2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Third C irc uit 10-20-2005 

# W or th am v . Kars t a dtquelle AG P re c e de nt i al or N on-P re c e de nt i al : N on-P re c e de nt i al D ocke t N o . 04-2848

F o llow thi s and a ddit ion al works at : http://di git alc ommon s .l a w . vill anova . e du/thirdc irc uit_2005

Thi s de c i sion i s brou ght t o you for f re e and ope n a c c e s s by the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Third C irc uit at V ill anova U nive r sity S choo l of L a

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w . vill anova . e du . Re c omme nde d C it at ion " W or th am v . K ar s t a dt quelle AG " (2005). 2005 D e cisio n s . P ape r 375. http://di git alc ommon s .l a

w . vi ll anova . e du/thirdc irc uit_2005/375H onor abl e A l an D . L our i e, C i r cui tJ udge of the U ni t ed St at es C our tof * A ppeal s forthe Feder al C i r cui t , s i t t i ng bydes i gnat i on. NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N o. 04- 2848 I N R E : NAZ I E RA CA S E S AGAI NS T GE RMAN

DE F E NDANT S L I T I GAT I ON MA R T I N G . W O R T H A M; BA RBA RA PRI NC I PE, A p p e llan ts v. KAR S T ADT QUE L L E AG; W ARENHAUS WERTHE I M GM BH ON APPEAL FROM THE U NI TED STATES DI STRI CT CO UR T

FOR TH E DI STRI CT O F NEW J ERSEY ( D i s t . C our tN o. 02- cv- 03890) D i s tr i c t C o u r t J u d g e : H o n o r a b l e Wil liam G. Ba ssler Subm i t t ed pur s uantt o L A R 34. 1( a) Sept ember26, 2005 B efore: A L ITO , A M B R O , and L O U R IE, C i rcui tJudg es. * ( Fi l ed: O ct ober20, 2005)2 OPI NI ON O F THE COURT P E R C U R I A M:

D ur i ng the N azi er a, pl ai nt i ffs ’ r el at i ves w er e for ced t o s el l thei rs har es i n a fami l ybus i nes s i n G erm any . A ft erthe w ar , theys oughtr es t i tut i on butal l egedl ys ett l ed thei rcl ai m fora fr act i on of i t s val ue due t o fr aud perpetr at ed part l yi n N ew Y ork byan agentof def

endant s ’ corpor at e pr edec es s or s . T he D i s tr i ctC our tdi s m i s s ed the compl ai nt forl ack of

per s onal j ur i s di ct i on, concl udi ng thatN ew Y ork’ s l ong- arm s t atut e does not r eac h defe ndant s bas ed mer el yon the fr aud, and thatas s ert i ng j ur i s di ct i on vi ol at es due p r o c e s s . P l a i n t i f

f s a p p e a l e d , r a i s i n g th e s e a n d o th e ri s s u e s . W e a f f i r m. I. Pl ai nt i ffs B arbar a Pr i nci pe and M art i n W or tham ar e a da ught erand a gr ands on, r es pect i vel y , of G üntherW or tham, w ho w as the s on of Fr anz a nd K äthe W e rth e im . B e f

o re 1 9 3 5 , F ra n z a n d K ä th e o w n e d 3 2 p e rc e n t o f th e c a p ital sto c k in W erthei m A G fürH andel s bet ei l i gungen, s ubs equent l yknow n as A W A G A l l gemei ne W ar enh ande l s - G es el l s haftA G ( “A W A G ”) . A W A G w as a hol di ng companythat o p e ra te d d e p a rt m e n t s to re s in B e rl in a n d o w n e d a n o th e r r e a l e s ta te h o ld in g c o m p a n y .

B e tw e e n 1 9 3 4 a n d 1 9 3 9 , the G e rm a n g o v e rn m e n t f o rc e d th e W e rth e im s to sell their ho lding s in A W A G to a c o n so rt ium o f n o n -Jew ish A W A G d ir ec tors led b yD r. A r thurL i ndgens . G üntherand hi s br otherFr i t z ( “the br other s ”) fl ed G erm anyi n 1939A W A G , W W , H ert i e, and K ar s t adtal l underw entnum er ous name changes and 1 m er ger s unr el at ed t o the r el evantevent s of thi s cas e. Fors i m pl i ci tyw e r efe rt o the c o m p a n i e s b y th e s e f

o u rn a m e s o n l y. 3 and l at ers ett l ed i n the U ni t ed St at es . I n 1950, the br other s fi l ed a c l ai m w i th the R es t i tut i on A uthor i tyi n W es tB er l i n, s eeki ng r eturn of the A W A G s har es thathad bee n for ci bl ys ol d t o the Li ndgens gr oup.

