United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 08-2935

__________

Ronald Tim Bacon, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* Southern District of Iowa.

*

Liberty Mutual Insurance Company, *

*

Appellee. *

___________

Submitted: March 11, 2009

Filed: August 6, 2009

___________

Before MURPHY, MELLOY, and SHEPHERD, Circuit Judges.

 ___________

SHEPHERD, Circuit Judge.

Ronald Bacon appeals the dismissal of his breach-of-contract and fraudulentmisrepresentation claims against Liberty Mutual Insurance Company (“Liberty

Mutual”) on the ground of forum non conveniens. We reverse and remand. 

I. 

Bacon’s suit against Liberty Mutual arises out of the settlement of a personal

injury lawsuit against Ridgetop Holdings, Inc. (“Ridgetop”), the parent company of

Bacon’s employer, Davis Erection Company, Inc. (“Davis Erection”). In July 2003,
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Bacon was severely injured in Omaha, Nebraska, while working on a construction

project for which Davis Erection was a subcontractor. Bacon’s injuries rendered him

paraplegic. At the time of the accident, Bacon was a resident of Nebraska. 

Liberty Mutual is a nationwide insurance company that does business both in

Iowa and Nebraska. Liberty Mutual provided Davis Erection with commercial

liability and workers’ compensation insurance under an Owner Controlled Insurance

Program for all participating contractors at the construction site. The insurance

provided by Liberty Mutual to Davis Erection covered Bacon’s workers’

compensation benefits, which were administered under the laws of Nebraska. In

2006, Bacon filed a personal injury action against several entities, including Ridgetop

and Kiewit Construction Company, the general contractor at the construction site.

The complaint also named Davis Erection and Liberty Mutual as defendants for the

sole purpose of the subrogation of Bacon’s workers’ compensation benefits. 

In June 2006, Bacon moved to Iowa, where he purchased a home that could

accommodate his physical impairment. Liberty Mutual contributed $100,000 to the

purchase of Bacon’s home. Liberty Mutual has also made weekly disability payments

to Bacon since May 2006. 

In January 2008, prior to the trial for Bacon’s personal injury lawsuit in

Nebraska, Ridgetop agreed to settle with Bacon. Before he received the settlement

funds, Bacon requested that Liberty Mutual acknowledge that it did not have a right

to subrogation of the settlement proceeds. When Liberty Mutual failed to do this,

Bacon filed a declaratory judgment action in a Nebraska state court seeking to

establish that Liberty Mutual had no subrogation claim on the proceeds from the

settlement with Ridgetop. 

In his declaratory judgment action, Bacon asserted that Liberty Mutual’s claim

to the settlement proceeds was precluded by the construction contract, which included
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a provision waiving the subrogation rights of subcontractors such as Davis Erection.

Bacon argued that, since Davis Erection was a subcontractor with no subrogation

rights to settlement proceeds paid by its parent company Ridgetop, Davis Erection’s

insurer, Liberty Mutual, should also be denied rights to subrogation. Bacon also

alleged that a claims representative from Liberty Mutual informed him that Liberty

Mutual had no claim on the settlement proceeds from Ridgetop. Liberty Mutual

denied these allegations in its answer to the complaint and asserted a lien on the

settlement proceeds in the amount of the workers’ compensation benefits it had paid

to Bacon. 

Shortly thereafter, Bacon filed an action against Liberty Mutual in the United

States District Court for the Southern District of Iowa, asserting a claim of fraudulent

misrepresentation, for which he sought punitive damages, and a claim of breach of

contract. According to Bacon, Liberty Mutual’s answer to his complaint in the

Nebraska declaratory judgment action constituted a knowing misrepresentation made

with the intent to deceive. His breach-of-contract claim rested on his allegation that

Liberty Mutual’s claim representative created a binding contract not to pursue any

claim to the settlement proceeds when she made the alleged representation that Liberty

Mutual waived any such claim. 

Liberty Mutual filed a motion to dismiss on the grounds of forum non

conveniens and that Nebraska law, which does not permit punitive damages for

fraudulent misrepresentation, should apply under the applicable choice-of-law rules.

