## Facts

- Price Waterhouse United Kingdom Firm (PW-UK) served as the worldwide auditor for Bank of Commerce and Credit International (BCCI) and coordinated audit work with affiliated Price Waterhouse firms, including Price Waterhouse LLP in the United States (PW-US) in New York.
- First American Corporation and First American Bankshares, Inc. (First American) sued in federal court in the District of Columbia alleging they had been secretly acquired and controlled by BCCI.
- To obtain discovery for the D.C. litigation, First American sought and served a Federal Rule of Civil Procedure 45 subpoena in the Southern District of New York (S.D.N.Y.) directed to PW-UK, a nonparty.
- Service was attempted through PW-US’s New York office and through a PW-UK partner temporarily working in New York; additional service was made at that partner’s Connecticut residence.
- The S.D.N.Y. enforced the subpoena and later held PW-UK in contempt for noncompliance, concluding it had personal jurisdiction over PW-UK because PW-UK was “doing business” in New York through PW-US under N.Y. C.P.L.R. § 301.
- PW-UK appealed the enforcement and contempt orders; First American cross-appealed on certain service- and scope-related rulings.

## Issues

1. Whether PW-UK was subject to general personal jurisdiction in New York under N.Y. C.P.L.R. § 301 based on continuous New York activities carried out through PW-US and an integrated worldwide accounting practice.
2. Whether exercising personal jurisdiction over PW-UK to enforce a Rule 45 subpoena satisfied federal due process requirements.
3. Whether the district court was required, as a matter of law or comity, to require First American to seek discovery first through the Hague Evidence Convention rather than through Rule 45.

## Decision

- The Second Circuit affirmed the district court’s central rulings enforcing the subpoena and holding PW-UK in contempt.
- The court held PW-UK was “doing business” in New York under C.P.L.R. § 301 through the continuous and systematic in-state activities of the coordinated Price Waterhouse network, including PW-US.
- The court held the exercise of personal jurisdiction comported with due process because PW-UK had sufficient New York contacts and it was reasonable to require compliance with the subpoena.
- The court rejected the argument that the Hague Evidence Convention procedures were mandatory or exclusive, concluding the district court could enforce Rule 45 discovery once jurisdiction existed.

## Legal Principles

- Under New York C.P.L.R. § 301, a foreign entity may be subject to general jurisdiction when it engages in continuous and systematic in-state activity with permanence and continuity, including activity carried out through an in-state affiliate where the relationship supports treating the in-state operations as the foreign entity’s business presence.
- For subpoena enforcement against a foreign nonparty, due process requires minimum contacts showing purposeful availment of the forum and that compelling compliance is reasonable under fairness factors.
- The Hague Evidence Convention generally provides optional mechanisms for transnational evidence gathering and does not automatically displace a federal court’s authority to compel discovery under Rule 45 when personal jurisdiction exists.
- A district court may hold a nonparty in contempt for refusal to comply with an enforceable subpoena issued by a court with personal jurisdiction, subject to abuse-of-discretion review.

## Conclusion

The Second Circuit upheld enforcement of a Rule 45 subpoena and a contempt sanction against a U.K. accounting partnership, ruling that New York had general jurisdiction based on the firm’s continuous business presence through an affiliated New York partnership, that due process was satisfied, and that Hague Convention procedures were not a required precondition to U.S. discovery.


First Am. Corp. v. Price Waterhouse L.L.P., 154 F.3d 16 (2d Cir. 1998)