Poole v. Transcontinental Fund Administration, Ltd. (Lawyers Weekly No. 002-060-15, 19 pp.) (Bruce Howe Hendricks, J.) 6:12-cv-02943; D.S.C.
Holding: Because the Cayman Islands defendant-administrator was involved in drafting the private offering circular – which included provisions plaintiff alleges have been breached – and because defendant knew or should have known the circular was being used to market investments to South Carolinians, this court has personal jurisdiction over defendant.
Defendant’s motions to dismiss are denied.
Defendant engaged in a specific business enterprise in the State of South Carolina from which the claims in this action eventually arose. Plaintiff was not simply and incidentally swept up on a broad, indiscriminate net of defendant’s international commerce. The jurisdiction is specific.
Contrary to its claim that its only conceived role was as a passive administrator, defendant did much more than just assist in post-sales administrative matters. It was involved in developing the representations that would be necessary to sell the securities to purchasers, like plaintiff, in South Carolina. Whether those specific representations were marketing or technical in nature, as defendant would quibble, seems not very relevant.
Defendant affirmatively engaged and assisted a South Carolina business who likely would generate South Carolina clientele, like plaintiff. This is purposeful availment and constitutionally reasonable to defend here.
Defendant expressly directed its conduct toward South Carolina. Whether or not it chose to be somehow willfully ignorant of the precise geographic territory in which it was operating, the court cannot say.
Even if defendant’s involvement were routine, this does not mean it was not directed at South Carolina clients and business. It is the purposefulness of the availment rather than its complexity that matters.
The subscription agreement includes a forum selection clause saying actions related to the subscription agreement are to be brought exclusively within the Cayman Islands.
The parties agree that plaintiff’s claims may be more substantively limited and subject to some jeopardy for certain defenses and periods of limitations if he were forced to refile this action in the Caymans. Defendant contends that this is not fundamental unfairness. Plaintiff may have delayed some in prosecuting his rights and, also, has parallel actions in state court to vindicate them.
Nevertheless, the court is concerned by the additional procedural delay and prejudice, this many years in federal court without resolution. Having found jurisdiction, there seems a grave inconvenience and unfairness that plaintiff would have to now, after almost three years, gather up his actions, so to speak, and start anew. It will continue here.