SW Legal studies in Business

Lebanese Bank Activity in U.S. Inadequate to Establish Jurisdiction in U.S. Court
Description

Federal court dismissed suits brought against Lebanese banks accused of providing financial services for a terrorist organization in Lebanon that assisted in that organization killing and injuring people in Israel. Federal and state requirements for long-arm jurisdiction were not met.

Topic Court Procedure
Key Words

Jurisdiction; Long-Arm; Alien Tort Claims Act; Foreign Banks

C A S E   S U M M A R Y
Facts

Hizbullah is a terrorist organization based in Lebanon. From its bases there, it fired rockets into Israel. Fifty-seven Israeli citizens who were injured in attacks, or are survivors of family members killed in attacks, brought suit in U.S. federal court, under the Alien Tort Claims Act, against five foreign banks, claiming that the banks assisted in terrorist activity by knowingly providing financial services to Hizbullah, which constituted aiding and abetting organizations to commit crimes against humanity. The banks, which are located in Lebanon, are connected to the international banking system. They moved to have the suit dismissed.

Decision

Motion granted. U.S. courts do not have jurisdiction over foreign banks under the New York long-arm statute nor under federal long-arm jurisdiction rules regarding foreign defendants. There was no substantial relationship between the foreign banks and operations in New York that would allow jurisdiction. For a claim to arise from a business transaction in New York, there must be a substantial relationship between transactions occurring within the state and the cause of action sued upon. Adequate evidence was not provided to establish such relationships.

Citation

Tamam v. Fransabank SAL, ---F.Supp.2d--- (2010 WL 21088, S.D., N.Y., 2010)

Back to Court Procedure Listings

©1997-2010  South-Western Legal Studies in Business, A Division of Cengage Learning. All Rights Reserved.