In 1 9 5 1 , h o w ev er, L ind g en s o rch estrated the s ale o f A W A G to a s u b sidiary of H ert i e W ar en- und K aufha us G m bH ( “H ert i e”) , and i n the pr oces s al l egedl ydefr auded the b roth ers. I n A u g u st of that y ea r, L ind g en s n eg o ti ated an ag ree m en t i n N ew Y o rk u n d e rw h i c h A W A G s h a r e h o l d e r s s o l d 5 0 . 7 % c o n tr o l o f A W A G t o H e r t i e . A f

e w d a ys l at er , L i ndgens negot i at ed a s ett l ementof the r es t i tut i on cl ai m w i th the br other s ’ att orney i n N ew Y ork. L i ndgens di d nott el l the br other s aboutthe pendi ng s al e, buti ns t ead i ndi cat ed thatA W A G w as i n fi nanci al s tr ai t s . T he br other s agr eed t o s ett l e foronl yfour per centof the cl ai m ’ s val ue. I n O ct ober , L i ndgens negot i at ed the form al s al e on A W A G ’ s behal f, exec ut i ng a s econd s al es agr eementthati ncorpor at ed the A ugus ts al es ag ree m en t byref

ere n ce . N eith er a g ree m en t w as p u b li clyrec o rde d at th at t im e. In N ovember , L i ndgens fi l ed the br other s ’ s ett l ementi n W es tB er l i n and pai d the s ett l ement fr om an ac countatH ert i e’ s bank.

In 1 9 6 0 A W A G tra n sf

e rre d a ll o f

its a ss e ts, liab ili ties , an d o p e ra tio n s to d e f e n d a n tW a r e n h a u s W e r th e i m Gmb H ( “ W W ” ) . AW AG d i s s o l v e d a n d He r t i e b e c a me 1 a W W s h a r e h o l d e r . I n 1 9 8 3 , W W tr a n s f e rr e d m o s to f

i t s a s s e t s t o H e r t i e , a n d t o d a y W W4

has no day - t o- dayoper at i ons and onl ytw o r eal es t at e hol di ngs . I n 1994, the company thatw oul d l at erbecome defe ndantK ar s t adt Q uel l e A G ( “K ar s t adt ”) acqui r ed 100 per cent of H ert i e’ s s t ock, and i n 1999 i tacqui r ed al l of H ert i e’ s as s et s and l i abi l i t i es , w her eupon H ert i e ce as ed t o exi s t . K ar s t adtthen tr ans ferr ed al l of H ert i e’ s bus i nes s oper at i ons and lia b iliti e s to a s u b s id ia ry. K a rs ta d t n o w o p e ra te s o n ly as a h o ld in g c o m p a n y .

Pl ai nt i ffs fi l ed thi s cas e i n the Southern D i s tr i ctof N ew Y ork i n M ar ch 2001, s eeki ng, i nt eral i a, damages r el at ed t o L i ngdens ’ al l eged f r aud. D efe ndant s fi l ed a m ot i on t o di s m i s s forl ack of per s onal j ur i s di ct i on, and the part i es conduct ed l i m i t ed di s covery . T he J udi ci al Panel on M ul t i di s tr i ctL i t i gat i on tr ans ferr ed the ca s e t o the D istri ct of

N ew Jerse yfo r pre tr ial p roc ee d ing s. (JA 4

– 5 . ) T h e F e d e ra l R e p u b lic o f G e rm a n ysu b m itt e d a lette r in su p p o rt o f d ism iss a l, w hi ch pl ai nt i ffs m oved t o s tr i ke. Pl ai nt i ffs al s o as ked the D i s tr i ctC our tt o s ugges tthat the M D L P an el rem an d the c ase to the S o u thern D istri ct of N ew Y o rk. T h e D istri ct C o u rt deni ed the mot i on t o s tr i ke and de ni ed w i thoutpr ej udi ce the mot i on fors ugges t i on of rem an d . (JA 6

– 7 . )

I n S e p t e mb e r2 0 0 3 , th e Di s tr i c tCo u r ti n f o r me d c o u n s e l th a th i s two in c o m in g la w c le rk s h a d f o rm e r a n d f

u tu re e m p lo ym e n t tie s to d e f e n d a n ts ’ t w o la w f

ir m s . P lai n ti ff s so o n fil ed a m o ti o n fo r th e jud g e to re cu se h im self. In N o v em b er 2 0 0 3 , af ter a h ea ri n g , the D istri ct C o u rtd en ied th e m o ti o n to rec u se b ec au se b o th law clerk s w ere w a lle d -o f

f f ro m th e c a s e . (J A 8

– 3 3 .)5 T he D i s tr i ctC our ts ubs equent l ydi s m i s s ed the ca s e forl ack of per s onal j ur i s di ct i on. ( J A 34–104. ) T he C our tdet erm i ned thatno gener al j ur i s di ct i on exi s t s over defe ndant s beca us e theydo notdo bus i nes s i n N ew Y ork, and thatno s peci fi c j ur i s di ct i on exi s t s underN ew Y ork’ s l ong- arm s t atut e, N . Y . C i v. Pr ac. L . & R § 302( a) ( 2) ( M cK i nney 1 9 9 0 ) , w h i c h a u th o r i z e s j u r i s d i c t i o n o v e rth o s e w h o c o m m i ta t o r ti n N e w Y o r k . F i n a l l y, th e C o u rt c o n c lu d e d th a t ev e n if § 3 0 2 (a )(2 ) re a c h e s d e f e n d a n ts, a ss e rtin g ju risd ictio n is no treas on able und er the D ue P rocess C l ause of the F ou rt eenth A m end m ent. (J A 8 5

– 1 0 3 .) II.

