DECISION & ORDERI. Background This Decision & Order resolves the motion of Samarco Mineracao S.A. (“Samarco”); BHP Billiton Limited (“BHP Ltd”), BHP Billiton PLC (“BHP Plc”), BHP Billiton Brasil LTDA (“BHP Brasil”) (BHP defendants collectively, “BHP”); and Vale S.A. (“Vale”) (collectively, “Defendants”), to dismiss Plaintiff’s third filed complaint (“Third Complaint”), dated March 21, 2018. The Third Complaint — as were Plaintiff’s first and second complaints — was filed as a class action by Banco Safra S.A. — Cayman Islands Branch (“Plaintiff” or “Banco Safra”). Second Amended Complaint, dated Mar. 21, 2018 (“Third Complaint” or “3rd Complaint”). Plaintiff is an offshore branch of Banco Safra S.A., a Brazilian bank, and was established under the laws of the Cayman Islands. Memorandum in Support of Motion, dated Jan. 13, 2017, at 8. Samarco is a Brazilian mining company that owns and operates iron ore mines and pellet processing facilities in the Brazilian states of Minas Gerais and Espirito Santo. Third Complaint 155. Samarco is a private company that is co-owned by BHP Brasil and Vale, all three of which are headquartered in Brazil. Id, 32, 34, 36, 58.Banco Safra purports to bring this action “on behalf of all purchasers of debt securities issued by Samarco ['Samarco Bonds'] during the Class Period [October 31, 2012 to November 30, 2015], who purchased such securities in domestic U.S. transactions.” Id. 1 1. The Samarco Bonds purchased by Banco Safra were initially offered “only outside the United States” and Banco Safra “acquired the overwhelming majority of [bonds] in the secondary market.” Pl.’s Opp’n to Defs.’ Mot. to Dismiss, dated Aug. 1, 2017 (“Pl.’s First Opp’n”), at 7 n.4.1Banco Safra alleges that Defendants violated U.S. federal securities laws, particularly Section 1O(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §78j(b), Rule 1Ob-5 promulgated thereunder, and Section 20(a) of the Exchange Act, id §78t(a) (“Section 20(a)”). Third Complaint 111, 22. It also brings state claims against Defendants for common law fraud, aiding and abetting fraud, and negligent misrepresentations under New York State law. Id.,i 2.Banco Safra alleges that “[t]his class action arises out of what is widely regarded as the worst environmental disaster in Brazil’s history,” which occurred on November 5, 2015 when Samarco’s Fundao “tailings” dam burst, “releasing more than 16,000 Olympic swimming pools’ worth of wastewater…generated by Samarco’s mining operations in…Minas Gerais.” Id. 3. Banco Safra claims that during the Class Period, Defendants misled investors “about the safety of the Samarco’s mining operations, including the Fundao dam and the tailings deposited at the dam, Samarco’s iron ore production and related matters.” Id. 15.In sum, this is a case by a Brazilian/Cayman Island plaintiff against Brazilian defendants regarding Brazilian bonds and claims which relate to a Brazilian catastrophe. The bonds were never listed on a U.S. exchange and were principally offered and sold outside the United States. It is difficult to perceive a domestic transaction under Morrison and its Second Circuit progeny.Plaintiff’s First Two ComplaintsThe instant complaint is Plaintiff’s third attempt sufficiently to plead a domestic U.S. transaction. Banca Safra filed its first complaint on November 14, 2016. See First Complaint, dated Nov. 14, 2016. On March 6, 2017, Banco Safra on its own initiative filed its second complaint which amended its First Complaint by adding “Exhibit A.” See Second Complaint, dated Mar. 6, 2017. Exhibit A purports to “bolster” the Plaintiff’s pleading of a domestic transaction by listing purchases and sales of Samarco Bonds, and including for each listed transaction the name and address of the U.S. “Counterparty/Broker-dealer,” the trade date, and the purchase or sale price in U.S. dollars. Id. at 2-3. The Second Complaint states that “[a]s set forth in Exhibit A attached hereto, Lead Plaintiff purchased Samarco bonds in domestic (U.S.) transactions during the Class Period and was damaged thereby. Specifically, Lead Plaintiff purchased Samarco bonds from counterparties and/or broker dealers located in the United States.” Second Complaint25.2On June 26, 2017, Defendants filed a motion to dismiss the Second Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure arguing, principally, that “Plaintiff has not [adequately] alleged a [U.S.] domestic securities transaction, and thus its federal securities claims must be dismissed” under Morrison v. Nat’l Australia Bank, 561 U.S. 247 (2010). Defs.’ Memorandum in Supp. of Mot. to Dismiss, dated June 26, 2017, at 4. Defendants (persuasively) argued that: “Merely alleging that [a] transaction[] took place in the United States or that a U.S. broker-dealer was involved is insufficient…. Plaintiff makes no attempt to allege where its contracts were formed, where its purchase orders were placed, where title to the Notes passed, or where payment was exchanged.” Id. (internal quotations omitted).On August 1, 2017, Banco Safra filed its opposition to Defendants’ motion. It separately filed a declaration, dated August 1, 2017, from its General Counsel Enrica Morpurgo apparently to bolster its claim that the case involves U.S. domestic transaction(s). See Pl.’s First Opp’n; Decl. of Enrica Morpurgo, dated Aug. 1, 2017 (“Morpurgo Declaration”). Banco Safra contended that “the [Second] Complaint plausibly alleges domestic transactions by pleading that Plaintiff purchased Samarco bonds in domestic (U.S.) transactions during the Class Period, specifically pleading that Plaintiff purchased Samarco bonds from counterparties and/or broker dealers located in the United States.” Pl.’s First Opp’n at 7. Plaintiff also contended that “[a]lthough unnecessary, Plaintiff provides additional evidence of domesticity. As set forth in the Declaration of Enrica Morpurgo submitted in support of Plaintiff’s opposition, all of the transactions listed in Exhibit A were conducted by Safra and/or its affiliates through bank accounts located in New York. Moreover, as reflected in Exhibit A, all of the counterparties to the transactions and/or their agents were located in the United States.” Pl.’s First Opp’n at 9. The Morpurgo Declaration also states that the alleged securities transactions “were consummated with U.S. dollars.” Morpurgo Decl.
