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Leasco Data Processing Equip. Corp. v. Maxwell

United States Court of Appeals for the Second Circuit

November 11, 1971, Argued; September 26, 1972, Argued ; October 30, 1972, Decided

Nos. 278, 138-142, Dockets Nos. 71-1563, 72-1638-72-1640, 72-1611, 72-1654

Opinion

 [*1330]  FRIENDLY, Chief Judge:

This case, in which the plaintiffs (hereinafter collectively referred to as Leasco) seek large damages allegedly resulting from the purchase of shares of a British company on the London Stock Exchange, first came to our attention in October, 1971, on Leasco's appeal from a judgment entered by Judge Lasker in the District Court for the Southern District of New York, 319 F. Supp. 1256, dismissing the complaint as against defendant Isidore Kerman, a London solicitor, for lack of jurisdiction over the person. Consideration of the questions presented by that appeal led us to wonder whether, because of the foreign elements in the transaction in suit, the district court had jurisdiction over the subject matter. As that issue had not been briefed or argued, we gave the parties an opportunity to submit further briefs, and, since the issue was of obvious interest to other defendants, also invited them to furnish briefs. Plaintiffs' counsel advised that this question as well [**2]  as claims of lack of personal jurisdiction as to other defendants were sub judice before Judge Ryan in the Southern District and suggested that the best course might be to withhold decision on Leasco's appeal from the judgment dismissing its complaint against Kerman until the entire matter could come before us. Following that suggestion, we awaited Judge Ryan's decision. He denied all the motions but certified the issues of in personam and subject matter jurisdiction pursuant to 28 U.S.C. § 1292(b). We granted leave to appeal.

The story of the circumstances underlying this action, a complicated one at best, is still harder to tell because there has thus far been no trial and the facts have not been determined. Yet the issue of subject matter jurisdiction and even, in some instances, that of personal jurisdiction depend on what the facts were. Conceding that, ] on the issue of subject matter jurisdiction, Leasco at this stage would be entitled to every favorable inference, Steele v. Bulova Watch Co., 344 U.S. 280, 284, 73 S. Ct. 252, 97 L. Ed. 319 (1952), [**3]  defendant Maxwell suggests that we are likely to get somewhat closer to the truth if we disregard Leasco's affidavits subsequent to the motion to dismiss for lack of subject matter jurisdiction and look to its answers to defendants' interrogatories, which were made before that issue was raised. In the main we shall follow that course, without thereby implying that broader assertions in Leasco's later affidavits would have been disregarded if they were necessary to our decision. We add that if a trial should disclose that the allegedly fraudulent acts of any of the defendants within the United States were non-existent or so minimal as not to be material, the principles announced in this opinion should be applied to the proven facts; the issue of subject matter jurisdiction persists.

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468 F.2d 1326 *; 1972 U.S. App. LEXIS 6956 **; Fed. Sec. L. Rep. (CCH) P93,657

LEASCO DATA PROCESSING EQUIPMENT CORPORATION, Leasco World Trade Company (U.K.) Ltd., Plaintiffs-Appellees, v. Robert MAXWELL et al., Defendants-Appellants. LEASCO DATA PROCESSING EQUIPMENT CORPORATION, Leasco World Trade Company (U.K.) Limited, Plaintiffs-Appellants, v. Isidore KERMAN, Defendant-Appellee

CORE TERMS

shares, stock, personal jurisdiction, purchases, misrepresentations, subject matter jurisdiction, securities exchange, subsidiary, fraudulent, territory, defendants', meetings, acquire, plaintiffs', district court, telephone, mailed, rules and regulations, foreign relations, wholly-owned, misleading, principles, answered, partner, Banks, forum non conveniens, motion to dismiss, interrogatories, transactions, partnership

Civil Procedure, Subject Matter Jurisdiction, Jurisdiction Over Actions, General Overview, Dismissal, Involuntary Dismissals, Diversity Jurisdiction, Citizenship, Business Entities, Securities Law, Postoffering & Secondary Distributions, Federal Jurisdiction, Parties, Joinder of Parties, Criminal Law & Procedure, Fraud, Securities Fraud, Elements, Civil Liability, Fraudulent Interstate Transactions, Scope of Provisions, Covered Transactions, Foreign Transactions, Blue Sky Laws, Offers & Sales, Civil Liability Considerations, Service of Process, Methods of Service, Pleadings, Jurisdiction, Jurisdiction & Venue, Jurisdiction, In Rem & Personal Jurisdiction, In Personam Actions, Torts, Procedural Matters, Commencement & Prosecution, In Personam Jurisdiction, Concerted Action, Civil Conspiracy