L o n g -a rm ju risd ictio n e x ists o v e r W W b u t n o t o v e r K a rsta d t. A. P erso n al j u ri sd ict ion ex ist s o v er a d ef en d an t i f th e state in w h ich th e c o u rt sit s au tho ri ze s jurisdicti o n , M il ler Y ac h t Sa les, Inc . v . S m ith , 3 8 4 F . 3 d 9 3 , 9 6 (3d C ir . 2 0 0 4 ) (c iti n g F e d . R . C iv . P . 4 (e )), a n d if th e D u e P ro c e ss C lau se o f th e F o u rte e n th A mend mentpe r mi t s the e xe r c i s e of j ur i s di c t i on , I nt ’ l Sho e Co. v. W a s hi ng t on , 32 6 U. S. 3 1 0 , 3 1 6 (1 9 4 5 ).

R egar di ng s t atut oryj ur i s di ct i on, pl ai nt i ffs chal l enge onl ythe D i s tr i ct C our t ’ s deci s i on thatj ur i s di ct i on does notexi s tunder§ 302( a) ( 2) , w hi ch ext ends per s onal ju risd ictio n o v e r a n yn o n -d o m icilia ryo f N e w Y o rk w h o “ c o m m its a to rtio u s a c t w ith inSubst ant i ve s t at e l aw i s t aken f r om the s t at e of the tr ans fer orcourt . N at i onw i de 2 M u t. I n s . C o . v . B u f

f e tta , 2 3 0 F .3 d 6 3 4 , 6 3 7 (3 d C ir . 2 0 0 0 ). 6 the s t at e . . . . ” Pl ai nt i ffs do notal l ege thatdefe ndant s comm i t t ed s uch a t or t . T hey 2 c laim th a t d e f

e n d a n ts a re c o rp o ra te s u c c e ss o rs o f H e rtie a n d A W A G , w h o p a rticip a ted in L in d g e n s ’ a lle g e d f

ra u d . T h e m e th o d b yw h ich c o rp o ra tio n s c o m b in e c a n re n d e r a “ su c c e ss o r in i nt er es t ” t o a pr i orcorpor at i on s ubj ectt o per s onal j ur i s di ct i on under§ 302 bas ed on the pr edec es s or ’ s act i ons . See C ol s on Ser vs . C orp. v. B ank of Bal t i m or e, 712 F. Supp. 28, 30 ( S. D . N . Y . 1989) . W e r efe rt o thi s conce ptas “s ucce s s orj ur i s di ct i on. ” A m er gerof corpor at i ons gener al l yi m pl i cat es s ucce s s orj ur i s di ct i on, w her eas a mer e ac qui s i t i on of as s et s does not . V i acom I nt ern. , I nc. v. M el vi n Si m on Pr oduct i ons , I nc. , 774 F. Supp. 8 5 8 , 8 6 4 (S .D .N .Y . 1 9 9 1 ). S im ila rl y , a d e f a c to m e rg e r t ri g g e rs s u c c e s s o r j u ri s d ic tio n . S e e J . L . B. E q u i t i e s , I n c . v . Oc we n F i n . Co rp . , 1 3 1 F . S u p p . 2 d 5 4 4 , 5 5 1 n . 2 ( S . D. N. Y. 2 0 0 1 ). In S ch en in v . M icro C o p p er C o rp., 2 7 2 F . S u p p . 5 2 3 (S . D . N . Y . 1 9 6 7 ), the C o u rt su g g e ste d th a t su c c e ss o r ju risd ictio n in h e re s n o t o n lyb ym e rg e r, b u t als o b y“ a sc h e m e to avoi d j ur i s di ct i on, ” and by“an a s s um pt i on of [the pr edec es s or ’ s ] l i abi l i t i es . ” I d. at526; s ee a l s o J eff

r eyv. R api d A m . C orp. , 529 N . W . 2d 644, 652 ( M i ch. 1995) ( “the ac t s of a pr edec es s orm aybe i m put ed t o the s ucce s s orforj ur i s di ct i onal purpos es [w hen] the s uc c e s s ore xp r e s s l ya s s ume[ s ] the pr e de c e s s or ’ s l i a bi l i t i e s . ” ) ; bu ts e e V i a c om, 77 4 F. Supp. at864 ( i m pl y i ng thatm er geri s the onl yci r cumst ance i m pl i cat i ng s ucce s s or7

j ur i s di ct i on) . T he N ew Y ork A ppel l at e D i vi s i on ci t ed Scheni n favor abl yi n A ppl i ed H y dr o- Pneum at i cs , I nc. v. B auerM anufa ctur i ng I nc. , 416 N . Y . S. 2d 817, 820 ( A pp. D i v. 1979) . See N at i onw i de, 230 F. 3d at637 ( i n pr edi ct i ng s t at e l aw , the C our tcan gi ve due r egar d t o l ow ers t at e courtdeci s i ons ) . A ppl i ed H y dr o- Pneum at i cs al s o concl uded that j ur i s di ct i on exi s t ed, des pi t e an a cqui s i t i on of as s et s , w her e a s ucce s s orcorpor at i on had n u n c p ro tu n c ra tif

