Southern District of New York Rejects Personal Jurisdiction Over Citigroup Subsidiary and Subsidiary CEO Based on Links With New York Parent

The World in U.S. Courts: Spring 2014 - Personal Jurisdiction

Beach v. Citigroup Alternative Investments LLC, U.S. District Court, Southern District of New York, March 7, 2014

In this action for fraud and negligent misrepresentation, the U.S. District Court in New York concluded it lacked personal jurisdiction over the UK-based Defendants, CSO Partners Limited, a subsidiary of defendant Citigroup, and John Pickett, CSO Partners’ CEO. First, the court rejected general personal jurisdiction because it could not be said that the corporation or Pickett were "at home" in New York. Instead, neither had done business in New York or had any physical presence in the state. All alleged actions occurring in New York were committed by Citigroup, the parent corporation, or another subsidiary, and the "alter-ego" test which would have attributed the parent’s actions to CSO Partners and Pickett was not satisfied. The court also rejected specific personal jurisdiction because the allegedly fraudulent investor letters were not sent or received in New York and Plaintiffs had not made a prima facie showing that the harm alleged in the complaint resulted from the actions that took place in New York. The court denied Plaintiffs’ request for jurisdictional discovery to establish these points, noting that Plaintiffs had failed to allege facts giving rise to an inference that any sufficient conduct occurred in New York.

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