United States District Court, E.D. New York
January 15, 2004.
JEAN DUFORT BAPTICHON, Plaintiff against NEVADA STATE BANK, et al., Defendants
The opinion of the court was delivered by: ROANNE MANN, Magistrate Judge
On May 1, 2001, plaintiff Jean Dufort Baptichon ("plaintiff"),
proceeding pro se, commenced this securities fraud action
against various defendants, seeking damages resulting from his
fraudulently induced investment of $10,000 in a promotion operated out of
California, As discovery was ending, plaintiff amended his complaint for
a second time and added Nevada State Bank ("defendant" or "NSB") as a
defendant. Plaintiff now requests additional opportunities to amend.
Concurrently, NSB moves to dismiss plaintiff's claims, based on lack of
personal jurisdiction, improper venue, failure to state a claim upon
which relief can be granted, and expiration of the applicable statutes of
limitations. On July 17, 2003, the Honorable Nicholas G. Garaufis
referred both sets of motions to the undersigned magistrate judge for a
Report and Recommendation,
For the reasons that follow, this Court recommends that NSB's motion to
dismiss be granted, and that plaintiff's motion to further amend be
denied, based on lack of personal jurisdiction.
PLATNTIFF'S VARIOUS PLEADINGS*fn1
Plaintiff filed his original complaint on May 2, 2001, charging Ronald
Mulhall, eight other individuals, and Yes Entertainment Network Inc.
("Yes"), with violating Section 10(b) of the Securities Exchange Act of
1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.RR. § 240, 10b-5.
See Complaint ("Compl.") [#1],*fn2 Plaintiff alleges in that
pleading that in August 1999, he was induced to invest in Yes as part of
a fundraising effort to launch an initial public offering. See
Compl. [#1] at ¶¶ 4, 6, and Exhibits ("PX") 1-2 thereto, As a result
of the original defendants' misrepresentations about the investment,
plaintiff, on August 11, 1999, sent them a check for $10,000 in exchange
for a certificate representing four "units." See Compl. [#1] at
¶¶ 7-10 and PX 4. Unbeknownst to plaintiff, his investment was
worthless and, after cashing plaintiff's check, the original defendants
failed to respond to any of plaintiffs messages. See Compl.
[#1] at ¶¶ 8-10.
On February 15, 2002, plaintiff filed his initial "Amended Complaint"
[#35], against the same defendants. This pleading repeated the prior
violations, but added particulars concerning the misrepresentations made
by the original defendants. See Amended Complaint
[#35] at ¶¶ 8-10, 15,
On August 30, 2002, the Pro Se Clerk's Office received from plaintiff a
different document entitled "Amended Complaint" [#61], which adds NSB as
a defendant, and drops several of the original defendants.*fn3 The
allegations against the original defendants remain substantially the
same. The allegations against NSB are contained in paragraph 13 of that
document, which complains that on or about August 16, 1999, NSB "aided
and assisted the defendants in defrauding the plaintiff of his money by
depositing [plaintiff's check] [into the] `Yes Entertainment Network'
account, as opposed to `Yes Entertainment Inc.,['] the payee named on the
plaintiffs check. . . ." Amended Complaint ("Am. Compl.") [#61] at
¶ 13. Plaintiff further alleges that, "but for the Nevada State
Bank's willful intent or negligence in accepting to deposit and cash the
plaintiff check on the account of an entity that was not named as payee
on the check, the defendants would not have defrauded the plaintiff of
his $10,000,00 invested with defendants on August 11, 1999."
Id. The pleading again alleges that "the defendants" violated
Section 10(b) and Rule 10b-5, Am. Compl. [#61] at ¶¶ 17-18.
On November 18, 2002, plaintiff submitted a document entitled "Motion
to Amend Amended Complaint as to Defendant Nevada State Bank" ("Mot.
