Kaplan v. Central Bank of the Islamic Republic of Iran, 1:19-cv-03142

Background

In 2006 Hezbollah fired rockets/missiles in northern Israel; Plaintiffs (primarily U.S. citizens) allege injury from those attacks and sued Iranian entities including Bank Saderat PLC (BSPLC) under the Anti-Terrorism Act (ATA) and other statutes.
Plaintiffs allege Iranian funds moved from the Central Bank of Iran to BSI and then to BSPLC in London, which forwarded funds to Hezbollah accounts in Beirut that financed the attacks.
The action was filed in D.C.; the district court dismissed some claims, the D.C. Circuit vacated parts of that dismissal and directed consideration of personal jurisdiction before the ATA act-of-war issue.
On remand the D.C. court found it lacked jurisdiction over BSPLC and transferred the ATA claims against BSPLC to the Eastern District of New York (EDNY).
After transfer BSPLC withdrew counsel and did not appear in EDNY; the Clerk entered default and Plaintiffs moved for a default judgment awarding damages against BSPLC.
The EDNY judge declined to enter final default judgment because the complaint lacked allegations sufficient to establish personal jurisdiction over BSPLC (both general and specific/4(k)(2)), denied the motion, and dismissed the action without prejudice for lack of personal jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether EDNY has personal jurisdiction over BSPLC (general jurisdiction)	Plaintiffs rely on BSPLC's presence/activities to justify jurisdiction generally.	BSPLC is a U.K. corporation with no pleaded contacts in NY or U.S.; not "at home" in NY.	No general jurisdiction — BSPLC not shown to be at home in NY.
Whether EDNY has specific jurisdiction over BSPLC under N.Y. CPLR §302 or Fed. R. Civ. P. 4(k)(2)	Plaintiffs contend federal claims (ATA) permit jurisdiction and default waives defenses.	BSPLC lacks alleged contacts, U.S. effects, or forum-directed conduct; complaint pleads no U.S. ties.	No specific jurisdiction: §302 not satisfied and 4(k)(2) fails because minimum contacts/forum-directed effects are not pleaded.
Whether BSPLC forfeited/jurisdictionally waived its defenses by default (relying on Mickalis Pawn Shop and Lelchook)	Plaintiffs say BSPLC forfeited the jurisdictional defense by withdrawing counsel and defaulting after warnings.	BSPLC previously prevailed on jurisdiction in D.C. and did not appear in EDNY; different posture than Mickalis or Lelchook.	Forfeiture/waiver argument rejected: Mickalis and Lelchook are distinguishable; prior D.C. judgment and lack of forum contacts preclude deeming waiver.
Whether to enter final default judgment and award damages	Plaintiffs seek conversion of default into final judgment and damages against BSPLC.	Defendant’s lack of appearance does not cure constitutional jurisdictional requirement; court must ensure jurisdiction before entering judgment.	Denied — court refused to enter default judgment because it cannot constitutionally exercise personal jurisdiction; case dismissed without prejudice.

Key Cases Cited

International Shoe Co. v. Washington, 326 U.S. 310 (establishes minimum-contacts standard for personal jurisdiction)
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (distinguishes general jurisdiction and the "at home" standard)
Daimler AG v. Bauman, 571 U.S. 117 (limits general jurisdiction to place of incorporation or principal place of business)
Walden v. Fiore, 571 U.S. 277 (due-process requires defendant's own forum contacts; plaintiff cannot be the sole link)
Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (personal jurisdiction protects liberty interests)
City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir.) (forfeiture of jurisdictional defense where defendant appears and then willfully withdraws)
Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207 (2d Cir.) (court may assure itself of personal jurisdiction before default judgment when defendant has not appeared)
Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir.) (framework for specific jurisdiction and New York law analysis)
Porina v. Marward Shipping Co., 521 F.3d 122 (2d Cir.) (tests for Rule 4(k)(2) jurisdiction)
Kaplan v. Central Bank of the Islamic Republic of Iran, 896 F.3d 501 (D.C. Cir.) (vacated dismissal and directed jurisdictional analysis prior to act-of-war inquiry)
Lelchook v. Islamic Republic of Iran, 393 F. Supp. 3d 261 (E.D.N.Y.) (entered default judgment against BSPLC in distinct factual posture with pleaded U.S. contacts)