Licci v. Lebanese Canadian Bank, et al., No. 10-1306 (2d Cir. 2012)

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Justia Opinion Summary

Plaintiffs appealed a decision and order of the district court granting the motions to dismiss filed by defendants, LCB and AmEx. Plaintiffs, all Israeli residents, were allegedly injured or their family members killed or injured, by rockets fired by Hizballah, a Lebanese terrorist organization, into northern Israel in July and August 2006. Plaintiffs asserted that Israeli law governed their negligence claim while AmEx maintained that New York law governed. The district court dismissed plaintiffs' negligence claim against AmEx, evaluating the claim under New York state law. Because the court concluded that New York law would apply even if a conflict between the laws of the relevant jurisdiction existed because New York had the greatest interest in the litigation, and that plaintiffs did not have a viable claim against AmEx under New York law, the judgment of the district court insofar as it was in favor of AmEx was affirmed.

The court issued a subsequent related opinion or order on October 18, 2013.
The court issued a subsequent related opinion or order on January 9, 2014.

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10-1306-cv Licci v. Lebanese Canadian Bank, SAL 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2010 4 (Argued: February 25, 2011 Decided: March 5, 2012) 5 Docket No. 10-1306-cv 6 ------------------------------------- 7 8 9 YAAKOV LICCI, a minor, by his father and natural guardian, ELIHAV LICCI, and by his mother and natural guardian, YEHUDIT LICCI, et al., 10 Plaintiffs-Appellants, 11 - v - 12 LEBANESE CANADIAN BANK, SAL; AMERICAN EXPRESS BANK LTD., 13 Defendants-Appellees.* 14 ------------------------------------- 15 Before: 16 KEARSE, SACK, and KATZMANN, Circuit Judges. Appeal from a judgment of the United States District 17 Court for the Southern District of New York (George B. Daniels, 18 Judge) granting the motion to dismiss filed by defendants- 19 appellees American Express Bank Ltd. ("AmEx"). 20 all Israeli residents, were allegedly injured, or their family 21 members killed or injured, by rockets fired by Hizballah, a 22 Lebanese terrorist organization, into northern Israel in July * The plaintiffs, The Clerk of Court is directed to amend the official caption as shown above. 1 and August 2006. 2 negligence claim against AmEx, evaluating the claim under New 3 York state law. 4 apply even if a conflict between the laws of the relevant 5 jurisdictions existed, and that the plaintiffs do not have a 6 viable claim against AmEx under New York law, the judgment of 7 the district court insofar as it is in favor of AmEx is hereby 8 AFFIRMED. 9 The district court dismissed the plaintiffs' Because we conclude that New York law would The district court's dismissal of a separate claim 10 against Lebanese Canadian Bank SAL is considered in a separate 11 opinion filed today. 12 13 14 Appearances: ROBERT J. TOLCHIN, Jaroslawicz & Jaros, New York, NY, for PlaintiffsAppellants. 15 16 17 18 JONATHAN D. SIEGFRIED (Lawrence S. Hirsh, on the brief), Dewey & LeBoeuf LLP, New York, NY, for DefendantAppellee Lebanese Canadian Bank, SAL. 19 20 21 22 23 MARK P. LADNER (Mark David McPherson, Michael Gerard, on the brief), Morrison & Foerster LLP, New York, NY, for Defendant-Appellee American Express Bank Ltd. 24 25 PER CURIAM: The plaintiffs-appellants, Yaakov Licci et al., 26 appeal from a March 31, 2010, decision and order of the United 27 States District Court for the Southern District of New York 28 (George B. Daniels, Judge) granting the motions to dismiss 2 1 filed by defendants-appellees Lebanese Canadian Bank, SAL 2 ("LCB") and American Express Bank Ltd. ("AmEx"). 3 This opinion addresses only the plaintiffs' 4 negligence claim against AmEx. 5 LCB are addressed in an accompanying opinion. 6 Lebanese Canadian Bank, SAL, __ F.3d __ (2d Cir. March 5, 7 2012). 8 that opinion. 9 The plaintiffs' claims against See Licci v. A full account of the underlying facts is set forth in This case concerns a series of rocket attacks 10 launched by Hizballah, a Lebanese terrorist organization, at 11 targets in northern Israel in July and August 2006. 12 plaintiffs are American, Canadian, and Israeli civilians who 13 were injured, or whose family members were injured or killed, 14 during the rocket attacks. 15 maintained bank accounts for an alleged Hizballah affiliate, 16 the Shahid (Martyrs) Foundation ("Shahid"), and carried out 17 dozens of international wire transfers on Shahid's behalf. 18 These wire transfers, which totaled several million dollars, 19 were conducted using LCB's correspondent bank account at AmEx 20 in New York. 21 these wire transfers on behalf of LCB and Shahid, breached a 22 legal duty of care to the plaintiffs and thereby caused the 23 plaintiffs' injuries. The They allege that LCB knowingly The plaintiffs assert that AmEx, by facilitating 3 1 "We review the district court's grant of a Rule 2 12(b)(6) motion to dismiss de novo, accepting all factual 3 claims in the complaint as true, and drawing all reasonable 4 inferences in the plaintiff's favor." 5 Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010). 6 doing, we ascertain whether the complaint "contain[s] 7 sufficient factual matter, accepted as true, to state a claim 8 to relief that is plausible on its face." 9 129 S. Ct. 1937, 1949 (2009) (internal quotation marks Famous Horse Inc. v. 5th In so Ashcroft v. Iqbal, 10 omitted). 11 affirm the decision below on dispositive but different 12 grounds." 13 Fin., 620 F.3d 146, 150 (2d Cir. 2010) (internal quotation 14 marks omitted). 15 "Because our review is de novo, we are free to Chase Grp. Alliance LLC v. City of N.Y. Dep't of This case presents a threshold question of choice of 16 law. Plaintiffs assert that Israeli law governs their 17 negligence claim, while AmEx maintains that New York law 18 governs. 19 novo." 20 Inc., 414 F.3d 325, 331 (2d Cir. 2005), cert. denied, 548 U.S. 21 904 (2006). "We review the district court's choice of law de Finance One Pub. Co. v. Lehman Bros. Special Fin., 22 "A federal court sitting in diversity or adjudicating 23 state law claims that are pendent to a federal claim must apply 24 the choice of law rules of the forum state." 4 Rogers v. 1 Grimaldi, 875 F.2d 994, 1002 (2d Cir. 1989). 2 York choice-of-law rules apply in adjudicating the plaintiffs' 3 negligence claim. 4 Accordingly, New Under New York choice-of-law rules, "'[t]he first 5 step in any case presenting a potential choice of law issue is 6 to determine whether there is an actual conflict between the 7 laws of the jurisdictions involved.'" 8 Inc., 471 F.3d 410, 415 (2d Cir. 2006) (quoting In re Allstate 9 Ins. Co., 81 N.Y.2d 219, 223, 597 N.Y.S.2d 904, 905, 613 N.E.2d Wall v. CSX Transp., 10 936, 937 (1993)). 11 performed unless there is "an 'actual conflict' between the 12 applicable rules of two relevant jurisdictions." 13 414 F.3d at 331. 14 is among the relevant jurisdictions, the court may simply apply 15 New York law. 16 Corp. v. Liberty Mut. Ins. Co., 363 F.3d 137, 143 (2d Cir. 17 2004). 18 A choice-of-law analysis need not be Finance One, If no actual conflict exists, and if New York See Wall, 471 F.3d at 422; Int'l Bus. Machs. The district court determined that "no actual 19 conflict exists between the applicable substantive law of 20 negligence in New York and Israel." 21 Ltd., 704 F. Supp. 2d 403, 409 (S.D.N.Y. 2010). 22 proceeded to evaluate the plaintiffs' negligence claim against 23 AmEx under New York state law. 24 observed that under New York law, "[b]anks do not owe non- Licci v. Am. Express Bank Id. at 410. 5 It therefore The district court 1 customers a duty to protect them from the intentional torts 2 committed by [the banks'] customers." 3 Fleet Bank, N.A., 459 F.3d 273, 286 (2d Cir. 2006)). 4 district court also determined that the plaintiffs had failed 5 plausibly to allege that AmEx's conduct was the proximate cause 6 of the plaintiffs' injuries. 7 reasons, the district court dismissed the plaintiffs' 8 negligence claim against AmEx. 9 Id. (citing Lerner v. Id. at 410-11. The For those On appeal, the plaintiffs contend that there is an 10 actual conflict between Israeli law and New York law, and 11 therefore the district court erred in declining to conduct a 12 choice-of-law analysis. 13 Israeli law, not New York law, governs their negligence claim 14 against AmEx. 15 The plaintiffs further argue that We use New York conflict of laws principles to 16 determine whether New York or Israeli law governs. See Rogers, 17 875 F.2d at 1002. 18 actual conflict exists between the relevant substantive laws of 19 New York and Israel, New York conflicts law directs that 20 "'[t]he law of the jurisdiction having the greatest interest in 21 the litigation will be applied.'" 22 Inc. v. Frank Crystal & Co., 449 F.3d 377, 384 (2d Cir. 2006) 23 (quoting Schultz v. Boy Scouts of Am., Inc., 65 N.Y.2d 189, 24 197, 491 N.Y.S.2d 90, 95, 480 N.E.2d 679, 684 (1985)). Even if the plaintiffs are correct and an 6 GlobalNet Financial.Com, 1 "Interest analysis is a 'flexible approach intended to give 2 controlling effect to the law of the jurisdiction which, 3 because of its relationship or contact with the occurrence or 4 the parties, has the greatest concern with the specific issue 5 raised in the litigation.'" 6 (quoting Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66, 72, 595 7 N.Y.S.2d 919, 922, 612 N.E.2d 277, 280 (1993)). 8 9 Finance One, 414 F.3d at 337 In tort-law disputes, interest analysis distinguishes between two sets of rules: conduct-regulating rules and loss- 10 allocating rules. 11 regulating rules are those that "people use as a guide to 12 governing their primary conduct," K.T. v. Dash, 37 A.D.3d 107, 13 112, 827 N.Y.S.2d 112, 117 (1st Dep't 2006), while "[l]oss 14 allocating rules . . . are laws that prohibit, assign, or limit 15 liability after the tort occurs," DeMasi v. Rogers, 34 A.D.3d 16 720, 721, 826 N.Y.S.2d 106, 108 (2d Dep't 2006) (internal 17 quotation marks omitted). 18 GlobalNet, 449 F.3d at 384. Conduct- The alleged conflict in this case concerns a conduct- 19 regulating rule: the scope of a bank's duty to protect third 20 parties against intentional torts committed by the bank's 21 customers. 22 issue, the law of the jurisdiction where the tort occurred will 23 generally apply because that jurisdiction has the greatest 24 interest in regulating behavior within its borders.'" "'If conflicting conduct-regulating laws are at 7 1 GlobalNet, 449 F.3d at 384 (quoting Cooney, 81 N.Y.2d at 72, 2 595 N.Y.S.2d at 922, 612 N.E.2d at 280). 3 Applying the interest-analysis test, we conclude that 4 New York has the greatest interest in this litigation. All of 5 the challenged conduct undertaken by AmEx occurred in New York, 6 where AmEx is headquartered and where AmEx administers its 7 correspondent banking services. 8 injuries occurred in Israel, and Israel is also the plaintiffs' 9 domicile, those factors do not govern where, as here, the Although the plaintiffs' 10 conflict pertains to a conduct-regulating rule. 11 449 F.3d at 384-85. 12 the stronger interest in regulating the conduct of New York- 13 based banks operating in New York. 14 N.Y.2d at 198, 491 N.Y.S.2d at 96, 480 N.E.2d at 684-85 (noting 15 the "locus jurisdiction's interests in protecting the 16 reasonable expectations of the parties who relied on it to 17 govern their primary conduct"). 18 Cf. GlobalNet, We conclude that New York, not Israel, has See, e.g., Schultz, 65 Accordingly, even assuming that the district court 19 was mistaken in deciding that there was no actual conflict 20 between New York law and Israeli law, we conclude that a 21 choice-of-law analysis would nonetheless require application of 22 New York law to the plaintiffs' negligence claim against AmEx. 23 The plaintiffs do not dispute that that claim must fail if New 24 York law is applied. The district court therefore did not err 8 1 in dismissing the plaintiffs' negligence claim against AmEx, 2 and we affirm on that ground. 3 4 For the foregoing reasons, the judgment of the district court insofar as it is in favor of AmEx is affirmed. 