AM Trust v. UBS AG

Filing 22

Order by Hon. Phyllis J. Hamilton granting 14 Motion to Dismiss.(pjhlc3, COURT STAFF) (Filed on 1/29/2015)

1
2
UNITED STATES DISTRICT COURT
3
NORTHERN DISTRICT OF CALIFORNIA
4
5
6

AM TRUST,

7

Plaintiff,

8

v.

9

UBS AG,

10

ORDER GRANTING MOTION
TO DISMISS

Defendant.
_______________________________/

11
For the Northern District of California

United States District Court

No. C 14-4125 PJH

12

Defendant's motion for an order dismissing the above-entitled action for lack of

13

personal jurisdiction came on for hearing before this court on January 21, 2015. Plaintiff

14

appeared by its counsel Thomas Easton, and defendant appeared by its counsel Lauren

15

Eber. Having read the parties' papers and carefully considered their arguments and the

16

relevant legal authority, the court hereby GRANTS the motion as follows and for the

17

reasons stated at the hearing.

18
19

BACKGROUND
Plaintiff AM Trust, the sole named plaintiff in this proposed class action, alleges that

20

it is a Bahamian trust created by or for the heirs of Adam Malik ("Malik"), an Indonesian

21

politician who served as Vice President of Indonesia under Suharto, and who was also the

22

26th President of the U.N. General Assembly. Malik died in September 1984. AM Trust’s

23

“settlor, trustees and beneficiaries” are allegedly the “heirs, assignees, creditors, and

24

executors of the Estate of Adam Malik,” none of whom are identified. See Cplt ¶¶ 17-18.

25

Defendant UBS AG has a 152-year history as a Swiss financial institution.

26

See Declaration of Anne Wildhaber ¶ 3. The present-day UBS AG was formed in 1998,

27

when Union Bank of Switzerland and Swiss Bank Corporation ("SBC") merged to form the

28

new company. Id. Today, UBS AG is Switzerland’s largest bank. Id. UBS AG is

1

incorporated, domiciled, and has its principal place of business and global headquarters in

2

Switzerland. Id. It operates under the Swiss Code of Obligations and Swiss Federal

3

Banking Act as an “Aktiengesellschaft” – or an "AG" – a corporation that issues shares of

4

common stock to investors. Id.

5

UBS AG and its subsidiaries have offices in more than 50 countries, including the

6

United States. Id. ¶ 4. UBS AG maintains two branches in California – one in Los

7

Angeles, and one in San Francisco – as well as branches in Connecticut, Florida, Illinois,

8

and New York. Id. UBS AG also has several wholly owned direct and indirect subsidiaries

9

that operate in and/or are incorporated in the United States. Id.
According to the complaint, Malik “obtained, came in possession or was assigned

11
For the Northern District of California

United States District Court

10

several bank and safekeeping accounts” with UBS AG’s predecessors. Cplt ¶ 26. The

12

accounts were allegedly “for [Malik’s] personal use” and “contained well over five million

13

dollars in currency and gold bullion.” Id. Other accounts were allegedly “assigned to Adam

14

Malik by Jusuf Muda Dalam, the former Director of the Indonesian Central Bank,” under

15

undisclosed circumstances. Cplt ¶ 27. AM Trust asserts that “the accounts and their

16

contents are believed to be in compliance with Indonesian law of that time and were not the

17

proceeds of unlawful activity.” Cplt ¶ 28.

18

AM Trust alleges that "[i]n 1985 representatives of the Estate of Adam Malik made a

19

small, partial withdrawal" from "one or two" of the UBS accounts in Zurich, in the amount of

20

$2.9 million Swiss Francs, while the Estate was being settled. Cplt ¶ 29. AM Trust also

21

alleges that since 1985, "the Estate of Adam Malik has made continuous efforts to trace the

22

ultimate disposition of other SBC or Union Bank of Switzerland accounts in Switzerland and

23

Singapore" as well as to "access known accounts by hiring attorneys and investigators."

24

Cplt ¶ 31. This search has allegedly been complicated "by the corruption endemic during

25

the Suharto regime in Indonesia." Cplt ¶ 31.

