289 F. Supp. 3d 870
N.D. Ill.2017Background
- Plaintiffs are putative class representatives (Greene, Lack, Motto, Pearce) asserting state-law claims arising from the collapse of Mt. Gox; Mizuho Bank processed fiat deposits/withdrawals for Mt. Gox.
- Motto (Illinois) and Greene (Illinois) are Illinois residents; Pearce is a Pennsylvania resident; Lack is a California resident. Motto and Lack represent the Deposit Subclass; Pearce represents the Withdrawal Subclass.
- The court previously denied Mizuho’s Rule 12(b)(2) motion as to Mizuho but conditioned denial on adding an Illinois resident (Motto) as a named plaintiff; the fourth amended complaint added Pearce (PA) and Motto (IL).
- After the Supreme Court decided Bristol-Myers (137 S. Ct. 1773 (2017)), Mizuho moved under Rule 54(b) to reconsider personal jurisdiction as to nonresident plaintiffs Lack and Pearce.
- Plaintiffs conceded dismissal of Lack’s claims; they opposed dismissal of Pearce because he is the sole representative of the Withdrawal Subclass. The court granted reconsideration and dismissed Pearce’s and Lack’s claims against Mizuho for lack of personal jurisdiction.
- The court excused Mizuho’s forfeiture of the argument because Bristol-Myers constituted a controlling intervening development and excusing forfeiture did not materially prejudice Pearce (limitations tolling by American Pipe was conceded).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Illinois has specific personal jurisdiction over nonresident named plaintiffs (Pearce, Lack) whose claims lack a forum nexus | Bristol-Myers does not apply to putative class actions; class status permits adjudicating nonresident claims alongside resident claims | Bristol-Myers requires a connection between the forum and each plaintiff’s specific claims; similarity to a resident plaintiff’s claims is insufficient | Dismissal for lack of personal jurisdiction as to Pearce and Lack granted under Bristol-Myers |
| Whether Phillips Petroleum v. Shutts allows Illinois to exercise jurisdiction over nonresident class members absent forum contacts | Shutts permits adjudicating absent class members’ claims once jurisdiction over the named representative is proper | Shutts does not address the threshold question whether the forum may assert jurisdiction over the defendant for nonresident plaintiffs’ claims | Shutts inapplicable; it governs absent class members’ due process rights, not the court’s authority to assert jurisdiction over a defendant |
| Whether pendent (or ancillary) personal jurisdiction allows adjudication of related claims lacking independent forum contacts | Pendent jurisdiction doctrines support exercising jurisdiction over closely related claims | Bristol-Myers and relevant precedent reject pendent jurisdiction in this context; each claim needs its own nexus | Pendent personal jurisdiction not available post-Bristol-Myers; claims without forum contacts must be dismissed |
| Whether Mizuho forfeited the personal-jurisdiction argument by not raising it earlier and consenting to Pearce’s addition | Plaintiffs argue Mizuho forfeited by consenting to the amendment and not raising the theory earlier | Mizuho contends argument became available/compelling only after Bristol-Myers | Court excused forfeiture due to intervening controlling law (Bristol-Myers) and lack of material prejudice to Pearce (tolling preserved his claim) |
Key Cases Cited
- Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (specific jurisdiction requires connection between forum and each plaintiff’s specific claims)
- Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) (once court properly asserts jurisdiction over the representative, it may bind absent class members as to certain due-process issues)
- American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) (class action filing tolls the statute of limitations for putative class members)
- Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90 (1991) (courts may apply correct governing law even if parties fail to cite it)
- Felland v. Clifton, 682 F.3d 665 (7th Cir. 2012) (on Rule 12(b)(2) motions, plaintiff need only make a prima facie showing of jurisdictional facts)
- Pickett v. Prince, 207 F.3d 402 (7th Cir. 2000) (law-of-the-case and district judge’s authority to reconsider prior rulings)