9 10-1306-cv Licci, et al. v. Lebanese Canadian Bank, SAL, et ano. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2010 4 (Argued: February 25, 2011 Decided: March 5, 2012) 5 Docket No. 10-1306-cv 6 ------------------------------------- 7 8 9 YAAKOV LICCI, a minor, by his father and natural guardian, ELIHAV LICCI, and by his mother and natural guardian, YEHUDIT LICCI, et al., 10 Plaintiffs-Appellants, 11 - v - 12 LEBANESE CANADIAN BANK, SAL; AMERICAN EXPRESS BANK LTD., 13 Defendants-Appellees.* 14 ------------------------------------- 15 Before: 16 KEARSE, SACK, and KATZMANN, Circuit Judges. Appeal from a judgment of the United States District 17 Court for the Southern District of New York (George B. Daniels, 18 Judge) dismissing the plaintiffs' complaint against defendant 19 Lebanese Canadian Bank, SAL, for lack of personal jurisdiction. 20 The plaintiffs, all Israeli residents, were allegedly injured, 21 or their family members killed or injured, by rockets fired by * The Clerk of Court is directed to amend the caption as set forth above. 1 Hizballah, a Lebanese terrorist organization, into northern 2 Israel in July and August 2006. 3 that the bank's use of its New York account was not enough to 4 permit the exercise of personal jurisdiction over it under the 5 New York long-arm statute, New York Civil Practice Law and 6 Rules § 302(a)(1). 7 insufficient New York State authority on the issue for us to 8 determine with confidence whether the district court's 9 conclusion was correct, we seek the views of the New York Court 10 of Appeals as to whether the plaintiffs' claims "aris[e] from" 11 a "transact[ion] [of] business" in New York within the meaning 12 of N.Y. C.P.L.R. § 302(a)(1). 13 The district court concluded Because we are of the view that there is The district court's dismissal of a separate claim 14 against American Express Bank Ltd. is affirmed by separate 15 opinion filed today. 16 17 18 19 Questions certified. Appearances: ROBERT J. TOLCHIN, Jaroslawicz & Jaros, New York, NY, for PlaintiffsAppellants. 20 21 22 23 JONATHAN D. SIEGFRIED (Lawrence S. Hirsh, on the brief), Dewey & LeBoeuf LLP, New York, NY, for DefendantAppellee Lebanese Canadian Bank, SAL. 24 25 26 27 28 MARK P. LADNER (Mark David McPherson, Michael Gerard, on the brief), Morrison & Foerster LLP, New York, NY, for Defendant-Appellee American Express Bank Ltd. 2 1 SACK, Circuit Judge: 2 This appeal presents the question whether a foreign 3 bank's maintenance and use of a correspondent banking account 4 in New York to conduct wire transfers on behalf of a foreign 5 client renders it amenable to personal jurisdiction in New York 6 under the state's long-arm statute to defend against claims 7 asserted by victims of terrorist attacks committed abroad. 8 plaintiffs are several dozen American, Canadian, and Israeli 9 citizens, all of whom reside in Israel, who were injured, or The 10 whose family members were killed or injured, in rocket attacks 11 allegedly committed by Hizballah, designated as an Islamic 12 terrorist organization,1 in July and August 2006. 13 plaintiffs have brought suit against Lebanese Canadian Bank, 14 SAL ("LCB"),2 a Lebanese bank headquartered in Beirut, alleging The 1 "Hizballah (Party of God)" has been designated by the United States Department of State as a "Foreign Terrorist Organization" pursuant to 8 U.S.C. § 1189(a). See U.S. Dep't of State, Office of Coordinator for Counterterrorism, Foreign Terrorist Organizations (Jan. 27, 2012), http://www.state.gov/j/ct/rls/other/des/123085.htm. We use the State Department's spelling throughout this opinion unless quoting directly from a source that uses different spelling. 2 The amended complaint also contains a single claim for negligence against defendant American Express Bank ("AmEx") under Israeli law. This claim is pleaded on behalf of all plaintiffs. The district court, applying New York law, dismissed that claim against AmEx on the basis that there was no actual conflict between Israeli and New York law, and that under New York law, "[b]anks do not owe non-customers a duty to protect them from the intentional torts committed by [the banks'] customers." Licci v. Am. Express Bank Ltd., 704 F. Supp. 2d 403, 410 (S.D.N.Y. 2010) (citing Lerner v. Fleet Bank, N.A., 459 F.3d 273, 286 (2d Cir. 2006)). The plaintiffs' appeal from the dismissal of their 3 1 that LCB assisted Hizballah by facilitating the international 2 financial transactions of a Hizballah-affiliated entity. 3 plaintiffs allege that LCB carried out dozens of dollar- 4 denominated international wire transfers totaling several 5 million dollars over the course of several years on behalf of 6 the Hizballah affiliate, with the assistance of another 7 defendant, American Express Bank, where LCB maintained and used 8 a correspondent banking account. 9 in carrying out these transactions, LCB acted with the The According to the plaintiffs, 10 knowledge that they were for the purpose of facilitating 11 Hizballah's ability to carry out acts of terrorism, such as the 12 rocket attacks at issue here. 13 against LCB under the Anti-Terrorism Act, 18 U.S.C. § 2333(a); 14 the Alien Tort Statute, 28 U.S.C. § 1350; and Israeli tort law. 15 The district court (George B. Daniels, Judge) granted The plaintiffs assert claims 16 LCB's motion to dismiss for lack of personal jurisdiction on 17 the grounds that LCB's maintenance of a correspondent banking 18 account in New York and use of that account to wire funds on 19 behalf of the Hizballah affiliate were insufficient to 20 establish specific personal jurisdiction over LCB under the New 21 York long-arm statute, N.Y. C.P.L.R. § 302(a)(1). 22 concluded both that "[t]he execution of wire transfers . . . The court negligence claim against AmEx is addressed in an accompanying opinion. 4 1 alone is [not] sufficient to confer jurisdiction over a foreign 2 bank," Licci v. Am. Express Bank Ltd., 704 F. Supp. 2d 403, 407 3 (S.D.N.Y. 2010), and that there was no "articulable nexus or 4 substantial relationship . . . between LCB's general use of its 5 correspondent account for wire transfers through New York and 6 the specific terrorist activities by Hizbollah underlying 7 plaintiffs' claims," id. at 408. The plaintiffs appeal. 8 The question of whether, and if so to what extent, 9 personal jurisdiction may be established under N.Y. C.P.L.R. 10 § 302(a)(1) over foreign banks based on their use of 11 correspondent banking accounts in New York remains unsettled. 12 We conclude that New York law is insufficiently developed in 13 this area to enable us to predict with confidence how the New 14 York Court of Appeals would resolve these issues of New York 15 State law presented on appeal. 16 Court of Appeals two questions concerning the application of 17 the New York long-arm statute. We therefore certify to the 18 BACKGROUND 19 The facts set forth below are drawn from the 20 plaintiffs' first amended complaint, see Am. Compl., Licci v. 21 Am. Express Bank Ltd., No. 08 Civ. 7253 (GBD) (S.D.N.Y. Mar. 22 31, 2010), ECF No. 23 ("Compl."), and from the district court's 23 opinion dismissing the claims against LCB for lack of personal 24 jurisdiction, see Licci, 704 F. Supp. 2d at 404-06. 5 All well- 1 pleaded facts are accepted as true at this stage of the 2 litigation. 3 F.3d 106, 108 (2d Cir. 2010). 4 think necessary for an understanding of our resolution of this 5 appeal. See Famous Horse Inc. v. 5th Ave. Photo Inc., 624 We recite only the facts that we 6 Allegations of the Amended Complaint 7 According to the allegations contained in the Amended 8 Complaint, between July 12, 2006, and August 14, 2006, 9 Hizballah, an Islamic terrorist organization, fired thousands 10 of rockets into northern Israel. 11 family members were injured or killed by these attacks. 12 Compl. ¶¶ 58-112. 13 The plaintiffs or their See The defendant, LCB, is a Lebanese bank with no 14 branches, offices, or employees in the United States. LCB 15 does, however, maintain a correspondent banking account at AmEx 16 in New York.3 The plaintiffs allege that LCB used this account "Correspondent accounts are accounts in domestic banks held in the name of [] foreign financial institutions. Typically, foreign banks are unable to maintain branch offices in the United States and therefore maintain an account at a United States bank to effect dollar transactions." Sigmoil Res., N.V. v. Pan Ocean Oil Corp. (Nigeria), 234 A.D.2d 103, 104, 650 N.Y.S.2d 726, 727 (1st Dep't 1996). "'Without correspondent banking . . . it would often be impossible for banks to provide comprehensive nationwide and international banking services -among them, the vital capability to transfer money by wire with amazing speed and accuracy across international boundaries.'" United States v. Davidson, 175 F. App'x 399, 401 n.2 (2d Cir. 2006) (summary order) (quoting Role of U.S. Correspondent Banking in International Money Laundering: Hearings Before the Permanent Subcomm. on Investigations of the S. Comm. on Gov't Affairs, 107th Cong. 1-2 (2001) (opening remarks of Senator Susan M. Collins)). 3 6 1 to conduct dozens of international wire transfers on behalf of 2 the Shahid (Martyrs) Foundation ("Shahid"), an entity that 3 maintained bank accounts with LCB and which the plaintiffs 4 allege to be an "integral part" of Hizballah and "part of [its] 5 financial arm." 6 Shahid-titled bank accounts "belonged to Hizbollah and were 7 under the control of Hizbollah"). 8 totaled several million dollars, "substantially increased and 9 facilitated Hizbollah's ability to plan, to prepare for[,] and 10 to carry out" the rocket attacks that injured the plaintiffs. 11 Id. ¶ 116. 12 Id. ¶ 46; see also id. ¶ 50 (alleging that the These wire transfers, which The plaintiffs contend that LCB's role in conducting 13 those wire transfers on Shahid's behalf was actionable. 14 allege that LCB had "actual knowledge" that Hizballah was a 15 violent terrorist organization, as reflected on official U.S. 16 government lists,4 and that Shahid was "part of Hizbollah's 17 financial arm." 18 allege that the bank, as a matter of "official LCB policy," Id. ¶¶ 130, 135. 4 They Moreover, the plaintiffs LCB notes that at all relevant times, Shahid itself was not designated as a terrorist organization on official U.S. government lists. Shahid was, however, added to the U.S. Treasury Department's "Specially Designated Nationals" list in July 2007. See U.S. Dep't of Treasury, Press Release, Twin Treasury Actions Take Aim at Hizballah's Support Network (July 24, 2007). Shahid today remains on that list of "individuals, groups, and entities, such as terrorists . . . that are not country-specific." See generally U.S. Dep't of Treasury, Specially Designated Nationals List (SDN), http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/ default.aspx (last visited Dec. 21, 2011). 7 1 "continuously supports and supported Hizbollah and its anti- 2 Israel program, goals and activities." 3 particular, the plaintiffs allege that LCB carried out the wire 4 transfers "in order to assist and advance Hizbollah's goal of 5 using terrorism to destroy the State of Israel." Id. ¶ 126. In Id. ¶ 129. 6 Procedural History 7 The plaintiffs began this lawsuit in New York State 8 Supreme Court, New York County, on July 11, 2008. 9 15, 2008, AmEx removed the matter to the United States District 10 On August Court for the Southern District of New York. 11 On January 22, 2009, the plaintiffs filed an amended 12 complaint. It contains five claims against LCB: (1) primary 13 liability for international terrorism under the Anti-Terrorism 14 Act, 18 U.S.C. § 2333(a) ("the Anti-Terrorism Act"); (2) 15 aiding-and-abetting liability for international terrorism under 16 the Anti-Terrorism Act; (3) aiding-and-abetting liability for 17 genocide, war crimes, and crimes against humanity in violation 18 of international law, as made actionable by the Alien Tort 19 Statute, 28 U.S.C. § 1350 (the "ATS"); (4) negligence, in 20 violation of Israeli Civil Wrongs Ordinance § 35; and (5) 21 breach of statutory duty, in violation of Israeli Civil Wrongs 22 Ordinance § 63.5 The Anti-Terrorism Act claims are brought by 5 Substantially the same group of plaintiffs has filed a related lawsuit in the Southern District of New York against Al Jazeera, a Qatar-based television network. The plaintiffs assert 8 1 the American plaintiffs alone; the ATS claims are brought by 2 various Canadian and Israeli plaintiffs; and the Israeli-law 3 claims are brought by all but four plaintiffs. 