883 F.3d 68 (2nd Cir. 2018), 16-1189-cv, Charles Schwab Corp. v. Bank of America Corp.

Docket Nº:16-1189-cv
Citation:883 F.3d 68
Opinion Judge:Gerard E. Lynch, Circuit Judge:
Party Name:CHARLES SCHWAB CORPORATION, Charles Schwab Bank, N.A., Charles Schwab & Co., Inc., Schwab Short-Term Bond Market Fund, Schwab Total Bond Market Fund, Schwab U.S. Dollar Liquid Assets Fund, Schwab Money Market Fund, Schwab Value Advantage Money Fund, Schwab Retirement Advantage Money Fund, Schwab Investor Money Fund, Schwab Cash Reserves, Schwab...
Judge Panel:Before: Livingston, Lynch, and Chin, Circuit Judges.
Case Date:February 23, 2018
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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883 F.3d 68 (2nd Cir. 2018)

CHARLES SCHWAB CORPORATION, Charles Schwab Bank, N.A., Charles Schwab & Co., Inc., Schwab Short-Term Bond Market Fund, Schwab Total Bond Market Fund, Schwab U.S. Dollar Liquid Assets Fund, Schwab Money Market Fund, Schwab Value Advantage Money Fund, Schwab Retirement Advantage Money Fund, Schwab Investor Money Fund, Schwab Cash Reserves, Schwab Advisor Cash Reserves, Schwab Yieldplus Fund, Schwab Yieldplus Fund Liquidation Trust, Plaintiffs-Appellants, FTC Capital GMBH, FTC Futures Fund PCC LTD, FTC Futures Fund SICAV, Carpenters Pension Fund of West Virginia, City of Dania Beach Police & Firefighters’ Retirement System, Ravan Investments, LLC, Mayor and City Council of Baltimore, Richard Hershey, Jeffrey Laydon, Metzler Investment GMBH, Roberto Calle Gracey, City of New Britain Firefighters’ and Police Benefit Fund, AVP Properties, LLC, 303030 Trading LLC, Ellen Gelboim, Atlantic Trading USA, LLC, Community Bank & Trust, The Berkshire Bank, Elizabeth Lieberman, 33-35 Green Pond Road Associates, LLC, Todd Augenbaum, Gary Francis, Nathaniel Haynes, Courtyard At Amwell II, LLC, Greenwich Commons II, LLC, Jill Court Associates II, LLC, Maidencreek Ventures II LP, Raritan Commons, LLC, Lawrence W. Gardner, Annie Bell Adams, Dennis Paul Fobes, Leigh E. Fobes, Government Development Bank for Puerto Rico, Margaret Lambert, Directors Financial Group, Betty L. Gunter, Direct Action Plaintiffs, Carl A. Payne, Kenneth W. Coker, City of Riverside, The Riverside Public Financing Authority, East Bay Municipal Utility District, County of San Mateo, San Mateo County Joint Powers Financing Authority, City of Richmond, The Richmond Joint Powers Financing Authority, Successor Agency to the Richmond Community Redevelopment Agency, County of San Diego, Guaranty Bank & Trust Company, Heather M. Earle, Henry K. Malinowski, Linda Carr, Eric Friedman, County of Riverside, Jerry Weglarz, Nathan Weglarz, SEIU Pension Plans Master Trust, Highlander Realty, LLC, Jeffrey D. Buckley, The Federal Home Loan Mortgage Corporation, County of Sonoma, David E. Sundstrom, in his official capacity as Treasurer of the County of Sonoma for and on behalf of the Sonoma County Treasury Pool Investment, The Regents of the University of California, San Diego