Case of the Day: Bank of Tokyo-Mitsubishi v. Peterson

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The case of the day is Bank of Tokyo-Mitsubishi UFJ, Ltd. New York Branch v. Peterson (S.D.N.Y. 2012). Deborah D. Peterson was the personal representative of the estate of Lance Cpl. James C. Knipple, a victim of the 1983 bombing of the Marine barracks in Beirut. Peterson had earlier obtained a judgment against Iran for more than $1 million in damages. Peterson sought to reach the assets of Iran and its instrumentalities in the hands of the Bank of Tokyo-Mitsubishi. In particular, she sought the funds located in the bank’s Tokyo offices. Peterson was proceeding under CPLR § 5222(b), which provides for service of a restraining notice on a judgment debtor’s bank.

Because Iran is a foreign state, under 28 U.S.C. § 1610(c) Peterson could not obtain a writ of execution or attachment without a court order. The judge had previously ordered issuance of a writ of execution:

with respect to the property and interests in property of Iran and [the Iranian Ministry of Information and Security] and/or property or interests in property of Iran’s agencies and instrumentalities, including, but not limited to Iranian financial institutions, including … the Central Bank of Iran, held by United States persons … and located outside the United States, all of which have been blocked by reason of President Obama’s Executive Order No. 13599 effective February 6, 2012.

The judge’s order, in summary, authorized Peterson to go after Iranian assets only if the assets were within the scope of the President’s blocking order. Executive Order 13599 provides:

All property and interests in property of the Government of Iran, including the Central Bank of Iran, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any foreign branch, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

The judge held that his prior order authorizing the writ of execution did not extend to assets of the Bank of Tokyo held in Japan. Peterson’s argument relied on the presence of a Bank of Tokyo branch in New York, and Peterson asserted that because the bank had a New York branch, it was a “United States person” for purposes of the order. The judge rejected this assertion, holding that “[t]he Japanese branches of a Japanese bank are not United States persons regardless of the existence of a New York branch of the bank.”

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