4 On April 17, 2009, LCB moved to dismiss all claims 5 against it for lack of personal jurisdiction under Rule 6 12(b)(2) and for failure to state a claim under Rule 12(b)(6). 7 On July 6, 2009, the plaintiffs filed an opposition to LCB's 8 motion and submitted, among other material, a declaration by a 9 former Israeli counter-terrorism official attesting to the fact 10 that Shahid is a financial front for Hizballah. 11 LCB filed a reply on September 3, 2009. 12 The District Court's Jurisdictional Ruling 13 On March 31, 2010, the district court granted LCB's 14 motion to dismiss pursuant to Rule 12(b)(2), concluding that 15 the plaintiffs had failed to make a prima facie showing of 16 personal jurisdiction over the defendants under N.Y. C.P.L.R. 17 § 302(a)(1). 18 to the court, "'[t]o establish personal jurisdiction under See Licci, 704 F. Supp. 2d at 406-08. According that Al Jazeera violated the Anti-Terrorism Act by purposefully televising the precise impact locations in Israel of Hizballah's rockets in order to assist Hizballah with aiming its attacks more accurately. That lawsuit was dismissed, with leave to amend the complaint, on the grounds that the plaintiffs had failed adequately to plead the elements of intent and proximate causation. See Kaplan v. Al Jazeera, No. 10 Civ. 5298, 2011 WL 2314783, 2011 U.S. Dist. LEXIS 61373 (S.D.N.Y. June 7, 2011) (Kimba M. Wood, J.). A second amended complaint was filed on July 18, 2011, but the plaintiffs voluntarily dismissed the action on November 21, 2011. 9 1 section 302(a)(1), two requirements must be met: (1) The 2 defendant must have transacted business within the state; and 3 (2) the claim asserted must arise from that business 4 activity.'" 5 Allure Resorts Mgmt., LLC, 450 F.3d 100, 103 (2d Cir. 2006)). 6 The court characterized the plaintiffs' theory of jurisdiction 7 as depending solely upon LCB's "alleged use of defendant Amex 8 Bank as its correspondent bank to carry out wire transfers of 9 funds to and from the Shahid-entitled bank accounts." Id. at 406 (quoting Sole Resort, S.A. de C.V. v. Id. at 10 406. 11 that neither of the two requirements for jurisdiction under 12 N.Y. C.P.L.R. § 302(a)(1) had been satisfied. Rejecting that theory, the court appeared to conclude 13 With respect to the first, "transacted business," 14 prong, the district court relied upon the general principle 15 that "[t]he mere maintenance of [a] correspondent bank account 16 with a financial institution in New York is not, standing 17 alone, a sufficient basis to subject a foreign defendant to 18 personal jurisdiction under § 302(a)(1)." 19 Although the court acknowledged that in some circumstances, a 20 "foreign bank's improper use of a New York correspondent 21 account" may support long-arm jurisdiction, id. (citing cases), 22 the court concluded that "[t]he execution of wire transfers is 23 not a 'use' of a correspondent account which alone is 24 sufficient to confer jurisdiction over a foreign bank," id., 25 and therefore "no meaningful distinction may be drawn between a 26 foreign bank's maintenance of a correspondent account to effect 10 Id. at 407. 1 international wire transfers and its indiscriminate use of that 2 account for that exact purpose," id. at 407-08. 3 With respect to the second, "arising from," prong, 4 the district court concluded that the plaintiffs' claims did 5 not arise from LCB's wire transfers in New York for the 6 purposes of N.Y. C.P.L.R. § 302(a)(1). 7 upon the factually similar case of Tamam v. Fransabank SAL, 677 8 F. Supp. 2d 720, 726-30 (S.D.N.Y. 2010),6 the district court 9 ruled that "[n]o articulable nexus or substantial relationship 10 exists between LCB's general use of its correspondent account 11 for wire transfers through New York and the specific terrorist 12 activities by Hizbollah underlying plaintiffs' claims." 13 704 F. Supp. 2d at 408. 14 district court observed that the "[p]laintiffs do not allege 15 that the rocket attacks were directly financed with the subject 16 wire transferred funds," but only that those "transferred 17 funds . . . 'substantially increased' Hizbollah's ability to 18 commit rocket attacks," id. 19 "[t]he injuries and death suffered by plaintiffs and their Id. at 408. Relying Licci, In reaching that conclusion, the The court further reasoned that 6 In Tamam, a different group of fifty-seven plaintiffs brought suit against five Lebanese banks (not including LCB) under the ATS for aiding and abetting genocide, and committing crimes against humanity, war crimes, and terrorism by providing financial services to parties associated with Hizballah. The Tamam plaintiffs were, like those in the instant case, either themselves injured in the July and August 2006 rocket attacks, or the survivors of family members killed in those attacks. See Tamam, 677 F. Supp. 2d at 722-24. The district court dismissed the Tamam plaintiffs' lawsuit for lack of personal jurisdiction, see id. at 725-34, and no appeal was taken. 11 1 family members were caused by the rockets launched by 2 Hizbollah, not by the banking services provided by LCB through 3 its correspondent account." 4 maintenance or use of its correspondent bank account is 5 [therefore] too attenuated from Hizbollah's attacks in Israel 6 to assert personal jurisdiction based solely on wire transfers 7 through New York." The court decided that "LCB's Id. After deciding that the requirements of N.Y. C.P.L.R. 8 9 Id. § 302(a)(1) had not been satisfied, the district court also 10 concluded, summarily, that "[t]he exercise of personal 11 jurisdiction over LCB on the basis alleged by plaintiffs would 12 not comport with constitutional principles of due process." 13 Id. 14 jurisdictional discovery on the ground that such discovery 15 would be "futile."7 16 that personal jurisdiction was lacking, the court did not reach 17 the merits of LCB's alternative arguments that dismissal of 18 each of the plaintiffs' claims was warranted under Fed. R. Civ. The district court also denied the plaintiffs' request for Id. Finally, because the court determined 7 On appeal, the plaintiffs do not challenge the district court's denial of jurisdictional discovery. We therefore need not decide whether the district court exceeded the bounds of its discretion in this respect. See Frontera Res. Azerbaijan Corp. v. State Oil Co. of Azerbaijan Republic, 582 F.3d 393, 401 (2d Cir. 2009) (noting that a district court possesses "wide latitude" and "typically [acts] within its discretion to deny jurisdictional discovery when the plaintiff has not made out a prima facie case for jurisdiction") (brackets and internal quotation marks omitted). 12 1 P. 12(b)(6). 2 judgment for the defendants on March 31, 2010. 3 See id. at 406-08. The district court entered The plaintiffs appeal. 4 DISCUSSION 5 I. Standard of Review 6 "We review a district court's dismissal of an action 7 for want of personal jurisdiction de novo, construing all 8 pleadings and affidavits in the light most favorable to the 9 plaintiff[s] and resolving all doubts in the plaintiff[s'] 10 favor." Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 34 11 (2d Cir. 2010). 12 lack of personal jurisdiction, [the] plaintiff[s] must make a 13 prima facie showing that jurisdiction exists." 14 (internal quotation marks omitted). 15 "must include an averment of facts that, if credited by the 16 ultimate trier of fact, would suffice to establish jurisdiction 17 over the defendant." 18 616 F.3d 158, 163 (2d Cir. 2010) (brackets omitted). 19 considering whether the plaintiffs have met this burden, "we 20 will not draw 'argumentative inferences' in the plaintiff's 21 favor," Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 22 507 (2d Cir. 1994), nor are we required "to accept as true a 23 legal conclusion couched as a factual allegation," Jazini v. 24 Nissan Motor Co., 148 F.3d 181, 185 (2d Cir. 1998). 25 any factual findings regarding personal jurisdiction for clear "In order to survive a motion to dismiss for Id. at 34-35 This prima facie showing Chloé v. Queen Bee of Beverly Hills, LLC, 13 In We review 1 error. Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 22 (2d 2 Cir. 2004). 3 II. Principles of Personal Jurisdiction 4 The lawful exercise of personal jurisdiction by a 5 federal court requires satisfaction of three primary 6 requirements. 7 First, the plaintiff's service of process upon the 8 defendant must have been procedurally proper. See Murphy 9 Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 10 (1999); In re Kalikow, 602 F.3d 82, 92 (2d Cir. 2010). 11 does not deny that it was properly served in Lebanon with the 12 plaintiffs' summons and complaint pursuant to Federal Rule of 13 Civil Procedure 4(f)(2)(C)(ii). 14 LCB Second, there must be a statutory basis for personal 15 jurisdiction that renders such service of process effective. 16 The available statutory bases in federal courts are enumerated 17 by Federal Rule of Civil Procedure 4(k). 18 plaintiffs rely solely upon Rule 4(k)(1)(A), which provides 19 that "[s]erving a summons . . . establishes personal 20 jurisdiction over a defendant . . . who is subject to the 21 jurisdiction of a court of general jurisdiction in the state 22 where the district court is located."8 8 In this case, the See also Spiegel v. At least two other statutory bases for personal jurisdiction might be relevant to lawsuits brought under the Anti-Terrorism Act: (1) Federal Rule of Civil Procedure 4(k)(2), 14 1 Schulmann, 604 F.3d 72, 76 (2d Cir. 2010) ("A district court's 2 personal jurisdiction is determined by the law of the state in 3 which the court is located."). 4 law in determining whether personal jurisdiction is available 5 in New York over LCB.9 We therefore look to New York which provides for personal jurisdiction in federal-question cases where a defendant is "not subject to jurisdiction in any state's courts of general jurisdiction," but "exercising jurisdiction [would be] consistent with the United States Constitution and laws," Fed. R. Civ. P. 4(k)(2); and (2) the Anti-Terrorism Act's nationwide service of process provision, which provides that a defendant "may be served in any district where the defendant resides, is found, or has an agent." 18 U.S.C. § 2334(a); see also Fed. R. Civ. P. 4(k)(1)(C). Because the plaintiffs in the instant litigation have relied only upon Rule 4(k)(1)(A), however, we do not consider these alternative bases for jurisdiction here. 9 There are two types of personal jurisdiction: general and specific. General jurisdiction is authorized where the defendant's "affiliations with the State are so 'continuous and systematic' as to render [it] essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011). A court asserts "general jurisdiction" over a defendant when the court is permitted to "hear any and all claims against" that defendant. Id. "Specific jurisdiction," however, "depends on an 'affiliation between the forum and the underlying controversy,' principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation." Id. (brackets omitted). Such jurisdiction is "confined to adjudication of 'issues deriving from, or connected with, the very controversy that establishes jurisdiction.'" Id.; see also Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn.8-9 (1984) (discussing the terms). The plaintiffs do not allege that LCB is subject to general personal jurisdiction in New York. See N.Y. C.P.L.R. § 301. They argue only that LCB is subject to specific personal jurisdiction under the first subdivision of the New York long-arm statute, N.Y. C.P.L.R. § 302(a)(1). 15 1 N.Y. C.P.L.R. § 302(a) provides, in pertinent part, 2 that a court "may exercise personal jurisdiction over any non- 3 domiciliary . . . who in person or through an agent . . . 