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Universal Trading & Investment Co.,Inc v. Credit Suisse (Guernsey) Ltd.; Credit Suisse Ag

December 12, 2012


The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge


Defendants Credit Suisse (Guernsey) Ltd. ("CS-G"), Credit Suisse AG ("CS-AG"), Credit Suisse Trust Ltd. ("CS-Trust"), Philip Glanfield ("Glanfield"), Pamela Le Cheminant ("Le Cheminant"), and Julia Church ("Church," and with Glanfield and Le Cheminant, the "Individual Defendants") move to dismiss Universal Trading and Investment Co., Inc's ("Universal Trading") and Foundation Honesty International, Inc.'s complaint seeking to recover money awarded to Universal Trading in an earlier case in which Universal Trading obtained a default judgment against United Energy Systems of Ukraine, PFG ("United Energy-Ukraine") in the amount of $18,344,480. Compl. at ¶¶ 1-2; see also United Energy Sys. of Ukraine, PFG v. Universal Trading & Inv. Co., Inc., No. 97 Civ. 12180 (D. Mass.). Plaintiffs' allegations paint a tangled web of trusts and other entities, many of which are not parties to this action. Non-party BL Trust was operated by CS-Trust and owned non-party Bassington, Ltd. ("Bassington"). Id. at ¶¶ 13, 55. Bassington owned 90% of non-party United Energy International, Ltd. which, in turn, owned 85% of non-party United Energy-Ukraine. Id. at ¶¶ 37-38, 50. Bassington was controlled by the Individual Defendants, in their capacity as CS-Trust employees. Id. at ¶ 49. Defendants are claimed to be complicit in a complicated international money laundering and bribery scheme by United Energy-Ukraine and two of its former executives, Olexander and Yulia Tymoshenko,*fn1 who improperly transferred "at least $460,000" to an account in New York via CS-AG and CS-G. Id. at ¶¶ 11, 13, 46, 57. Based on these allegations, Plaintiffs seek to collect from Defendants the $18 million they are owed by United Energy-Ukraine, plus damages claimed to be caused by Defendants' purposeful participation in a fraudulent scheme to frustrate Universal Trading's efforts to collect on the judgment. For the reasons discussed below, Defendants' motion to dismiss the complaint is granted.


Defendants moved to dismiss the complaint on a variety of theories, including that (1) the Court lacks personal jurisdiction over CS-G, CS-Trust, and the Individual Defendants; (2) the Southern District of New York constitutes a forum non conveniens; (3) Plaintiffs failed to state a claim upon which relief can be granted with respect to counts two through nine; and (4) count one was inadequately pled. The Court only addresses those issues necessary to decide this motion, and therefore does not opine on all of Defendants' theories.


I.Judicial Notice

In support of its opposition to Defendants' motion to dismiss, Plaintiffs have requested that the Court take judicial notice of voluminous filings. Defendants object that judicial notice would be improper with regard to statements contained in filings in other recent and ongoing litigation. In deciding a motion to dismiss, the Court may consider "matters of which judicial notice may be taken." Kramer v. Time Warner, Inc., 937 F.2d 767, 773 (2d Cir. 1991). Courts must be cautious in doing so, however, "because the effect . . . is to deprive a party of the opportunity to use rebuttal evidence, cross-examination, and argument to attack contrary evidence." Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d 66, 70 (2d Cir. 1998). Therefore, while "'[a] court may take judicial notice of a document filed in another court . . . to establish the fact of such litigation and related filings,'" it may not take judicial notice "'for the truth of the matters asserted in the other litigation.'" Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (quoting Int'l Star Class Yacht Racing, 146 F.3d at 70). Since Plaintiffs seek recognition of the assertions made in other litigations, rather than merely acknowledging the existence of the other litigations and filings made therein, the Court rejects Plaintiffs' Request for Judicial Notice as to assertions made in Exhibits A, B, C, D, E, F, I and J of the Plaintiffs' filing.