Am.") [#54]. Paragraph 4 of the motion papers describes NSB's involvement
in the misconduct alleged by plaintiff, and
avers that NSE, as the depositary bank, "accepted a forged
endorsement" on plaintiff's $10,000 check and "willfully or negligently"
"disregard[ed] the restriction on the check," by depositing the check
into the account of "Yes Entertainment Network Inc." and presenting the
cheek to plaintiff's bank for payment, despite the fact that the check
was made payable to "Yes Entertainment Inc," Mot. Am. [#54] at ¶
4.*fn4 Attached to plaintiff's motion is a document entitled "Amended
Complaint as to Defendant Nevada State Bank" ("Am. Compl. NSB") [#54]. In
addition to adding language concerning Rule 15 of the Federal Rules of
Civil Procedure and supplemental jurisdiction (Am. Compl. NSB [#54] at
¶¶ 2, 4), that pleading includes a new paragraph that alleges that
plaintiff's payment "in violation of a forged restrictive endorsement"
gives rise to liability "based on money had and received or
conversion. . . ." Id. at ¶ 15.*fn5
Plaintiff's Proposed Amended Complaint as to NSB [#54] which in
fact constitutes his fourth pleading and third amended
complaint is one of the pleadings that is the subject of the
pending motions referred by Judge Garaufis. Although plaintiff's
characterizations of his claims vary somewhat from submission to
submission, he has now unequivocally abandoned any theory that NSB aided
and abetted a federal securities law violation;*fn6 rather, plaintiff
appears to complain of "a violation of a forged restrictive endorsement
based on money had and received or conversion, couched in negligence."
Letter to the Court dated November 18,
2002, from Jean Dufort Baptichon [#49] at 2; see
id. at 6 ("plaintiff's claim against the Defendant is for money
had and received or conversion and common law negligence. . . .");
compare "Brief Memorandum in Support of Plaintiff's Motion to
Amend Second Amended Complaint as to Defendant Nevada State Bank" ("Pl.
Mem. to Am.") [#64] at 10 (stating that plaintiff seeks to assert, "in
addition to the Security fraud violations, claims arising under the
doctrine of money had and received, conversion, willful or negligent
violation of common law and the UCC"),
At a premotion conference held on February 26, 2003, plaintiff
disclosed that he wished to amend his complaint further, and Judge
Garaufis gave him until March 21, 2003, to submit additional materials.
See Calendar Entry dated February 26, 2003. This resulted in
the submission of a document dated May 15, 2003, mistakenly entitled
"Plaintiff's Third Amended Complaint as to Defendant Nevada State Bank"
("Third Am. Compl.") [#76].*fn7
Plaintiff's proposed "Third Amended Complaint" omits the prior
allegations as to the original defendants and, in describing the injuries
flowing from NSB's acts, now complains of "economic damages and emotional
distress." Third Am. Compl. [#76] at ¶ 7. In addition to reiterating
his theories of liability "based on money had and received or
conversion," id. plaintiff also claims that NSB violated "me
Bank Secrecy Act," 12 U.S.C. § 1951 et seq., and the "Money
Laundering Control Act," 31 U.S.C. § 5311 et seq., and he
seeks civil and
criminal penalties. Third Am. Compl. [#76] at ¶¶ 8-16 see id. at
Liberally construed, plaintiff's various pleadings appear to allege the
following theories of liability; money had and received, conversion,
violation of the Uniform Commercial Code ("UCC"), aiding and abetting an
act of fraud, and violations of the Bank Secrecy Act and Money Laundering
Control Act. NSB moves to dismiss all claims and opposes plaintiff's
motions to amend based on lack of personal jurisdiction, improper venue,
failure to state a claim upon which relief can be granted, and expiration
of the applicable statutes of limitations.
For the purpose of the pending motions, the Court accepts as true die
facts alleged in plaintiff's pleadings and related submissions.
