U.S. Plaintiffs Lose Venue Battle in International Dispute

• Pages: 22-22
• Date: 01 July 2023
• Author: Stephen Carr
• Subject Matter: Civil Law

Published in Litigation News Volume 48, Number 4, Summer 2 023. © 2023 by the Amer ican Bar Association . Reproduced with pe rmission. All rights re served. This info rmation or any porti on thereof may not be c opied or disseminated in an y

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U.S. plaintiff’s choice of forum will not always win

out in a dispute over activity occurring abroad.

The U.S. District Court for the Northern District

of Illinois kicked a lawsuit to the U.S. District

Court for the Western District of Arkansas at

the defendants’ request, despite the fact that one of the plain-

tiffs was an Illinois citizen suing over a robbery in Argentina.

ABA Litigation Section leaders observe that the court can

sometimes overrule a plaintiff’s own assessment of his or her

best interests.

Esposito v. Airbnb Action, LLC arose out of a robbery

that occurred while a newly married couple was vacation-

ing with relatives in Argentina. The ve plaintiffs in the

case included the husband, a citizen of Argentina; the wife,

who maintained a domicile in Illinois; and the wife’s sister,

brother-in-law, and niece, all citizens of Arkansas. At mid-

night on the night of their arrival, four men broke into the

group’s rental house with guns and knives and bound and

gagged the adult plaintiffs. They stole cash and jewelry before

leaving the house.

The family sued the rental company and house owners in

an Illinois federal court asserting a variety of tort and con-

tract claims. The rental company responded by moving to

send the case to arbitration based on the arbitration clause

in the rental agreement or to transfer the case to Arkansas

under 28 U.S.C. §1404(a). The statute permits transfer of

venue to any other district court where the case might have

been brought originally for the convenience of the parties

and in the interest of justice.

The court granted the defendants’ motion to transfer,

nding that both the convenience of the parties and the

interest of justice favored Arkansas. The court dodged the

question of whether venue was ever appropriate in Illinois

by nding that the rental company defendant “forfeited, if

not waived, any argument that venue does not lie in this

District” by moving to transfer the case without objecting

to personal jurisdiction. Venue is proper against a corporate

defendant anywhere that personal jurisdiction exists over the

corporation.

In discussing the convenience factors, the court emphasized

that “the [Northern District of Illinois] is not the situs of any

material event in this case, with the sole exception of some

medical treatment that Britton received after the robbery.” The

court also pointed out that three of the plaintiffs resided in

Arkansas, making that state a convenient location for them,

and that they received some medical treatment there.

Likewise, in discussing the interest of justice factors, the

court found Arkansas clearly the better venue—the docket in

Arkansas moved faster than Illinois, and the plaintiffs were

unable to identify any signicant differences between the two

states’ substantive law that could affect the outcome of the

dispute. Finally, the court concluded that the Western District

of Arkansas’s community has a greater stake in the litigation

since a majority of the plaintiffs were from Arkansas and

received medical treatment there.

“What is ironic here is that the movant, Airbnb, and the

court disagree with the plaintiffs’ own assessment of what

is best for them,” observes Marc J. Zucker, Philadelphia, PA,

cochair of the Litigation Section’s Commercial & Business

Litigation Committee. “The court ruled, in essence, that since

three of the ve plaintiffs reside in Arkansas, an Arkansas

venue would be more convenient and more economical for the

plaintiffs, even though they clearly viewed their best interests

differently when choosing to le suit in Illinois,” Zucker adds.

“Underlying this fact pattern is a recognition that the

place with the closest connection to the dispute is Argentina,

where the criminal conduct occurred and the injuries were

sustained,” Zucker explains. “Neither Arkansas nor Illinois

had a particularly close nexus with the facts. That gave the

court additional latitude in its ruling.”

The Esposito court largely glossed over the rental com-

pany’s alternative motion to send the case to arbitration—

although the court noted that the issue could be raised in

Arkansas. Indeed, following transfer, the Arkansas court

granted the motion to compel arbitration of the claims

against the rental company and stayed the proceedings as to

those claims.

“The court’s order shows that an arbitration clause

may not always spare the parties the burdens of litigating

the appropriate venue in international disputes that nd

their way into federal court in the United States,” explains

Henry L. Parr Jr., Greenville, SC, cochair of the Section’s

International Litigation & Dispute Resolution Committee.

“Here, the district court, when faced with a motion to

compel arbitration and, in the alternative, to transfer venue,

transferred the case without prejudice to the motion to com-

pel arbitration,” Parr states. “Thus, the parties had to bear the

expense of dealing with the venue issue, even if their motion

to compel arbitration is subsequently granted.”

A digital versi on of this Civil Proce dure update, incl uding links to resour ces

and authoritie s, is available at http://bit.ly/LN- civpro.

U.S. Plaintiffs Lose Venue Battle in

International Dispute

By Stephen Carr, Litigation News Contribu ting Editor

SUMMER 2 023 • VOL. 48 NO. 4

22 | ABA LITIGATION SECTIO N

CIVIL PROCEDURE UPDATE