NEW YORK (LN) — The First Department on Tuesday unanimously affirmed a forum non conveniens dismissal of a derivative lawsuit brought on behalf of Credit Suisse Group AG, ruling the Swiss bank's home jurisdiction was better suited to adjudicate breach-of-duty claims against its directors.
Ezra Cattan filed the derivative action in New York County Supreme Court in 2020, naming board members including Urs Rohner, Michael Klein, Timothy P. O'Hara, Robert S. Shafir, Pamela A. Thomas-Graham, Sean T. Brady, Robert Jain, and Philip Vasan, along with Credit Suisse entities. Justice Andrea Masley granted the defendants' motion to dismiss in April 2023, finding Switzerland a more appropriate forum.
On appeal, Cattan argued the case fell within an exception under CPLR 327(b), which applies when claims arise out of or relate to agreements governed by New York law. The First Department found the argument unpreserved because Cattan first raised it in a sur-reply motion that the motion court denied and he did not challenge on appeal. The panel added that even if reviewable, the argument failed because the Swiss law breach-of-duty claims did not arise out of any New York-governed agreement.
The panel found the forum non conveniens factors weighed in favor of dismissal. Although Cattan resides in New York, Credit Suisse is a Swiss company with its principal place of business in Switzerland, most individual defendants live outside New York, and the alleged economic injuries occurred there. The court noted that "Switzerland has the primary interest in overseeing and regulating the operations of a Swiss bank and determining whether the directors met their obligations under Swiss law."
The panel also found that litigating in New York would impose substantial burdens on defendants and witnesses, since key witnesses are current and former Credit Suisse executives who live in Switzerland, and most documentary evidence related to corporate governance is there. Cattan did not demonstrate Switzerland is an inadequate alternative forum, the panel said.
The First Department distinguished its recent decision in Employees Retirement Sys. for the City of Providence v. Rohner, noting that case involved defendants all based in Credit Suisse's New York offices where the alleged wrongdoing occurred. "Virtually every aspect of the subject matter underlying that action occurred in New York," the panel noted.
The court dismissed as abandoned Cattan' appeal from the March 2022 order denying his motions to file sur-reply papers.