Siegel et al v. HSBC Holdings, PLC et al

Filing 79

MEMORANDUM Opinion and Order Signed by the Honorable John Robert Blakey on 8/14/2017. Mailed notice (jk, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Jeffrey Siegel, et al.,
Plaintiffs,
v.

Case No. 15-cv-10139

Judge John Robert Blakey

HSBC Holdings, plc, et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
On November 9, 2005, terrorists affiliated with al-Qaeda in Iraq (“AQI”) 1
perpetuated coordinated bombings of three hotels in Amman, Jordan.

Certain

victims of that cowardly attack and their representatives 2 now allege that
Defendants HSBC Holdings, plc (“HSBC-Holdings”), HSBC Bank USA, N.A.
(“HSBC-U.S.”), HSBC Bank Middle East Limited (“HSBC-Middle East”), HSBC
North America Holdings, Inc. (“HSBC-North America”), and Al Rajhi Bank
facilitated AQI’s access to American financial markets, thereby aiding and abetting
AQI, also known as the Islamic State of Iraq and the Levant, was officially designated as a Foreign
Terrorist Organization by the United States in December 2004. U.S. DEP’T OF STATE, DESIGNATED
FOREIGN TERRORIST ORGANIZATIONS, https://www.state.gov/j/ct/rls/other/des/123085.htm (last visited
August 9, 2017).
1

Plaintiffs Michael Butler and Sooha Akkad are nationals of the United States who survived the
November 2005 attack. [59] at 5-6. Plaintiffs Jeffrey Siegel, Tarek Akkad, Malek Akkad, Zade
Akkad, Susan Gitelson, Ziad Monla, Tarek Monla, and Moustapha Monla are either heirs to, or the
personal representatives of, certain deceased victims of the November 2005 attack. All of these
individuals are from California or Massachusetts, except for Susan Gitelson. Since these parties
stand on equal footing for the purposes of the present motions, the Court will refer to them
collectively as “Plaintiffs” in this Memorandum Opinion and Order.
2

AQI’s terrorist activity in violation of the Anti-Terrorism Act (“ATA”), 18 U.S.C.
§ 2333(d).
Currently pending before the Court are a Motion to Dismiss or To Transfer
filed by Al Rajhi Bank [64] and a Motion to Strike, Dismiss and Transfer filed by
the HSBC entities [67]. Both motions are fully briefed, and the Court heard oral
argument on July 26, 2017.
For the reasons explained below, Al Rajhi Bank’s motion is granted, and the
collective HSBC motion is granted in part and denied in part, all without prejudice.
I.

Background
A.

Al Rajhi Bank

Al Rajhi Bank is incorporated under the laws of the Kingdom of Saudi Arabia
and maintains its principal place of business there. [59] at 9. It functionally has no
presence in the United States, according to the unrebutted affidavit submitted by
its Chief Operations Officer. [52-1] at 1-3. It is not registered or licensed to do
business here, and it does not have any employees, branch offices, subsidiaries or
agencies here. Id.
Plaintiffs claim that Al Rajhi Bank entered into a “scheme” whereby it
“established, maintained and administered a highly organized program to make
financial payments to terrorist groups al-Qaeda and AQI possible.”

[59] at 27.

Plaintiffs also generally allege the each Defendant, including Al Rajhi Bank,
“committed numerous acts in furtherance of this scheme,” and took “affirmative
steps to conceal” these transactions from American regulators. Id. at 19-20.
2

Plaintiff’s Amended Complaint also incorporates a report from 2010 entitled
“U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing,”
authored by the United States Senate Permanent Subcommittee on Investigations
(“the Report”). Id. at 17. The Report reflects, inter alia, that while banks “rarely
carry explicit links to terrorist financing,” Al Rajhi Bank exhibits a number of
troubling “factors,” including “the naming of a key bank official in a list of al Qaeda
financial benefactors, a U.S. law enforcement search of Al Rajhi nonprofit and
business ventures in the United States to disrupt terrorist financing, a CIA report
targeting the bank for being a ‘conduit’ for extremist finance, the bank’s refusal to
produce authenticating bank documents for use in the criminal trial of a client who
cashed travelers cheques at the bank for use by terrorists, and multiple accounts
held by suspect clients.” Id. at 18-19.
Al Rajhi Bank is seeking to dismiss the claims against it for want of personal
jurisdiction, or, in the alternative, to transfer this action to the Southern District of
New York. See generally [64].
B.