ie d th e p re d e c e s s o r’ s N e w Y o rk c o n tr a c t a c tiv itie s . Id . T h e se c a se s te a c h th a t su c c e ss o r-ju risd ictio n in N e w Y o rk c a n b e p re se n t in the fol l ow i ng s i tuat i ons : ( 1) m er gerorde fa ct o m er ger ; ( 2) expr es s ori m pl i ed as s um pt i on of l i abi l i t i es , i ncl udi ng bya r at i fi cat i on of the pr edec es s or ’ s act i vi t i es ; or( 3) a c q u is itio n o f

a s s e ts o r r e o rg a n iz a tio n u n d e rt a k e n to f ra u d u le n tly a v o id ju ri s d ic tio n . N ot abl y , s ucce s s orl i abi l i tyi s i m put ed i n s i m i l arci r cumst ance s . Schum ache rv. R i char ds ShearC o. , 451 N . E . 2d 195, 198 ( N . Y . 1983) ( des cr i bi ng ci r cumst ance s of s ucce s s or liab ili ty ). S e e a lso C ityo f R ich m o n d v . M a d iso n M g m t. G ro u p , 9 1 8 F .2 d 4 3 8 , 4 5 4 (4 th C i r . 1990) ( s ucce s s orj ur i s di ct i on exi s t s i f s ucce s s orl i abi l i tyi s pr es ent ) ; butcf. L ongi nes - W i t tnauerW at ch C o. v. B arnes & R ei necke , I nc. , 15 N . Y . 2d 443, 460 ( 1965) (“ u ltim a te lia b ility” is s e p a ra te is s u e f ro m ju ri s d ic tio n ). Pl ai nt i ffs bearthe bur den t o s how a pr i m a fa ci e ca s e of pe r s onal j ur i s di ct i on overdefe ndant s . M i l l er , 384 F. 3d at97. N orm al l y , w her e no evi dent i aryhear i ng i s hel d, w e w oul d acc eptthe al l egat i ons i n the compl ai ntas true. I d. T he D i s tr i ctC our tdi d not conductan evi dent i aryhear i ng, buti tdi d al l ow j ur i s di ct i onal di s covery . A ccor di ngl y , theP lain tiff s a lleg e th a t d e f

e n d a n ts re c e n tlyc laim e d to b e leg a l su c c e ss o rs o f H e rtie 3 and A W A G , butthos e admi s s i ons do notal t erthe ac tual pr oces s es byw hi ch the c o m p a n ie s c o m b in e d . 8 part i es agr eed “ thatthe fa ctual m at er i al s now befor e the C our tal l ow the C our tt o deci de w hetherpl ai nt i ff ha s m ade a pr i m a fa ci e s how i ng of per s onal j ur i s di ct i on overeac h d e f e n d a n t bas ed upon com petent evi dence ,” a n d n o t m e re ly u p o n p la in tif f s ’ a lle g a tio n s . ( J A 54 ( emphasi s added) . ) See al s o I n r e M agnet i c A udi ot ape A nt i trus tL i t i g. , 334 F. 3d 204, 206 ( 2d C i r . 2003) ( perm i t t i ng r evi ew of fa ct s out s i de the pl eadi ngs aft er j ur i s di ct i onal di s coverybutabs entan evi dent i aryhear i ng) ; I n r e K or ean A i rL i nes D i sast er, 82 9 F . 2d 11 71 (D . C . C i r. 19 87 ) ( l aw of tr ansferor di stri ctm eri t s “cl ose c o n s id e ra tio n ” ).

T h e p a rties d o n o t d isp u te th e f a c ts re g a rd in g th e d e f

e n d a n ts’ c o rp o ra te reor gan i zat i on s, w hich ar e descri bed i n the declar at i on of D r. H arol d K ruez ( JA 1085–92) . A bs enta fa ctual di s put e, thi s C our texer ci s es pl enaryr evi ew overthe D i s tr i ct

3 C our t ’ s gr antof a 12( b) ( 2) m ot i on. I M O I ndus . , I nc. v. K i ekertA G , 155 F. 3d 254, 258 ( 3d C i r . 1998) ; I n r e Seventh J ud. D i s t . A s bes t os L i t i gat i on, 788 N . Y . S. 2d 579, 583–84 ( Sup. C t . 2005) ( not i ng thatdet erm i ni ng w hetherde fa ct o m er geroccurr ed bas ed on p a rticu lar f

