Think3 Litigation Trust v. Zuccarello, et al. (September 19, 2014)
Issues: Plaintiff Litigation Trust brought adversary proceeding against multiple Defendants. Defendants were former officers and directors of the Debtor, a Delaware corporation that maintained operations in Italy. Three Italy-based Defendants and three California-based Defendants filed Motions to Dismiss for Lack of Personal Jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure (“Rules”) and Bankruptcy Rule 7012. One Italy-based Defendant also sought dismissal for insufficiency of service of process under Italian law under Rule 12(b)(5). Issues addressed by the Court included: (1) whether “nationwide” minimum contacts with the United States was sufficient for the bankruptcy court to exercise personal jurisdiction over the defendants under Bankruptcy Rule 7004; (2) whether personal jurisdiction could be exercised over three California-based Defendants; (3) whether personal jurisdiction could be exercised over three Italy-based Defendants; and (4) whether service of process on one Italy-based Defendant was sufficient under the Hague Convention. Holdings: The Court denied the Motions to Dismiss For Lack of Personal Jurisdiction as to five Defendants, and granted the Motion as to one Italy-based Defendant. The Court’s oral ruling on the Motions is set forth in an audio file attached to the docket sheet. In general, the Court held: (1) “nationwide” minimum contacts with the United States was sufficient for the bankruptcy court to exercise personal jurisdiction over Defendants under Bankruptcy Rule 7004; (2) as to three Defendants residing in California, sufficient minimum contacts existed with the United States to exercise personal jurisdiction and notwithstanding their limited contacts with the State of Texas where the bankruptcy court was located; (3) two of the Italy-based Defendants had sufficient minimum contacts with the United States under “specific jurisdiction” principles for the court to exercise personal jurisdiction, and one Italy-based Defendant did not have sufficient minimum contacts with the United States for the court to exercise personal jurisdiction; and (4) service of process under Hague Convention on Italy-based Defendant was sufficient.