The HSBC Defendants

The Amended Complaint frequently makes wholesale reference to the “HSBC
Defendants.”

These collective allegations purport that, inter alia, the HSBC

Defendants were “offering a gateway for terrorists to gain access to U.S. dollars and
the U.S. financial system,” “opening U.S. correspondent accounts for high risk
affiliates without conducting due diligence,” and “providing U.S. correspondent
services to banks with links to terrorism,” including Al Rajhi Bank. [59] at 7-8.
3

1.

HSBC-North America

Defendant HSBC-North America is a Delaware corporation with its principal
place of business in New York City. [68-4] at 2. It principally serves as a holding
company for its subsidiaries. Id.
The only allegation in the Amended Complaint specific to HSBC-North
America states that its “officials, committee members, compliance officers, and AntiMoney Laundering (‘AML’) directors are involved with, and oversee, the compliance
and AML operations at [HSBC-U.S.].” [59] at 7.
HSBC-North America is seeking to strike the claims against it pursuant to
Federal Rule of Civil Procedure 12(f) or, in the alternative, to transfer this action to
the Southern District of New York. See generally [67].
2.

HSBC-Holdings

Defendant HSBC-Holdings is a holding company organized under the laws of
the United Kingdom, with its principal place of business in London. [68-1] at 2. It
is, by its own admission, the “ultimate parent company of the other HSBC
Defendants,” [68] at 4, and it has no operations or employees in the United States.
[68-1] at 2.
The Amended Complaint contends that HSBC-Holdings “used tactics to
circumvent” regulatory procedures that identify and halt transactions involving
prohibited persons and countries. [59] at 22. These “tactics” include “stripping
information from wire transfer documentation to conceal the participation of a
prohibited country or person, or characterizing a transaction as a transfer between
4

banks in an approved jurisdiction, while omitting payment details that would
disclose participation of a prohibited originator or beneficiary.” Id.
HSBC-Holdings is seeking to have the claims against it dismissed for lack of
personal jurisdiction. See generally [67].
3.

HSBC-Middle East

Defendant HSBC-Middle East is a bank incorporated and headquartered in
Dubai, with no U.S. operations or employees. [68-2] at 2. It does not offer the
“correspondent” banking services that are central to Plaintiffs’ allegations. 3 [68-3]
at 2.
HSBC-Middle East is also seeking to have the claims against it dismissed for
want of personal jurisdiction. See generally [67].
4.

HSBC-U.S.

Finally, Defendant HSBC-U.S. is a national banking association with its
principal place of business in McLean, Virginia and its principal executive offices in
New York, New York. [68-3] at 2. It also maintains an office in Mettawa, Illinois.
[59] at 7.
HSBC-U.S. offers commercial and consumer banking products, including the
international correspondent banking services central to Plaintiffs’ allegations. [683] at 2-3. HSBC-U.S.’s correspondent banking business is centered in New York.
Id. at 3. HSBC-U.S. does not have any bank branches in this judicial district, and,
according to an unrebutted affidavit submitted by Matthew F. Living, Head of the
Correspondent banking is, essentially, the facilitation of international transactions for foreign
banks, including payments and fund transfers.

3

5

Correspondent Banking and Business Management Financial Institutions Group at
HSBC-U.S., no employees or documents involved in correspondent banking services
are in this judicial district.
HSBC-U.S. has not moved to dismiss, but rather seeks to transfer, the claims
against it to the Southern District of New York. See generally [67].
II.

