Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
BRYAN A. MERRYMAN (SBN 134357) [email protected] WHITE & CASE LLP 555 South Flower Street, Suite 2700 Los Angeles, CA 90071-2433 Telephone: (213) 620-7700 Facsimile: (213) 452-2329 CHRISTOPHER M. CURRAN (pro hac vice) [email protected] OWEN C. PELL (pro hac vice) [email protected] JAIME M. CROWE (pro hac vice) [email protected] REUBEN J. SEQUEIRA (pro hac vice pending) [email protected] Attorneys for Defendant Toshiba Corporation
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
MARK STOYAS, NEW ENGLAND TEAMSTERS & TRUCKING INDUSTRY PENSION FUND, and AUTOMOTIVE INDUSTRIES PENSION TRUST FUND, individually and on behalf of all others similarly situated,
Plaintiffs,
v. TOSHIBA CORPORATION, a Japanese Corporation,
Defendant.
Case No. 2:15-cv-04194-DDP-JC DEFENDANT TOSHIBA CORPORATION’S: (1) NOTICE OF MOTION AND
MOTION TO DISMISS THE SECOND AMENDED COMPLAINT; AND
(2) MEMORANDUM OF POINTS AND AUTHORITIES
Date: December 16, 2019 Time: 10:00 a.m. Courtroom: 9C Judge: Hon. Dean D. Pregerson
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 1 of 32 Page ID #:1980
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - i - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
TO: ALL PARTIES AND THEIR COUNSEL OF RECORD. PLEASE TAKE NOTICE that on December 16, 2019, at 10:00 am, or as
soon thereafter as counsel may be heard, before the Honorable Dean D. Pregerson,
in the United States District Court for the Central District of California, located at
350 W. First Street, Los Angeles, California, Courtroom 9C, Defendant Toshiba
Corporation (“Toshiba”) will and hereby does move to dismiss the Second
Amended Consolidated Class Action Complaint (“Second Amended Complaint”)
(ECF No. 75) of Plaintiffs Mark Stoyas, New England Teamsters & Trucking
Industry Pension Fund, and Automotive Industries Pension Trust Fund, individually
and on behalf of all others similarly situated.
Toshiba moves to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure on the grounds that the Second Amended Complaint fails to state a
claim upon which relief can be granted, as well as under principles of comity and
the doctrine of forum non conveniens.
On May 20, 2016, the Court granted Toshiba’s Motion to Dismiss Plaintiffs’
Amended Complaint (ECF No. 65), and on June 27, 2016, the Court entered
judgment in Toshiba’s favor dismissing this action with prejudice (ECF No. 67).
Plaintiffs appealed to the United States Court of Appeals for the Ninth Circuit from
the Court’s May 20, 2016 Order (ECF No. 68). On July 17, 2018, a panel of the
Ninth Circuit issued an Opinion reversing the Court’s May 20, 2016 Order and
remanding the case to allow Plaintiffs to amend their complaint (ECF No. 71).
Plaintiffs filed their Second Amended Complaint on August 8, 2019 (ECF No. 75).
For the reasons set forth in the Memorandum of Points and Authorities,
Toshiba respectfully moves to dismiss the Second Amended Complaint in its
entirety, with prejudice, pursuant to Rule 12(b)(6), as well as under principles of
comity and the doctrine of forum non conveniens.
This Motion is made following a conference of counsel pursuant to L.R. 7-3
that took place on August 14, 2019, during which Plaintiffs’ counsel indicated that
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 2 of 32 Page ID #:1981
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - ii - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
Plaintiffs oppose this Motion.
Dated: September 19, 2019 WHITE & CASE LLP By: /s/ Bryan A. Merryman Bryan A. Merryman CHRISTOPHER M. CURRAN (pro hac vice) [email protected] OWEN PELL (pro hac vice) [email protected] JAIME M. CROWE (pro hac vice) [email protected] REUBEN J. SEQUEIRA (pro hac vice pending) [email protected] Attorneys for Defendant Toshiba Corporation
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 3 of 32 Page ID #:1982
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - iii - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
TABLE OF CONTENTS Page
INTRODUCTION ............................................................................................ 1
BACKGROUND .............................................................................................. 3
ARGUMENT ................................................................................................... 8
A. The Second Amended Complaint Fails To State A Claim Under The U.S. Exchange Act ............................................................................... 8
The SAC Fails To Allege That Plaintiffs Purchased Unsponsored ADRs In Domestic Transactions ................................ 9
The SAC Fails To Allege That Toshiba’s Purported Conduct Was “In Connection With” Plaintiffs’ ADR Transactions ............. 11
a. The SAC Fails To Allege That Toshiba Induced Plaintiffs To Purchase The Unsponsored ADRs .............................................. 11
b. The SAC Fails To Allege That The Unsponsored ADRs Are Toshiba Securities ......... 12
c. The SAC Cannot State A U.S. Exchange Act Claim Based On Conduct “In Connection With” An Upstream Foreign Transaction In Toshiba Common Stock ............... 15
d. Comity Considerations Require Construing The “In Connection With” Requirement Narrowly ............................................................... 19
B. Even If The SAC Did State A U.S. Exchange Act Claim, Adjudicatory Comity Compels Dismissal ................................................ 21
C. Comity And Forum Non Conveniens Considerations Compel Dismissal Of Plaintiffs’ Japanese-Law Claim .......................................... 24
CONCLUSION .............................................................................................. 25
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 4 of 32 Page ID #:1983
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - iv - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
TABLE OF AUTHORITIES
Page(s)
CASES Absolute Activist Value Master Fund Ltd. v. Ficeto,
677 F.3d 60 (2d Cir. 2012) ....................................................................... 9, 10, 17
Ambassador Hotel Co. v. Wei-Chuan Inv., 189 F.3d 1017 (9th Cir. 1999) ............................................................. 2, 12, 16, 18
Arrington v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 651 F.2d 615 (9th Cir. 1981) ............................................................................... 11
Ashcroft v. Iqbal, 556 U.S. 662 (2009) .............................................................................................. 1
Auto. Indus. Pension Tr. Fund v. Toshiba Corp., 896 F.3d 933 (9th Cir. 2018) ........................................................................ passim
Banco Safra S.A. - Cayman Islands Branch v. Samarco Mineração S.A., No. 16 Civ. 8800, 2019 U.S. Dist. LEXIS 101561 (S.D.N.Y. June 18, 2019) .................................................................................... 11
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................ 1, 10, 13, 14
Carmell v. Texas, 529 U.S. 513 (2000) ............................................................................................ 18
Chadbourne & Parke LLP v. Troice, 571 U.S. 377 (2014) ............................................................................................ 17
Cohen v. NVIDIA Corp., 768 F.3d 1046 (9th Cir. 2014) ............................................................................... 1
Cummings v. Missouri, 71 U.S. 277 (1867) .............................................................................................. 18
Daniel v. Nat’l Park Serv., 891 F.3d 762 (9th Cir. 2018) ............................................................................... 11
Dehoog v. Anheuser-Busch InBev SA/NV, 899 F.3d 758 (9th Cir. 2018) ............................................................................... 13
F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004) ............................................................................................ 19
Hawai’i Wildlife Fund v. Cty. of Maui, 881 F.3d 754 (9th Cir. 2018) ............................................................................... 18
Howe v. Goldcorp Inv., Ltd., 946 F.2d 944 (1st Cir. 1991) ............................................................................... 25
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 5 of 32 Page ID #:1984
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - v - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
In re Petrobras Sec. Litig., 862 F.3d 250 (2d Cir. 2017) .................................................................................. 9
Loginovskaya v. Batratchenko, 764 F.3d 266 (2d Cir. 2014) ................................................................................ 10
Morrison v. Nat’l Austl. Bank, Ltd., 561 U.S. 247 (2010) ..................................................................................... passim
Mujica v. AirScan, Inc., 771 F.3d 580 (9th Cir. 2014) .......................................................................... 21-24
Parkcentral Glob. Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198 (2d Cir. 2014) .................................................................................. 8
Pinker v. Roche Holdings Ltd., 292 F.3d 361 (3d Cir. 2002) ................................................................................ 12
Prime Int’l Trading, Ltd. v. BP P.L.C., No. 17-2233, 2019 U.S. App. LEXIS 26205 (2d Cir. Aug. 29, 2019) ......................................................................................... 8
Rezner v. Bayerische Hypo-Und Vereinsbank AG, 630 F.3d 866 (9th Cir. 2010) ............................................................................... 12
Rocky Mountain Farmers Union v. Corey, 913 F.3d 940 (9th Cir. 2019) ............................................................................... 24
SEC v. Tourre, No. 10 Civ. 3229, 2012 U.S. Dist. LEXIS 165214 (S.D.N.Y. Nov. 19, 2012) .................................................................................... 17
Stoneridge Inv. Partners, LLC v. Sci.-Atlanta, 552 U.S. 148 (2008) .............................................................................................. 2
Stoyas v. Toshiba Corp., 191 F. Supp. 3d 1080 (C.D. Cal. 2016) ........................................................ passim
Toshiba Corp. v. Auto. Indus. Pension Tr. Fund, 139 S. Ct. 2766 (2019) ............................................................................................
Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981 (9th Cir. 2009) ................................................................................. 9
STATUTES, RULES & REGULATIONS
17 C.F.R. § 240.12g3-2(b) ........................................................................................ 14
Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq. ................................................................................. passim
15 U.S.C. § 78j(b) ......................................................................................... passim
15 U.S.C. § 78t(a) .................................................................................................. 9
Japanese Financial Instruments and Exchange Act Article 21-2 ........................ 2-3, 8
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 6 of 32 Page ID #:1985
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - vi - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
OTHER AUTHORITIES
Additional Form F-6 Eligibility Requirement Related to the Listed Status of Deposited Securities Underlying American Depositary Receipts, Securities Act Release No. 8287, Exchange Act Release No. 48,482, 68 Fed. Reg. 54,644 (Sept. 17, 2003) .......................................... 4, 15
Ronald R. Adee et al., Depository Receipt Program, 3F Sec. & Fed. Corp. Law § 28:15 (2d ed. 2018) .......................................................................... 5
Exemption from Registration Under Section 12(g) of the Securities Exchange Act of 1934 for Foreign Private Issuers, Exchange Act Release No. 58,465, 73 Fed. Reg. 52,752 (Sept. 10, 2008) ................ 6, 13, 22, 24
FAQ on F Shares, OTCMarkets, https://www.otcmarkets.com/files/FAQ-F-Shares.pdf (last visited Sept. 19, 2019) ................................................................................... 4
France Amicus Brief, Morrison v. Nat’l Austl. Bank, Ltd., 561 U.S. 247 (2010) ............................................................................................ 23
J.P. Morgan, DR Advisor Insights, ADR Liquidity – There’s More Than Meets the Eye, OTC Markets Group 1-2 (2012), available at https://www.otcmarkets.com/files/WhitePaperDRInsight09_2012.pdf.......... 5, 16
Paul, Weiss, Rifkind, Wharton & Garrison LLP, SEC Amends Form F-6, Which Has Implications for Foreign Private Issuers That Do Not Have ADR Programs (2008), https://www.paulweiss.com/media/1053659/3nov08-f-6.pdf ............................. 13
U.S. Amicus Brief, Morrison v. Nat’l Austl. Bank, Ltd., 561 U.S. 247 (2010) ...................................................................................... 19, 23
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 7 of 32 Page ID #:1986
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 1 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
The U.S. Court of Appeals for the Ninth Circuit agreed that the First
Amended Complaint (“FAC”) was deficient, but reversed and remanded to allow
Plaintiffs to file another amended complaint. Plaintiffs’ Second Amended
Complaint (“SAC”) is also deficient and must be dismissed.
INTRODUCTION To survive Toshiba’s renewed motion to dismiss, the SAC must contain
“factual allegations” sufficient to give rise to a “plausible claim.” Ashcroft v. Iqbal,
556 U.S. 662, 679-80 (2009). “Legal conclusions” and “speculati[on]” do not plead
a plausible claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); see
Cohen v. NVIDIA Corp., 768 F.3d 1046, 1051 (9th Cir. 2014) (affirming dismissal
of claims under Section 10(b), stating: “[f]actual allegations must be enough to
raise a right to relief above the speculative level” (quoting Twombly, 550 U.S. at
555)). In remanding, the Ninth Circuit directed this Court to consider whether the
SAC sufficiently pleads (i) that AIPTF purchased Toshiba ADRs in a domestic
transaction subject to the U.S. Exchange Act, and (ii) that the alleged fraud by
Toshiba was “in connection with” AIPTF’s purchase of Toshiba ADRs. Auto.
Indus. Pension Tr. Fund v. Toshiba Corp. (“AIPTF”), 896 F.3d 933, 949, 951 (9th
Cir. 2018).
The Ninth Circuit held that the FAC failed to satisfy the first prong of
Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) (holding that the
U.S. Exchange Act applies to “any security registered on a national securities
exchange” (561 U.S. at 266)), because the over-the-counter (“OTC”) platform
through which Plaintiffs allegedly purchased unsponsored ADRs “is simply not an
‘exchange’ under the Exchange Act.” AIPTF, 896 F.3d at 943, 945, 947.
The Ninth Circuit held that the FAC also failed to satisfy the second prong of
Morrison (holding that the U.S. Exchange Act applies to “domestic transactions in
other securities” (561 U.S. at 267)), because the FAC failed to sufficiently allege a
domestic transaction. See AIPTF, 896 F.3d at 949, 951. On this issue, the Ninth
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 8 of 32 Page ID #:1987
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 2 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
Circuit held that Plaintiffs should be granted leave to amend their complaint. The
Ninth Circuit (like Toshiba) assumed that Plaintiffs “could almost certainly allege
sufficient facts to establish that AIPTF purchased its Toshiba ADRs in a domestic
transaction.” Id. at 949. Surprisingly, the SAC fails to cure the FAC’s deficiencies
and is still “[m]issing . . . specific factual allegations regarding where the parties to
the transaction incurred irrevocable liability,” including “relevant facts” specifically
required by the Ninth Circuit, such as who sold the securities and where those
persons were paid. Id.
The Ninth Circuit also held that “the FAC falls short” of stating a claim
under the U.S. Exchange Act because Plaintiffs failed to plead “‘a connection
between the misrepresentation or omission and the purchase or sale of a security,’”
specifically, “the securities transaction in question.” Id. at 951 (emphasis in
original) (quoting Stoneridge Inv. Partners, LLC v. Sci.-Atlanta, 552 U.S. 148, 157
(2008) and Ambassador Hotel Co. v. Wei-Chuan Inv., 189 F.3d 1017, 1026 (9th
Cir. 1999)). The SAC likewise “falls short,” because it, too, is devoid of factual
allegations plausibly showing any Toshiba role whatsoever in the issuance or sale
of the ADRs. Indeed, prodded by the Ninth Circuit (id. at 951), Plaintiffs finally
concede that Toshiba did not sponsor the ADRs. SAC ¶ 56.
The Ninth Circuit also directed this Court to apply the comity limitations
described in Morrison, stating that those limitations are “directly relevant to
whether the Funds have sufficiently alleged an Exchange Act claim.” AIPTF, 896
F.3d at 950-51. Japan, the United Kingdom, and numerous foreign and domestic
market participants expressed to the Supreme Court their grave concerns about the
implications of this case for foreign securities law enforcement, and the United
States acknowledged that those concerns are “weighty” and must be taken
“seriously.” U.S. Amicus Br. 21 (No. 18-486). Comity reinforces the need to
dismiss the SAC.
Finally, the SAC again brings a claim under the Japanese Foreign
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 9 of 32 Page ID #:1988
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 3 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
Instruments and Exchange Act (“JFIEA”). SAC ¶¶ 362-76 (Third Claim for
Relief). Previously, this Court analyzed and dismissed that claim based on comity
considerations and forum non conveniens. See Stoyas v. Toshiba Corp., 191 F.
