EFTA01386028.pdf

See generally Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir.1995). Considering the totality of the circumstances surrounding this case, I make the following findings. First, Epstein and Financial Trust have selected this forum, and they are residents of the Virgin Islands with strong ties to this community. Epstein owns a seventy-acre island, and he and Financial Trust employ some twenty people. (Pls' Mem. Of Law in Opp'n to Mot. To Dismiss, Epstein Dec1.112. 4-5.) It is important that local plaintiffs with grievances against defendants subject to this Court's jurisdiction be permitted to seek redress here in the Virgin Islands. As already noted, no forum selection clause binds the parties to bring suit in any particular jurisdiction. The defendants contacted the plaintiffs and entered into negotiations concerning the AIG investment while they were in the Virgin Islands. and at least one agreement was addressed to the plaintiffs through transmission to the plaintiffs' attorneys in New York, intending that it be sent to the Virgin Islands. I do not find that the defendants will suffer any great inconvenience by litigating this matter here. As the plaintiffs point out, most of the documents needed to try the case have already been filed in this Court, and the defendants are currently litigating other cases in this Court. Moreover, the defendants have not stated that their key witnesses are unable to travel to the Virgin Islands. See Jumara, 55 F.3d at 879. Finally, it is not at all clear that New York law must be applied to determine the causes of action raised by plaintiffs, but to the extent that another jurisdiction's jurisprudence does apply, this Court is fully capable of applying such law. For the foregoing reasons, I find that the requisite factors weigh in favor of litigating this matter in the Virgin Islands, and thus I will deny the motion to transfer. D. THE AMENDED COMPLAINT ADEQUATELY STATES CLAIMS UPON WHICH RELIEF MAY BE GRANTED UNDER FEDERAL RULE OF CIVIL PROCEDURE 12(B)(6) The defendants aver that I should dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(6) because the amended complaint fails to state a claim upon which relief may be granted. In considering a Rule 12(b)(6) motion, I accept all allegations in the complaint as true, and draw all reasonable inferences in favor of the non-moving party. In re Rockefeller CV. Props., Inc., 311 F.3d 198, 215 (3d Cir.2002). "The inquiry is not whether plaintiffs will ultimately prevail in a trial on the merits, but whether they should be afforded an opportunity to offer evidence in support of their claims." Id. (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds, Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)). The defendants raise several arguments in support of their motion, each of which I address in turn. (Mem. of Law in Support of Deis' Motion to Dismiss at 36-52.) 1. VIRGIN ISLANDS LAW GOVERNS THIS LAWSUIT Throughout their brief, the defendants rely on New York law to support their 12(b)(6) motion. Their reliance on New York law, however, is misplaced. In the Amended 1999 Note, the parties stipulated only that [t]his note shall be governed by, and construed in accordance with, the laws of the State of New York, including matters of construction, validity and performance, without giving effect to principles of conflicts of law (Mem. Of Law in Support of Deis' Mot. To Dismiss, Ex. D at 10.) The issues raised by the plaintiffs, however, do not involve the "construction, validity and performance" of the note; rather, they involve allegations of fraud, misrepresentation, misinformation, and breach of a fiduciary duty of the defendants in advising the plaintiffs about the AIG-managed fund. Accordingly, I find that New York law does not govern these claims, and instead shall look to Virgin Islands law to determine whether the plaintiffs have stated claims cognizable in this jurisdiction. 2. NEW YORK'S MARTIN ACT DOES NOT APPLY TO THIS LAWSUIT The defendants aver that the Marlin Act, New York General Business section 352 et seq., bars the plaintiffs' claims for negligent misrepresentation (Count IV) and breach of fiduciary duty (Count V) because, under the Act, only New York State's Attorney General has the power to bring such claims resulting from the sale or negotiation of any securities or commodities, and that there is no private right of action. (Defs.' Mem. Of Law in Support of Mot. To Dismiss at 44-46.) The plaintiffs counter that New York's Martin Act does not apply to nor bar their claims, (Pls.' Mem. Of Law in Opp'n to Mot. To Dismiss at 48-49.) The plaintiffs correctly assert that New York law does not govern their claims. In Count IV of the amended complaint, the plaintiffs allege that the defendants failed to disclose that they or their affiliates had a pecuniary interest in the AIG Investment "despite mismanagement" of the AIG fund. The plaintiffs contend that they relied on the information and advice given by defendants, and suffered a substantial pecuniary loss as a result. (Am. Comps.¶¶ 56-57.) In Count V, the plaintiffs accuse the defendants of breaching a fiduciary duty owed to them. (Id. ¶¶ 59-61.) Neither of these claims involves the "construction, validity and performance" of the Amended 1999 Note, and therefore. they are not governed by New York law.2 3. THE AMENDED COMPLAINT'S NONDISCLOSURE ALLEGATIONS ARE FACTUAL ISSUES TO BE DETERMINED AT TRIAL CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0087546 CONFIDENTIAL SDNY_GM_00233730 EFTA01386028