RealTrust IRA Alternatives, LLC v. The Entrust Group
1:10-cv-00382
D.N.H.Mar 21, 2011Background
- RealTrust IRA Alternatives, LLC sues Mechanics Bank, The Entrust Group, and Onaga in this 2010 NH federal case across six counts.
- RealTrust alleges mishandling of custodial banking for clients' uninvested funds and improper transitions between custodians (IBT to Mechanics to Onaga).
- IBT custodial agreement with RealTrust existed in NH; Mechanics custodial agreement later followed, with California law governing it.
- TEG terminated IBT responsibilities and appointed Mechanics as successor custodian; RealTrust contends insufficient notice and improper conduct in succession.
- Mechanics moves to dismiss for lack of personal jurisdiction; RealTrust requests jurisdictional discovery as an alternative and for amending the complaint.
- The court denies jurisdictional discovery and grants Mechanics’ Rule 12(b)(2) motion, concluding no NH contacts or relatedness justify jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has personal jurisdiction over Mechanics | RealTrust argues Mechanics had NH contacts through IBT and TEG and ongoing duties in NH. | Mechanics contends there are no NH contacts or purposeful availment by Mechanics. | No personal jurisdiction over Mechanics |
| Whether relatedness supports specific jurisdiction over Mechanics | RealTrust asserts claims arise from NH-based custodial relationships and notices related to Mechanics. | Mechanics notes lack of direct NH activities tied to the alleged contract breaches. | Relatedness not satisfied |
| Whether RealTrust is entitled to jurisdictional discovery | RealTrust seeks discovery to uncover NH contacts and fraud related to jurisdiction. | Discovery is unwarranted and untimely under local rules and case law. | Jurisdictional discovery denied |
| Whether NH long-arm statute permits the exercise of jurisdiction over Mechanics | Plaintiff points to NH-based actions and nexus via TEG/IBT. | No sufficient NH-related contacts by Mechanics to satisfy due process. | NH long-arm not satisfied; no specific jurisdiction |
Key Cases Cited
- Platten v. HG Berm. Exempted Ltd., 437 F.3d 118 (1st Cir. 2006) (jurisdictional discovery standard; need detailed inquiry)
- Sunview Condo. Ass'n v. Flexel Int'l, 116 F.3d 962 (1st Cir. 1997) (plaintiff must show why discovery would reveal jurisdiction)
- Adams v. Adams, 601 F.3d 1 (1st Cir. 2010) (three-part due process test (relatedness, purposeful availment, reasonableness))
- Swiss Am. Bank, Ltd. v. United Aircraft Corp., 274 F.3d 610 (1st Cir. 2001) (need for detailed facts to establish jurisdiction via discovery)
- Phillips Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d 284 (1st Cir. 1999) (outlines minimum contacts and relatedness requirements)
- Lechoslaw v. Bank of Am., N.A., 618 F.3d 49 (1st Cir. 2010) (prima facie standard for jurisdiction when no hearing is held)