Supp. 3d 1080, 1095-100 (C.D. Cal. 2016). The Ninth Circuit declined to address
that dismissal (AIPTF, 896 F.3d at 952 n. 25), and the SAC’s few conclusory
amendments to the JFIEA claim do not warrant a different outcome now.
All told, the SAC fails to cure the deficiencies that the Ninth Circuit
identified in the FAC. Dismissal is again warranted.
BACKGROUND As before, Plaintiffs seek to represent a class of persons who “acquired
beneficial ownership interests in Toshiba through the purchase of one or more of
the following securities: 6502, TOSBF and/or TOSYY.” SAC ¶ 37; see id. ¶ 334.
Having previously flouted the distinctions among those securities (see AIPTF, 896
F.3d at 951), Plaintiffs now concede some differences, while continuing to ignore
others.
6502 securities. 6502 securities are shares of Toshiba common stock that Toshiba issued and lists exclusively in Japan. See SAC ¶¶ 23, 38. There is no
allegation that Toshiba took any steps to place 6502 securities in the United States.
6502 securities are regulated by Japan’s Securities Exchange and Surveillance
Commission. See id. ¶ 301(c).
Only the SAC’s Third Claim for Relief under the JFIEA asserts a claim
concerning the 6502 securities. See id. ¶¶ 362-76. The SAC, like the FAC, alleges
that Plaintiff New England Teamsters & Trucking Industry Pension Fund purchased
only Toshiba 6502 securities on only Japanese stock exchanges (id. ¶ 23) — not
any securities even allegedly covered by the U.S. Exchange Act.
TOSBF securities. TOSBF securities are shares of Toshiba common stock that Toshiba issued and lists exclusively in Japan (i.e., like 6502 securities) but that
find their way onto a U.S. OTC platform. See id. ¶ 39. Plaintiffs admit that so-
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 10 of 32 Page ID #:1989
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 4 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
called “F-shares,” like TOSBF securities, are simply securities with ticker symbols
created by broker-dealers to facilitate the reporting, in U.S. dollars, of trades in
foreign securities during U.S. business hours. See id. According to OTC Markets
Group, F-shares are settled, cleared, and held outside the United States, except
under certain conditions that do not apply to TOSBF securities. See id. ¶ 39; FAQ
on F Shares, OTCMarkets, https://www.otcmarkets.com/files/FAQ-F-Shares.pdf
(last visited Sept. 19, 2019). The SAC does not allege that Toshiba brought
TOSBF securities into the United States — in fact, Plaintiffs do not plead any
involvement of Toshiba in any trading of TOSBF securities.
The SAC’s First and Second Claims for Relief under the U.S. Exchange Act,
and its Third Claim for Relief under the JFIEA, make allegations concerning the
TOSBF securities. See SAC ¶¶ 343-76. Like the FAC, however, the SAC fails to
allege that any named Plaintiff purchased any TOSBF securities. See id. ¶¶ 20-24.
TOSYY securities. TOSYY securities are American Depository Receipts (“ADRs”) traded through an OTC platform referencing shares of Toshiba common
stock that Toshiba issued and lists exclusively in Japan. See id. ¶ 40. ADRs are
negotiable certificates evidencing American Depositary Shares (“ADSs”). See
Additional Form F-6 Eligibility Requirement Related to the Listed Status of
Deposited Securities Underlying American Depositary Receipts, Securities Act
Release No. 8287, Exchange Act Release No. 48,482 (“F-6 Eligibility
Requirement”), 68 Fed. Reg. 54,644, 54,644 & n.4 (Sept. 17, 2003); SAC ¶ 51.
Market participants use the terms ADR and ADS interchangeably. See F-6
Eligibility Requirement, 68 Fed. Reg. at 54,644 & n.4. ADRs are created by
depositaries (banks or trust companies), and represent an ownership interest in
foreign securities held by the depositary. Id. Each ADR references “a fixed
number or fraction of underlying securities on deposit with a depositary.” Id.; see
also SAC ¶¶ 50-52.
When ADRs are not purchased on the secondary market but “issued” in
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 11 of 32 Page ID #:1990
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 5 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
exchange for deposited securities, as alleged here (SAC ¶ 21), the investor or its
agent must first purchase the underlying securities for deposit. As described on the
OTC Markets Group website:
[A] U.S. broker orders, on behalf of an investor, the shares of a non-
U.S. company. (See step 1 in the diagram). These shares are
purchased by the broker’s overseas office or via another broker
located in the foreign market (step 2). The shares are then deposited
with a custodian located in this market (step 3). After receiving
confirmation from the custodian (step 4), the depositary bank issues to
the U.S. broker ADRs that represent an equivalent number of the
deposited shares (step 5).
J.P. Morgan, DR Advisor Insights, ADR Liquidity – There’s More Than Meets the
Eye, OTC Markets Group 1-2 (2012) [hereinafter OTC, JPM Whitepaper],
available at https://www.otcmarkets.com/files/WhitePaperDRInsight09_2012.pdf
(providing diagram); see Ronald R. Adee et al., Depository Receipt Program, 3F
Sec. & Fed. Corp. Law § 28:15 (2d ed. 2018) (cited in AIPTF, 896 F.3d at 940 n.6)
(describing the same investment process).
ADRs may be sponsored or unsponsored: “ADRs are sponsored when a
depositary institution and the foreign company jointly file Form F-6 to register the
ADRs. Thus, purchasers of sponsored ADRs enter into essentially a three-party
contract with the depositary and the foreign company.” AIPTF, 896 F.3d at 941 n.8
(citations omitted); see Stoyas, 191 F. Supp. 3d at 1091-92. A foreign issuer may
use sponsored ADRs to raise capital. See AIPTF, 896 F.3d at 941 n.8.
As the Ninth Circuit observed: “Toshiba ADRs are unsponsored, which
means that the depositary institutions each filed Form F-6 without Toshiba’s
‘formal participation’ and possibly without its acquiescence. Accordingly, when
AIPTF purchased TOSYY ADRs, it was entering into ‘essentially a two-party
contract’ with the depositary institution” — a contract to which Toshiba was not a
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 12 of 32 Page ID #:1991
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 6 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
party. AIPTF, 896 F.3d at 941 (citations omitted); see also SAC ¶ 56 (“TOSYY is
an unsponsored ADS”).
Furthermore, while a depositary must file a Form F-6 with the SEC to create
an unsponsored ADR program, the SEC does not require the foreign issuer of the
referenced securities to register or make filings with the SEC. See Exemption from
Registration Under Section 12(g) of the Securities Exchange Act of 1934 for
Foreign Private Issuers, Exchange Act Release No. 58,465 (“Exemption from
Registration”), 73 Fed. Reg. 52,752, 52,762 (Sept. 10, 2008) (codified at 17 C.F.R.
pts. 239, 240, and 249).
The SAC’s First and Second Claims for Relief under the U.S. Exchange Act,
and its Third Claim for Relief under the JFIEA, make allegations concerning the
unsponsored ADRs. See SAC ¶¶ 343-76. According to the SAC, Lead Plaintiff
Automotive Industries Pension Trust Fund (“AIPTF”) purchased only unsponsored
ADRs. Id. ¶ 20. The SAC does not allege anything about any purchases by
Plaintiff Mark Stoyas. See id. ¶ 24.
Proceedings in this Court. In dismissing the FAC, this Court determined that the ADR transactions at issue “are securities transactions that occurred
domestically,” but that “Plaintiffs have not argued or pled that Defendant was
involved in those transactions in any way.” Stoyas, 191 F. Supp. 3d at 1094. The
Court concluded that the U.S. Exchange Act did not apply in light of Morrison. See
id. at 1094. The Court also dismissed the JFIEA claim, finding that “the comity
issues raised in this case weigh in favor of dismissal.” Id. at 1097-98. The Court
further held that private and public factors weighed in favor of dismissal under
forum non conveniens, including because “[m]ost of the evidence and witnesses
identified by both parties as material are in Japan,” and there would be “many
practical issues” with litigating the claim in this Court, particularly in “taking
discovery from and deposing” both willing and unwilling witnesses. Id. at 1100.