Association of Governments, CEMA Joint Venture, County of Sacramento, the City of Philadelphia, The Pennsylvania Intergovernmental Cooperation Authority, Principal Funds, Inc., Pfi Bond & Mortgage Securities Fund, PFI Bond Market Index Fund, PFI Core Plus Bond I Fund, PFI Diversified Real Asset Fund, PFI Equity Income Fund, PFI Global Diversified Income Fund, PFI Government & High Quality Bond Fund, PFI High Yield Fund, PFI High Yield Fund I, PFI Income Fund, PFI Inflation Protection Fund, PFI Short-Term Income Fund, PFI Money Market Fund, PFI Preferred Securities Fund, Principal Variable Contracts Funds, Inc., PVC Asset Allocation Account, PVC Money Market Account, PVC Balanced Account, PVC Bond & Mortgage Securities Account, PVC Equity Income Account, PVC Government High Quality Bond Account, PVC Income Account, PVC Shortterm Income Account, Principal Financial Group, Inc., Principal Financial Services, Inc., Principal Life Insurance Company, Principal Capital Interest Only I, LLC, Principal Commercial Funding, LLC, Principal Commercial Funding II, LLC, Principal Real Estate Investors, LLC, Texas Competitive Electric Holdings Company LLC, National Credit Union Administration Board, as Liquidating Agent of U.S. Central Federal Credit Union, Western Corporate Federal Credit Union, Members United Corporate Federal Credit Union, Southwest Corporate Federal Credit Union, and Constitution Corporate Federal Credit Union, Federal National Mortgage Association, Darby Financial Products, Capital Ventures International, Bay Area Toll Authority, Prudential Investment Portfolios 2, on behalf of Prudential Core Short-Term Bond Fund, Prudential Core Taxable Money Market Fund, Triaxx Prime CDO 2006-1, Ltd., Triaxx Prime CDO 2006-2, Ltd., Triaxx Prime CDO 2007-1, Ltd., The Federal Deposit Insurance Corporation, as Receiver, Direct Action Plaintiff, Direct Action Plaintiffs, Salix Capital U.S. Inc., Fran P. Goldsleger, Joseph Amabile, Louie Amabile, Norman Byster, Michael Cahill, Richard Deogracias, Marc Federighi, Scott Federighi, Robert Furlong, David Gough, Brian Haggerty, David Klusendorf, Ronald Krug, Christopher Lang, John Monckton, Philip Olson, Brett Pankau, David Vechhione, Randall Williams, Eduardo Restani, Nicholas Pesa, John Henderson, 303 Proprietary Trading LLC, Margery Teller, California Public Plaintiffs, National Asbestos Workers Pension Fund, Pension Trust for Operating Engineers, Hawaii Annuity Trust Fund for Operating Engineers, Cement Masons’ International Association Employees’ Trust Fund, Axiom Investment Advisors, LLC, Axiom HFT LLC, Axiom Investment Advisors Holdings L.P., Axiom Investment Company, LLC, Axiom Investment Company Holdings L.P., Axiom FX Investment Fund, L.P., Axiom FX Investment Fund II, L.P., Axiom FX Investment 2X Fund, L.P., Ephraim F. Gildor, Gildor Family Advisors L.P., Gildor Family Company L.P., Gildor Management, LLC, City of Philadelphia, Pennsylvania Intergovernmental Cooperation Authority, City of New Britain, Linda Zacher, Plaintiffs,


