licci v. american express - plaintiffs court of appeals brief

7/27/2019 Licci v. American Express - Plaintiffs Court of Appeals Brief

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United States Court of Appeals, Second Circuit Docket No. 10-1306-cv

Court of AppealsSTATE OF NEW YORK

YAAKOV LICCI, a minor, by his father and natural guardian ELIHAV LICCI andby his mother and natural guardian YEHUDIT LICCI, et al., YAAKOV LICCI, a

minor, by his father and natural guardian ELIHAV LICCI and by his mother

and natural guardian YEHUDIT LICCI, et al., ELIHAV LICCI, YEHUDIT LICCI,

TZVI HIRSH, ARKADY GRAIPEL, TATIANA KREMER, YOSEF ZARONA, TAL SHANI,

SHLOMO COHEN, NITZAN GOLDENBERG, RINA DAHAN, RAPHAEL WEISS, AGAT

KLEIN, TATIANA KOVLEYOV, VALENTINA DEMESH, RIVKA EPON , JOSEPH MARIA,

IMMANUEL PENKER, ESTHER PINTO, AVISHAI REUVANCE, ELISHEVA ARON ,

CHAYIM KUMER, SARAH YEFET, SHOSHANA SAPPIR, RAHMI GUHAD GHANAM,

a minor, by his father and natural guardian FUAD SHCHIV GHANAM and by his

mother and natural guardian SUHA SHCHIV GHANAM, SHCHIV GHANAM FUAD,

Individually, SUHA SHCHIV GHANAM, Individually, MAAYAN ARDSTEIN, a minor,

by her father and natural guardian BRIAN ARDSTEIN, and by her mother and

natural guardian KEREN ARDSTEIN, NOA ARDSTEIN, a minor, by her father and

natural guardian BRIAN ARDSTEIN, and by her mother and natural guardian

KEREN ARDSTEIN, NETIYA YESHUA ARDSTEIN, a minor, by her father and

natural guardian BRIAN ARDSTEIN, and by her mother and natural guardian

KEREN ARDSTEIN, BRIAN ARDSTEIN, Individually, KEREN ARDSTEIN, Individually,

MARGALIT RAPPEPORT, a minor, by her mother and natural guardian LAURIE

RAPPEPORRT, LAURIE RAPPEPORT, Individually, YAI R MOR, ORN A MOR,

MICHAEL FUCHS, ESQ., MUSHKA KAPLAN, a minor, by her father and natural

guardian CHAIM KAPLAN, and by her mother and natural guardian RIVKA

KAPLAN, ARYE LEIB KAPLAN, a minor, by his father and natural guardian

CHAIM KAPLAN, and by his mother and natural guardian RIVKA KAPLAN,

(Caption Continued on the Reverse)

Certification of Questions by the United States

Court of Appeals for the Second Circuit

BRIEF FOR PLAINTIFFS-APPELLANTS

THE BERKMAN LAW OFFICE, LLC

Attorneys for Plaintif fs-Appellants

111 Livingston Street, Suite 1928

Brooklyn, New York 11201

718-855-3627

Date Completed: July 5, 2012


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MENACHEM KAPLAN, a minor, by his father and natural guardian CHAIM KAPLAN,

and by his mother and natural guardian RIVKA KAPLAN, CHANA KAPLAN, a

minor, by her father and natural guardian CHAIM KAPLAN, and by her mother

and natural guardian RIVKA KAPLAN, EFRAIM LEIB KAPLAN, a minor, by hisfather and natural guardian CHAIM KAPLAN, and by his mother and natural

guardian RIVKA KAPLAN, CHAIM KAPLAN, Individually, RIVKA KAPLAN,

Individually, ROCHELLE SHALMONI, OZ SHALMONI, DAVID OCHAYON, YAAKOV

MAIMON, MIM I BITON, MIRIAM JUMAA, as Personal Representative of

the Estate of FADYA JUMAA, MIRIAM JUMAA, Individually, SALAH JUMAA,

Individually, SAID JUMAA, Individually, ABD EL-RAHMAN JUMAA, as Personal

Representative of the Estate of SAMIRA JUMAA, ABD EL-RAHMAN JUMAA,

Individually, RAHMA ABU-SHAHIN, ABDEL GAHNI, as Personal Representative

of the Estate of SOLTANA JUMAA and Individually, SHADI SALMAN AZZAM, as

the Personal Representative of the Estate of MANAL CAMAL AZAM, KANAR

SHAADI AZZAM, a minor, by his father and natural guardian, SHADI SALMANAZZAM, ADEN SHAADI AZZAM, a minor, by his father and natural guardian,

SHADI SALMAN AZZAM, SHADI SALMAN AZZAM, Individually, ADINA MACHASSAN

DAGESH, ARKADY SPEKTOR, YORI ZOVREV, MAURINE GREENBERG, JACOB

KATZMACHER, DEBORAH CHANA KATZMACHER, CHAYA KATZMACHER, MIKIMI

STEINBERG, JARED SAUTER, DANIELLE SAUTER, YAAKOV ABUTBUL, ABRAHAM

NATHAN MOR, a minor, by his father and natural guardian, Z ION MOR, and by

his mother and natural guardian, REVITAL MOR, BAT ZION MOR, a minor, by her

father and natural guardian, ZION MOR, and by her mother and natural guardian,

REVITAL MOR, MICHAL MOR, a minor, by her father and natural guardian, ZION

MOR, and by her mother and natural guardian, REVITAL MOR, ODED CHANA

MOR, a minor, by her father and natural guardian, Z ION MOR, and by hermother and natural guardian, REVITAL MOR, Z ION MOR, Individually, REVITAL

MOR, Individually, ADHAM MAHANE TARRABASHI, JIHAN KAMUD ASLAN,

ZOHARA LOUIE SAAD, IYAH ZAID GANAM, a minor, by his father and natural

guardian, ZIAD SHCHIV GHANAM, and by his mother and natural guardian,

GOUROV TISIR GHANAM, ZIAD SHCHIV GHANAM, Individually, GOUROV TISIR

GHANAM, Individually, THEODORE GREENBERG, EMILLA SALMAN ASLAN,

Plaintiffs-Appellants,

v.

AMERICAN EXPRESS BANK LTD., LEBANESE CANADIAN BANK, SAL,Defendants-Respondents.


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Table of Contents

TABLE OF AUTHORITIES .................................................................................. iv

QUESTIONS PRESENTED .................................................................................... 1

PRELIMINARY STATEMENT .............................................................................. 2

STATEMENT OF FACTS ....................................................................................... 4

POINT I

THE EXERCISE OF PERSONAL JURISDICTION OVER LCB IS

ENTIRELY CONSISTENT WITH FEDERAL CONSTITUTIONALDUE PROCESS LIMITATIONS ............................................................................ 9

POINT II

DEFENDANTS COMMUNICATIONS WITH AND USE OF

AMERICAN EXPRESS SERVICES IN NEW YORK TO

CONDUCT BUSINESS IN NEW YORK CONSTITUTE A

TRANSACT[ION] OF BUSINESS FOR THE PURPOSES OF

CPLR 302(a)(1) .................................................................................................... 12

POINT III

THE ARTICULABLE NEXUS AND SUBSTANTIAL

RELATIONSHIP TESTS UNDER CPLR 302(a)(1) REQUIRE

ONLY THAT THE DEFENDANTS TRANSACTION(S) AND

PLAINTIFFS CAUSE OF ACTION ARE RELATED ...................................... 19


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A. This Courts CPLR 302(a)(1) Cases Require Only that

the Relationship Between Defendants Transaction(s)

and Plaintiffs Cause of Action are not Disparate, not

that One Cause the Other .................................................................. 20

B. The Text of CPLR 302(a)(1) Dictates Only that There

Not be a Disparate Relationship Between Defendants

Transaction(s) and Plaintiffs Cause of Action ............................... 29

C. The Legislative History of CPLR 302(a)(1) Dictates

Only that There Not be a Disparate Relationship

Between Defendants Transaction(s) and Plaintiffs

Cause of Action ................................................................................... 38

POINT IV

ALTERNATIVELY, IF THIS COURT CONCLUDES THAT CPLR

302(a)(1)s ARISING FROM LANGUAGE DENOTES

CAUSATION, IT DENOTES MERE BUT-FOR CAUSATION,

RATHER THAN PROXIMATE CAUSATION ................................................. 47

POINT VALTERNATIVELY, IF THIS COURT CONCLUDES THAT CPLR

302(a)(1)s ARISING FROM LANGUAGE DENOTES

PROXIMATE CAUSATION, IT SHOULD FIND AN

EXCEPTION FOR CASES ARISING FROM ACTS OF

TERRORISM .......................................................................................................... 51

POINT VI

PLAINTIFFS FACTUAL ALLEGATIONS AND THE LEGAL

ELEMENTS OF THEIR CLAIMS ADEQUATELY RELATE TO

LCBS TRANSACTIONS IN NEW YORK ......................................................... 55


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POINT VII

PLAINTIFFS POSITION IS MODEST AND DOES NOT OPEN

THE PROVERBIAL FLOODGATES OF LITIGATION ............................... 62

CONCLUSION ...................................................................................................... 64


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Table of Authorities

Constitution

U.S.CONST. art. III, 2 ................................................................................................. 30U.S.CONST. amend. XIV, 1 ................................................................ 12, 33, 37-38, 41

Cases

Aetna Cas. & Sur. Co. v. Crowther, Inc., 581 N.E.2d 833 (Ill. App.

