Loginovskaya v. Batratchenko
764 F.3d 266
| 2d Cir. | 2014Background
- Loginovskaya, a Russian resident, was solicited in 2006 to invest in Thor Group programs managed in New York.
- She transferred $720,000 to Thor United in New York, with a remaining principal of $590,000 after withdrawals.
- Investment materials, contracts, and statements were largely prepared or executed in Russia; title to loginovskaya’s interest was held by Thor United, not Loginovskaya.
- Thor entities allegedly misrepresented liquidity, managerial expertise, and audits; funds were later alleged diverted to related entities and used in the United States.
- Loginovskaya filed suit in 2012 asserting CEA §4o fraud and state-law claims; district court dismissed the CEA claim under Morrison’s domestic-transaction test and declined jurisdiction over state claims.
- On appeal, Loginovskaya challenges the application of Morrison to §22 private rights of action under the CEA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Morrison applies to CEA §22 private rights of action | Loginovskaya contend Morrison governs §22. | Thor entities argue Morrison controls §22’s reach. | Yes; Morrison applies to §22, restricting private §22 suits to domestic transactions. |
| Whether Loginovskaya pleaded a domestic commodities transaction under §22 | Loginovskaya alleges purchase/interest in a commodity pool occurred domestically. | Defendants contend the transaction occurred abroad; title and negotiations in Russia. | No; no domestic transaction alleged; §22 claim fails. |
| Whether §4o fraud claims survive without a §22 domestic transaction | Loginovskaya argues §4o reaches fraudulent conduct regardless of §22. | Majority treats §22 as threshold to §4o analysis. | Not reached; §22 failure forecloses §4o claims in federal court. |
| What constitutes a domestic transaction under §22 and Morrison integration | Loginovskaya argues transactions occurred in the United States via New York actions. | Transfers and documents alone do not make a domestic transaction; contract negotiations occurred in Russia. | Domestic transaction requires title transfer or irrevocable liability within the United States; not shown here. |
Key Cases Cited
- Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (presumption against extraterritoriality governs domestic focus unless Congress clearly expresses extraterritorial intent)
- Klein & Co. Futures, Inc. v. Bd. of Trade of N.Y., 464 F.3d 255 (2d Cir. 2006) (private right under CEA §22 limited to listed transactions in the domestic arena)
- Absolute Activist Value Master Fund Ltd. v. Ficeto, 677 F.3d 60 (2d Cir. 2012) (domestic-transaction formulation for private securities actions analogue to CEA context)
- Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013) (presumption against extraterritoriality applied to ATS; recognizes Civil-Private action distinctions)
- Gomez-Perez v. Potter, 553 U.S. 474 (2008) (conflation caution between private rights and substantive reach of statutes)
- Balintulo v. Daimler AG, 727 F.3d 174 (2d Cir. 2013) (presumption against extraterritoriality applies to transnational statutory regimes; caution on private rights)