District Court Permits Post-Judgment Discovery of New York Affiliate of Non-U.S. Bank Registered With New York Banking Regulators

The World in U.S. Courts: Spring 2015 - Personal Jurisdiction

Vera v. Republic of Cuba, U.S. District Court for the Southern District of New York, March 17, 2015

Plaintiffs obtained a judgment against Cuba and sought to execute it against Cuban-owned property in the U.S., including funds held at banks in New York. In prior proceedings, the District Court had concluded it had personal jurisdiction over the defendant banks, and ordered discovery aimed at identifying relevant Cuban assets. After the U.S. Court of Appeals in New York decided Gucci America Ltd. v. Li (discussed in The World in U.S. Courts, Fall 2014 Issue), two of the defendant banks sought reconsideration, arguing that case held that the mere presence in New York of affiliate branches of a non-U.S. bank was insufficient to support a claim of specific personal jurisdiction.

Addressing a question left open by the Court of Appeals in Gucci, the District Court held that the bank's submission to the jurisdiction of New York banking regulators carried with it consent to personal jurisdiction for purposes of issues arising out of its banking operations. "Foreign banks should not be permitted to promote the legitimacy of their business by registering to do business in New York, and then hide illicit activity by 'keeping' information concerning assets related to terrorism in other countries." In the alternative, the District Court held that in the context of the present action—discovery after judgment aimed at aiding in the execution of the judgment—the federal courts' policy of liberal discovery was stronger than in Gucci, a pretrial proceeding.

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