II.Personal Jurisdiction

Defendants move to dismiss the complaint for lack of personal jurisdiction over CS-G, CS-Trust and the Individual Defendants, but do not contest the Court's personal jurisdiction over CS-AG.*fn2 Def.'s Mem. of Law at 8 n.9. Since Plaintiffs assert diversity jurisdiction, Compl. at ¶ 17, personal jurisdiction is governed by New York law. D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 104 (2d. Cir. 2006). Under the New York law, jurisdiction over out-of-state defendants may be based on general jurisdiction under CPLR § 301 ("Section 301") or long-arm jurisdiction under CPLR § 302 ("Section 302"). "[P]laintiff[s] carr[y] the burden of demonstrating that jurisdiction exists." Penachio v. Benedict, 461 Fed. Appx. 4, 5 (2d Cir. 2012) (citing Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994)). They have failed to do so and Defendants' motion to dismiss with respect to CS-G, CS-Trust, and the Individual Defendants is therefore granted.

A.Section 301 -- General Jurisdiction Section 301 grants jurisdiction over a foreign party "engaged in such a continuous and systematic course of 'doing business' [in New York] as to warrant a finding of its 'presence' in this jurisdiction." Laufer v. Ostrow, 434 N.E.2d 692, 649 (N.Y. 1982) (quoting McGowan v. Smith, 419 N.E.2d 321, 323 (N.Y. 1981)). This requires a finding that they are "'present' in the state 'not occasionally or casually, but with a fair measure of permanence and continuity.'" Landoil Resources Corp. v. Alexander & Alexander Servs., 77 N.Y.S.2d 28, 34 (1990). With regards to corporations, courts consider five factors in making this determination: (1) whether the company has an office in New York; (2) whether it solicits business in New York; (3) whether it has any bank accounts or other property in New York; (4) whether it has a phone listing in New York; and (5) whether it has individuals permanently located in New York to promote its interests. See, e.g., Hoffritz for Cutlery Inc. v. Amajac, Ltd., 763 F.3d 55, 58 (2d Cir. 1985); Seldon v. Direct Response Techs., Inc., No. 03 Civ. 5381 (SAS), 2004 WL 691222, at *4 (S.D.N.Y. Mar. 31, 2004).

Plaintiffs do not allege that CS-G had offices, solicited business, had a phone listing, or had employees located in New York. Rather, they focus on the existence of a bank account at an unspecified Credit Suisse entity in New York that was controlled by CS-G. Standing alone, that is not sufficient to confer general jurisdiction over a foreign defendant. J.L.B. Equities, Inc. v. Ocwen Fin. Corp., 131 F. Supp. 2d 544, 548 (S.D.N.Y. 2001).

With regard to CS-Trust, Plaintiffs note that Defendants have admitted that it has "provided trust administration services to 'a small number of U.S. citizens,'" presumably in order to show that it has solicited business within the United States. See Def.'s Mem. of Law at 9 (quoting Poidevin Decl. at n.2, May 14, 2012, Dkt. No. 36). But they bear the burden of showing that CS-Trust solicited business in New York in particular, not just within the United States. Furthermore, they omit the rest of the footnote, which specifies that "most, if not all of these clients did not reside in the United States at the time CS-Trust provided its services." Poivedin Decl. at n.2. As a result, this is clearly insufficient to show a connection between CS-Trust and New York.

Plaintiffs have not alleged that the Individual Defendants engaged in any "systematic course of 'doing business'" in New York, Lauder, 434 N.E.2d at 649. As a result, neither CS-G, CS-Trust, nor the Individual Defendants are subject to personal jurisdiction under Section 301.

B.Section 302 -- Specific Jurisdiction Plaintiffs assert that this Court "has jurisdiction over all Defendants, because they have conducted business in the United States, particularly in New York." Compl. at ΒΆ 18. Section 302(a)(1) provides that a court may exercise personal jurisdiction over a non-domiciliary who "transacts any business within [New York], provided that the cause of action arises out of the transaction of business." Deer Consumer Prods., Inc. v. Little, 938 N.Y.S.2d 767, 776 (N.Y. Sup. Ct. 2012) (citing Lebel v. Tello, 707 N.Y.S.2d 426, 426 (1st Dep't 2000)). To satisfy Section 302(a)(1), "there must be 'an articulable nexus or a substantial relationship between transactions occurring within the state and the cause of action sued upon.'" Tamam v. Fransabank Sal, 677 F. Supp. 2d 720, 726 ...

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