Plaintiffs appealed to the Ninth Circuit.
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 13 of 32 Page ID #:1992
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 7 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
Court of Appeals proceedings. As discussed above, the Ninth Circuit reversed and remanded to allow Plaintiffs to amend the FAC. Applying Morrison,
the Ninth Circuit held that the platform through which Plaintiffs purchased their
unsponsored ADRs was not an “exchange” under the U.S. Exchange Act. AIPTF,
896 F.3d at 945-47. The Ninth Circuit next held that Plaintiffs failed to
“sufficiently allege a domestic violation of the Exchange Act.” Id. at 947-50, 952.
The Ninth Circuit also held that Plaintiffs had failed to “clearly set[] forth the
transactions” and to allege facts showing that Toshiba was “‘involved in the
establishment’ of the ADRs.” Id. at 951-52. The Court remanded the case to allow
Plaintiffs to re-plead their U.S. Exchange Act claims. The Ninth Circuit declined to
review this Court’s dismissal of the FAC’s JFIEA claim. Id. at 952 n.25.
Supreme Court proceedings. Toshiba sought certiorari on the question of whether a domestic transaction, in and of itself, is sufficient for the U.S. Exchange
Act to apply, even when a case is essentially foreign in its other aspects. See
Petition for a Writ of Certiorari, Toshiba Corp. v. Auto. Indus. Pension Tr. Fund,
139 S. Ct. 2766 (2018) (No. 18-486). Numerous foreign and domestic amici
supported the petition, including sovereigns (Japan’s Ministry of Economy, Trade
and Industry, and the United Kingdom); domestic trade groups (the U.S. Chamber
of Commerce, the Securities Industry and Financial Markets Association, the
Competitive Enterprise Institute, and the Organization for International
Investment); and foreign trade groups (Keidanren (Japan Business Federation),
Europeanissuers, Économiesuisse, the International Chamber of Commerce
Switzerland, and the Association Française des Entreprises Privées).
Although the U.S. Solicitor General and SEC recommended against
certiorari, both suggested that Morrison’s animating comity concerns may be
“persuasive in challenging [Plaintiffs’] efforts to satisfy the ‘in connection with’
requirement.” U.S. Amicus Br. 16. The Supreme Court denied Toshiba’s petition.
Toshiba Corp. v. Auto. Indus. Pension Tr. Fund, 139 S. Ct. 2766 (2019).
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 14 of 32 Page ID #:1993
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 8 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
Proceedings on Remand. Plaintiffs filed the SAC on August 8, 2019, again asserting claims under Sections 10(b) and 20(a) of the U.S. Exchange Act and
Article 21-2 of the JFIEA. This motion follows.
Toshiba expressly preserves its argument that, under Morrison, application of
the U.S. Exchange Act to Toshiba in this case is impermissibly extraterritorial,
regardless of whether the SAC alleges a domestic transaction. Toshiba does not
repeat its arguments here given the Ninth Circuit’s binding holding, but notes that
the Second Circuit recently reaffirmed the approach of Parkcentral Global Hub
Ltd. v. Porsche Automobile Holdings SE, 763 F.3d 198 (2d Cir. 2014), which the
Ninth Circuit rejected. See Prime Int’l Trading, Ltd. v. BP P.L.C., No. 17-2233,
2019 U.S. App. LEXIS 26205, at *20 (2d Cir. Aug. 29, 2019) (affirming dismissal
of Commodity Exchange Act claims and endorsing Parkcentral’s “reasoning that ‘a
rule making [Section 10(b)] applicable whenever the plaintiff’s suit is predicated on
a domestic transaction,’ regardless of the ‘foreignness of the facts,’ would trample
on Morrison by requiring us to apply the statute to ‘wholly foreign activity’”).
ARGUMENT A. The Second Amended Complaint Fails To State A Claim Under The
U.S. Exchange Act The Ninth Circuit held that, to avoid dismissal, the SAC must (1) “allege
sufficient facts to establish that AIPTF purchased its Toshiba ADRs in a domestic
transaction,” and (2) “sufficiently plead[] Toshiba’s connection to the ADR
transactions.” AIPTF, 896 F.3d at 949, 951. The Ninth Circuit also held that
“Morrison’s animating comity concerns” are “directly relevant” to “sufficiently
alleg[ing] an Exchange Act claim.” Id. at 950.
As explained below, the SAC, like the FAC, does not allege a domestic
transaction. Nor does the SAC allege any Toshiba misconduct “in connection
with” a domestic transaction. Thus, under the express terms of the Ninth Circuit’s
remand, the SAC has failed to plead a claim under Section 10(b), and this Court
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 15 of 32 Page ID #:1994
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 9 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
should dismiss the SAC’s U.S. Exchange Act claims in their entirety. See Zucco
Partners, LLC v. Digimarc Corp., 552 F.3d 981, 990 (9th Cir. 2009) (“Section
20(a) claims may be dismissed summarily . . . if a plaintiff fails to adequately plead
a primary violation of section 10(b).”).
The SAC Fails To Allege That Plaintiffs Purchased Unsponsored ADRs In Domestic Transactions
On appeal, the Ninth Circuit adopted the “irrevocable liability test to
determine whether the securities were the subject of a domestic transaction.”
AIPTF, 896 F.3d at 949. According to the Ninth Circuit: “Looking to where
purchasers incurred the liability to take and pay for securities, and where sellers
incurred the liability to deliver securities, hews to Section 10(b)’s focus on
transactions and Morrison’s instruction that purchases and sales constitute
transactions.” Id. (citing Absolute Activist Value Master Fund Ltd. v. Ficeto, 677
F.3d 60, 68 (2d Cir. 2012), and Morrison, 561 U.S. at 267-68). The Ninth Circuit
then held that the FAC failed the irrevocable liability test because “[m]issing from
the FAC . . . are specific factual allegations regarding where the parties to the
transaction incurred irrevocable liability.” AIPTF, 896 F.3d at 949 (citing In re
Petrobras Sec. Litig., 862 F.3d 250, 262, 273 (2d Cir. 2017) as “identifying the
relevant facts as including who sold the relevant securities and how those
transactions were effectuated, as evidenced by documentation such as confirmation
slips”).
The SAC ’s account of AIPTF’s ADR transaction (see SAC ¶¶ 20-22) fails to
provide the “specific factual allegations” the Ninth Circuit requires, namely, the
sort of specifics “evidenced by documentation such as confirmation slips.” AIPTF,
896 F.3d at 949. The SAC does not specifically allege who sold or who purchased
the Toshiba common stock that was pledged to Citibank in exchange for issuance
of the ADRs. See SAC ¶ 22(e) & (f). The SAC does not specifically allege who
received payment for the ADRs, stating only that they were “issued by Citibank.”
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 16 of 32 Page ID #:1995
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 10 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
Id. ¶ 22(e). Taken together, the SAC’s new allegations (made mostly in the passive
voice) defiantly obscure “where” AIPTF and the seller actually incurred their
respective liabilities. See id. ¶¶ 21-22. The SAC alleges that AIPTF’s purchase of
the ADRs “was settled” in New York on March 26, 2015 (id. ¶ 22(f)), but that the
settlement occurred three days after AIPTF allegedly “purchased” the ADRs on
March 23, 2015 (id. ¶ 20). Title to the ADRs allegedly “was recorded” sometime
after the settlement payment. See id. ¶ 22(g). These allegations cannot establish a
domestic transaction. See Loginovskaya v. Batratchenko, 764 F.3d 266, 275 (2d
Cir. 2014) (holding “actions needed to carry out the transactions” were “not the
transactions themselves”).
The SAC’s allegations about where AIPTF is “based” (SAC ¶ 20), where its
investment advisor is “located” (id. ¶ 22(a)), where AIPTF’s broker is “located” (id.
