United States District Court, N.D. California
For AM Trust, Plaintiff: Thomas Dewey Easton, Law office of Thomas Easton, Springfield, OR.
For UBS AG, Defendant: Dean Joel Kitchens, LEAD ATTORNEY, Gibson Dunn Crutcher LLP, Los Angeles, CA; Lauren Allyn Eber, Gibson, Dunn Crutcher LLP, Los Angeles, CA.
ORDER GRANTING MOTION TO DISMISS
PHYLLIS J. HAMILTON, United States District Judge.
Defendant's motion for an order dismissing the above-entitled action for lack of personal jurisdiction came on for hearing before this court on January 21, 2015. Plaintiff appeared by its counsel Thomas Easton, and defendant appeared by its counsel Lauren Eber. Having read the parties' papers and carefully considered their arguments and the relevant legal authority, the court hereby GRANTS the motion as follows and for the reasons stated at the hearing.
Plaintiff AM Trust, the sole named plaintiff in this proposed class action, alleges that it is a Bahamian trust created by or for the heirs of Adam Malik (" Malik" ), an Indonesian politician who served as Vice President of Indonesia under Suharto, and who was also the 26th President of the U.N. General Assembly. Malik died in September 1984. AM Trust's " settlor, trustees and beneficiaries" are allegedly the " heirs, assignees, creditors, and executors of the Estate of Adam Malik," none of whom are identified. See Cplt ¶ ¶ 17-18.
Defendant UBS AG has a 152-year history as a Swiss financial institution. See Declaration of Anne Wildhaber ¶ 3. The present-day UBS AG was formed in 1998, when Union Bank of Switzerland and Swiss Bank Corporation (" SBC" ) merged to form the new company. Id. Today, UBS AG is Switzerland's largest bank. Id. UBS AG is incorporated, domiciled, and has its principal place of business and global headquarters in Switzerland. Id. It operates under the Swiss Code of Obligations and Swiss Federal Banking Act as an " Aktiengesellschaft" -- or an " AG" -- a corporation that issues shares of common stock to investors. Id.
UBS AG and its subsidiaries have offices in more than 50 countries, including the United States. Id. ¶ 4. UBS AG maintains two branches in California -- one in Los Angeles, and one in San Francisco - as well as branches in Connecticut, Florida, Illinois, and New York. Id. UBS AG also has several wholly owned direct and indirect subsidiaries that operate in and/or are incorporated in the United States. Id.
According to the complaint, Malik " obtained, came in possession or was assigned several bank and safekeeping accounts" with UBS AG's predecessors. Cplt ¶ 26. The accounts were allegedly " for [Malik's] personal use" and " contained well over five million dollars in currency and gold bullion." Id. Other accounts were allegedly " assigned to Adam Malik by Jusuf Muda Dalam, the former Director of the Indonesian Central Bank," under undisclosed circumstances. Cplt ¶ 27. AM Trust asserts that " the accounts and their contents are believed to be in compliance with Indonesian law of that time and were not the proceeds of unlawful activity." Cplt ¶ 28.
AM Trust alleges that " [i]n 1985 representatives of the Estate of Adam Malik made a small, partial withdrawal" from " one or two" of the UBS accounts in Zurich, in the amount of $2.9 million Swiss Francs, while the Estate was being settled. Cplt ¶ 29. AM Trust also alleges that since 1985, " the Estate of Adam Malik has made continuous efforts to trace the ultimate disposition of other SBC or Union Bank of Switzerland accounts in Switzerland and Singapore" as well as to " access known accounts by hiring attorneys and investigators." Cplt ¶ 31. This search has allegedly been complicated " by the corruption
endemic during the Suharto regime in Indonesia." Cplt ¶ 31.
AM Trust asserts that in 1993, the Estate of Adam Malik entered into extensive correspondence with UBS AG's predecessor SBC and its lawyers " regarding SBC accounts at the Basel, Breganzona, and Biningen branches that were tied to a Union Bank of Switzerland account in Zurich that was controlled by Adam Malik." Cplt ¶ 32. According to the complaint, SBC's Legal Department " eventually admitted" that while Malik had dealt directly with Ernest Siedel, Principal Director of Swiss Banking Corporation in Basel, no further record of " the accounts" could be located because 10 years had elapsed since the Basel account or accounts " were presumably closed." Id.
