Am. Fid. Assurance Co. v. Bank of N.Y. Mellon

• Decision Date: 20 January 2016
• Docket Number: No. 15–6009.,15–6009.
• Citation: 810 F.3d 1234
• Parties: AMERICAN FIDELITY ASSURANCE COMPANY, Plaintiff–Appellee, v. The BANK OF NEW YORK MELLON, Defendant–Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

810 F.3d 1234

AMERICAN FIDELITY ASSURANCE COMPANY, Plaintiff–Appellee,

v.The BANK OF NEW YORK MELLON, Defendant–Appellant.

No. 15–6009.

United States Court of Appeals, Tenth Circuit.

Jan. 20, 2016.

Charles A. Rothfeld, Mayer Brown, LLP, Washington, DC (Paul W. Hughes and James F. Tierney, Mayer Brown, LLP Washington, DC; and Matthew D. Ingber and Christopher J. Houpt, Mayer Brown, LLP, New York, N.Y., with him on the briefs), appearing for Appellant.

Stuart W. Emmons (William B. Federman, on the brief), Federman & Sherwood, Oklahoma City, OK, appearing for Appellee.

Before LUCERO, MATHESON, and PHILLIPS, Circuit Judges.

MATHESON, Circuit Judge.

American Fidelity Assurance Company ("American Fidelity") sued the Bank of New York Mellon ("BNYM") in the Western District of Oklahoma for claims arising from BNYM's conduct as Trustee of a trust holding mortgage-backed securities owned by American Fidelity. BNYM did not assert a personal jurisdiction defense in its first two motions to dismiss or in its answer. In its third motion to dismiss, BNYM argued it was not subject to general jurisdiction in Oklahoma. The district court denied the motion, concluding BNYM had waived the defense by failing to raise it in prior filings. BNYM challenges that decision in an interlocutory appeal. Exercising jurisdiction under 28 U.S.C. § 1292(b), we affirm.

I. BACKGROUND

A. FACTUAL HISTORY

Countrywide Financial Corporation and related entities ("Countrywide") sold mortgage-backed securities ("Certificates"). BNYM, a commercial bank and securities services company, is chartered under New York law and its principal place of business is New York. Through Pooling and Service Agreements between Countrywide and BNYM, Countrywide created trusts to hold the Certificates for the benefit of the Certificate holders and appointed BNYM to administer the trusts as Trustee.

American Fidelity, an insurance company, purchased Certificates from Countrywide. BNYM was therefore Trustee of the trusts holding American Fidelity's securities.

B. Procedural History

American Fidelity sued BNYM, invoking diversity jurisdiction and alleging that BNYM breached contractual and fiduciary duties as Trustee.

In April 2012, BNYM moved to dismiss American Fidelity's complaint for failure to state a claim. The district court granted BNYM's motion, and American Fidelity filed an amended complaint. Shortly thereafter, American Fidelity filed a second amended complaint, which is the operative complaint for this appeal.

In May 2013, BNYM moved to dismiss American Fidelity's second amended complaint, arguing American Fidelity again failed to state a claim. The district court denied the motion. BNYM did not assert a personal jurisdiction defense in either of its pre-answer motions to dismiss.

In January 2014, BNYM answered American Fidelity's second amended complaint, and again did not assert a personal jurisdiction defense. Four days later, the Supreme Court decided Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014).

The parties filed a joint status report and discovery plan in which BNYM stated it "may move to dismiss the case in light of recent Supreme Court decisions that limit the permissible scope of personal jurisdiction under the U.S. Constitution." App. at 44.

In March 2014, BNYM filed a third motion to dismiss, arguing for the first time that the court lacked personal jurisdiction over BNYM. BNYM contended the court lacked general jurisdiction based on Daimler, and also lacked specific jurisdiction because American Fidelity failed to allege sufficient contacts between BNYM and Oklahoma. Before the court ruled on the motion, the parties stipulated to the following jurisdictional facts:

a. BNYM has conducted corporate trust business or services for clients that are located in the State of Oklahoma;

b. BNYM has conducted commercial indenture trust business for clients that are located in the State of Oklahoma;

c. BNYM has provided investment services for trusts, insurance companies, and/or banks that are located in the State of Oklahoma;

d. BNYM has provided commercial broker-dealer services for clients that are located in the State of Oklahoma;

e. BNYM has solicited business from municipal or state governmental organizations that are located in the State of Oklahoma; and

f. BNYM has provided investment services for municipal or state governmental organizations that are located in the State of Oklahoma.

App. at 51–52.

