In Re Optimal U.S. Litigation
2011 U.S. Dist. LEXIS 96070
S.D.N.Y.2011Background
- Putative class action arising from investments in Optimal U.S. Equity fund that invested with Madoff; plaintiffs allege due diligence failures, red flags ignored, misstatements and omissions in sales, and improper fee collection.
- Court previously dismissed Santander Plaintiffs from action due to forum selection clause in SBT terms, and dismissed several common-law claims as derivative/for lack of standing, while deferring Wagoner standing issue.
- Court ruled on motions for reconsideration: Santander U.S., OIS, Clark, and Banco Santander forum-clauses issues revisited; Wagoner Rule held not to confer standing for Counts V-VII and IX-X.
- Court held Wagoner does not grant standing to plaintiffs to bring derivative-type claims directly; Counts V-VII and IX-X remain dismissed as to OIS, Clark, and Banco Santander.
- Santander U.S. properly dismissed from action; remaining claims are limited to non-derivative theories against OIS, Clark, and Banco Santander, with additional forum/non-forum considerations addressed for remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Forum-selection clause applicability to non-signatories | Santander Plaintiffs argue non-signatories should be bound | Defendants contend no close relation to SBT warrants enforcement | Santander U.S., OIS, Clark, Banco Santander barred from enforcing clause (for OIS/Clark/Banco Santander) but Santander U.S. may invoke clause |
| Wagoner Rule standing for Counts V-VII and IX-X | Wagoner Rule provides standing to pursue claims directly | Claims belong to the Fund, not plaintiffs; unclean hands defense applies | Wagoner Rule does not grant direct standing; Counts V-VII and IX-X remain dismissed |
| Santander U.S. dismissal from action | Santander U.S. should remain to pursue direct claims | Remaining claims against Santander U.S. lack standing and arise from private banking relationship with SBT | Santander U.S. dismissed; remaining direct claims against OIS, Clark, Banco Santander proceed under other theories |
Key Cases Cited
- Wagoner v. HMK Patents & Securities, 944 F.2d 114 (2d Cir. 1991) (derives standing limitations; credits claims to creditors when appropriate)
- Kirschner v. KPMG LLP, 15 N.Y.3d 446 (N.Y. 2010) (in pari delicto and standing distinctions in New York)
- In re Sharp Intern. Corp., 403 F.3d 43 (2d Cir. 2005) (fiduciary/undue influence context for standing and related claims)
- Anwar v. Fairfield Greenwich Ltd., 742 F.Supp.2d 367 (S.D.N.Y. 2010) (Anwar II; forum selection clauses in private banking services)