District Court Finds No Personal Jurisdiction Over Swiss Bank Arising Out of Claimed Violations in Switzerland

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

AM Trust v. UBS AG, United States District Court for the Northern District of California, January 29, 2015

AM Trust, a Bahamian trust created by or for the heirs of an Adam Malik, an Indonesian politician, sued UBS AG, a Swiss bank, for failure to provide access to certain accounts.

AM Trust alleged that it held several accounts with UBS AG's predecessors, and that it was unable to get records regarding or access to those accounts. It filed a purported class action, claiming diversity jurisdiction and defining the proposed class as "Secret Bank Account Holders at UBS AG . . . who held an interest in secret bank accounts during the past 62 years." AM Trust claimed that the plaintiff class should be able to sue in the U.S., as they had exhausted all possible remedies in Switzerland, and that Malik's public profile would render a fair trial in Indonesia impossible.

The District Court explained that California's long-arm statute is coextensive with federal Due Process requirements, and so the jurisdictional analyses under state law and federal due process are the same. Here, the only initially alleged connection to California was that some of the proposed class members lived in California. Plaintiffs also maintained that UBS AG is subject to the International Banking Act of 1978, which subjects it to regulation by the United States Comptroller of the Currency, and that UBS AG operated two branches in California.

As a preliminary matter, the District Court determined that a U.S. branch of a non-U.S. bank operating under the International Banking Act retained a non-U.S. character so far as federal law was concerned, and so the statute did not confer jurisdiction. The District Court determined that general personal jurisdiction over UBS AG did not exist because the very strict criteria for such a finding to be made as to a corporation--largely limited to its place of incorporation and principal place of business—both pointed to Switzerland. Specific jurisdiction did not exist because AM Trust's claims did not arise out of any of UBS AG's contacts with the California. The District Court noted finally that the hypothetical existence of class members residing in California was irrelevant to the question of specific jurisdiction.

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