Licci Ex Rel. Licci v. Lebanese Canadian Bank, SAL
2012 U.S. App. LEXIS 4556
| 2d Cir. | 2012Background
- Israeli rocket attacks in July–August 2006 injured plaintiffs or their relatives; plaintiffs are American, Canadian, and Israeli residents.
- Plaintiffs allege Lebanese Canadian Bank, SAL (LCB) assisted Hizballah by handling Shahid Foundation transfers via LCB accounts.
- Shahid had accounts with LCB; transfers totaled several million dollars routed through LCB’s New York correspondent account with AmEx.
- Plaintiffs allege AmEx facilitated these transfers, giving rise to a negligence claim under New York law.
- District court dismissed AmEx negligence claim, applying New York law after an alleged lack of actual conflict with Israeli law.
- Second, the district court dismissed LCB claims for lack of personal jurisdiction under NY CPLR § 302(a)(1); the appeals address only AmEx here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Israeli and New York law present an actual conflict | Israeli law may govern; there is a conflict with New York law requiring analysis. | No real conflict; New York law applies if relevant. | New York conflict rules apply; NY law governs the negligence claim. |
| Whether a foreign bank's maintenance and use of a New York correspondent account constitutes a 'transaction of business' in New York under § 302(a)(1) | Maintenance and active use to execute multiple wire transfers constitutes ‘transacting business’ in NY. | Maintenance or use of a NY correspondent account alone is insufficient to satisfy § 302(a)(1). | The question is certified; the panel cannot decide and asks NY Court of Appeals to answer whether such conduct constitutes a transaction of business. |
| Whether plaintiffs' claims 'arise from' LCB's NY transactions under § 302(a)(1) | There is an articulable nexus between NY banking activity and the claims. | The nexus is too attenuated; injuries occurred from Hizballah rockets, not NY transfers. | Certification sought to determine nexus; court cannot resolve without NY Court of Appeals guidance. |
| Whether the proceedings should certify questions to the New York Court of Appeals | N.Y. Court of Appeals should resolve unsettled issues on long-arm jurisdiction. | Certification unnecessary if resolvable; but issues are unsettled. | The court certifies two questions to the New York Court of Appeals. |
| Effect of Kiobel on ATS claims and court's jurisdictional analysis | ATS claims may be viable; jurisdictional analysis governs whether to reach merits. | Kiobel undermines ATS jurisdiction; defer merits unless jurisdiction resolved. | Kiobel issue noted; resolution deferred pending interlocutory developments. |
Key Cases Cited
- Amigo Foods Corp. v. Marine Midland Bank-N.Y., 39 N.Y.2d 391 (N.Y. 1976) (correspondent-bank relationship alone not sufficient for long-arm jurisdiction)
- Ehrlich-Bober & Co. v. Univ. of Houston, 49 N.Y.2d 574 (N.Y. 1980) (correspondent-bank use can support jurisdiction when centered in NY)
- Banco Ambrosiano v. Artoc Bank & Trust, 62 N.Y.2d 65 (N.Y. 1984) (due process/jurisdiction tied to NY-based banking activity)
- Indosuez Intl. Finance B.V. v. National Reserve Bank, 98 N.Y.2d 238 (N.Y. 2002) (course of dealing through NY accounts suffices to subject to jurisdiction)
- Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460 (N.Y. 1988) (nexus and substantial relationship concepts for § 302(a)(1))
- McGowan v. Smith, 52 N.Y.2d 268 (N.Y. 1981) (nexus/relationship approach to § 302(a)(1))
- Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100 (2d Cir. 2006) (articulable nexus and substantial relationship tests for nexus)
- Best Van Lines, Inc. v. Walker, 490 F.3d 239 (2d Cir. 2007) (nexus between in-forum conduct and claim; related to § 302(a)(1))
- Tamam v. Fransabank S.A.L., 677 F. Supp. 2d 720 (S.D.N.Y. 2010) (no direct nexus between NY funds transfers and missiles in Israel)