context: Neither the Virginia state courts nor the Fourth Circuit have addressed the issue of defining personal jurisdiction over entities engaged in letter of credit transactions. Nevertheless, several federal circuit courts and other courts have addressed the issue and the consensus appears to be that the beneficiary's status as a resident of the forum state is not sufficient to establish personal jurisdiction over the banks involved in issuing or confirming the letter of credit for the benefit of the beneficiary.
citation_a.signal: see
citation_a.identifier: 90 F.3d 1386, 1386-87
citation_a.parenthetical: foreign bank issuing letter of credit payable at Missouri confirming bank for benefit of Missouri citizen was not subject to personal jurisdiction in Missouri
citation_a.sentence: See Moog World Trade Corp., 90 F.3d at 1386-87 (foreign bank issuing letter of credit payable at Missouri confirming bank for benefit of Missouri citizen was not subject to personal jurisdiction in Missouri); Jet Charter Serv., Inc. v. W. Koeck Progress Aviation (U.S.A), Inc., 907 F.2d 1110, 1114-15 (11th Cir.1990) (Swiss bank’s failure to issue letter of credit in favor of Florida beneficiary for purchase of assets in Florida was not sufficient to establish personal jurisdiction in Florida under Fourteenth Amendment); Pacific Reliant Indus. v. Amerika Samoa Bank, 901 F.2d 735, 737 (9th Cir.1990) (defendant was “not subject to personal jurisdiction in Oregon simply because it issued a letter of credit in favor of an Oregon beneficiary”); Chandler v. Barclays Bank, PLC, 898 F.2d 1148, 1150-53 (6th Cir.1990) (Egyptian bank issuing letter of credit payable at confirming bank in New York for the benefit of Michigan beneficiary was not subject to personal jurisdiction in Michigan because of lack of minimum contacts); Leney v. Plum Grove Bank, 670 F.2d 878, 880-81 (10th Cir.1982) (letter of credit issued by Illinois bank on behalf of Illinois customer payable to California resident for purchase of Colorado property did not subject Illinois issuing bank to personal jurisdiction in Colorado); Empire Abrasive Equip. Corp. v. H.H. Watson, Inc., 567 F.2d 554, 558 (3d Cir.1977) (Rhode Island bank’s issuance of letter of credit for Rhode Island customer payable in Rhode Island did not subject issuing bank to jurisdiction of Pennsylvania where beneficiary resided); Martin v. First Interstate Bank of Cal., 914 F.Supp. 473, 477-78 (D.N.M.1995) (jurisdiction over California issuing bank was not proper in New Mexico where beneficiary of letter of credit resided) (cited favorably in DeSantis, 949 F.Supp. at 424); Occidental Fire & Gas. Co. of N.C. v. Continental Ill. Nat’l Bank & Trust Co. of Chicago, 689 F.Supp. 564, 568 (E.D.N.C.1988) (North Carolina court could not constitutionally exercise jurisdiction over Illinois bank that issued letter of credit that benefitted North Carolina resident); but see American Nat’l Bank & Trust Co. v. Int’l Seafoods of Alaska, Inc., 735 P.2d 747, 752-53 (Alaska 1987) (jurisdiction over Tennessee bank that confirmed letter of credit issued by Florida bank in favor of Alaska resident was constitutionally allowable in Alaska); Van Schaack & Co. v. Dist. Ct., Eighteenth Judicial District, 189 Colo. 145, 538 P.2d 425, 426 (1975) (Kansas issuing bank subject to personal jurisdiction in Colorado when it issued letter of credit on behalf of its Kansas client for the benefit of a Colorado resident purchasing property in Colorado).
citation_b.signal: but see
citation_b.identifier: 538 P.2d 425, 426
citation_b.parenthetical: Kansas issuing bank subject to personal jurisdiction in Colorado when it issued letter of credit on behalf of its Kansas client for the benefit of a Colorado resident purchasing property in Colorado
citation_b.sentence: See Moog World Trade Corp., 90 F.3d at 1386-87 (foreign bank issuing letter of credit payable at Missouri confirming bank for benefit of Missouri citizen was not subject to personal jurisdiction in Missouri); Jet Charter Serv., Inc. v. W. Koeck Progress Aviation (U.S.A), Inc., 907 F.2d 1110, 1114-15 (11th Cir.1990) (Swiss bank’s failure to issue letter of credit in favor of Florida beneficiary for purchase of assets in Florida was not sufficient to establish personal jurisdiction in Florida under Fourteenth Amendment); Pacific Reliant Indus. v. Amerika Samoa Bank, 901 F.2d 735, 737 (9th Cir.1990) (defendant was “not subject to personal jurisdiction in Oregon simply because it issued a letter of credit in favor of an Oregon beneficiary”); Chandler v. Barclays Bank, PLC, 898 F.2d 1148, 1150-53 (6th Cir.1990) (Egyptian bank issuing letter of credit payable at confirming bank in New York for the benefit of Michigan beneficiary was not subject to personal jurisdiction in Michigan because of lack of minimum contacts); Leney v. Plum Grove Bank, 670 F.2d 878, 880-81 (10th Cir.1982) (letter of credit issued by Illinois bank on behalf of Illinois customer payable to California resident for purchase of Colorado property did not subject Illinois issuing bank to personal jurisdiction in Colorado); Empire Abrasive Equip. Corp. v. H.H. Watson, Inc., 567 F.2d 554, 558 (3d Cir.1977) (Rhode Island bank’s issuance of letter of credit for Rhode Island customer payable in Rhode Island did not subject issuing bank to jurisdiction of Pennsylvania where beneficiary resided); Martin v. First Interstate Bank of Cal., 914 F.Supp. 473, 477-78 (D.N.M.1995) (jurisdiction over California issuing bank was not proper in New Mexico where beneficiary of letter of credit resided) (cited favorably in DeSantis, 949 F.Supp. at 424); Occidental Fire & Gas. Co. of N.C. v. Continental Ill. Nat’l Bank & Trust Co. of Chicago, 689 F.Supp. 564, 568 (E.D.N.C.1988) (North Carolina court could not constitutionally exercise jurisdiction over Illinois bank that issued letter of credit that benefitted North Carolina resident); but see American Nat’l Bank & Trust Co. v. Int’l Seafoods of Alaska, Inc., 735 P.2d 747, 752-53 (Alaska 1987) (jurisdiction over Tennessee bank that confirmed letter of credit issued by Florida bank in favor of Alaska resident was constitutionally allowable in Alaska); Van Schaack & Co. v. Dist. Ct., Eighteenth Judicial District, 189 Colo. 145, 538 P.2d 425, 426 (1975) (Kansas issuing bank subject to personal jurisdiction in Colorado when it issued letter of credit on behalf of its Kansas client for the benefit of a Colorado resident purchasing property in Colorado).