Analysis
A.
Motions to Dismiss Claims Against Al Rajhi Bank, HSBCHoldings, and HSBC-Middle East
Al Rajhi Bank, HSBC-Holdings, and HSBC-Middle East each seek to dismiss

the claims against them pursuant to Rule 12(b)(2), which permits a court to dismiss
claims for “lack of personal jurisdiction.” Fed. R. Civ. P. 12(b)(2); Abbott Labs., Inc.
v. BioValve Techs., Inc., 543 F. Supp. 2d 913, 918 (N.D. Ill. 2008). To successfully
oppose a Rule 12(b)(2) motion, Plaintiffs bear the burden of demonstrating that the
Court has personal jurisdiction over the moving defendant. RAR, Inc. v. Turner
Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997); United Airlines, Inc. v. Zaman, 152
F. Supp. 3d 1041, 1045 (N.D. Ill 2015). In making this determination, the Court
may receive and weigh affidavits from both parties.

Nelson by Carson v. Park

Indus., Inc., 717 F.2d 1120, 1123 (7th Cir. 1983). The Court draws every reasonable
inference and resolves all factual disputes in favor of Plaintiffs. GCIU-Employer
Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009). Unrefuted
facts in a defendant’s affidavits, however, will be taken as true. Id.

6

1.

Principles of Personal Jurisdiction

“Personal jurisdiction” refers to the Court’s “power over the parties.” KM
Enters., Inc. v. Glob. Traffic Techs., Inc., 725 F.3d 718, 723 (7th Cir. 2013).

It

involves the Court’s “power to bring a person into its adjudicative process.” N.
Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014) (internal quotation
omitted). While that power “derives ultimately from the state (in the general sense
of the term), the party’s contacts with the state, and the reasonableness of the
assertion of judicial authority,” the “mechanics for asserting personal jurisdiction in
federal court are found in Federal Rule of Civil Procedure 4(k).” KM Enters., 725
F.3d at 723.
Indeed, “Plaintiffs and all moving Defendants acknowledge that Federal Rule
of Civil Procedure 4(k)(2) governs this jurisdictional analysis.” [70] at 7.

Rule

4(k)(2) provides that where defendants are not subject to the jurisdiction of any
state’s court system and the plaintiffs’ claims arise under federal law, any federal
district court may, as a matter of procedure, properly exercise jurisdiction over the
defendants.
Of course, the Court’s exercise of jurisdiction in a Rule 4(k)(2) case must still
comport with the Constitution’s due process requirements. See Torrent Pharm. Ltd.
v. Daiichi Sankyo, Inc., 196 F. Supp. 3d 871, 879 (N.D. Ill. 2016). The “Due Process
Clause permits courts to exercise either general (‘all-purpose’) jurisdiction or
specific (‘conduct-linked’) jurisdiction.”

Id.

7

Only the latter is implicated here,

however, as Plaintiffs confirmed at the July 26 hearing that they do not contend
that this Court has general personal jurisdiction over any Defendant.
The “specific personal jurisdiction analysis focuses on the relationship among
the defendant, the forum . . . and the conduct at issue in the litigation.” Id. In
determining whether the exercise of specific jurisdiction is constitutionally proper in
this case, the Court considers whether: (1) the particular defendant at issue had
sufficient minimum contacts with the country as a whole; and (2) “the suit arises
out of or relates to such contacts.” Id.
Under controlling Seventh Circuit precedent, this “relatedness” inquiry is
principally concerned with the tacit quid pro quo at the heart of the social contract:
“out-of-state residents may avail themselves of the benefits and protections of doing
business in a forum state, but they do so in exchange for submitting to jurisdiction
in that state for claims arising from or relating to those activities.” uBID, Inc. v.
GoDaddy Grp., Inc., 623 F.3d 421, 430 (7th Cir. 2010) (“The precise causal
relationship between contacts and claim was not important; what was required was
that the relationship be intimate enough to keep the quid pro quo proportional and
personal jurisdiction reasonably foreseeable.”) (internal quotation omitted).
2.

Lack of Specific Personal Jurisdiction

Plaintiffs have failed to satisfy either prong of the specific personal
jurisdiction inquiry with respect to Al Rajhi Bank, HSBC-Holdings, and HSBCMiddle East.

8

None of these entities had sufficient minimum contacts with the United
States as a whole to justify the exercise of this Court’s jurisdiction. The unrebutted
affidavits supplied by all three defendants conclusively establish that: (1) they do
not conduct business in the United States; and (2) their activities are not directed at
this country. See supra at 2-6. The conclusions and observations in the Report
(published five years after the November 2005 attacks), are certainly troubling, but
they remain irrelevant to the requisite jurisdictional inquiry here.

