Judge Huck Sends Madoff/Banco Santander Claims to.....Ireland?

huckirishspring

In a significant forum non ruling involving a multi-national cast of characters all swirling around Bernie Madoff, Judge Huck has sent the Madoff/Banco Santander litigation off to the Emerald Isle with a traditional (if somewhat off color) Irish toast:

Here's to our wives and girlfriends:

May they never meet!

Oh no, that's definitely not it!

Let me try again:

Here's to a long life and a merry one.

A quick death and an easy one.

A pretty girl and an honest one.

A cold pint-- and another one!

Sheesh, I keep messing this up -- way off.

One more time:

Since the Court lacks personal jurisdiction over half (and apparently some of the most important) of the Defendants in this action, including the Bahamian funds’ auditor, custodian, administrator, and a director, it makes little sense to try an expensive and time-consuming case in Florida while another court, in a virtually duplicative proceeding over four thousand miles away, potentially adjudicates the same legal and factual issues. The Plaintiffs do not agree that the inability to try this entire case in the United States weighs in favor of trying all claims together in another venue. The Court, however, considers this a textbook example of a private convenience factor favoring forum non conveniens dismissal.

Choice of law considerations also favor trying this case in Ireland. In their motions to dismiss, many of the Defendants argue that the Plaintiffs’ claims are barred by Irish and Bahamian law, which, under applicable choice of law rules, appear to govern many of the Plaintiffs’ claims. The Court also notes the possibility that the laws of other nations, such as Switzerland or Spain, may also be applicable to some aspects of the transactions at issue. Even though the relevant transactions took place between foreign parties outside the United States, the Plaintiffs insist the New York common law—and not the law of any other jurisdiction—governs all of their common law claims. Despite the fact that the Supreme Court has expressly declined to extend federal securities law to the claims at issue and the distinct possibility that other nations may have laws and regulations that govern the securities transactions here (not to mention the near certainty that foreign law governs most, if not all, of the Plaintiffs’ common law claims), the Plaintiffs contend that a Florida court should apply federal securities law and New York common law in adjudicating claims between, for instance, a Spanish investor and a Spanish bank, a British Virgin Islands company and an Irish auditor, or a Mexican investor and a Swiss investment manager, none of whom contracted to perform any services for the Plaintiffs in the United States.

The Court finds that it is not appropriate to try to force a square peg (claims by foreign parties, governed by foreign law and concerning foreign securities) into a round hole (an American court). Because Ireland offers an available and more convenient alternative for trying this case on the merits, it should be tried there. As the Eleventh Circuit has explained, forum non conveniens is a favored and workable intellectual tool that, by “separating out for hearing only those cases where contacts with the American forum predominate,” offers a reasonable solution to “vexing jurisdictional” and “complicated international choice of law questions increasingly presented to district courts.” Sigalas v. Lido Maritime, Inc., 776 F.2d 1512, 1519 n.10 (11th Cir. 1985).

   May the road rise to meet you (I'm paraphrasing....).

3d DCA Watch -- The Continuing Story of BDO Seidman

Well it feels good to be back in the saddle again.

Three things I learned from my recent "unplugging":

1. Working a matter up for trial is hard.

2. There are too many distractions in the day, and it felt clarifying to be able to focus for extended periods of time on a single topic or issue, without answering phone calls, continually looking at emails, or incessantly surfing the tubes for Drew Barrymore updates.

3. Oy with this Sultan of Brunei.

Speaking of Resplendently Robed Ones™, let's dig right in and see what written utterances have emerged from our very own sometimes blinkered, always bunkered band of A-Team judicial misfits:

BDO Seidman v. Banco Espirito:

It's nice to see the 3d DCA pick up some steady work.

Here, that work consists of regularly passing on various appellate issues that arise from the accounting malpractice trial that has been playing to sold-out audiences before Judge Rodriguez for several years, with no apparent end in sight:

The accounting firm of BDO Seidman, LLP appeals a jury verdict and final judgment awarding the appellees over $159 million in compensatory damages and over $351 million in punitive damages. The appellees—Banco Espirito Santo and two of its affiliates (collectively, “Banco”)—cross-appeal the denial of prejudgment interest on the compensatory award from the date the losses allegedly occurred through the date of the jury verdict. We reverse the final judgment and remand the case for a new trial, finding that the “trifurcation” of the trial into three distinct phases impermissibly allowed the jury to render a verdict on BDO’s liability for gross negligence (a determination pertinent in this case as a predicate for the later consideration of punitive damages)1 two months before the jury’s consideration of, and verdict deciding, the intertwined issues of causation, reliance, and comparative fault.

Because of the prejudice inherent in the premature, first-phase gross negligence finding, we do not address in detail other aspects of the trial. Our conclusion regarding the “trifurcation” issue renders moot or pretermits our consideration of most of the other parts of the jury’s verdicts and the remaining points on appeal and cross-appeal.

I once had trifurcated premature, first-phase gross pretermittal -- once.

(It may have been the six Gin Gibsons, I'm not sure.)

Actually, reading Judge Salter's clear, concise, calm opinion, it's amazing anyone could have thought otherwise. Here's the nub of it:

The trial court ultimately determined that comparative fault and causation issues would be tried and determined in the second, compensatory damages phase rather than in the first phase. The question of whether BDO was “personally guilty of gross negligence” would be determined in the first phase. The jury would then be asked at the close of phase II whether Banco was entitled to punitive damages against BDO (and if so, the amount of those punitive damages would be determined in phase III). This meant that the phase I jury deliberation regarding negligence and gross negligence did not include specific evaluations of the alleged negligence and fault, including failures to report or act, on the part of the Banco parties and ten third-party or Fabre actors. Those determinations occurred instead at the close of phase II, when all of the evidence in that phase was viewed against the backdrop that BDO had already been found not merely negligent, but so negligent (or “guilty”) as to arise to the level of intentional disregard for the rights of others.

This makes eminent sense, though that means they have to do it all over again (presumably without Big Lew Freeman).

Judge Salter at the end is sympathetic to a case that has dragged on for years, consumed seven months of trial time and has resulted in one mistrial already, but he ultimately concludes that the "cart cannot lead the horse," which either was the title of an old episode of Little House on the Prairie or else is judicial-speak for "enjoy the retrial."

I guess for the 37 firms involved, that's a good thing?

It's Motion to Dismiss Day in Banco Santander Land!

Anyone remember that Banco Santander/Madoff suit pending before Judge Huck?

Well it looks like the defendants got together and decided to just bombard the court with motions to dismiss.

I'm not sure but I think even Judge Huck filed one, that's how many motions there are to wade through.

The main one filed by Banco Santander asserts that the allegations of securities fraud do not have a United States nexus and the securities laws cannot apply extraterritorially.

It's a pretty interesting read and remarkable that they got it in under 20 pages.

Brevity is the soul of wit, kids.

(I expect Judge Huck to be issuing orders on these motions by this afternoon).

Pacer Surfing Thursday!

So did anybody file anything interesting lately?

Let's take a look....

Remember that Banco Santander/Madoff case that was filed with much fanfare back in January?

Well from what I can tell the litigation hasn't progressed too far, even though it's in front of Judge Paul "Rocket Man" Huck.

The plaintiffs are still trying to serve everybody, some of the defendants have filed a big fat motion to dismiss (summarized as follows: "wow, this case sure has lots of foreigners!") and the plaintiffs are trying to conduct some jurisdictional discovery, PSLRA be damned.

Plus nobody can seem to agree on anything, even scheduling.

And you people like when I report on this stuff?