26

AM Trust asserts that in 1993, the Estate of Adam Malik entered into extensive

27

correspondence with UBS AG’s predecessor SBC and its lawyers “regarding SBC accounts

28

at the Basel, Breganzona, and Biningen branches that were tied to a Union Bank of
2

1

Switzerland account in Zurich that was controlled by Adam Malik.” Cplt ¶ 32.1 According to

2

the complaint, SBC’s Legal Department “eventually admitted” that while Malik had dealt

3

directly with Ernest Siedel, Principal Director of Swiss Banking Corporation in Basel, no

4

further record of “the accounts” could be located because 10 years had elapsed since the

5

Basel account or accounts “were presumably closed.” Id.

6

AM Trust asserts, however, that SBC “conducted only a partial search confined to its

Breganzona, and Binningen connected to SBC.” Id. AM Trust claims that “the Estate

9

relying on SBC’s false assurance did not realize at the time that SBC itself had converted

10

the proceeds of the accounts and taht the records still existed and that the alleged search

11
For the Northern District of California

Basel branch even though the Estate had also identified Adam Malik accounts at Zurich,

8

United States District Court

7

had not been conducted in good faith.” Id.

12

AM Trust alleges that in 1997, a night bank guard at Union Bank of Switzerland,

13

discovered that bank officials were destroying documents about dormant assets, believed

14

to be the balances of deceased Jewish clients whose heirs’ whereabouts were unknown,

15

as well as books from the German Reichsbank, which listed stock accounts for companies

16

in business during the Holocaust, and real-estate records for Berlin property that had been

17

seized by the Nazis, placed in Swiss accounts, and then claimed to be owned by Union

18

Bank of Switzerland. Cplt ¶ 33. The guard's whistleblowing allegedly led to the filing of

19

class actions in federal court in New York, “a $1.25 [sic] settlement,” several official reports,

20

the release of records, and “the necessity for the promulgation of the 62 year statute of

21

limitations law on dormant accounts in Switzerland.” Cplt ¶ 33.

22

AM Trust alleges that in 2006, “with newly discovered documentation in hand” (not

23

specified), “representatives of the Estate” traveled to Zurich to meet with representatives of

24

UBS AG. A “quantity of information” was allegedly “handed over to UBS officers including

25

information on the “merged Malik accounts.” Cplt ¶ 35. However, in November 2006, UBS

26

AG advised that there was no UBS AG account under the name Adam Malik, although

27
28

1

Basel, Zurich, Breganzona, and Binningen are all cities located in Switzerland.
3

1

Union Bank of Switzerland had had an “account relationship that was closed in 1985.”

2

According to AM Trust, UBS AG “falsely stated that no records existed because 10 years

3

had elapsed since the date of closure.” Id.

4

AM Trust alleges that in 2007, the Estate made further inquiries about the accounts

5

in Singapore and Hong Kong, but “did not receive a definitive answer from UBS AG,” and

6

that between 2007 and 2013, the Estate made additional attempts “through intermediaries

7

and representatives,” with no result. Cplt ¶¶ 36-37. In July 2013, the Swiss Banking

8

Ombudsman Central Claims Office undertook a search of its centralized database, and in

9

November 2013, the Office reported that no assets connected with Adam Malik had been

11
For the Northern District of California

United States District Court

10

reported to it as dormant, an opinion it reaffirmed in March 2014. Cplt ¶¶ 41-45.
AM Trust filed the present action on September 12, 2014, as a purported class

12

action (on behalf of a “worldwide class"), and alleging diversity jurisdiction under the Class

13

Action Fairness Act, 28 U.S.C. § 1332(d). AM Trust asserts seven causes of action –

14

(1) quasi-contract (unjust enrichment); (2) accounting; (3) restitution; (4) breach of fiduciary

15

duty; (5) conversion; (6) constructive trust; and (7) trespass to chattel.

16

The complaint defines the proposed class as follows:

17

Secret Bank Account Holders at UBS AG And its predecessors Swiss
Banking Corporation (SBC) and Union Bank Switzerland who held an interest
in secret bank accounts during the past 62 years (the current Swiss Statute of
Limitations for dormant accounts) which were deliberately closed and
converted by defendants without consent of the account holders and records
destroyed, concealed, or withheld under the so called ten year rule when
subsequent inquiries were initiated. The class excludes: certain beneficiaries
of the Swiss Bank Holocaust settlements if their membership in the class is
based solely on accounts for which they have already been compensated, all
account holders who have previously relinquished or settled their claims, the
Judge or Magistrate Judge to who [sic] this case is assigned and their
families, all class members whose claim is solely based on accounts that
have been reported to the Swiss Banking Ombudsman Dormant Account
Database and who therefore have a remedy available and all class members
who timely exclude themselves.

