Yambo-Torres v. Citigroup Global Markets Holdings, Inc.
- Andrew Carter
- 1:21-cv-02386
- U.S. District Court · Southern District of New York
- 3
In Yambo-Torres v. Citigroup, Judge Carter granted Citigroup’s motion to dismiss because Yambo-Torres did not properly serve it.
Joel Yambo-Torres’s case was closed after the court granted Citigroup Global Markets Holdings Inc.’s motion to dismiss for insufficient service of process.
What happened
In Yambo-Torres v. Citigroup Global Markets Holdings, Inc., Joel Yambo-Torres claimed that Citigroup fraudulently interfered with notes tied to an index and filed a false registration statement. He sought compensatory and punitive damages.
Citigroup asked the court to dismiss the case, arguing that the court lacked authority over the case and that Yambo-Torres had not properly served Citigroup. Yambo-Torres did not respond to the motion or to the court’s order asking why the motion should not be treated as unopposed.
Judge Andrew L. Carter, Jr. ruled that Yambo-Torres had not served Citigroup as required by the federal rules, so the court lacked authority over Citigroup. The judge granted Citigroup’s motion to dismiss, declined to address the subject-matter jurisdiction arguments, and directed the Clerk to close the case.
The detailed version
- Yambo-Torres v. Citigroup Global Markets Holdings, Inc. · No. 1:21-cv-02386
- Andrew Carter
- Jan. 28, 2022
Background
Joel Yambo-Torres sued Citigroup Global Markets Holdings Inc. under New York law for fraud and under Section 11 of the Securities Act, a federal securities law concerning false registration statements. Yambo-Torres held UWT notes issued by Citigroup and alleged that Citigroup represented that the notes were tied to a particular index. He alleged that, in March 2020, the notes did not rise consistently with changes in that index because of Citigroup’s intervention.
Yambo-Torres sought $37,383.03 in compensatory damages and $336,447.27 in punitive damages.
Motion and Service of Process
Citigroup moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), for lack of subject-matter jurisdiction, and Rule 12(b)(5), for insufficient service of process. The court explained that Rule 12(b)(5) permits dismissal when a defendant has not been properly served before answering, and that the plaintiff bears the burden of showing that service was adequate after the defendant challenges it.
The court had ordered Yambo-Torres to serve a summons on Citigroup. Although the Clerk issued a summons, it was never returned. Citigroup also stated that it offered to waive formal service using a federal waiver form, but Yambo-Torres never requested that waiver. The court found that Yambo-Torres had not served Citigroup in a manner consistent with the Federal Rules of Civil Procedure.
Yambo-Torres did not file an opposition to Citigroup’s motion by the deadline. After the court ordered him to explain why the motion should not be treated as unopposed, he still did not respond.
Ruling
Judge Andrew L. Carter, Jr. held that the failure to properly serve Citigroup meant that the court lacked personal jurisdiction—the court’s authority over the defendant. The court declined to address Citigroup’s arguments about subject-matter jurisdiction.
The court granted Citigroup’s motion to dismiss, directed the Clerk to terminate the motion, close the case, and mail Yambo-Torres a copy of the opinion and order.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.