224 F. Supp. 3d 108
D. Mass.2016Background
- David Lelchook, a U.S. citizen, was killed by a Hezbollah rocket in Israel during the 2006 conflict; his relatives sued Iran, CBI, BSI, and BSPLC alleging those defendants funnelled money to Hezbollah, supporting ATA and FSIA claims plus state/Israeli tort claims.
- Plaintiffs originally sued in D.C.; district court there dismissed ATA and related claims against BSPLC (citing an "act of war" exception) but did not rule on personal jurisdiction; plaintiffs refiled in D. Mass.
- In D. Mass., plaintiffs amended to assert two bases for personal jurisdiction over BSPLC: (1) the rocket attack was allegedly directed at the United States; (2) BSPLC’s dollar-denominated transfers were processed through the U.S. (primarily New York) banking system.
- BSPLC moved to dismiss for lack of personal jurisdiction; plaintiffs alternatively sought jurisdictional discovery and urged transfer to the Eastern District of New York where related cases are pending.
- The court found plaintiffs’ "targeting the U.S." theory inadequate under Walden and its progeny, but concluded plaintiffs plausibly alleged that dollar transfers were routed through New York correspondent banking (supporting jurisdiction there).
- Because Rule 4(k)(2) was inapplicable (plaintiffs did not certify the negation requirement and New York likely has jurisdiction), the court denied BSPLC’s motion and transferred the case to the Eastern District of New York under 28 U.S.C. § 1631.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. courts have specific jurisdiction because Hezbollah’s rocket targeted the U.S. | Rocket killing a U.S. citizen abroad equates to directing the tort at the U.S., supporting jurisdiction | No plausible allegation that Hezbollah (or defendants) purposely targeted the U.S.; contacts with U.S. are attenuated | Rejected: insufficient under due process and Walden; no purposeful availment |
| Whether Rule 4(k)(2) provides federal personal jurisdiction based on dollar transfers processed through U.S. banks | Dollar-denominated transfers were cleared/settled in New York (CHIPS/FRBNY), making BSPLC’s conduct target the U.S.; thus federal jurisdiction is proper | Rule 4(k)(2) inapplicable because plaintiffs did not certify defendant is not subject to any state-court jurisdiction; New York likely can exercise jurisdiction | Court held Rule 4(k)(2) not proper because plaintiffs failed negation certification and New York plausibly has jurisdiction |
| Whether jurisdictional discovery should proceed in Massachusetts or New York | Discovery should be in E.D.N.Y. because transfers likely routed through New York and related cases are pending there | Implicitly opposed transfer/discovery location | Court transferred the case to E.D.N.Y. for resolution and (if needed) jurisdictional discovery |
| Whether congressional findings in JASTA alter the personal-jurisdiction constitutional analysis | JASTA findings suggest defendants who materially support terrorism reasonably expect suit in U.S., affecting jurisdictional inquiry | Constitutional due-process limits are unaffected by congressional findings; findings are non-operative for jurisdictional limits | Rejected: congressional findings do not change Fifth Amendment analysis or jurisdictional requirements |
Key Cases Cited
- Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42 (1st Cir.) (plaintiff bears burden on personal jurisdiction; prima facie standard on pre-evidentiary-hearing motions)
- United States v. Swiss Am. Bank, Ltd., 274 F.3d 610 (1st Cir.) (three elements for Rule 4(k)(2) and federal long-arm framework)
- United States v. Swiss Am. Bank, Ltd., 191 F.3d 30 (1st Cir.) (Rule 4(k)(2) functions as federal long-arm for national contacts)
- Adelson v. Hananel, 510 F.3d 43 (1st Cir.) (personal-jurisdiction three-step test: relatedness, purposeful availment, reasonableness)
- Walden v. Fiore, 134 S. Ct. 1115 (U.S.) (minimum-contacts analysis focuses on defendant’s contacts with the forum, not contacts with forum residents)
- Licci v. Lebanese Canadian Bank, 20 N.Y.3d 327 (N.Y.) (New York may assert jurisdiction over foreign banks that use New York correspondent accounts for dollar transactions)