An inconvenient truth: how forum non conveniens doctrine allows defendants to escape state court jurisdiction.

Author:Springer, Brian J.

INTRODUCTION I. THE DEVELOPMENT OF THE FORUM NON CONVENIENS DOCTRINE A. The Origins of the Forum Non Conveniens Doctrine B. The Continuing Importance of the Forum Non Conveniens Doctrine II. HOW REMOVAL POSES SPECIAL PROBLEMS FOR THE FORUM NON CONVENIENS DOCTRINE AND UNDERCUTS OTHER PROTECTIONS A. The Forum Non Conveniens Doctrine Under Erie and the Problem Posed by Removal B. How Applying Federal Forum Non Conveniens in Diversity Cases Undercuts Other Protections 1. Equitable Nature of the Forum Non Conveniens Doctrine 2. Transfer of Law Under [section] 1404(a) 3. Interests of the States III. THE PROPOSED REMEDY A. Waiver as a Workable Solution B. Amendment of the Removal Statute as the Preferred Solution CONCLUSION APPENDIX INTRODUCTION

Imagine you are a foreign citizen. You have been injured in a foreign country due to the negligence of a U.S. company and have a legitimate tort claim for millions of dollars against the company. You file suit in the state court in Missoula, Montana-located at 200 W. Broadway, Missoula, Montana 59802. (1) The defendant company removes the case, on the basis of diversity of citizenship, to the United States District Court of Montana-located at 201 E. Broadway, Missoula, Montana 59802 (2)-and argues that the case should be dismissed under the doctrine of forum non conveniens. The state court probably would not have granted the motion, but rather would have allowed the case to proceed to the merits. (3) But now that the case has been moved just two blocks away (4) to a federal district court, that court can exercise its discretion under federal forum non conveniens doctrine and dismiss the case. (5) This sequence of events does not occur infrequently. (6)

Because almost every federal court applies federal forum non conveniens law in diversity cases, (7) defendants can remove cases to federal court solely for the purpose of getting them dismissed on forum non conveniens grounds. In cases where a state would not dismiss under its own forum non conveniens doctrine, it is unfair for defendants to exploit removal to obtain dismissal. Allowing defendants to engage in this practice undercuts the rights of the parties and undermines the purpose of the forum non conveniens doctrine.

The appropriate remedy is for courts to find that defendants who remove from state court waive their right to argue forum non conveniens in federal court when the state would not have dismissed the case under its forum non conveniens law. This would prevent the injustice of defendants using removal as a mechanism for dismissal. However, courts may be unwilling to adopt waiver. Ultimately, I propose that Congress remedy this injustice by amending the removal statute to permit remand to the state court when the federal court dismisses on forum non conveniens grounds.

In this Comment, I discuss the inequities of the current system and why my proposal would remedy this injustice. In Part I, I trace the development of the forum non conveniens doctrine and delineate its importance in cases today. In Part II, I explain how the decision of most federal courts to use federal forum non conveniens law in diversity cases creates an inequity that has effects beyond the forum non conveniens inquiry. Finally, in Part III, I propose that the proper remedy is to impute waiver of forum non conveniens arguments to defendants who remove a case from a state that would not have dismissed under its forum non conveniens doctrine. The courts could do this themselves by adopting waiver into the common law. But ultimately, to remedy this inequity, Congress should amend the removal statute to require remand to state court, rather than outright dismissal, when a federal court concludes that it is an inconvenient forum.


    1. The Origins of the Forum Non Conveniens Doctrine

      The Supreme Court has long recognized the discretion of both state and federal courts to decline to exercise jurisdiction in exceptional circumstances. (8) In Gulf Oil Corp. v. Gilbert, the Court acknowledged the availability of forum non conveniens doctrine as a tool to dismiss cases in federal court. (9) The forum non conveniens inquiry was formulated as an equitable test focusing on the unfairness associated with having the dispute heard in a particular forum, with the plaintiff's choice of forum rarely disturbed. (10) Rather than articulating a particular rule, the Court instead enumerated a list of private considerations--directed to the dynamics of the lawsuit--and public considerations--directed to the community's interest in the resolution of the dispute--for courts to consider in forum non conveniens determinations. (11) However, to trigger the doctrine's application, a court must first find that an adequate alternative forum exists. (12)

