Foreign corporations: forum non conveniens and change of venue.

• Author: Barry, Desmond T., Jr.

THE doctrine of forum non conveniens can have a profound impact on litigation in the United States involving foreign corporations. This article provides an overview of the doctrine and its applicability to the foreign corporation. The analysis begins with a look at forum non conveniens as a means of dismissal of a case to a foreign jurisdiction and emphasizes factors such as the degree of deference a U.S. court should give to the plaintiff's choice of forum. The article also considers arguments for and against domestic forum non conveniens transfer of venue pursuant to 28 U.S.C. [section] 1404(a) to a federal court where an action may have been brought originally.

FORUM NON CONVENIENS DISMISSAL

The common law doctrine of forum non conveniens developed in Scotland in the early 19th century as a discretionary device designed to allow trial courts to decline to exercise jurisdiction when it appeared that the convenience of the parties and the interests of justice would best be served by trial of the action in another forum.(1) In two companion 1947 cases--Gulf Oil Corp. v. Gilbert(2) and Koster v. Lumbermen's Mutual Casualty Co.(3)--the U.S. Supreme Court established the framework for forum non conveniens analysis by setting forth the private and public interest factors to be considered in the discretionary application of the doctrine.

Historically, a presumption favoring a plaintiff's initial choice of forum operated to assure plaintiffs substantial latitude in choosing an advantageous jurisdiction.(4) Recent decades have seen a growing number of foreign plaintiffs seeking redress in U.S. courts because of the contingency fee system, the availability of jury trials and large damage verdicts, extensive pretrial discovery, lower filing fees, relatively prompt trial dates, liberal joinder rules and the minimal likelihood of having to pay the other party's expenses, including attorney's fees, in the event of a loss.(5)

In 1981, the U.S. Supreme Court addressed this increase in Piper Aircraft Co. v. Reyno(6) and refined the forum non conveniens test for actions brought by foreign plaintiffs. Piper Aircraft focuses on the degree of deference owed a foreign plaintiff's chosen forum and the weight to be given the fact that the substantive law in the alternative forum may be less favorable to the plaintiff.

1. Plaintiff's Choice of Forum

   In Piper Aircraft, relatives of Scottish citizens killed in an aircraft accident in the United Kingdom commenced an action in the United States against the manufacturers of the aircraft and its propellers. The manufacturers were U.S. citizens and personal jurisdiction existed over them. The Supreme Court nevertheless affirmed forum non conveniens dismissal of the litigation because the real parties in interest, the wreckage and the witnesses were all located in the United Kingdom. The Court concluded that dismissal was appropriate even though the products liability law of the United Kingdom was less favorable to the plaintiffs than that of the United States.

   The Piper Aircraft Court also held that although the plaintiffs' initial forum choice normally is given considerable weight, this presumption applies with less force when plaintiffs are foreign citizens,(7) stating:

   When the home forum has been chosen [by the

   plaintiff], it is reasonable to assume that this

   choice is convenient. When the plaintiff is foreign, however, this assumption is much less reasonable.

   Because the central purpose of any forum

   non conveniens inquiry is to ensure that the

   trial is convenient, a foreign plaintiff's choice

   deserves less deference.(8)

   The Supreme Court also noted the potential problems that could arise if these criteria were not followed:

   The Supreme Court also notedthe potential problems that could arise if these criteria were not followed: The American courts, which are already extremely attractive to foreign plaintiffs, would become even more attractive. The flow of litigation into the United States would increase and further congest already crowded courts.(9)

   As a result of Piper Aircraft, courts throughout the United States have granted forum non conveniens dismissal in numerous cases brought by foreign plaintiffs, even when the defendant was a U.S. citizen:

   * Nolan v. Boeing Co.,(10) actions by foreign plaintiffs arising from an air crash in England, although some evidence regarding the design, manufacture and testing of the aircraft was located in Boeing's offices in the United States. Jennings v. Boeing Co.,(11) actions by Irish plaintiffs against Boeing arising from helicopter crash in Ireland.

   * Ahmed v. Boeing Co.,(12) wrongful death actions against Boeing where decedents were Pakistani citizens and aircraft crashed in Saudi Arabia.

   * Cheng v. Boeing Co.,(13) claims of foreign citizens arising from airplane crash in Taiwan.

   * Pain v. United Technologies Corp.,(14) claims of foreign citizens arising from crash of helicopter in the North Sea en route from Norway, but the dismissal was with conditions.