AM Trust asserts, however, that SBC " conducted only a partial search confined to its Basel branch even though the Estate had also identified Adam Malik accounts at Zurich, Breganzona, and Binningen connected to SBC." Id. AM Trust claims that " the Estate relying on SBC's false assurance did not realize at the time that SBC itself had converted the proceeds of the accounts and taht the records still existed and that the alleged search had not been conducted in good faith." Id.
AM Trust alleges that in 1997, a night bank guard at Union Bank of Switzerland, discovered that bank officials were destroying documents about dormant assets, believed to be the balances of deceased Jewish clients whose heirs' whereabouts were unknown, as well as books from the German Reichsbank, which listed stock accounts for companies in business during the Holocaust, and real-estate records for Berlin property that had been seized by the Nazis, placed in Swiss accounts, and then claimed to be owned by Union Bank of Switzerland. Cplt ¶ 33. The guard's whistleblowing allegedly led to the filing of class actions in federal court in New York, " a $1.25 [sic] settlement," several official reports, the release of records, and " the necessity for the promulgation of the 62 year statute of limitations law on dormant accounts in Switzerland." Cplt ¶ 33.
AM Trust alleges that in 2006, " with newly discovered documentation in hand" (not specified), " representatives of the Estate" traveled to Zurich to meet with representatives of UBS AG. A " quantity of information" was allegedly " handed over to UBS officers including information on the " merged Malik accounts." Cplt ¶ 35. However, in November 2006, UBS AG advised that there was no UBS AG account under the name Adam Malik, although Union Bank of Switzerland had had an " account relationship that was closed in 1985." According to AM Trust, UBS AG " falsely stated that no records existed because 10 years had elapsed since the date of closure." Id.
AM Trust alleges that in 2007, the Estate made further inquiries about the accounts in Singapore and Hong Kong, but " did not receive a definitive answer from UBS AG," and that between 2007 and 2013, the Estate made additional attempts " through intermediaries and representatives," with no result. Cplt ¶ ¶ 36-37. In July 2013, the Swiss Banking Ombudsman Central Claims Office undertook a search of its centralized database, and in November 2013, the Office reported that no assets connected with Adam Malik had been reported to it as dormant, an opinion it reaffirmed in March 2014. Cplt ¶ ¶ 41-45.
AM Trust filed the present action on September 12, 2014, as a purported class action (on behalf of a " worldwide class" ), and alleging diversity jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d).
AM Trust asserts seven causes of action -- (1) quasi-contract (unjust enrichment); (2) accounting; (3) restitution; (4) breach of fiduciary duty; (5) conversion; (6) constructive trust; and (7) trespass to chattel.
The complaint defines the proposed class as follows:
Secret Bank Account Holders at UBS AG And its predecessors Swiss Banking Corporation (SBC) and Union Bank Switzerland who held an interest in secret bank accounts during the past 62 years (the current Swiss Statute of Limitations for dormant accounts) which were deliberately closed and converted by defendants without consent of the account holders and records destroyed, concealed, or withheld under the so called ten year rule when subsequent inquiries were initiated. The class excludes : certain beneficiaries of the Swiss Bank Holocaust settlements if their membership in the class is based solely on accounts for which they have already been compensated, all account holders who have previously relinquished or settled their claims, the Judge or Magistrate Judge to who [sic] this case is assigned and their families, all class members whose claim is solely based on accounts that have been reported to the Swiss Banking Ombudsman Dormant Account Database and who therefore have a remedy available and all class members who timely exclude themselves.
Cplt ¶ 47.
AM Trust claims it " has exhausted the limited remedy offered by the Swiss Banking Ombudsman Central Claims Office and UBS AG, and has reason to believe that because of the nature of this claim it cannot receive a fair trial in Switzerland and that [its] claim would be rejected out of hand without remedy." Cplt ¶ 12. AM Trust also asserts that " revelations about [Malik's] financial affairs and historical legacy would cause political repercussions in Indonesia thus rendering a fair trial impossible," and would " revive numerous false ...