18
19
20
21
22
23
24
25

Cplt ¶ 47.

26

AM Trust claims it "has exhausted the limited remedy offered by the Swiss Banking

27

Ombudsman Central Claims Office and UBS AG, and has reason to believe that because

28

of the nature of this claim it cannot receive a fair trial in Switzerland and that [its] claim
4

1

would be rejected out of hand without remedy." Cplt ¶ 12. AM Trust also asserts that

2

"revelations about [Malik's] financial affairs and historical legacy would cause political

3

repercussions in Indonesia thus rendering a fair trial impossible," and would “revive

4

numerous false allegations and conspiracy theories involving the former rulers of Indonesia

5

Suharto and Sukarno.” Cplt ¶ 13.
DISCUSSION

6
7
8
9

A.

Legal Standard
A district court sitting in diversity may exercise personal jurisdiction to the same

extent as the courts of general jurisdiction of the state in which it is located. See
CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011). Because

11
For the Northern District of California

United States District Court

10

California’s long-arm statute is “coextensive with federal due process requirements, the

12

jurisdictional analyses under state law and federal due process are the same.” Id.

13

(quotations and citations omitted); see also Cal. Code of Civ. Proc. § 410.10. “It is well

14

established that the Fourteenth Amendment’s Due Process Clause limits the power of a

15

state’s courts to exercise jurisdiction over defendants who do not consent to jurisdiction.”

16

Martinez v. Aero Caribbean, 764 F.3d 1062, 1066 (9th Cir. 2014).

17

Absent one of the traditional bases for jurisdiction, constitutional due process

18

requires that the defendant have certain “minimum contacts with [the forum state] such that

19

the maintenance of the suit does not offend traditional notions of fair play and substantial

20

justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). When a defendant

21

deliberately engages in significant activities within a state, purposely availing itself of the

22

privilege of doing business in that state, it is reasonable to require the defendant to “submit

23

to the burdens of litigation in that forum as well.” Burger King v. Rudzewicz, 471 U.S. 462,

24

475-76 (1985).

25

Under the “minimum contacts” analysis, a court can exercise either “general or

26

all-purpose jurisdiction," or "specific or conduct-linked jurisdiction.” Daimler AG v. Bauman,

27

134 S. Ct. 746, 751 (2014) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 131

28

S.Ct 2846, 2851 (2011)); see Int’l Shoe, 326 U.S. at 316-20. “Where a defendant moves to
5

1

dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of

2

demonstrating that jurisdiction is appropriate.” Schwarzenegger v. Fred Martin Motor Co.,

3

374 F.3d 797, 800 (9th Cir. 2004) (internal quotation marks omitted).

4

If the defendant’s activities in the forum are “substantial, continuous, and

5

systematic,” general jurisdiction is available – the nonresident defendant will be subject to

6

suit even on matters unrelated to his or her contacts with the forum. Perkins v. Benguet

7

Consol. Mining Co., 342 U.S. 437, 446 (1952); see Daimler, 134 S.Ct. at 754-58.

less substantial contacts with the forum gave rise to the claim or claims pending before the

10

court – that is, if the cause of action “arises out of" or has a substantial connection with that

11
For the Northern District of California

Alternatively, a court may exercise specific jurisdiction over a defendant if his or her

9

United States District Court

8

activity. Hanson v. Denckla, 357 U.S. 235, 250-53 (1958); see Goodyear, 131 S.Ct. at

12

2854. The Ninth Circuit applies a three-part test to determine whether a defendant’s

13

contacts with the forum are sufficient to establish specific jurisdiction.

14

17

(1) The nonresident defendant must do some act or consummate some
transaction within the forum or perform some act by which he purposefully
avails himself of the privilege of conducting activities in the forum, thereby
invoking the benefits and protections of its laws. (2) The claim must be one
that arises out or of results from the defendant’s forum-related activities. (3)
Exercise of jurisdiction must be reasonable.

18

Gordy v. Daily News, L.P., 95 F.3d 829, 831-32 (9th Cir. 1996) (quoting Data Disc, Inc. v.