¶ 22(b)), where OTC Markets Group has its “offices” or where its subcontractors’
servers are “located” (id. ¶¶ 87-88) — even if “consistent with” incurring
irrevocable liability in the United States — are all insufficient to allege a domestic
transaction. Twombly, 550 U.S. at 557; see AIPTF, 896 F.3d at 949 (rejecting as
insufficient the FAC’s allegations that AIPTF is a U.S. entity headquartered and
operating in the United States; that the depositaries’ principal offices, agents for
service, and offices where ADR holders can convert their ADRs into Toshiba
common shares “are all in New York”; and that OTC Markets Group “operates
OTC Link in the United States”); Absolute Activist, 677 F.3d at 68-69 (holding that
“‘[a] purchaser’s citizenship or residency does not affect where a transaction
occurs’” and “the location of the broker alone does not necessarily demonstrate
where a contract was executed”).
Transmitting messages “routed through” OTC Link’s U.S. servers also
cannot establish irrevocable liability. SAC ¶ 22(d). Otherwise, every OTC
transaction would be subject to the U.S. Exchange Act, regardless of the location of
the parties, subverting the Ninth Circuit’s holding that the OTC platform “is simply
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 17 of 32 Page ID #:1996
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 11 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
not an ‘exchange’ under the Exchange Act.” AIPTF, 896 F.3d at 945; see Banco
Safra S.A. - Cayman Islands Branch v. Samarco Mineração S.A., No. 16 Civ. 8800,
2019 U.S. Dist. LEXIS 101561, at *16-17 (S.D.N.Y. June 18, 2019) (holding that
“allegations that [plaintiff’s] purchases and sales of [securities] were conducted
‘through’ bank accounts in New York are insufficient to demonstrate a domestic
transaction,” reasoning that “‘there is almost no limiting principle. New York is the
financial capital of the world. Many wire transfers and other financial transactions
pass through our banking system here’” (citation and alterations omitted)).
Given these deficiencies, the SAC’s conclusory legal assertion that “AIPTF
incurred irrevocable liability in the United States” (SAC ¶ 22) is “not entitled to an
assumption of truth.” Daniel v. Nat’l Park Serv., 891 F.3d 762, 767 (9th Cir. 2018)
(citing Iqbal, 556 U.S. at 678-80).
The SAC Fails To Allege That Toshiba’s Purported Conduct Was “In Connection With” Plaintiffs’ ADR Transactions
The Ninth Circuit held that, even if the U.S. Exchange Act applies to
Plaintiffs’ purchase of ADRs, the SAC still must “sufficiently plead[] Toshiba’s
connection to the ADR transactions” to state a U.S. Exchange Act claim. AIPTF,
896 F.3d at 951. Specifically, Toshiba’s alleged conduct “must ‘touch’ the sale” of
the unsponsored ADRs, “i.e., it must be done to induce [AIPTF’s] purchase” of the
unsponsored ADRs. Id. (quoting Arrington v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 651 F.2d 615, 619 (9th Cir. 1981)).
a. The SAC Fails To Allege That Toshiba Induced Plaintiffs To Purchase The Unsponsored ADRs
The SAC does not allege that Toshiba “induce[d]” Plaintiffs to exchange
Toshiba common stock for the unsponsored ADRs from Citibank, or that Toshiba
had anything at all to do with that transaction. Id. at 951 (citing Arrington, 651
F.2d at 617-19 (holding that broker statements were “in connection with” securities
transaction where the statements induced retirees to purchase those securities);
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 18 of 32 Page ID #:1997
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 12 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
Ambassador Hotel Co. v. Wei-Chuan Inv., 189 F.3d 1017, 1026-27 (9th Cir. 1999)
(holding that statements about hotel construction costs were “in connection with” a
securities transaction where the statements induced the plaintiff to fund
construction in exchange for shares); and Rezner v. Bayerische Hypo-Und
Vereinsbank AG, 630 F.3d 866, 872 (9th Cir. 2010) (holding that
misrepresentations about tax treatment of investment collateralized with securities
were not “in connection with” a securities transaction, where the misrepresentations
were not “about the value of the securities [plaintiff] pledged”)).
b. The SAC Fails To Allege That The Unsponsored ADRs Are Toshiba Securities
The SAC attempts to allege a “connection” by asserting that the unsponsored
ADRs are effectively Toshiba securities because Toshiba somehow “consented” to
the creation of the ADRs. SAC ¶¶ 66-74. Like the FAC, however, the SAC fails to
allege facts plausibly showing that Toshiba had any involvement in — or consented
to or was even aware of — the creation and sale of the unsponsored ADRs at issue.
See id. ¶ 56 (admitting that “TOSYY is an unsponsored ADS”); Stoyas, 191 F.
Supp. 3d at 1091-92 (explaining that “[a]n unsponsored ADR is established with
little or no involvement of the issuer of the underlying security” whereas “[a]
sponsored ADR, in contrast, is established with the active participation of the issuer
of the underlying security” (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361,
367 (3d Cir. 2002))).
The SAC relies on vague and equivocal allegations that a depositary “in
practice,” or “typically,” or “frequently” requests a letter of non-objection from the
foreign issuer before establishing a program in unsponsored ADRs. SAC ¶¶ 67-68;
see also id. ¶ 69 (alleging purported “confirm[ation]” by unidentified individuals
that depositaries “are generally required to contact foreign issuers” or “had a
practice of contacting foreign issuers” or that such practice “was customary” at
unspecified times (emphases added)). These statements necessarily acknowledge
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 19 of 32 Page ID #:1998
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 13 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
that in establishing an unsponsored ADR program depositaries do not uniformly
seek or obtain a foreign issuer’s non-objection beforehand. Crucially, none of the
SAC’s sources refers to any contact by Citibank — or any other depositary — with
Toshiba seeking consent to issue any unsponsored ADRs, much less the ADRs
purchased by AIPTF. The SAC’s allegations, therefore, cannot support the
speculative leap that Plaintiffs urge. See Dehoog v. Anheuser-Busch InBev SA/NV,
899 F.3d 758, 765 (9th Cir. 2018) (holding that “general allegations regarding past
[behavior] in the market” amount to “only speculation” and “stop[] short of the line
between possibility and plausibility of entitlement to relief” (citing Twombly, 550
U.S. at 557)).
Moreover, the letter to the SEC from depositary Deutsche Bank (SAC ¶ 67)
described alleged industry practices before the SEC issued its 2008 rule that made it
easier to “establish unsponsored ADRs on [an] expanded group of foreign private
issuers,” without the foreign issuers’ participation, consent, or even knowledge.
Exemption from Registration, 73 Fed. Reg. at 52,762. Intending to facilitate U.S.
investors’ access to ADRs by expanding the market for unsponsored ADRs, the
SEC considered — and rejected — proposals to (1) require a foreign issuer’s
consent to the creation of unsponsored ADRs referencing its securities; (2) require
depositaries to notify the foreign issuer of the creation of unsponsored ADRs; or (3)
prohibit the registration of unsponsored ADRs if the foreign issuer objects. Id.
One source the SAC cites (see SAC ¶ 68 n.6) in fact emphasizes that, after the SEC
rule change, “it is now far easier for unsponsored ADR programs to be established
– without the consent of the issuer of the securities that underlie the ADRs,” and
that the foreign issuer has “no ability to stop the proliferation of unsponsored
programs” without entering the U.S. securities market. Paul, Weiss, Rifkind,
Wharton & Garrison LLP, SEC Amends Form F-6, Which Has Implications for
Foreign Private Issuers That Do Not Have ADR Programs 1-2 (2008),
https://www.paulweiss.com/media/1053659/3nov08-f-6.pdf (emphases added).
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 20 of 32 Page ID #:1999
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 14 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
The unsponsored ADRs at issue here were created within weeks after this
2008 SEC rule change. See SAC Ex. 11, Form F-6 filed by Citibank, N.A., dated
October 27, 2008. The SAC’s allegations of general practices before the rule
change are irrelevant, and cannot plausibly show Toshiba’s consent given the
“obvious alternative explanation” that Citibank availed itself of the new rule to
create TOSYY ADRs without Toshiba’s consent. Twombly, 550 U.S. at 567.
