337 F. Supp. 3d 343
S.D. Ill.2018Background
- Plaintiffs are former senior executives of Nikko and its U.S. subsidiary NAMA who received stock acquisition rights (SARs) under Nikko’s 2009 and 2011 employee plans and later left employment while retaining vested SARs.
- Nikko (Japan) and parent/affiliate defendants SMTB and SMTH (Japanese) and CEO Shibata moved to dismiss the FAC on forum non conveniens and lack of personal jurisdiction grounds; plaintiffs seek to enforce SARs and assert securities and related state-law claims.
- The Plans and allotment documents were governed by Japanese-language materials; NAMA Plaintiffs received Award Notices and some Plaintiffs (Hansen and Alfandary) signed later Separation Agreements with New York forum-selection clauses and integration clauses.
- Plaintiffs allege a scheme by Nikko leadership (including Shibata) and SMTB/SMTH to depress valuations, obtain low appraisal opinions, and then force repurchase offers (¥1/share in one offer) that extinguished SAR value; purchase offers were mailed from Tokyo to former employees in the U.S.
- Court held extensive factual submissions show defendants have substantial U.S. contacts (SEC filings, NAMA operations, communications to U.S. employees) and that Separation Agreements consented to New York jurisdiction for Hansen and Alfandary.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Forum non conveniens | Plaintiffs prefer New York (plaintiffs are U.S. residents; evidence and some recordings in NY; U.S. securities-law interests) | Japan is adequate alternative; most witnesses/documents in Japan; forum-selection clauses in Award Notices point to Tokyo | Denied — defendants failed to show Gulf Oil factors strongly favor Japan; New York forum preserved given plaintiffs’ choice and U.S. interests |
| Enforceability of conflicting forum-selection clauses | Separation Agreements (later) supersede prior Award Notices and designate NY courts | Award Notices (earlier) require Tokyo jurisdiction | Held for Plaintiffs — Separation Agreements contain clear integration/merger clauses and exclusive NY-jurisdiction clauses that supersede Award Notices |
| Personal jurisdiction over Nikko and Shibata | Plaintiffs: purposeful direction to U.S.; Purchase Offers and other contacts caused U.S. injuries; Nikko’s SEC registration and NAMA operations | Defendants: foreign corporation/officers; Daimler limits general jurisdiction; contacts allegedly incidental | Held: personal jurisdiction exists — both general and specific contacts shown; purposeful availment through U.S. activity and directed communications |
| Personal jurisdiction over SMTB and SMTH | Plaintiffs: alleged conspiracy, control of Nikko, and effects test (Calder) from acts aimed at NY; co-conspirator acts attributed | Defendants: indirect parent status and foreign location insufficient | Held: personal jurisdiction exists — conspiracy pleading plus effects and control allegations suffice; reasonableness factors not met to defeat jurisdiction |
Key Cases Cited
- Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp., 549 U.S. 422 (court may dismiss for forum non conveniens without deciding merits)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (forum non conveniens framework)
- Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (private and public interest factors for forum non conveniens)
- Atl. Marine Constr. Co. v. United States Dist. Court, 571 U.S. 49 (enforcement of forum-selection clauses)
- Daimler AG v. Bauman, 571 U.S. 117 (limits on general jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (specific jurisdiction requires defendant's purposeful contacts with forum)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (specific jurisdiction and purposeful availment)
- Calder v. Jones, 465 U.S. 783 (effects test for personal jurisdiction)
- D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95 (forum-selection clauses can establish consent to jurisdiction)