Specifically, in August 1999, plaintiff was contacted by the other
defendants and fraudulently induced to invest in Yes. Plaintiff mailed a
$10,000 check to Yes in exchange for a certificate representing four
"units." Because of a "prior bad experience" with an investment scheme,
plaintiff intentionally made the check out to "Yes Entertainment Inc.,"
rather than to "Yes Entertainment Network, Inc.," in order to "protect
his investment, "*fn8 Nonetheless, the check was endorsed in the name of
"Yes Entertainment Network"*fn9 and NSB deposited it into the account of
Yes Entertainment Network, Inc.; the check was forwarded through the
normal federal banking channels until it
finally reached plaintiff's New York account, which was debited
Plaintiff does not allege that NSB had any knowledge of the state in
which plaintiff's bank account was located. Nor is there any evidence
suggesting that NSB was at all involved in, or even had knowledge of,
Yes's fraudulent acts, Plaintiff has proffered no facts to establish that
NSB does or solicits business in New York or derives substantial revenue
from New York or from interstate or international commerce.
For the reasons detailed below, this Court concludes that personal
jurisdiction over NSB has not been established. Although NSB raises a
variety of other arguments as to why the case should be dismissed, the
undersigned respectfully suggests that the viability of plaintiff's
claims should be left for decision by a court having jurisdiction over
When faced with a motion to dismiss under Rule 12(b)(2) of the Federal
Rules of Civil Procedure, the plaintiff bears the burden of showing that
the court has personal jurisdiction over the defendant. See
DiStefano v. Carozzi N. Am., 286 F.3d 81, 84 (2d Cir. 2001);
Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566
(2d Cir. 1996), In order to defeat a jurisdictional challenge in the
absence of discovery or an evidentiary hearing, the plaintiff must make a
prima facie showing that includes an allegation of facts to
assertion of jurisdiction over the defendant.*fn12 See Jazini
v. Nissan Motor Co., 148 F.3d 181, 1S4 (2d Cir. 1998), In this
connection, all pleadings and affidavits must be construed in the light
most favorable to the plaintiff and all doubts resolved in his favor.
See Hoffritz for Cutlery, Inc. v. Amajac Ltd., 763 F.2d 55, 57
(2d Cir. 1985).
In a diversity action, the Court looks to the law of the forum state to
determine the existence of personal jurisdiction over a defendant.
See Metro, Life, 84 F.3d at 567.*fn13 The Court then inquires
whether the exercise of personal jurisdiction meets both the "minimum
contacts" and "reasonableness" requirements of the due process clause,
in that "the defendant has sufficient contacts with the forum state to
justify the court's exercise of personal jurisdiction," and "it is
reasonable under the circumstances of the particular case" to assert
jurisdiction over the defendant. Id. at 567-68,
In his pleadings, plaintiff purports to rely on various provisions of
New York's long-arm
statute, NT. C.P.L.R, § 302(a)(1)-(3), as the basis for
persona) jurisdiction over NSB. See Pl. Mem. to Am. (#64) at
10-12; but see Pl. Opp. Mem. [#68] at 940 (relying exclusively
on section 302(a)(3)). That state statute allows a court to exercise
personal jurisdiction over a non-domiciliary who:
(1) transacts any business within the state
. . .; or
(2) commits a tortious act within the state
. . .; or
(3) commits a tortious act without the state
causing injury to person or property within the
state . . . if he
(i) regularly does or solicits business, or
engages in any other persistent course of
conduct, or derives substantial revenue from
. . . services rendered, in the state, or
(ii) expects or should reasonably expect the
act to have consequences in the state and
derives substantial revenue from interstate or
international commerce. . . .
N.Y. C.P.L.R. § 302 (McKinney 2003).*fn14
In order to make a
prima facie showing of jurisdiction under the long-arm statute,
the plaintiff must "aver facts that if credited, would suffice to
establish all the requirements under one of § 302(a)'s
subsections. . . ." Bank Brussels Lambert v. Fiddler Gouzalez &
Rodriguez, 171 F.3d 779
, 785 (2d Cir. 1999). Plaintiff does not, and
apparently cannot, do so.
A. Jurisdiction Under Section 302(a)11 (Transacting Business
in New York)
Under the first prong of section 302(a), "a defendant who transacts
business in New York will be subject to personal jurisdiction in New York
if the acts were purposeful and there is a substantial relationship
between those acts and the plaintiff's claim." Semi Conductor
Materials, Inc. v. Citibank lnt'l PLC, 969 F. Supp. 243, 246
(S.D.N.Y. 1997) (citing PDK
Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir.
