Wednesday, August 29, 2018

Case of the Day: Pearce v. Mizuho Bank, 2018 U.S. Dist. LEXIS 146005 (E.D. Pa. Aug. 27, 2018)


Plaintiff was a bitcoin investor with Mt. Gox, previously one of the world's most prominent bitcoin exchanges. On behalf of those similarly situation, plaintiff sued Mt. Gox's president and Mizuho Bank, the exclusive processor of all bank deposits and withdrawals made by Mt. Gox during relevant time period. Plaintiff alleged that, in an attempt to pressure Mt. Gox into severing the banking relationship, Mizuho made it difficult for Mt. Gox's customers located abroad to withdraw funds from Mt. Gox accounts, which eventually led to Mt. Gox's bankruptcy.

The court granted Mizuho's motion to dismiss based on lack of personal jurisdiction. The court found there was no purposeful availment of the Pennsylvania forum, as refusing to do business with a customer in Pennsylvania is not an activity, but an absence of activity.


This is the correct result: despite the valiant attempt to flip the negative to the affirmative, there is no specific jurisdiction when the defendant didn't do something in the forum. It is also ironic to see traders in bitcoin--something that was intended to transcend artifices like countries and borders--are being stymied by a classic application of the territoriality principle.

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