Spetner v. PIB, 70 F.4th 632

Background

Plaintiffs are U.S. victims and relatives of victims of terrorist attacks in Israel (Sept. 2001–Mar. 2003) who sued Palestine Investment Bank (PIB) under the Anti‑Terrorism Act, alleging PIB knowingly enabled Hamas and the Arab Liberation Front (ALF) by providing financial services.
PIB, a Palestinian Territories commercial bank, maintained dollar accounts for ALF (allegedly funded by Saddam Hussein’s Iraqi government) and for the Holy Land Foundation (HLF), a U.S.‑based Hamas fundraiser.
PIB lacked U.S. branches and did not hold U.S. correspondent accounts in its own name; instead it processed dollar transfers via a nested correspondent relationship: PIB ⇢ AJIB (Amman) ⇢ AJIB’s correspondent accounts at New York banks (Citibank, Chase, BNY Mellon).
Plaintiffs allege repeated transfers routed through AJIB’s New York correspondent accounts (including checks and disbursements labelled as payments to “martyrs”), and that PIB directed or accepted routing that made New York integral to the transfers.
The district court dismissed for lack of personal jurisdiction under N.Y. C.P.L.R. § 302, reasoning the New York correspondent accounts were not in PIB’s name and AJIB was not PIB’s agent.
The Second Circuit vacated and remanded, holding plaintiffs made a prima facie showing that (1) PIB transacted business in New York through AJIB as its agent and (2) exercising specific jurisdiction would comport with due process.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether New York §302(a)(1) authorizes jurisdiction over a foreign bank that uses a correspondent account it does not own (nested accounts)	PIB purposefully availed itself of New York by repeatedly using AJIB’s NY correspondent accounts to clear dollar transfers for PIB customers	Use of a correspondent account not held in PIB’s name is insufficient; mere dollar transactions are not purposeful New York contacts	Held: Repeated use of an agent’s NY correspondent account can constitute transacting business under §302(a)(1) when the foreign bank purposefully selects and benefits from NY clearing.
Whether a foreign bank can be haled into NY based on agent’s contacts (agency question)	AJIB acted for PIB’s benefit, with PIB’s knowledge and consent, and at PIB’s direction (including instructing customers to route transfers)	AJIB was an independent intermediary; UCC Article 4A shows receiving banks are not agents; no formal agency exists	Held: Plaintiffs plausibly alleged agency—AJIB acted for PIB’s benefit, with PIB’s knowledge/consent, and under sufficient control to attribute AJIB’s NY contacts to PIB.
Whether plaintiffs’ claims "arise from" the business transacted in New York	The transfers through AJIB’s NY accounts enabled funds to reach ALF/HLF accounts and financed acts underlying plaintiffs’ injuries	Plaintiffs cannot trace particular incentive payments through NY settlement; alleged transfers are too attenuated	Held: Plaintiffs pleaded an articulable nexus—at least one element of the claims arises from PIB’s NY‑related transactions; they need only make a prima facie showing at this stage.
Whether asserting specific jurisdiction would satisfy constitutional due process	PIB directed conduct at NY via AJIB and could foresee suit in NY given repeated, purposeful use of NY clearing	Due process bars haling a foreign bank into NY based solely on third‑party activity; physical presence absent	Held: Due process satisfied—PIB’s deliberate use and control over AJIB’s NY accounts created minimum contacts and jurisdiction is reasonable.

Key Cases Cited

Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir. 2013) (correspondent‑account jurisprudence: purposeful use of NY correspondent accounts can support §302 jurisdiction)
Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 20 N.Y.3d 327 (N.Y. 2012) (state court decision on when correspondent‑account use constitutes transacting business)
Int'l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts due process standard)
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (reasonableness and foreseeability in specific jurisdiction analysis)
Charles Schwab Corp. v. Bank of Am. Corp., 883 F.3d 68 (2d Cir. 2018) (agency‑based attribution of forum contacts)
Al Rushaid v. Pictet & Cie, 28 N.Y.3d 316 (N.Y. 2016) (choice of New York forum as volitional contact)