1997)), Although a subject-heading in plaintiff's memorandum mentions the
transaction of business as a basis for personal jurisdiction, plaintiff
does not make any allegations suggesting what business NSB conducted in
New York, or how such business was carried out. See Pl. Mem. to
Am. [#64] at 10-11.
In examining whether a defendant has "transacted business in New York,
[the Court] must look at the totality of circumstances concerning the
party's interactions with, and activities within, the state."
Orbittravel.com Corp. v. SCS Solars, No. 01 CIV, 7555 (RCC),
2002 WL 31040411, at *3 (S.D.N.Y. Sept. 12, 2002) (citing Bank
Brussels Lambert, 171 F.3d at 787), In this case, the only
allegation identifying the business that NSB transacted in New York is
plaintiff's assertion that NSB sent plaintiff's check through normal
federal banking channels to plaintiff's New York bank, where it was
presented for payment. See Pl. Opp. Mem. [#68] at 9; Def. Mem.
[#70] at 4, There is no suggestion that NSB (a Nevada banking
corporation) maintains a New York office, is affiliated with a New York
bank, or conducts any business in New York. Indeed, the uncontroverted
affidavit of NSB's Senior Vice President and Community Banking
Administrator establishes otherwise. See Affidavit of Cassi
Eisinger dated April 7, 2003 ("Eisinger Aff.").*fn15
Faced with an indistinguishable set of facts, and after reviewing
analogous caselaw and
the policies underlying the exercise of personal jurisdiction, New
York State Supreme Court Justice Stephen Crane concluded that a
non-domiciliary bank's limited contact with New York did not support the
assertion of personal jurisdiction under section 302(a)(1) or, for that
matter, any provision of New York's long-arm statute. See Citibank.
N.A. v. Inter continental Bank, 646 N.Y.S.2d 261 (Sup.Ct. N.Y.
County 1996) (no personal jurisdiction where defendant bank had no office
or place of business in New York and owned no real property in New York,
and where sole connection with the state was transmission of check
through normal banking channels to New York bank) (citing, inter
alia, Faravelli v. Bankers Trust Co., 447 N.Y.S.2d 962
(1st Dep't 1982) ("the mere mailing from [the defendant foreign bank] of
a draft together with documents to a New York bank for payment does not
constitute transacting business within New York, Nor does the tact that
[the foreign bank] had correspondent banks in New York, in and of itself
provide sufficient contacts for long-arm jurisdiction . . .")
(citations omitted)); see also Symenow v. State Street Bank &
Trust Co., 665 N.Y.S.2d 141, 142 (4th Dep't 1997)
(reversing and dismissing for lack of personal jurisdiction under section
302(a)(1), where defendant bank's "only contact with New York was in
wiring money from the allegedly fraudulent or forged checks to designated
parties in New York."), Accordingly, section 302(a)(1) provides no basis
for personal jurisdiction over NSB. See Semi Conductor
Materials, 969 F. Supp. at 246 (English bank's acceptance of payment
of plaintiff's confirmation fee under letter of credit in bank's New York
bank account, and its agreement to act as confirming bank under letter of
credit in favor of company doing business in New York, did not support a
finding that the bank "transacted business" in New York).
B. Jurisdiction Under Section 302(a)(2) (Tort Inside New
There likewise is no personal jurisdiction under section 302(a)(2),
which applies when the defendant has committed a tortious act within the
state. See Security Nat'l Batik v. UBEX Corp., 404 F. Supp. 471,
473-74 (S.D.N.Y. 1975) (where bank in Texas failed to return or give
prompt notice of dishonor of two promissory notes payable to New York
corporation, alleged conversion occurred in Texas, not New York, within
the meaning of New York's long-arm statute). It is a well-settled point
of law that for personal jurisdiction to exist under this section, the
defendant or its agents must be physically present in New York. See
Bank Brussels Lambert, 171 F.3d at 790, There is no suggestion in
plaintiff's pleadings or submissions that NSB has ever been physically
present in New York State, and NSB's affidavit establishes that it has
not. See Eisinger Aff. at ¶¶ 2-5.
