Mizuho Bank secures dismissal of claims brought by California-based customer of MtGox

Mizuho Bank has managed to secure dismissal of one of the cases brought by US customers of ill-fated Bitcoin exchange MtGox. Earlier this week, Judge John A. Kronstadt of the California Central District Court granted Mizuho’s Motion to Dismiss claims against it brought by Johnathan Carmel.

In October, the Court indicated that it was inclined to grant Mizuho’s motion. This week, the official order and the reasons behind the Court’s decision were announced.

Carmel brought a putative class action on March 27, 2018 against Mizuho Bank, Ltd. and Mark Karpeles. The plaintiff advanced claims of negligence and fraud against Karpeles, and a claim of tortious interference against Mizuho. The claims are related to the collapse of MtGox.

Jonathan Carmel held $52,493.22 and unsuccessfully attempted to withdraw his funds from the exchange. The plaintiff asserts a claim of tortious interference against Mizuho Bank, on the theory that its unilateral termination of its provision of outbound wire transfers to Mt. Gox’s U.S. customers knowingly disrupted the contracts between such customers and the exchange.

Mizuho filed a motion to dismiss in June this year. The bank contends that it is not subject to personal jurisdiction in California, and that Carmel has failed to plead the essential elements of his tortious interference claim, including that Mizuho (1) knew that he had a contract with Mt. Gox or that he was even a Mt. Gox user; (2) intentionally induced a breach of that contract; or (3) caused any loss that Carmel suffered.

In granting Mizuho’s Motion to Dismiss, the Judge said that Mizuho is not subject to general jurisdiction in California. Also, All of Mizuho’s alleged conduct occurred in Japan. Thus, all of the following matters are undisputed: (i) Mt. Gox’s account with Mizuho was opened at its Shibuya branch in Tokyo; (ii) all employees responsible for operational decisions relating to Mt. Gox, including the decisions to seek to suspend services or stop accepting international wire transfers, were located in Japan; (iii) Mizuho did not communicate with Mt. Gox customers about its banking relationship with Mt. Gox; and (iv) all relevant witnesses and documents in Mizuho’s control are located in Japan.

Finally, the Court found that the plaintiff’s arguments are insufficient to demonstrate that Mizuho expressly aimed its conduct at him in California.

In the face of the dismissal of the claims against Mizuho, Carmel will continue his efforts to serve Mark Karpeles.

The case is captioned Jonathan Carmel v. Mizuho Bank, Ltd. et al (2:18-cv-02483).