Broker-Dealer Litigation - Greenberg Traurig LLP

to a contractual indemnity agreement, owed the defendants indemnity for claims relating to
alleged misstatements about those loans. The court refused to resolve the question of whether
“related to” jurisdiction existed, instead assuming that it did and holding that remand was
warranted in any event based upon equitable considerations. The court found that comity
concerns weighed in favor of remand, that the connection between the case and the bankruptcy
proceedings was very remote, and that the defendants had failed to explain how its claims against
AHM would be treated under the bankruptcy plan or how this action could impact the
administration of the plan.
Charles Schwab Corp. v. Bank of Am. Sec. LLC, 2011 WL 864978 (N.D. Cal. Mar. 11, 2011).
The plaintiff brought suit against the defendants in state court asserting various state law
claims as well as claims under the Securities Act of 1933 stemming from the plaintiff’s purchase
of certificates in securitization trusts backed by residential mortgage loans. Defendants removed
the case, asserting that it was “related to” several bankruptcy proceedings involving loan
originators, including American Home Mortgage and IndyMac Bancorp. While conceding that
diversity jurisdiction did not exist on the face of the pleadings, the defendants claimed that the
plaintiff had received its claims as a result of a collusive assignment from Schwab Bank, a
diverse entity which actually invested in the trusts at issue in the case, but assigned its claims to
the plaintiff, a non-diverse entity. The court found that although the assignment bore some
hallmarks of collusion, it constituted a complete assignment because no party besides the
plaintiff had standing to bring the claims, and therefore the court would not ignore the plaintiff’s
citizenship to determine diversity. The court concluded that it did possess federal subject matter
jurisdiction based on the relationship to the pending bankruptcy cases of the loan originators, but
that the equities nevertheless favored remand to state court.
Quail Cruises Ship Mgmt, Ltd. v. Agencia de Viagens CVC Tur Limitada, 2011 WL 5057203
(S.D. Fla. Oct. 24, 2011).
The plaintiff, a Bahamanian corporation that acquired a cruise ship by purchasing the
shares of a corporation whose primary asset was the ship, brought suit against, among others, the
corporate seller and its principal, for fraud under the Securities Exchange Act of 1934, along
with various maritime and state law torts. The corporate seller’s principal, a citizen of Brazil,
moved to dismiss for lack of personal jurisdiction. The district court denied the motion, holding
that the plaintiff successfully established a prima facie case that the principal had committed a
tortious act within the meaning of the Florida long-arm statute through his agents in Florida as
part of the civil conspiracy alleged by the plaintiff. The court also found that exercise of personal
jurisdiction comported with due process because the principal’s communications with his Florida
agents occurred in furtherance of the conspiracy and the conspirators had availed themselves of
the privilege of conducting business in Florida by consummating the sale of the ship in Florida.
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