477 F.Supp.3d 241
S.D.N.Y.2020Background
- Plaintiffs Rigoberto Vasquez and Eva Garcia are California residents who wired funds to WCM777, an alleged Ponzi scheme, by sending three transfers (Oct. 2013) that were routed through an HSBC USA New York correspondent account to WCM777’s HSBC Hong Kong account.
- Plaintiffs sued HSBC Hong Kong under RICO and state common-law theories, alleging the bank facilitated transfers for the Ponzi scheme; HSBC USA was previously dismissed from the action.
- The Court authorized and completed jurisdictional discovery focused on whether HSBC Hong Kong “transacted business” in New York via its correspondent account at HSBC USA.
- Plaintiffs sought to base jurisdiction on many classwide transfers (thousands, millions of dollars); the Court limited the §302(a)(1) analysis to the named plaintiffs’ transfers.
- Plaintiffs relied on several unauthenticated HSBC materials and an expert; the Court excluded those materials as inadmissible.
- Holding: the Court found the three transfers insufficient to establish purposeful availment under CPLR §302(a)(1) and dismissed HSBC Hong Kong without prejudice for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New York has specific personal jurisdiction over HSBC Hong Kong under CPLR §302(a)(1) based on use of an HSBC USA New York correspondent account | HSBC HK repeatedly used and encouraged use of the New York correspondent account for WCM777 transfers, establishing a course of dealing and purposeful availment | HSBC HK was a passive recipient; originators/banks dictated routing; only three plaintiff-related transfers occurred and HSBC HK lacked control or other NY contacts | No — plaintiffs failed to show purposeful availment; three transfers (and unauthenticated documents) insufficient to satisfy §302(a)(1); dismissal without prejudice |
Key Cases Cited
- Amigo Foods Corp. v. Marine Midland Bank–N.Y., 46 N.Y.2d 855 (N.Y. 1979) (mere passive receipt via a correspondent account does not establish long‑arm jurisdiction)
- Licci ex rel. Licci v. Lebanese Canadian Bank, 20 N.Y.3d 327 (N.Y. 2012) (repeated, deliberate use of a NY correspondent account on behalf of a client can show purposeful availment)
- Licci ex rel. Licci v. Lebanese Canadian Bank, 732 F.3d 161 (2d Cir. 2013) (applying Licci II and addressing due‑process implications)
- Rushaid v. Pictet & Cie, 28 N.Y.3d 316 (N.Y. 2016) (correspondent‑account use that is integral to a scheme and involves affirmative bank action supports jurisdiction)
- Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779 (2d Cir. 1999) (governs the transaction‑of‑business analysis for §302(a)(1))
- Daimler AG v. Bauman, 571 U.S. 117 (U.S. 2014) (distinguishes general from specific personal jurisdiction)