BANK OF AMERICA CORPORATION, Bank of America, N.A., Bank of Tokyo-Mitsubishi UFJ, Ltd., Barclays Bank PLC, Citigroup Inc., Citibank, N.A., Cooperatieve Centrale Raiffeisenboerenleenbank B.A., Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings PLC, HSBC Bank PLC, JPMorgan Chase & Co., JPMorgan Chase Bank, N.A., Lloyds Banking Group Plc, Hbos Plc, Royal Bank of Canada, The Norinchukin Bank, The Royal Bank of Scotland Group PLC, UBS AG, Portigon AG, FKA WestLB AG, WestDeutsche Immobilienbank AG, Defendants-Appellees, Rabobank Group, Credit Suisse Group, NA, Societe Generale, Deutsche Bank Financial LLC, Deutsche Bank Securities Incorporated, Barclays Capital Inc., Barclays U.S. Funding LLC, Credit Suisse Securities (USA) LLC, Bank of America Securities LLC, J.P. Morgan Clearing Corp., HSBC Securities (USA) Inc., UBS Securities LLC, Citigroup Global Markets Inc., National Association, Bank of Nova Scotia, BNP Paribas S.A., Credit Agricole, S.A., Sumitomo Mitsui Banking Corporation, Barclays PLC, WestLB AG,Chase Bank USA, N.A., Royal Bank of Scotland PLC, National Collegiate Student Loan Trust 2007-1, Citizens Bank of Massachusetts, agent of RBS Citizens Bank, NA, RBS Citizens, N.A., (f/k/a Citizens Bank of Massachusetts) incorrectly sued as Charter One Bank NA, Stephanie Nagel, British Bankers’ Association, BBA Enterprises, Ltd., BBA Libor, Ltd., Credit Suisse International, HSBC Bank USA, N.A., Lloyds TSB Bank PLC, J.P. Morgan Bank Dublin PLC, formerly known as Bear Stearns Bank PLC, UBS Limited, Citigroup Financial Products Inc., ICAP PLC, Credit Suisse AG, Credit Suisse (USA), Inc., The Hongkong and Shanghai Banking Corporation, Ltd., J.P. Morgan Markets Ltd., Lloyds Bank Plc, (formerly known as Lloyds TSB Bank PLC), RBC Capital Markets, LLC, Bank of America Home Loans, Citi Swapco Inc., J.P. Morgan Securities, LLC, Merrill Lynch Capital Services, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBS Securities Inc., Citigroup Global Markets Limited, Citigroup Funding, Inc., HSBC Finance Corporation, HSBC USA, Inc., Merrill Lynch & Co., Inc., Merrill Lynch International Bank, Ltd., Bear Stearns Capital Markets, Inc., Citizens Bank N.A., Credit Suisse Securities (USA) Inc., Barclays Capital (Cayman) Limited, Societe Generale, S.A., Defendants.

No. 16-1189-cv

United States Court of Appeals, Second Circuit

February 23, 2018

Argued: September 25, 2017

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Plaintiffs-Appellants appeal from a judgment entered by the United States District Court for the Southern District of New York (Naomi Reice Buchwald, J.) on April 11, 2016, dismissing their complaint. This case is one of dozens seeking to recover for harm allegedly resulting from a conspiracy among Defendants-Appellees, major banks, to manipulate the London Interbank Offered Rate, a set of benchmark interest rates that inform trillions of dollars of financial transactions. On appeal, Plaintiffs contend that the district court erred in dismissing its state-law claims on personal jurisdiction grounds, and in dismissing its claims for fraud, violation of the Securities Exchange Act, and unjust enrichment for failure to state a claim. Because we find that certain Defendants' actions in selling financial products to Plaintiffs give rise to personal jurisdiction, that other Defendants may be subject to personal jurisdiction as a result of the acts of their agents or co-conspirators, and that certain claims were prematurely dismissed at the pleading stage, we AFFIRM IN PART, VACATE IN PART, and REMAND for further proceedings.

Thomas C. Goldstein (Eric F. Citron, on the brief ), Goldstein & Russell, P.C., Bethesda, Maryland, for Plaintiffs-Appellants.

Neal Kumar Katyal (Eugene A. Sokoloff, Marc J. Gottridge, Lisa J. Fried, Benjamin A. Fleming, on the brief ), Hogan Lovells U.S. LLP, Washington, D.C., for Defendants-Appellees Lloyds Banking Group plc and HBOS plc (additional counsel for the many parties and amici are listed in Appendix A).

Before: Livingston, Lynch, and Chin, Circuit Judges.


Gerard E. Lynch, Circuit Judge:


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