Finding that Nebraska had a greater interest in deciding the suit than Iowa, the district

court dismissed the suit on the ground of forum non conveniens. It did not decide the

choice-of-law issue. 

II. 

We begin by noting that a federal district court’s power to dismiss a case

properly within its jurisdiction under the common-law doctrine of forum non
1

Transfers among the federal courts are governed by 28 U.S.C. § 1404(a),

which, in its entirety, provides: “For the convenience of parties and witnesses, in the

interest of justice, a district court may transfer any civil action to any other district or

division where it might have been brought.”

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conveniens has been substantially eliminated by the federal transfer of venue statute,

28 U.S.C. § 1404(a).1

 See Norwood v. Kirkpatrick, 349 U.S. 29, 32 (1955) (“The

harshest result of the application of the old doctrine of forum non conveniens,

dismissal of the action, was eliminated by the provision in [section] 1404(a) for

transfer.”). “The common-law doctrine of forum non conveniens ‘has continuing

application [in federal courts] only in cases where the alternative forum is abroad,’

and perhaps in rare instances where a state or territorial court serves litigational

convenience best.” Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp., 549

U.S. 422, 430 (2007) (italics omitted) (quoting American Dredging Co. v. Miller, 510

U.S. 443, 449 n.2 (1994)). The district court dismissed Bacon’s suit believing either

the state or federal courts in Nebraska to be a more appropriate forum for the case.

See Bacon v. Liberty Mut. Ins. Co., No. 1-08-cv-12-CRW-TJS, slip op. at 2, (S.D.

Iowa Aug. 18, 2008) (“The State of Nebraska and its state and federal courts have a

keen interest in deciding this dispute and plainly provide the forum where the issues

here pleaded should be decided.”). 

To the extent that there is an alternative federal forum, the district court lacked

the power of dismissal because “[w]ith its enactment in 1948, § 1404(a) superseded

the common law doctrine of forum non conveniens insofar as transfer to another

federal district court is possible.” Cowan v. Ford Motor Co., 713 F.2d 100, 103

(1983) (italics omitted). “[W]ith respect to cases wholly within the system of U.S.

federal courts, the doctrine [of forum non conveniens] has been largely replaced by

the transfer of venue statute . . . .” Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 717 (7th

Cir. 2002); see also Yerostathis v. A. Luisi, Ltd., 380 F.2d 377, 379 (9th Cir. 1967)

(“28 U.S.C. § 1404(a) has, in effect, codified and replaced [the forum non conveniens]

doctrine whenever the more convenient tribunal is a United States district court where
2

Neither the parties nor the district court have raised the issue of whether a

transfer to federal court in Nebraska would have been appropriate under section

1404(a). Thus, although the district court apparently assumed that federal court in

Nebraska could provide a possible forum for this case, there is not enough information

in the record for us confidently to determine whether Nebraska federal court was

indeed an available forum. Thus, we feel compelled to explain why dismissal because

of forum non conveniens was in error even if Nebraska state court were the only

available alternative forum. 

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the action might have been brought.” (quotation omitted)); Headrick v. Atchison, T.

& S. F. Ry. Co., 182 F.2d 305, 308 (10th Cir. 1950) (“It seems clear to us that the

evident purpose of the statute is to do away with dismissal as an inherent right of the

courts and to substitute therefor the right in proper cases to transfer to a more

convenient forum when there is such a forum.”). Except in cases where it cannot be

used, “§ 1404(a) eliminated the necessity of dismissal by granting authority for district

courts to transfer a case to another area.” Yerostathis, 380 F.2d at 379. Given the

apparent availability of an alternative federal forum in Nebraska, this is not a situation

in which “[t]he common-law doctrine of forum non conveniens has continuing

application [in federal court].” Sinochem, 549 U.S. at 429 (italics omitted). 

