175 F. Supp. 3d 3
E.D.N.Y2016Background
- Over 200 U.S. nationals and estates sued Crédit Lyonnais, S.A. (a French bank) under the Antiterrorism Act (ATA) for allegedly providing material support to Hamas via transfers routed for and on behalf of CBSP and related charities tied to Hamas, arising from 19 attacks in Israel/Palestine (2001–2004).
- Crédit Lyonnais maintained a staffed New York Branch that cleared U.S. dollar transfers for its Paris operations; Plaintiffs point to five transfers routed through that branch (the “New York Transfers”) as part of a broader course of transfers to charities claimed to be Hamas fronts.
- Defendant earlier litigated merits motions without asserting lack of personal jurisdiction but, after Daimler, moved to dismiss for lack of personal jurisdiction or, alternatively, for summary judgment limited to the five New York Transfers.
- Plaintiffs argued Defendant waived the jurisdiction defense; the court held Daimler changed controlling law and Defendant timely raised the defense after Daimler, so no waiver.
- The court found no basis for general jurisdiction under Daimler but held New York’s long-arm statute (CPLR § 302(a)(1)) and federal nationwide service (ATA § 2334/Rule 4(k)(1)(C)) supported specific jurisdiction based on purposeful use of New York banking services and a sufficient nexus between the New York Transfers and Plaintiffs’ ATA claims.
- The court denied Defendant’s alternative summary judgment motion, concluding jurisdictional limits did not confine Plaintiffs to proving liability only from the five New York Transfers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of personal‑jurisdiction defense | Credit Lyonnais waived it by litigating for years without raising jurisdictional objection | Late objection waived because could have been raised earlier | No waiver — Daimler changed the law and made the defense newly available; timely raised post‑Daimler |
| General jurisdiction | N/A (Plaintiffs primarily relied on specific jurisdiction) | New York Branch and registration render bank "at home" in NY | No general jurisdiction under Daimler; contacts not the "exceptional case" |
| Specific jurisdiction under NY long‑arm (CPLR §302(a)(1)) | Repeated purposeful availment via NY Branch and five NY transfers form an articulable nexus to ATA claims | Five transfers are de minimis and most transfers did not touch NY; insufficient nexus | §302(a)(1) satisfied: purposeful availment and a sufficient nexus because the NY Transfers were part of the conduct underlying the ATA claims |
| Due process (minimum contacts & reasonableness) | Use of NY banking system and communications with NY Branch gave foreseeability and suit‑related contacts with U.S. | Contacts too few/value too small; cannot be haled into U.S. for transfers that never touched NY | Due process satisfied: minimum contacts (use of NY Branch to execute transfers) and reasonableness factors do not preclude jurisdiction; jurisdiction covers all related ATA claims |
Key Cases Cited
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (limits general jurisdiction to a corporation's place of incorporation or principal place of business except in exceptional cases)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (general jurisdiction requires contacts so "continuous and systematic" as to render entity at home)
- Gucci America, Inc. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014) (post‑Daimler analysis permitting a bank to press lack of general jurisdiction; Daimler altered Circuit precedent)
- Licci v. Lebanese Canadian Bank, SAL (Licci II), 20 N.Y.3d 327 (N.Y. 2012) (NY Court of Appeals: repeated use of NY correspondent banking demonstrates purposeful availment under §302(a)(1))
- Licci v. Lebanese Canadian Bank, SAL (Licci III), 732 F.3d 161 (2d Cir. 2013) (due process satisfied where in‑forum banking services were used to effect transfers implicated in ATA claims)
- Strauss v. Crédit Lyonnais, S.A. (Strauss II), 925 F. Supp. 2d 414 (E.D.N.Y. 2013) (prior merits ruling summarizing facts and evidence of bank's concerns about CBSP and timeline relevant to scienter)