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Moneygram Payment Systems, Inc. v. Deutsche Bank AG

Court of Appeals of Minnesota

July 22, 2013

MoneyGram Payment Systems, Inc., Appellant,
Deutsche Bank AG, et al., Respondents, Goldman, Sachs & Co., et al., Defendants


Hennepin County District Court File No. 27-CV-12-1349 Bjorkman, Judge

Carolyn G. Anderson, Brian C. Gudmundson, June P. Hoidal, Zimmerman Reed, P.L.L.P., Minneapolis, Minnesota; and Joseph D. Daley (pro hac vice), Robbins Geller Rudman & Dowd LLP, San Diego, California (for appellant)

Thomas H. Boyd, William A. McNab, Winthrop & Weinstine, P.A., Minneapolis, Minnesota; and Pamela Rogers Chepiga (pro hac vice), Allen & Overy LLP, New York, New York (for respondents)

Considered and decided by Smith, Presiding Judge; Schellhas, Judge; and Bjorkman, Judge.



Appellant MoneyGram Payment Systems Inc. (MoneyGram) challenges the dismissal of its claims against respondents Deutsche Bank AG (DBAG) and Deutsche Bank Securities Inc. (DBSI), arguing that the district court (1) erred by determining Minnesota lacks personal jurisdiction over DBAG and DBSI and (2) abused its discretion by not granting jurisdictional discovery. Because we conclude that personal jurisdiction exists over DBSI but not DBAG and that MoneyGram did not properly present its jurisdictional-discovery request to the district court, we affirm in part, reverse in part, and remand.


MoneyGram sued DBAG, DBSI, and several other investment banks, [1] alleging fraud and misrepresentation in connection with the sale of mortgage-related collateralized debt obligations (CDOs) and residential-mortgage-backed securities (RMBSs) to MoneyGram from 2005 to 2007.

The complaint[2] alleges that MoneyGram is a Delaware corporation that provides global payment services. It maintained its principal place of business in Minnesota at all times relevant to its claims.[3] DBAG is a German corporation that provides global financial services and is based in Frankfurt, Germany. DBSI, a registered broker-dealer and a subsidiary of DBAG, is a Delaware corporation with its principal place of business in New York.

DBSI marketed and sold securities to Minnesota residents, including the securities at issue here, two CDOs and four RMBSs, which DBSI sold to employees of MoneyGram's Minneapolis office. MoneyGram further alleges that DBAG and DBSI are closely interrelated and that DBSI functions as DBAG's instrumentality or alter ego. DBAG, through its London branch, arranged the CDOs that DBSI sold to MoneyGram and was aware that CDOs and RMBSs were being sold to Minnesota customers. MoneyGram alleges that it sustained substantial monetary loss as a result of the actions of DBSI and DBAG.

DBSI and DBAG moved to dismiss MoneyGram's complaint under Minn. R. Civ. P. 12 for lack of personal jurisdiction and failure to state a claim upon which relief can be granted. The motion largely focused on the merits of MoneyGram's claims.MoneyGram submitted three affidavits to oppose the motion.

First, Douglas Porter, an employee in MoneyGram's investment group, averred that DBSI employees contacted MoneyGram's office in Minneapolis "all the time to show MoneyGram different deals or securities that were on the market" and sold securities to MoneyGram. Porter was aware of these contacts because he interacted and worked closely with the employees who received the communications.

Second, Daniel Bolles, an investment accountant at MoneyGram International, [4]provided an affidavit identifying 37 securities that "Deutsche" sold to MoneyGram International, its affiliates, and its successors from 2000 to 2007. The list includes five of the six securities that form the basis of the claims against DBSI and DBAG.

Third, Jason Davis, counsel for MoneyGram, submitted an affidavit attaching (1) five Bloomberg documents or trade tickets showing the actual or expected settlement date of sales from DBSI to MoneyGram; (2) a Deutsche Bank document regarding one of the CDO transactions underlying MoneyGram's claims; (3) a January 16, 2007 e-mail from a DBSI employee to a MoneyGram employee in Minneapolis concerning one of the CDOs at issue; and (4) a DBAG press release naming Greg Lippman, DBSI's head of CDO trading, DBAG's global head of ABS trading and syndicate and CDO trading.

The district court granted DBAG and DBSI's motion to dismiss for lack of personal jurisdiction, concluding that MoneyGram failed to plead any relevant contacts between the Deutsche Bank entities and Minnesota and that the state has no interest in providing MoneyGram a forum. MoneyGram requested permission to seek reconsideration under Minn. R. Gen. Pract. 115.11. The district court denied the request. MoneyGram appealed. DBSI and DBAG move this court ...

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