Clearstream Banking, S.A. v. Deborah D. Peterson, et al.

In this judgment enforcement action, judgment creditors seek to execute against an alleged foreign sovereign asset that has never been in the United States and is held by a foreign garnishee (Petitioner Clearstream). In recognizing specific personal jurisdiction over Clearstream, the Court of Appeals disregarded this Court’s governing “arise out of or relate to” standard, Ford Motor Co. v. Montana Eighth Judicial District Court, 592 U.S. 351, 359 (2021), and instead explicitly relied on a separate “relatively permissive” standard used to construe New York’s long-arm statute. Due to that misstep, the court erroneously endorsed the exercise of specific jurisdiction based solely on Clearstream’s use of a “correspondent” bank account in New York that, as a matter of law, is not subject to execution. Compounding its error, the Court of Appeals held that the threat of catastrophic double liability, which this Court has long considered to violate due process in this context, is no obstacle to exercising jurisdiction. The question presented is: Whether due process is violated by exercising specific personal jurisdiction over a foreign garnishee to execute against an asset that has never been in the United States, based solely on the garnishee’s use of a correspondent account in New York, where execution against the foreign asset would threaten the garnishee with catastrophic double liability.