a c ts is a n iss u e o f

law ). P lain tiff

s m u st s h o w ju risd ictio n w ith p a rticu lar ityto th e irc la im s . S u n w a rd E le c s ., In c . v . M c D o n a ld , 3 6 2 F .3 d 1 7 , 2 4 (2 d C ir . 2 0 0 4 ). B. T h e D istri ct C o u rtco rrectl yco n clud ed that K arstad t i s n o t H erti e’sT he D i s tr i ctC our tconcl uded thats ucce s s orj ur i s di ct i on cannotexi s tw i thout 4 c o n s e n tb yth e c o rp o r a t e s u c c e s s o r , r e l y i n g o n Ar mo u rHa n d c r a f t s , I n c . v . M i a mi D ecor at i ng and D es i gn C ent er , I nc. , 471 N . Y . S. 2d 607 ( A pp. D i v. 1984) . A r m our H andcr aft s hel d thatcons enti s s uffi ci entt o i m pl i cat e s ucce s s orj ur i s di ct i on, butnotthat c o n se n t is n e c e ss a ry . T h e m e rg e d c o rp o ra tio n o v e r w h o m ju risd ictio n w a s in iti a lly l acki ng i n thatcas e mayhave s i m pl yfai l ed t o m eetthe s t andar d of § 302( a) ( 4) ( i nvol vi ng c o n tr o l o v e r r e a l p ro p e rt yin N e w Y o rk ). 9 ju risd ictio n a l su c c e ss o r u n d e r § 3 0 2 (a )(2 ), b u t in c o rre c tlyc o n c lu d e d th e sa m e a b o u t W W . A c c o rd in g to d e f

e n d a n ts’ e v id e n c e a n d g e n e ra l m e rg e r c o n c e p ts, K a rsta d t m e rg e d w ith H ert i e. ( J A 1086–87) ; G r ant - H ow ar d A s s ocs . v. G en. H ous ew ar es C orp. , 454 N . Y . S. 2d 521, 523 ( Sup. C t . 1982) ( defi ni ng m er geras “abs orpt i on of one c orpor at i on byanother w hi ch r et ai ns i t s name and corpor at e i dent i tyw i th the adde d capi t al , fr anchi s es and p o w ers o f a m erg ed co rpo rati o n ”). I n ad d it ion , K arstad t exp resslyassu m ed H erti e’s l i abi l i t i es , butK ar s t adtpr om pt l ytr ans ferr ed H ert i es ’ oper at i ons and l i abi l i t i es t o a su b sid iar y . P lain tiff

s d o n o t alle g e th a t th e tra n sf e r “ w a s p a rt o f

a sc h e m e to a v o id juri sd ict ion , ” S ch en in, 27 2 F . S u p p . at 52 6 , n o r do theych all en g e the D istri ct C o u rt ’s con cl usi on that the acti vit i es of K ars t adt’ s subsi diar i es do n ot s ubj ecti tt o jur i sdi ct i on (J A 60–66) . T her efor e, K ar s t adtno l ongerpos s es s es the s peci fi c pr edi cat e forbei ng s ubj ect to § 3 0 2 (a )( 2 ) j u ri s d ic tio n f o r t h e c la im s in v o lv in g L in d g e n s ’ a lle g e d f ra u d . U n lik e K a rsta d t, W W is A W A G ’s ju risd ictio n a l su c c e ss o r w ith re g a rd to the cl ai m s i nvol vi ng L i ndgens ’ al l eged f r aud. W W acqui r ed A W A G ’ s as s et s and li ab il it ies i n 1 9 6 0 . W W lat er trans fe rred A W A G ’s de p artm en t st o res to H erti e, bu t th ere i s no evi dence thatW W al s o di s pos ed of A W A G ’ s l i abi l i t i es . D efe ndant s ar gue that 410

W W has no oper at i ons and fe w r emai ni ng as s et s , buttheydo nots how thatW W no lo n g e r p o s s e s s e s A W A G ’s lia b iliti e s . In a d d itio n , W W a p p a re n tly m e rg e d w ith A W A G . S e e G ra n t-H o w a rd A ss o c s., 4 5 4 N .Y .S .2 d a t 5 2 3 (d e f in in g m e rg e r); In re N e w Y o rk C ity A s bes t os L i t i g. , 789 N . Y . S. 2d 484, 486 ( A pp. D i v. 2005) ( defi ni ng de fa ct o m er gerby “cont i nui tyof ow ner s hi p, ” “di s s ol ut i on of the s el l i ng corpor at i on, ” “a s s um pt i on of the l i abi l i t i es , ” and “ cont i nui tyof gene r al bus i nes s oper at i on”) ; Fi t zger al d v. Fahnes t ock & C o . , 7 3 0 N . Y . S . 2 d 7 0 , 7 1

– 7 2 (A p p . D iv. 20 0 1 ) (st ati n g that, in a d e f ac to m erg er, “‘a s ucce s s orthateff

ect i vel yt akes overa companyi n i t s ent i r etys houl d carrythe p re d e c e ss o r’s liab ili ties a s a c o n c o m itan t to th e b e n e f its it d e riv e s f

ro m th e g o o d w ill p u rch ase d ’” (q u o ti n g G ran t- H o w ard A sso cs., 6 3 N . Y . 2 d at 29 6 )). C. T o obt ai n j ur i s di ct i on overW W , pl ai nt i ffs w er e al s o r equi r ed t o s how that A W A G , “i n per s on orthr ough an age nt. . . comm i t [ed] a t or t i ous actw i thi n the s t at e . . . . ” § 302( a) and ( a) ( 2) . T he D i s tr i ctC our tdi d notcl ear l yerri n fi ndi ng that A W A G w a s L in d g e n s ’ c o -c o n s p ir a to r i n d e f ra u d in g th e b ro th e rs in N e w Y o rk . N ev erthe less, as d iscu ssed b elow , the w ea k n ex u s co n n ec ti n g A W A G to N ew Y o rk u n d e rm in e s th e c o n s titu tio n a l p e rm is s ib ility o f e x e rc is in g ju ri s d ic tio n o v e r W W . III . In order t o asser tpersonal j uri sdi ct i on ov er a defend ant, the D ue P rocess C l aus e of the Four t eenth A m endmentr equi r es that( 1) the def endanthas “mi ni m um11