Ct. 1991) ...................................................................................................................... 36

Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd., 62 N.Y.2d 65(1984) ......................................................................................................................... 18

Boim v. Holy Land Found. for Relief and Dev., 549 F.3d 685 (7th Cir.

2008) (en banc) ............................................................................................................ 51

Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158 (2d Cir. 2010) ..................... 13

Classic Auto Sales, Inc. v. Schocket, 832 P.2d 233 (Colo. 1992) ................................. 34

Cumberland Coal & Iron Co. v. Hoffman Steam Coal Co., 30 Barb. 159

(Gen. Term. 1859) ............................................................................... 21-22, 45-46, 56

Deutsche Bank Sec., Inc. v Montana Bd. of Invs., 7 N.Y.3d 65 (2006) ................... 12-13

Doundoulakis v. Town of Hempstead, 42 N.Y.2d 440 (1977) ...................................... 54

Fischbarg v. Doucet, 9 N.Y.3d 375 (2007) ......................................................... 17, 21-22

George Reiner & Co., Inc. v. Schwartz, 41 N.Y.2d 648 (1977) ................................... 14

Green v. Wilson, 565 N.W.2d 813 (Mich. 1997) ......................................................... 37

Greene v. Whiteside, 908 N.E.2d 975 (Ohio Ct. App. 2009) ...................................... 38

Haas v. Four Seasons Campground, Inc., 952 A.2d 688 (Pa. Super.

Ct. 2008) ..................................................................................................................... 38

Hanson v. Denckla, 357 U.S. 235 (1958) ...................................................................... 10


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Holder v. Humanitarian Law Project,___ U.S. ___, 130 S. Ct. 2705,

2720, 2729 (2010) ...................................................................................................... 50

Indosuez Intl Fin. B.V. v. Natl Reserve Bank, 98 N.Y.2d 238 (2002) ....................... 18

Intl Shoe v. Washington, 326 U.S. 310 (1945) ............................................................... 9

J. McIntyre Machinery, Ltd. v. Nicastro, ___ U.S. ___, 131 S.Ct. 2780

(2011) ..................................................................................................................... 10-11

Johnson v. Ward, 4 N.Y.3d 516 (2005) ........................................................ 21-22, 25-27

Keefe v. Kirschenbaum & Kirschenbaum, P.C., 40 P.3d 1267 (Colo.

2002) ............................................................................................................................ 35

Kreutterv. McFadden Oil Corp., 71 N.Y.2d 460 (1988) ....................... 8, 12, 19, 40, 56Licci v. Am. Express Bank Ltd., 704 F. Supp. 2d 403 (S.D.N.Y. 2010) .................... 7-8

Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50 (2d Cir. 2012) ....................passim

Longines-Wittnauer Watch Co. v Barnes & Reinecke, 15 N.Y.2d 443

(1965) .............................................................................................. 34-35, 39-40, 59-61

McGowan v. Smith, 52 N.Y.2d 268 (1981) ............................................. 8, 19, 22, 27-30

New London County Mut. Ins. Co. v. Nantes, 36 A.3d 224 (Conn.2012) ............................................................................................................................ 35

Phelps v. Kingston, 536 A.2d 740 (N.H. 1987) ............................................................ 37

Ryan v. Cerullo, 918 A.2d 867 (Conn. 2007) .............................................................. 35

Sifers v. Horen, 188 N.W.2d 623 (Mich. 1971) ...................................................... 36-37

Simonson v. Intl Bank, 14 N.Y.2d 281 (1964) .................................................. 37-38, 41

Spartan Motors, Inc. v. Lube Power, Inc., 786 N.E.2d 613 (Ill. App.Ct. 2003) ...................................................................................................................... 36

SPCA of Upstate New York, Inc. v. American Working Collie Assn,

18 N.Y.3d 400 (2012) ............................................................................................ 20-24

State of New York v Patricia II, 6 N.Y.3d 160 (2006) ................................................. 31


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Talbot v. Johnson Newspaper Corp., 71 N.Y.2d 827 (1988).................................... 24-25

Tatro v. Manor Care, Inc., 625 N.E.2d 549 (Mass. 1994) ...................................... 47-49

Statutes and Regulations

CPLR 302(a)(1) ....................................................................................................passim

CPLR 302(a)(2) ..................................................................................................... 40, 60

CPLR 302(a)(3) ........................................................................................................... 40

18 U.S.C. 2333(a) ...................................................................................................... 1, 4

28 U.S.C. 1331 ............................................................................................................ 30

28 U.S.C. 1350 note .................................................................................................. 1, 4

31 U.S.C. 5318(i) .................................................................................................... 15-16

Uniting and Strengthening America by Providing Appropriate Tools

Required to Intercept and Obstruct Terrorism Act of 2001 312, Pub.

L. No. 10756, 115 Stat. 272 (2001) ................................................................ 2, 15-16

67 Fed. Reg. 48348 (July 23, 2002) .............................................................................. 16

71 Fed. Reg. 496 (Jan. 4, 2006) ..................................................................................... 16

76 Fed. Reg. 9403 (Feb, 17, 2011) ............................................................................ 2, 14

COLO.REV.STAT. 13-1-124(1)(a) ............................................................................... 34

CONN.GEN.STAT. 52-59b(a) ..................................................................................... 35

735 ILL.COMP.STAT.5/2-209...................................................................................... 36

MASS.GEN.LAWSch. 223A. 3 ................................................................................... 48

MICH.COMP.LAWS 600.705 ...................................................................................... 36


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N.H.REV.STAT.ANN. 510:4 ...................................................................................... 37

OHIO REV.CODE ANN. 2307.382(a) .......................................................................... 38

PA.CONS.STAT. 5322(a) ............................................................................................ 38

22N.Y.C.R.R. 500.27 .................................................................................................... 3

Other Authority

4 C. Wright & A. Miller, Federal Practice & Procedure 1068, n. 12 (3d

ed.) .................................................................................................................... 33-35, 38

ADVISORY COMMITTEE ON PRACTICE AND PROCEDURE,SECOND

PRELIMINARY REPORT38-39 (1958) ......................................................... 41-42, 44, 57

DAVID L.FERSTENDIG,HISTORICAL APPENDIX FOR CPLR302 ....................... 43-44,57

MEMORANDUM OF THE LAW REVIEW COMMISSION,NEW YORK STATE

LEGISLATIVE ANNUAL164 (1979) ............................................................................. 44

SENATE FINANCE COMMITTEE &ASSEMBLY WAYS AND MEANS COMMITTEE,FIFTH PRELIMINARY REPORT TO THE LEGISLATURE 66-67(1961) .................. 42-43, 57

BLACKS LAW DICTIONARY 115 (8th ed. 2004) ............................................................ 30

Federal Financial Institutions Examination Council, Correspondent

Accounts (Foreign)Overview,http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047

.htm(last visited July 3, 2012). ............................................................................... 5-6
http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htmhttp://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htmhttp://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htmhttp://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htmhttp://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htm


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Jo Becker, Beirut Bank Seen as a Hub of Hezbollahs Financing, N.Y.TIMES,

Dec. 13, 2011,available at:

http://www.nytimes.com/2011/12/14/world/middleeast/beirut-

bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=all................. 2

Mariam Karouny, Lebanese Bank for Sale After U.S. Laundering

Claim, Mar. 3, 2011,

http://www.reuters.com/article/2011/03/03/lebanon-bank-

idUSLDE7221KS20110303/................................................................................ 14-15

U.S. Department of State, Foreign Terrorist Organizations, Jan. 27,

2012,http://www.state.gov/j/ct/rls/other/des/123085.htm........................ 11

U.S.DEPARTMENT OF STATE,PATTERNS IN GLOBAL TERRORISM 1999 56(2000) ......................................................................................................................... 50

U.S. Department of Treasury, Fact Sheet: Overview of Section 311 of the

USA PATRIOT Act, Feb. 10, 2011 ............................................................................. 3

U.S. Department of Treasury, Treasury Identifies Lebanese Canadian Bank

Sal as a Primary Money Laundering Concern, Feb. 10, 2011,

http://www.treasury.gov/press-center/press-

releases/pages/tg1057.aspx.................................................................................. 2-3

William E. Nelson, Civil Procedure in Twentieth-Century New York, 41 ST.

