A call for stricter appellate review of decisions on forum non conveniens.

• Published date: 22 September 2012
• Author: Fromherz, Nicholas A.
• Date: 22 September 2012

ABSTRACT

Forum non conveniens has been criticized as anachronistic and unfair. Critics say that it amounts to little more than economic protectionism, serving as a pretext for the dismissal of suits brought against domestic: corporate defendants. Even if one does not view the doctrine as inherently flawed, it is undeniable that its application has been extremely uneven owing to the broad discretion exercised by district courts' ruling on the issue. Troubling in any circumstances, the misapplication of forum non conveniens is all the more so because of the high stakes at issue in such matters. When a case is dismissed for forum non conveniens, it usually goes away for good.

Against this background, I argue that the appellate courts should adopt a stricter standard of review for decisions on forum non conveniens. The basic rubric (abuse of discretion) should remain, but appellate courts should apply this standard with heightened scrutiny in light of the serious consequences of the underlying decision. The courts have clone so in the analogous context of rulings on class certification. Doing so in the context of forum non conveniens would significantly curb abuse, all the while demonstrating to litigants and the broader community that the judiciary understands the importance of these decisions in today's world.

                TABLE OF CONTENTS
                INTRODUCTION
                I. A PRIMER ON FORUM NON CONVENIENS
                 A. History and Evolution
                 B. The Basic' Test, Underlying Principles, and Practical
                 Problems
                 1. The Test and Underlying Principles
                 2. Problems in Practice
                 a. A Presumption Against Foreign Plaintiffs
                 b. Practical and Procedural Considerations that
                 Enable Early Dismissal
                 c. Lenient Appellate Review
                II. FNC AND CLASS CERTIFICATION: PROCEDURAL ISSUES THAT
                 OVERSHADOW THE MERITS
                III. STANDARD OF APPELLATE REVIEW AND WHY IT MATTERS
                 A. Abuse of Discretion Review in FNC and Class Certification
                 Appeals
                 B. An Empirical Analysis
                 1. The Samples and Results
                 a. Decisions on Class Certification
                 i. Methodology
                 ii. Results
                 b. Decisions on Forum Non Conveniens
                 i. Methodology
                 ii. Results
                 2. Conclusions Drawn and Other Observations
                IV. THE NEED FOR CONSISTENT APPELLATE REVIEW OF FNC AND
                 CLASS CERTIFICATION RULINGS
                CONCLUSION
                

INTRODUCTION

We live in a shrinking world. With rapid economic globalization and technology that defies geography, national boundaries become less significant every day. This is all the more true for U.S.-based companies,

But it is not all profit and progress. As U.S. companies expand their international presence, (2) they frequently cause injuries to foreign citizens. Argentines contract HIV through the reckless distribution of blood products; (3) a Ford-owning Mexican is injured in a rollover; (4) and the list goes on. And so with the ascendancy of international commerce, we see a corresponding ascendancy in international litigation--with the United States as the venue of choice. (5)

For a number of reasons, foreign plaintiffs want their cases heard in U.S. courts and, perhaps counter-intuitively, U.S. defendants prefer to resolve matters elsewhere. (6) In fact, the draw to litigate in the United States is so powerful, and the consequences so high, that the issue of location frequently overshadows the merits. In legal terms, it all comes down to the doctrine of forum non conveniens ("FNC"). This doctrine permits U.S. courts to dismiss lawsuits brought by foreign plaintiffs when the deference normally paid to the plaintiff's choice of forum is vastly outweighed by considerations of convenience. (7) In theory, FNC dismissals are the exception; in practice, however, FNC dismissals seem to have become more like the rule. (8)

One of the reasons for this, the reason I explore in this article, is the standard of appellate review. When a federal district court dismisses a case on FNC grounds, a federal appellate court reviews that decision for an abuse of discretion. (9) A deferential standard of review in most contexts, it is all the more so in FNC cases. (10) But with so much riding on the outcome--an FNC dismissal is usually case-dispositive appellate review should be more rigorous. The standard should still be abuse of discretion, but it should be more like the abuse of discretion analysis applied in the review of class certification decisions. Call it "abuse-of-discretion-plus."

