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In Re Herald

September 8, 2011

IN RE HERALD, PRIMEO AND THEMA FUNDS SECURITIES LITIGATION,


The opinion of the court was delivered by: Pitman, United States Magistrate Judge:

ORDER

This Document Relates to: (Consolidated with ALL ACTIONS. 09 Civ. 2032 and 09 Civ. 2558)

By letter dated August 18, 2011, plaintiffs seek to compel discovery with respect to the motion of certain defendants that (1) the Court lacks in personam jurisdiction over certain defendants and (2) the action should be dismissed pursuant to the doctrine of forum non conveniens. Oral argument on plaintiffs' application was held on September 6, 2011, and at the conclusion of the argument, I denied plaintiffs' application for discovery. I write to supplement the reasons stated on the record for denying plaintiffs' application.

Plaintiffs' application is prompted by a motion to dismiss made by defendants on June 29, 2011. 27 of the 48 defendants seek dismissal of the pending complaint for lack of in personam jurisdiction. 43 of the defendants seek dismissal on the ground of forum non conveniens. With a few exceptions, most of the defendants who assert lack of in personam jurisdiction challenge only the sufficiency -- and not the accuracy -- of plaintiffs' jurisdictional allegations. A few of the defendants have challenged plaintiffs' specific factual allegations and have submitted affidavits or affirmations averring that putative trips to New York never occurred or that purported New York offices were not the offices of a defendant in this action.

Plaintiffs' discovery requests, which consist of five interrogatories and one document request, are extremely broad and untethered to the facts relevant to either in personam jurisdiction or the doctrine of forum non conveniens. Specifically, plaintiffs' interrogatories seek the following:

1. Identify all documents showing your or any of your representatives' communications in or originating from the United States and/or the State of New York with any person related to Madoff or BMIS, whether directly or indirectly.

2. Identify all documents showing your or any of your representatives' communications with BMIS and/or Madoff, whether directly or indirectly.

3. Identify all documents showing your or your representatives communications with any defendant in this action concerning BMIS or Madoff.

4. Identify all documents showing your or your representatives' communications with any person related to BMIS or Madoff.

5. Identify all persons who were consulted, directly or indirectly, in order to respond to these interrogatories.

(Ex. C to Plaintiffs' Letter to the Court, dated August 18, 2011). Plaintiffs' single document seeks "all documents identified in Interrogatories No. 1 through No. 4" (Ex. D to Plaintiffs' Letter to the Court, dated August 18, 2011). Plaintiffs have not served any discovery requests aimed at the specific factual averments made by certain of the defendants in support of their motion.

The standards applicable to a motion seeking discovery on the issue of in personam jurisdiction were set forth by the Honorable Gerard E. Lynch, then District, now Circuit Judge, in Ayyash v. Bank Al-Madina, 04 Civ. 9201 (GEL), 2006 WL 587342 at *5 (S.D.N.Y. Mar. 9, 2006):

"District courts have considerable discretion in determining how best to handle jurisdictional questions," Best Van Lines, Inc. v. Walker, No. 03 Civ. 6585, 2004 WL 9642009, at *3 (S.D.N.Y. May 5, 2004), citing CutCo Indus. v. Naughton, 806 F.2d 361, 364-65 (2d Cir. 1986), and "generally" may permit a plaintiff to conduct "limited discovery with respect to the jurisdictional issue." Filius v. Lot Polish Airlines, 907 F.2d 1328, 1332 (2d Cir.1990); see also APWU v. Potter, 343 F.3d 619, 627 (2d Cir. 2003) (cautioning that "a court should take care to give the plaintiff ample opportunity to secure and present evidence relevant to the existence of jurisdiction" (quoting Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000)). Such discovery has typically been authorized where the plaintiff has made "a threshold showing that there is some basis for the assertion of jurisdiction[,] facts that would support a colorable claim of jurisdiction." Daval Steel Prods, v. M.V. Juraj Dalmatinac, 718 F. Supp. 159, 162 (S.D.N.Y. 1989); see also Strategem Dev. Corp. v. Heron Int'l N.V., 153 F.R.D. 535, 547-48 (S.D.N.Y. 1994) (authorizing jurisdictional discovery where plaintiff "made a sufficient start" toward establishing jurisdiction, though not a prima facie showing).

A court does not abuse its discretion by denying jurisdictional discovery to a plaintiff who has failed to make a prima facie showing of in personam jurisdiction. Best Van Lines, Inc. v. Walker, 490 F.3d 239, 255 (2d Cir. 2007); Girl Scouts of the U.S. v. Steir, 102 F. App'x 217, 221 (2d Cir. 2004); Jazini v. Nissan Motor Corp., 148 F.3d 181, 186 (2d Cir. 1998). However, a prima facie showing of in personam jurisdiction is not a sine qua non to jurisdictional ...


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