Second Circuit reverses dismissal of property dispute for trial in Egypt on grounds of forum non conveniens and international comity holding that modest involvement of foreign law does not warrant dismissal where Canadian plaintiffs' choice of U.S. forum is substantially justifiable
The Bigios (plaintiffs), a Jewish family, possessed large commercial holdings in Egypt, including a bottling plant, which the Nasser regime wrongfully seized. Thereafter the plaintiffs fled to Canada. After Nasser died, the Egyptian government ordered the property returned. The state-owned entity holding the property, however, refused and sold the bottling plant to a joint venture in which Coca-Cola (defendant) bought a substantial interest. Coca-Cola rejected the plaintiffs' claims to ownership.
After an unsuccessful attempt to obtain relief in the Egyptian courts, the plaintiffs sued Coca-Cola in New York federal court. When this case first came before the Second Circuit, it saw no merit in plaintiffs' claims under the Alien Tort Claims Act, but remanded the common law claims. It also held the "Act-of-State" doctrine inapplicable, since the issues do not negatively impact international relations. See Bigio v. Coca-Cola Co., 239 F.3d 440 (2d Cir. 2000). See 2000 International Law Update 188.
On remand, the district court dismissed plaintiffs' claims on the grounds of international comity and forum non conveniens. Plaintiffs again took an appeal. The Second Circuit now reverses and remands.
The Circuit Court first rules that the district court had applied the wrong legal standard in dismissing the plaintiffs' claims on international comity grounds. The Court explains that international comity may involve two distinct doctrines: first "as a cannon [sic] of construction, it might shorten the reach of a statute; second, it may be viewed as a discretionary act of deference by a national court to decline to exercise jurisdiction in a case properly adjudicated in a foreign state, the so-called comity among courts." See In re Maxwell Comm. Corp. 93 F.3d 1036, 1047 (2d Cir. 1996)." [Slip op. 3]
Here, the lower court had mistakenly applied the test used to determine whether a court should apply a U.S. statute extraterritorially. The international comity issue raised in the instant case , however, is whether adjudication of the issues before U.S. courts "would offend "amicable working relationships' with Egypt." [Slip op. 2]
This common law suit for damages involves Canadian plaintiffs and a U.S. corporate defendant and requires a minimal application of Egyptian law. Since the Egyptian government has never voiced any objections, "resolution of this case by United States courts will "not likely impact on international relations' with Egypt." [Slip op. 3] Litigants regularly call upon U.S. courts to interpret foreign law and they usually do so without infracting principles of international comity.
The Circuit Court then evaluates the district court's dismissal under the forum non conveniens doctrine to decide whether the lower court had misapplied the relevant legal standards. The Court finds reversal appropriate here mainly because the district court gave the plaintiffs' choice of forum no weight at all in its discussion of the balance of conveniences.
"The more that a plaintiff, even a foreign plaintiff, chooses to sue in a United States court for "legitimate reasons,' the more deference must be given to that choice ... The action should be dismissed only if the chosen forum is shown to be genuinely inconvenient and the selected forum significantly preferable." [Slip op. 3] The Court holds that plaintiffs' reasons for suing in defendants' own country were legitimate and substantial in light of the vicissitudes of seeking relief in Egypt.
Furthermore, since the key witnesses, the parties and the attorneys are located in either the U.S. or Canada, no genuine inconveniences exist that would make the Egyptian forum "significantly preferable." The Court need not decide whether another forum, such as Canada, might be more appropriate since the only germane comparison in this appeal is between the U.S. and Egypt.
Dissenting in part and concurring in part, one Judge agrees that the district court had applied the wrong test in determining whether dismissal is appropriate under forum non conveniens. This Judge however, would merely vacate the judgment, leaving it entirely to the informed discretion of the district court on remand.
Citation: Bigio v. Coca-Cola Co., No. 05-2426-cv (2d Cir. May 9, 2006).
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