The SAC’s allegation that Toshiba’s registration exemption under SEC Rule
12g3-2(b) somehow “support[ed] the sale of unsponsored ADSs in the United
States” (SAC ¶ 74(a)) has already been rejected by the Ninth Circuit. See AIPTF,
896 F.3d at 952 n.24 (“[A]s Toshiba points out, there are many plausible reasons
for a company to provide English materials, precluding the inference that Toshiba’s
actions were to support unsponsored ADRs.”). And the SAC’s conclusory
allegation that depositaries’ “substantial holdings” of Toshiba stock imply
coordination with Toshiba (SAC ¶ 74(c)) is unsupported. No allegations back the
dubious inference that depositaries cannot freely purchase “substantial” amounts of
Toshiba stock on Japanese exchanges or in private transactions. The SAC also
ignores that a significant portion of a depositary’s holding may consist of stock
purchased and deposited by investors like AIPTF.
The Court should not credit Plaintiffs’ speculation that Citibank or any other
depositary “contacted Toshiba” before creating the unsponsored ADRs, much less
Plaintiffs’ further, baseless speculation that Toshiba “provided its affirmative
consent” to the creation of the unsponsored ADRs. SAC ¶¶ 70-71 (emphasis
added). The SAC’s fallback, that Toshiba’s “consent may be implied” (id. ¶ 71) —
while underscoring the SAC’s deficiency — likewise lacks any factual allegations
of Toshiba involvement with the unsponsored ADRs. See Twombly, 550 U.S. at
555 (“The pleading must contain something more than a statement of facts that
merely creates a suspicion . . . .” (citation and alterations omitted)).
In any event, Toshiba’s consent would not be enough to deem the
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 21 of 32 Page ID #:2000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 15 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
unsponsored ADRs “Toshiba securities,” because Toshiba did not and could not
raise any capital through the issuance of unsponsored ADRs. In dismissing the
FAC’s U.S. Exchange Act claims, this Court held:
Some affirmative act in relation to the purchase or sale of securities is
required under the Supreme Court’s holding: “Section 10(b) reaches
the use of a manipulative or deceptive device or contrivance only in
connection with the purchase or sale of a security listed on an
American stock exchange, and the purchase or sale of any other
security in the United States.” [Morrison, 561 U.S.] at 273 (emphasis
added). . . . There are allegations that Toshiba committed accounting
fraud and misrepresented its profits to investors around the world. But
there is no allegation that those fraudulent actions were connected to
Toshiba selling its securities in the United States.
Stoyas, 191 F. Supp. 3d at 1094. This Court’s earlier reasoning comports with the
Ninth Circuit’s instruction and still compels dismissal of Plaintiffs’ U.S. Exchange
Act claims, albeit under the rubric of the “in connection with” requirement rather
than the inapplicability of the U.S. Exchange Act.
c. The SAC Cannot State A U.S. Exchange Act Claim Based On Conduct “In Connection With” An Upstream Foreign Transaction In Toshiba Common Stock
Plaintiffs undertake to manufacture a claim by conflating their purportedly
domestic purchases of unsponsored ADRs with purchases of Toshiba common
stock in Japan. SAC ¶ 50 (“The purchase of an ADS is equivalent to the purchase
of the underlying foreign securities (here, 6502 shares issued by Toshiba) . . . .”
(emphasis added)). But, like the FAC, the SAC “erroneously ignores the
distinction between ADRs and common stock.” AIPTF, 896 F.3d at 951; see also
id. at 942 (“ADRs and the deposited securities are separate securities . . . .” (quoting
F-6 Eligibility Requirement, 68 Fed. Reg. at 54,644 n.4, 54,646)). Any Toshiba
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 22 of 32 Page ID #:2001
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 16 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
conduct allegedly “in connection with” the purchase of Toshiba common stock
cannot be imputed somehow to a purchase of separate unsponsored ADR securities.
See AIPTF, 896 F.3d at 951(“The fraud ‘must have more than some tangential
relation to the securities transaction.’” (quoting Ambassador Hotel, 189 F.3d at
1026)).
Plaintiffs’ insistence that “the economic reality” of their ADR transaction
was the “purchase and ownership of shares of common stock – i.e., 6502,” issued
and listed exclusively in Japan (SAC ¶ 65), merely confirms that Plaintiffs’ fraud
claims arise from, in “reality,” foreign transactions. Indeed, the “transactional”
reality (Morrison, 561 U.S. at 269-70 (emphasis added)) appears to be that AIPTF
purchased its ownership interest in Toshiba common stock in Japan before
transacting with Citibank to repackage that interest into unsponsored ADRs. See
SAC ¶¶ 20-22.
According to OTC Markets Group, only after AIPTF or its agent purchased
Toshiba common stock in Japan and deposited the stock with Citibank’s custodian
in Japan could Citibank have issued the ADRs to AIPTF. See OTC, JPM
Whitepaper at 1-2 (explaining deposited shares first “are purchased by the
[investor’s] broker’s overseas office or via another broker located in the foreign
market”); see also SAC ¶ 21 (“The TOSYY ADR reflecting AIPTF’s purchase and
its beneficial ownership of the underlying 6502 shares was issued by Citibank . . . .”
(emphasis added)); id. ¶ 40 (alleging “TOSYY is an [ADR] reflecting ownership of
shares of 6502 common stock that have been deposited with or are otherwise
controlled by a depositary institution . . . .”); Citibank Form F-6 at Ex.(a)-4
(providing: “Every person presenting Shares for Deposit shall be deemed thereby
to represent and warrant that . . . (iv) the Shares presented for deposit are free and
clear” of any competing ownership interest).
Under Absolute Activist, “the securities transaction that the fraud must be ‘in
connection with’ is the allegedly fraudulent transaction itself—not one connected to
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 23 of 32 Page ID #:2002
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 17 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
it in some other way.” SEC v. Tourre, No. 10 Civ. 3229, 2012 U.S. Dist. LEXIS
165214, *21-22 (S.D.N.Y. Nov. 19, 2012) (applying Absolute Activist); see AIPTF,
896 F.3d at 949 (adopting Absolute Activist’s irrevocable liability test); see also
Chadbourne & Parke LLP v. Troice, 571 U.S. 377, 396-97 (2014) (holding fraud
“in connection with” plaintiff’s purchase of certain securities is not thereby “in
connection with” plaintiff’s upstream sale of other securities to fund the purchase).
In Tourre, the SEC alleged that Goldman Sachs and its employee Tourre had
fraudulently induced foreign bank IKB and its client Loreley to purchase notes of a
U.S. issuer. There, a domestic transaction (Goldman’s purchase in New York of
the U.S. issuer’s notes) “set the wheels in motion for the ultimate IKB/Loreley
transaction” (transfer of the notes from Goldman’s London affiliate to IKB’s client
in Jersey) “down the chain.” Tourre, 2012 U.S. Dist. LEXIS 165214 at *4, *19.
The court held that the “in connection with” requirement was not met with respect
to a domestic transaction, because “the SEC seeks to impose liability for a fraud
purportedly perpetrated on IKB/Loreley—not on Goldman” in New York. Id. at
*19. Just as the Ninth Circuit repeatedly emphasized here, Tourre further held that
“the alleged fraud . . . must be ‘in connection with’ the particular securities
transaction for which redress is sought.” Id. at *17; see AIPTF, 896 F.3d at 951
(holding “the FAC falls short” of alleging fraud in connection with “the securities
transaction in question” (emphasis in original)).
Although the Tourre situation is reversed here — AIPTF purportedly is a
domestic purchaser of the securities of a foreign issuer — the “in connection with”
requirement is not satisfied because, as in Tourre, the SAC does not seek to impose
liability on AIPTF’s purported domestic counterparty for the unsponsored ADRs
(Citibank). Nor, as discussed above, does the SAC allege any Toshiba misconduct
in connection with AIPTF’s transaction in the unsponsored ADRs with Citibank.
See Tourre, 2012 U.S. Dist. LEXIS 165214 at *17, *19.
