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Appeal from the United States District Court for the Eastern District of Michigan at Flint. No. 4:12-cv-14607--Terrence George Berg, District Judge.
Raymond R. Burkett, BURKETT & ASSOCIATES, Livonia, Michigan, for Appellant.
Christopher A. Cornwall, DICKINSON WRIGHT, PLLC, Detroit, Michigan, Richard L. Scheff, MONTGOMERY MCCRACKEN WALKER & RHOADS LLP, Philadelphia, Pennsylvania, for Appellees.
Before: SILER, SUTTON, and McKEAGUE, Circuit Judges.
SILER, Circuit Judge.
The main issues in this case are (1) whether answering a phone call establishes personal jurisdiction in the state from which the phone call was made; and (2) whether a bank owes a duty of care to an identity theft victim who is not a customer. SFS Check, LLC (SFS), a Michigan financial services company, processed all its transactions through its account at Fifth Third Bank. Fifth Third discovered that illegal gambling transactions were being processed through an account associated with SFS at First Bank of Delaware (FBD). Fifth Third terminated SFS's account. SFS soon went bankrupt. It sued FBD and some of its officers, alleging negligence and fraud. The district court found that (1) it lacked personal jurisdiction over all individual defendants; (2) FBD owed no duty of care to SFS because SFS was not a customer; and (3) SFS failed to adequately plead a claim of fraud. SFS now appeals the dismissal of its complaint. We AFFIRM.
SFS is a defunct company run by Charles Kopko in Michigan. It provided financial transaction processing and electronic funds transfers to companies engaged in e-commerce. It processed those transactions through its account at Fifth Third, which is not a party to this suit. In 2010, Fifth Third discovered that FBD was processing illegal gambling funds through SFS's account at Fifth Third and notified SFS that it was closing SFS's account immediately. Losing this account crippled SFS's ability to do business, and it soon went bankrupt.
In August 2010, Kopko telephoned FBD and spoke to Sian Bastable, FBD's vice-president for e-commerce. According to Kopko, Bastable said FBD did not have an account in SFS's name. In October 2010, SFS received a grand jury subpoena related to a federal investigation of the gambling transactions done in SFS's name. When Kopko called Bastable again to discuss the subpoena, Bastable ...