4 transacts any business within the state," so long as the 5 plaintiff's "cause of action aris[es] from" that 6 "transact[ion]."10 7 jurisdiction may be exercised under section 302(a)(1), "a court 8 must decide (1) whether the defendant 'transacts any business' 9 in New York and, if so, (2) whether this cause of action Id. So, in determining whether personal 10 'aris[es] from' such a business transaction." 11 Inc. v. Walker, 490 F.3d 239, 246 (2d Cir. 2007) (citing 12 Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65, 13 71, 818 N.Y.S.2d 164, 166, 850 N.E.2d 1140, 1142 (2006)). 14 Best Van Lines, Third, the exercise of personal jurisdiction must 15 comport with constitutional due process principles. 16 case, because the plaintiffs' assertion of personal 17 jurisdiction rests upon a state long-arm statute, the relevant 18 constitutional constraints are those imposed by the Due Process 19 Clause of the Fourteenth Amendment. 10 In this See Chloé, 616 F.3d at Section 302(a)(1) also authorizes personal jurisdiction where a defendant "contracts anywhere to supply goods or services in the state." That provision is not at issue in this appeal. Nor do the plaintiffs rely on sections 302(a)(2) or 302(a)(3), which authorize personal jurisdiction for claims arising out of torts committed within and without New York State, respectively. 16 1 164. The constitutional analysis under the Due Process Clause 2 consists of two separate components: the "minimum contacts" 3 inquiry and the "reasonableness" inquiry. 4 contacts" inquiry requires us to consider "whether the 5 defendant has sufficient contacts with the forum state to 6 justify the court's exercise of personal jurisdiction." 7 The "reasonableness" inquiry requires us to decide "whether the 8 assertion of personal jurisdiction comports with 'traditional 9 notions of fair play and substantial justice' -- that is, 10 whether it is reasonable to exercise personal jurisdiction 11 under the circumstances of the particular case." 12 Id. The "minimum Id. Id. The New York long-arm statute does not extend in all 13 respects to the constitutional limits established by 14 International Shoe Co. v. Washington, 326 U.S. 310 (1945), and 15 its progeny. 16 standards are thus not co-extensive, as they are in many other 17 states. 18 (noting "gaps" between the jurisdiction conferred by the New 19 York long-arm statute and that permissible under the federal 20 Due Process Clause); Banco Ambrosiano, S.p.A. v. Artoc Bank & 21 Trust Ltd., 62 N.Y.2d 65, 71, 476 N.Y.S.2d 64, 67, 464 N.E.2d 22 432, 435 (1984) ("[I]n setting forth certain categories of 23 bases for long-arm jurisdiction, [the New York long-arm 24 statute] does not go as far as is constitutionally The state statutory and federal constitutional See, e.g., Best Van Lines, 490 F.3d at 244-45 & n.8 17 1 permissible."); see also Patrick J. Borchers, The Problem with 2 General Jurisdiction, 2001 U. Chi. Legal F. 119, 122 & n.17 3 (collecting examples from other states of long-arm statutes 4 that extend to constitutional limits). 5 plaintiffs premise their theory of personal jurisdiction upon 6 the New York long-arm statute, we first consider whether the 7 requirements of the statute have been satisfied before 8 proceeding to address whether the exercise of jurisdiction 9 would comport with the Due Process Clause. Where, as here, the See Chloé, 616 F.3d 10 at 163-64; Am. Buddha, 609 F.3d at 35; Best Van Lines, 490 F.3d 11 at 242, 244. 12 constitutional avoidance. 13 F.3d 542, 547 (2d Cir. 2007); United States v. Magassouba, 544 14 F.3d 387, 404 (2d Cir. 2008) (collecting cases discussing the 15 doctrine).11 This reflects our respect for the doctrine of See Ehrenfeld v. Bin Mahfouz, 489 We therefore address the statutory bases of 11 In many cases, the jurisdictional analysis under the New York long-arm statute may closely resemble the analysis under the Due Process Clause of the Fourteenth Amendment. See Best Van Lines, 490 F.3d at 242 ("[T]he analysis of the state statutory and federal constitutional limitations have become somewhat entangled in New York jurisprudence . . . ."). This similarity of state-law and constitutional standards appears particularly evident with respect to N.Y. C.P.L.R. § 302(a)(1), the subdivision of the New York long-arm statute under which the plaintiffs in this case argue the court has personal jurisdiction over LCB. See Chloé, 616 F.3d at 166, 169 (taking note of these similarities); Best Van Lines, 490 F.3d at 247 (same); Ehrenfeld v. Bin Mahfouz, 9 N.Y.3d 501, 508, 851 N.Y.S.2d 381, 385-86, 881 N.E.2d 830, 834-45 (2007) (same). 18 1 personal jurisdiction prior to considering the constitutional 2 limitations. 3 4 See, e.g., Am. Buddha, 609 F.3d at 35. III. A. Long-Arm Jurisdiction Under Section 302(a)(1) Transaction of Business in New York 5 The first question we consider is whether a foreign 6 bank's maintenance of a correspondent banking account in New 7 York, and use of that account over the course of several years 8 to effect a succession of wire transfers totaling several 9 million dollars on behalf of a foreign client, constitutes a 10 transaction of business within New York. 11 Appeals has explained that "the overriding criterion necessary 12 to establish a transaction of business is some act by which the 13 defendant purposefully avails itself of the privilege of 14 conducting activities within New York," Ehrenfeld, 9 N.Y.3d at 15 508, 851 N.Y.S.2d at 385, 881 N.E.2d at 834 (brackets and 16 internal quotation marks omitted), thereby "invoking the 17 benefits and protections of its laws," Fischbarg v. Doucet, 9 18 N.Y.3d 375, 380, 849 N.Y.S.2d 501, 505, 880 N.E.2d 22, 26 19 (2007). 20 The New York Court of A defendant need not physically enter New York State 21 in order to transact business, "so long as the defendant's 22 activities here were purposeful." 23 Sec., Inc., 7 N.Y.3d at 71, 818 N.Y.S.2d at 167, 850 N.E.2d at 24 1142). Id. (quoting Deutsche Bank "Not all purposeful activity, however, constitutes a 19 1 'transaction of business' within the meaning of [N.Y. C.P.L.R. 2 § 302(a)(1)]." 3 indicated that "'merely telephon[ing] a single order' to New 4 York requesting a shipment of goods to another state, [or] the 5 transitory presence of a corporate official here, [or] 6 communications and shipments sent here by an out-of-state 7 doctor serving as a 'consultant' to plaintiff's New York 8 physician do not support [N.Y. C.P.L.R. § 9 jurisdiction." 10 Id. For example, the Court of Appeals has 302(a)(1)] Id. (citations omitted). "Although it is impossible to precisely fix those 11 acts that constitute a transaction of business . . . it is the 12 quality of the defendants' New York contacts that is the 13 primary consideration." 14 will, in the proper case, satisfy the requirements of section 15 302(a)(1). 16 167, 850 N.E.2d at 1143 ("[W]hen the requirements of due 17 process are met, as they are here, a sophisticated 18 institutional trader knowingly entering our state - whether 19 electronically or otherwise - to negotiate and conclude a 20 substantial transaction is within the embrace of the New York 21 long-arm statute."). 22 act in New York will not suffice, an ongoing course of conduct 23 or relationship in the state may. 24 N.Y.3d at 382-83, 849 N.Y.S.2d at 507, 880 N.E.2d 22 at 28 Id. A single act within New York See Deutsche Bank, 7 N.Y.3d at 72, 818 N.Y.S.2d at Other times, however, when an individual 20 See, e.g., Fischbarg, 9 1 (defendants' "substantial ongoing professional commitment" 2 supported long-arm jurisdiction); Longines-Wittnauer Watch Co. 3 v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 458, 261 N.Y.S.2d 8, 4 19, 209 N.E.2d 68, 76 (1965); Grimaldi v. Guinn, 72 A.D.3d 37, 5 44, 895 N.Y.S.2d 156, 162 (2d Dep't 2010). 6 regard for the "totality of the circumstances." 7 Farkas, 36 A.D.3d 852, 853, 830 N.Y.S.2d 220, 221 (2d Dep't 8 2007); accord Best Van Lines, 490 F.3d at 246. 9 A court must have Farkas v. The plaintiffs assert that LCB's maintenance and use 10 of its correspondent banking account in New York was 11 sufficiently purposeful to constitute a transaction of business 12 within New York State. 13 on the fact that LCB owned a correspondent banking account in 14 New York, but also on the fact that LCB allegedly used that 15 account "dozens" of times to execute international wire 16 transfers on Shahid's behalf. 17 They emphasize that they rely not only Compl. ¶ 53. The district court rejected the plaintiffs' proffered 18 distinction. Relying upon a line of Second Circuit district- 19 court cases, the court stated that "[t]he mere maintenance of 20 [a] correspondent bank account with a financial institution in 21 New York is not, standing alone, a sufficient basis to subject 22 a foreign defendant to personal jurisdiction under 23 § 302(a)(1)." 24 F. Supp. 2d at 727; Daventree Ltd. v. Republic of Azerbaijan, Licci, 704 F. Supp. 2d at 407 (citing Tamam, 677 21 1 349 F. Supp. 2d 736, 762 (S.D.N.Y. 2004); and Leema Enters., 2 Inc. v. Willi, 575 F. Supp. 1533, 1537 (S.D.N.Y. 1983)). 3 Although the district court acknowledged the plaintiffs' 4 attempt to distinguish between the "'mere maintenance of 5 correspondent banking accounts'" and "'the active execution 6 . . . of dozens of wire transfers totaling millions of dollars 7 over a multi-year period,'" Licci, 704 F. Supp. 2d at 407 8 (emphasis omitted), the court concluded that "no meaningful 9 distinction may be drawn between a foreign bank's maintenance 10 of a correspondent account to effect international wire 11 transfers and its indiscriminate use of that account for that 12 exact purpose," id. at 407-08. 13 The New York Court of Appeals has apparently not yet 14 addressed the precise question before the district court and 15 now before us: whether a foreign bank's frequent use of a 16 correspondent account in New York to effect international wire 17 transfers on behalf of an overseas client is an act directed 18 with sufficient purposefulness at New York to constitute a 19 transaction of business in that state under the long-arm 20 statute. 21 have the ability to ask the New York Court of Appeals for 22 guidance. 23 § 500.27(a). And, of course, the district court did not itself See N.Y. Comp. Codes R. & Regs. tit. 22, 22 1 New York courts have, however, considered several 2 similar sets of circumstances. In perhaps the most prominent 3 case concerning a similar issue, Amigo Foods Corp. v. Marine 4 Midland Bank-N.Y., 39 N.Y.2d 391, 384 N.Y.S.2d 124, 348 N.E.2d 5 581 (1976), the Court of Appeals addressed the question 6 "whether, under the governing long-arm jurisdiction statute 7 [N.Y. C.P.L.R. § 302(a)(1), also invoked here], a showing that 8 a New York bank is the correspondent of an out-of-State bank 9 provides a sufficient basis upon which New York courts may 10 exercise jurisdiction over the out-of-State bank." 11 384 N.Y.S.2d at 125, 348 N.E.2d at 582. 12 Id. at 393, The plaintiff, a New York wholesaler, had contracted 13 to buy several truckloads of potatoes from a Maine distributor. 14 After the plaintiff made payment, its letter of credit passed 15 through a New York correspondent account owned by one of the 16 defendants, Aroostook Trust Company, a Maine bank. 17 384 N.Y.S.2d at 126, 348 N.E.2d at 582. 18 Id. at 394, The Appellate Division dismissed the plaintiff's 19 claims against Aroostook, "holding that a correspondent bank 20 relationship was an insufficient basis upon which to predicate 21 long-arm jurisdiction." 22 N.E.2d at 583. 23 a correspondent bank relationship in New York "suffic[ed], in 24 and of itself," to support the exercise of personal Id. at 395, 384 N.Y.S.2d at 126, 348 And the Court of Appeals declined to hold that 23 1 jurisdiction. Id. at 395, 384 N.Y.S.2d at 127, 348 N.E.2d at 2 583. 3 itself, a correspondent bank relationship, without any other 4 indicia or evidence to explain its essence, may not form the 5 basis for long-arm jurisdiction under [N.Y. C.P.L.R. 6 § 302(a)(1)]." 7 584. 8 permit the plaintiff to establish that the general rule did not 9 apply. The court announced a general rule that "standing by Id. at 396, 384 N.Y.S.2d at 127, 348 N.E.2d at The court then remanded for jurisdictional discovery to Discovery would allow the plaintiff to inquire into, 10 among other things, "the precise nature of [Aroostook's] 11 relationship with [its correspondent bank in New York] 12 vis-à-vis the handling of [the plaintiff's] letters of credit." 