District Court Declines to Dismiss Case Against Japanese Bank Over Failed Bitcoin Exchange Despite Presence of Significant Evidence and Witnesses in Japan

The World in U.S. Courts: Summer and Fall 2016 - Personal Jurisdiction/Forum Non Conveniens/ Foreign Sovereign Immunity Act (FSIA) | June.29.2016

Greene v. Mizuho Bank, U.S. District Court for the Northern District of Illinois, August 26, 2016

This class action lawsuit alleges that Mizuho Bank and others are liable for the failure of the “Mt. Gox” Bitcoin exchange.  After concluding that the complaint stated a claim under the governing State law, the District Court in Chicago considered whether the case should be dismissed on forum non conveniens grounds.  It first considered whether there was an “alternative and adequate” forum for the case, and focused on Mizuho’s proposal that the case should be heard in Japan.  The plaintiffs objected that Japanese law does not authorize class actions, but the Court concluded that this factor did not constitute so significant a disadvantage to litigation of the plaintiffs’ claims that it made a potential trial in Japan an inadequate substitute.

The Court then proceeded to balance considerations of private interests and concluded that they did not point strongly one way or another.  Most notably, the Court observed that Bitcoin maintained its accounts in Japan (where Mt. Gox’s operator also could be found), and that many records were located there and would have to be translated into English if the U.S. case were to continue.  But the Court was critical of Mizuho for identifying only a small range of potentially relevant documents that would be implicated by this inconvenience, and not arguing that the evidence in Japan would be inaccessible.

The Court also was required to balance factors of public interest, and concluded that they slightly favored retaining jurisdiction.  Dismissal would ease court congestion, which was much worse in District Court in Chicago than in Japan, but more importantly the Court concluded that U.S. law would apply to the case.  It acknowledged that both Japan and the U.S. had a strong interest in resolution of the case.  As a closing note, the Court noted that it would have denied Mizuho’s motion to dismiss the case even if the factors slightly favored dismissal, as U.S. citizens are entitled to deference in their selection of U.S. courts to hear disputes.

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