LOUIS U. L.J. 1157, 1216 (1997) ............................................................... 40-41, 44, 57
http://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.state.gov/j/ct/rls/other/des/123085.htmhttp://www.state.gov/j/ct/rls/other/des/123085.htmhttp://www.state.gov/j/ct/rls/other/des/123085.htmhttp://www.treasury.gov/press-center/press-releases/pages/tg1057.aspxhttp://www.treasury.gov/press-center/press-releases/pages/tg1057.aspxhttp://www.treasury.gov/press-center/press-releases/pages/tg1057.aspxhttp://www.treasury.gov/press-center/press-releases/pages/tg1057.aspxhttp://www.treasury.gov/press-center/press-releases/pages/tg1057.aspxhttp://www.state.gov/j/ct/rls/other/des/123085.htmhttp://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=all


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BRIEF FOR PLAINTIFFS-APPELLANTS

QUESTIONS PRESENTED

The following two questions were certified to this Court by the

United States Court of Appeals for the Second Circuit (626*):

1. Does a foreign banks maintenance of a correspondent

bank account at a financial institution in New York, and use of that account

to effect dozens of multimillion dollar wire transfers on behalf of a foreign

client, constitute a transact[ion] of business in New York within the

meaning of CPLR 302(a)(1)?

2. If so, do the plaintiffs claims under the Anti-Terrorism

Act, 18 U.S.C. 2333(a), the Alien Tort Statute, 28 U.S.C. 1350 note, or for

negligence or breach of statutory duty in violation of Israeli law, aris[e]

from LCBs transaction of business in New York within the meaning of

CPLR 302(a)(1)?

*Unless otherwise noted, parenthetical page references refer to

the Record on Appeal.


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PRELIMINARY STATEMENT

The remaining defendant-respondent herein, the Lebanese

Canadian Bank, SAL (LCB or Defendant) has, through its business and

transactions in New York, facilitated the terrorism and related activities of

Hizballah,1a Lebanese terrorist organization. LCB is the unofficial bank of

Hizballah and is regarded as the hub of Hizballahs financial

operations.2For its activities related to the cocaine trade in South America

and its ties to Hizballah, the United States Treasury identified LCB as a

financial institution of primary money laundering concern under Section

311 of the USA PATRIOT Act.3 LCB enabled millions of dollars of wire

1 Hizballah, a transliteration from another language, hasmany different forms in English. We have adopted the form used by the

Second Circuit except to the extent that it appears in a quotation with a

different spelling.2SeeJo Becker, Beirut Bank Seen as a Hub of Hezbollahs Financing,

N.Y.TIMES,Dec. 13, 2011,available at:

http://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-

seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=all.

3Finding that the Lebanese Canadian Bank SAL is a Financial

Institution of Primary Money Laundering Concern, 76 Fed. Reg. 9403 (Feb,

17, 2011); see also U.S. Department of Treasury, Treasury Identifies Lebanese

Canadian Bank Sal as a Primary Money Laundering Concern, Feb. 10, 2011,

(continued next page)
http://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=allhttp://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html?pagewanted=all


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transfers to Hizballah, which in turn enabled Hizballah to play a material

role in terrorist attacks that caused the plaintiffs-appellants (Plaintiffs) to

be significantly harmed. (46, 66-71, First Amended Complaint (FAC) at

53, 57-58, 113-20, 126-37). Plaintiffs have sued LCB for their damages in

federal court, and seek to establish personal jurisdiction over LCB in the

courts of the State of New York on the basis of LCBs transactions

occurring in New York.

The Second Circuit Court of Appeals has certified to this Court

two questions, which are quoted above as the Questions Presented. (626)

Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 74-75 (2d Cir. 2012). This

Court accepted those questions on March 29, 2012 and communicated the

same to the Second Circuit on April 11, 2012. (628). This Court has

jurisdiction pursuant to 22N.Y.C.R.R. 500.27.

http://www.treasury.gov/press-center/press-releases/pages/tg1057.aspx; U.S.

Department of Treasury, Fact Sheet: Overview of Section 311 of the USA

PATRIOT Act, Feb. 10, 2011.
http://www.treasury.gov/press-center/press-releases/pages/tg1057.aspxhttp://www.treasury.gov/press-center/press-releases/pages/tg1057.aspxhttp://www.treasury.gov/press-center/press-releases/pages/tg1057.aspx


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STATEMENT OF FACTS

Plaintiffs, American and non-American citizens who reside in

Israel, were injured, or their family members killed or injured, by rockets

fired by Hizballah, a Lebanese terrorist organization, into northern Israel in

July and August 2006. (46-65, FAC 57-112). The Plaintiffs initiated this

action on July 11, 2008, (580) Licci, 673 F.3d at 57.4The FAC, filed January

22, 2009, alleged, inter alia, that LCB violated the Anti-Terrorism Act

(ATA), 18 U.S.C. 2333(a); the Alien Tort Statute (ATS), 28 U.S.C.

1350 note; and Israeli tort law, which is applicable to this case under

choice of law principals. (580) Licci, 673 F.3d at 57.

Plaintiffs claim that New York courts have personal jurisdiction

over Defendant LCB, the unofficial bank of Hizballah, on the basis of LCBs

dozens of dollar-denominated international wire transfers, totaling several

million dollars over the course of several years, on behalf of a Hizballah

affiliate that is controlled entirely by Hizballah. (45-46, FAC 45-54). In

4 This statement of facts relies on the FAC, which was filed

January 22, 2009. At this preliminary stage in the litigation, all of the well-

pleaded factual allegations therein, whether recounted here or not, must be

accepted as true. (577-78) Licci, 673 F.3d at 56.


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order to facilitate those transfers, it is alleged that LCB maintained and

used a correspondent banking account5 with (now dismissed) defendant

5 The Federal Financial Institutions Examination Council

(FFIEC), an interagency body empowered to prescribe principles and

standards in the assistance of other governmental agencies including the

Federal Reserve, explains correspondent banking relationships that cross

international boarders as follows: Foreign financial institutions maintainaccounts at U.S. banks to gain access to the U.S. financial system and to

take advantage of services and products that may not be available in the

foreign financial institutions jurisdiction. These services may be performed

more economically or efficiently by the U.S. bank or may be necessary for

other reasons, such as the facilitation of international trade. Services may

include: [(1)] Cash management services, including deposit accounts. [(2)]

International funds transfers. [(3)] Check clearing. [(4)] Payable through

accounts. [(5)] Pouch activities. [(6)] Foreign exchange services. [(7)]

Overnight investment accounts (sweep accounts). [(9)] Loans and letters of

credit.

It explains further that [e]ach relationship that a U.S. bank has

with a foreign correspondent financial institution should be governed by

an agreement or a contract describing each partys responsibilities and

other relationship details (e.g., products and services provided, acceptance

of deposits, clearing of items, forms of payment, and acceptable forms ofendorsement). The agreement or contract should also consider the foreign

financial institutions [anti-money laundering] regulatory requirements,

customer base, due diligence procedures, and permitted third-party usage

of the correspondent account.



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American Express Bank, Ltd. (AmEx) in New York. (44-46, FAC 42-

45, 54-56). Plaintiffs alleged that LCB facilitated the above-mentioned wire

transfers to Hizballah through that correspondent banking account in New

York. (46, FAC 54-56). Plaintiffs contend that those wire transfers and

the various bilateral communications that were necessary to effect both the

underlying relationship between the banks and the wire transfers at issue

amount to transact[ions] within the scope of CPLR 302(a)(1), and

therefore are sufficient to establish long arm jurisdiction in the courts of

New York.

In order to open its correspondent account with AmEx, LCB

entered into a business relationship with AmEx. The two banks initiated

that relationship starting no later than 2004 and continued to maintain it

And the FFIEC posits that U.S. banks that offer foreign

correspondent financial institution services should have policies,

procedures, and processes to manage the [Bank Secrecy Act]/[anti-money

laundering] risks inherent with these relationships and should closely

monitor transactions related to these accounts to detect and reportsuspicious activities. Federal Financial Institutions Examination Council,

Correspondent Accounts (Foreign)Overview,

http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htm

(last visited July 3, 2012).
http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htmhttp://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htmhttp://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htm


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until at least July 12, 2006. (45, FAC 45). Starting in 2004, LCB and AmEx

began providing extensive wire transfer services to Hizballah and/or a

Hizballah affiliate. (45-46, FAC 52-56). Between 2004 and July 12, 2006,

Hizballah effected dozens of U.S. dollar-denominated wire transfers

utilizing the New York-based services of LCB and AmEx. (46, FAC, 53-

55). Those wire transfers are valued in the millions of dollars, money that

Hizballah needed to plan, prepare, and carry out its terrorist activities. (46,

66, FAC 53, 113-17). All of those wire transfers were carried out in and

through the State of New York. (46, 67, FAC 54-56, 118-19).

