Strauss v. Crédit Lyonnais, S.A.

• Decision Date: 31 March 2016
• Docket Number: 07-cv-914 (DLI) (MDG),06-cv-702 (DLI) (MDG)
• Citation: 175 F.Supp.3d 3
• Parties: Moses Strauss, et al., Plaintiffs, v. Crédit Lyonnais, S.A., Defendant. Bernice Wolf, et al., Plaintiffs, v. Crédit Lyonnais, S.A., Defendant.
• Court: U.S. District Court — Eastern District of New York

175 F.Supp.3d 3

Moses Strauss, et al., Plaintiffs,

v.Crédit Lyonnais, S.A., Defendant.

Bernice Wolf, et al., Plaintiffs,

v.Crédit Lyonnais, S.A., Defendant.

06-cv-702 (DLI) (MDG)

07-cv-914 (DLI) (MDG)

United States District Court, E.D. New York.

Signed March 31, 2016

James P. Bonner, Stone Bonner & Rocco LLP, Ramya Kasturi, Shawn Patrick Naunton, Zuckerman Spaeder LLP, New York, NY, Joel Lawrence Israel, Mark S. Werbner, Sayles Werbner, Dallas, TX, Noel J. Nudelman, Tracy R. Kalik, Richard D. Heideman, Heideman Nudelman & Kalik, P.C., Peter R. Kolker, Zuckerman Spaeder LLP, Washington, DC, for Plaintiffs.

Jonathan I. Blackman, Lawrence B. Friedman, Cleary, Gottlieb, Steen & Hamilton, Barbara Ann Ryan, Mark J. Aaronson, Mark B. Feinstein, Michael M. Futterman, Aaronson, Rappaport, Feinstein & Deutsch, LLP, New York, NY, Peter R. Kolker, Zuckerman Spaeder LLP, Washington, DC, for Defendant.

OPINION AND ORDER

DORA L. IRIZARRY, United States District Judge

This is a consolidated action pursuant to the civil liability provision of the Antiterrorism Act of 1992 (“ATA”), 18 U.S.C. § 2333(a) (“§ 2333(a) ”). Plaintiffs, over 200 individuals and estates of people who are deceased (collectively, “Plaintiffs”), seek to recover damages from Defendant Crédit Lyonnais, S.A. (“Defendant”) in connection with 19 attacks in Israel and Palestine allegedly perpetrated by Hamas. (See generally Fourth Am. Compl., (“Strauss FAC”), Strauss Dkt. Entry No. 358; Compl. (“Wolf Compl.”), Wolf Dkt. Entry No. 1).¹ Specifically, Plaintiffs allege that Defendant is civilly liable pursuant to the ATA's treble damages provision for: (1) aiding and abetting the murder, attempted murder, and serious physical injury of American nationals outside the United States in violation of 18 U.S.C. § 2332 ; (2) knowingly providing material support or resources to a Foreign Terrorist Organization (“FTO”) in violation of 18 U.S.C. § 2339B ; and (3) willfully and unlawfully collecting and transmitting funds with the knowledge that such funds would be used for terrorist purposes in violation of 18 U.S.C. § 2339C. (Strauss FAC ¶¶ 672-90; Wolf Compl. ¶¶ 407-25.) Defendant moves for dismissal of this action for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, or in the alternative, for summary judgment pursuant to Rule 56. (See Def.'s Mem. of Law in Supp. of Mot. to Dismiss (“Def.'s Mem.”), Strauss Dkt. Entry No. 369.) Plaintiffs oppose. (See Pls.' Mem. of Law in Opp'n to Mot. to Dismiss (“Pls.' Opp'n”), Strauss Dkt. Entry No. 371.) For the reasons set forth below, Defendant's motion is denied in its entirety.

BACKGROUND²

I. The Parties

Plaintiffs' claims arise from 19 terrorist attacks that occurred in Israel and Palestine between approximately 2001 and 2004, which allegedly were perpetrated by Hamas.³ See Strauss v. Crédit Lyonnais, S.A. (“Strauss II ”), 925 F.Supp.2d 414, 418 (E.D.N.Y.2013). Plaintiffs comprise over 200 United States nationals who were injured in those attacks, the estates of persons killed in those attacks, and/or family members of persons killed or injured in those attacks. Id.

Defendant is a financial institution incorporated and headquartered in France. Id. At the time of the events giving rise to this action, Defendant conducted business in New York through the Crédit Lyonnais Americas New York Branch (Defendant's “New York Branch”).⁴ (See Decl. of Joseph Virgilio (“Virgilio Decl.”) ¶ 2, Ex. 3 to the Decl. of Emily P. Eckstut in Supp. of Def's. Mot. for Summary Judgment, Strauss Dkt. Entry No. 316-1.) According to Defendant, the New York Branch served as the “intermediary bank for U.S. Dollar denominated transfers that were requested by customers of Crédit Lyonnais in France.” (Id. ) Plaintiffs allege that Defendant also maintains an office in Miami, Florida, and is registered with State banking authorities there. (Strauss FAC ¶ 579; Wolf Compl. ¶ 316.)