   * Dahl v. United Technologies Corp.,(15) wrongful death actions in which decedents were Norwegians and the helicopter crashed in Norway.

   * Chhawachharia v. Boeing Co.,(16) action by Indian resident arising from air crash in Japan.

   * Rubenstein v. Piper Aircraft wrongful death action brought by U.S. citizen against U.S. defendant where decedents were residents of West Germany and accident occurred there.

   * In re Disaster at Riyadh Airport,(18) actions by foreign plaintiffs arising from air crash in Saudi Arabia, where some defendants were U.S. citizens.

2. Plaintiffs U.S. Citizenship

   A corollary to the Piper Aircraft rule is that a plaintiff's U.S. citizenship is not an impenetrable shield against forum non conveniens dismissal. As the D.C. Circuit stated in 1980 in Pain:

   Federal courts recently have begun to acknowledge that judicial unwillingness to dismiss actions to competent courts abroad on grounds of citizenship alone may merely reflect an unthinking orientation overly protective of American plaintiffs--even those who reside abroad--and "insufficiently sensitive to the ability of foreign courts to perform their adjudicatory functions fully as well as do courts of the United States."(19)

   Even when a U.S. citizen has chosen a domestic forum, the Supreme Court has established conclusively that forum non conveniens dismissal is proper wherever, as it stated in Piper Aircraft, "the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court." Indeed, numerous courts have dismissed actions brought on behalf of U.S. citizens killed in foreign aviation accidents where the Gulf Oil private and public interest factors pointed to a more convenient trial in a foreign forum.(20)

   In Santamauro v. Taito do Brasil Industria e Comercia(21) the district court dismissed an action filed by a U.S. citizen based on forum non conveniens and a forum selection clause in an assignment agreement. The court analyzed the Gulf Oil factors and held that Brazil was the more convenient forum. Although recognizing the strong presumption in favor of a plaintiff's choice of forum, the court noted that a U.S. citizen's forum choice is not dispositive in a forum non conveniens analysis.

   In McInnes v. British Airways(22) the Fifth Circuit affirmed a trial court's forum non conveniens dismissal of a personal injury action involving U.S. residents injured in an automobile-pedestrian accident in Bahrain. The district court adopted the magistrate judge's recommendation, which had explained the basis for the dismissal as follows:

   This litigation is only very remotely connected

   with this jurisdiction [Texas]. Most of the fact

   witnesses, the relevant sources of proof and the

   site of the accident are all located in Bahrain.

   The only real contact that this action has with

   the United States is the fact that plaintiffs reside

   here and that Mr. McInnes has been treated by a

   Houston physician. The resources of the courts

   of the Southern District of Texas should be expended

   only in connection with disputes that

   have significant contacts with the United States.

   The significant contacts in this dispute lie in

   Bahrain, not the United States, and it should be

   resolved in Bahrain. In fact, if this action were

   to be tried here, the court will be required, under

   the applicable choice of law principles, to apply

   the law of Bahrain.23

   On appeal, the plaintiffs in McInnes argued that the district court had not given sufficient weight to their choice of forum. Dismissing this argument, the Fifth Circuit stated:

   It is true that we give that factor considerable

   deference. See, e.g., Coats v. Penrod Drilling

   Corp., No. 92-7378, slip op. 709, 723 (5th Cir.

   Oct. 18, 1993). It is not always necessary, however,

   ever that factor to be analyzed specifically.

   Empresa Lineas Maritimas Argentinas S.A. v.

   Schichau-Unterweser A.G., 955 F.2d 368, 373-74

   (5th Cir. 1992). The factors here point so

   strongly in favor of dismissal that it is evident

   that the district court's balancing of factors was

   correct.(24)

   Multinational corporations face unique difficulties when they attempt to use forum non conveniens as a defensive strategy. In litigation against a foreign subsidiary, the multinational should make every effort to preserve the presumption of separate corporate entities in order to substantiate the convenience of the alternative forum while decreasing the risk of liability to the parent. To be successful in a forum non conveniens dismissal, multinationals must demonstrate the superior convenience and adequacy of the alternative forum and must satisfy the court that the alternative forum is more appropriate to both parties in terms of justice and remedy.

2. Adequate Alternative Forum

   The existence of an available and adequate alternative forum is a threshold prerequisite to the application of forum non conveniens doctrine.(25) A foreign forum is "available" when the entire case and...