The United States District Court for the Southern District of

New York dismissed Plaintiffs FAC without the benefit of jurisdictional

discovery. Licci v. Am. Express Bank Ltd., 704 F. Supp. 2d 403 (S.D.N.Y. 2010)

(Daniels,J.), reasoning that LCBs maintenance of a correspondent banking

account in New York and use of that account to wire funds on behalf of the

Hizballah affiliate were insufficient to establish specific personal

jurisdiction over LCB under New Yorks long-arm statute, CPLR

302(a)(1). Licci, 704 F. Supp. 2d at 407. The district court further held that

there was no articulable nexus or substantial relationship...between LCBs


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general use of its correspondent account for wire transfers through New

York and the specific terrorist activities by Hizbollah underlying plaintiffs

claims. Id. at 408. The Plaintiffs timely appealed to the Second Circuit.

(572).

The Second Circuit was not convinced by the district courts

conclusions, and held that the questions presented by this appeal are

insufficiently developedto enable us to predict with confidence how the

New York Court of Appeals would resolve these issues of New York State

law. (577) Licci, 673 F.3d at 55. Nevertheless, it stated explicitly that if it

were

required to decide ourselves, we might conclude

that the first prong of the long-arm jurisdiction test

under N.Y. CPLR 302(a)(1)whether the

defendant has transacted business within New

Yorkmay be satisfied by the defendants use of a

correspondent bank account in New York, even if

no other contacts between the defendant and New

York can be established, if the defendants use of

that account was purposeful.

(603) Id.at 66. (Emphasis omitted). It similarly stated that [t]o the extent

that the Court of Appeals determined in Kreutter[v. McFadden Oil Corp., 71

N.Y.2d 460 (1988)] and McGowan [v. Smith,52 N.Y.2d 268 (1981)] that the


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nexus requirement may be satisfied by a showing of a substantial

relationship or an articulable nexus, respectively, it would appear as

though no showing of causation is required by N.Y. CPLR 302(a)(1).

(615-16) Id.at 71. (Internal citations omitted). Notwithstanding its apparent

inclination to side with the Plaintiffs, the Second Circuit felt it necessary, in

light of a perceived uncertainty in New Yorks law, to certify the two

questions now before this Court. (622-24) Id.at 74-75.

POINT I

THE EXERCISE OF PERSONAL JURISDICTION

OVER LCB IS ENTIRELY CONSISTENT WITH

FEDERAL CONSTITUTIONAL DUE PROCESS

LIMITATIONS

To maintain jurisdiction, courts must be satisfied that the

defendant has established minimum, sufficient contacts with the state

such that the maintenance of the suit does not offend traditional notions

of fair play and substantial justice. See Intl Shoe v. Washington, 326 U.S.

310, 316 (1945). (Internal quotation marks omitted). Necessarily, the

minimum contacts and purposeful availment inquiries that grow out

of International Shoe have changed over time as technological advances


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have minimized the business need for physical presence in a locality and

have altered notions of what it means to be in a state. See Hanson v.

Denckla, 357 U.S. 235, 250-52 (1958).

In its most recent pronouncement on the subject, the Supreme

Court reiterated that jurisdiction is available when a defendant

purposefully avails itself of the privilege of conducting activities within

the forum State, thus invoking the benefits and protections of its laws. J.

McIntyre Machinery, Ltd. v. Nicastro, ___ U.S. ___, 131 S.Ct. 2780, 2785 (2011)

(plurality opinion) (quoting Hanson, 357 U.S. at 253). The Court affirmed

that deliberately contacting entities in another forum, entering into

relationships with such entities, and engaging in other activity directed to a

particular forum can form a basis for specific personal jurisdiction in the

courts of that forum. Id. at 2788.

Manufacturers and other concerns that actively seek out

business in a foreign forum thereby subject themselves to personal

jurisdiction in that forum. Id. Sometimes, merely sending goods (including

money transfers, which are the goods in the banking business) to a

foreign jurisdiction is sufficient if the claims relate in some way to the


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transmission. The touchstone is simply whether the transmission at issue

was commissioned with the purpose of engaging business in the forum

state. See id.

There is simply no question that LCB actively and purposefully

sought business in New York. It deliberately made contacts and contracts6

with AmEx to conduct business in New York. (44-46, FAC 41-45, 52-

56). It purposefully availed itself of the laws and protections of the state of

New York by transmitting assets to New York on behalf of Hizballah, a

major client and a known terrorist organization.7And it transmitted those

assets for the express purpose of conducting business in New York.

Exercising personal jurisdiction over LCB for claims related to these

6 Because the motion in the district court was a pre-answer

motion, no discovery was conducted. Accordingly, the contracts are not in

the record. However, it is inconceivable that two banks would have a

multi-million dollar ongoing correspondent banking relationship without

some form of writing between them. See supra footnote 5. Undoubtedly,

whatever writing exists may contain provisions that bear on jurisdiction,such as forum selection or choice of law clauses, etc.

7 Hizballah is listed by the U.S. Department of State as a

Foreign Terrorist Organization. U.S. Department of State, Foreign Terrorist

Organizations, Jan. 27, 2012,http://www.state.gov/j/ct/rls/other/des/123085.htm.
http://www.state.gov/j/ct/rls/other/des/123085.htmhttp://www.state.gov/j/ct/rls/other/des/123085.htmhttp://www.state.gov/j/ct/rls/other/des/123085.htmhttp://www.state.gov/j/ct/rls/other/des/123085.htm


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transfers is plainly consistent with the Due Process Clause of the United

States Constitution, U.S.CONST. amend. XIV, 1 (Due Process).

POINT II

DEFENDANTS COMMUNICATIONS WITH AND

USE OF AMERICAN EXPRESS SERVICES IN NEW

YORK TO CONDUCT BUSINESS IN NEW YORK

CONSTITUTE A TRANSACT[ION] OF BUSINESS

FOR THE PURPOSES OF CPLR 302(a)(1)

A single act can provide a basis for jurisdiction under CPLR

301(a)(1). Deutsche Bank Sec., Inc. v Montana Bd. of Invs., 7 N.Y.3d 65, 71

(2006); Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467 (1988). This Court

indicated in Kreutter that 302(a)(1) authorizes the court to exercise

jurisdiction over nondomiciliaries for tort and contract claims arising from

a defendants transaction of business in this State, even if plaintiffs are

able to demonstrate just one transaction. Id.It does not matter whether the

defendant has ever set foot in the state of New York so long as the

defendants activities here were purposeful and there is a substantial

relationship between the transaction and the claim asserted. Id.

Accordingly, a single shipment by an out-of-state defendant into New York

might well be sufficient to establish personal jurisdiction under


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302(a)(1). Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 170 (2d Cir.

2010).

Deutsche Bankinvolved a series of communications that all took

place on one day and were made across state lines via the Bloomberg

Messaging System, an instant messaging service for investment traders. See

Deutsche Bank, 7 N.Y.3d at 69-70. The defendant, a Montana state agency,

deliberately communicated with the plaintiffs representative, who was

located in New York. Id. This Court declared that a sophisticated

institutional trader knowingly entering our statewhether electronically

or otherwiseto negotiate and conclude a substantial transaction is within

the embrace of the New York long-arm statute. Id. at 72.

LCB, a sophisticated institutional trader,8entered the State of

New York for the purpose of conducting business on multiple occasions. It

8LCB offers a broad range of corporate, retail, and investment

products, and maintains extensive correspondent accounts with banks

worldwide, including several U.S. financial institutions. As of 2009 LCBstotal assets were worth over $5 billion. Finding that the Lebanese

Canadian Bank SAL is a Financial Institution of Primary Money

Laundering Concern, 76 Fed. Reg. 9403, 9404 (Feb, 17, 2011). As of 2011, it

was ranked as one of Lebanons top banks, with more than $5 billion in



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entered the state to form its relationship with AmEx. And it entered the

state each time it requested a wire transfer using its correspondent account

in New York. Each one of those single acts was purposeful and substantial

and done with the intent to engage in business in New York. Each one,

even when taken individually, gives rise to personal jurisdiction.

