Allianz Global Investors GMBH v. Bank of Am. Corp.

457 F.Supp.3d 401

ALLIANZ GLOBAL INVESTORS GMBH, et al., Plaintiffs,

v.BANK OF AMERICA CORPORATION, et al., Defendants.

18 Civ. 10364 (LGS)

United States District Court, S.D. New York.

Signed April 30, 2020

OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge:

This case concerns an alleged conspiracy among the world's largest banks to fix prices in the foreign exchange ("FX") market. Plaintiffs¹ bring this action against sixteen banks and their affiliates, alleging that Defendants manipulated the FX market in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, et seq. and the common law doctrine that prohibits unjust enrichment.

Defendants HSBC Bank plc ("HSBC Bank"), MUFG Bank, Ltd. ("MUFG Bank"), Royal Bank of Canada ("RBC"), The Royal Bank of Scotland plc ("RBS"), Societe Generale ("SocGen"), Standard Chartered Bank ("Standard Chartered") and UBS AG (collectively, the "Foreign Defendants")² move to dismiss the Second Amended Complaint (the "Complaint") for lack of personal jurisdiction in accordance with Federal Rule of Civil Procedure 12(b)(2). For the reasons discussed below, the motion is denied as to HSBC Bank, RBS, SocGen, Standard Chartered and UBS AG, and granted as to MUFG Bank and RBC.

I. BACKGROUND

The following brief summary is taken from the Complaint. See MacDermid, Inc. v. Deiter , 702 F.3d 725, 727 (2d Cir. 2012) ; accord GlaxoSmithKline LLC v. Laclede, Inc. , No. 18 Civ. 4945, 2019 WL 293329, at *3 (S.D.N.Y. Jan. 23, 2019). For the purpose of this motion, the allegations in the Complaint are taken as true to the extent they are uncontroverted by the Foreign Defendants’ affidavits. See MacDermid , 702 F.3d at 727 ; accord GlaxoSmithKline , 2019 WL 293329, at *3.

From approximately 2003 to 2013, Defendants conspired with each other to manipulate the FX market for their own financial benefit. Defendants exchanged confidential customer information and coordinated their trading strategies to manipulate FX benchmark rates and to inflate bid/ask spreads, through non-public methods of communications, including private chatrooms and text messages. As a result of the conspiracy, Plaintiffs, who were participants in the market for FX instruments, were harmed.

II. STANDARD

A. Requirements for Personal Jurisdiction

"[W]hen a motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing" of jurisdiction. MacDermid , 702 F.3d at 727 ; see also Charles Schwab Corp. v. Bank of Am. Corp. , 883 F.3d 68, 81 (2d Cir. 2018). The court must "construe the pleadings and affidavits in the light most favorable to plaintiffs, resolving all doubts in their favor." Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A. , 722 F.3d 81, 85 (2d Cir. 2013) ; accord Affiliated FM Ins. Co. v. Kuehne + Nagel, Inc. , 328 F. Supp. 3d 329, 333 (S.D.N.Y. 2018). "[A] prima facie showing suffices, notwithstanding any controverting presentation by the moving party , to defeat the motion." Dorchester Fin. Sec., Inc. , 722 F.3d at 86 (emphasis in original) (quoting Marine Midland Bank, N.A. v. Miller , 664 F.2d 899, 904 (2d Cir. 1981) ); accord Esso Expl. & Prod. Nigeria Ltd. v. Nigerian Nat'l Petroleum Corp. , 397 F. Supp. 3d 323, 332 (S.D.N.Y. 2019).

"[T]he plaintiff bears the burden of establishing personal jurisdiction over the defendant." MacDermid , 702 F.3d at 727 ; accord Kuehne + Nagel, Inc. , 328 F. Supp. 3d at 332. Courts will not resolve "argumentative inferences in the plaintiff's favor" or "accept as true a legal conclusion couched as a factual allegation." In re Terrorist Attacks on Sept. 11, 2001 , 714 F.3d 659, 673 (2d Cir. 2013) (internal quotation marks omitted); accord Zornoza v. Terraform Glob., Inc. , 419 F. Supp. 3d 715, 726 (S.D.N.Y. 2019). " ‘[C]onclusory non-fact-specific jurisdictional allegations’ or ‘legal conclusion[s] couched as a factual allegation’ will not establish a prima facie showing of jurisdiction." DeLorenzo v. Viceroy Hotel Grp., LLC , 757 F. App'x 6, 8 (2d Cir. 2018) (summary order) (quoting Jazini v. Nissan Motor Co., Ltd. , 148 F.3d 181, 185 (2d Cir. 1998) ); accord Comunale v. Gemma , No. 18 Civ. 12104, 2020 WL 635554, at *2 (S.D.N.Y. Feb. 11, 2020). "A plaintiff that initially establishes jurisdiction by a prima facie showing eventually must establish jurisdiction by a preponderance of the evidence, based on the presentation of evidence." Contant v. Bank of Am. Corp. , 385 F. Supp. 3d 284, 290 (S.D.N.Y. 2019) (" Contant ") (citing Dorchester , 722 F.3d at 85 ).