C. Jurisdiction Under Section 302(a)(3) (Tort Outside New York
Causing Injury Inside New York)
Plaintiff's final (and primary) assertion of personal jurisdiction is
under section 302(a)(3) of the long-arm statute, which involves the
commission of a tortious act outside New York that causes injury within
New York, For this section to apply, each of the following must be shown:
(1) a tortious act committed outside New York; (2) resultant injury
within New York; and (3) the defendant either (i) does or solicits
business or engages in any other course of conduct, or derives
substantial revenue from activities, in New York, or (ii) expects or
should expect that its tortious act will have consequences in New York,
and derives substantial revenue from interstate or
international commerce, RY. C.P.L.R. § 302(a)(3) (McKinney 2003),
Even assuming arguendo that plaintiff could establish the
first element of section 302(a)(3),*fn16 he nevertheless has railed to
establish the second and third elements of that section.
1. Second Element: Injury in New York
The determination of where the injury occurred is governed by the
"situs-of-injury test," which requires the Court to identify the
"original event which caused the injury," Bank Brussels
Lambert, 171 F.3d at 791 (citation omitted). The situs of the injury
is where the underlying, original event causing the injury took place,
and is to be distinguished from both the initial tort and its final
economic consequences. See id.; Whitaker v. Am.
Telecasting, Inc., 261 F.3d 196, 209 (2d Cir. 2001).
Each of plaintiff's claims stems from NSB's allegedly wrongful conduct
in depositing plaintiff's check into the account of Yes Entertainment
Network, Inc., when the check was made out to "Yes Entertainment, Inc."
The original event causing plaintiff's injury thus occurred in Nevada,
where NSB deposited the check. Under no reasonable analysis can it be
said that the injury occurred in New York, as required under section
Plaintiff would have the Court conclude that the presentation of the
check to plaintiff's New York bank was the original event that caused his
injury, See Pl. Opp. Mem. [#68] at 9. However, plaintiff's
check entered New York not because NSB took: any deliberate action in or
even directed at New York; it was only by happenstance that plaintiff's
bank was located in New York and that the check was returned there
through normal banking channels. "The occurrence of financial
consequences in New York due to the fortuitous location of [plaintiff's
bank] in New York is not a sufficient basis for jurisdiction under
§ 302(a)(3) where the underlying events took place outside New York,"
Whitaker, 261 F.3d at 209 (internal citation and quotation
marks omitted); see also Mile Assocs. v. Halliburton Servs.,
552 F. Supp. 418, 420 (S.D.N.Y. 1982) (collecting cases where courts
"declined to assert personal jurisdiction under CPLR 302(a)(3) over
defendants alleged to have engaged in out-of-state tortious conduct
causing injury `in' New York solely because plaintiff (or plaintiff's
bank account) was located in the state."); Security Nat'l Bank,
404 F. Supp. at 474-75; Cooperstein v. Pan-Oceanic Marine,
Inc., 507 N.Y.S.2d 893, 895 (2d Dep't 1986) (to satisfy section
302(a)(3), "there must be a more direct injury within the State than the
indirect financial loss resulting from the fact that the injured person
resides or is domiciled here.") (citation omitted).
Plaintiff alternatively claims that the original event occurred
earlier, when the fraudulent misrepresentations were made by Yes in New
York. See PI. Opp. Mem. [#68] at 10, However, the record
contains no evidence or suggestion that NSB was at all involved in, or
even had knowledge of, Yes's acts of fraudulent misrepresentation.
Plaintiff admits as much by claiming that NSB aided and abetted the fraud
only after the fraud "was already committed . . . by Yes. . . ."
Pl. Opp. Mem.  at 16-17. Thus, plaintiff has not established
resultant injury in New York,
2. Third Element; Interstate Nexus
Nor has plaintiff satisfied either of the two alternative prongs of the
final element of section 302(a)(3): (i) doing business in New York or
(ii) anticipating consequences in New York and deriving substantial
revenue from interstate commerce,
Subsection (i): Plaintiff docs not dispute NSB's sworn
allegation that it does not engage
in or solicit business in New York, derive substantial revenue from
activities in New York, or engage in any course of conduct in New York,
within the meaning of section 302(a)(3)(i). See Eisinger Aff.
at ¶¶ 4-5; Security Nat'l Bank, 404 F. Supp. at 474-75
(granting motion to dismiss for lack of personal jurisdiction over Texas
bank). The most that can be said is that NSE regularly sends checks
through the federal banking system, some of which may find their way to
New York banks for processing. Cf. Eisinger Aff. at ¶ 6.