The Ninth Circuit foreclosed any argument that the required “connection”
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 24 of 32 Page ID #:2003
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 18 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
can be found merely because Toshiba’s conduct affected the value of one security,
Toshiba common stock, which in turn affected the value of another security, the
unsponsored ADRs. The Ninth Circuit squarely acknowledged that the “ADR
value is directly linked to the value of Toshiba common stock,” but nonetheless
held that “the FAC falls short,” emphasizing the difference between alleging fraud
“in connection with” Toshiba common stock versus “the securities transaction in
question,” i.e., Plaintiffs’ transactions in the unsponsored ADRs:
The [district] court should consider whether the plaintiff has shown
some causal connection between the fraud and the securities
transaction in question. Deception related to the value or merit of the
securities in question has sufficient connection to securities
transactions to bring the fraud within the scope of § 10(b).
AIPTF, 896 F.3d at 941, 951 (emphases in original) (quoting Ambassador Hotel,
189 F.3d at 1026). The “in connection with” test requires allegations showing that
Toshiba “induce[d]” AIPTF’s exchange of Toshiba common stock for ADRs, not
merely caused the ADRs to lose value. Id. at 951; see Ambassador Hotel, 189 F.3d
at 1025-30 (analyzing “in connection with” and “loss causation” as distinct claim
elements).
To hold that Plaintiffs may purchase Toshiba common stock in a foreign
transaction but allege a domestic transaction, subject to the U.S. Exchange Act,
after merely repackaging the Toshiba stock into unsponsored ADRs “would make a
mockery of” Morrison’s bar on the extraterritorial application of the Act. Hawai’i
Wildlife Fund v. Cty. of Maui, 881 F.3d 754, 768 (9th Cir. 2018); see Carmell v.
Texas, 529 U.S. 513, 541 (2000) (“The legal result must be the same, for what
cannot be done directly cannot be done indirectly.” (quoting Cummings v. Missouri,
71 U.S. 277, 325 (1867))).
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 25 of 32 Page ID #:2004
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 19 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
d. Comity Considerations Require Construing The “In Connection With” Requirement Narrowly
The Ninth Circuit instructed this Court to assess the “in connection with”
requirement in light of “Morrison’s animating comity concerns,” which are
“directly relevant” to “sufficiently alleg[ing] an Exchange Act claim” — even if the
Act applies. AIPTF, 896 F.3d at 950. The U.S. Exchange Act thus must be
construed to avoid unreasonable interference with other nations’ sovereign
authority to regulate their securities markets in ways that “often differ[] from ours.”
Morrison, 561 U.S. at 269; see F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542
U.S. 155, 164-65 (2004) (stating that narrow construction of U.S. law “helps the
potentially conflicting laws of different nations work together in harmony—a
harmony particularly needed in today’s highly interdependent commercial world”);
Stoyas, 191 F. Supp. 3d at 1095 (“Morrison properly limited the reach of § 10(b)
claims based on the plain language of the statute, the presumption against
extraterritorial reach of U.S. laws, and comity concerns.”).
Allowing U.S. Exchange Act claims to proceed against foreign issuers
having no involvement in domestic transactions in unsponsored ADRs, or in the
creation of unsponsored ADRs, risks interference with foreign sovereigns’
regulation of their own securities markets and issuers. See U.S. Amicus Brief at 18,
Morrison v. Nat’l Austl. Bank, Ltd., 561 U.S. 247 (2010) (No. 08-1191) [hereinafter
U.S. Amicus Br. in Morrison] (warning of “international friction that might result if
the United States attempted to apply its laws to securities-related conduct that has
little relationship to this country” (citing Empagran, 542 U.S. at 164)). Numerous
amici supporting Toshiba’s certiorari petition agreed. See, e.g., U.K. Amicus Br. 10
(No. 18-486) (“If other nations believe that American policy unfairly disadvantages
their citizens . . . they are apt to resist enforcement efforts and perhaps to retaliate
with countermeasures of their own.”).
It remains true that “all the policy and reasoning in Morrison” point against
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 26 of 32 Page ID #:2005
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 20 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
subjecting to the U.S. Exchange Act “a foreign company that only listed its
securities on foreign exchanges but whose stocks are purchased by an American
depositary bank on a foreign exchange and then resold as a different kind of
security (an ADR) in the United States.” Stoyas, 191 F. Supp. 3 at 1094. As this
Court recognized, such an outcome would have profound extraterritorial
consequences and would be extremely unfair. See id. at 1094-95 (warning of the
“essentially limitless reach of § 10(b) claims because even if the foreign defendant
attempted to keep its securities from being sold in the United States, the
independent actions of [third parties] could create liability,” a result “inconsistent
with the spirit and law of Morrison”). Dismissal would not be unfair to holders of
Toshiba ADRs who, if necessary, could bring U.S. claims against their depositaries
to ensure that the depositaries seek recovery as shareholders in Japan for the benefit
of the ADR holders.
The prospect of overreaching U.S. law matters to foreign nations. Japan’s
Ministry of Economy, Trade and Industry (“METI”) has voiced its concern over
this case to the Supreme Court in an amicus brief inexplicably ignored by Plaintiffs.
See METI Amicus Br. (No. 18-486); SAC ¶ 373 (incorrectly stating: “Neither the
government of Japan or any prosecutorial or regulatory authority in Japan . . . has
objected to the pendency of this action . . . .”). METI expressly objected to the
“risk that Japanese companies and stakeholders could be put at a great disadvantage
by being subjected to damage claims for huge sums of money in a form that cannot
be at all anticipated, regardless of whether or not they are involved at all in the
issuance of the ADR or transactions related to it.” METI Amicus Br. 2. The United
Kingdom described lawsuits like this one as “a particularly alarming example of
interference with a foreign nation’s legal system.” U.K. Amicus Br. 2.
This Court, therefore, should hold that investors and depositaries transacting
domestically in unsponsored ADRs cannot thereby create a “connection” for U.S.
Exchange Act purposes with foreign issuers like Toshiba that are strangers to the
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 27 of 32 Page ID #:2006
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 21 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
transaction at issue and have not taken any step to enter the U.S. securities market.
B. Even If The SAC Did State A U.S. Exchange Act Claim, Adjudicatory Comity Compels Dismissal
The Ninth Circuit has also endorsed this Courts’ discretion to dismiss claims,
including claims under U.S. law, where the alternative forum is adequate and the
foreign government’s interests in adjudicating the dispute outweigh U.S. interests.
See Mujica v. AirScan Inc., 771 F.3d 580, 603 (9th Cir. 2014) (holding federal and
state law claims “nonjusticiable under the doctrine of international comity”).
This Court previously listed the relevant non-exclusive factors under Mujica:
(1) the location of the conduct in question, (2) the nationality of the parties, (3) the
character of the conduct in question, (4) the foreign policy interests of the
sovereigns, and (5) any public policy interests. Stoyas, 191 F. Supp. 3d at 1096. A
proper comity analysis recognizes that: “Foreign states, no less than the United
States, have legitimate interests in regulating conduct that occurs within their
borders, involves their nationals, impacts their public and foreign policies, and
implicates universal norms.” Mujica, 771 F.3d at 607. There is no dispute that
Japan offers a fair and adequate forum (Stoyas, 191 F. sup. 3d at 1097), and Japan’s
interest in adjudicating this dispute far outweighs any U.S. interest.
The weak U.S. nexus (first and second factors) favors dismissal. The “weaker the nexus between the challenged conduct and U.S. territory or U.S.
parties, the weaker the justification for adjudicating the matter in U.S. courts and
applying U.S. federal or state law.” Id. at 605-06 (setting forth comity’s “guiding
principle”). The primary comity consideration — “where the conduct in question
took place” — points directly to Japan. Id. at 604-05 (“[C]omity is most closely
tied to the question of territoriality.”); see SAC ¶¶ 154-212 (alleging misstatements
made only in Japan). The parties’ nationalities also favor deference to Japan.
Toshiba is “a citizen of Japan,” “headquartered in Tokyo” (SAC ¶¶ 13, 25), while
the putative class is multinational (SAC ¶ 2 (seeking to represent “all persons who
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 28 of 32 Page ID #:2007
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 22 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
purchased shares of TOSYY or TOSBF” and “all citizens and residents of the
United States who purchased shares of Toshiba common stock” (emphasis added))).
