The opinion of the court was delivered by: BATTS
DEBORAH A. BATTS, United States District Judge.
Plaintiff, The Independent Order of Foresters, brings this diversity action for breach of warranty, mutual mistake, breach of fiduciary duty and negligent and fraudulent misrepresentation, based on the sale of securities. Defendants, Donaldson, Lufkin & Jenrette, Inc. and Donaldson, Lufkin & Jenrette Securities Corp., have moved to dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(6) and 9(b).
Plaintiff is a fraternal benefit society located in Ontario, Canada, that issues life, accident and health policies and annuities for and to its members. (Compl. P 1.) Defendants are located in New York and engage in the business of buying and selling securities. (Compl. PP 2-3.)
Beginning in 1980, Plaintiff set out to acquire a portfolio of securities. (Compl. P 6.) From 1980 until 1990, William E. Boothe ("Boothe"), was responsible, subject to the approval of Plaintiff's board of directors, for choosing appropriate securities. (Compl. P 7.) From 1981 until 1989, Daniel Walsh ("Walsh"), employed by L.F. Rothschild & Co., Inc., advised Boothe. (Compl. P 8.) In 1989 Walsh, then employed by the Defendants continued to advise Boothe and the Plaintiff until 1994. (Compl. PP 8-9.)
Defendants, on behalf of Plaintiff, bought collateralized mortgage obligations securities. (Compl. PP 11-19, 26.) Plaintiff alleges that sales brochures, prepared by Defendants, were sent to Plaintiff and that those brochures, containing purportedly false statements, induced it to buy the mortgage securities. Many of the transactions eventually lost money. (Id.) Plaintiff alleges that Defendants had a special knowledge about the instability of the securities traded, which Plaintiff did not have, and breached a duty to Plaintiff by inducing it to buy that type of security. Plaintiff makes no mention in its Complaint of any contracts between it and the Defendants to buy securities, or of any documents required to be filed with the SEC before a securities sale can go forward, such as, offering circulars. Instead, Plaintiff brings its action based solely on the statements in the sales brochures, declaring them to be warranties.
Defendants now move for dismissal pursuant to Rule 12(b)(6) and 9(b).
"On a motion to dismiss under Rule 12(b)(6), the court must accept as true the factual allegations in the complaint, and draw all reasonable inferences in favor of the plaintiff." Bolt Elec., Inc. v. City of N.Y., 53 F.3d 465, 469 (1995) (citations omitted). "The district court should grant such a motion only if, after viewing plaintiff's allegations in this favorable light, 'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Walker v. City of N.Y., 974 F.2d 293, 298 (2d Cir. 1992) (quoting Ricciuti v. New York City Transit Auth., 941 F.2d 119 (2d Cir. 1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957))), cert. denied, 507 U.S. 961 (1993).
Plaintiff claims that discovery is necessary to determine whether Ontario or New York law applies. Federal courts, when determining what law to apply, must follow the choice of law rules prevailing in the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 494, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Norlin Corp. v. Rooney, Pace Inc., 744 F.2d 255, 263 (2d Cir. 1984). In New York, it is required that a party wishing to apply the law of a foreign state show how that law differs from the forum state's law. Failure to do so results in the application of New York law. Loebig v. Larucci, 572 F.2d 81, 85 (2d Cir. 1978); Richmond Lace Works, Inc. v. Epstein, 31 F.R.D. 150, 152 (S.D.N.Y. 1962); Stein v. Siegel, 50 A.D.2d 916, 377 N.Y.S.2d 580, 583 (N.Y. App. Div. 2d Dep't 1975). Furthermore, when the foreign state is a common law state, courts assume that the foreign law is the same as New York's law. Loebig, 572 F.2d at 85. Plaintiff, if it wished to invoke Ontario law, had an obligation to show how that law differed from New York law. Plaintiff is able to do so without discovery. Plaintiff failed to do so. Hence, the Court will apply New York law.
Even assuming Plaintiff made any type of showing of the applicability of Ontario law, the Court still finds that, under New York choice of law rules, New York has the greater interest in applying its laws. To determine which forum's laws should apply, New York applies the interests analysis test. Istim, Inc. v. Chemical Bank, 78 N.Y.2d 342, 347, 575 N.Y.S.2d 796, 798, 581 N.E.2d 1042 (1991); Stein, 377 N.Y.S.2d at 583. The Defendants are located in New York and the acts took place in New York, as Plaintiff concedes in its Complaint. Furthermore, there is no allegation that Ontario securities were traded by the Defendants, or that any ...