Overview
In a motion yesterday, various banks involved in the multidistrict litigation relating to alleged LIBOR manipulation moved to dismiss for lack of jurisdiction. They argue that LIBOR is set in set in London by foreign banks or foreign employees and, thus, the allegations lack a sufficient connection to the United States:
Earlier this year, the Supreme Court issued two opinions that effected a dramatic shift in personal jurisdiction law. In Daimler AG v. Bauman, 134 S. Ct. 746, 762 n.20, 763 (2014), the Supreme Court established that, absent exceptional circumstances, corporations are “at home” and, consistent with the constitutional guarantee of due process, subject to general jurisdiction only where they are incorporated or have their principal place of business. Under Daimler, the foreign bank defendants and the British Bankers’ Association are “at home” only in their respective home countries, and not in any of the various states where the Direct Actions were filed. The domestic bank defendants are “at home” only where they are incorporated or have their principal place of business and are therefore not subject to general jurisdiction in other states. The second Supreme Court case, Walden v. Fiore, addresses specific jurisdiction and makes clear that a defendant’s knowledge of the plaintiffs’ residence, and thereby knowledge of the location of any alleged harm, is insufficient to permit specific jurisdiction over a nonresident defendant. 134 S. Ct. 1115, 1125 (2014). The Court observed that “[t]he proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant’s conduct connects [it] to the forum in a meaningful way.” Id. As this Court has recognized and as Plaintiffs allege, the benchmark at the center of this multi-district litigation, USD LIBOR, was at all relevant times administered by a British trade association and based upon submissions from panel banks in London. For foreign banks, these submissions originated either from London or the bank’s home country. Similarly, USD LIBOR submissions by domestic banks were made by employees outside of the United States. Even though the Direct Actions originally were filed in several different forums, thereby implicating each forum state’s long-arm statute, this makes no difference. The exercise of jurisdiction over defendants does not comport with constitutional due process protections following Daimler and Walden.Our prior posts on the LIBOR litigation are here.