19

Systems Tech. Assocs., Inc., 557 F.2d 1280, 1287 (9th Cir. 1977)); see also Doe v. Unocal

20

Corp., 248 F.3d 915, 923 (9th Cir. 2001).

21

B.

15
16

Defendant's Motion

22

The gist of the complaint in the present action is that UBS AG holds assets that

23

Malik’s heirs are entitled to, that those heirs have been unable to access the assets or

24

accounts due to lack of cooperation or other acts by UBS AG, and that UBS AG has

25

misappropriated the funds for its own use, improperly closing the accounts or giving them

26

“dormant” status.

27
28

UBS AG contends that it is difficult to ascertain from the complaint exactly what AM
Trust is asserting, beyond the general description above. UBS AG also argues that the
6

1

complaint on its face identifies multiple factors that make information about the purported

2

Malik accounts difficult to obtain, including the approximately 30 years that have passed

3

since Malik’s death; the mysterious circumstances surrounding the “assignment” of Swiss

4

bank accounts from a political predecessor into Malik’s name for his personal use; the

5

absence of any allegation that any of Malik’s heirs was ever named on any of the accounts

6

as a signatory, successor in interest, or beneficiary; and the fact that UBS AG was not even

7

formed until 14 years after Malik’s death.
Nevertheless, UBS AG asserts, none of this matters, because the court does not

8
9

have personal jurisdiction over UBS AG, and the entire action should be dismissed. UBS
argues that under Daimler, a corporate defendant's "place of incorporation and principle

11
For the Northern District of California

United States District Court

10

place of business" are the only places where it is "fairly regarded as at home" and thus

12

subject to jurisdiction for claims that arose outside the forum. Daimler, 134 S.Ct. at 760-61

13

& n.19; see also Martinez v. Aero Caribbean, 764 F.3d 1062, 1070 (9th Cir. 2014) (citing

14

Daimler, 134 S.Ct. at 750-52, 760-61).

15

Because UBS AG’s place of incorporation and principal place of business are

16

located in Switzerland, UBS AG argues that it is not “at home” in California, and not subject

17

to jurisdiction in California for claims unrelated to UBS AG's contacts with the forum. UBS

18

AG asserts that Daimler clearly rejected the notion that a court should "look beyond the

19

exemplar bases" identified by the Supreme Court in Goodyear, 131 S.Ct. at 2850-54, as

20

limited to place of incorporation and principal place of business. See Daimler, 134 S.Ct. at

21

760.

22

UBS AG also contends that it is not subject to specific personal jurisdiction in

23

connection with this case. As explained above, specific jurisdiction requires that the claim

24

be one that arises out of or results from the defendant's forum-related activities. Here, UBS

25

AG argues, there are no allegations in the complaint that UBS AG had any contacts with

26

California (or even the United States) in connection with the alleged conduct giving rise to

27

this action. The allegations involve UBS AG's handling of accounts in Switzerland (and

28

possibly Singapore) belonging to an Indonesian national, and now benefitting his heirs,
7

1
2

through a Bahamian trust.
The only connection alleged to California is that "some members of the Account

3

Holders class reside in California and this District." Cplt ¶ 9. UBS argues that such

4

persons are purely hypothetical, and that in any event, where the purported class members

5

reside is irrelevant to the specific jurisdiction analysis, because the class allegations

6

concern UBS AG's handling of accounts in Switzerland.

7

In opposition, AM Trust asserts that the court has general jurisdiction and specific

8

jurisdiction, and that by operating banks in the U.S., UBS AG has “consented” to

9

jurisdiction. First, AM Trust argues that the court has general personal jurisdiction because
UBS AG is regulated by the International Banking Act (“IBA”), which AM Trust asserts

11
For the Northern District of California

United States District Court

10

applies federal banking laws to U.S. branches of foreign banks.

12

The International Banking Act of 1978 (“IBA”), 12 U.S.C. §§ 3101–3108, is the

13

principal federal law governing foreign bank operations. See United States v. Lewis, 67

14

F.3d 225, 230 (9th Cir. 1995) (citation omitted). Until the enactment of the IBA, foreign

15

banks operating branches in the United States did so only under state authority. Id. at 231

16

(citation omitted). Under the IBA, a branch of a foreign bank must choose between state

17

and federal treatment, and, subject to the approval of the Comptroller of the Currency, a

18

foreign bank may establish either a “federal branch” or a “federal agency” in any state in

19

which it is not operating a branch under state law, and in which the establishment of such

20

branch is not prohibited by state law. Id. (citing 12 U.S.C. § 3102(a)(1)). AM Trust argues

21

that pursuant to 12 U.S.C. § 3106a, UBS became a “domesticated federal and/or state

22

bank” by virtue of being regulated by the Federal Reserve, the Office of the Comptroller of

23

the Currency, and the state banking regulator.

