The First Department of New York’s Appellate Division recently held that a Taiwanese bank that has 128 worldwide branches, 107 of which are in Taiwan and only one of which is in New York, was required to provide information on all of its branches in responses to an information subpoena. See B & M Kingstone, LLC v. Mega Int'l Commercial Bank Co., 15 N.Y.S.3d 318 (1st Dept. 2015). In the case, a judgment creditor served an information subpoena on a Taiwanese bank that it believed held assets for the judgment debtor. The bank responded, informed the creditor that the debtor had no assets in its New York branch, and refused to provide additional information on its other branches. The creditor sought an order compelling compliance with the entire subpoena. In response, the bank argued: (i) merely operating a branch in the forum jurisdiction is insufficient to establish general jurisdiction; (ii) New York’s separate entity rule provides that subpoenas served on bank branches in New York are operative only as to in-state branches; and (iii) international comity precludes compliance, as the bank would be subject to fines in both Panama and Taiwan if it complied. The court rejected all of the bank’s arguments. First, though it agreed that a New York court would not have general jurisdiction over the bank’s worldwide operations, the bank “consented to the necessary regulatory oversight in return for permission to operate in New York, and therefore is subject to jurisdiction requiring it to comply with the appropriate Information Subpoenas.” Second, it found that the separate entity rule was expressly limited to restraining notices and turnover orders, and did not apply to information subpoenas. Finally, it held that international comity did not prevent compliance, as the debtor had previously signed a consent to disclose his bank information, and the “foreign laws [regarding fines] were not cited with sufficient specificity.”
For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.
