Viropro, Inc. v. Pricewaterhousecoopers Advisory Services SDN BHD
1:15-cv-06235
S.D.N.Y.Jan 19, 2016Background
- Viropro, Inc. (Nevada corp., principal place of business in California) owned and operated through its Malaysian subsidiary Alpha Biologics Sdn Bhd from 2011–2014; Viropro was also a creditor of Alpha.
- Bank Pembangunan Malaysia Berhad appointed Lim San Peen (a PwC partner) and PwC Advisory Services Sdn Bhd as receiver/manager over Alpha in September 2014 under Malaysian loan agreements.
- Viropro alleges PwC (a Malaysian corporation) exceeded its receivership authority, liquidated Alpha in Malaysia, wasted assets, and harmed Viropro as owner and creditor.
- Viropro sued in New York state court; PwC removed to federal court and the court realigned Alpha as a defendant because PwC controlled Alpha as receiver.
- Defendants moved to dismiss for lack of personal jurisdiction (and other grounds); the court considered general and specific jurisdiction arguments and denied jurisdictional discovery on general jurisdiction.
- Court granted defendants’ motion to dismiss for lack of personal jurisdiction and entered judgment for defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| General personal jurisdiction (CPLR § 301 / due process) | PwC Malaysia is part of the global PwC network with presence in 158 countries and used network-identifying materials, so it is "essentially at home" in NY | PwC is incorporated and principally located in Malaysia; no continuous/systematic contacts in NY to render it "at home" | Dismissed—PwC not "essentially at home" in NY; general jurisdiction lacking |
| Specific personal jurisdiction under CPLR § 302(a)(1) (transacting business) | PwC acted as Alpha’s receiver (Alpha is integral to Viropro, which has NY contacts) and communicated with Viropro directors in NY, so PwC transacted business in NY | PwC’s receivership acts and liquidation occurred in Malaysia under Malaysian contracts; Plaintiff’s NY contacts cannot be imputed to PwC; communications with NY individuals insufficiently purposeful | Dismissed—no prima facie showing PwC purposefully transacted business in NY related to the claims |
| Due Process (minimum contacts and reasonableness) | Plaintiff argues foreseeability and contacts via network/communications justify haling PwC into NY court | PwC lacked minimum contacts with NY; litigating in NY would be burdensome and NY’s interests are weak given foreign locus of conduct | Dismissed—exercise of jurisdiction would violate due process; contacts insufficient and exercise unreasonable |
| Jurisdictional discovery request | Plaintiff sought discovery to probe PwC’s ties to global PwC network and NY contacts | Defendants opposed; court had previously denied jurisdictional discovery on general jurisdiction | Denied—no threshold showing to justify jurisdictional discovery on general jurisdiction; case dismissed |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must contain factual matter that is plausible)
- Daimler AG v. Bauman, 134 S. Ct. 746 (general jurisdiction requires defendant to be "essentially at home" in forum)
- Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221 (Circuit application of Daimler to § 301 analysis)
- Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (prima facie showing required for personal jurisdiction in Second Circuit)
- Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158 (§ 302(a)(1) "transaction of business" and purposeful availment analysis)
- Best Van Lines, Inc. v. Walker, 490 F.3d 239 (two-part test for § 302(a)(1): transact business and nexus to claim)
- Fischbarg v. Doucet, 9 N.Y.3d 375 (quality of New York contacts primary consideration for § 302)
- Deutsche Bank Securities, Inc. v. Montana Board of Investments, 7 N.Y.3d 65 (electronic/telephonic projection into NY can suffice in certain circumstances)