Sixth Circuit vacates dismissal on grounds of forum non conveniens holding that lower court should have given U. S. citizen's choice of forum greater deference than that of foreign party and that courts should separately consider each claim to be litigated in its analysis
In 1998 Wayne Duha (Plaintiff) agreed to move to Argentina at the request of his employer, Agrium U. S., a subsidiary of Canadian-based Agrium, Inc. (Defendant), to enhance Agrium's Argentine subsidiary, Agroservicios Pampeanos, S.A. (ASP). Plaintiff accepted the position in reliance on certain incentives; these included not only 3,000 stock options but also additional credit for years of service to improve his benefits and any severance pay.
During his two years in Argentina, Plaintiff claims he observed ASP engaging in "shady record-keeping and business practices," including "bribery." Further, Plaintiff alleges that ASP was using his Michigan residence to buy equipment and supplies, to avoid having to pay tax and costs associated with letters of credit; ASP processed more than $20 million worth of goods in this way. An investigation revealed that the alleged practices were, in fact, taking place.
Shortly after Plaintiff reported these practices to his supervisors and U. S. authorities, Agrium fired him, allegedly because Plaintiff was supplying his subordinates with prostitutes as a work incentive. A human resources manager, however, had sent an e-mail to ASP management claiming that the comments referring to the prostitute were made jokingly.
While still in Argentina, Plaintiff filed for legal conciliation as required by Argentine law. Although the parties did come to a tentative settlement, the agreement fell apart when Agrium required Plaintiff to release all claims against Agrium and Agrium U. S. in addition to his claims against ASP.
In late June 2000, Plaintiff moved back to Michigan without receiving severance pay, or pay for unused vacation, or money due for business expenses incurred before his termination. Furthermore, Plaintiff alleged that Agrium had canceled his stock options.
Plaintiff agreed to go to work for a different company in September of 2000 for which he had to move to Indiana. Plaintiff claimed, however, that Agrium's Board of Directors intervened and prevented the award of a business opportunity to Plaintiff's new company, potentially robbing Plaintiff of a substantial commission.
Plaintiff then filed a 45-count complaint against Agrium in a Michigan federal court. The complaint dealt mainly with claims under contract and tort principles, including many allegations directly relating to his termination. Initial discovery revolved around defendants' motion to dismiss on grounds of forum non conveniens. The court determined that Agrium possessed most of the relevant documents; and that over one hundred potential witnesses lived in Canada, the U.S. and Argentina; a handful of the most crucial witnesses resided in each of the three countries.
In dismissing the case on forum non conveniens grounds, the district court ruled on numerous public and private law factors. These included (1) that Argentina offered easier access to witnesses; (2) that only the Argentine courts could compel certain nonparty defense witnesses crucial to Agrium's defense to testify but only in Argentina; (3) that compulsory document discovery from Argentine sources would not be available to Agrium in Michigan; (4) that Argentina has a strong interest in the alleged wrongdoing of a company domiciled there; (5) that the Foreign Corrupt Practices Act creates no private cause of action and thus does not supply a federal interest in retaining the suit; (6) that Michigan citizens stand to be less affected by a trial than Argentineans and (7) that it is likely that Argentine substantive law would apply.
In a 2 to 1 split, the U. S. Court of Appeals for the Sixth Circuit vacates and remands. It holds (1) that the district court gave the U. S. plaintiff's choice of forum too little deference and (2) that the district court erred in dismissing many of plaintiff's claims without including them in its forum non conveniens analysis.
For dismissal under forum non conveniens to be appropriate, the defendant must establish that the claim may be brought in an available and adequate alternate forum, and that the balance of private and public law factors, originally laid out in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947), favors that disposition. Applying a clear-abuse-of-discretion standard of review, the Court decides that the district court had misapplied the Gulf Oil factors. These factors require a court (1) to give more weight to the forum choice of a U. S. plaintiff over that of a foreign party; (2) to weigh the relative ease of access to documents and witnesses; and (3) to apply the relevant convenience factors separately to each claim.
