283 F.Supp.3d 722
N.D. Ill.2017Background
- Plaintiffs are victims and representatives of victims of the November 9, 2005 AQI bombings in Amman, Jordan, suing various banks under the Anti-Terrorism Act for allegedly facilitating terrorist access to U.S. financial markets.
- Defendants: Al Rajhi Bank (Saudi corporation; no U.S. presence per its affidavit); HSBC entities including HSBC Holdings plc (UK holding co., no U.S. operations), HSBC Bank Middle East Ltd. (Dubai-based, no U.S. operations), HSBC Bank USA, N.A. (HSBC‑U.S., correspondent banking in New York), and HSBC North America Holdings, Inc. (Delaware holding co. with NY HQ).
- Complaint alleges a scheme by Al Rajhi and HSBC entities to move U.S. dollars through U.S. markets, strip identifying wire data, and provide correspondent services that enabled terrorism financing; it relies in part on a 2010 Senate Report describing vulnerabilities.
- Procedural posture: Al Rajhi moved to dismiss for lack of personal jurisdiction or to transfer; HSBC moved to strike/dismiss/transfer. Court heard motions and argument and deferred Rule 12(b)(6) briefing pending jurisdictional resolution.
- Court found plaintiffs failed to establish specific personal jurisdiction over Al Rajhi, HSBC Holdings, and HSBC Middle East and dismissed claims against them without prejudice; denied Rule 12(f) strike as improper vehicle for merits/statutory‑standing attacks; transferred remaining claims (HSBC‑U.S. and HSBC North America) to S.D.N.Y.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over foreign banks (Al Rajhi, HSBC‑Holdings, HSBC‑Middle East) | Plaintiffs contend defendants had sufficient contacts with the U.S. (through correspondent banking and alleged scheme) to permit jurisdiction under Fed. R. Civ. P. 4(k)(2) and due process | Defendants submitted unrebutted affidavits showing no U.S. operations or directed activities and argued claims do not arise from any U.S. contacts | Dismissed without prejudice for lack of specific personal jurisdiction; plaintiffs failed both minimum‑contacts and relatedness prongs |
| Motion to strike claims against HSBC‑North America under Rule 12(f) | Plaintiffs oppose strike; claims should remain pending jurisdictional/merits adjudication | HSBC‑North America argued it is merely a holding company with no correspondent banking role and claims against it are immaterial | Denied without prejudice; Rule 12(f) is improper to test sufficiency of claims (should be 12(b)(6)) |
| Challenge to Susan Gitelson’s standing as Special Administrator | Plaintiffs assert Gitelson is properly appointed to pursue wrongful death claims | Defendants argue a Special Administrator’s authority is limited and statutory standing defects warrant dismissal | Motion denied without prejudice to raise standing via Rule 12(b)(6); court refused to backdoor 12(b)(6) via 12(f) |
| Transfer of remaining claims to S.D.N.Y. under 28 U.S.C. § 1404(a) | Plaintiffs selected N.D. Ill.; argued convenience of Chicago midpoint for dispersed parties | Defendants argued key events, witnesses, evidence, and HSBC‑U.S. correspondent operations are in S.D.N.Y., making New York more convenient and appropriate | Transfer granted: remaining claims (against HSBC‑U.S. and HSBC North America) transferred to the Southern District of New York |
Key Cases Cited
- Abbott Labs., Inc. v. Biovalve Techs., Inc., 543 F. Supp. 2d 913 (N.D. Ill.) (standards for Rule 12(b)(2) jurisdictional motions)
- RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272 (7th Cir.) (plaintiff bears burden to show personal jurisdiction)
- uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421 (7th Cir.) (relatedness inquiry and quid pro quo for specific jurisdiction)
- GCIU‑Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018 (7th Cir.) (weighing affidavits; unrefuted facts taken as true)
- In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659 (2d Cir.) (allegations of providing financial services to clients associated with terrorists insufficient for personal jurisdiction)
- Whittlestone, Inc. v. Handi‑Craft Co., 618 F.3d 970 (9th Cir.) (Rule 12(f) is not a substitute for Rule 12(b)(6))
- Leibovitch v. Islamic Republic of Iran, 852 F.3d 687 (7th Cir.) (forum‑connection and puzzlement over plaintiffs’ choice of Illinois forum)
- Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654 (7th Cir.) (standards for granting motions to strike)
- Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286 (7th Cir.) (Rule 12(f) may remove unnecessary clutter but is disfavored)