Motorola Credit Corp. v. Uzan

132 F. Supp. 3d 518, 2015 U.S. Dist. LEXIS 129103, 2015 WL 5613077
CourtDistrict Court, S.D. New York
DecidedSeptember 9, 2015
DocketNo. 02 Civ. 666(JSR)
StatusPublished
Cited by5 cases

This text of 132 F. Supp. 3d 518 (Motorola Credit Corp. v. Uzan) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Motorola Credit Corp. v. Uzan, 132 F. Supp. 3d 518, 2015 U.S. Dist. LEXIS 129103, 2015 WL 5613077 (S.D.N.Y. 2015).

Opinion

[520]*520 MEMORANDUM ORDER

JED S. RAKOFF, District Judge.

For over a decade, plaintiff Motorola Credit Solutions f/k/a Motorola Credit Corporation (“Motorola”) has been trying to collect billions of dollars in judgment from defendants Kemal Uzan, Murat Hak-an Uzan, Cem Cengiz Uzan, Melahat Uzan, Aysegul Akay, and Antonio Luna Betancourt (the “Uzans”).1 Relying on a web of proxies, the Uzans have evaded payment. In 2012, the Court permitted Motorola to serve ex parte discovery requests on third parties to gather information about “[defendants’ and/or their agents’ assets or whereabouts.” Order Regarding Service of Ex Parte Discovery Requests, No. 1:02-cv-00666-JSR (S.D.N.Y. Nov. 19, 2012). In 2013, Motorola served subpoenas on the New York branches of three foreign banks, “Bank 1,” “Bank 2,” and “Bank 3.”

The banks have refused to comply with the subpoenas with respect to certain material located outside the United States. Initially, the Court agreed with Bank l’s objections, on international comity grounds, to producing documents held in the United Arab Emirates (the “UAE”) and Jordan. Motorola Credit Corp. v. Uzan, 293 F.R.D. 595, 601 (S.D.N.Y.2013). However, Motorola moved for reconsideration, and, after oral argument and full briefing, the Court revisited its prior decision and ordered all recipients of Motorola subpoenas to comply with them even in the UAE and Jordan. Motorola Credit Corp. v. Uzan, 73 F.Supp.3d 397, 405 (S.D.N.Y.2014). The banks have now moved for reconsideration in light of the Supreme Court’s decision in Daimler A.G. v. Bauman, — U.S. -, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), and the Second Circuit’s decision in Gucci America, Inc. v. Bank of China, 768 F.3d 122 (2d Cir.2014).

The Court first addresses whether reconsideration is appropriate. Although the standard is “strict,” Shrader v. CSX Transp. Inc., 70 F.3d 255, 257 (2d Cir.1995), reconsideration is justified when there is “an intervening change of controlling law.” Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992) (citation omitted). Daimler and Gucci significantly changed the law of personal jurisdiction. Both were decided after this Court issued its- December 22, 2014 Order compelling compliance with the subpoenas.2 In light of the intervening changes wrought by Daimler and Gucci, the Court grants the banks’ request for reconsideration.

The banks raise several arguments against compelling compliance, but, in this Memorandum Order, the Court addresses only the threshold question of personal jurisdiction. A court “must have personal jurisdiction over a nonparty in order to compel it to comply with a valid discovery request.” Gucci, 768 F.3d at 141. Personal jurisdiction over a foreign corporate entity depends on (1) the laws of the forum state and (2) whether jurisdiction over the foreign entity comports with constitutional due process requirements. Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 168 (2d Cir.2013). In light of the constitutional obstacles to asserting jurisdiction over the banks, the Court does not reach the ques[521]*521tion of whether New York’s long-arm statute allows for jurisdiction over them.

The banks argue, correctly, that Gucci prevents this 'Court from asserting general jurisdiction over them. General jurisdiction depends on whether “the corporation’s affiliations with the State in which suit is brought are so constant and pervasive ‘as to render [it] essentially at home in the forum State.’ ” Daimler AG v. Bauman, — U.S. -, 134 S.Ct. 746, 751, 187 L.Ed.2d 624 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011)). Applying Daimler in the context of non-party discovery, the Second Circuit held that a district court could not enforce a subpoena against a non-party foreign bank simply because it operated branches in the United States. The bank in Gucci Bank of China (“BOC”), was incorporated and had its principal place of business abroad. Moreover, “BOC [had] only four branch offices in the United States and only a small portion of its worldwide business [was] conducted in New York.” Gucci 768 F.3d at 135. The Second Circuit concluded that the bank was not “at home” in New York and could not be subjected to general jurisdiction here. See id.

Gucci is on all fours with the banks in this case. The Court has received no indication that the banks’ contacts with New York would be materially different from those of BOC considered by the Second Circuit in Gucci All three banks are incorporated and maintain their principal places of business abroad, and no “exceptional circumstances” exist that would otherwise support general jurisdiction over them. Daimler, 134 S.Ct. at 761 n. 19; see Bank 2 Jan. 30, 2015 Mem. at 6; Bank 1 Jan. 30, 2015 Mem. at 8 (quoting Gucci 768 F.3d at 126). None of the banks are “at home” in New York.

Motorola argues that the banks have waived their objections to personal jurisdiction. First, Motorola argues that the “banks have consented to jurisdiction by appearing in the case.” P. Jan. 30, 2105 Resp. Mem. to Banks 2 & 3 at 4; P. Jan. 30, 2015 Resp. Mem. to Bank 1 at 3. It is true that none of the banks presented objections to personal jurisdiction when they first appeared. However, “a party cannot be deemed to have waived objections or defenses which were not known to be available at the time they could first have been made.” Hawknet, Ltd. v. Overseas Shipping Agencies, 590 F.3d 87, 92 (2d Cir.2009) (citation omitted). The banks’ objections to jurisdiction were not available before Daimler and Gucci. See Gucci 768 F.3d at 135-36. Therefore, the banks did not waive their objections by failing to raise them earlier.

Second, Motorola contends that the banks have constructively consented to the Court’s jurisdiction “by obtaining a license to conduct banking operations in New York” under State and federal law. P. Jan. 30, 2105 Resp. Mem. to Banks 2 & 3 at 4; P. Jan. 30, 2015 Resp. Mem. to Bank 1 at 3. Under New York Banking Law § 200, Banks 1 and 2 must register with and be licensed by the Superintendent of the Department Financial Services, who may receive service on their behalf. Bank 3 holds a federal banking license. See Bank 3 March 25, 2015 Suppl. Letter-Brief at 1-2. However, to find that satisfaction of requirements mandatory for operation of a branch in New York signal constitutional consent to jurisdiction would directly contradict Gucci. Gticci stands for the proposition that mere operation of a branch office in a forum — and satisfaction of any attendant licensing requirements — is not constitutionally sufficient to establish general jurisdiction. ' Accordingly, the Court finds that the banks did not consent to this [522]*522Court’s jurisdiction by registering or being licensed under New York Banking Law § 200 or federal law.

The banks contend that

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Sonterra Capital Master Fund v. Barclays Bank Plc
366 F. Supp. 3d 516 (S.D. Illinois, 2018)
In re Del Valle Ruiz
342 F. Supp. 3d 448 (S.D. Illinois, 2018)
Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG
277 F. Supp. 3d 521 (S.D. New York, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
132 F. Supp. 3d 518, 2015 U.S. Dist. LEXIS 129103, 2015 WL 5613077, Counsel Stack Legal Research, https://law.counselstack.com/opinion/motorola-credit-corp-v-uzan-nysd-2015.