While a single act is not always sufficient to create personal

jurisdiction, many acts performed in an ongoing or continuous business

relationship are. See George Reiner & Co., Inc. v. Schwartz, 41 N.Y.2d 648, 653

(1977) (identifying that the existence of an ongoing contractual

relationship, rather than a one-time-event, counsels in favor of

jurisdiction). LCB had an ongoing business relationship with AmEx in

New York. This ongoing business relationship was manifested through its

contract to open a correspondent account in New York. It was furthered by

assets, 35 branches in Lebanon[,] and an office in Montreal. Mariam

Karouny, Lebanese Bank for Sale After U.S. Laundering Claim, Mar. 3,

2011, http://www.reuters.com/article/2011/03/03/lebanon-bank-

idUSLDE7221KS20110303/.
http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/http://www.reuters.com/article/2011/03/03/lebanon-bank-idUSLDE7221KS20110303/


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the due diligence investigation9 that AmEx presumably performed, or at

least should have performed, (both before and after entering into its

relationship with LCB) pursuant to good business practice and the due

diligence requirements imposed upon it by the Uniting and Strengthening

America by Providing Appropriate Tools Required to Intercept and

Obstruct Terrorism Act of 2001 312, Pub. L. No. 10756, 115 Stat. 272

(2001)(USA PATRIOT Act). See 31 U.S.C. 5318(i).10Its relationship was

9As delineated further in the next footnote, AmEx was subject

to the due diligence requirements of the USA PATRIOT Act when entering

into its relationship with LCB and at all times thereafter.10The USA PATRIOT Act, 312, requires that [e]ach financial

institution that establishes, maintains, administers, or manages a private

banking account or a correspondent account in the United States for a non-

United States person, including arepresentative of a non-United States

personestablish appropriate, specific, and, where necessary, enhanced,

due diligence policies, procedures, and controls that are reasonably

designed to detect and report instances of money laundering through those

accounts. 31 U.S.C. 5318(i).

The Interim Final Rule promulgated by Treasury pursuant to

312, Special Due Diligence Programs for Certain Foreign Accounts, 67Fed. Reg. 48348 (July 23, 2002), which was in force until February 3, 2006,

required all banks to assess the degree to which a correspondent account

poses a risk of money laundering and to take appropriate steps to guard

against money laundering. See id. at 48350. It expressed that correspondent



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furthered with each of dozens of wire transfers over a period of years. (45-

46, 89, FAC 52-56, 179). Such a prolonged relationship is certainly a

transact[ion] for the purposes of CPLR 302(a)(1).

Finally, personal jurisdiction rests over the out-of-state

defendants when their New York agent performs substantial work for

accounts used to provide services to third parties (such as Hizballah and its

affiliates) must receive a higher priority of due diligence. Id.

On January 4, 2006, Treasury promulgated a Final Rule that

was effective on February 3, 2006 (until a subsequent amendment after the

dates relevant to this appeal). Special Due Diligence Programs for Certain

Foreign Accounts, 71 Fed. Reg. 496. The Final Rule required covered banks

(including AmEx) to assess the risk posed by each of their correspondent

accounts. The risk assessment had to consider matters such as [t]he nature

of the foreign financial institutions business and the markets it serves, and

the extent to which its business and the markets it serves present an

increased risk for money laundering and [t]he anti-money laundering

and supervisory regime of the jurisdiction that issued the charter or license

to the foreign financial institution. Id. at 502-03. Given that LCB operates

in a market with a large exposure to terrorist activity and in a country that

is not known to be friendly to the laws of the United States, the abovefactors undoubtedly increased the burden of AmExs due diligence

towards its LCB correspondent account(s). While the risk-based due

diligence regime did not apply until October 2, 2006 to correspondent

accounts opened prior to April 4, 2006, AmEx and LCB were undoubtedly



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them in New York.See Fischbarg v. Doucet, 9 N.Y.3d 375 (2007). The clients

of a New York attorney were found to be subject to jurisdiction in New

York notwithstanding the fact that the clients never stepped foot in New

York. Id. at 377. The clients, residents of California, communicated with

their attorney by telephone and mail. The attorney performed all or

materially all of his work for them from his New York office. Id. at 377-78.

This Court found that the defendants purposeful attempt to establish an

attorney-client relationship in New York, coupled with their direct

participation in that relationship that they projected through their

communications into the State of New York, was sufficient for the

purposes of 302(a)(1). Id. at 380-84.

LCB deliberately sought out the assistance of AmEx. It needed

AmEx to conduct its business in the United States as it did not have, and

presumably could not obtain at reasonable cost, its own account or

physical presence in the United States. See (43-44, FAC 33-43).

Accordingly, it entered into an ongoing contractual relationship with

engaged in significant correspondence in the months following the release

of these rules in order to ensure future compliance with them.


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AmEx by which AmEx would act as its agent in New York to siphon

dollars to and from Hizballah accounts. Id. It thus purposefully availed

itself of the benefits and protections of this state. See also, e.g.,Indosuez Intl

Fin. B.V. v. Natl Reserve Bank, 98 N.Y.2d 238, 244 (2002) (finding

jurisdiction on the basis of a series of dollar-denominated international

transactions that needed to occur in New York); Banco Ambrosiano, S.P.A. v.

Artoc Bank & Trust Ltd., 62 N.Y.2d 65, 72-73 (1984) (finding jurisdiction

solely on the basis of defendants maintenance of a correspondent account

that it needed in New York to conduct its international business). The

present case presents a very clear 302(a)(1) transact[ion].

POINT III

THE ARTICULABLE NEXUS AND SUBSTANTIAL

RELATIONSHIP TESTS UNDER CPLR 302(a)(1)

REQUIRE ONLY THAT THE DEFENDANTS

TRANSACTION(S) AND PLAINTIFFS CAUSE OF

ACTION ARE RELATED

This Court has interpreted CPLR 302(a)(1) to require that

there be either an articulable nexus, McGowan v. Smith, 52 N.Y.2d 268,

272 (1981), or a substantial relationship, Kreutter v McFadden Oil Corp., 71

N.Y.2d 460, 467 (1988), between the cause of action and the transaction(s)


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that gives rise to jurisdiction. Those requirements, which we will refer to

collectively as the nexus limitations,11 require only that the transaction

and the cause of action are related. There must be some connection

between the two. An alternative rule would, pursuant to CPLR 302(a)(1),

make unrelated torts, contracts, property disputes, and countless other

matters subject to general jurisdiction whenever, for example, someone

driving from Lebanon, Pennsylvania to Lebanon, Connecticut buys a soda

at a convenience store in Lebanon, New York. That simply cannot be. The

nexus limitations prevent the back-door exercise of general jurisdiction but

(consistent with the objective of the statute) permit the exercise of specific

jurisdiction for claims that relate to the purchase of that can of soda, even if

those causes of action are not directly caused by the purchase. Causation is

not necessary.12

11Plaintiffs coin their own phrase as a means of demonstrating

that they rely on neither the articulable nexus test nor the substantial

relationship test exclusively. It is unclear whether there is a differencebetween the tests and, if there is a difference, what that difference is.

Accordingly, we will refer to both with the term nexus limitations.12 While Plaintiffs strongly object to the use of a causation

standard, as explained at length below, they are certain that, if required to



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A. This Courts CPLR 302(a)(1) Cases Require Only that the

Relationship Between Defendants Transaction(s) and

Plaintiffs Cause of Action are not Disparate, not that One

Cause the Other

When assessing whether the nexus limitations of CPLR

302(a)(1) have been satisfied, this Court has inquired whether the

relationship between the activities and the allegedly offending statement is

too diluted.SPCA of Upstate New York, Inc. v. American Working Collie

Assn, 18 N.Y.3d 400, 404 (2012). It has inquired into whether the

relationship between the claim and transaction is too attenuated. Johnson

v. Ward, 4 N.Y.3d 516, 520 (2005). Jurisdiction has been denied when a

contact has a mere tangential relationship to the present case. Fischbarg v.

Doucet, 9 N.Y.3d at 384. As far as the plaintiffs are aware, this Court has

never denied jurisdiction under CPLR 302(a)(1) on the basis of a

deficiency of causation.

As discussed infra in the section relating to legislative history,

the nexus requirements likely derive from a simple desire to avoid having

do so and with the benefit of jurisdictional discovery, they will be able to

demonstrate causation.


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the courts of New York assume jurisdiction in cases involving only

tangential relationships or, perhaps, no relationships, to the State of New

York. They likely derive ultimately from an 1859 decision in which the

plaintiff, a Maryland corporation, sought jurisdiction in New York over

another Maryland corporation in a dispute involving Maryland property.

The court noted that it would seem little short of preposterous to suggest

that the State of New York had any connection to the dispute. Cumberland

Coal & Iron Co. v. Hoffman Steam Coal Co., 30 Barb. 159 (Gen. Term. 1859).

