MZLS is proud to announce a significant victory in federal court, securing the dismissal of all claims against its client, Evolve Bank & Trust (referred to as "Evolve Bank" in the court document), in a complex financial services dispute before The United States District Court for the District of Puerto Rico. This favorable ruling, issued on June 23, 2025, underscores the critical importance of jurisdictional defenses in multi-party litigation.
In Vauban International Bank Corporation et al v. EZBanc Corp, et al., Civ. No. 24-1199 (ADC), MZLS Special Counsel Carlos Steffens represented Evolve Bank in conjunction with its national law firm, TALG.
The plaintiffs, Tolomeo Bank International Corp., Tolomeo Bank Limited, and Vauban International Bank Corporation (collectively, the "bank plaintiffs"), filed a complaint alleging thirteen causes of action relating to alleged unauthorized withdrawal of funds deposited with co-defendant, Evolve Bank. Their claims included conversion, unjust enrichment, negligence, constructive fraud, and breach of fiduciary duties.
The lawsuit involved multiple defendants, including BSI Group LLC ("BSI"), EZBanc Corp. and its Directors and Officers ("EZBanc"), EZBanc's President, Gregory Donahue ("Donahue"), Evolve Bank & Trust and its Directors and Officers ("Evolve Bank"), and Solid Financial Technologies, Inc., its Chief Executive Officer, Arjun Thyagarajan, its President, Raghav Lal, and its Directors and Officers ("Solid Tech"). The Court noted that plaintiffs' allegations were "cobbled together" almost entirely from another proceeding filed in the Eastern District of Arkansas.
Evolve Bank, through the joint legal representation of TALG and MZLS, moved to dismiss the complaint based on, inter alia, lack of personal jurisdiction. On June 23, 2025, the U.S. District Court for the District of Puerto Rico granted these motions, dismissing plaintiffs' claims without prejudice.
The Court’s decision to dismiss was primarily predicated on the lack of personal jurisdiction over the defendants. Personal jurisdiction is a fundamental requirement for a court to hear a case, representing "the power to require the parties to obey its decrees". As this case was brought under diversity jurisdiction, the Court applied the prima facie standard in reviewing motions to dismiss under Fed. R. Civ. P. 12(b)(2).
The Court conducted a detailed analysis of specific jurisdiction, which applies "where the cause of action arises directly out of, or relates to, the defendant's forum-based contacts". Applying the First Circuit Court of Appeals' three-pronged test—relatedness, purposeful availment, and reasonableness—the Court found the plaintiffs’ complaint to be fatally flawed.
Specifically, the Court determined that the plaintiffs failed to satisfy the crucial relatedness prong. The ruling highlighted that while plaintiffs alleged injury in Puerto Rico, they did not allege that any allegedly tortious conduct occurred in Puerto Rico. The alleged mishandling of funds occurred outside of Puerto Rico. The Court reiterated that an "in-state injury alone is not sufficient under the Due Process Clause to prove relatedness for tort claims". Without satisfying this threshold requirement, the Court was not required to proceed with further jurisdictional analysis.
This successful dismissal demonstrates MZLS's strong capabilities in defending clients against complex federal litigation, particularly within the U.S. District Court for the District of Puerto Rico. The firm, through Carlos Steffens, effectively argued the critical legal principles of personal jurisdiction under Fed. R. Civ. P. 12(b)(2), safeguarding Evolve Bank's interests against claims brought in an improper forum. Our collaboration with national law firm TALG further showcases our ability to provide seamless and effective defense in multi-jurisdictional disputes.
MZLS maintains a strong focus in navigating the intricate procedural and substantive aspects of federal litigation, providing comprehensive litigation defense for financial institutions and other corporate clients facing complex claims. This victory reinforces our commitment to employing strategic legal arguments to protect our clients from unwarranted litigation.
The outcome in Vauban International Bank Corporation et al v. EZBanc Corp, et al. underscores the importance of a robust defense against claims brought in judiciary forums, in this particular case demonstrating the importance of understanding and having clear the requirements for jurisdiction across state lines. For businesses and financial institutions facing federal lawsuits or contemplating litigation, understanding these jurisdictional nuances is paramount. Staying informed on proposed federal rule changes, such as Proposed Changes to Federal Rules of Evidence or Proposed Federal Rule Changes: What Businesses and Their Attorneys Need to Know, is also crucial for proactive litigation strategy.
Our team at MZLS possesses deep knowledge in federal litigation and representing clients in banking litigation as well as other complex commercial disputes within the U.S. District Court for the District of Puerto Rico and state courts. We provide strategic counsel to assess jurisdictional vulnerabilities and mount vigorous defenses.
Schedule a Consultation with MZLS today to discuss your federal litigation defense needs, personal jurisdiction concerns, or any complex legal challenges your business may face in Puerto Rico or involving federal courts.
Disclaimer: This blog article provides general legal information and analysis regarding the U.S. District Court for the District of Puerto Rico's Opinion and Order in Vauban International Bank Corporation et al v. EZBanc Corp, et al., Civ. No. 24-1199 (ADC), issued on June 23, 2025. This information should not be considered legal advice. Past results do not guarantee future outcomes. Legal cases are complex and fact-specific. Businesses and individuals should consult with qualified legal counsel for advice specific to their situation. MZLS provides comprehensive legal counsel and representation in federal litigation, corporate defense, banking litigation, and appellate matters in Puerto Rico and Washington D.C. We also monitor developments in areas such as Proposed Amendments to Federal Bankruptcy Rules: Key Updates to offer holistic client support.
Established in 2019, MZLS LLC is a full-service law firm with offices in San Juan, Puerto Rico and Washington D.C. We provide comprehensive legal counsel and litigation defense to clients facing complex challenges in federal courts and various jurisdictions. Our robust litigation and appellate practice includes extensive experience in personal jurisdiction defenses, corporate defense, banking litigation, and guiding clients through intricate federal regulatory compliance matters. We are committed to protecting our clients' interests in their most demanding legal disputes.
