Court Opinion

ID: 3179514
Source: CourtListenerOpinion
Date Created: 2016-02-23 16:06:44.245132+00
Date Added: 2024-06-11T14:19:32.452546
License: Public Domain

15-736-cv
Simmtech Co., Ltd. v. Citibank N.A. et al.

                                UNITED STATES COURT OF APPEALS
                                    FOR THE SECOND CIRCUIT

                                             SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

        At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
23rd day of February, two thousand sixteen.

Present:          ROSEMARY S. POOLER,
                  PETER W. HALL,
                  SUSAN L. CARNEY,
                             Circuit Judges.

_____________________________________________________

SIMMTECH CO., LTD.,

                                    Plaintiff-Appellant,

                           v.                                                  15-736-cv

CITIBANK, N.A., CITIGROUP INC., CITIBANK OVERSEAS
INVESTMENT CORPORATION, CITICORP HOLDINGS INC.,
CITIGROUP GLOBAL MARKETS INC.,

                        Defendants-Appellees.
_____________________________________________________

Appearing for Appellant:            Alan L. Poliner, Kim & Bae, P.C., Fort Lee, NJ.

Appearing for Appellee:             Daniel M. Perry, Milbank Tweed Hadley & McCoy LLP (Scott A.
                                    Edelman, Jed M. Schwartz, on the brief), New York, NY.

       Appeal from the United States District Court for the Southern District of New York
(Forrest, J.).
     ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of said District Court be and it hereby is VACATED and
REMANDED.

        Simmtech Co., Ltd. appeals from the February 17, 2015 judgment of the United States
District Court for the Southern District of New York (Forrest, J.) dismissing its complaint
against Citibank, N.A., Citigroup Inc., Citibank Overseas Investment Corp., Citibank Holdings
Inc., and Citigroup Global Markets Inc. (together, “Citibank”) on the ground of forum non
conveniens. We assume the parties’ familiarity with the underlying facts, procedural history, and
specification of issues for review.

        Simmtech is a South Korean corporation that sells circuit boards for semiconductors
worldwide. Between 2006 and 2008 it purchased certain derivatives from Citibank, including
“knock-in” and “knock-out options” (“KIKOs”), dual currency deposits, and currency coupon
swaps. Simmtech bought the securities at issue from Citibank Korea (“CKI”), and alleges that it
lost $73 million when the contracts expired between 2006 and 2008. CKI is a Korean bank,
organized under Korean law. All of the negotiations for the contracts took place in Korea and
were conducted in Korean between representatives of Simmtech and representatives of CKI.
Simmtech alleges that Citibank, through CKI, marketed the derivatives to Simmtech and other
clients as safe and appropriate investments, concealing the fact that the investments were actually
risky. Unsuccessful in its efforts to recoup its losses from CKI in the South Korean courts,
Simmtech filed the instant lawsuit in New York state court against Citibank, which removed it to
federal court. The district court granted Citibank’s motion to dismiss on the ground of forum
non conveniens.

        The “decision to dismiss a case on forum non conveniens grounds lies wholly within the
broad discretion of the district court and may be overturned only when we believe that discretion
has been clearly abused.” Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001)
(internal quotation marks and emphasis omitted). “Discretion is abused in the context of forum
non conveniens when a decision (1) rests either on an error of law or on a clearly erroneous
finding of fact, or (2) cannot be located within the range of permissible decisions, or (3) fails to
consider all the relevant factors or unreasonably balances those factors.” Pollux Holding Ltd. v.
Chase Manhattan Bank, 329 F.3d 64, 70 (2d Cir. 2003) (internal citation omitted). The degree
of deference owed to plaintiffs’ choice of forum is measured on a “sliding scale,” Iragorri, 274
F.3d at 71. Thus:

               the more it appears that the plaintiff’s choice of a U.S. forum was
               motivated by forum-shopping reasons—such as . . . the
               inconvenience and expense to the respondent resulting from
               litigation in that forum—the less deference the plaintiff’s choice
               commands, and, consequently, the easier it becomes for the
               defendant to succeed on a forum non conveniens motion by
               showing that convenience would better be served by litigating in
               another country's courts.

                                                 2
Id. at 72. Conversely, “the greater the plaintiff’s or the lawsuit's bona fide connection to the
United States and to the forum of choice and the more it appears that considerations of
convenience favor the conduct of the lawsuit in the United States, the more difficult it will be for
the defendant to gain dismissal for forum non conveniens.” Id. (footnote omitted).

         We find the district court’s grant of Citibank’s motion fell outside the range of
permissible decisions. Iragorri warns that district courts must “arm themselves with an
appropriate degree of skepticism in assessing whether the defendant has demonstrated genuine
inconvenience and a clear preferability of the foreign forum.” Id. at 75. Here, the district court
failed to appreciate that the complaint is grounded in the theory of agency. See, e.g., Suez Equity
Inv’rs, L.P. v. Toronto-Dominion Bank, 250 F.3d 87, 101 (2d Cir. 2011) (“A corporation can
only act through its employees and agents, and an allegation that a particular agent may have
doctored or conveyed the [forged] report will not immunize the principals from [primary]
liability for a knowing deception.” (citation omitted)). Viewed through the lens of an agency
theory of fraud, it is readily apparent that there are a multitude of contacts with New York that
indicate a strong likelihood that witnesses and evidence are most conveniently produced in
plaintiff’s chosen forum. Simmtech alleges that “many if not all of CKI’s advertising and
marketing materials prominently bore the label ‘Citigroup,’” App’x at 572, including reports
provided by CKI to Simmtech related to future movements of the Korean Won relative to the
U.S. dollar. Simmtech also alleges that all of the KIKO purchase confirmations indicated they
were generated by Citigroup or its New York subsidiaries. The complaint further alleges that the
disclosure report corresponding to an initial underlying KIKO contract was explicitly attributed
to Citigroup and “identified (in English) a variety of Citigroup subsidiaries [in other countries] to
which the report was being distributed.” App’x at 611-12. Simmtech further alleges that
“[v]irtually all of the relevant email communications between CKI and Simmtech were sent from
a ‘citigroup.com’ or ‘citi.com’ domain.” App’x at 573. We find the pleadings sufficiently allege
conduct in New York such that the private and public factors favor litigation here. See, e.g.,
Dandong v. Pinnacle Performance Ltd., No. 10 Civ 8086(LBS), 2011 WL 5170293, *5-7
(S.D.N.Y. Oct. 23, 2011), affirmed in part, and remanded on other grounds, 474 Fed. App’x 910
(2d Cir. 2012).

       Accordingly, the order of the district court hereby is VACATED, and this matter is
REMANDED for further proceedings, including, but not necessarily limited to, consideration of
such other additional bases for dismissal as defendants have raised or may raise going forward.

                                                      FOR THE COURT:
                                                      Catherine O’Hagan Wolfe, Clerk

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