Shlomo Leibovitch v. Islamic Republic of Iran, No. 08 C 1939 (N.D. Ill. May 19, 2016) [click for opinion]
In June 2003, Plaintiffs' minivan was shot at in Jerusalem, killing one child and seriously injuring another. Plaintiffs believed the group responsible for the shooting had connections to the Republic of Iran and filed suit against the Iranian government pursuant to the Antiterrorism Act ("ATA"), 18 U.S.C. § 2333, and the state-sponsored terrorism exception of the Foreign Sovereign Immunities Act. Plaintiffs eventually won a default judgment after Defendants failed to appear.
Plaintiffs sought to enforce the judgment by serving discovery requests, citations to discover assets, and subpoenas on the Chicago branches of the Bank of Tokyo (a Japanese bank) and Paribas (a French bank) (collectively, the "Banks") for information about Defendants' assets. The Banks' respective Chicago branches accounted for a minimal amount of the Banks' revenue and business activities. Plaintiffs' discovery requests sought information located at any branch in the world. The Banks resisted, arguing lack of both general and specific personal jurisdiction.
The court noted that the 2014 Supreme Court decision Daimler AG v. Bauman limited general jurisdiction over corporations to a corporation's place of incorporation and/or principal place of business "in all but the most 'exceptional' cases." Neither of the Banks was incorporated in Illinois, and neither had its principal place of business there. Under the pre-Daimler law, the Banks' branches in Illinois would have established general jurisdiction; post-Daimler, the existence of a Chicago branch accounting for a tiny portion of a foreign company's business activities does not create sufficient grounds for general jurisdiction over the company.
Plaintiffs nevertheless argued that Daimler applies only to defendants, not third parties. The court rejected that assertion, finding that the Daimlerrationale, rooted in meeting the minimum contacts requirement of the Due Process Clause, applies to defendants and non-parties alike. The court also rejected Plaintiffs' argument that the Banks' having registered to do business under Illinois's Foreign Banking Office Act created personal jurisdiction. Nor did the court agree that the Illinois registration statute's requirement that the Banks appoint a registered agent for service of process created general jurisdiction.
Plaintiffs also failed to establish the requisite minimum contacts to support specific jurisdiction. The court found "virtually no link" between the Banks' in-state activities and the events that gave rise to the Plaintiffs' claims, much less the required "suit-related conduct." The court also addressed another, narrower inquiry into minimum contacts over third-party discovery: where other Circuits had focused on the connection between the non-party's contacts with the forum and the discovery at issue. Declining to determine whether the narrower inquiry was the proper one, the court found that specific jurisdiction nevertheless did not exist under that inquiry. There was no evidence that the banks held accounts for Defendants in Illinois or anywhere in the U.S.; Plaintiffs were instead seeking vast discovery relating to Defendants' assets located abroad. There was also no evidence that the Banks' Illinois branches were involved in activities sanctioned by regulators, for processing financial transactions involving countries with which the United States does not do business.
Plaintiffs also argued that, under the ATA, which authorizes nationwide service of process, the court should consider the Banks' activities in the United States as a whole (not merely in Illinois) to evaluate minimum contacts. The court disagreed. The proceeding was post-judgment and against non-parties; Plaintiffs had brought no substantive claim against the Banks under the ATA. And, even if it were to consider the Banks' activities in the United States as a whole, still the court would not have found specific jurisdiction, as the link between the discovery sought and the Banks' activities would be insufficient.
Forcing the Banks to comply with these "far-reaching" requests would also have been unduly burdensome and thus violated principles of fairness. The Chicago branches did not have responsive documents, and lacked centralized databases with which to conduct global searches. Moreover, ordering the Banks to comply with these requests would likely have forced them to violate the laws of their home countries. And, although the United States has an interest in combatting terrorism and providing remedies for victims of terrorism, only one of the eight Plaintiffs was a U.S. citizen, and none had any connection to the district.
Finally, even if personal jurisdiction did exist, principles of international comity would weigh against ordering compliance with discovery. Ordering discovery would place the Banks at risk of civil and criminal liability, and the Plaintiffs had other avenues for enforcing the judgment.