24

AM Trust also contends that the court has specific jurisdiction in California. AM

25

Trust asserts that in operating two branches in California, UBS has purposely availed itself

26

of the privilege of conducting activities in the forum. As for UBS AG's contention that its

27

California activities at the two branches have no relationship to the complaint in the present

28

action, AM Trust responds that
8

1
2
3
4
5
6

UBS AG and its predecessors embarked on a long time policy of corrupt
banking practices aimed at a vulnerable subset of secret bank account
holders, including United States citizens in California who held Swiss bank
accounts through UBS AG and its predecessors’ cross-border entities and are
estimated to number over 1000 persons and entities who make up a portion
of the worldwide class who have been deprived of their accounts through the
actions of UBS AG.
Opp. at 9-10.
AM Trust contends that "[g]iven the troubled history of secret banking and Swiss

7

banking in particular, it is not only plausible but probable that UBS AG’s California branches

8

in San Francisco and Los Angeles catered to a wealthy clientele like Adam Malik interested

9

in opening undeclared, secret and low denomination accounts." Opp. at 10.
AM Trust asserts further that under the Edge Act, 12 U.S.C. § 632, the presence of

11
For the Northern District of California

United States District Court

10

UBS AG’s branches in California essentially amounts to UBS AG “consenting to”

12

jurisdiction in this forum. The Edge Act provides, in part, that

13
14
15
16
17

all suits of a civil nature at common law or in equity to which any corporation
organized under the laws of the United States shall be a party, arising out of
transactions involving international or foreign banking, or banking in a
dependency or insular possession of the United States, or out of other
international or foreign financial operations, . . . shall be deemed to arise
under the laws of the United States, and the district courts of the United
States shall have original jurisdiction of all such suits; . . . .
12 U.S.C. § 632.

18

AM Trust argues that UBS AG's "federally chartered branches" (apparently a

19

reference to the IBA argument above) can be considered "any corporation organized under

20

the laws of the United States" if they have what AM Trust calls a "dual identity." AM Trust

21

adds, "Likewise, some of UBS AG's other subsidiaries are organized under the laws of the

22

United States. Therefore UBS AG has acquired a dual nationality by consenting to operate

23

under US banking laws." Opp. at 11-12.

24

Finally, AM Trust contends that because the nature of UBS AG’s contacts and “cross

25

border banking operations” in California are “not fully elucidated by the pleadings before the

26

[c]ourt,” and because UBS’ contacts with the U.S. are “quite complex and at times

27

controversial,” the court “could benefit from jurisdictional discovery.” AM Trust also argues

28

that if the court “is in doubt as to the class allegations in particular and their relationship to
9

1
2

this jurisdiction," discovery would be appropriate. Opp. at 12-13.
In particular, AM Trust asserts, it wants jurisdictional discovery regarding UBS AG’s

3
4
5
6

branch banking, cross border operations, wealth management and other
operations in California as well as the United States to determine if UBS AG
has acquired a dual US banking nationality and therefore is either ‘at home’ in
California and/or meets the criteria for specific jurisdiction and/or has
intentionally or unintentionally consented to jurisdiction by operating under US
statutes such as the IBA and Edge Act.

7

Opp. at 12. According to AM Trust, the materials it would seek would include “filings with

8

the Federal Reserve and the Comptroller of the Currency.” Opp. at 12-13.

9

The court finds that the motion to dismiss must be GRANTED. First, under Daimler,
UBS AG is not subject to general jurisdiction in this District (or anywhere in the United

11
For the Northern District of California

United States District Court

10

States) because it is incorporated in Switzerland and its principal place of business is in

12

Switzerland. AM Trust's argument that UBS AG is subject to general jurisdiction because it

13

is regulated by the IBA, which applies federal banking law to U.S. branches of foreign

14

banks, amounts to saying that a foreign corporation is subject to general personal

15

jurisdiction in the U.S. simply because U.S. operations are governed by U.S. law. As UBS

16

AG notes, if this were the standard, every foreign corporation would be subject to general

17

jurisdiction in the U.S., since every corporation operating in the U.S. is subject to some

18

extent to U.S. laws. Nothing in the IBA causes UBS AG's branches to be "at home" in the

19

U.S. rather than in Switzerland, where UBS AG is incorporated and headquartered.