See GCIU-

Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1024 (7th Cir. 2009) (To “be
relevant for personal jurisdiction, past contacts should either bear on the
substantive legal dispute between the parties or relate to the operative facts of the
case.”).
Even assuming arguendo that these Defendants had sufficient minimum
contacts with the United States to satisfy the first prong, Plaintiff still fails to carry
his burden because none of the allegations “arise out of” the putative contacts. As
to HSBC-Holdings and HSBC-Middle East, Plaintiffs do not allege that they had
any involvement with the November 2005 bombing that is the basis of their claim.
Nor do Plaintiffs allege that these specific Defendants had dealings with AQI or Al
Rajhi Bank.

In short, Plaintiffs have not adequately alleged that their claims

against HSBC-Holdings and HSBC-Middle East “directly arise out of [their] specific
contacts” with the United States, and thus, this Court is not empowered to exercise
jurisdiction over them See RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1278
(7th Cir. 1997) (emphasis in original); see also Leibovitch v. Islamic Republic of Iran,
9

188 F. Supp. 3d 734, 751 (N.D. Ill. 2016), aff'd, 852 F.3d 687 (7th Cir. 2017) (There
“is virtually no link between the in-state banking activities of these French and
Japanese banks and Plaintiffs’ claims arising from a terrorist attack that occurred
in Israel with the support of the Iranian government. It certainly cannot be said
that Plaintiffs’ claims directly arise out of the banking activities of these local
branches.”).
Jurisdictionally, Plaintiffs’ claims against Al Rajhi Bank are similarly
deficient. The only allegation in the Amended Complaint regarding U.S.-directed
conduct by Al Rajhi Bank concerns a “scheme” between the “HSBC Defendants” and
Al Rajhi Bank to make it “possible” for Al Rajhi Bank to transfer U.S. dollars
through the United States in a way that “circumvent[ed] monitoring by U.S.
regulators.” [59] at 27-29. Without more, this allegation, taken as true for the
purposes of the present motions, is simply insufficient to justify the exercise of
specific personal jurisdiction in this case, which concerns harms occasioned by the
November 2005 attack. See In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659,
676 (2d Cir. 2013) (Plaintiffs’ “central allegation against the Liechtenstein
defendants is that they provided financial services to clients that purportedly were
associated with al Qaeda, and thereby aided al Qaeda. These allegations are not
enough for personal jurisdiction purposes.”) (internal citation and quotation
omitted); see also Digisound-WIE, Inc. v. Bestar Techs., Inc., No. 07-cv-6535, 2008
WL 2095605, at *4 (N.D. Ill. May 16, 2008) (granting motion to dismiss because
“naked allegations that [the defendant] committed or conspired to commit an
10

intentional tort . . . without more, is not sufficient to establish a prima face case of
personal jurisdiction”).
Quite simply, Plaintiffs have not connected these Defendants to the
November 2005 attack that is the crux of this lawsuit. Moreover, their claims do
not “arise from” these Defendants’ (extremely tenuous) connections to the United
States, and the claims are accordingly dismissed for want of personal jurisdiction.
B.

Motion to Strike Claims Against HSBC-North America

Defendants have also moved, pursuant to Federal Rule of Civil Procedure
12(f), to strike both: (1) the claims against HSBC-North America; and (2) any claims
brought by Susan Gitelson, who was appointed as a “Special Administrator” of the
estate of Rima Akkad Monla pursuant to the Illinois Wrongful Death Act, 740 Ill.
Comp. Stat. 180/0.01. These requests are denied without prejudice, for the reasons
explained below.
1.

Principles Governing Motions to Strike

Rule 12(f) provides that the Court may strike “an insufficient defense or any
redundant, immaterial, impertinent, or scandalous matter.” Motions to strike “are
generally disfavored because they potentially only delay the proceedings.” Edwards
v. Mack Trucks, Inc., 310 F.R.D. 382, 386 (N.D. Ill. 2015). The moving party has the
burden of showing that the challenged allegations “are so unrelated to plaintiff’s
claim as to be devoid of merit, unworthy of consideration, and unduly prejudicial.”
E & J Gallo Winery v. Morand Bros. Beverage Co., 247 F. Supp. 2d 979, 982 (N.D.
Ill. 2003) (internal quotations omitted). A motion to strike is proper, however, when
11

it serves to remove “unnecessary clutter” and thus expedites a case. Heller Fin.,
Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989).
A motion to strike should be granted only if the language in the pleading: (1)
“bears no possible relation to the controversy”; or (2) “may cause the objecting party
prejudice.”

Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 664 (7th Cir.

1992). The former “is essentially a relevancy inquiry.” Volling v. Antioch Rescue
Squad, 999 F. Supp. 2d 991, 1007 (N.D. Ill. 2013). Regarding the latter, sufficient
prejudice results “when the matter complained of has the effect of confusing the
issues, or where it is so lengthy and complex that it places an undue burden on the
responding party.”

Sun Life Assurance Co. of Canada v. Great Lakes Business

Credit LLC, 968 F. Supp. 2d 898, 903 (N.D. Ill. 2013).
2.

Defendants’ Arguments Regarding Their Motion to Strike

HSBC-North America insists that the claims against it should be stricken
because it “does not even offer correspondent banking services to non-U.S. clients
like Al Rajhi Bank,” and its “primary business” is to “act as a holding company.”
[68] at 13. Defendants also note that the only allegation in the Amended Complaint
specific to HSBC-North America states that its “officials, committee members,
compliance officers, and Anti-Money Laundering (‘AML’) directors are involved
with, and oversee, the compliance and AML operations at [HSBC-US],” which is an
inadequate basis for liability. [68] at 7-8. In short, HSBC-North America argues
that the claims against it should be stricken because it “has nothing to do with the
allegations in the Amended Complaint.” Id. at 8.
12

Defendants also suggest that all claims brought by Susan Gitelson, as the
“Special Administrator” of the estate of Rima Akkad Monla, should be dismissed for
want of statutory standing. Gitelson was appointed as a “Special Administrator”
pursuant to the Illinois Wrongful Death Act, 740 Ill. Comp. Stat. 180/0.01, and “the
powers and duties of a special administrator are strictly limited to those prescribed
by the wrongful death statute,” such that a Special Administrator’s “authority to
prosecute a cause of action is limited to the wrongful death claim.”

Brooks v.

McLean Cty. Unit Dist. No. 5, 8 N.E.3d 1203, 1208 (Ill. App. Ct. 4th Dist. 2014)
(internal quotation omitted).
3.

Defendants’ Requests Are Procedurally Flawed

Both of Defendants’ arguments are improper under Rule 12(f). HSBC-North
America is essentially challenging the sufficiency of the allegations against it, which
must be done pursuant to Rule 12(b)(6), not Rule 12(f).

See Ehlerding v. Am.

Mattress & Upholstery, Inc., 208 F. Supp. 3d 944, 953 (N.D. Ind. 2016) (“Rule 12(f)
is not the proper vehicle to attack the sufficiency of Plaintiff's claims, which is
essentially what Defendants are attempting to do.”); 5C Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 1380 (“Rule 12(f) . . . as the cases
make clear, is neither an authorized nor a proper way to procure the dismissal of all
or a part of a complaint, or a counterclaim, or to strike an opponent’s affidavits.”).
The arguments regarding Gitelson’s lack of statutory standing should also
have been brought pursuant to Rule 12(b)(6). See In re Fluidmaster, Inc., 149 F.
Supp. 3d 940, 951 (N.D. Ill. 2016) (“Questions of statutory standing are reviewed
13

under Rule 12(b)(6) . . . .”); D.G. ex rel. Tang v. William W. Siegel & Assocs.,
Attorneys at Law, LLC, 791 F. Supp. 2d 622, 625 (N.D. Ill. 2011) (Multiple courts
“have specifically explained that a motion for lack of prudential or statutory
standing is evaluated under Rule 12(b)(6).”).
The Court will not permit Defendants to “backdoor” Rule 12(b)(6) arguments
through Rule 12(f). Such an allowance would “creat[e] redundancies within the
Federal Rules of Civil Procedure,” and subject the Court’s decision to “a different
standard of review than if [it] had adjudicated the same substantive action under
Rule 12(b)(6).” Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 974-75 (9th Cir.
2010). Such an attack is particularly unfair in this case, as the parties expressly
agreed to defer briefing on Rule 12(b)(6) issues until jurisdictional questions were
settled. [32] at 1-4.
This portion of Defendants’ motion is accordingly denied without prejudice.
At this point, the Court is expressing no opinion regarding the ultimate viability of
either the claims brought against HSBC-North America or the claims brought by
Susan Gitelson. The Court is merely insisting that any challenges to those claims
be brought pursuant to the appropriate Federal Rule (and in accordance with the
approved briefing agreement of the parties).
C.