      The question of what qualifies as an adequate alternative became the central inquiry in the Court's next major forum non conveniens case, Piper Aircraft Co. v. Reyno. (13) There, the plaintiff filed a wrongful death suit in California state court arising out of a plane crash that occurred in Scotland. (14) The defendants removed the case to federal court and obtained a transfer to the United States District Court for the Middle District of Pennsylvania. (15) The defendants then moved for dismissal under the doctrine of forum non conveniens, arguing that Scotland was the more appropriate forum. (16) The plaintiff opposed this motion, contending that dismissal would be unfair because Scottish law was significantly less favorable than California law. (17)

      The Supreme Court agreed with the defendants, holding that Scotland was an adequate alternative forum and that dismissal for forum non conveniens was therefore appropriate. (18) The Court recognized that because the central focus of Gilbert's forum non conveniens inquiry was convenience, "dismissal [could] not be barred solely because of the possibility of an unfavorable change in law." (19) The Court further noted the need to retain flexibility in the doctrine, (20) thereby solidifying forum non conveniens as a discretionary tool by which district courts can dismiss inconvenient litigation when the balance of inequities strongly favors the defendant.

    2. The Continuing Importance of the Forum Non Conveniens Doctrine

      Section 1404 empowers a federal district court to transfer a case to another district court in which the case could have been filed originally when doing so furthers the interests of convenience and justice. (21) A district court's latitude to grant a transfer under [section] 1404(a) has been interpreted to be much greater than its latitude to dismiss under forum non conveniens. (22) Modern transfer procedures have effectively eliminated the use of the forum non conveniens doctrine in cases where the alternative forum is another U.S. district court. (23) Nevertheless, the federal forum non conveniens doctrine is still applicable where the alternative forum is a foreign court. (24)

      The continued vitality of forum non conveniens in cases involving foreign events is especially important as the world increasingly moves toward international harmonization. Countries have adopted similar commercial and legal standards to facilitate cooperation. (25) Globalization will likely lead to more international disputes filed in U.S. courts. (26) And because these disputes usually involve non-U.S. citizens, they will often end up in federal courts (27) and implicate the doctrine of forum non conveniens. (28)

      Furthermore, foreign plaintiffs have both opportunity and incentive to file in U.S. courts. Foreign plaintiffs generally prefer to file in the United States to benefit from the procedural advantages--including extensive pretrial discovery, contingency fees, and efficient resolution and enforcement of judgments--as well as the substantive advantages--including plaintiff-friendly juries and liability awards allowing both compensatory and punitive damages--unique to the U.S. court system. (29)

      After the Supreme Court's recent decision in Kiobel v. Royal Dutch Petroleum Co., (30) foreign plaintiffs have even greater incentives to bring claims in state courts. The Court held that federal courts have no jurisdiction under the Alien Tort Statute (ATS) (31) where the act underlying the dispute occurred outside of the United States. (32) This effectively abrogated the lower courts' more liberal grants of jurisdiction under the ATS. (33) Although the decision leaves open the possibility that federal district courts will be able to hear disputes when the claims at issue sufficiently "touch and concern the territory of the United States," (34) this exception is very narrow. (35)

      Because the Supreme Court severely limited the circumstances in which federal courts have original jurisdiction under the ATS, commentators suggest that plaintiffs will have to bring these claims under international or state law, rather than under the ATS. (36) This will lead to an increase in filings in state courts. (37) Since a large portion of these disputes will involve an international party, it is likely that many will be removed to federal court on the basis of diversity jurisdiction. (38) These considerations suggest that defendants will continue to use forum non conveniens as a tool for dismissal in federal court.

  2. How Removal Poses Special Problems for The Forum Non Conveniens Doctrine and Undercuts Other Protections

    1. The Forum Non Conveniens Doctrine Under Erie and the Problem Posed by Removal

      After the adoption of the Federal Rules of Civil Procedure in 1938, the Supreme Court recognized that its rule in Swift v. Tyson--that federal courts hearing cases in diversity were free to fashion rules of federal common law (39)--was unconstitutional. (40) According to the Court, the policy of federal jurisdiction required elimination of the Swift rule, which had resulted in unequal administration of the law and encouraged litigants to forum...

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