20

It is true that the IBA requires that “a foreign bank shall conduct its operations in the

21

United States in full compliance with provisions of” certain laws that apply to U.S. banks,"

22

12 U.S.C. § 3106a, but nothing in any provision of the IBA changes the foreign character of

23

a U.S. branch of a foreign bank. Indeed, § 3106a refers to “foreign banks” and their

24

“operations in the United States” as distinct from “national banks” or “State-chartered

25

banks.”

26

The IBA defines a “foreign bank” as “any company organized under the laws of a

27

foreign country . . . which engages in the business of banking . . ." and clarifies that the

28

term “foreign bank” includes various "foreign institutions that engage in banking activities
10

1

usual in connection with the business of banking in the countries where such foreign

2

institutions are organized or operating[.]" 12 U.S.C. § 3101(7). A “federal branch” is “a

3

branch of a foreign bank established and operating under section 3102 of this title.” 12

4

U.S.C. § 3101(6). These definitions make clear that a branch of a foreign bank operating in

5

the United States is foreign in character. The fact that the foreign bank has to comply with

6

U.S. banking regulations does not change the fact that the foreign bank remains “at home”

7

in its place of incorporation and principal place of business.

8
9

Under the IBA, a branch of a foreign bank must choose between federal and state
treatment, and can expect thereafter to be subject to the same restrictions as a similarly
situated domestic bank. See 12 U.S.C. §§ 3101-3102; Lewis, 67 F.3d at 230-01. When a

11
For the Northern District of California

United States District Court

10

U.S. branch of a foreign bank registers with the federal government, pursuant to § 3102, it

12

is called a “federal branch” (meaning it is registered with federal, as opposed to state,

13

authorities). However, U.S.-based branches of foreign banks are entirely distinct from

14

national banks or state banks, which are “domestic banks” chartered and regulated by the

15

United States or a state.

16

As shown by documents attached to UBS AG's Request for Judicial Notice and

17

supporting declaration, its branches in the United States are registered with the OCC as

18

federal branches (rather than as state branches). The attached report entitled "National

19

Banks and Federal Branches and Agencies as of 10/31/2014," shows that UBS AG has

20

Federal branches in Miami, New York, Los Angeles, San Francisco, and Tampa, and that

21

all list “Switzerland” as their “home country.”

22

Under the applicable regulations, a foreign bank’s “home country” is “the country in

23

which the foreign bank is chartered or incorporated.” 12 C.F.R. § 211.21(p). Moreover, the

24

IBA requires oversight of the foreign bank by a “home country supervisor” which is defined

25

as “the governmental entity or entities in the foreign bank’s home country with responsibility

26

for supervision and regulation of the foreign bank.” 12 C.F.R. § 211.21(q). In other words,

27

the IBA recognizes that a foreign bank with a federal branch (such as UBS AG) retains its

28

foreign character and is incorporated in a foreign country (and, indeed, imposes the
11

1

requirement that the foreign bank be subject to government oversight by its home country).

2

Adherence to the IBA does not result in the conversion of a federal branch of a

3

foreign bank into an entity that is “at home” in the United States. The only relevant

4

considerations for purposes of determining general jurisdiction are place of incorporation

5

and principal place of business, which in the case of UBS AG is Switzerland.

arise out of any of UBS AG’s contacts with the forum. AM Trust’s assertion that the court

8

has specific jurisdiction appears to be based on the theory that the claims that will be

9

asserted by the proposed class members once the class is certified arise out of UBS AG’s

10

contacts with California. However, claims of unnamed class members are irrelevant to the

11
For the Northern District of California

Second, UBS AG is not subject to specific jurisdiction, as AM Trust’s claims do not

7

United States District Court

6

question of specific jurisdiction. See, e.g., Ambriz v. Coca Cola Co., 2014 WL 296159 at

12

*4-6 (N.D. Cal. Jan. 27, 2014).

