On March 30, 2017, Justice Sherwood of the New York County Commercial Division issued a decision in Magna Equities II, LLC v. Writ Media Group Inc., 2017 NY Slip Op. 30627(U), holding that a transfer agent was not bound by the forum selection clause in notes it allegedly failed to transfer, explaining:
As to plaintiffs’ assertion that Pacific [the transfer agent] is subject to the forum selection clause in the Notes, New York courts have held that non-signatories may be bound by such a clause if they are closely related to the signatory party, as well as to the dispute itself such that it was reasonably foreseeable that it would be bound by the forum selection clause. In Tate & Lyle, the non-signatory was a signatory’s parent company, which had been intimately involved in many phases of the agreement at issue, including in deciding to bring the suit in that case. The non-signatory’s involvement in this matter was far more than a parent company’s mere approval of a contract. After making all the critical decisions for its subsidiary in this matter from the signing of the contract to the commencement of litigation, the parent cannot seriously argue that it was not reasonably foreseeable that the forum selection clause in the contract it approved, would not be asserted against it. In the case relied upon by the plaintiffs, SRT Capital Ltd v. Soleil Capital Ltd, the non-signatory was a principal of the signatory company and played an active role in the transaction. Here, Pacific is not a closely related entity to Writ. Pacific was not involved when the transaction was consummated, and it was not reasonably foreseeable that Pacific would be bound by the forum selection clause in the Note. The fact that Pacific may have received copies of the Notes when it began acting as Writ’s transfer agent, does not make it subject to them.
(Internal quotations and citations omitted) (emphasis added).