Kaupthing Ehf v. Bricklayers and Trowel Trades International Pension Fund Liquidation Portfolio
Civil Action No. 2017-0761
| D.D.C. | Dec 1, 2017Background
- Kaupthing ehf., an Icelandic bank, sold notes governed by New York law; Bricklayers and Trowel Trades International Pension Fund (the Fund), a D.C. resident, held some notes via an account called the Liquidation Portfolio (the Account).
- Kaupthing exercised a repurchase provision in 2008 and paid the Account for the notes; Kaupthing later entered bankruptcy and sued in Iceland to rescind the buy-back and recover the amounts paid.
- In the Icelandic action only the Fund’s manager (WAMC) appeared; the Icelandic court declined to hold WAMC liable, found the Account a legal person capable of suit, and entered default judgment against the Account for $422,296.03 (the Fund was omitted from the adjudication).
- Kaupthing filed this diversity action in D.C. under the D.C. Uniform Foreign-Country Money Judgments Recognition Act (UFMJRA) seeking enforcement against the Account, the Fund, and individual Trustees.
- Defendants moved to dismiss, arguing the Account lacks capacity to be sued, the Icelandic judgment does not bind the Fund or Trustees, and the Icelandic court lacked personal jurisdiction over them; the Court granted dismissal on all these grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Capacity to be sued (Account) | Kaupthing proceeded against the Account as a defendant in Iceland; dismissal inappropriate | Account is merely a portfolio/bank account controlled by the Fund and lacks independent legal capacity | Account lacks capacity to be sued under D.C. law and is dismissed |
| Enforceability under D.C. UFMJRA (between the parties) | Judgment should be enforced against the Fund to prevent asset-avoidance | Icelandic judgment named only the Account; Fund and Trustees are not parties to that judgment | UFMJRA permits enforcement only as between the identical parties; cannot enforce against Fund or Trustees |
| Personal jurisdiction in Iceland | Icelandic court’s exercise of jurisdiction and service were sufficient; D.C. court should defer | Icelandic court lacked personal jurisdiction over Fund/Trustees; foreign judgment therefore nonrecognizable under mandatory exception | Icelandic court lacked constitutionally sufficient minimum contacts over defendants; recognition refused |
| Role of comity | Comity requires recognizing foreign judgment despite jurisdictional defects | Comity does not override lack of valid personal jurisdiction | Comity cannot cure absence of personal jurisdiction; recognition denied |
Key Cases Cited
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (specific-jurisdiction framework)
- Daimler AG v. Bauman, 134 S. Ct. 746 (standard for general jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and minimum contacts)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (minimum contacts test)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (foreseeability and jurisdiction)
- Novae Corp. Underwriting Ltd. v. Atl. Mut. Ins. Co., 556 F. Supp. 2d 489 (UFMJRA "between the parties" interpretation)
- Cunard S.S. Co. v. Salen Reefer Servs. AB, 773 F.2d 452 (comity requires valid personal jurisdiction)