Justices Say Australian Bank Can't Be Sued in U.S.
(CN) - Foreign investors can't sue the National Australia Bank in the United States, the Supreme Court ruled Thursday after upholding an appeals court decision to toss three Australian investors' lawsuit because American courts lack jurisdiction.
The bank had bought HomeSide Lending, a mortgage company, for $1.2 billion in 1998. It later sold the company to Washington Mutual.
The bank said it used incorrect calculated the fees it would generate from future mortgages.
Three Australian investors who bought shares in the bank on the Australian stock exchange wanted to proceed with their class-action in the United States.
They claimed that foreign plaintiffs can sue in an American court for securities violations.
The law in question does not allow for securities misconduct lawsuits to be brought against foreign or American defendants by foreign plaintiffs in American courts.
"Like the United States, foreign countries regulate their domestic securities exchanges and securities transactions occurring within their territorial jurisdiction," Justice Antonin Scalia wrote. "And the regulation of other countries often differs from ours as to what constitutes fraud, what disclosures must be made, what damages are recoverable, what discovery is available in litigation, what individual actions may be joined in a single suit, what attorney's fees are recoverable, and many other matters."