Broker-Dealer Litigation - Greenberg Traurig LLP

the power of a sovereign.” It was not enough that the defendant might have predicted that its
goods would reach the forum. The inquiry required a forum-by-forum analysis, and under the
facts of the case, while the manufacturer targeted the United States market as a whole, New
Jersey’s courts nevertheless lacked jurisdiction because the manufacturer had not purposefully
availed itself of the New Jersey market. Justices Breyer and Alito concurred in the result, but
suggested that the case could be resolved based on prior precedents, none of which held that a
single isolated sale, even if accompanied by the kind of sales effort that occurred in this case,
sufficed to establish personal jurisdiction.
Indah v. SEC, 661 F.3d 914 (6th Cir. 2011).
In an action brought by putative owners of Indonesian mines against a mining company,
the SEC and others, the mining company moved to dismiss for lack of personal jurisdiction, and
the district court granted the motion. On appeal, the plaintiffs argued that the nationwide service
of process provision in the Securities Exchange Act of 1934 permitted exercise of personal
jurisdiction based upon the mining company’s minimum contacts with the United States as a
whole, rather than any particular state. The court found that the district court correctly held that
the plaintiffs’ complaint failed to state a claim for violation of the Exchange Act, and therefore
its nationwide service of process provision could not be used to establish personal jurisdiction.
The Sixth Circuit also rejected the plaintiffs’ contention that the combined facts that (1) the
mining company formerly had a registered subsidiary in the forum state, (2) did substantial
business with a third-party company headquartered in the forum, and (3) sold stock to the general
public including residents of the forum state, were sufficient to establish personal jurisdiction.
The court of appeals therefore affirmed dismissal of the claims against the mining company for
lack of personal jurisdiction.
Toussie v. Smithtown Bancorp, Inc., 2011 WL 1155597 (E.D.N.Y. Feb. 7, 2011).
Plaintiff brought suit against a bank holding company and its president in New York state
court, alleging that they defrauded him by knowingly making materially false statements to
induce him to purchase shares in the bank. The defendants removed the case to federal court,
claiming that the suit necessarily raised substantial federal issues. The federal court remanded
the case, holding that the plaintiff could prove his claims by relying solely on state law, the
complaint did not contain a logically separate claim relating to violations of federal laws or
regulations, and that references to FDIC examinations related only to defenses, and therefore
federal question jurisdiction did not exist.
Alki Partners, L.P. v. Vatas Holding GmbH, 769 F. Supp. 478 (S.D.N.Y. 2011).
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