Among other customers, Defendant maintained bank accounts in France for the Comite de Bienfaisance et de Secours aux Palestiniens (“Committee for Palestinian Welfare and Relief”) (“CBSP”), a non-profit organization registered in France and self-described as providing humanitarian aid to various charitable organizations in the West Bank, Gaza, and surrounding areas. See Strauss II , 925 F.Supp.2d at 418–19. During the time CBSP had accounts with Defendant, it transferred money to certain charitable organizations (each a “Charity,” and collectively the “Charities”) that Plaintiffs contend actually were front organizations for Hamas. See Id. at 419. Plaintiffs allege that Defendant aided Hamas by maintaining CBSP's accounts and sending money to the Charities on CBSP's behalf, despite knowing that CBSP supported Hamas. See Id. at 424–25. While the vast majority of transfers Defendant made to the Charities on behalf of CBSP never went through the United States, the parties agree that Defendant executed five such transfers through its New York Branch (the “New York Transfers”), each in response to a specific request by CBSP to send funds in U.S. Dollars. (See Ex. A to the Oct. 16, 2015 Friedman Ltr., Strauss Dkt. Entry No. 393.) The relevant electronic transfer records reflect that each New York Transfer was initiated by Defendant in Paris and routed through its New York Branch, then was directed for the benefit of the respective Charity to a correspondent account maintained by that Charity's bank either at a New York branch of Arab Bank, PLC, or in one instance, Citibank N.A. (See Exs. A-D to the Feb. 7, 2014 Osen Ltr., Strauss Dkt. Entry No. 362; Ex. B to the Oct. 16, 2015 Osen Ltr., Strauss Dkt. Entry No. 392; Ex. A to the Oct. 16, 2015 Friedman Ltr.)

II. Procedural History

After initially commencing an action against Defendant in the United States District Court for the District of New Jersey, Plaintiffs refiled the Strauss case in this Court in February 2006. The initial complaint, and every amended complaint thereafter, alleged that Defendant is subject both to general personal jurisdiction (“general jurisdiction”) and specific personal jurisdiction (“specific jurisdiction”) in the United States. (See Strauss FAC ¶ 4; see also Wolf Compl. ¶ 4.) Following its voluntary acceptance of service of process in February 2006, (Strauss Dkt. Entry No. 3), Defendant moved for dismissal of the Strauss action pursuant to Rule 12(b)(6), declining to contest personal jurisdiction at that time. (See Mot. to Dismiss, Strauss Dkt. Entry No. 10.) The late Honorable Charles P. Sifton, then presiding, denied the motion to dismiss with respect to Plaintiffs' claims that Defendant provided material support to an FTO and knowingly transmitted funds that financed terrorism, but dismissed Plaintiffs' aiding and abetting claim, with leave to amend. Strauss v. Crédit Lyonnais, S.A. (“Strauss I ”), 2006 WL 2862704 (E.D.N.Y. Oct. 5, 2006). Defendant similarly accepted service in the Wolf action and thereafter filed a motion to dismiss, which the parties resolved by stipulation without any objection by Defendant as to personal jurisdiction. (See Wolf Dkt. Entry Nos. 6, 13, and 31.)

Extensive merits discovery between the parties ensued. On October 7, 2011, the Court formally consolidated the Strauss and Wolf actions. Thereafter, Defendant moved for summary judgment dismissing the consolidated action, but again declined to raise a defense of lack of personal jurisdiction. (See Strauss Dkt. Entry No. 293.) By Opinion and Order dated February 28, 2013, the Court granted summary judgment in favor of Defendant with respect to one attack for which certain Plaintiffs sought recovery, but denied Defendant's motion with respect to Plaintiffs' claims concerning more than a dozen other attacks. See Strauss II , 925 F.Supp.2d at 452–53.

On February 6, 2014, Defendant notified the Court that, in light of the Supreme Court's decision in Daimler AG v. Bauman , ––– U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), it intended to assert a personal jurisdiction defense for the first time in these proceedings. (See Feb. 6, 2014 Friedman Ltr., Strauss Dkt. Entry No. 361.) Decided in January 2014, Daimler addressed the extent to which a forum State may exercise general jurisdiction over a foreign corporation. Revisiting its past personal jurisdiction jurisprudence, the Supreme Court clarified that a corporation is subject to general jurisdiction in a forum State only where its contacts are “so continuous and systematic,” judged against the corporation's nationwide and worldwide activities, that it is “essentially at home” in that State. Daimler , 134 S.Ct. at 761 & n. 20 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011) ) (internal quotation marks omitted). Aside from the “exceptional case,” the Supreme Court explained, a corporation is at home and subject to general jurisdiction only in a State that represents its formal place of incorporation or principal place of business. See Id. & nn.19–20. The Supreme Court emphasized that the “exceptional case” exists only in rare and compelling circumstances like those in Perkins v. Benguet Consol. Mining Co. , 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952), where a foreign corporation maintained a surrogate headquarters in Ohio during a period of wartime occupation in its native Philippines. See Id. at 755–56 & nn. 8, 19.

Citing the “new rule” on general jurisdiction purportedly announced in Daimler , (see Feb. 6, 2014 Friedman Ltr.), Defendant filed the instant motion to dismiss this action pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. In the alternative, Defendant contends that it is entitled to summary judgment dismissing Plaintiffs' claims because, at most, it is subject to personal jurisdiction in New York only with respect to the five New York Transfers it executed through its New York Branch. (See Def.'s Mem. at 15-25.) Renewing arguments from its prior summary judgment...