13

Third, UBS AG has not consented to jurisdiction in this forum via operation of the

14

Edge Act (or otherwise). The Edge Act allows national banks (i.e., United States banks) to

15

engage in international banking through federally-chartered subsidiaries. See 12 U.S.C.

16

§ 601 et seq. Thus, it addresses the issue of U.S. banks engaged in international banking,

17

rather than (as here) international banks engaging in U.S. banking. Moreover, the

18

provision cited by AM Trust (§ 632) relates to subject matter jurisdiction, not to personal

19

jurisdiction or consent thereto – and, it applies to corporations “organized under the laws of

20

the United States,” not to corporations organized under the laws of foreign countries.

21

AM Trust’s contention that UBS AG, while a Swiss company, is also organized under

22

the laws of the United States, makes no sense. It is undisputed that UBS AG is a

23

organized as an Aktiengesellschaft under the Swiss Code of Obligations and Swiss Federal

24

Banking Act. Daimler does not contemplate that a company can be found to be organized

25

under the laws of the United States by virtue of operating branches or subsidiaries there.

26

Rather, personal jurisdiction of a corporation is based solely on the place of incorporation

27

and principal place of business.

28

Finally, the court finds that jurisdictional discovery is unnecessary and inappropriate,
12

1

as it would not reveal facts sufficient to constitute a basis for jurisdiction. Indeed, Daimler

2

directly addressed the impact of its decision on the need for jurisdictional discovery, stating

3

that "it is hard to see why much in the way of discovery would be needed to determine

4

whether a corporation is at home." Daimler, 134 S.Ct. at 762 n.20.

5

AM Trust's explanation of what it would seek through jurisdictional discovery

6

confirms that none of the proposed discovery has any relevance to the applicable

7

jurisdictional inquiry. In particular, AM Trust says it needs discovery to "determine if UBS

8

AG has acquired a dual banking nationality." However, the Daimler Court rejected the

9

argument that general jurisdiction is appropriate whenever a corporation engages in a
"substantial, continuous, and systemic course of conduct – and clearly found that the only

11
For the Northern District of California

United States District Court

10

relevant facts for determining whether a corporation is "at home" are its place of

12

incorporation and its principal place of business.

13
14

CONCLUSION
In accordance with the foregoing, the complaint is DISMISSED. The dismissal is

15

WITH PREJUDICE. Under Daimler, there is no general jurisdiction in this court over a

16

bank that is incorporated and has its principal place of business in Switzerland. As for

17

specific jurisdiction, the claims asserted by AM Trust have no connection to the United

18

States, let alone this forum. The only accounts opened by or for Malik that are referenced

19

in the complaint were located in Switzerland or possibly Singapore. There are no

20

allegations showing that "but for" UBS AG's contacts with California, AM Trust's cause of

21

action would not have arisen. See Omeluk v. Langsten Slip & Bathyggeri A/S, 52 F.3d 267,

22

271 (9th Cir. 1995).

23

Moreover, the claims of the unnamed class members are irrelevant to the specific

24

jurisdiction analysis. It is settled that venue and personal jurisdiction requirements to suit

25

“must be satisfied for each and every named plaintiff for the suit to go forward.” Abrams

26

Shell v. Shell Oil Co., 165 F.Supp. 2d 1096, 1107 n.5 (C.D. Cal. 2001) (citing cases); see

27

also Blair v. CBE Group, Inc., 2013 WL 2029155 at *2 (S.D. Cal. May 13, 2013).

28

Finally, as for jurisdictional discovery, there is no dispute that UBS AG is a Swiss
13

1

Aktiengesellschaft, incorporated in Switzerland and having its principal place of business

2

there. Nothing that discovery might reveal that will change that fact. AM Trust by its own

3

admission is a Bahamian trust with Indonesian beneficiaries, asserting a claim that UBS

4

converted and concealed assets in accounts in Switzerland and possibly Singapore. AM

5

Trust has not brought any claim on its own behalf arising from UBS AG’s contacts with the

6

Northern District of California. There is no specific jurisdiction, and discovery in that regard

7

would be nothing but a fishing expedition.

8
9

Dated: January 29, 2015.
______________________________
PHYLLIS J. HAMILTON
United States District Judge

11
For the Northern District of California

United States District Court

10

IT IS SO ORDERED.

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
14