Anderjaska v. Bank of America, N.A.

Background

John Anderjaska, Chungyao Chen, Teena Colebrook, Joel Griffith, Art Heineman, Calvin Williams, and Charles Witte brought a proposed class action on behalf of themselves and others similarly situated against Bank of America, N.A., Capital One, N.A., Citibank, N.A., J.P. Morgan Chase, N.A., and Wells Fargo Bank, N.A. The claims alleged negligence, aiding and abetting, and fraudulent concealment under New York common law and Article 9 of the New York Civil Practice Law and Rules. The claims arose from payment-processing services allegedly connected to a fraudulent binary-options scheme.

The plaintiffs said that, beginning as early as 2015, they used credit cards, debit cards, and wire transfers through accounts with the defendants to make deposits or payments to binary-options platforms. After they had trouble withdrawing money from those platforms, they tried to initiate chargeback transactions with the banks based on alleged fraud by the platforms. The banks refused those requests.

Motions and jurisdictional standard

Wells Fargo, Bank of America, and Capital One each moved under Federal Rule of Civil Procedure 12(b)(2), which permits dismissal when a court lacks personal jurisdiction over a defendant. Personal jurisdiction is a court’s power to adjudicate claims against a particular defendant.

The plaintiffs did not allege or argue that their claims arose from activities by the three moving banks in New York, so they did not assert specific jurisdiction. Instead, they argued that the court had general jurisdiction based on the banks’ contacts with New York. General jurisdiction can allow a court to hear claims unrelated to a corporation’s activities in the forum, but, under the authorities discussed by the court, a corporation ordinarily is considered essentially at home only where it is incorporated or has its principal place of business, absent an exceptional case.

The parties did not dispute that none of the three banks was incorporated or maintained its principal place of business in New York. The court also noted that registering to do business in New York or designating an in-state service agent did not establish general jurisdiction under the applicable law.

Court’s analysis

The court held that the plaintiffs had not met their heavy burden to show that New York presented an exceptional case for general jurisdiction. The plaintiffs pointed to each bank’s physical banking locations, ATMs, office space, and workforce in New York, but generally did not compare those contacts with the banks’ national or global activities as required when evaluating whether a corporation is essentially at home in a state.

The court considered the comparisons the plaintiffs did provide and found that they did not support an exceptional case. It also rejected reliance on evidence concerning Wells Fargo’s chief executive’s New York base, statements in regulatory filings, and the importance of New York as a financial center. The court concluded that these facts did not show that Wells Fargo, Bank of America, or Capital One was essentially at home in New York.

The plaintiffs also sought discovery to develop facts supporting jurisdiction. The court denied that request because the plaintiffs had not made a preliminary showing of personal jurisdiction and because substantial information about the federally chartered banks’ New York contacts was already publicly available.

Disposition

The court concluded that it lacked personal jurisdiction over Wells Fargo, Bank of America, and Capital One. It granted all three Rule 12(b)(2) motions to dismiss the Complaint. The court stated that the Complaint would be dismissed as against the three moving defendants and directed the clerk to terminate Wells Fargo Bank, N.A., Bank of America, N.A., and Capital One, N.A., as parties. The case remained referred to Magistrate Judge Gorenstein for general pretrial management.