As explained further below, in order to avoid problems like the

one presented in Cumberland Coal, the State Legislature demanded in CPLR

302(a)(1) that the cause of action for which jurisdiction is sought must

aris[e] from the transact[ion of] any business within the state. Id.And

based on that language, this Court gave us the nexus limitations.McGowan

v. Smith, 52 N.Y.2d 268, 272-73 (1981) (explicitly deriving the necessity of

some articulable nexus between the business transacted and the cause of

action sued upon from the statutory scheme that demands that the

cause of action arose outof those business contacts (a clear reference to

the arising from language of CPLR 302(a)). (Emphasis added).


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To be clear, the nexus limitations are there only to ensure that

the relationship between the cause of action and the transaction is not too

diluted, SPCA, 18 N.Y.3d at 404, too attenuated, Johnson, 4 N.Y.3d at

520, or simply tangential. Fischbarg, 9 N.Y.3d at 384. They impose a

requirement of some articulable nexus. McGowan, 52 N.Y.2d at 272

(emphasis added). They do not demand causation or any sort of strict

relationship.

This claim regarding the scope of the nexus limitations is

confirmed by looking at some of the cases in which jurisdiction was denied

by this Court. They demonstrate both that (1) causation is irrelevant, and

(2) all the Court needs to grant jurisdiction is some clear link (what we will

describe infra in the section relating to textual analysis as an origin)

between the claim and the stated basis for jurisdiction (e.g., the

transaction). For example:

SPCA involved an out-of-state corporation that had no New

York presence but made three phone calls and two short visitstotaling

less than three hours to New York and donated supplies to the plaintiff in

New York. SPCA, 18 N.Y.3d at 405. This Court found that there was no


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substantial relationship between the allegedly defamatory statements

and defendants New York activities. Id. This Court did not devote even a

single word of its decision to assessing causation. To the contrary, it

suggested that if the defendant had actively chosen a New York

destination for its philanthropy, that might have formed a substantial

relationship, despite that doing so would not have caused the alleged

defamation. Id. The Court continued and noted that the standard for

substantial relationship is stricter in defamation cases out of a desire to

avoid unduly chilling speech. Id. at 405-06. The risk of unduly chilling

speech is absent here and, nevertheless, the Defendant asks this Court to

invent a stricter standard than the one that it used in SPCA.

Similarly, in Talbot v. Johnson Newspaper Corp., 71 N.Y.2d 827

(1988), this Court denied jurisdiction for a defamation action on the

grounds that there was an insufficient nexus between a college coachs

defamation action (the cause of action) and a former students pursuit of a

college degree in New York (the transaction). The Court noted that there

was no showing thatyears after termination of [one of the defendants

relationship with her New York university]there was the required nexus


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between the [the defendants] New York business and the cause of

action. Id. at 829. Again, the Court did not hold that the New York

business did not cause the defamation. Nor did it address causation. It

held, rather, that the relationship between the cause of action and the

transaction was attenuatedimplying that a greater relationship between

the two could have provided a basis for jurisdiction. The letter that

allegedly defamed the plaintiff was written two years after the defendant

had left her university. Id. at 828. It appears that the passage of time, more

than anything else, is what motivated this Court to deny jurisdiction. See id.

at 828-29. Of course, passage of time does not undermine causation and a

shorter temporal window cannot create causation where it does not

already exist.13

13 It is important to note that Talbot does not undermine the

Plaintiffs arguments. In the present case, there is no significant (defined

with reference to the nature of the action and it the circumstances that

surround it) passage of time to render the transactions by LCB on behalf of

Hizballah too attenuated. In a defamation action, the passage of two yearsbetween the underlying incident and the allegedly defamatory speech,

which increases the risk of error on the part of the speaker and renders the

speech stale, might indeed be a significant passage of time. Two years, or

even many years, after a terrorist attack that involves serious injury and



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In Johnson v. Ward, 4 N.Y.3d 516 (2005), this Court denied

jurisdiction in a negligence action on the grounds that there was an

insufficient nexus between the tort and the defendants New York

connections. Id. at 518. The plaintiffs were struck by a car in New Jersey.

The driver of the other car, the defendant, possessed a New York drivers

license and had registered his car in New York. He had since moved to

New Jersey but retained his New York license and registration. Id. The

Court noted that the accident had little or nothing to do with the New York

license and registration:

The relationship between the negligence claim and

defendants possession of a New York license and

registration at the time of the accident is tooinsubstantial to warrant a New York courts

exercise of personal jurisdiction over defendant.

The negligent driver could have had a license from

any state, or no licensethat defendant had a New

York license and registration is merely coincidental.

Id.at 520. Note that the Court made no mention of causation.

death is not very much time at all. And, as noted above, the standards are

heightened in defamation casesa factor not relevant here. See SPCA, at

405-06.


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TheJohnsonCourt actually understated the divide between the

New York license and registration and the New Jersey accident: they have

nothing to do with each other. As the Court indicated, the defendant could

have just as easily been driving without a license or could have had a

license from a different state. Moreover, even if we assume that the

defendant had some extrinsic need for a New York license and registration,

the fact of that license was neither the cause nor the origin of the accident

in New Jersey. The defendant had permission to drive in New Jersey not

because of his license, but because the laws of New Jersey permitted him to

drive in New Jersey. The New York license and registration only become

relevant once applicable lawNew Jersey lawrecognizes them. In

contrast, LCBs connection to New Yorka connection that it sought out

and relied upon for the execution of its businessis closely related to the

Plaintiffs claims.

In McGowan v Smith, 52 N.Y.2d 268, 270 (1981), this Court

denied jurisdiction over a Japanese exporter of a fondue pot. The machine

had been shipped by the Japanese company to a store in Buffalo where it

was purchased by the plaintiff and brought to Ontario, Canada. In Ontario,


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it allegedly injured the plaintiff. The plaintiff sued the retailer, a New York

department store, which attempted to implead the Japanese exporter. Id. at

270-71. The exporter had made several trips to New York to engage in

marketing research. This Court held that those trips did not bear a

substantial relationship to the transaction out of which the instant cause of

action arose. Id. at 272. The Court explained:

Essential to the maintenance of a suit against anondomiciliary under CPLR 302 (subd [a], par 1) is

the existence of some articulable nexus between the

business transacted and the cause of action sued

upon. Indeed, it is this basic requirement that

differentiates the long-arm authority conferred by

CPLR 302 (subd [a], par 1) from the more

traditional authority of the New York courts under

CPLR 301 to exercise in personam jurisdiction over

foreign defendants who are present within the

State by virtue of their doing business here.

Where jurisdiction is predicated upon the

provisions of CPLR 301, there is no need to

establish a connection between the cause of action

in issue and the foreign defendants business

activities within the State, because the authority ofthe New York courts is based solely upon the fact

that the defendant is engaged in such a continuous

and systematic course of doing business here as to

warrant a finding of its presence in this jurisdiction.


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Where the plaintiffs proof falls short of establishing

such a systematic course of doing business,

however, our statutory scheme permits him to

bring the foreign defendant within the power of the

New York courts upon a lesser showing of some

business contacts within the State only if he

demonstrates that his cause of action arose out of

those business contacts.

Id. at 272-73 (internal citation and quotation marks omitted). The reason for

the nexus limitations thus rests in the distinction between CPLR 301 and

CPLR 302. CPLR 301 provides jurisdiction for presence in the State of

New York. CPLR 302 applies where presenceand thus the connection

to the stateis deficient. The nexus limitations are there to fill that

deficiency by requiring that there be some connection between the cause of

action and the State of New York. That connection is achieved by requiring

that the plaintiffs cause of action arise[s] (as explained infra in the

section on textual analysis, that word, as used here, means originates)

from defendants transaction in the state. Demanding causation would be

excessive and entirely unnecessary in light of the nexus limitations

objectives.


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B. The Text of CPLR 302(a)(1) Dictates Only that There Not be

a Disparate Relationship Between Defendants Transaction(s)

and Plaintiffs Cause of Action

CPLR 302(a)(1) provides that courts in New York may

exercise personal jurisdiction with regard to a cause of action arising

from the acts of a non-domiciliary who transacts any business within the

state or contracts anywhere to supply goods or services in the state. Id.

The word any is expansive, suggesting no limitation. The word

transacts likewise provides no meaningful limitation.

The phrase arising from thus forms the textual basis for the

nexus limitations incorporated into CPLR 302(a)(1). See McGowan 52

N.Y.2d at 272-73 (explicitly deriving the necessity of some articulable

nexus between the business transacted and the cause of action sued upon

from the statutory scheme that demands that the cause of action arose

out of those business contacts (a clear reference to the arising from

language of CPLR 302(a))). (Emphasis added).

The word arise has four senses in Blacks Law Dictionary.