The nature of the claim (third factor) favors dismissal. Japan has a very strong interest in adjudicating these claims because the “character” of this action, to
enforce adequate disclosure by a Japanese issuer listed on Japanese exchanges,
implicates Japan’s sovereign prerogative to regulate its securities issuers and
markets. Mujica, 771 F.3d at 604; id. at 606 (“The closer the connection between
the conduct and core prerogatives of the sovereign, the stronger that sovereign’s
interest.”); see Decl. of T. Ishiguro, Ex. B, Art. 1 (Japanese Exchange Act), ECF
No. 46-2 (explaining that Japan’s Exchange Act was enacted to contribute to “the
sound development of the national economy and the protection of investors”); see
also SAC ¶ 301(g) (alleging approximately 75 percent of Toshiba stockholders are
Japanese, with the remainder disbursed globally). Here, the Japanese Government
supported Toshiba’s petition for a writ of certiorari, and declared Japan’s
“significant economic, political, and legal interests in ensuring that companies
based in Japan comply with the Japanese legal system.” METI Amicus Br. 1.
By contrast, the U.S. interest in adjudicating these claims is weak. The SEC
has exempted from registration foreign issuers whose securities are primarily listed
abroad, because a foreign regulator “principally regulates and oversees the trading
of the issuer’s securities and the issuer’s disclosure obligations to investors.”
Exemption from Registration, 73 Fed. Reg. at 52,755; see 17 C.F.R. § 240.12g3-
2(b); see also SAC ¶ 301(c) (acknowledging reporting regimes in Japan that
regulate Toshiba). The unsponsored ADRs here were created by depositaries
relying on this SEC exemption premised on the foreign regulation of foreign issuers
like Toshiba. See, e.g., Citibank Form F-6 at I-3, Ex.(a)-6 (SAC at 373, 383).
The United States in this case confirmed to the Supreme Court that, under the
SEC’s hands-off approach to foreign issuers that have not entered the U.S.
securities market, the Form F-6 that depositaries must file when creating
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 29 of 32 Page ID #:2008
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 23 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
unsponsored ADRs “does not elicit any information about the foreign issuer itself,
such as its financial statements or a description of its business.” U.S. Amicus Br. 3.
According to the United States: “That approach reflects Congress’s judgment that,
in this context, ‘registration of [a] foreign issuer’s securities generally is not
required.’” Id. That approach favors dismissal here.
Foreign policy (fourth factor) favors dismissal. U.S. interests also favor dismissal because litigating in a U.S. court “would be harmful to U.S. foreign
policy.” Mujica, 771 F.3d at 606. In Morrison, the United States confirmed that
“[p]rivate securities actions . . . present a significant risk of conflict with foreign
nations because the United States affords private plaintiffs litigation procedures and
remedies that other countries often do not provide.” U.S. Amicus Br. in Morrison at
27. One example is the conflict created by the opt-out (as opposed to opt-in) class-
action procedure that Plaintiffs seek to utilize here, which is unavailable in Japan.
See France Amicus Brief at 24, Morrison v. Nat’l Austl. Bank, Ltd., 561 U.S. 247
(2010) (No. 08-1191) (stating: “application of U.S. rules to foreign securities
transactions could upset a foreign nation’s carefully thought out balancing of
plaintiffs’ and defendants’ interests,” and that the U.S. opt-out class action
particularly “conflicts with the public policy of many nations”). Morrison took
such concerns seriously, acknowledging that U.S. litigation procedure as to “what
disclosures must be made . . . what discovery is available in litigation, what
individual actions may be joined in a single suit . . . and many other matters,” risks
“interference” with other countries’ regulatory policies. 561 U.S. at 269-70.
The risk of interference is acute where, as here, (i) the foreign regulator has
investigated the foreign issuer, and (ii) the matter is the subject of foreign litigation.
Potentially disparate treatment of overlapping issues, witnesses and evidence could
compromise the integrity and efficiency of foreign civil or criminal proceedings.
Public policy (fifth factor) favors dismissal. The Japanese Government is greatly concerned that Japanese issuers, regulated in Japan, that have not entered
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 30 of 32 Page ID #:2009
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 24 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
the U.S. securities markets nevertheless would be subject to U.S. securities
litigation. METI Amicus Br. 1-2; see Mujica, 771 F.3d at 607 (“[D]eference to
foreign state’s position on matters that took place within its territory is ‘inherent in
the concept of comity.’”). The U.S. Government’s statements above support
deferring to Japan, given the U.S. policy of deference to foreign regulators
regarding foreign securities markets and issuers, including issuers of securities
referenced in ADRs. This deference aligns with the U.S. policy to facilitate U.S.
investors’ trading in unsponsored ADRs. See Exemption from Registration, 73
Fed. Reg. at 52,762 (explaining SEC’s 2008 amendment of foreign private issuer
exemption was to make it easier to “establish unsponsored ADRs on [an] expanded
group of foreign private issuers,” without the foreign issuers’ involvement). In
short, deference to Japan is consistent with the Ninth Circuit’s acknowledgement
that Morrison’s comity concerns support a “forceful[]” argument for dismissal of
the U.S. Exchange Act claims, even if the Act applies. AIPTF, 896 F.3d at 950.
C. Comity And Forum Non Conveniens Considerations Compel Dismissal Of Plaintiffs’ Japanese-Law Claim
Plaintiffs again assert a Third Claim for Relief under the JFIEA on behalf of
all purchasers in the United States of Toshiba’s 6502 common stock, and all
purchasers of TOSBF securities and unsponsored ADRs. SAC ¶¶ 362-76. On
appeal, the Ninth Circuit “decline[d] to address” this Court’s previous analysis or
dismissal of Plaintiffs’ JFIEA claim on the alternative grounds of international
comity and forum non conveniens. AIPTF, 896 F.3d at 952 n.25.
Because that dismissal was predicated on a detailed consideration and
analysis of the relevant legal factors, this Court should not reconsider its prior
decision. See Rocky Mountain Farmers Union v. Corey, 913 F.3d 940, 951 (9th
Cir. Jan. 18, 2019) (stating law of the case doctrine “precludes reconsideration of an
issue that has already been decided by the same court . . . in the identical case”).
In any event, Toshiba hereby incorporates as if fully set forth here its prior
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 31 of 32 Page ID #:2010
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 - 25 - TOSHIBA CORPORATION’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
2:15-cv-04194-DDP-JC
arguments urging dismissal of the JFIEA claim on comity and forum non
conveniens grounds (ECF No. 44-1, at 16-25; ECF No. 63, at 14-23), as well as the
supporting declarations of Toru Ishiguro (ECF No. 46) and Ayumi Wada (ECF No.
47) to the extent previously permitted by this Court. See Stoyas, 191 F. Supp. 3d at
1087-88. None of the SAC’s new allegations, almost exclusively attempting to
state a claim under the U.S. Exchange Act, warrants altering this Court’s prior
dismissal of the JFIEA claim on the grounds of comity and forum non conveniens.
Finally, if this Court concludes that Plaintiffs somehow state U.S. Exchange
Act claims, forum non conveniens, as well as comity, warrants dismissal of those
claims. See Howe v. Goldcorp Inv., Ltd., 946 F.2d 944, 950-53 (1st Cir. 1991)
(affirming forum non conveniens dismissal of U.S. Exchange Act claims).
CONCLUSION For the foregoing reasons, the Court should grant Toshiba’s Motion and
dismiss the Second Amended Complaint in its entirety with prejudice.
Dated: September 19, 2019 WHITE & CASE LLP By: /s/ Bryan A. Merryman Bryan A. Merryman CHRISTOPHER M. CURRAN (pro hac vice) [email protected] OWEN PELL (pro hac vice) [email protected] JAIME M. CROWE (pro hac vice) [email protected] REUBEN J. SEQUEIRA (pro hac vice pending) [email protected] Attorneys for Defendant Toshiba Corporation
Case 2:15-cv-04194-DDP-JC Document 79 Filed 09/19/19 Page 32 of 32 Page ID #:2011