When Liability Travels: Successor Jurisdiction and the Limits of Due Process

The Supreme Court is being asked to weigh in on a significant personal jurisdiction dispute that could have meaningful implications for international contractors and cross-border transactions.

In Société Générale de Banque au Liban SAL v. Lelchook, No. 25-983, a Lebanese bank seeks review of a Second Circuit decision holding that New York courts may exercise personal jurisdiction over it based solely on the forum contacts of a bank whose assets and liabilities it later acquired.

Background

The underlying litigation arises from 2006 Hezbollah rocket attacks in Israel. U.S. plaintiffs allege that Lebanese Canadian Bank SAL facilitated financial transactions for Hezbollah, including dollar-denominated transfers routed through a New York correspondent bank. In 2011, after the U.S. Department of the Treasury designated Lebanese Canadian Bank a “primary money laundering concern,” Société Générale de Banque au Liban SAL acquired its assets and liabilities for approximately $580 million.

The plaintiffs later sued Société Générale in federal court in New York, arguing that by assuming Lebanese Canadian Bank’s liabilities, it also inherited its jurisdictional status.

The district court rejected that theory, concluding that successor jurisdiction under New York law required a formal merger. On appeal, however, the Second Circuit certified the issue to the New York Court of Appeals, which held that an entity acquiring all assets and liabilities may inherit the predecessor’s jurisdictional status even absent a statutory merger. Relying on that answer, the Second Circuit reversed and held that exercising jurisdiction comports with due process.

The Due Process Question

The certiorari petition frames the issue in constitutional terms: whether the Due Process Clause permits a court to exercise personal jurisdiction over a foreign defendant that has no suit-related contacts with the forum, based solely on a predecessor’s contacts occurring before the acquisition.

Supreme Court precedent has emphasized that personal jurisdiction must rest on the defendant’s own purposeful contacts with the forum or on affiliations rendering it essentially at home there. The petitioner argues that imputing a third party’s historical contacts is inconsistent with that framework and deepens an acknowledged split among federal circuits and state courts.

The Second Circuit, by contrast, viewed the acquisition of liabilities tied to New York contacts as rendering jurisdiction foreseeable, satisfying federal due process.

Implications for International Contractors

For international contractors, financial institutions, and cross-border acquirers, the stakes are substantial.

First, the decision raises risk-allocation concerns in asset transactions. If successor liability carries with it automatic exposure to U.S. personal jurisdiction wherever a predecessor conducted forum-related business, foreign purchasers may face litigation risk untethered to their own conduct. That is particularly salient in sectors where U.S. dollar clearing, correspondent banking, or supply-chain touchpoints create incidental U.S. connections.

Second, the case intersects with compliance and threat-financing due diligence. Acquiring entities in high-risk jurisdictions already conduct sanctions and anti-money-laundering reviews. If historical forum contacts can independently establish jurisdiction in U.S. courts, transactional diligence may need to expand beyond substantive liability exposure to jurisdictional mapping of predecessor conduct.

Third, the ruling has potential consequences for government contractors operating internationally. Contractors that acquire foreign subsidiaries or assume liabilities in restructuring transactions may need to assess whether legacy activities involving U.S. agencies, U.S. funding streams, or U.S. banking channels could create jurisdictional anchors in future disputes.

If the Supreme Court grants review, the decision could clarify the constitutional limits of successor jurisdiction in an increasingly interconnected commercial environment. Regardless of the outcome, the petition underscores that in international contracting, the jurisdictional footprint of a transaction can persist long after the deal closes.