The first of those senses is to originate or to stem from. BLACKS LAW

DICTIONARY 115 (8th ed. 2004). That is, of course, the same sense of the


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word that appears in the United States Constitutions jurisdictional

discussion: The judicial Power shall extend to all Cases, in Law and

Equity, arising under this Constitution. U.S. CONST. art. III, 2.

(Emphasis added); see also28 U.S.C. 1331 (The district courts shall have

original jurisdiction of all civil actions arisingunder the Constitution, laws,

or treaties of the United States. (Emphasis added)). It is also clearly the

most common usage of the word arise. If one were to say, for example,

that this brief arises from the Defendants illegal actions, an accurate and

grammatically correct statement, he would be saying only that Defendants

actions gave birth to these legal proceedings. He would not be making the

stronger claim that the Defendant causedthis brief.

CPLR 302(a)(1) incorporates, on its face, no causation

requirement. If the New York Legislature insisted upon a direct causation

requirement, it could have easily substituted the words caused by for the

words arising from. The statute would have then applied to a cause of

action caused by any of the acts enumerated in this section. Plainly, the

Legislature chose not to phrase the statute that way because it intended no

causation requirement. In order to give the statutory language its full


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effect, see State of New York v Patricia II, 6 N.Y.3d 160, 162 (2006) (The

starting point is always to look to the language itself and where the

language of a statute is clear and unambiguous, courts must give effect to

its plain meaning. (Internal quotation marks and alteration marks

omitted)), this Court should not allow the nexus limitations to undermine

the objectives of New Yorks long arm statute.

Rather, New Yorks long arm statute demands that the

plaintiffs cause of action originate from the defendants transactions in the

State of New York. An origin for a cause of action is an event that gave rise

to or inspired, but did not necessarily cause, the plaintiffs cause of action.

For example, a reckless driver who creates a distraction while swerving on

the road where that distraction causes an accident between two other

drivers elsewhere on the road has arguably originated the injured

plaintiffs cause of action. That origination gives rise to long arm

jurisdiction over that driver in New York.14 Conversely, a Pennsylvania

14Appellants take no position on this appeal as to whether such

a plaintiff would be able to recover under New Yorks tort law, which

might have an independent proximate causation requirement. It does not

matter, though, as the plaintiffs inability to win on the merits does not



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resident who rents a car in Pennsylvania, drives it through New York en

route to New Hampshire, but strikes a pedestrian in Vermont along the

way should not be subject to long arm jurisdiction in the State of New York

despite that, strictly speaking, his use of New Yorks roads caused his

entre into Vermont and the accident. The defendants use of New Yorks

roads did not originate the accident in Vermont even if that use would be

deemed a cause of the accident. An alternative rule that looks only to

causation would be overbroad as it would allow jurisdiction in New York

despite that New Yorks connection to the Vermont accident is

exceptionally weak.

In the present case, LCBs transactions in New York originated

the terrorist attacks by Hizballah that resulted in the Plaintiffs significant

injuries. Regardless of whether LCBs transactions will ultimately be

determined to have actually caused the Hizballah attacksa point that is

deprive New Yorks courts of jurisdiction over the defendant should the

plaintiff decide to sue notwithstanding that perhaps he will not be able to

win on the merits.


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premature to address prior to discoveryLCBs transactions were, no

doubt, an origin of those attacks.

Other states with long-arm statutory language similar to New

Yorks have likewise interpreted that language broadly and without a strict

causation requirement.15For example:

15

According to Wright & Miller, at least twenty-eightjurisdictions have adopted long arm statutes that extend the jurisdiction of

their courts to the limits of Due Process. 4 C. Wright & A. Miller, Federal

Practice & Procedure 1068, n. 12 (3d ed.) (listing (1) Alabama,

(2) Arkansas, (3) California, (4) Colorado, (5) Georgia, (6) Illinois,

(7) Indiana, (8) Iowa, (9) Kansas, (10) Kentucky, (11) Louisiana,

(12) Maryland, (13) Michigan, (14) Minnesota, (15) Missouri, (16) Nevada,

(17) New Jersey, (18) North Dakota, (19) Oregon, (20) Pennsylvania,

(21) Puerto Rico, (22) South Carolina, (23) South Dakota, (24) Tennessee,

(25) Texas, (26) Utah, (27) Washington, and (28) West Virginia). The

language of many of these long arm statutes is remarkably similar to that

of New Yorksome of them are highlighted in the text. While this Court

has chosen not to extend the jurisdiction of New Yorks courts to the extent

permissible under the Federal Constitution on the grounds that the

language of CPLR 302 is too plain and precise to permit it to be read [as

co-extensive with the Federal Constitution], see Longines-Wittnauer WatchCo. v Barnes & Reinecke, 15 N.Y.2d 443, 459-60 (1965), the interpretation of

New Yorks long arm statute ought to be influenced, to the extent that it is

ambiguous, by interpretations of similar language by other courts. See id.at

457 n.5.


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Colorado. COLO. REV. STAT. 13-1-124(1)(a) provides a basis

for jurisdiction for one who engage[es] in any actconcerning any cause

of action arising from the transaction of any business within this state. Id.

It subjects to jurisdiction any party that engages in purposeful acts

performed within the state in relation to the contract or transaction that

creates the basis of jurisdiction. Those purposeful acts can give rise to

jurisdiction despite that they might be preliminary or subsequent to the

execution of the contract. Classic Auto Sales, Inc. v. Schocket, 832 P.2d 233,

239 (Colo. 1992). The purpose of the nexus requirement appears to be an

assurance that the defendant has fair warning of the possibility that he

might be hailed into a Colorado court, thus making extraneous the need for

a strict causation requirement. See Keefe v. Kirschenbaum & Kirschenbaum,

P.C., 40 P.3d 1267, 1271 (Colo. 2002).

Connecticut. CONN. GEN. STAT. 52-59b(a) provides a basis

for jurisdiction for one who acts creating a cause of action arising from

the [t]ransact[ion of] any business within the state. Id. That language

requires simply that the present litigation bears some connection with the

business conducted by the foreign corporation in this state. Where the


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plaintiffs cause of action has no connection with or relationship to

business transacted in Connecticut, there can be no jurisdiction. Ryan v.

Cerullo, 918 A.2d 867, 880 (Conn. 2007) (emphasis added); see also New

London County Mut. Ins. Co. v. Nantes, 36 A.3d 224, 234 (Conn. 2012) (Our

courts have consistently interpreted arising out of to mean was

connected with, had its origins in, grew out of, flowed from, or was

incident to .). Where there is a connection, even if there is no causation,

there is a basis for jurisdiction.

Illinois. 735 ILL. COMP. STAT. 5/2-209 provides a basis for

jurisdiction for acts giving rise to any cause of action arising from

thetransaction of any business within this State.Id. The arising from

language is there to insure that there is a close relationship between a

cause of action against a nonresident defendant and his jurisdictional

activities. The minimum relationship required by the phrase is that the

plaintiffs action be one which lies in the wake of the commercial activities

by which the defendant submitted to the jurisdiction of Illinois courts.

Aetna Cas. & Sur. Co. v. Crowther, Inc., 581 N.E.2d 833, 835-36 (Ill. App. Ct.

1991) (internal quotation marks omitted). More recent cases explore simply


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whether there is any connection between the cause of action and the

state. See, e.g., Spartan Motors, Inc. v. Lube Power, Inc., 786 N.E.2d 613, 619

(Ill. App. Ct. 2003).

Michigan. MICH.COMP. LAWS 600.705 provides a basis for

jurisdiction for those claims that aris[e] out of[t]he transaction of any

business within the state. The Supreme Court of Michigan has determined

that this language extend[s] the states jurisdiction to the farthest limits

permitted by due process. Sifers v. Horen, 188 N.W.2d 623, 623-24 (Mich.

1971). It is broader than doing business. Id. at 624 (citing Simonson v. Intl

Bank, 14 N.Y.2d 281 (1964)). It includes each and every and

comprehends the slightest. Id. at 624 n.2. See also Green v. Wilson, 565

N.W.2d 813, 816-17 (Mich. 1997) (identifying that the outer limits are

generally consistent with federal Due Process requirements, but insisting

on a separate inquiry to determine whether the limitations of the long arm

statute are met in light of the fact that the legislature chose not to adopt a

catch-all grant of jurisdiction).

New Hampshire. N.H. REV. STAT. ANN. 510:4 provides a

basis for jurisdiction for any cause of action arising from or growing out


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of the acts of one who transacts any business within this state. Id.The

state legislature intended that provision, wrote the Supreme Court of New

Hampshire, to be construed in the broadest legal sense to encompass

personal, private and commercial transactions. Phelps v. Kingston, 536

A.2d 740, 742 (N.H. 1987). It provide[s] jurisdiction over foreign

defendants to the full extent that the statutory language and due process

will allow. Id.