cont act s ” w i th the forum , and ( 2) the exe r ci s e of j ur i s di ct i on comport s w i th “tr adi t i onal not i ons of fa i rpl ayand s ubs t ant i al j us t i ce. ” Toy s “R ” U s , I nc. v. St ep Tw o, S. A . , 318 F. 3d 446, 451 ( 3d C i r . 2003) ( quot i ng Pi nkerv. R oche H ol di ngs L t d. , 292 F. 3d 361, 368 (3d C ir . 2 0 0 2 ), B u rge r K ing C o rp. v. R u d ze w icz, 47 1 U . S . 4 6 2 , 4 7 4 (19 8 5 ), an d Int’l S h o e , 3 2 6 U .S . at 3 1 6 ). A d e f e n d a n t h a s “ m in im u m c o n tac ts” if it “p u rp o se f

u llya v a ils i t s el f of the pr i vi l ege of conduct i ng act i vi t i es w i thi n the forum St at e, thus i nvoki ng the b en ef it s an d p rotec ti o n s o f it s law s. ” Id . (q u o tin g A s a h i M e ta l I n d u s . C o . v . S u p e ri o r C t., 4 8 0 U .S . 1 0 2 , 1 0 9 (1 9 8 7 )). Ju risd ictio n is “ f a ir” if th e d e f e n d a n t “‘ sh o u ld re a so n a b ly ant i ci pat e bei ng hal ed i nt o court ’ i n the forum . ” I d. ( quot i ng W or l d- W i de V ol ks w agen C orp. v. W oods on, 444 U . S. 286, 297 ( 1980) ) . R eas onabl enes s i nvol ves the fol l ow i ng f a c to rs: th e b u rd e n o n th e d e f e n d a n t, th e f

o ru m S tate ’s in ter e st in adj udi cat i ng the di s put e, the pl ai nt i ff’ s i nt er es ti n obt ai ni ng co n v en ient an d ef

fe cti v e re li ef

, the in terst ate jud ici al sy stem ’s i nt er es ti n obt ai ni ng the mosteff i ci entr es ol ut i on of c o n tro v e rsie s, a n d th e sh a re d in ter e st o f th e se v e ra l S tate s in furtheri ng fun dam ental subst anti ve social po l i ci es. Pennzoi l Pr ods . C o. v. C ol el l i & A s s ocs . , 149 F. 3d 197, 205–06 ( 3d C i r . 1998) ( quot i ng B ur gerK i ng, 471 U . S. at477) . A w eak mi ni m um cont act s s how i ng r equi r es gr eat er emphasi s on r eas onabl enes s . M etr o. L i fe I ns . C o. v. R obert s on- C eco Corp. , 84 F. 3d 560, 5 6 8 (2 d C ir . 1 9 9 6 ) ( c itin g o th e r c ir c u its ).

“[S] ever al court s have r ecogni zed thatthe j ur i s di ct i onal cont act s of a pr edec es s orcorpor at i on m aybe i m put ed t o i t s s ucce s s orcorpor at i on w i thoutoffe ndi ngSi m i l ar l yforK ar s t adt , pay i ng the s ett l ementoutof H ert i e’ s bank w as not 5 di r ect ed atN ew Y ork. 12 due pr oces s . ” Pur due R es ear ch Found. v. Sanofi - Synthel abo, S. A . , 338 F. 3d 773, 783 ( 7th C i r . 2003) . N everthel es s , due pr oces s m us tbe as s es s ed foreac h defe ndant i ndi vi dual l y . C art er etSav. B ank, FA v. Shusha n, 954 F. 2d 141, 145 n. 6 ( 3d C i r . 1992) ( ci t i ng C al derv. J ones , 465 U . S. 783, 790 ( 1984) ) . M er e t or tl i abi l i ty , even i f s uffi ci ent t o es t abl i s h s t atut oryj ur i s di ct i on, m i ghtnots at i s fydue pr oces s . See C artyv. B eec h A i r cr aftC orp. , 679 F. 2d 1051, 1061 ( 3d C i r . 1982) ( ci t i ng W i t tv. Scul l y , 539 F. 2d 950, 9 5 1 (3d C ir . 1 9 7 6 )).