To make this argument, I devote Part I to discussing the origins of FNC, the governing analytical framework, and the doctrine's underlying principles. In Part II, I discuss the practical effects of FNC decisions by drawing a parallel to decisions on class certification. In Part III, I discuss the standard of appellate review for FNC decisions. I observe that while the stakes are similar to class certification rulings and the standard of review is ostensibly the same (abuse of discretion), appellate courts actually give much more deference to district court decisions concerning FNC. I substantiate the point through an empirical analysis. Finally, in Part IV, I press my central thesis: Appellate courts should apply the same rigorous version of abuse of discretion review to decisions on FNC that they apply to rulings on class certification. This would be in better harmony with the driving principles of the FNC doctrine and the high stakes of the issue.

I. A PRIMER ON FORUM NON CONVENIENS

In this part, I discuss the history and evolution of FNC, the test as it currently stands, the doctrine's driving principles, and problems in practice. Through this discussion, we come to see that while FNC was designed to prevent abuses in venue selection, it has become a tool that courts aggressively use to dismiss cases that plaintiffs have legitimately filed in the United States. In practice, FNC does its job too well.

A. History and Evolution

Like so many judicial doctrines, it is difficult to pin down the exact time and place of FNC's origin. The general consensus, however, is that Scottish courts first developed the doctrine in the nineteenth century. (11) Then, as now, courts used FNC to prevent abuses in venue selection--where the alternative forum was in a different country and the plaintiff chose Scotland simply to harass the defendant through a distant and inconvenient forum. (12) As the doctrine gained permanence in the British Isles, American state courts picked it up as well. Though they rarely used the term forum non conveniens, that was, in substance, exactly the doctrine they were applying. (13) By the early 1900s, the concept (if not the term) was an accepted feature of common law in most state courts. (14)

In the federal courts though, a definitive statement on FNC would not come until 1947. That year saw the Supreme Court's decision in Gulf Oil Corp. v. Gilbert, (15) still one of the two most important cases in FNC jurisprudence. In Gilbert, the Court held that a district court has the inherent power to dismiss an action for FNC despite proper jurisdiction. (16) I will set forth the modern FNC test in a moment, but for now it suffices to note that Gilbert made a pair of lasting contributions: (1) the initial presumption that a plaintiff's choice of forum is entitled to deference; (17) and (2) the need to weigh both "public" and "private" factors in determining whether that presumption is overcome by practical inconvenience. (18)

But Gilbert was still a step removed from the scenario we are concerned with in this article--that of international litigation. The plaintiff in Gilbert was a Virginia citizen who sued a Pennsylvania corporation in the Southern District of New York. (19) It was not until 1981, in Piper Aircraft Co. v. Reyno, that the Supreme Court would speak on FNC in cases involving foreign plaintiffs. (20)

The core set of facts in Piper--a foreign citizen injured abroad by a product designed and manufactured in the United States (21)--is one we see over and over in modern FNC cases. Along with Gilbert, it is the other giant of FNC jurisprudence. But the Piper Court did not merely apply the principles of Gilbert to an international case. Rather, it adjusted the doctrine in two important ways. First, the Court added a preliminary test to protect a plaintiff whose home nation lacks any meaningful system of justice. (22) If the alternative forum is not "available" and "adequate," the analysis stops right there and the case stays with the U.S. court. (23) But as we shall see, this is scant protection in most cases; unless the alternative forum is truly horrendous, it will clear this hurdle. (24) And, if the Court's first adjustment nevertheless seems pro-plaintiff, the second adjustment tips the scale in favor of defendants. After announcing the "available and adequate" threshold test, the Court held that a foreign plaintiff's choice of forum may be accorded less deference by U.S. courts than that enjoyed by domestic plaintiffs. (25) Even if the Court did not intend it, this skews the whole analysis going forward, coloring each of the public and private factors in defendants' favor. (26)

B. The Basic Test, Underlying Principles, and Practical Problems

In this part, I describe the basic test and underlying principles of FNC. Then I discuss the problems of FNC in practice, including the presumption against foreign plaintiffs, practical and procedural considerations that enable early dismissal, and the lenient standard of appellate review.

1. The Test and Underlying Principles

As the Court recently confirmed in Sinochem Int'l Co., Ltd. v. Malaysia Int'l Shipping Corp., (27) the Piper and Gilbert decisions set the basic rules for courts deciding motions to dismiss on FNC. On paper, the test is simple enough. A court starts with the presumption that the chosen forum is appropriate, and the defendant therefore bears a "heavy burden" in moving for dismissal on FNC. (28) But the defendant's burden is not that heavy when it faces off against a foreign plaintiff, as the presumption in the plaintiff's favor applies "with less force" when the...