withdrawing and defaulting after long participation | BSPLC: preserved jurisdictional challenge; its pre‑transfer conduct does not amount to forfeiture | Vacated and remanded — district court relied on erroneous factual premise (that BSPLC "won" pre‑transfer); court must reassess forfeiture under correct facts and all circumstances |
| Personal jurisdiction in E.D.N.Y. | Plaintiffs: NY courts plausibly have jurisdiction (e.g., contacting U.S./NY via transfers) | BSPLC: contests jurisdiction over it in the U.S./NY | Not decided on appeal; remand for district court to reassess whether jurisdiction exists or was forfeited |
| Sua sponte raising jurisdiction | Plaintiffs: district court should not have denied default judgment without first ruling jurisdiction was lacking | BSPLC: N/A (relies on preserved challenge) | Court may assess jurisdiction sua sponte only if defense not forfeited; remand required because forfeiture unresolved due to factual error |
| Effect of § 1631 transfer on considering pre‑transfer conduct | Plaintiffs: prior proceedings carry over; pre‑transfer conduct showing appearance is relevant to forfeiture | BSPLC: transfer may reset appearance status; pre‑transfer conduct may be irrelevant | Unsettled; district court must determine whether transferred case should be treated like a new action or a continuation when assessing forfeiture, and then reassess forfeiture accordingly |
Key Cases Cited
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (established minimum‑contacts due‑process test for personal jurisdiction)
- Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir. 2013) (New York jurisdiction based on repeated use of correspondent accounts when transactions substantially connect to claims)
- Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207 (2d Cir. 2010) (district court may assure itself of personal jurisdiction before entering default against a non‑appearing defendant)
- City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (defendant forfeits jurisdictional defense by appearing, litigating, then willfully withdrawing and defaulting)
- Hamilton v. Atlas Turner, Inc., 197 F.3d 58 (2d Cir. 1999) (standards for reviewing district court's finding that defendant did not waive personal jurisdiction)
- Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (transferring for want of jurisdiction is an alternative to dismissal when in the interest of justice)
- Goldlawr, Inc. v. Heiman, 369 U.S. 463 (1962) (transfer statutes aim to avoid injustice of dismissals for venue errors)
- Kaplan v. Cent. Bank of Islamic Republic of Iran, 896 F.3d 501 (D.C. Cir. 2018) (remanding for district court to decide personal jurisdiction before merits)
- Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982) (non‑appearing defendant may later contest enforcement of default judgment in collateral proceedings)