A prima facie showing of personal jurisdiction requires: (1) procedurally proper service of process, (2) "a statutory basis for personal jurisdiction that renders such service of process effective" and (3) that "the exercise of personal jurisdiction ... comport with constitutional due process principles." Waldman v. Palestine Liberation Org. , 835 F.3d 317, 327 (2d Cir. 2016) ; accord Johnson v. UBS AG, 791 F. App'x 240, 242 (2d Cir. 2019) (summary order). The parties do not dispute service or whether the provisions of the federal antitrust laws provide the statutory basis for personal jurisdiction. The parties’ dispute concerns whether or not the exercise of personal jurisdiction would violate constitutional due process. Plaintiffs argue that there is personal jurisdiction over each of the Foreign Defendants through the theories of specific (versus general) jurisdiction applied by this Court in three related matters: In re Foreign Exch. Benchmark Rates Antitrust Litig. , No. 13 Civ. 7789, 2016 WL 1268267 (S.D.N.Y. Mar. 31, 2016) (" Forex "), Nypl v. JPMorgan Chase & Co. , No. 15 Civ. 9300, 2018 WL 1472506 (S.D.N.Y. Mar. 22, 2018) (" Nypl ") and Contant , 385 F. Supp. 3d 284.

"The inquiry of whether a forum State may assert specific jurisdiction over a nonresident defendant focuses on the relationship among the defendant, the forum, and the litigation." In re del Valle Ruiz , 939 F.3d 520, 528 (2d Cir. 2019) (quoting Walden v. Fiore , 571 U.S. 277, 283–84, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014) ). "[T]here must be an ‘affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.’ " Id. at 529 (quoting Bristol-Myers Squibb Co. v. Superior Court of Cal. , ––– U.S. ––––, 137 S. Ct. 1773, 1780, 198 L.Ed.2d 395 (2017) ). In other words, "to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum." Walden , 571 U.S. at 284, 134 S.Ct. 1115. A court conducts this analysis in two steps: (1) "the court must decide if the individual or entity has ‘purposefully directed his activities at the forum and the litigation arises out of or relates to those activities’ " (the "minimum contacts" analysis); and (2) "the court must ‘determine whether the assertion of personal jurisdiction would comport with fair play and substantial justice’ " (the "reasonableness" analysis). In re del Valle Ruiz , 939 F.3d at 528-29 (internal citations, quotation marks and alterations omitted) (quoting Burger King Corp. v. Rudzewicz , 471 U.S. 462, 472, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ).

B. Minimum Contacts Standard

Here, Defendants challenge only the minimum contacts part of the analysis, and not the reasonableness prong of the two-part test.

Because Plaintiffs allege a violation of the Sherman Act, the appropriate forum to consider for purposes of the minimum contacts analysis is the entire United States. See, e.g., S.E.C. v. Straub , 921 F. Supp. 2d 244, 253 (S.D.N.Y. 2013) ("When the jurisdictional issue flows from a federal statutory grant that authorizes suit under federal-question jurisdiction and nationwide service of process, ... the minimum-contacts test in such circumstances looks to contacts with the entire United States rather than with the forum state.") (collecting cases); accord Commodity Futures Trading Comm'n v. TFS-ICAP, LLC , 415 F. Supp. 3d 371, 381 (S.D.N.Y. 2019).

Courts have recognized "independent, if conceptually overlapping, methods of demonstrating minimum contacts." Best Van Lines, Inc. v. Walker , 490 F.3d 239, 243 (2d Cir. 2007) ; accord Contant , 385 F. Supp. 3d at 291. Minimum contacts supporting specific jurisdiction may exist when a defendant "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla , 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) ; accord Schwab , 883 F.3d at 85. Specific jurisdiction may be premised on a defendant's actions that are "expressly aimed" at the forum state. See Calder v. Jones , 465 U.S. 783, 789-90, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) ; accord Schwab , 883 F.3d at 87 (referring to the "effects test" theory of personal jurisdiction). Specific jurisdiction may also exist where a defendant's connection to the forum state arises from participation in a conspiracy connected to the forum state by a co-conspirator's acts in furtherance of the conspiracy. See Schwab , 883 F.3d at 86–87. To allege conspiracy jurisdiction, a plaintiff must allege "that (1) a conspiracy existed; (2) the defendant participated in the conspiracy; and (3) a co-conspirator's overt acts in furtherance of the conspiracy had sufficient contacts with a state to subject that co-conspirator to jurisdiction in that state." Id. at 87 ; see also Contant , 385 F. Supp. 3d at 292 n.2 (observing that "an out-of-state defendant can be subject to personal jurisdiction in New York [through conspiracy jurisdiction] ... when that defendant ‘has knowledge of the New York acts of his co-conspirators’ "). Ultimately, the exercise of jurisdiction comports with due process only if the defendant's conduct and connection with the forum is "such that [the defendant] should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286,...