Moreover, the district court was in error under traditional forum non conveniens

principles, even if transfer under section 1404(a) were unavailable and Nebraska state

court remained the only available alternative forum.2

 See Reid-Walen v. Hansen, 933

F.2d 1390, 1401 (8th Cir. 1991) (reversing dismissal on the ground that Jamaica was

a more convenient forum); Lehman v. Humphrey Cayman, Ltd., 713 F.2d 339, 347

(8th Cir. 1983) (reversing dismissal on the ground that the Cayman Islands, West

Indies, were a more appropriate forum). “An abuse of discretion may occur when the

district court fails to consider one or more of the important private or public interest

factors, does not hold the defendants to their burden of persuasion on all elements of

the forum non conveniens analysis, or has clearly erred in weighing the factors the

court must consider.” Reid-Walen, 933 F.2d at 1394. 
3

Neither the parties nor the district court have raised any abstention arguments

regarding the declaratory judgment action pending in Nebraska state court. 

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First, the district court neglected the private-interest factors and discussed only

a single public-interest factor—Nebraska’s interest in deciding Bacon’s claim. See

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981) (listing the private and

public-interest factors relevant to forum non conveniens). Although the district court

noted that Bacon formerly lived in Nebraska, was injured in Nebraska, and had filed

workers’-compensation and personal-injury actions in Nebraska, none of these have

any direct bearing on Bacon’s fraudulent-misrepresentation and breach-of-contract

claims. The declaratory judgment action pending in Nebraska is the only factor

weighing in Liberty Mutual’s favor, because Bacon’s fraudulent-misrepresentation

claim turns on the veracity of the answer Liberty Mutual filed in that suit. However,

with no showing of how Liberty Mutual or the Iowa federal courts would be

inconvenienced by this litigation, it was error to ignore Bacon’s choice of his home

forum.3

 See Lehman, 713 F.2d at 342 (“[I]n any balancing of conveniences, a real

showing of convenience by a plaintiff who has sued in his home forum will normally

outweigh the inconvenience the defendant may have shown.” (quoting Koster v.

(Am.) Lumbermens Mut. Casualty Co., 330 U.S. 518, 524 (1947))). 

Second, “[t]he defendant has the burden of persuasion in proving all elements

necessary for the court to dismiss a claim based on forum non conveniens.” ReidWalen, 933 F.2d at 1393. However, the district court required Bacon to justify the

choice of his home forum by showing that Nebraska courts would not be adequate,

thereby absolving Liberty Mutual of its burden of persuasion. This is simply not one

of those “rare instances” in which a state court is so much more suitable than a federal

forum that the harsh measure of dismissal because of forum non conveniens is

appropriate. See Sinochem, 549 U.S. at 430; Augustin v. Mughal, 521 F.2d 1215,

1217 (8th Cir. 1975) (per curiam) (noting that, notwithstanding a state court

proceeding pending at the time of dismissal, forum non conveniens was inappropriate

because state court was not a “substantially more convenient forum”); 14D Charles
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Alan Wright, Arthur R. Miller, & Edward H Cooper, Federal Practice and Procedure

§ 3828 (3d ed. 2007).

III. 

Bacon also asks us to decide whether Iowa or Nebraska law should govern his

suit in Iowa. Only under Iowa law will he be able to recover punitive damages for his

fraudulent misrepresentation claim. However, because the district court chose to

dismiss Bacon’s suit, it did not decide the choice-of-law question. Accordingly, we

decline to decide which state’s law applies to this suit. See Cavegn v. Twin City Pipe

Trades Pension Plan, 223 F.3d 827, 831 (8th Cir. 2000) (“Except for jurisdictional

questions, we do not usually address issues that have not been considered by a district

court regardless of the standard of review we use to decide the case.”). Upon remand,

the district court should use Iowa’s choice-of-law rules to determine whether Iowa or

Nebraska law will govern this suit. See Prudential Ins. Co. of America v. Kamrath,

475 F.3d 920, 924 (8th Cir. 2007) (“A district court sitting in diversity applies the law,

including the choice-of-law rules, of the state in which it sits.”). 

IV. 

Accordingly, we reverse the district court’s order of dismissal and remand for

proceedings in accordance with this opinion.