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International Law

Personal Jurisdiction Exists Only Where Venue Proper; Claim Against Bank of China Severed and Transferred To S.D.N.Y.

By Louis M. Solomon

Wultz v. Islamic Republic of Iran, 08-cv-1460 (RCL) (D.D.C. Jan. 2011) [enhanced version available to subscribers], is the opinion on reconsideration of an earlier decision, which we posted on because of its rulings on the pleading of causation in a claim to overcome a sovereign immunity defense. The case arises out of the suicide bombing in 2006 or a restaurant in Tel Aviv by members of the Palestinian Islamic Jihad (PIJ). The claims are brought under the federal Antiterrorism Act, 18 U.S.C. sec. 2331 et seq. (ATA) on behalf of the estate and family members of Daniel Wultz, an American citizen killed in the attack. The particular claims against the Bank of China is that the Bank executed dozens of wire transfers on behalf of PIJ, funneling money that was used in the planning and execution of terrorist attacks between senior PIJ leadership in Iran and Syria and officers and agents of the Bank.

Earlier in the case the Court denied a motion to dismiss, holding that "plaintiffs have standing, plaintiffs' claims do not raise nonjusticiable political questions, the Bank is not entitled to sovereign immunity, the Court has personal jurisdiction over the Bank, venue is proper, plaintiffs have adequately pled claims upon which relief may be granted, and plaintiffs have not pled duplicative claims". The portions of the decision being reconsidered are the interplay between personal jurisdiction and venue in light of the specific venue provision of the ATA, which is similar to other federal venue provisions applicable in other international litigation.

The international litigation practice discussions in the reconsideration decision include the following:

First, the Court found its authority to reconsider its earlier decision in Fed. R. Civ. P. 54(b), which "by its terms allows the trial court to modify its earlier order".

Second, the Court found on reconsideration that personal jurisdiction for an ATA claim was not nationwide service of process but limited to where venue was proper only. This arguably counterintuitive, or certainly uncommon, result follows from the ATA itself, which provides:

Any civil action under section 2333 of this title against any person may be instituted in the district court of the United States for any district where any plaintiff resides or where any defendant resides or is served, or has an agent. Process in such a civil action may be served in any district where the defendant resides, is found, or has an agent".

The Court found that the plain reading of the statute is that personal jurisdiction exists only where venue was proper. The Court's earlier decision that "pendent venue" would apply to any non-ATA claims was not reconsidered. But with the new holding the main venue link to the District of Columbia District was now missing.

Third, the Court determined that it has power to transfer the claims against the Bank to the Southern District of New York even if venue and personal jurisdiction were missing in the District Court for the District of Columbia, relying on 28 U.S.C. sec. 1406(a) and Goldlawr, Inc. v. Heiman, 369 U.S. 463 (1962) [enhanced version available to subscribers / unenhanced version available from lexisONE Free Case Law]. The Court determined that only the claims against the bank needed to be transferred and thus severed the claims against the bank to achieve that result.


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