67 F.4th 69
2d Cir.2023Background
- Plaintiffs are U.S. citizens (and family/estate) injured or killed in 2006 Hezbollah rocket attacks in Israel and allege Lebanese Canadian Bank (LCB) provided financial support to Hezbollah before the attacks.
- In 2011 SGBL acquired LCB’s business under a Purchase Agreement that (as alleged) transferred “all of the Seller’s Assets and Liabilities” to SGBL; LCB continues to exist in litigation.
- In prior litigation the New York Court of Appeals and this Court held LCB amenable to personal jurisdiction in New York for claims tied to the 2006 attacks and that plaintiffs stated plausible ATA claims against LCB (Licci/Kaplan line of cases).
- Plaintiffs here sue SGBL under the ATA as LCB’s successor, alleging SGBL assumed successor liability and therefore inherited LCB’s New York jurisdictional status.
- The district court dismissed SGBL for lack of personal jurisdiction, concluding New York treats successor jurisdiction as available only on a merger; plaintiffs appealed.
- The Second Circuit concluded New York law is unsettled on whether an acquirer that expressly assumes all liabilities (but does not merge) inherits predecessor-specific jurisdiction, and certified two questions to the New York Court of Appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a non-merged acquirer that assumes all of a predecessor’s assets and liabilities inherits the predecessor’s status for specific personal jurisdiction in New York | Assumption of all liabilities (express in Purchase Agreement) makes SGBL successor in interest and therefore subject to the same NY jurisdiction as LCB | Asset acquisition—even with assumed liabilities—does not automatically confer predecessor’s jurisdictional contacts; merger or other basis (de facto merger, continuity, fraud) is required | Issue is unresolved under New York law; Second Circuit certified the question to the NY Court of Appeals |
| When will an acquiring entity be subject to specific personal jurisdiction in New York? | Successor liability exceptions (express assumption, mere continuation, de facto/statutory merger, fraud) should allow imputation of jurisdiction where successor assumes liabilities | Only certain bases (e.g., merger/de facto merger or other substantive contacts) permit imputing jurisdiction; broad automatic imputation is disfavored | Unresolved; certified to New York Court of Appeals for definitive guidance |
Key Cases Cited
- Licci v. Lebanese Canadian Bank, SAL, 20 N.Y.3d 327 (N.Y. 2012) (New York Court of Appeals: LCB’s correspondent-account activity satisfied CPLR §302 and supported jurisdictional nexus)
- Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir. 2013) (affirming that exercising personal jurisdiction over LCB in New York comported with due process for claims tied to the 2006 attacks)
- Kaplan v. Lebanese Canadian Bank, SAL, 999 F.3d 842 (2d Cir. 2021) (plausible ATA aiding-and-abetting claim against LCB)
- New York v. Nat’l Serv. Indus., Inc., 460 F.3d 201 (2d Cir. 2006) (enumerating the traditional successor-liability exceptions under New York law)
- LiButti v. United States, 178 F.3d 114 (2d Cir. 1999) (discussing Rule 25(c)/successor substitution and limits of inheriting jurisdictional status)
- U.S. Bank Nat’l Ass’n v. Bank of Am. N.A., 916 F.3d 143 (2d Cir. 2019) (distinguishing merger-based successor jurisdiction from asset acquisitions; discussed risk of forum shopping via mergers)
- Semenetz v. Sherling & Walden, Inc., 21 A.D.3d 1138 (3d Dep’t 2005), aff’d, 7 N.Y.3d 194 (2006) (Appellate Div. noted a successor may inherit predecessor’s jurisdictional status in certain circumstances but limited applicability)
- BRG Corp. v. Chevron U.S.A., Inc., 163 A.D.3d 1495 (4th Dep’t 2018) (Appellate Div. rejected inherited-jurisdiction claim and described the issue as novel and unsettled)
- Matter of Gronich & Co. v. Simon Prop. Grp., Inc., 180 A.D.3d 541 (1st Dep’t 2020) (distinguished merger—where contacts are imputed—from mere asset acquisitions; did not resolve liability-on-assumption question)
- Schenin v. Micro Copper Corp., 272 F. Supp. 523 (S.D.N.Y. 1967) (refused to impute predecessor’s activities for jurisdictional purposes absent statutory merger or fraud)