The district court denied the motion, concluding BNYM had waived any general jurisdiction defense under Federal Rule of Civil Procedure 12(h). It explained that Daimler applied the standard previously articulated in Goodyear Dunlop Tires Operations, S.A. v. Brown, ––– U.S. ––––, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011). BNYM was therefore not presenting a new defense that had been unavailable when it previously moved to dismiss American Fidelity's original and second amended complaints and when it filed its answer. The court did not address BNYM's arguments about specific jurisdiction because BNYM had waived its general jurisdiction defense, thereby allowing the court to exercise personal jurisdiction over BNYM.

BNYM now seeks interlocutory review of the district court's decision.

II. APPELLATE JURISDICTION

Although BNYM appeals the district court's denial of its motion to dismiss—which typically is a non-final order—we have jurisdiction under the "two-tiered arrangement," Swint v. Chambers Cty. Comm'n, 514 U.S. 35, 47, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995), described in 28 U.S.C. § 1292(b).

The district court denied BNYM's third motion to dismiss on September 10, 2014, and certified that order for interlocutory appeal under 28 U.S.C. § 1292(b) on December 12, 2014. On December 22, 2014, BNYM timely requested approval from the Tenth Circuit to file an interlocutory appeal under § 1292(b). See id. (authorizing court of appeals to hear interlocutory appeals certified by a district court if "application is made to [the circuit court] within ten days after the entry of the [certification] order"). The Tenth Circuit granted BNYM's application. We therefore have jurisdiction under 28 U.S.C. § 1292(b).

III. DISCUSSION

BNYM argues its general jurisdiction defense was not available before Daimler was decided but was available afterwards because Daimler narrowed the basis for general jurisdiction. We disagree. BNYM's general jurisdiction defense was available when it first responded to American Fidelity's original and second amended complaints and when it filed its answer. By "available" we mean the standard it relies upon would have been the same if it had relied on it earlier. Put another way, the general jurisdiction standard BNYM asserts was the same before and after Daimler was decided, and it was therefore available to BNYM from the outset of the litigation.¹

Federal Rule of Civil Procedure 12(h)(1) provides that a party waives the defenses listed in Rule 12(b)(2)–(5), including lack of personal jurisdiction, Rule 12(b)(2), by failing to assert them in a responsive pleading or an earlier motion. Rule 12(g)(2) limits the waiver rule to defenses that were "available to the party but omitted from its earlier motion." BNYM waived its personal jurisdiction defense if it was available when it moved to dismiss American Fidelity's original and second amended complaints and when it filed its answer.

Whether a party has waived a personal jurisdiction defense is a mixed question of law and fact. FDIC v. Oaklawn Apts., 959 F.2d 170, 173 (10th Cir.1992). We review the district court's legal conclusions de novo. Id. Although we typically review the district court's factual findings for clear error, id., the parties do not contest any facts on appeal.

Our discussion proceeds as follows. First, we explain the concept of general jurisdiction. Second, we identify the standard for general jurisdiction developed and applied in the Supreme Court and the Tenth Circuit before Daimler was decided. Third, we discuss the Daimler decision. Finally, we show that the general jurisdiction defense that BNYM raised and the district court rejected as waived was available to BNYM when it moved to dismiss American Fidelity's original and second amended complaints and when it filed its answer. As a result, we agree with the district court that BNYM waived its general jurisdiction defense, and we affirm dismissal of this case.

A. General Jurisdiction

Under the Fourteenth Amendment, "a State may authorize its courts to exercise personal jurisdiction over an out-of-state defendant if the defendant has ‘certain minimum contacts with the State such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.’ " Goodyear, 131 S.Ct. at 2853 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ) (brackets omitted). Two personal jurisdiction categories emerged from this standard: general jurisdiction and specific jurisdiction. See OMI Holdings, Inc. v. Royal Ins. Co. of Can.,

149 F.3d 1086, 1090–91 (10th Cir.1998).

A court exercises general jurisdiction when it asserts personal jurisdiction "over a defendant in a suit not arising out of or related to the defendant's contacts with the forum." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (emphasis added). "Where a court has general jurisdiction over a defendant, that defendant may be called into that court to answer for any alleged wrong, committed in any place, no matter how unrelated to the defendant's contacts with the forum." Abelesz v. OTP Bank, 692 F.3d 638, 654 (7th Cir.2012) (quotations omitted).

B. Pre–Daimler Precedent

1. The Supreme Court and the Goodyear standard

In Goodyear, the Supreme Court explained, "[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so...