First, the Sixth Circuit holds that the district court must accord adequate deference to a U. S. plaintiff's choice of his home forum and choose dismissal only when the defendant ""establishes such oppressiveness and vexation as to be out of all proportion to plaintiff's convenience, which may be shown to be slight or nonexistent." [Slip op. 7]. Here, the lower court erroneously gave only the degree of deference generally applied to the forum selections of foreign plaintiffs.
Second, the Sixth Circuit rules that the district court did not correctly weigh the relative ease of access to documents and witnesses. To make this determination, the court applies another three variables: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process for the attendance of unwilling' witnesses; (3) and the cost of obtaining attendance of willing witnesses.
The parties have obtained the most documents in the U. S. or Canada, and these are written in English. Thus, the U. S. forum offers greater ease of access to the relevant documents. Furthermore, a trial in the U. S. would not vex and oppress Agrium because the mere shipment of the documents to the U. S. forum would not be vexatious or oppressive.
Next, the Sixth Circuit evaluates the obtainability of compulsory process. Since neither party has put on evidence tending to show the existence of recalcitrant witnesses, the court should not have given this factor much weight. While the courts have often treated compulsory process as an important factor in forum non conveniens analysis, a moving party must first show that compulsory process will be necessary.
Finally, with respect to witness travel costs, the Court rules that it should take into account only those witnesses whose relevance has been shown. Since most witnesses are located either in the U. S. or Canada, overall travel costs would be lower if the case were tried in the U.S. rather than in Argentina. Furthermore, analysis should not merely focus on the number of witnesses in each location, but on their accessibility and convenience to the forum. Since interstate travel costs considerably less than international travel, the U. S. forum is preferable.
Third, the Court addresses the district court's dismissal of plaintiff's additional claims less directly linked to the termination. The Court holds that, for each factually distinct claim, the district court should have conducted a separate forum non conveniens evaluation. Support for this proposition comes from the inter-district transfer of federal cases under 28 U.S.C. Section 1404. When applying the statute, federal courts have weighed the comparative convenience of analytically distinct causes of action separately, even when they appear in the same complaint.
The district court's decision to dismiss all claims finds no additional support in the availability of other appropriate U. S. forums. Availability of such forums may support the statutory transfer of certain federal claims, but not dismissal on forum non conveniens grounds.
One Circuit Judge dissents on the ground that the majority has incorrectly applied the clear abuse-of-discretion standard. "While the majority acknowledges the proper standard of review, they have "lost sight of this rule,' and improperly "substituted [their] own judgment for that of the district court.'" Quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981).
A forum non conveniens analysis tends to turn on its facts; therefore a court must practice restraint in overturning a lower court ruling. The district court sits closer to the facts and has an easier time deciding the case, especially in a factually intense inquiry in cases such as forum non conveniens.
Although the dissenter agrees that a citizen's forum choice deserves more deference, the choice of filing in one's home forum should not serve as an automatic bar against dismissal. When a district court accords a domestic plaintiff's choice of forum "due deference" and balances the relevant factors, there is no abuse of discretion.
The dissent also finds that the district court did, in fact, give greater deference to the domestic plaintiff's choice of forum. It points out that the court appropriately quoted Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 n.23 (1981): "Dismissal is not "automatically barred' when a plaintiff brings suit in his home forum; rather, the court should give deference to the plaintiff's choice and dismiss only when "the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court.'" [Slip op. 18]
The court then carried out a proper forum non conveniens analysis by determining that an appropriate alternative forum did exist and by evaluating the relevant private and public law factors.
"The district court accorded the proper deference to the plaintiff's choice of forum, weighed the relevant information, determined that the majority of the plaintiff's complaint revolved around conduct in Argentina, with documents and witnesses in Argentina, and with Argentinian [sic] courts capable of adjudicating the complaint." [Slip op. 19]
Citation: Duha v. Agrium, Inc., 448 F.3d 867 (6th Cir. 2006).
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