Capital Bank Intern. Ltd. v. Citigroup, Inc.

• Decision Date: 04 August 2003
• Docket Number: Civil Action No 02-1149 (RMU).
• Citation: 276 F.Supp.2d 72
• Parties: CAPITAL BANK INTERNATIONAL LTD., Plaintiff, v. CITIGROUP, INC., et al., Defendants.
• Court: U.S. District Court — District of Columbia

276 F.Supp.2d 72

CAPITAL BANK INTERNATIONAL LTD., Plaintiff, v. CITIGROUP, INC., et al., Defendants.

Civil Action No 02-1149 (RMU).

United States District Court, District of Columbia.

August 4, 2003.

Frazer Walton, Jr., Washington, DC, Mark Lane, Greenwich, NJ, for Plaintiff.

Mitchell Bruce Weitzman, Bean, Kinney & Korman, P.C., Arlington, VA, Audrey E. Moog, Hogan & Hartson, L.L.P., Washington, DC, for Defendants.

MEMORANDUM OPINION

URBINA, District Judge.

TRANSFERRING THE ACTION TO THE DISTRICT OF DELAWARE

I. INTRODUCTION

This matter is before the court on motions by two of the three defendants to dismiss the complaint for lack of personal jurisdiction and a motion by the plaintiff to transfer the action to the District of Delaware if the court finds that it lacks personal jurisdiction. The plaintiff is Capital Bank International Ltd. ("Capital Bank"), a West Indies banking corporation. The defendants are Citigroup, Inc. ("Citigroup"), a Delaware banking association; Citibank Delaware, another Delaware banking association; and BT North America, Inc. ("BTNA"), a corporation with its principal place of business in New York. The plaintiff brings suit against the defendants to recover $272,772.46 after an allegedly fraudulently indorsed check in that amount was deposited into a Capital Bank account. Defendants Citigroup and Citibank Delaware filed motions to dismiss for lack of personal jurisdiction. Because the contacts between the two defendants and the District of Columbia are insufficient to satisfy specific or general jurisdiction, the court lacks personal jurisdiction over either defendant. In the interest of justice, however, the court grants the plaintiff's motion to transfer the action to the District of Delaware.

II. BACKGROUND

A. Factual Background

At the heart of this action is a single check in the amount of $272,772.46 that changed hands some four years ago. In February 1999, a client of defendant Citibank Delaware issued the check to defendant BTNA. Am. Compl. ¶¶ 7-8. The check apparently was indorsed over to Waset Asset Management ("Waste"), who deposited the check in its Capital Bank account.¹ Id. The plaintiff accepted the check, subject to clearance by defendants Citibank Delaware and Citigroup, and sent it off to its collecting and correspondent bank, the International Bank of Miami. Id. ¶¶ 9-10. After the International Bank of Miami credited the check to the plaintiff's account, the plaintiff allowed Waset to draw against the $272,772.46. Id. ¶ 11.

In May 1999, after receiving a returned check against Waset's account, the plaintiff discontinued service to Waset and froze the balance of Waset's account. Id. ¶¶ 12-13. In August 1999, after no additional checks were returned against Waset's account, the plaintiff closed Waset's account and returned the balance to Waset. Id. ¶ 13.

Several months later, in February 2000, the International Bank of Miami determined that the indorsement on the $272,772.46 check deposited by Waset into its Capital Bank account had been forged. Id. ¶ 14. Accordingly, the International Bank of Miami debited Capital Bank's account by that amount. Id. After informing Citigroup and Citibank Delaware of this deduction, Capital Bank repeatedly demanded reimbursement, but was unsuccessful. Id. ¶¶ 15-16.

B. Procedural History

In June 2002, the plaintiff filed a complaint charging defendant BTNA with negligence and defendant Citibank Delaware with breach of contract, breach of warranty, negligence, and fraud. Compl. ¶¶ 17-63. The plaintiff seeks compensatory and punitive damages. Id. On February 3, 2003, the plaintiff amended its complaint to add Citigroup as a defendant on the breach of contract, breach of warranty, negligence, and fraud claims. See generally Am. Compl. On February 14, 2003, defendant BTNA filed an answer. On February 26, 2003, defendant Citibank Delaware filed a motion to dismiss for lack of personal jurisdiction. On March 3, 2003 defendant Citigroup filed a motion to dismiss for lack of personal jurisdiction and for failure to state a claim upon which relief can be granted. In its oppositions to the motions to dismiss, the plaintiff requested that if the court lacks personal jurisdiction over these defendants, it transfer the action to the District of Delaware. Pl.'s Citigroup Opp'n at 9; Pl.'s Citibank Delaware Opp'n at 6. The court now turns to the motions to dismiss.