Ohio. OHIO REV.CODE ANN. 2307.382(a) provides a basis for

jurisdiction for ones acts generating a cause of action arising from [a]

persons [t]ransacting any business in this state. Id. (line break omitted).

Ohio courts define transacting broadly: The word transact is broader

than the term contract and includes in its meaning to carry on business

and to have dealings. Greene v. Whiteside, 908 N.E.2d 975, 980 (Ohio Ct.

App. 2009). There does not appear to be a causation requirement.

Pennsylvania. PA.CONS.STAT. 5322(a) provides a basis for

jurisdiction for one who acts generating a cause of action or other matter

arising from such person [t]ransacting any business in this

Commonwealth. Id. (line break omitted). That language permits the


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exercise of jurisdiction to the fullest extent allowed under the Constitution

of the United States and may be based on the most minimum contact with

this Commonwealth allowed under the Constitution of the United States,

Fourteenth Amendments Due Process Clause. Haas v. Four Seasons

Campground, Inc., 952 A.2d 688, 692 (Pa. Super. Ct. 2008) (internal quotation

marks omitted).

Following the lead of these highest courts of sister states, this

Court should continue to interpret the words transacts any business

within the state broadly, in a manner that does not demand a showing of

causation between the transaction and the plaintiffs claims.

C. The Legislative History of CPLR 302(a)(1) Dictates Onlythat There Not be a Disparate Relationship Between

Defendants Transaction(s) and Plaintiffs Cause of Action

The legislative history of CPLR 302(a)(1) indicates an intent

by the State Legislature to create an expansive grant of jurisdiction. Indeed,

the purpose of long arm statutes in general was to expand, not contract,

jurisdiction. 4 C. Wright & A. Miller, Federal Practice & Procedure 1068

(3d ed.). New Yorks long arm statute was no different. Simonson v. Intl

Bank, 14 N.Y.2d 281, 288 (1964) ([CPLR 302] discards the concept of


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doing business as a test of jurisdiction and substitutes therefor the

broader standard of transacting any business; it further abandons the

requirement of the defendants presence in cases involving real property

situated in this State and tortious acts (other than defamation) committed

here.); Longines-Wittnauer Watch Co. v Barnes & Reinecke, 15 N.Y.2d 443,

452, 456 (1965) (The Advisory Committee which drafted [CPLR

302]follow[ed] the broad, inclusive language of the Illinois provision,

adopting as the criterion the transact[ion of] any business within the state.

The design of the legislation, as expressed by the committee, was to take

advantage of the new [jurisdictional] enclave opened up by International

Shoe. (Internal citation and quotation marks omitted); Kreutter v

McFadden Oil Corp., 71 N.Y.2d 460, 466-67 (1988) ([CPLR 302] was

enacted in response to [decisions by the U.S. Supreme Court that]

expanded the permissible powers of States to obtain personal jurisdiction

over nondomiciliaries.). Indeed, the enactment of CPLR 302

undoubtedly produced the most significant expansion of state court

jurisdiction during the entire course of the twentieth century. William E.

Nelson, Civil Procedure in Twentieth-Century New York, 41 ST.LOUIS U. L.J.


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1157, 1216 (1997). When this Court read a portion16 of 302 narrowly

shortly after the statute was enacted, the Legislature, acting consistently

with its original objective, immediately amended the long-arm statute to

reverse this aspect of the [Court of Appeals decision] and explicitly grant

jurisdiction [in future occurrences]. Nelson, supra. Reading 302 now to

excessively restrict access to New York courts would frustrate the

expansive purpose for which 302 was enacted.

The Advisory Committee that drafted the first version of what

would become CPLR 302 intended to exercise the States new powers to

expand jurisdiction over non-residents in a manner consistent with the Due

Process Clause. Simonson, 14 N.Y.2d at 288. The original draft version of

the statute, as proposed in 1958, read:

(a) A court may exercise jurisdiction over any

person, or his administrator or executor, only as to a

cause of action arising from any of his acts

16Relating to CPLR 302(a)(2), not relevant to this appeal. The

Legislature overturned a portion of Longines-Wittnauer Watch Co. v. Barnes

& Reinecke, 15 N.Y.2d 443, 459-60 (1965). The amendment added the CPLR

302(a)(3) extension of long arm jurisdiction over defendants who commit

a tortious act outside of New York but cause injury within New York.


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enumerated in this section, in the same manner as if

he were a domiciliary of the state, if, in person or

through an agent, he:

(1) transacts business within the state; or

(2) commits a tortious act within the state

resulting in physical injury to person or property; or

(3) owns, uses or possesses any real property

situated within the state.

ADVISORY COMMITTEE ON PRACTICE AND PROCEDURE, SECOND PRELIMINARY

REPORT38-39 (1958). It modeled the statute after Illinois long arm statute

with the intent of tak[ing] advantage of the constitutional power of the

state of New York to subject non-residents to personal jurisdiction when

they commit acts within the state. Id. at 39.

In 1961, two legislative committees made only minor changes

to the proposed legislation. Their revisions read (new language italicized):

(a) Acts which are the basis of jurisdiction. A court

may exercise personal jurisdiction over any non-

domiciliary, or his executor or administrator, as to a

cause of action arising from any of the actsenumerated in this section, in the same manner as if

he were a domiciliary of the state, if, in person or

through an agent, he

1. transacts anybusiness within the state; or


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2. commits a tortious act within the state, except

as to a cause of action for deformation [sic] of

character arising from the act; or

3. owns, uses or possesses any real property

situated within the state.

SENATE FINANCE COMMITTEE & ASSEMBLY WAYS AND MEANS COMMITTEE,

FIFTH PRELIMINARY REPORT TO THE LEGISLATURE 66-67 (1961). (Emphasis

added). It appears that the Committees primary concerns related to the

second prong of the statute (relating to tortious acts). See id. Their only

amendment to relevant language was to add the word any after

transacts, indicating an intent to render the statute even more expansive

than did the Advisory Committee. Id.

While the language relevant to the present litigation (As to a

cause of action arising from any of the acts enumerated in this section, a

court may exercise personal jurisdiction over any non-domiciliary, or his

executor or administrator, who in person or through an agent transacts any

business within the state CPLR 302) has since changed only in the


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order of its words,17 subsequent amendments to the statute indicate a

consistent and steady legislative intent to expand the scope of 302. See

DAVID L. FERSTENDIG, HISTORICAL APPENDIX FOR CPLR 302 ([T]he

legislature has now and again shown a willingness to target identifiable

problems and expand CPLR 302 to meet them. (Emphasis added)). For

example, the Legislature expanded the scope of CPLR 302(a)(1) in 197918

to allow New York courts to exercise personal jurisdiction over a

nondomiciliary who contracts outside New York to supply goods or

services in New York, even if the contract is breached before the goods are

ever shipped into, or the services performed in, New York. Id.;

MEMORANDUM OF THE LAW REVIEW COMMISSION, NEW YORK STATE

LEGISLATIVE ANNUAL 164 (1979). Similarly, in 1966, shortly after 302s

enactment, the Legislature made changes to the statute to overrule a

17 In addition to switching the order of the first and secondclauses of the statute, the version currently in effect lacks the words in the

same manner as if he were a domiciliary of the state. Those words were

likely superfluous when written and, in any event, do not affect the current

litigation.


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decision by this Court that the Legislature deemed to be overly restrictive.

Nelson, supra, at 1216.

The State Legislature apparently paid little attention to the

words arising from, which were included in the initial proposal of 1958.

See ADVISORY COMMITTEE ON PRACTICE AND PROCEDURE, SECOND

PRELIMINARY REPORT 38-39 (1958). It would be odd in the extreme if the

Legislature, which was motivated to expand jurisdiction over non-

residents, included language that was intended to impose a highly

restrictive causation requirement, and did so without even commenting

about that restrictive intent.

As far as Plaintiffs are aware, the first time that the words

arising from (or a derivation) appear in this State with reference to

jurisdiction over non-residents was in the 1859 case of Cumberland Coal &

Iron Co., supra. The Cumberland Coal Court wrote that it cannot accept

jurisdiction over a foreign corporation unless the case meets the following

requirement: The cause of action, or the subject, or at least some property

18 The 1979 amendments added the words or contracts

anywhere to supply goods or services in the state after transacts any



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to be acted on, must have arisenor be situated within our jurisdiction. Id.,

30 Barb. at 159. (Emphasis added). In Cumberland Coal & Iron Co., the word

arisen was intended to require not causation, but origin. As the court

explained, a cause of action or the subject which has not arisen in New

York would have no connection to the state and the courts exercise of

jurisdiction would operate on nothing in the state, and bedisregarded

by other states, when called upon to give effect to the judgment[on the

grounds that it was] not a judicial

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