13 Id. 14 Several years later, in Ehrlich-Bober & Co. v. Univ. 15 of Houston, 49 N.Y.2d 574, 427 N.Y.S.2d 604, 404 N.E.2d 726 16 (1980), the Court of Appeals upheld the exercise of personal 17 jurisdiction over a public university located in Texas based 18 upon the fact that the university -- which had contracted to 19 sell securities to the plaintiff, a New York securities dealer 20 employed the services of a correspondent bank in New York to 21 carry out the transaction. 22 404 N.E.2d at 728. 23 "[a]lthough 'standing by itself, a correspondent bank 24 relationship . . . may not form the basis for long-arm Id. at 577, 427 N.Y.S.2d at 606, The Court of Appeals concluded that 24 1 jurisdiction under [N.Y. C.P.L.R. § 302(a)(1)],' the facts 2 alleged here, which we accept as true for this purpose, show 3 substantially more." 4 N.E.2d at 729 (quoting Amigo Foods, 39 N.Y.2d at 396, 384 5 N.Y.S.2d at 127, 348 N.E.2d at 584) (citation omitted). 6 court appeared to regard as relevant the fact that the 7 contractual transactions at issue had been "centered" in New 8 York.12 9 ("[T]he transactions in question . . . were initiated by an 10 employee of the defendant university in a phone call to the 11 plaintiff's New York offices. 12 by the plaintiff. 13 securities were delivered in New York."). 14 Id. at 579, 427 N.Y.S.2d at 607, 404 The Id. at 581-82, 427 N.Y.S.2d at 609, 404 N.E.2d at 731 They were accepted in New York The money was paid in New York. The In Banco Ambrosiano v. Artoc Bank & Trust, 62 N.Y.2d 15 65, 476 N.Y.S.2d 64, 464 N.E.2d 432 (1984), a decision applying 16 due process standards rather than the long-arm statute, the 17 Court of Appeals upheld the exercise of quasi-in-rem 18 jurisdiction over a Bahamian bank based upon its use of a 19 correspondent account in New York to conduct a loan transaction 12 The principal issue on appeal in Ehrlich-Bober & Co. was not the scope of N.Y. C.P.L.R. § 302(a)(1), but whether the trial court should have declined jurisdiction over the plaintiff's suit against the defendant university as a matter of comity based upon a Texas statute limiting the jurisdictions in which the university is subject to suit. Id. at 577-79, 427 N.Y.S.2d at 606-07, 404 N.E.2d at 728-29. 25 1 with the plaintiff, id. at 72-73, 476 N.Y.S.2d at 67-68, 464 2 N.E.2d at 435-36. 3 contact and its significance in the context of this 4 litigation," viewed the bank's correspondent account as 5 "closely related to plaintiff's claim" because it was "the very 6 account through which [the bank] effectuated the transaction at 7 issue." 8 36. 9 transaction [was not] an isolated one" inasmuch as the bank had The court, emphasizing the "quality of this Id. at 72, 476 N.Y.S.2d at 67-68, 464 N.E.2d at 435- The court also appeared to rely on the fact that "this 10 "utilize[d] this account regularly to accomplish its 11 international banking business." 12 68, 464 N.E.2d at 436. 13 not on a determination that the New York long-arm statute was 14 satisfied, but on a conclusion that the exercise of quasi-in- 15 rem jurisdiction under the circumstances would not violate due 16 process standards, see generally id. at 71-73, 476 N.Y.S.2d at 17 66-68, 464 N.E.2d at 434-36, the decision may be relevant 18 insofar as the statutory and constitutional inquiries "have 19 become . . . entangled in New York jurisprudence." 20 Lines, 490 F.3d at 242. 21 Id. at 72-73, 476 N.Y.S.2d at Although the court's decision rested Best Van In Indosuez International Finance B.V. v. National 22 Reserve Bank, 98 N.Y.2d 238, 746 N.Y.S.2d 631, 774 N.E.2d 696 23 (2002), the Court of Appeals upheld the exercise of personal 24 jurisdiction in New York over a Russian bank that had 26 1 maintained a bank account in New York and used it in connection 2 with currency-exchange options transactions with the plaintiff. 3 The court ruled that the bank's "course of dealing" in making 4 and accepting payments through a New York bank "constitute[d] 5 purposeful exercise . . . of the privilege of conducting 6 business in New York State sufficient to subject it to personal 7 jurisdiction" under N.Y. C.P.L.R. § 302(a)(1). 8 N.Y.S.2d at 636, 774 N.E.2d at 701. 9 Id. at 247, 746 Those four decisions suggest to us that the 10 "transaction of business" prong of the test for jurisdiction 11 under section 302(a)(1) may, in appropriate cases, be satisfied 12 by a showing that the defendant maintained and used a 13 correspondent bank account in New York. 14 courts nonetheless seem to regard a nondomiciliary defendant's 15 maintenance and use of such an account in New York, standing 16 alone, as ipso facto insufficient to support personal 17 jurisdiction under the New York long-arm statute. 18 Faravelli v. Bankers Trust Co., 85 A.D.2d 335, 339, 447 19 N.Y.S.2d 962, 964-65 (1st Dep't 1982) ("[T]he fact that Punjab 20 had correspondent banks in New York in and of itself [does not] 21 provide sufficient contacts for longarm jurisdiction under 22 [N.Y. C.P.L.R. § 302]."), aff'd for the reasons stated by the 23 Appellate Division, 59 N.Y.2d 615, 618, 463 N.Y.S.2d 194, 449 24 N.E.2d 1272 (1983); Nemetsky v. Banque de Developpement de la 27 Some New York State See 1 Republique du Niger, 65 A.D.2d 748, 748-49, 407 N.Y.S.2d 556, 2 557 (2d Dep't 1978) ("Even if the trade acceptance [upon which 3 plaintiff brought suit] were shown to be part of the 4 [defendant's] correspondent bank relationship [with a New York 5 bank], that relationship does not itself provide the basis for 6 long arm jurisdiction under [N.Y. C.P.L.R. § 302(a)(1)]."), 7 aff'd mem., 48 N.Y.2d 962, 964, 425 N.Y.S.2d 277, 401 N.E.2d 8 388 (1979) ("All that appears is a correspondent bank 9 relationship between defendant and Credit Lyonnais and the 10 trade acceptance connected to that relationship. 11 standing alone are insufficient to support an exercise of in 12 personam jurisdiction . . . ."); Taub v. Colonial Coated 13 Textile Corp., 54 A.D.2d 660, 661, 387 N.Y.S.2d 869, 870 (1st 14 Dep't 1976) (depending on Amigo Foods for the conclusion that 15 an Israeli bank's use of a correspondent account in New York 16 does not suffice to establish long-arm jurisdiction). 17 federal district court decisions in this Circuit have relied 18 upon these state-court decisions and Amigo Foods' statement 19 that a correspondent banking relationship "standing by itself" 20 does not suffice, Amigo Foods, 39 N.Y.2d at 396, 384 N.Y.S.2d 21 at 127, 348 N.E.2d at 584, to conclude that the "mere 28 These factors And 1 maintenance" of a correspondent bank account in New York does 2 not suffice to establish personal jurisdiction there.13 3 Assuming for present purposes that this "mere 4 maintenance" principle is a faithful articulation of the Court 5 of Appeals' decision in Amigo Foods, it is unclear to us how to 6 apply it to the facts of this case: 7 "mere" intended to play? 8 that it is intended to distinguish the "maintenance" of an 9 account from its active use. 10 (describing this argument). 11 suggest that other types of contacts with the forum -- such as 12 borrowing money in New York, signing notes payable in New York, 13 or negotiating agreements in New York -- are also required in What role is the word It may be, as the plaintiffs suggest, See Licci, 704 F. Supp. 2d at 407 But perhaps it is intended to 13 See, e.g., Tamam, 677 F. Supp. 2d at 727 ("[M]erely maintaining a New York correspondent bank account is insufficient to subject a foreign bank to personal jurisdiction."); Neewra, Inc. v. Manakh Al Khaleej Gen. Trading & Contracting Co., No. 03 Civ. 2936, 2004 WL 1620874, at *3, 2004 U.S. Dist. LEXIS 13556, at *10 (S.D.N.Y. July 20, 2004); Societe Generale v. Fla. Health Scis. Ctr., Inc., No. 03 Civ. 5615, 2003 WL 22852656, at *4, 2003 U.S. Dist. LEXIS 21502, at *11 (S.D.N.Y. Dec. 1, 2003) (merely maintaining correspondent bank account is not sufficient); Globex Int'l Inc. v. Commercial Bank of Namibia Ltd., No. 99 Civ. 4789, 1999 WL 529538, at *1, 1999 U.S. Dist. LEXIS 11321, at *2 (S.D.N.Y. July 23, 1999) (same); Semi Conductor Materials, Inc. v. Citibank Int'l PLC, 969 F. Supp. 243, 246-47 (S.D.N.Y. 1997) (same); Johnson Elec. N. Am., Inc. v. Bank of Wales, PLC, No. 90 Civ. 6683, 1991 WL 20006, at *2, 1991 U.S. Dist. LEXIS 1596, at *5 (S.D.N.Y. Feb. 8, 1991) (same); Celton Man Trade, Inc. v. UTEX S.A., No. 84 Civ. 8179, 1986 WL 6788, at *4, 1986 U.S. Dist. LEXIS 24280, at *12 (S.D.N.Y. June 12, 1986) (same); Exchange Nat'l Bank of Chicago v. Empresa Minera del Centro del Peru S.A., 595 F. Supp. 502, 505 (S.D.N.Y. 1984) (same). 29 1 order to permit jurisdiction over the defendant to be 2 exercised. 3 691 F. Supp. 2d 405, 423 (S.D.N.Y. 2010). 4 the term means that a transaction of business in New York will 5 not suffice unless the plaintiff's cause of action also 6 "arise[s] from" that transaction -- in other words, that the 7 second prong of the test must also be satisfied.14 8 Inc., 2004 WL 1620874, at *3, 2004 U.S. Dist. LEXIS 13556, at 9 *10 ("A foreign bank's mere maintenance of a correspondent See, e.g., DirecTV Latin Am., LLC v. Park 610, LLC, Or it may be that See Neewra, 10 account . . . is not enough . . . . 11 cause of action arising out of a transaction involving the use 12 of a correspondent account may confer jurisdiction over [the] 13 defendant in New York.'") (citation omitted; emphasis in 14 original). 14 On the other hand, 'a District courts in this Circuit have upheld personal jurisdiction based upon a defendant's use of a correspondent bank account in New York where the use of that account was held to lay at the "very root of the [plaintiff's] action." Correspondent Servs. Corp. v. J.V.W. Invs. Ltd., 120 F. Supp. 2d 401, 4005 (S.D.N.Y. 2000); see also, e.g., Dale v. Banque SCS Alliance S.A., No. 02 Civ. 3592, 2005 WL 2347853, at *3, 2005 U.S. Dist. LEXIS 20967, at *12-*13 (S.D.N.Y. Sept. 22, 2005) (upholding jurisdiction based on defendant's use of "several correspondent bank accounts in New York . . . to effect a number of the funds transfers that are the subject of this action"); Chase Manhattan Bank v. Banque Generale du Commerce, No. 96 Civ. 5184, 1997 WL 266968, at *2 (S.D.N.Y. May 20, 1997) (finding personal jurisdiction proper based on the defendant's use of a correspondent account in New York because "the [plaintiff's] cause of action arises out of [that] use"). 30 1 Were we required to decide ourselves, we might 2 conclude -- in light of the Court of Appeals' post-Amigo Foods 3 decisions in Ehrlich-Bober & Co., Banco Ambrosiano, and 4 Indosuez -- that Amigo Foods is best read as standing for the 5 proposition that the first prong of the long-arm jurisdiction 6 test under N.Y. C.P.L.R. § 302(a)(1) whether the defendant 7 has transacted business within New York may be satisfied by 8 the defendant's use of a correspondent bank account in New 9 York, even if no other contacts between the defendant and New 10 York can be established, if the defendant's use of that account 11 was purposeful. 12 certify that question to the New York Court of Appeals were it 13 the only one that challenged us, in light of the fact that we 14 are asking the court to address the second, "arising from," 15 prong of the test for long-arm jurisdiction, we consider it 16 prudent to ask that court also to address the first prong of 17 the test, and to further explicate its guidance in Amigo Foods 18 -- if, of course, it chooses to do so. 19 the following question to the New York Court of Appeals for its 20 consideration: 21 22 23 24 25 26 Whether or not we would think it necessary to Accordingly, we certify (1) Does a foreign bank's maintenance of a correspondent bank account at a financial institution in New York, and use of that account to effect "dozens" of wire transfers on behalf of a foreign client, constitute a "transact[ion]" of business in 31 1 2 3 4 5 New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)? B. Nexus Between Plaintiffs' Claims and Defendant's Transaction in New York If the first prong of the test for jurisdiction under 6 N.Y. C.P.L.R. § 302(a)(1) has been satisfied, a question as to 7 which we are asking the New York Court of Appeals for help, we 8 must then inquire whether the plaintiffs' claims arise from 9 that transaction. We have explained, with respect to this 10 "nexus" requirement, that "'[a] suit will be deemed to have 11 arisen out of a party's activities in New York if there is an 12 articulable nexus, or a substantial relationship, between the 13 claim asserted and the actions that occurred in New York.'" 14 Best Van Lines, 490 F.3d at 246 (quoting Henderson v. INS, 157 15 F.3d 106, 123 (2d Cir. 1998)); see also Kreutter v. McFadden 16 Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 198, 522 17 N.E.2d 40, 43 (1988) (employing a "substantial relationship" 18 test); McGowan v. Smith, 52 N.Y.2d 268, 272, 437 N.Y.S.2d 643, 19 645, 419 N.E.2d 321, 323 (1981) (employing an "articulable 20 nexus" test). 