Plaintiff cites no cases and offers no specific data to support the
proposition that such activities meet the requirements of section
This Court is not persuaded that forwarding checks of whose
geographical origins the bank may be entirely unaware through
federally regulated channels, amounts to engaging in or soliciting
business or engaging in conduct in New York, or deriving substantial
revenue from activities in New York. There is no evidence or allegation
that NSB is linked to New York through anything other than the fortuitous
circumstances that some of the cheeks deposited at NSB may have been
drawn on New York banks. When faced with a similar factual scenario in
the Citibank case, the court declined to find that forwarding
checks through normal banking channels to New York constitute "business
activities in New York sufficient to satisfy the requirements of CPLR
302." Citibank, 646 N.Y.S.2d at 263. Indeed, the court
suggested that the assertion of personal jurisdiction in those
circumstances would offend due process notions of fair play and
substantial justice. See id. at 262-63, This Court concurs in
both respects.*fn17 See also Micro Experts, Inc. v. Edison Techs.,
Inc., 701 N.E.2d 1033, 1037
(Ohio Ct. App. 1997) ("Numerous decisions stand for the proposition
that the mere forwarding of a check through the federal bank system by an
otherwise foreign bank is an insufficient basis upon which to permit the
exercise of persona) jurisdiction.") (collecting cases); Fleitas v.
Union Chelsea Nat'l Bank, 687 So.2d 911, 912 (Ha. Dist. Ct. App.
1997) ("We agree (hat the actions of the New York bank in accepting the
Florida check, initiating its collection through the normal Federal
Reserve clearing house process, and paying the proceeds all of
which occurred in New York did not . . . subject it to the
long-arm jurisdiction of the Florida court.") (collecting cases).
Subsection (ii): Nor can it be said that by depositing
plaintiff's check, which then was forwarded through the federal banking
system, NSB should have expected that its act would have consequences in
New York, within the meaning of section 302(a)(3)(ii). To conclude
otherwise unfairly presupposes that NSB takes note of the location of the
paying bank each time it accepts and deposits a check into an account
held at NSB. Although no reported cases in New York or this circuit have
expressly addressed this precise issue, other courts have concluded that
the processing of a draft in the ordinary course of a bank's business
should not, without more, subject the bank to jurisdiction of a foreign
state having some connection to the draft or underlying transaction.
See Time Shave Vacation Club v. Atlantic Resorts. Ltd.,
735 F.2d 61, 66 n.7 (3d Cir. 1984) ("Neither do we believe that the mere
issuance of a check which finds its way to a Pennsylvania bank provides
the requisite foreseeability of economic impact in Pennsylvania.");
cf. Citibank, 646 N.Y.S.2d at 263 (where Florida bank merely
"placed a check [drawn on a New York bank] into the usual channels for
collection[,] . . . [t]his does not constitute conduct from which [the
Florida bank] should reasonably anticipate
being haled into court in New York."), As one federal court
Checks often follow circuitous routes during the
clearing process. . . . [I]t would be unwise
policy to hold a bank subject to the jurisdiction
of any foreign state regardless of how fortuitous
the bank's contact therewith, merely because the
bank happens to conduct a business with certain
Jack O'Donnell Chevrolet, Inc. v. Shankles, 276 F. Supp. 998
1004 (N.D. Ill. 1967).
In any event, to succeed under section 302(a)(3)(ii), plaintiff also
must make an adequate showing that NSB receives "substantial revenue"
from interstate or international commerce. See Balaban v.
Wescott, No. 96 CV 3177 (ILG), 1996 WL 599722, at *4 (E.D.N.Y. Oct.
