Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-01931/USCOURTS-cand-3_05-cv-01931-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

EDAPS CONSORTIUM, a business entity

under Ukrainian law,

Plaintiff,

 v.

SERGIY G. KIYANICHENKO, AKA

SERGIY G. KYANYCHENKO, an individual,

and DOES 1 through 50, inclusive,

Defendants. /

No. C 05-01931 WHA

ORDER DENYING 

MOTION TO DISMISS

INTRODUCTION

In this diversity action, defendant now moves to dismiss on the basis of forum non

conveniens. Although a Ukrainian court would likely be the most convenient forum for

adjudicating this dispute, defendant has failed to meet its threshold burden of establishing that it

would be an adequate alternative forum. Accordingly, this motion is DENIED.

STATEMENT

Plaintiff EDAPS Consortium is a business entity under the laws of the Ukraine (Compl.

¶ 1). It consists of the following entities, none of which are alleged to conduct business in the

United States: ZNAK, Ltd, Polly-Service, Ltd., Specialized Enterprise Holography, Ltd., JSB

Commercial Industrial Bank, JSC KP VTI, and PK Zorya (id. ¶ 7). Collectively, these

companies entered into contracts with Ukrainian government officials to supply goods and

services in connection with “a comprehensive Ukrainian state computer-controlled system of

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For the Northern District of California

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product and issuance of securely printed documents, including, for example, passports, drivers

licenses, government ID’s and other official documents” (id. ¶ 6).

The complaint, filed on May 10, 2005, alleges that defendant Sergiy Kiyanichenko

distributed written materials to Ukrainian government officials containing false, derogatory,

defamatory and libelous statements about EDAPS Consortium (id. ¶ 12). In addition, a

television program, which aired on or about February 10, 2005, announced that an investigation

of plaintiff’s contracts with the Ukrainian government would be undertaken (id. ¶ 14). 

Defendant is also accused of making other false, derogatory, defamatory, slanderous and

libelous statements regarding EDAPS in a document titled “Passportisim” and during a press

conference held on April 13, 2005 (id. ¶¶ 16–21). On April 13, 2005, the Ministry of the

Interior issued a letter indicating that plaintiff’s contracts with the Ukrainian government were

being audited by the General Prosecutor’s Office; all work and payments would also be

suspended pending the investigation (id. ¶ 22).

The complaint further alleges that on or about March 10, 2005, the President of the

Ukraine changed the passport specifications by “lowering the standards to a level which would

make it more feasible for a competitor of EDAPS” to provide passports and other securely

printed documents (id. ¶ 15). Plaintiff asserts that defendant intends to become one such

competitor (ibid.).

Plaintiff seeks relief for (1) trade libel; (2) tortious interference with contract;

(3) intentional interference with prospective economic advantage; (4) negligent interference

with prospective economic advantage; (5) unfair business practices in violation of California

Business & Professions Code § 17200, et seq.; and (6) unfair competition in violation of the

Lanham Act, 15 U.S.C. 1125(a)(1)(B).

Although defendant admits he possesses a green card and resides in California for some

portion of the year, he asserts that he is a citizen of the Ukraine and is employed by the

Ukrainian government-owned printing facility Polygrafichniy Kombinat Ukrania

(Kiyanichenko Decl. ¶ 3–4, 6). He also states that he “[is] willing to submit to the jurisdiction

of the Courts of the Ukraine and [is] willing to be served in the Ukraine” (id. ¶ 6). Defendant

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argues that all of the wrongful conduct alleged in the complaint occurred in the Ukraine. 

Moreover, all the witnesses, documents, photographs and videotapes are located in the Ukraine. 

For these reasons, defendant seeks dismissal of the action for reasons of forum non conveniens.

ANALYSIS

1. LEGAL STANDARD.

The inherent power of federal courts to dismiss actions under the common-law doctrine

of forum non conveniens was recognized in the seminal case Gulf Oil Corp. v. Gilbert, 330 U.S.

501 (1947)(finding it permissible to dismiss an action brought in a District Court in New York

when the more appropriate venue was Virginia). Because transfer of venue is now available

pursuant to 28 U.S.C. 1404(a), “the federal doctrine of forum non conveniens has continuing

application only in cases where the alternative forum is abroad.” Am. Dredging Co. v. Miller,

510 U.S. 443, 449 n.2 (1994). A court may, in the exercise of its sound discretion, dismiss an

action where litigation in a foreign forum would be more convenient, “even if jurisdiction and

proper venue are established.” Id. at 448. 

Under this doctrine, a district court must conclude that (1) an adequate alternative forum

exists and (2) the balance of public and private interest factors favor dismissal. Lueck v.

Sundstrand Corp., 236 F.3d 1137, 1142 (9th Cir. 2001). In addition, the Court may also be

required to make a choice of law determination before dismissing the action. Id. at 1143.

