Subpoenas. Personal Jurisdiction. Seventh Circuit refuses to enforce subpoenas seeking disclosure of assets held in foreign bank branches based on lack of jurisdiction.

Leibovitch v. Islamic Republic of Iran, No. 16-2504 (7th Cir., Mar. 29, 2017) [click for opinion]

The Seventh Circuit affirmed, in a Judge Posner opinion, a district court's refusal to enforce subpoenas on two banks, Bank of Tokyo-Mitsubishi (Japan) and BNP Paribas (France). Plaintiffs sought to enforce subpoenas against these banks in order to determine whether any of their worldwide branches held assets belonging to the Iranian government.

This case is but a small piece of lengthy litigation brought by surviving family members and the estate of a child who was killed in Jerusalem by members of a terrorist group supported by the government of Iran. The case was brought under both the Antiterrorism Act, 18 U.S.C. § 2333, and the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605. Plaintiffs obtained a default judgment of $67 million.

This appeal results from Plaintiffs' attempt to collect on that judgment. Plaintiffs argued that Bank of Tokyo and BNP Paribas held Iranian government assets in the past, so they should be able to enforce subpoenas against both banks, "seeking an order directing the parent banks to reveal Iranian assets held in any of the far-flung, worldwide branches of the two banks."

The banks agreed to provide information sought by the subpoenas as regards to their United States branches, but refused as to their world-wide branches and their respective parent banks. The banks argued to the district court that Plaintiffs' subpoenas should be quashed because the court lacked personal jurisdiction over them.

The Seventh Circuit agreed, finding that subpoenas are in essence enforcement mechanisms and not mere requests, so the court must have personal jurisdiction to enforce them. Relying on the Supreme Court's Daimler AG v. Bauman decision, the Seventh Circuit found that it lacked jurisdiction over the parent banks and their world-wide branches because they were not "essentially at home in the forum State."

The court also dispelled Plaintiffs' argument that specific jurisdiction existed. The subpoenas were in no way "tailored to the banks' presence or activities in the United States." The Seventh Circuit concluded its very brief opinion affirming the district court's judgment by asking why Plaintiffs had chosen the forum, considering they did not even allege the banks held Iranian government assets there.