Four recent cases in New York and New Jersey demonstrate that the doctrine of forum non conveniens, a venerable rule of law tempered with equitable principles, is alive and well. Under the doctrine, one court having jurisdiction over a dispute and the parties, can dismiss a lawsuit before it and allow it to proceed in another court also having jurisdiction. As one commentator, Professor David Siegel of the Albany Law School, puts it, the doctrine is designed to spare the local court of the burden of entertaining a case which has no significant contacts with that first court. New York’s doctrine is court-made but codified in statute, while New Jersey – like most states and the federal courts – relies upon judicial case law. The doctrine has an amazing similarity in all jurisdictions. These recent cases show the similarity, and the vigor, of the states’ forum non conveniens rules.
A court considering a motion to dismiss on forum non conveniens grounds looks to practical and pragmatic factors: the law to be applied, convenience to the parties if the case remains in the original court or is moved to another court, availability of witnesses and evidence, and ability to include parties not amenable to process in the original court. In general, a court deciding such a motion may deny it, dismiss the action without condition, or dismiss it with strict conditions. The New Jersey case, Yousef v. General Dynamics Corp., denied the motion outright, as did Nordkap Bank AG v. Standard Chartered Bank, decided by a New York lower court. In Patrick Exploration, LLC v. Thompson & Knight, LLP, the motion was granted but with defined conditions, and later affirmed by New York’s high court. Similarly, the Southern District of New York dismissed a lawsuit, with conditions allowing the suit to be brought in the Netherlands, in Lust v. Nederlandse Programma Stichting. Remember, the original court must have jurisdiction in the first instance, or the doctrine does not apply. In that case, the motion should be to dismiss for lack of jurisdiction, not forum non conveniens. Also, the defendant bears the burden to establish that plaintiff’s choice of forum should be disregarded.
In Yousef, the New Jersey Supreme Court affirmed a decision that a dismissal was not warranted. Plaintiffs were civilian employees of the U.S. Army at the Picatinny Arsenal in New Jersey. General Dynamics had a contract with the Army doing business in the state. The plaintiffs and certain General Dynamics employees traveled to South Africa on a joint project. While there plaintiffs were injured while riding as passengers in an automobile operated by one of the General Dynamics employees. They brought suit for their injuries in state court in their home state of New Jersey. General Dynamics asked the trial court to divest itself of jurisdiction and allow the case to be moved to South Africa for easy reach of certain witnesses such as investigating police officers. The trial court denied the motion because South African law would be disadvantageous to plaintiffs, verdicts are generally lower there, court calendars are slower, and litigating the case there would pose hardship and inconvenience upon plaintiffs. On appeal, the Supreme Court agreed that the defendant failed to establish that the plaintiff’s choice of forum is “demonstrably inappropriate.”
Similarly, the lower court in Nordkap Bank, addressed an international forgery claim between two foreign banks, one Swiss and the other English. Despite the absence of any party from New York, the court emphasized that the note and guarantee, allegedly forged, were executed in New York, and both state that New York law will govern them, with any dispute to be resolved in New York courts. The Supreme Court, New York County, chose to retain its jurisdiction over the case, denying the motion.
A different result is seen in a recent decision of the Court of Appeals of New York. Patrick Exploration, LLC v. Thompson & Knight, LLP, involved a legal malpractice case against Texas lawyers representing Alaskan clients in deals with Texas companies, about land in Texas. We are not told why the case was brought in New York in the first place, or why it was not dismissed outright for lack of jurisdiction. The Court of Appeals ruled that the case should be dismissed for forum non conveniens, on condition that if the case is brought in Texas, the defendants would not raise the Texas shorter statute of limitations as a defense.
Most recent is a July 18, 2011, decision of the U.S. District Court for the Southern District of New York, in Lust v. Nederlandse Programma Stichting, granting a forum non conveniens motion. All the parties, including plaintiff Wilhelm Lust, are Dutch citizens. Lust was in New York on temporary assignment. He later sued his employer for alleged breaches of his employment contract. All of the witnesses and evidence are in the Netherlands, and the contract is in Dutch and governed by Dutch law. The Netherlands has far greater interest in the litigation than does the United States. Emphasizing its concern that plaintiff was shopping for a more favorable forum, the District Court dismissed the action, with the express agreement of the defendants to waive any statute of limitations defense in a lawsuit to be brought in the Netherlands.
The forum non conveniens doctrine remains an important and viable tool for a defendant faced with a lawsuit in an inconvenient and unfriendly court, even if that court otherwise has jurisdiction over the defendant and the dispute. The defendant can ask the court to give up jurisdiction in favor of a forum elsewhere, provided the defendant establishes that good reason exists to deprive the plaintiff of the forum originally chosen.
© Copyright 2011 John C. Lane