III. ANALYSIS

A. Legal Standard for Motion to Dismiss for Lack of Personal Jurisdiction

On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing a factual basis for the court's exercise of personal jurisdiction over the defendant. Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C.Cir.1990). The plaintiff must allege specific facts connecting the defendant with the forum. Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C.Cir.2001). Bare allegations and conclusory statements are insufficient. Id.

In determining whether a factual basis for personal jurisdiction exists, the court should resolve factual discrepancies appearing in the record in favor of the plaintiff. Crane, 894 F.2d at 456. The court need not, however, treat all of the plaintiff's allegations as true. United States v. Philip Morris Inc., 116 F.Supp.2d 116, 120 n. 4 (D.D.C.2000). Instead, the court "may receive and weigh affidavits and other relevant matter to assist in determining the jurisdictional facts." Id.

B. Legal Standard for Personal Jurisdiction Over a Non-Resident Defendant

A court may exercise personal jurisdiction over a non-resident defendant "by finding specific jurisdiction based on conduct connected to the suit, or by finding general jurisdiction." ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711 (4th Cir.2002) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). In the District of Columbia ("the District"), there are three statutory bases — D.C.Code sections 13-334, 13-422, and 13-423 — for the exercise of personal jurisdiction over a corporation.² Richard v. Bell Atlantic Corp., 946 F.Supp. 54, 68 (D.D.C.1996) (citing D.C.CODE §§ 13-334, 13-422, 13-423).

First, a plaintiff may establish specific jurisdiction under section 13-423, the District's long-arm statute. D.C.CODE § 13-423; GTE New Media Servs. v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C.Cir.2000). Section 13-423 provides, inter alia, that personal jurisdiction exists over any person for claims arising from the person's "transacting any business in the District[,] contracting to supply services in the District[, or] having an interest in, using, or possessing real property in the District." D.C.CODE § 13-423(a). If jurisdiction is based solely on section 13-423, however, "only a claim for relief arising from acts enumerated in this section may be asserted" against the defendant. Id. § 13-423(b); Koteen v. Bermuda Cablevision, Ltd., 913 F.2d 973, 974-75 (D.C.Cir.1990).

Second, the plaintiff may establish general jurisdiction under sections 13-334 or 13-422. D.C.CODE §§ 13-334, 13-422. For general jurisdiction under section 13-334, the plaintiff must show that the defendant "carries on a consistent pattern of regular business activity within the jurisdiction." Trerotola v. Cotter, 601 A.2d 60, 63 (D.C.1991) (citing D.C.CODE § 13-334). For general jurisdiction under section 13-422, the plaintiff must demonstrate that the defendant is "domiciled in, organized under the laws of, or maintain[s] . . . its principal place of business in, the District." Id. (quoting D.C.CODE § 13-422); Richard, 946 F.Supp. at 68.

Under both specific and general jurisdiction, the exercise of personal jurisdiction must comply with constitutional due process. Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 509 (D.C.Cir.2002); GTE New Media Servs., 199 F.3d at 1347. Due process is satisfied "when in personam jurisdiction is asserted over a nonresident corporate defendant that has certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Gorman, 293 F.3d at 509 (quoting Helicopteros Nacionales, 466 U.S. at 414, 104 S.Ct. 1868). These minimum contacts must be grounded in "some act by which the defendant purposefully avails itself of the privilege of conducting activities with the forum state, thus invoking the benefits and privileges of its laws." Asahi Metal Indus. v.Super. Ct. of Cal., 480 U.S. 102, 109, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). In short, "the defendant's conduct and connection with the forum State [must be] such that he should reasonably anticipate being haled into court there." GTE New Media Servs., 199 F.3d at 1347 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)).

C. The Court Lacks Personal Jurisdiction Over Defendants Citigroup and Citibank Delaware

1. Specific Jurisdiction Under the District's Long-Arm Statute

Defendant Citigroup asserts that the court lacks specific jurisdiction over it under the District's long-arm statute because it has no agent, does no business, owns no property, and maintains no bank accounts in the District. Def. Citigroup's Mot. to Dismiss ("Def. Citigroup's Mot.") at 2-4, Ex. 1 ("Cohen Aff."); Def. Citigroup's Reply at 2-3. Similarly, defendant Citibank Delaware contends that the court lacks specific jurisdiction over it because it is a Delaware association that transacts business only in Delaware. Def. Citibank Delaware's Mot. to Dismiss ("Def. Citibank Del.'s Mot.") at 2-3, Ex. 1 ("Klimashousky Aff."); Def. Citibank Del.'s Reply at 2. In addition, both defendants point out that the checking transaction on which the plaintiff bases its claims has "absolutely no connection" with this forum. Def. Citigroup's Mot. at 4; Def. Citibank Del.'s Mot. at 4. Finally, both defendants assert...