Motion to Transfer Claims

Finally, Defendants seek to transfer “what remains of the action” to the
Southern District of New York. [68] at 29. Defendants’ request is made pursuant to
28 U.S.C. § 1404(a), which provides that “for the convenience of parties and
14

witnesses, in the interest of justice, a district court may transfer any civil action to
any other district or division where it might have been brought.” The decision to
transfer venue under Section 1404(a) requires a weighing of multiple factors. This
balancing “necessarily involves a large degree of subtlety and latitude,” and is
therefore committed to the sound discretion of the Court. Nagle v. The Hartford
Life & Accident Ins. Co., No. 15-cv-6072, 2015 WL 9268420, at *2 (N.D. Ill. Dec. 21,
2014) (quoting Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986)).
1.

Factors To Consider

Several factors must be met for an action to be transferred to another venue:
(1) venue must be proper in this district; (2) venue and jurisdiction must be proper
in the transferee district; (3) the transferee district must be more convenient for
both the parties and witnesses; and (4) transfer must serve the interest of justice.
See Delta Air Lines, Inc. v. Perfekt Mktg., Inc., 861 F. Supp. 2d 919, 920 (N.D. Ill.
2012). The first two factors are not disputed. 4

Venue is proper both here and in the Southern District of New York pursuant to 18 U.S.C. § 2334
(“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.”). Defendants, by virtue of their transfer request, have also waived any
personal jurisdiction objections. See 21 srl v. Newegg Inc., No. 09-CV-6590, 2010 WL 1178066, at *3
(N.D. Ill. Mar. 24, 2010) (Defendant “waived any arguments regarding personal jurisdiction when it
brought a motion to transfer under 28 U.S.C. § 1404(a).”). Plaintiffs, in their opposition to the
motion to transfer, did not raise any jurisdictional concerns, and with good reason. See Bull v. Ill.
Union Ins. Co., No. 16 C 11446, 2017 WL 3234374, at *3 (N.D. Ill. July 31, 2017) (“The relevant
question under § 1404(a), however, is whether the plaintiff could have brought suit in the transferee
forum, for which personal jurisdiction over the plaintiff is not a prerequisite. To that end, courts in
this district have found personal jurisdiction over the plaintiff irrelevant to a § 1404(a) transfer
analysis.”) (internal citation omitted).
4

15

2.

Convenience of the Parties Favors Transfer

The relative convenience of the venues, however, is hotly contested.

To

resolve this dispute, the Court must consider four factors: (1) Plaintiffs’ choice of
forum; (2) the situs of the material events; (3) the relative ease of access to sources
of proof; and (4) the convenience of the parties and witnesses.

See Fed. Trade

Comm’n v. Big Dog Sols. LLC, No. 16-CV-6607, 2016 WL 5391391, at *2 (N.D. Ill.
Sept. 27, 2016). On balance, these factors weigh in favor of transfer.
While Plaintiffs obviously chose this forum, their selection is given less
deference “where, as here, the chosen forum lacks any significant connection to the
cause of action.” Sanders v. Franklin, 25 F. Supp. 2d 855, 858 (N.D. Ill. 1998). The
only Defendant with connections to this judicial district does not offer the type of
international correspondent banking services at issue here. The only Plaintiff from
Illinois is Susan Gitelson, who seemingly does not reside in this district and may
not even be a party to this action after briefing pursuant to Rule 12(b)(6). The
Court accordingly gives Plaintiffs’ selection less deference than it would normally
carry.
The situs of material events is in the Southern District of New York, where
HSBC-U.S.’s correspondent banking business is centered. Unsurprisingly, sources
of proof can also be found more easily in the Southern District of New York, since
“New York is the headquarters of defendant’s [relevant] U.S. operations, [and] those
employees of defendant most familiar with the company’s U.S. operations work in