21 C.P.L.R. § 302(a)(1)] where the relationship between the claim 22 and transaction is too attenuated," Johnson v. Ward, 4 N.Y.3d 23 516, 520, 797 N.Y.S.2d 33, 35, 829 N.E.2d 1201, 1203 (2005), 24 and "[a] connection that is 'merely coincidental' is 25 insufficient to support jurisdiction," Sole Resort, 450 F.3d at "[J]urisdiction is not justified [under N.Y. 32 1 103 (quoting Johnson, 4 N.Y.3d at 520, 797 N.Y.S.2d at 35, 829 2 N.E.2d at 1203); see also Fischbarg, 9 N.Y.3d at 384, 849 3 N.Y.S.2d at 508 09, 880 N.E.2d at 29-30 (a contact's 4 "tangential relationship to the present case" will not 5 suffice). 6 There is no bright-line test for determining whether 7 the "nexus" is present in a particular case. "This inquiry is 8 a fact-specific one, and [the point at which] the connection 9 between the parties' activities in New York and the 10 [plaintiffs'] claim crosses the line from 'substantially 11 related' to 'mere coincidence' is not always self-evident." 12 Sole Resort, 450 F.3d at 103. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 We observed: In cases where claims have been dismissed on jurisdictional grounds for lack of a sufficient nexus between the parties' New York contacts and the claim asserted, the event giving rise to the plaintiff's injury had, at best, a tangential relationship to any contacts the defendant had with New York. In fact, in those cases, the injuries sustained and the resulting disputes bore such an attenuated connection to the New York activity upon which the plaintiffs attempted to premise jurisdiction that the disputes could not be characterized as having "arisen from" the New York activity. Id. at 104. The district court, deciding that the nexus 29 requirement was not satisfied in this case, concluded that 30 "[n]o articulable nexus or substantial relationship exists 31 between LCB's general use of its correspondent account for wire 33 1 transfers through New York and the specific terrorist 2 activities by Hizbollah underlying plaintiffs' claims."15 3 Licci, 704 F. Supp. 2d at 408. 4 the court relied principally upon two observations. 5 court noted that the "[p]laintiffs themselves are not customers 6 of . . . [LCB], nor did they have any financial interest in the 7 wired funds," id., thereby distinguishing several cases that 8 had upheld personal jurisdiction based upon a defendant's use 9 of a correspondent banking account in New York.16 In reaching that conclusion, First, the Second, the 10 court concluded that "[t]he injuries and death[s] suffered by 11 plaintiffs and their family members were caused by the rockets 12 launched by Hizbollah, not by the banking services provided by 13 LCB through its correspondent account or wire transfers with 14 Amex Bank via New York."17 Id. Based on this assertion, the 15 In conducting its analysis into whether the plaintiffs' claims "aris[e] from" LCB's transaction of business in New York for the purposes of section 302(a)(1), the district court did not separately evaluate the plaintiffs' Anti-Terrorism Act, ATS, and Israeli-law claims. 16 See Dale, 2005 WL 2347853, at *3, 2005 U.S. Dist. LEXIS 20967, at *12-*13; Correspondent Servs. Corp., 120 F. Supp. 2d at 405; Chase Manhattan Bank, 1997 WL 266968, at *2, 1997 U.S. Dist. LEXIS 7020, at *4-*7. 17 This conclusion echoed the one reached in the factually similar Tamam case, in which the court stated: "It is clear that the events giving rise to the physical injuries and deaths for which Plaintiffs seek redress are missile attacks in Israel, not funds transfers in New York." Tamam, 677 F. Supp. 2d at 728. Indeed, there, as here, the district court concluded that the plaintiffs had failed to demonstrate a "'substantial 34 1 district court concluded that "LCB's maintenance or use of its 2 correspondent bank account is too attenuated from Hizbollah's 3 attacks in Israel to assert personal jurisdiction based solely 4 on wire transfers through New York." 5 Id. The district court was of course correct in observing 6 that the rockets launched by Hizballah were the alleged 7 immediate cause of the plaintiffs' injuries or their relatives' 8 deaths. 9 its role in the transfer of funds to Hizballah. But the plaintiffs bring their claims against LCB for And the 10 jurisdictional nexus analysis directs us to consider the 11 relationship between the plaintiffs' claims and LCB's alleged 12 transactions in New York. 13 in concluding that "[t]he injuries and death[s] suffered by 14 plaintiffs" were caused by Hizballah rather than LCB, id., was 15 reaching a conclusion that properly bears upon the ultimate 16 merits of plaintiffs' claims, which seek to hold LCB liable for 17 damages allegedly inflicted by Hizballah.18 It may be that the district court, And while we may relationship' between the correspondent bank accounts and Hizbollah's terrorist activity." Id. at 727-30. 18 As discussed below, the parties vigorously dispute whether the plaintiffs, to state a claim against LCB under the Anti-Terrorism Act, must demonstrate a causal connection between LCB's provision of banking services and Hizballah's rocket attacks. Because this case reaches us solely on appeal from a Rule 12(b)(2) dismissal, however, we need not and do not address the parties' arguments concerning the existence vel non of such a causation requirement under the Anti-Terrorism Act at this time. 35 1 eventually be required to address the merits, such merits 2 determinations do not bear on the pure state-law question of 3 whether the plaintiffs can show that the facts alleged in the 4 complaint in support of their claims are sufficient to 5 establish personal jurisdiction under the New York long-arm 6 statute. 7 On appeal from the district court's judgment in this 8 regard, the plaintiffs make several arguments directed solely 9 to their Anti-Terrorism Act claims, and others that appear 10 directed primarily to their other claims. 1. 11 The Anti-Terrorism Act Claims. On appeal, the 12 plaintiffs focus their arguments primarily on the district 13 court's treatment of their Anti-Terrorism Act claims. The Anti-Terrorism Act, enacted in 1990,19 provides 14 15 that "[a]ny national of the United States injured in his or her 16 person, property, or business by reason of an act of 17 international terrorism, or his or her estate, survivors, or 18 heirs, may sue therefor in any appropriate district court of 19 the United States." 18 U.S.C. § 2333(a). 19 For an act to The Anti-Terrorism Act was originally enacted in 1990. Due to a procedural error, however, the Anti-Terrorism Act was repealed in April 1991 and later re-introduced and reenacted in substantially the same form. The current text of the AntiTerrorism Act, codified at 18 U.S.C. § 2333, was enacted in 1992. See Wultz v. Islamic Republic of Iran, 755 F. Supp. 2d 1, 19 n.1 (D.D.C. 2010) (summarizing this history); Strauss v. Credit Lyonnais, S.A., 249 F.R.D. 429, 444 (E.D.N.Y. 2008) (same). 36 1 constitute "international terrorism," it must satisfy four 2 separate requirements: (1) it must "involve violent acts or 3 acts dangerous to human life"; (2) it must qualify as "a 4 violation of the criminal laws of the United States or of any 5 State" if it were committed within a United States 6 jurisdiction; (3) it must "appear to be intended" to intimidate 7 a civilian population, influence government policy, or affect 8 the conduct of government by certain specified means; and (4) 9 it must occur primarily outside the United States or transcend 10 national boundaries. Id. § 2331(1)(A)-(C). 11 Circuit, and several district courts in this Circuit, have 12 concluded that a defendant's violation of the criminal 13 material-support statutes, see 18 U.S.C. §§ 2339A, 2339B & 14 2339C,20 constitutes an act of "international terrorism" within 15 the meaning of section 2331(1). 16 victims of terrorism therefore may bring civil suits against 20 The Seventh According to these courts, Those three statutes criminalize, respectively: (1) "provid[ing] material support or resources . . . knowing or intending that they are to be used in preparation for[] or in carrying out" certain identified criminal offenses, 18 U.S.C. § 2339A(a); (2) "knowingly provid[ing] material support or resources to a foreign terrorist organization," id. § 2339B(a)(1); and (3) "directly or indirectly . . . provid[ing] or collect[ing] funds with the intention that such funds be used, or with the knowledge that such funds are to be used, in full or in part, in order to carry out . . . any [] act intended to cause death or serious bodily injury to a civilian," id. § 2339C(a)(1). Each of the three statutes contain further provisions defining or limiting their terms. 37 1 violators of those statutes under section 2333(a), see, e.g., 2 Boim v. Holy Land Found. for Relief and Dev. (Boim II), 549 3 F.3d 685, 690-91 (7th Cir. 2008) (en banc), cert. denied, 130 4 S. Ct. 458 (2009); Boim v. Quranic Literacy Inst. (Boim I), 291 5 F.3d 1000, 1012-16 (7th Cir. 2002). 6 The plaintiffs contend that the district court's 7 decision reflects a mistaken understanding about the elements 8 of an Anti-Terrorism Act cause of action -- in particular, the 9 extent to which proof of causation is required to sustain such See Pls.' Br. at 16-25 (citing Holder v. Humanitarian 10 a claim. 11 Law Project, 130 S. Ct. 2705, 2720, 2729 (2010) (concluding 12 that Congress could lawfully criminalize the provision of 13 "training" or "expert advice or assistance" to terrorist 14 groups, even when the assistance was intended to further non- 15 violent or humanitarian ends, because the recipients of such 16 assistance could nonetheless use it "as part of a broader 17 strategy to promote terrorism"); Boim II, 549 F.3d at 695 18 (concluding that a charity which donates money to a terrorist 19 organization may be held liable under the Anti-Terrorism Act -- 20 even if a plaintiff is unable to prove that the money the 21 charity donated actually helped finance the attacks that 22 injured the plaintiff -- if a plaintiff proves that the charity 23 "kn[ew] the [terrorist] character of that [donee] 24 organization.")). However, the plaintiffs' contentions 38 1 regarding the scope of the Anti-Terrorism Act bear upon the 2 merits of this case. 3 question we ask the Court of Appeals to consider, is an 4 antecedent question of state law: whether the plaintiffs' 5 claims, as supported by the facts alleged, see Chloé, 616 F.3d 6 at 163 (determining whether plaintiff alleged "facts that, if 7 credited by the ultimate trier of fact, would suffice to 8 establish jurisdiction over the defendant" under the New York 9 long-arm statute) (brackets omitted), arise from LCB's The question we confront here, and the 10 transaction of business in New York, thereby giving rise to 11 personal jurisdiction over LCB under the New York long-arm 12 statute. 13 As an initial matter, we conclude that the district 14 court was mistaken about what alleged conduct by LCB is being 15 relied upon by the plaintiffs as giving rise to the their 16 claims. 17 that LCB played a direct role in committing or facilitating the 18 particular rocket attacks that injured the plaintiffs. 