Recent Appellate Decisions Limit Access To Customer Assets Held At Foreign Bank Branches

On October 23, 2014, the New York Court of Appeals held for the first time that, under New York law, the "separate entity" rule prevents a court from ordering a foreign bank operating branches in New York from restraining a judgment debtor's assets held in foreign branches of the bank. Motorola Credit Corp. v. Standard Chartered Bank, No. 162 (N.Y. Oct. 23, 2014). Just over one month ago, and without reference to the separate entity rule, the Second Circuit articulated its own jurisdictional standard for determining whether foreign financial institutions may be subject to a court order freezing a customer's non-U.S. assets or requiring the production of discovery located outside the U.S. Gucci Am., Inc. v. Bank of China, No. 11-cv-3934, F.3d, 2014 WL 4629049 (2d Cir. Sept. 17, 2014).