442 F.Supp.3d 809
S.D.N.Y.2020Background
- Plaintiffs are Sudanese victims of government- and militia-perpetrated atrocities (1977–2009) who allege BNP Paribas S.A. (BNPP), primarily its Geneva branch, enabled the Sudanese regime to evade U.S. sanctions and thereby facilitated the abuses.
- Alleged misconduct by BNPP Geneva: served as Sudan's correspondent bank, used regional/satellite banks to conceal dollar transactions, issued letters of credit that financed trade (including arms), omitted sanctioned parties’ names in messages, and routed clearing through unaffiliated U.S. banks.
- Plaintiffs sued in federal court asserting twenty state-law tort claims (negligence, IIED, aiding-and-abetting, conspiracy, etc.).
- The district court previously dismissed (act-of-state, timeliness, failure to state a claim); the Second Circuit reversed as to act-of-state and timeliness and remanded.
- On remand the district court applied New York choice-of-law rules and concluded Swiss law governs because the allegedly tortious conduct occurred in Switzerland; but the court found the parties’ Swiss-law materials insufficient and ordered further meet-and-confer, potential discovery, supplemental briefing, and a hearing to determine whether the complaint states a claim under Swiss law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which jurisdiction's substantive law governs the state-law tort claims? | Plaintiffs argued New York (pointing to NY/federal prosecutions and NY clearing activity). | BNPP suggested alternative fora; emphasized connections to the U.S. financial system and international-law dimensions. | Court: Swiss law governs because the bulk of the alleged tortious conduct was conceived and executed in Switzerland. |
| Does New York have a sufficient interest to displace Swiss law? | NY has interest because prosecutions occurred in NY and dollar-clearing passed through NY. | BNPP: NY interest is incidental; substantive misconduct was in Switzerland. | Held: NY's interest is limited; incidental clearing is insufficient to displace Swiss law. |
| Do federal interests (international law / jus cogens connection) require federal law? | Plaintiffs:international-law aspects do not convert choice-of-law to federal law analysis. | BNPP: plaintiffs’ claims implicate jus cogens violations and thus unique federal interests. | Held: Federal interest in international law is general and does not outweigh Switzerland’s strong local interest; federal law does not displace Swiss law here. |
| Should the complaint survive under Swiss law? | Plaintiffs’ Swiss-law expert says most claims survive under Swiss tort principles. | BNPP’s Swiss expert contends Swiss law would dismiss the claims (statutory/causation barriers). | Held: Court cannot decide on current record; ordered further discovery/briefing and a hearing to resolve Swiss-law issues. |
Key Cases Cited
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (federal courts apply forum state's choice-of-law rules)
- Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66 (N.Y. 1993) (distinction between conduct-regulating and loss-allocating rules in choice-of-law)
- Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 672 F.3d 155 (2d Cir. 2012) (interest-analysis principle; place of tort usually governs conduct-regulating rules)
- Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 739 F.3d 45 (2d Cir. 2014) (place of wrongful conduct protects reasonable expectations and admonitory effect)
- Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (act-of-state doctrine description)
- Kashef v. BNP Paribas S.A., 925 F.3d 53 (2d Cir. 2019) (reversing district court on act-of-state and timeliness; recognized jus cogens nexus)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard; reasonable inference requirement)
- Roth v. Jennings, 489 F.3d 499 (2d Cir. 2007) (documents attached to or incorporated in complaint may be considered)