Case of the Day: In re MTS Bank

The case of the day is In re MTS Bank (S.D. Fla. 2017). MTS was a creditor of Transaero, a Russian firm that was subject to bankruptcy proceedings in Saint Petersburg, Russia. MTS’s investigation suggested that Transaero had defrauded creditors.

Alexander Krinichanskiy was a former Transaero executive. He owned real property in Florida and had a car registered there, and he had a Florida telephone number. MTS brought a 1782 application in aid of the Russian proceedings seeking to serve a subpoena on Krinichanskiy, who moved to quash. There were several issues, but the only one I want to consider is whether Krinichanskiy was “found” in Florida, as the statute requires.

So Krinichanskiy owned a home and a car in Florida, and he had done some financial transactions relating to Florida, but it seems he didn’t live there, and he wasn’t served with the subpoena in Florida. It’s clear that if Krinichanskiy had happened to be passing through Florida and had been served with the subpoena, that would have been enough to show that he was “found” in Florida. But that didn’t happen. It’s also clear that Krinichanskiy didn’t reside in Florida. So what’s the basis for the court’s decision that the requirements of § 1782 were met?

The judge seemed to acknowledge that “the relationship between section 1782 and the contours of personal jurisdiction are not the same.” I agree. The judge doesn’t really make the case, but maybe the basis of the decision is that you can “reside” in many places, even if you can only have one domicile or permanent home at a time. That would be a reasonable approach to construing the word “resides” in the statute, but I don’t see a sufficient factual basis in the decision to reach that conclusion.

One other point to note: leave the requirements of § 1782 aside. A person subject to a subpoena can only be required to appear or to serve process within 100 miles of a place where he resides, is employed, or regularly transacts business in person. FRCP 45(c). I suppose that since the court found the statutory requirements were met, likely because it determined that Krinichanskiy resided in Florida, it would also find the subpoena proper under FRCP 45(c), though the decision doesn’t address that point.

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