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plaintiffdefendantjurisdictionstatuteappealrespondent

plaintiffdefendantjurisdictionappealcivil procedurerespondent

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Spetner v. Palestine Investment Bank

Facts

Plaintiffs are American victims and relatives of victims of terrorist attacks in Israel between 2001 and 2003, alleging that PIB facilitated these attacks by providing financial services to terrorist organizations. PIB, a commercial bank in the Palestinian Territories, maintained a U.S. dollar-denominated checking account for the head of the Arab Liberation Front and processed funds for Hamas's fundraising arm, the Holy Land Foundation. The plaintiffs claim that PIB's actions violated the Anti-Terrorism Act, and the district court dismissed the case for lack of personal jurisdiction.

Plaintiffs allege that Palestine Investment Bank (PIB) facilitated the attacks by knowingly providing financial services to the terrorist organizations that allegedly perpetrated them, in violation of the Anti-Terrorism Act, 18 U.S.C. 2331-39D.

Issue

Whether the district court had personal jurisdiction over Palestine Investment Bank based on its alleged facilitation of terrorist activities through financial services.

This appeal requires us to answer a single question: whether the district court has personal jurisdiction over PIB.

Rule

New York's long-arm statute, N.Y. C.P.L.R. 302(a)(1), allows for personal jurisdiction over a foreign defendant if the cause of action arises from transacting business within the state, which requires purposeful activity that avails the defendant of the forum's laws.

Federal Rule of Civil Procedure 4(k)(1)(A) permits a federal court to exercise personal jurisdiction over a defendant to the extent allowed by the law of the state in which it sits.

Analysis

The court determined that PIB's repeated use of a correspondent account in New York constituted transacting business under the long-arm statute. The plaintiffs successfully alleged that PIB had knowledge and consent regarding the use of the correspondent account, which facilitated the transfer of funds related to terrorist activities. The court found that PIB's actions were purposeful and not coincidental, thus satisfying the requirements for personal jurisdiction.

We easily find that plaintiffs successfully pled benefit as well as knowledge and consent. As for the former, AJIB's alleged role in transferring payments through its correspondent accounts in New York redounded to PIB's benefit. While a foreign bank can theoretically bypass the United States to clear dollarsfor example, at an offshore Federal Reserve-sanctioned clearing centerthese processing mechanisms presumably lack the 'cost savings or other conveniences' that New York correspondent accounts offer.

Conclusion

The court vacated the district court's decision and remanded the case for further proceedings, concluding that personal jurisdiction over PIB was established.

For the reasons that follow, we VACATE the district court's decision and REMAND for proceedings consistent with this opinion.

Who won?

The plaintiffs prevailed in the appeal, as the court found that their allegations were sufficient to establish personal jurisdiction over PIB.

The district court dismissed the case on the ground that it lacked personal jurisdiction over PIB.

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