2. NO ADEQUATE ALTERNATIVE FORUM EXISTS.

The burden is upon defendant to prove the existence of an adequate alternative forum,

which is a threshold requirement. Cheng v. Boeing Co., 708 F.2d 1406, 1411 (9th Cir. 1983). 

When plaintiff is a United States citizen, this is a heavy burden of proof because “[w]hen the

home forum has been chosen, it is reasonable to assume that this choice is convenient”; a

foreign plaintiff’s choice of forum, on the other hand, “deserves less deference.” Piper Aircraft,

454 U.S. at 255–56. Yet, “less deference is not the same thing as no deference.” Ravelo

Monegro v. Rosa, 211 F.3d 509, 514 (9th Cir. 2000).

Here, plaintiff argues that its choice of forum should be accorded great deference

because one of its member entities, PolyService, Ltd., is the exclusive dealer in the Ukraine for

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 Plaintiff challenges the authenticity of Kiyanichenko’s signature on his declaration. In light of the

ruling below, the Court declines to rule at this time whether it would be admissible evidence.

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DataCard, a company based in Minnesota (Gilbert Decl. ¶ 18). This argument is unpersuasive. 

DataCard is not a named plaintiff in this action; nor for that matter is PolyService, Ltd. (Even if

DataCard were a party to this action, Minnesota, not California, would be its home forum.) It is

undisputed that EDAPS Consortium is a Ukrainian business entity. As a foreign plaintiff, its

choice of forum deserves less deference.

The alternative-forum requirement is usually satisfied when the defendant is amenable

to service of process in the other forum. Piper Aircraft, 454 U.S. at 255 n.22. Otherwise, a

conditional dismissal would satisfy the alternative-forum requirement. Contact Lumber Co. v.

P.T. Moges Shipping Co., 918 F.2d 1446, 1450 (9th Cir. 1990). Defendant has promised to

submit to jurisdiction in the Ukraine.* Ordinarily, this would be sufficient. The problem is that

this may be an empty promise.

“Where the remedy offered by the other forum is clearly unsatisfactory” or “where the

alternative forum does not permit litigation of the subject matter in dispute,” the threshold

requirement of an adequate alternative forum would not be satisfied. Piper Aircraft, 454 U.S. at

255 n.22. Plaintiff proffers a declaration from Volodymyr Petryna, an attorney in the Ukraine. 

Therein, he opines that the Ukraine is an inadequate forum because “there is no treaty in place

between the United States and Ukraine that permits reciprocal enforcement of judgments”

(Petryna Decl. ¶ 11). By itself, this would be unconvincing, as the Court could condition

dismissal on defendant’s guarantee that he would satisfy any judgments against him in a

Ukrainian court. Petryna further asserts that there are “no equivalent Ukrainian laws” for

defamation of business entities (i.e., trade libel as opposed to defamation of an individual) or

interference with contracts (id. ¶¶ 12–14). In addition, while the Anti-Monopoly Committee

may “investigate questionable business practices of companies on behalf of the government of

Ukraine,” any fines imposed are paid to the government of Ukraine (id. ¶ 13). There is no

corresponding private right of action for damages (ibid.).

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Defendant apparently does not dispute that plaintiff has no judicial remedy in the

Ukraine, but counters that an administrative remedy via the Anti-Monopoly Committee would

be sufficient (Reply Br. 2–3). Defendant accurately points out that “the forum non conveniens

analysis does not look to the precise source of the plaintiff’s remedy, so [courts] will not require

the alternative forum to offer a judicial remedy.” Lueck, 236 F.3d at 1145. In Lueck, however,

New Zealand’s no-fault accident compensation scheme was found to be an adequate alternative

remedy because it provided some (albeit probably less) coverage for the plaintiff’s losses. In

contrast, the administrative remedy here would not compensate plaintiff at all, as any fines

imposed by the Anti-Monopoly Committee would be paid instead to the Ukrainian government.

It is true that “dismissal on grounds of forum non conveniens may be granted even

though the law applicable in the alternative forum is less favorable to the plaintiff’s chance of

recovery.” Piper Aircraft, 454 U.S. at 250. But if no private causes of action for trade libel,

interference with contracts or unfair competition exist in the Ukraine, then plaintiff’s remedy is

not merely less favorable, but effectively “no remedy at all.” Piper Aircraft, 454 U.S. at 254.

Because the threshold requirement of an adequate alternative forum has not been met,

this order need not analyze the balance of public and private interest factors. The Court stresses

that it is not convinced that California law, rather than Ukrainian law, would govern this dispute

because all of the allegedly tortious acts occurred in the Ukraine. This, however, remains to be

decided another day.

CONCLUSION

For the foregoing reasons, defendant’s motion to dismiss on the grounds of forum non

conveniens is DENIED.

IT IS SO ORDERED.

Dated: August 18, 2005 WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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