In re: Sealed Case, No. 19-5068 (D.C. Cir. 2019)Annotate this Case
The United States government thought that three banks, headquartered in China, held records that might clarify how North Korea finances its nuclear weapons program. After the government subpoenaed those records, the Banks resisted and claimed that the district court lacked personal jurisdiction, that the Patriot Act subpoena exceeded the government's statutory authority, and that compelling production would run afoul of comity principles. The district court overruled the Banks' objections and subsequently held the Banks in civil contempt for failing to produce the requested records.
The DC Circuit affirmed the contempt orders, holding that the Banks' jurisdictional challenges were meritless where Banks One and Two consented to jurisdiction when they opened branches in the United States and, although Bank Three has no U.S. branch and executed no such agreement, its choice to maintain correspondent accounts in the United States established an adequate connection to the forum and the enforcement action to sustain jurisdiction.
The court also held that records "related to" a U.S. correspondent account, under 31 U.SC. 5318(k)(3)(A)(i), include records of transactions that do not themselves pass through a correspondent account when those transactions are in service of an enterprise entirely dedicated to obtaining access to U.S. currency and markets using a U.S. correspondent account. In this case, Bank Three's subpoena under the Patriot Act did not exceed the Attorney General's statutory authority, because all records pertaining to the Company's Bank Three account and its correspondent banking transactions, no matter where they occurred, are "related to" the Bank's U.S. correspondent accounts.
In regard to the Banks' comity concerns, the court held that the district court did not abuse its discretion by enforcing the subpoenas despite the fact that the United States chose not to pursue the process designated in the Mutual Legal Assistance Agreement (MLAA) between the United States and China. Finally, the court held that the district court did not abuse its discretion by issuing the civil contempt orders in light of the circumstances.
This opinion or order relates to an opinion or order originally issued on July 30, 2019.