19 are based upon the assertion that LCB knowingly wired money on 20 behalf of a Hizballah affiliate through New York; that LCB 21 purposefully did so in order to assist Hizballah (irrespective 22 of how it intended the money would be used by Hizballah, or how 23 it was in fact used); that these services constituted material 24 support to a terrorist organization; and that LCB therefore The plaintiffs' claims are not premised on allegations 39 They 1 violated the Anti-Terrorism Act. 2 LCB's transactions in New York are among the operative facts 3 underpinning the plaintiffs' Anti-Terrorism Act claims as 4 alleged. 5 reus of the torts attributed to LCB in the [amended complaint] 6 is none other than LCB's transfers to Hezbollah via its account 7 at Amex Bank in New York"). 8 are without sufficient guidance to permit us to resolve the 9 state-law question authoritatively. 10 It would appear, then, that Cf. Pls.' Br. at 20 (asserting that "the entire actus We nonetheless conclude that we Once again, the question is whether, as a matter of 11 New York law, the plaintiffs' Anti-Terrorism Act claims, as 12 they are alleged by the plaintiffs, "aris[e] from" the 13 defendants' transaction of business in New York within the 14 meaning of N.Y. C.P.L.R. § 302(a)(1). 15 present in the New York Court of Appeals' statement that a 16 sufficient nexus exists where "there is a substantial 17 relationship between [a New York] transaction and the claim 18 asserted," Kreutter, 71 N.Y.2d at 467, 527 N.Y.S.2d at 198, 522 19 N.E.2d at 43 (emphases added) - what is a "substantial 20 relationship"? 21 22 23 24 25 But two ambiguities are And, what is a "claim"? a. What is a "substantial relationship" for purposes of N.Y. C.P.L.R. § 302(a)(1)? First, it remains unclear to us what sort of causal connection, if any, must be demonstrated between a defendant's 40 1 New York activities and a plaintiff's "claim" under the New 2 York long-arm statute's nexus requirement. 3 interpreted the Court of Appeals' decisions in McGowan v. 4 Smith, 52 N.Y.2d 268, 437 N.Y.S.2d 643, 419 N.E.2d 321 (1981), 5 and similar cases, as holding that N.Y. C.P.L.R. § 302(a)(1) 6 contains a nexus requirement that is considerably stricter than 7 its constitutional analogue. 8 Utah Med. Prods., Inc., 149 F.3d 1382, 1386-87 (Fed. Cir. 1998) 9 (concluding that the statutory nexus requirement has been Some courts have See Graphic Controls Corp. v. 10 "interpreted very narrowly" by the New York Court of Appeals); 11 Beacon Enters, Inc. v. Menzies, 715 F.2d 757, 764-65 & n.6 (2d 12 Cir. 1983) (stating that N.Y. C.P.L.R. § 302(a)(1) requires 13 proof of "a strong nexus," meaning "'a direct relation between 14 the cause of action and the in-state conduct'" (quoting 15 Fontanetta v. Am. Bd. of Internal Med., 421 F.2d 355, 357 (2d 16 Cir. 1970))); Talbot v. Johnson Newspaper Corp., 123 A.D.2d 17 147, 149, 511 N.Y.S.2d 152, 154 (3d Dep't 1987) ("A defendant 18 may not be subject to personal jurisdiction under [N.Y. 19 C.P.L.R. § 302(a)(1)] simply because her contact with New York 20 was a link in the chain of events giving rise to the cause of 21 action[.]"), aff'd, 71 N.Y.2d 827, 527 N.Y.S.2d 729, 522 N.E.2d 22 1027 (1988). 23 with the view that the New York long-arm statute requires that 24 the defendant's contacts with New York be the "proximate cause" Those interpretations appear to be consistent 41 1 of the plaintiff's injuries. Cf., e.g., Mass. Sch. of Law at 2 Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 35 (1st Cir. 1998) 3 (concluding that, to comport with the Due Process Clause, the 4 exercise of specific jurisdiction requires proof that the 5 defendant's forum contacts were the proximate cause of the 6 plaintiff's injury); see generally Dudnikov v. Chalk & 7 Vermilion Fine Arts, Inc., 514 F.3d 1063, 1078-79 (10th Cir. 8 2008) (describing "proximate cause" approach and comparing it 9 to other approaches); O'Connor v. Sandy Lane Hotel Co., 496 10 F.3d 312, 318-19 (3d Cir. 2007) (same). 11 support in the text of the long-arm statute itself, insofar as 12 it provides jurisdiction only for a plaintiff's "cause of 13 action arising from" an enumerated act by the defendant. 14 C.P.L.R. § 302(a). 15 This view may find N.Y. Other courts have assumed or suggested, however, that 16 the nexus requirement of the New York long-arm statute is 17 relatively permissive. 18 (implying that the nexus requirement is met unless "the event 19 giving rise to the plaintiff's injury had, at best, a 20 tangential relationship to any contacts the defendant had with 21 New York"); PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1109 22 (2d Cir. 1997) ("A cause of action arises out of a defendant's 23 New York transactions when it is 'sufficiently related to the 24 business transacted that it would not be unfair to deem it to See, e.g., Sole Resort, 450 F.3d at 104 42 1 arise out of the transacted business.'" (quoting Hoffritz for 2 Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 59 (2d Cir. 3 1985))). 4 connection" or "discernible relationship" approaches, O'Connor, 5 496 F.3d at 319-20, and reflect the view that the proper test 6 for satisfaction of the nexus requirement should not be 7 causally based. 8 Inc., 14 Cal. 4th 434, 456, 475, 926 P.2d 1085, 1099, 1112 9 (1996) (adopting a "substantial nexus or connection" approach 10 in applying the California long-arm statute and, in rejecting 11 other approaches, questioning the wisdom "of importing a 12 causation test from tort law to measure a matter that is 13 fundamentally one of relationship and fairness rather than 14 causation"). 15 Cir.) (suggesting in dicta that the "relatedness" test under 16 the Due Process Clause may require proof of either but-for or 17 proximate causation), cert. denied, 525 U.S. 948 (1998). 18 the extent that the Court of Appeals determined in Kreutter and 19 McGowan that the nexus requirement may be satisfied by a 20 showing of a "substantial relationship" or an "articulable 21 nexus," respectively, see Kreutter, 71 N.Y.2d at 467, 527 22 N.Y.S.2d at 198, 522 N.E.2d at 43; McGowan, 52 N.Y.2d at 272, 23 437 N.Y.S.2d at 645, 419 N.E.2d at 323, it would appear as 24 though no showing of causation is required by N.Y. C.P.L.R. These interpretations evoke the "substantial See, e.g., Vons Cos., Inc. v. Seabest Foods, But cf. Chew v. Dietrich, 143 F.3d 24, 29-30 (2d 43 To 1 § 302(a)(1). Cf. Thomason v. Chem. Bank, 234 Conn. 281, 290, 2 661 A.2d 595, 600-01 (1995) (concluding, as to Connecticut's 3 long-arm statute providing specific jurisdiction over cases 4 that "arise out of" a defendant's forum contacts, that the 5 statute "does not require a causal connection between the 6 defendant's forum-directed activities and the plaintiffs' 7 lawsuit").21 8 better position to respond to that question than are we. But we think the New York Court of Appeals is in a 9 10 b. What is a "claim" for purposes of N.Y. C.P.L.R. § 302(a)(1)? 11 Further complicating the analysis is a lack of 12 clarity regarding what must "aris[e] from" a defendant's New 13 York contacts. 14 inquiry requires us to decide whether "there is a substantial Although it is well-established that the nexus 21 Complicating matters, an approach has begun to emerge in the federal district courts that a plaintiff's claim may only arise from a defendant's use of a correspondent banking account in New York where the defendant's use of such an account was "clearly 'at the very root' of the action." Tamam, 677 F. Supp. 2d at 727-29; see also Licci, 704 F. Supp. 2d at 407; Daventree, 349 F. Supp. 2d at 762; Correspondent Servs. Corp., 120 F. Supp. 2d at 405. It is not clear to us whether this "very root of the action" formulation is consistent with the constructions of the nexus requirement under N.Y. C.P.L.R. § 302(a)(1) elaborated by Kreutter and McGowan. It also remains unclear whether it is possible that a plaintiff's cause of action might bear an "articulable nexus" but not a "substantial relationship" (or vice versa) to a defendant's New York-based contacts. Cf. Helicopteros, 466 U.S. at 415 n.10 (reserving the question "whether the terms 'arising out of' and 'related to' describe different connections between a cause of action and a defendant's contacts with a forum"). 44 1 relationship between the transaction and the claim asserted," 2 Kreutter, 71 N.Y.2d at 467, 527 N.Y.S.2d at 198, 522 N.E.2d at 3 43 (emphasis added), it is not clear whether the plaintiffs' 4 "claim" is to be understood more loosely as the factual 5 circumstances surrounding the harm suffered by a plaintiff, or 6 more strictly as the doctrinal elements of a particular theory 7 of recovery. 8 Grand Rent A Car Corp., 98 F.3d 25, 31 (2d Cir. 1996) 9 (comparing the elements of plaintiff's cause of action to Cf., e.g., Agency Rent A Car System, Inc. v. 10 defendant's forum contacts). And if a "claim" refers to the 11 elements of a cause of action, it is unclear whether the 12 relevant element here is the plaintiffs' "injuries" or the 13 defendant's wrongful act (referred to in the tort context as a 14 "breach of duty") - or perhaps both. 15 Corp. v. Gottshall, 512 U.S. 532, 550-51 (1994) (noting that 16 "traditional tort concepts" include "injury" and "breach of 17 duty"). 18 the plaintiffs' injuries - the deaths and injuries in Israel 19 - "aris[e] from" the defendant's use of a New York 20 correspondent bank account, or must the defendant's alleged 21 wrongful act -- LCB's transfer of funds -- "aris[e] from" the 22 use of that account?22 See, e.g., Consol. Rail In other words, for sufficient nexus to exist, must This distinction is of potential 22 Some cases have placed a greater emphasis on the connection between the plaintiff's injury and the defendant's New 45 1 relevance because under plaintiffs' theory of recovery, the 2 injury suffered is causally decoupled from the defendant's 3 wrongful act,23 and LCB's alleged wrongful act bears a closer 4 relationship to its New York contacts than do the plaintiffs' 5 injuries. 6 "claim" compounds the previously noted uncertainty as to the 7 meaning of "substantial relationship" for purposes of N.Y. 8 C.P.L.R. § 302(a)(1). This ambiguity regarding the meaning of the term York contacts. See Sole Resort, 450 F.3d at 104 (discussing the "nexus between the parties' New York contacts and the . . . event giving rise to the plaintiff's injury"); Holness v. Maritime Overseas Corp., 251 A.D.2d 220, 224, 676 N.Y.S.2d 540, 544 (1st Dep't 1998) ("[P]laintiff's alleged injury and the tort action based on it cannot be said to have arisen directly out of this . . . transaction . . . ."); Chamberlain v. Peak, 155 A.D.2d 768, 769, 547 N.Y.S.2d 706, 707 (3d Dep't 1989) ("[N.Y. C.P.L.R. § 302(a)(1)] requires an articulable nexus . . . between the New York activity . . . and the asserted claim and injury."). Other cases have focused instead on the link between the defendant's breach of duty and its New York activities. See Best Van Lines, 490 F.3d at 254 (discussing the "nexus . . . between allegedly tortious conduct" and New York activity); Hoffritz for Cutlery, 763 F.2d at 60 (finding "a substantial nexus between these [New York] activities . . . and the alleged breach of the franchise agreement"); Hugeclick.com, Inc. v. Vanderpol, No. 00 Civ. 1976, 2001 WL 170803, at *2, 2001 U.S. Dist. LEXIS 1619, at *4-*5 (S.D.N.Y. Feb 21, 2001) ("[T]here is a 'substantial relationship' between these activities and defendant's alleged torts and other breaches of duty . . . ."). 23 See Pls.' Br. at 21 ("[A] [section] 2333 plaintiff need only show that the defendant knowingly gave material support to the terrorist group that harmed him, and need not allege or prove that the specific material support provided by the defendant caused the harm." (citing Boim II, 594 F.3d at 695-700)). 46 1 To be sure, there have been several relatively recent 2 decisions by the New York Court of Appeals and by our Court 3 applying the nexus requirement. 