16

New York.” Virgin Air, Inc. v. Virgin Atl. Airways, Inc., No. 91-cv-8118, 1992 WL
73522, at *2 (N.D. Ill. Mar. 30, 1992).
Finally, the convenience of the parties and witnesses is well-served by a
transfer. As discussed supra, the vast majority of the Plaintiffs are residents of
either California or Massachusetts, while the HSBC entity that provides the
correspondent banking services at issue here is located in the Southern District of
New York.
While Plaintiffs initially attempted to establish that this judicial district is
more convenient than the Southern District of New York (because Chicago
represents a “convenient geographic midpoint” for parties dispersed on the East and
West coasts), they later conceded in court that commercial airlines regularly fly
convenient routes into both Chicago and New York City. [70] at 18. Clearly, the
dispositive factor here is the location of HSBC-U.S.’s correspondent banking
services, which renders the Southern District of New York more convenient.
3.

The Interests of Justice Favor Transfer

Finally, the Court must consider whether the interests of justice favor a
transfer, in an effort to: (1) ensure the efficient administration of justice; (2) have
the trial before a judge who is familiar with the applicable law; and (3) honor the
relative desire of communities to adjudicate matters that affect them directly. Big
Dog Sols. LLC, 2016 WL 5391391, at *4.
As a preliminary matter, common sense “suggests that the litigation will
move more quickly in a venue close to key witnesses and evidence, and where such
17

witnesses are within the court’s subpoena power.” Andrade v. Chase Home Fin.,
LLC, No. 04-cv-8229, 2005 WL 3436400, at *9 (N.D. Ill. Dec. 12, 2005). Similarly,
the Southern District of New York has a stronger interest in adjudicating the
present dispute, which turns on correspondent banking services offered in New
York City. Transfer is also consistent with the efficient administration of justice, as
Al Rajhi Bank is currently embroiled in multi-district litigation in the Southern
District of New York, involving allegations similar to those presented here. See In
re Terrorist Attacks on Sept. 11, 2001, Case No. 1:03-md-1570 (S.D.N.Y.). Indeed,
Plaintiffs might be able to re-plead their claims against Al Rajhi Bank in this
lawsuit with the requisite jurisdictional grounding, and if they do, it makes good
sense for this case to be litigated in the Southern District of New York.
The Seventh Circuit’s recent decision in Leibovitch v. Islamic Republic of
Iran, 852 F.3d 687 (7th Cir. 2017), is illustrative here. In that case, the court
denied a motion to compel where personal jurisdiction was lacking over the target
foreign banks. Id. at 681. Judge Posner concluded his opinion with the following
observation:
We're puzzled that none of the plaintiffs who brought the
suit against Iran that resulted in the default judgment
are residents of Illinois. Why they are suing here rather
than in the districts in which they live or work is
unexplained. What is worse than merely unexplained is
that they've presented no evidence to suggest that the two
Chicago branch banks are either holding Iranian
government assets or have any knowledge of where those
assets might be held. In short, what are they doing here?
Id. at 690.
18

This Court is similarly puzzled as to why Plaintiffs initiated this case in this
district.

The banking services at issue were provided in New York, and the

Plaintiffs largely hail from Massachusetts or California. Clearly, this case does not
belong here.
III.

Conclusion
As noted above, Al Rajhi Bank’s Motion to Dismiss or To Transfer [64] is

granted without prejudice. The Motion to Strike, Dismiss and Transfer filed by the
HSBC entities [67] is denied in part and granted in part. Plaintiffs’ claims against
HSBC Holdings, plc and HSBC Bank Middle East Limited are dismissed without
prejudice for want of personal jurisdiction. The remainder of this action, consisting
of Plaintiffs’ claims against HSBC North America Holdings, Inc. and HSBC Bank
USA, N.A., is transferred to the United States District Court for the Southern
District of New York.
Date: August 14, 2017
ENTERED:

____________________________
John Robert Blakey
United States District Judge

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