District Court Finds Defendants Judicially Estopped From Arguing that Personal Jurisdiction Existed Where Defendants Had Consistently Taken the Contrary Position in a Previous Action

The World in U.S. Courts: Winter 2015 - Personal Jurisdiction

Katherine Elizabeth Barnet, et al. v. Drawbridge Special Opportunities Fund LP, et al., U.S. District Court for the Southern District of New York, October 17, 2014

Plaintiffs are the Court-appointed liquidators of members of the Octaviar Group, a group of now-insolvent Australian corporations. Plaintiffs’ claims arose out of an alleged fraudulent conveyance of approximately AU$200,000,000 from the Octaviar Group to Australian affiliates of Defendant Fortress Investment Group LLC. The Liquidators commenced litigation against the Australian affiliates of Fortress. Throughout that proceeding, in their briefing and in Court appearances, Defendants consistently maintained that there would be no personal jurisdiction over them or any of their U.S. affiliates in Australia, and the Australian Courts agreed.

The liquidators subsequently brought this action based on the same underlying facts as the Australian case. Defendants moved to dismiss based on the doctrine of forum non conveniens. The Court denied the motion, and in a later order denied Defendants’ request to dismiss or stay the case based on principles of international comity. In its decision, the Court noted that because Defendants had consistently taken the contrary position in the Australian litigation (i.e., that there would be no personal jurisdiction over them or any of their U.S. affiliates in Australia), they could not argue to the U.S. Courts that jurisdiction in Australia was available. The absence of an alternative remedy in Australia thus argued in favor of the Court retaining jurisdiction.

In the present order, Defendants sought reconsideration. The Court denied the request, stating that it had correctly addressed the issues in its previous orders.

RETURN TO Winter 2015 Edition

RETURN TO The World in U.S. Courts Home Page

U.S. Laws Discussed

Editorial Board