Beyond the Financial Services Modernization Act (also known as the Gramm-Leach-Bliley Act), which generally provides that a financial institution may not disclose a customer’s nonpublic personal information unless it falls under one of the general exceptions of 15 U.S.C. § 6802(e) (e.g., consent of the customer or compliance with a properly authorized civil subpoena), the failure to domesticate a subpoena remains one of the most utilized arguments in motions to quash.
New York Precedent:
In Amelius v. Grand Imperial LLC, the Supreme Court of the State of New York found no personal jurisdiction for discovery purposes over a Delaware corporation with its principal place of business in California although it was registered to do business in New York. 64 N.Y.S.3d 855, 868 (N.Y. Sup. Ct. 2017) (citing Wilderness USA, Inc. v. Deangelo Bros., LLC, 265 F. Supp. 3d 301 (W.D.N.Y. 2017); Famular v. Whirlpool Corp., No. 16 CV 944 (VB), 2017 WL 2470844 (S.D.N.Y. June 6, 2017); Bonkowski v. HP Hood LLC, No. 15-CV-4956 (RRM) (PK), 2016 WL 4536868 (E.D.N.Y. August 30, 2016); Chatwal Hotels & Resorts LLC v. Dollywood Co., 90 F. Supp. 3d 97, 105 (S.D.N.Y. 2015); Mischel v. Safe Haven Enters., No. 653651/2016, 2017 WL 1384214 (N.Y. Sup. Ct. April 17, 2017); Brown v. Lockheed Martin Corp., 814 F.3d 619, 639–41 (2d Cir. 2016); Genuine Parts Co. v. Cepec, 137 A.3d 123 (Del. 2016); Tanya J. Monestier, Registration Statutes, General Jurisdiction, and the Fallacy of Consent, 36 Cardozo L. Rev. 1343 (2015)).
Citing Daimler AG v. Bauman, 134 S. Ct. 746 (2014), the court in Amelius explained: “For the dual reasons that the statutes do not adequately apprise foreign corporations that they will be subject to general jurisdiction in the courts of this State and that foreign corporations are required to register for conducting a lesser degree of business in this State than the Supreme Court of the United States has ruled should entail general jurisdiction, this Court finds that Yelp is not subject to general jurisdiction merely because it has registered to do business here.” Id. at 869.
New Jersey Precedent:
New Jersey courts recognize and follow Daimler and BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017). In one case, a New Jersey court concluded that “a corporation’s principal place of business and place of incorporation establishes where the corporation is ‘at home’ and subject to general jurisdiction.” FDASmart, Inc. v. Dishman Pharm. & Chems. Ltd., 152 A.3d 948, 952 (N.J. Super. Ct. App. Div. 2016) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Like Daimler and BNSF, the FDASmart court recognized that the standard for personal jurisdiction is difficult to meet and requires being at home in the forum state. Id.
Similarly, neither registering to do business in New Jersey nor having a New Jersey-registered agent is sufficient to confer general all-purpose jurisdiction. In Dutch Run-Mays Draft, LLC v. Wolf Block, LLP, the Superior Court of New Jersey held that the mere registration to do business and acceptance of service of process, absent more, does not bestow courts with general jurisdiction. 164 A.3d 435, 444, 446 (N.J. Super. Ct. App. Div. 2017) (reaffirming Daimler by ruling that New Jersey’s foreign corporation registration and registered agent statutes do not equate to registrations with consent to general jurisdiction and that “the use of a registered agent is more likely a means of facilitating service of process for actions where jurisdiction properly relates to minimum contacts or specific actions in the forum”).
For the foregoing reasons, regardless of whether a financial institution is being issued a subpoena concerning a New York or New Jersey state court case, the subpoena needs to be domesticated in the state where the financial institution is incorporated and has its principal place of business.