Howard Family Charitable Foundation, Inc. v. Trimble
2011 OK CIV APP 85
| Okla. Civ. App. | 2011Background
- Plaintiffs allege Archway and MF Global, Inc. (MFG) aided and abetted a fraudulent hedge fund scheme run by Trimble and PCM, under 71 O.S.Supp.2004 § 1-509(G).
- Trial court dismissed for lack of personal jurisdiction, failure to state a claim, and preemption by federal commodities scheme; motions for new trial denied.
- MFG is a non-Oklahoma, Delaware corporation acting as a futures commission merchant; Archway is an Indiana-based provider of ATWeb software and outsourcing services.
- Fund investments were alleged initially in stocks and later shifted to commodities futures; investors reportedly paid millions in fees based on false profit figures.
- Archway allegedly posted Fund data via ATWeb and had access to PCM data; Plaintiffs alleged Archway could have verified information like bank statements.
- Court must decide whether Oklahoma securities Act claims against Archway are viable and whether MFG’s actions are preempted by federal law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1-509(G) claims against MFG are preempted | MFG aided a securities scheme under the Act and should not be preempted. | Federal preemption bars state aiding-and-abetting claims for commodities transactions. | MFG claims preempted; no amendable cure |
| Whether Archway can be liable under the Act for aiding and abetting | Archway provided data and outsourcing services aiding the fraud in Fund operations. | Archway merely hosted data and could not be liable as an aider and abettor under the Act. | Archway actionable; aid may be proven; remand for fact-fgedud |
| Whether Oklahoma has personal jurisdiction over Archway | Archway had targeting activities via password-protected access to Fund investors in OK, creating minimum contacts. | Archway had Indiana-based hosting with no Oklahoma presence or consent to suit there. | Minimum contacts established; specific jurisdiction supported; remand for forum issues |
| Whether forum-selection clause and venue issues bar the claim | Clause should not bar claims as litigation involves aiding and abetting; unresolved factual questions require remand. | Clause merits enforcement against the forum selection and dismissal. | Remand to address enforceability of forum clause; not dispositive at this stage |
| Whether fraud was pleaded with particularity under Rule 9(b)/§ 2009(B) | Plaintiffs allege false statements, concealment, and data manipulation by Trimble/PCM with Archway’s aid; specificity meets § 2009(B). | Fraud allegations lack necessary particularity and the connection to Archway is insufficiently pled. | Fraud pleaded with sufficient particularity; Archway liable for aiding and abetting on remand |
Key Cases Cited
- Conoco, Inc. v. Agrico Chemical Co., 115 P.3d 829 (Okla. 2004) (due-process and jurisdiction standards in Oklahoma)
- Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (U.S. Supreme Court 1994) (aiding-and-abetting liability under federal law depends on statutory text)
- Keating v. Edmondson, 37 P.3d 882 (Okla. 2001) (interpretation of legislative intent in applying aiding/abettor liability)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. Supreme Court 1985) (purposeful availment and minimum contacts in internet-era jurisdiction)
- Willbros USA, Inc. v. Certain Underwriters at Lloyds of London, 220 P.3d 1166 (Okla. Civ. App. 2009) (traditional vs. Zippo approach to internet-based jurisdiction)
- Goldstein v. Christiansen, 70 Ohio St.3d 232, 638 N.E.2d 541 (Ohio 1994) (fiduciary relationships extending duties to privity when professional services)