4 generally undertaken fact-bound analyses that shed little light 5 on how the nexus requirement should be applied in the instant 6 case.24 7 whether the New York Court of Appeals would conclude that the These decisions, however, have In light of the foregoing, we cannot confidently say 24 See, e.g., Sole Resort, 450 F.3d at 104 (nexus requirement satisfied, in petitioner's action to vacate an arbitral award, where respondent had New York contacts "underlying [the] contract that [had] provide[d] for [the] arbitration"); Grand River Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 167 (2d Cir. 2005) (nexus requirement satisfied, in plaintiff's antitrust suit, where parties had negotiated and signed relevant contract in New York), cert. denied, 549 U.S. 951 (2006); Kronisch v. United States, 150 F.3d 112, 130-32 (2d Cir. 1998) (nexus requirement satisfied, in plaintiff's Bivens action, where defendant drugged plaintiff in Paris but regularly visited New York in connection with clandestine LSD-testing scheme); Fischbarg, 9 N.Y.3d at 384, 849 N.Y.S.2d at 508-09, 880 N.E.2d at 29-30 (nexus requirement satisfied, in plaintiff's action to recover legal fees accrued, where defendants solicited plaintiff in New York to perform legal services in Oregon); Johnson, 4 N.Y.3d at 520, 797 N.Y.S.2d at 35, 829 N.E.2d at 1203 (nexus requirement not satisfied because "[p]laintiffs' cause of action arose out of defendant's allegedly negligent driving in New Jersey, not from the issuance of a New York driver's license or vehicle registration [to the defendant]"); see also Copp v. Ramirez, 62 A.D.3d 23, 30, 874 N.Y.S.2d 52, 58-59 (1st Dep't 2009) (nexus requirement not satisfied, in defamation action, where defamatory statements were made in New Mexico concerning events in New York that defendants had witnessed during a one-day visit to New York three years prior); Opticare Acquisition Corp. v. Castillo, 25 A.D.3d 238, 246-47, 806 N.Y.S.2d 84, 91 (2d Dep't 2005) (nexus requirement satisfied, in plaintiff's contract and misappropriation action, where contracts were executed and other business activities were transacted in New York). 47 1 plaintiffs have demonstrated an "articulable nexus" or 2 "substantial relationship" on these facts. 3 2. The ATS and Israeli-Law Claims. The Canadian 4 and Israeli plaintiffs bring claims against LCB under the ATS. 5 The plaintiffs also assert claims against LCB under Israeli law 6 for negligence and breach of statutory duty. 7 pursuant to Rule 12(b)(6) to dismiss each of these claims as 8 insufficient as a matter of law.25 9 reach their merits, dismissing them on jurisdictional grounds LCB moved The district court did not 10 alone. Therefore, as with the Anti-Terrorism Act claims, we 11 ask only whether those claims bear an "articulable nexus" to, 12 or a "substantial relationship" with, the business allegedly 13 transacted by LCB in New York. 14 (internal quotation marks omitted). 15 discussed with respect to the plaintiffs' Anti-Terrorism Act 16 claims, however, we find that inquiry difficult. Best Van Lines, 490 F.3d at 246 For the reasons already 17 It must be noted that under the current law of this 18 Circuit, as established after the district court decided this 25 Before the district court, LCB did not express a view as to whether New York or Israeli law governed the plaintiffs' tort claims, but instead argued that the claims would fail regardless of which law governs. The district court, in dismissing these claims for lack of personal jurisdiction, did not reach the choice-of-law question, and the parties have not briefed it on appeal. Therefore, insofar as we refer to these claims as "Israeli law" claims, we do not intend to signal any view regarding the choice-of-law question. 48 1 case, the ATS claims against LCB cannot be maintained in any 2 event because the ATS does not provide subject matter 3 jurisdiction to enable us to entertain civil actions against 4 corporations for violations of customary international law. 5 Kiobel v. Royal Dutch Petro. Co., 621 F.3d 111 (2d Cir. 2010), 6 cert. granted, 132 S. Ct. 472 (2011). 7 of the Supreme Court's review of Kiobel, however, and the fact 8 that the jurisdictional inquiry applicable to all of 9 plaintiffs' claims appears to be similar, we reserve decision Based on the imminence 10 as to the ATS claims. 11 allow the Court of Appeals first to address whether personal 12 jurisdiction exists over each of the plaintiffs' claims, 13 including the ATS claim. 14 We think it the more prudent course to Should the Supreme Court reverse our decision in 15 Kiobel, and the Court of Appeals decision (if any) indicate 16 that we have personal jurisdiction over LCB in this case, the 17 ATS claims will likely require further proceedings in the 18 district court. 19 Court of Appeals indicates that we do not have personal 20 jurisdiction over LCB, we will likely be required to affirm the 21 dismissal of the ATS claims against it on either or both 22 grounds. 23 of those courts before reaching a conclusion as to the ATS 24 claims against LCB. If the Supreme Court affirms in Kiobel or the We will therefore await the decisions of one or both 49 1 * * * 2 3 In light of the foregoing, we certify the following second question to the Court of Appeals: 4 5 6 7 8 9 10 (2) Do the plaintiffs' claims under the Anti-Terrorism Act, the ATS, or for negligence or breach of statutory duty in violation of Israeli law, "aris[e] from" LCB's transaction of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)? 11 IV. 12 The rules of this Court provide that "[i]f state law 13 permits, the court may certify a question of state law to that 14 state's highest court." 15 Buddha, 609 F.3d at 41 42. 16 requested certification, we are empowered to pursue it on our 17 own motion. 18 Indem. Co., 634 F.3d 112, 125 (2d Cir. 2011); Kuhne v. Cohen & 19 Slamowitz, LLP, 579 F.3d 189, 198 (2d Cir. 2009). 20 whether to certify is discretionary. 21 41. 22 principally by three factors. Certification 2d Cir. Local R. 27.2(a); see also Am. Although the parties have not See 10 Ellicott Square Court Corp. v. Mtn. Valley Our decision Am. Buddha, 609 F.3d at In determining whether to pursue it, we are guided 23 First, "certification may be appropriate if the New 24 York Court of Appeals has not squarely addressed an issue and 25 other decisions by New York courts are insufficient to predict 26 how the Court of Appeals would resolve it." 50 Id. at 42; see 1 also 10 Ellicott Square Court Corp., 634 F.3d at 125-26 2 (collecting cases); N.Y. Comp. Codes R. & Regs. tit. 22, 3 § 500.27(a). 4 of importance to the state," 10 Ellicott Square Court Corp., 5 634 F.3d at 126 (internal quotation marks and ellipsis 6 omitted), and "its resolution must 'require[] value judgments 7 and important public policy choices that the New York Court of 8 Appeals is better situated than we to make,'" id. (quoting Am. 9 Buddha, 609 F.3d at 42). Second, "the question on which we certify must be Third, "we may certify if the Id. (citing 10 question is 'determinative' of a claim before us." 11 N.Y. Comp. Codes R. & Regs. tit. 22, § 500.27(a)) (other 12 internal quotation marks omitted); see also O'Mara v. Town of 13 Wappinger, 485 F.3d 693, 698 (2d Cir. 2007). 14 Although we need not certify if we are confident that 15 we can correctly resolve the matter at issue ourselves, see, 16 e.g., Best Van Lines, 490 F.3d at 242 n.3, we conclude that the 17 standards for certification are met in the case before us. 18 First, the New York Court of Appeals does not appear to have 19 squarely addressed the jurisdictional questions presented by 20 this case, and we conclude that the decisions of other New York 21 state courts do not enable us to predict with confidence how 22 the Court of Appeals would resolve them. 23 the scope of the New York long-arm statute is -- as we have 24 previously noted in certifying other jurisdictional questions, 51 Second, determining 1 see, e.g., Am. Buddha, 609 F.3d at 32 -- a task that requires 2 the exercise of "value judgments and important public policy 3 choices," 10 Ellicott Square Court Corp., 634 F.3d at 126, best 4 left to New York's highest court, if possible. 5 answers to these questions will be determinative if the Court 6 of Appeals decides that long-arm jurisdiction is lacking in 7 this instance, as all of the plaintiffs' claims against LCB 8 would have to be dismissed. 9 10 Finally, the Accordingly, we certify to the New York Court of Appeals the following two questions: 11 12 13 14 15 16 17 18 (1) Does a foreign bank's maintenance of a correspondent bank account at a financial institution in New York, and use of that account to effect "dozens" of wire transfers on behalf of a foreign client, constitute a "transact[ion]" of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)? 19 20 21 22 23 24 25 (2) If so, do the plaintiffs' claims under the Anti-Terrorism Act, the ATS, or for negligence or breach of statutory duty in violation of Israeli law, "aris[e] from" LCB's transaction of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)? 26 "As is our practice, we do not intend to limit the 27 scope of the Court of Appeals' analysis through the formulation 28 of our question[s], and we invite the Court of Appeals to 29 expand upon or alter th[ese] question[s] as it should deem 30 appropriate." 10 Ellicott Square Court Corp., 634 F.3d at 126. 52 1 2 3 4 V. Constitutional Due Process Limits to Personal Jurisdiction For personal jurisdiction over LCB to be permissible, 5 federal constitutional due process standards must also be 6 satisfied. 7 statute permits personal jurisdiction, the second step is to 8 analyze whether personal jurisdiction comports with the Due 9 Process Clause of the United States Constitution."); accord See Chloé, 616 F.3d at 164 ("If the long-arm 10 LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, 216, 713 N.Y.S.2d 11 304, 308, 735 N.E.2d 883, 887 (2000). 12 v. Gottdiener, 462 F.3d 95, 105 (2d Cir. 2006) (suggesting that 13 the application of section 302(a) automatically "meets 14 [constitutional] due process requirements"). 15 district court determined that exercising personal jurisdiction 16 was not authorized by the New York long-arm statute, it was not 17 required to reach the question of whether exercising 18 jurisdiction would comport with the Due Process Clause. 19 Nonetheless, the district court concluded similarly that "[t]he 20 exercise of personal jurisdiction over LCB on the basis alleged 21 by plaintiffs would not comport with constitutional principles 22 of due process." But see D.H. Blair & Co. Because the Licci, 704 F. Supp. 2d at 408.26 26 We reserve On appeal, the plaintiffs do not expressly challenge that conclusion. Under the circumstances, however, and in light of the substantial similarity between the statutory and constitutional inquiries, we do not think that the plaintiffs have forfeited their argument in this respect -- nor does LCB 53 1 decision on this issue. 2 this case returns to us following the New York Court of 3 Appeals' disposition of our certification request. 4 Ehrenfeld, 489 F.3d at 547. 5 opinion is intended, or should be read, to indicate our view as 6 to whether jurisdiction in this case would pass Fourteenth 7 Amendment muster. 8 We will address it, if necessary, when See Accordingly, nothing in this CONCLUSION 9 For the foregoing reasons and pursuant to New York 10 Court of Appeals Rule 500.27 and Local Rule 27.2 of this court, 11 we certify the following two questions to the New York Court of 12 Appeals: 13 14 15 16 17 18 19 20 21 (1) Does a foreign bank's maintenance of a correspondent bank account at a financial institution in New York, and use of that account to effect "dozens" of multimillion dollar wire transfers on behalf of a foreign client, constitute a "transact[ion]" of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)? 22 23 24 25 26 27 28 29 (2) If so, do the plaintiffs' claims under the Anti-Terrorism Act, the ATS, or for negligence or breach of statutory duty in violation of Israeli law, "aris[e] from" LCB's transaction of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)? argue that they have. 54 1 It is hereby ORDERED that the Clerk of this Court 2 transmit to the Clerk of the New York Court of Appeals this 3 opinion as our certificate, together with a complete set of the 4 briefs, the appendix, and the record filed in this Court by the 5 parties. 6 that may be imposed by the New York Court of Appeals in 7 connection with this certification. 8 consideration of this appeal after the disposition of this 9 certification by the New York Court of Appeals. The parties shall bear equally any fees and costs 55 This panel will resume its