T he D i s tr i ctC our tcorr ect l ydet erm i ned thatthe exe r ci s e of j ur i s di ct i on over W W d o e s n o t co m p o rt w ith d u e p ro c e ss . W W p o ss e ss e s c o n tac ts to N e w Y o rk o n ly thr ough A W A G , w hi ch thr ough a pow erof att orneyexec ut ed the O ct ober1951 s al e, w hi ch r efe r ence s the A ugus t1951 s al e, w hi ch thr ough L i ndgens i s l i nked t o the al l eged fr aud of the br other s . T he pow erof att orneydoes notdi r ectthatL i ndgens conductany act i vi t i es i n N ew Y ork, nordi d the br other s l i ve i n N ew Y ork. T hes e mul t i pl e degr ees of s epar at i on fai l t o demonstr at e thatA W A G and W W “purpos eful l yavai l [ed] ” themsel ves of N ew Y ork l aw s uch thattheycoul d expec tt o be hal ed i nt o courtther e. Pl ai nt i ffs ar gue th a t W W re c e n tlyso u g h t to b e n e f it fro m th e sa le, b u t th o se a c tio n s d o n o t d ire c tly capi t al i ze on the al l eged f r aud orr epr es enta cont actw i th N ew Y ork. 5 N orcan pl ai nt i ffs s at i s fythe gr eat eremphasi s thatthe C our tpl ace s on13

r eas onabl enes s due t o the w eak mi ni m um cont act s s how i ng. For ci ng a w hol l yfor ei gn companyw i th no day - t o- dayoper at i ons t o l i t i gat e i n N ew Y ork i s no s m al l bur den. “The uni que bur dens pl ace d upon one w ho m us tdefe nd ones el f i n a for ei gn l egal s y s t em sh o u ld h av e sig n ifi ca n t w eigh t i n asse ssing the re aso n ab lene ss o f stretch ing the lo n g arm o f p e rso n a l ju risd ictio n o v e r n a tio n a l b o rd e rs.” A sa h i, 48 0 U .S . at 1 1 4 . P lain tiff s p o in t to W W ’s corporat e soph i st i cat i on , bu tthey“fai l t o all ege [ that W W ] transact s any bu si ness in N ew Y o rk.” (JA 6 6 . )

N ew Y o rk h as m inim al i n terest i n this case b ec au se L ind g en s’ N ew Y o rk act i vi t i es i n further ance of the al l eged f r aud ar e l i t t l e more than an “ i s ol at ed occ urr ence w her e the def

endanthad no conne ct i on w i th the forum s t at e . . . . ” M es al i c v. Fi ber fl oat C o rp ., 8 9 7 F .2 d 6 9 6 , 7 0 2 (3 d C ir. 1 9 9 0 ). T h e su b jec t o f th e to rt, i ts v ictim s a n d in ju ry , all exi s tout s i de N ew Y ork. R el y i ng on B ank B rus s el s L amber tv. Fi ddl erG onzal ez & R o d rig u e z , 1 7 1 F .3 d 7 7 9 , 7 9 1 (2 d C ir. 1 9 9 9 ), p lain tiff s a rg u e th a t th e in

ju ryo c c u rre d in N ew Y or k, butthatcas e addr es s es “the or i gi nal eventw hi ch ca us ed the i nj ury ” under § 302( a) ( 3) , and not“the fi nal economi c i nj uryand the fe l tcons equenc es of the t or t . ” P lain tiff s’ in ter e st in o b tain in g re lief in N e w Y o rk re lies u p o n c h o ice -o f -la w iss u e s th a t, as the D i s tr i ctC our tnot ed, “ar e notperm i s s i bl e cons i der at i ons i n the cont extof a j ur i s di ct i onal i nqui ry . ” M etr o. L i fe I ns . , 84 F. 3d at574 ( ci t i ng K eet on v. H us t l er M a g a z in e , In c ., 4 6 5 U .S . 7 7 0 , 7 7 8 (1 9 8 4 )) .

O th e r c o n s id e ra tio n s a ls o c o u n s e l a g a in s t a s s e rt in g ju ri s d ic tio n o v e r W W .14

Pl ai nt i ffs s eek a dj udi cat i on of r eal pr opertyi nt er es t s i n G erm any , as w el l as r i ght s ati s s ue i n form erand pendi ng pr ocee di ngs i n G erm an tr i bunal s . ( J A 96–97, 101–02. ) “G r eat car e and r es erve s houl d be exe r ci s ed w hen ext endi ng ournot i ons of per s onal j ur i s di ct i on i nto the int ernat i on al fi el d. ” A sahi , 48 0 U . S . at11 5 (quo t i ng U nit ed S t at es v. F i rs t N ati o n al C ityB an k , 3 7 9 U . S . 3 7 8 , 4 0 4 (19 6 5 ) (H arlan , J. , d issen ti n g )).

F or al l of these r easons, w e affirm the D i stri ctC ou rt ’s grantof d efen dan t s’ m ot i on t o di s m i s s forl ack of per s onal j ur i s di ct i on.

