Richards

Alan Richards and 573 other individuals (collectively, the plaintiffs or the Names) brought suit against the Corporation of Lloyd’s (Lloyd’s) and against Lloyd’s of London, a- community of enterprises characterized by the plaintiffs as an Unincorporated Association (the Unincorporated Association). The plaintiffs alleged securities fraud under the Securities Act of 1933, 15 U.S.C. § 77a (the 1933 Act) and under the Securities Exchange Act of 1934, 15 U.S.C. § 78a (the 1934 Act). The suit also alleged related violations of the Racketeer Influenced and Corrupt Organizations Act of 1970, 18 U.S.C. § 1961 et seq. (RICO). The plaintiffs further alleged breach of state Blue Sky laws, breach of fiduciary duty, and common law fraud. • On motion of the defendants under *-160 Fed.R.Civ.P. 12(b)(3) the district court dismissed the plaintiffs’ action.

The primary question presented on appeal is whether forum selection and choice of law provisions in the contracts signed by the Names (the Choice Clauses) require the application of English law to the plaintiffs’ claims and the confinement of these claims to the courts of England. Holding that the Choice Clauses are void because they violate…

Concurring and Dissenting:

I would affirm the judgment dismissing the action pursuant to Fed.R.Civ.P. 12(b)(3). The Choice Clauses are valid and are not preempted by extraterritorial application of the United States securities laws.

Appellants, all citizens or residents of the United States, claim that Section 14 of the 1933 Act and Section 29a of the 1934 Act, give them the right to repudiate their insuring agreements. Section 14 reads:

The key question is whether the transactions described in the complaint made the appellants “persons acquiring any security.” The majority concludes, without deciding, whether these foreign insurance undertakings are securities, that the appellants haye brought themselves within the protection of a law designed to protect domestic investors from being victimized by combinations of their own greed and the artifices of sellers of investment schemes. The majority holds that just because the Appellants alleged in their complaint that they were “persons acquiring any security,” United States securities law renders void the carefully written terms of the engagements by which the Appellants brought themselves into the English insurance underwriting…