7, 1996) (citing Trafalgar Capital Corp, v. Oil Producers Equip.
Corp., 555 F. Supp. 305, 310 (S.D.N.Y. 1983) (Weinfeld, D.J.)),
Conclusory assertions of jurisdiction are insufficient, even absent
discovery. See Jazini 148 F.3d at 184. Since plaintiff provides
no information whatsoever regarding NSB's purported interstate revenues,
the jurisdictional claim under section 302(a)(3)(ii) fails on this ground
alone. See Sage Realty Corp. v. Barnhart Interests, Ltd., No.
02 Civ. 0725 (LAK), 2002 WL 603035, at *2 (S.D.N.Y. April 18, 2002);
Bank of Cal. v. Smith Barney, Inc. No. 89-CV-551, 1997 WL
736529, at *5 (N.D.N.Y. Oct. 31, 1997) (granting pre-discovery motion to
dismiss) (citing KIC Chems., Inc. v. ADCO Chem. Co., No. 95
CIV, 6321 (MBM), 1996 WL 122420, at *S (S.D.N.Y. Mar. 20, 1996));
Balaban, 1996 WL 599722, at *4 (granting pre-discovery motion
D. Constitutional Limitations
More fundamentally, even if NSB's conduct were construed to fall within
the reach of New York's long-arm statute, the exercise of personal
jurisdiction over NSB would violate constitutional notions of fairness
embodied in the due process clause.*fn19 As the court concluded in
Citibank, the Florida bank's placement of a New York check into
the federal clearing process "does not constitute conduct from which [the
bank] should reasonably anticipate being haled into court in New York."
Citibank, 646 N.Y.S.2d at 263 (citing World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980)). Quoting from the
Seventh Circuit's constitutional analysis in Froning & Deppe,
Inc. v. Continental Illinois National Bank & Trust Co.,
695 F.2d 289, 291-92 (7th Cir. 19S2), the New York court agreed that "the
fundamentals of substantial justice . . . would be offended by basing
jurisdiction over a non-resident bank upon the bank's mere acceptance of
a check which indicates on its face its origin in the forum state,"
Citibank, 646 N.Y.S.2d at 263: accord Jet Charter Serv.,
Inc. v. Koeck, 907 F.2d 1110, 1114 (11th Cir. 1990): Gateway
Leasing, Inc. v. Am. Bank, 577 F. Supp. 908, 910-11 (D. Md. 1984);
see also Dollar Sav. Bank v. First Sec. Bank of Utah. N.A.,
746 F.2d 208, 213 (3d Cir. 1984) (due process does not allow exercise of
personal jurisdiction over nonresident bank where "the only contacts are
that the funds originated and were repaid in the
So too here, it cannot be said that NSB "purposefully directed [its]
activities" toward New York so as to make it amenable to personal
jurisdiction in that state. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 472 (1985) (quotation omitted). To "subject [NSB] to suit in
any state from which a check cashed by one of its customers might
originate" would "hinder the underlying policies of the several
states which favor the free flow of commerce and of interstate banking
transactions in particular." Fronine & Deppe, 695 F.2d at
294 (emphasis in original) (quoted with approval in Citibank,
646 N.Y.S.2d at 263). "[S]uch a result would wreak havoc upon the orderly
conduct of interstate business." Froning & Deppe, 695 F.2d
at 294; accord Citibank, 646 N.Y.S.2d at 263. The
exercise of personal jurisdiction over NSB in New York is impermissible
as a matter of constitutional law.
For the foregoing reasons, this Court recommends that NSB's motion to
dismiss be granted, and that plaintiff's motion to further amend the
pleadings be denied, based on lack of personal jurisdiction.
Any objections to the recommendations contained herein must be filed
with the Honorable Nicholas G. Garaufis on or before January 27, 2004,
Failure to file objections in a timely manner may waive a right to appeal
the District Court order. See 2S U.S.C. § 636(b)(1);
Small v. Sec'y of Health & Human Scrvs., 892 F.2d 15, 16
(2d Cir. 1989).
The Clerk is directed to transmit copies of this Report and
Recommendation, by Federal Express, to pro se plaintiff and