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IN RE PARMALAT SECURITIES LITIGATION

August 5, 2005.

In re PARMALAT SECURITIES LITIGATION. This document relates to: 05 Civ. 4015. ENRICO BONDI, Plaintiff,
v.
BANK OF AMERICA CORPORATION, et al., Defendants.



The opinion of the court was delivered by: LEWIS KAPLAN, District Judge

MEMORANDUM OPINION

Defendant Banc of America Securities Limited ("BASL")*fn1 moves to dismiss this action for lack of personal jurisdiction.*fn2 The case is described in detail in a separate opinion issued today (the "Main Opinion"), familiarity with which is assumed.

  Facts

  The following facts are taken from the complaint and presumed true.

  BASL is a limited liability company organized under the laws of the United Kingdom with its principal place of business in London. It is a wholly-owned subsidiary of Bank of America Corporation.*fn3 Like all of the BoA*fn4 defendants, BASL's "finances, policies and business practices . . . were dominated, controlled and directed by the Bank of America entities and their officers and employees headquartered in North Carolina."*fn5

  BoA maintains an "integrated global organization."*fn6 The Bank's website states that BoA's Global Corporate and Investment Banking group provides a broad range of financial services through a network of offices in 31 countries.*fn7 BoA does not break down the revenue from Global Corporate and Investment Banking by business unit, but reports the revenue as a consolidated figure.*fn8

  BASL played supporting roles — roles that the complaint does not always spell out clearly — in several of the international financial transactions at issue, in particular the December 1997 $80 million credit arrangement with a Venezuelan Parmalat subsidiary,*fn9 the September 1998 $100 million credit agreement with a Brazilian Parmalat subsidiary,*fn10 the October 1999 $25 million agreement with a Mexican Parmalat subsidiary,*fn11 and the December 2001 $80 million loan.*fn12

  BoA employee Luca Sala devised and helped implement some of the transactions at issue,*fn13 including the September 1998 $80 million credit agreement with the Venezuelan subsidiary,*fn14 the $300 million equity investment in Administracao,*fn15 and the December 2001 $80 million loan.*fn16 Sala "received the support of" and "was supervised by" Bank of America employees in a number of locations, including North Carolina, New York, Chicago, and London.*fn17 There is, however, no indication that Sala worked for BASL, as opposed to some other BoA entity.

  More generally, "the conduct, transactions, acts and omissions that form the basis of th[e] complaint were structured, overseen, implemented and monitored by . . . the Bank of American [sic] entities and their officers and employees headquartered in North Carolina."*fn18 The transactions were "approved at the top levels of Bank of America and required the coordination of" BoA management committees in locations throughout the world, including North Carolina, New York, England, and Italy.*fn19

  The transactions in question allegedly had effects in North Carolina. Investors in North Carolina purchased Parmalat's securities and were harmed by the frauds.*fn20 Furthermore, the complaint alleges that BoA's conduct "has substantially affected Parmalat's operations in North Carolina, including without limitation its dairy operations and its ability to conduct financial operations in North Carolina."*fn21 Discussion

  A. Standards

  On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing jurisdiction. The applicable standard depends upon the procedural context in which the jurisdictional challenge is raised.*fn22 Where, as here, no discovery has taken place, the plaintiff need make only a prima facie showing of jurisdiction "by pleading in good faith, see Fed.R.Civ.P. 11, legally sufficient allegations of jurisdiction."*fn23 If affidavits are submitted, the Court is to resolve factual disputes in the plaintiff's favor.*fn24

  BASL has submitted an affidavit stating in substance that it has no office or property in North Carolina, never has filed documents with the Office of the Secretary of State of North Carolina, and complies with United Kingdom regulatory requirements regarding corporate governance "by having an independent Board of Directors that establishes the approval process for all business it conducts."*fn25 The affidavit does not contradict the allegations in the complaint.

  Analysis of personal jurisdiction requires a two-step inquiry. A court first must determine whether the law of the state in which the action was commenced would permit the exercise of personal jurisdiction by courts of general jurisdiction in that state. Second, the court must determine whether the exercise of jurisdiction in such a ...


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