I V. Pl ai nt i ffs r ai s e s ever al otherchal l enges . Pl ai nt i ffs cannotchal l enge the M D L P a n e l’s tra n sf

e r o rd e r in th is a p p e a l, se e 2 8 U .S .C . § 1 4 0 7 (e ), an d th e ir o b jec tio n to th e D is tr ic t C o u rt ’s re f

u s a l to s u g g e s t tr a n s f

e r i s m o o t in lig h t o f

th e la c k o f

ju ri s d ic tio n . T h e D istric t C o u rt d id n o t ab u se its d isc re tio n in re f u sin g to re c u se itse lf based o n it s conf

l i ct ed b ut w al l ed-off law cl erks. S el kri dg e v. U nit ed o f O m aha L i fe Ins. C o. , 360 F. 3d 155, 166 ( 3d C i r . 2004) ( deni al of m ot i on t o r ecus e i s r evi ew ed forabus e of di s cr et i on) . T he i s ol at i on of both l aw cl erks fr om the ca s e, the abs ence of pr i orw ork on N az i era ca ses b yM s. P ark , an d the o p en an d ca u ti o u s w ayin w h ich th e D istri ct C o u rt d e a lt w ith th e iss u e , all su f f icie n tlysu p p o rt th e c o n c lu sio n th a t a r e a so n a b le p e rso n w o u ld n o t q u e stio n its im p a rtiality . S e e H a m id v . P ric e W a ter h o u se , 5 1 F .3 d 1 4 1 1 , 1 4 1 7 (9 th C ir. 1 9 9 5 ) (f

in d in g n o a b u se o f

d isc re tio n w h e re o n e law c ler k w h o late r w o rk e d a t a d ef en d an t’ s firm d id n o t w o rk o n the c ase d u ri n g the c lerksh ip, and the o ther law clerk15

w ho w or ked ata def

endant ’ s fi r m befor e the cl erks hi p and w orked on the ca s e dur i ng the cl erks hi p di d notr eturn t o w ork atthatfi r m ) . I s ol at i on of l aw cl erks us ual l yamel i or at es the a p p ea ran ce o f im p rop ri ety . F ir st I n terst ate B an k o f A ri zo n a, N . A . v . M u rph y , W eir & B ut l er , 210 F. 3d 983, 989 ( 9th C i r . 2000) ; s ee a l s o B yrne v. N ezha t , 261 F. 3d 1075, 1101–02 ( 11th C i r . 2001) ( fi ndi ng no abus e of di s cr et i on w her e the j udge w al l ed off a l aw cl erk w ho had w orked on the ca s e dur i ng pr i orempl oym ent ) ; H untv. A m er i can Bank & T rus tC o. , 783 F. 2d 1011, 1016 ( 11th C i r . 1986) ( “I f a c l erk has a pos s i bl e conf l i ctof interest, itis th e c lerk, no t th e jud g e, w h o m u st be d isqu ali fied . ”).

W e r evi ew forabus e of di s cr et i on the D i s tr i ctC our t ’ s r efus al t o s tr i ke a le tte r f ro m W o lf

g a n g Is c h in g e r, t h e A m b a s s a d o r o f th e F e d e ra l R e p u b lic o f G e rm a n y . L l oy d v. H ovens a, L L C , 369 F. 3d 263, 274 ( 3d C i r . 2004) . G erm anys ubm i t t ed the l ett er i n s uppor tof def

endant s ’ m ot i on t o di s m i s s , ar gui ng thatl i t i gat i on r el at i ng t o s ett l ed r es t i tut i on cl ai m s underm i nes negot i at i ons betw een G erm anyand the C onfer ence on J ew i s h M at er i al C l ai m s agai ns tG erm any , I nc. ( J A 761. 1–61. 2. ) G erm anydi d not in te rv e n e u n d e r F e d . R . C iv . P . 2 4 , n o r d id it f o rm a lly o b ta in s ta tu s a s a n a m ic u s c u ri a e . Al th o u g h a p p e l l a t e ru l e s r e g u l a t e th e s u b mi s s i o n o f a mi c u s b r i e f

s o n a p p e a l , s e e F e d . R. A p p . P . 2 9 , a d istric t co u rt’s d e c isio n to a c c e p t o r re jec t an a m icu s f

ili n g is e n tirelyw ith in the c o u rt ’s discre ti o n . U n it ed S tat es v . G o tt i, 7 5 5 F . S u p p . 1 1 5 7 , 1 1 5 8 (E . D . N . Y . 1 9 9 1 ); U ni t ed St at es v. A l kaabi , 223 F. Supp. 2d 583, 592 ( D . N . J . 2002) . O n appea l , ami cus b rie f s a re p e rm itt e d w h e n a m ici d isc lo se “ a su f f icie n t ‘in ter e st’ in th e c a se a n d [ ] th e ir16

br i ef i s ‘ des i r abl e’ and di s cus s es m att er s thatar e ‘ r el evantt o the di s pos i t i on of the cas e . . . . ’ ” N eonat ol ogyA s s oci at es , P. A . v. C . I . R . , 293 F. 3d 128, 129 ( 3d C i r . 2002) (qu o ti n g R u le 29 (b)).

B eca us e the D i s tr i ctC our tcoul d have gr ant ed G erm anyami cus cur i ae st atus, den y i ng plai nti ffs’ m oti on t o stri ke w as w i thin the C ou rt ’s dis cret i on . P l ai nti ffs’ onl yobj ect i on i s thatthe D i s tr i ctC our tdi d notr equi r e G erm anyt o s ubm i ta s t at ementof f in a n c ia l in te re s t, b u t p la in tif f s c ite n o a u th o ri ty th a t n e c e s s ita te s s u c h a f ilin g . V. F o r th e re a so n s g iv e n a b o v e , w e a f f irm th e d e c isio n s o f

th e D istric t C o u rt.