Opinion ID: 697268
Heading Depth: 3
Heading Rank: 1

Heading: Well Grounded in Fact and Law

Text: 37 Preliminarily, we note our rejection of defendants' attempts to support the award of sanctions on the grounds that the claims asserted in the complaint and the selection of New York as a forum were frivolous. Under the objective standard, in order to warrant an award of Rule 11 sanctions on the basis that a complaint is not well grounded in fact or law, it must be 'patently clear that a claim has absolutely no chance of success.'  Oliveri 803 F.2d at 1275 (quoting Eastway, 762 F.2d at 254). Plainly this standard was not met with respect to the claims asserted in the New York complaint, for the district court, as described in Part I.C.2. above, declined to find that they were not well grounded. Rather, the court explicitly refused to address the merits, and dismissed without prejudice to the merits of plaintiff[s'] claims, thereby allowing them to be pursued in the Israeli action. Moreover, at least one of the conditions imposed by the court precedent to its actual dismissal of the complaint, i.e., that defendants present assurances from the appropriate Israeli authorities that Sussman would not be detained in Israel should he go there in connection with the Israeli action, was designed specifically to enable plaintiffs' claims to be assessed on their merits. Accordingly, for purposes of Rule 11 analysis, their claims must be deemed nonfrivolous. 38 Nor can the award of sanctions be sustained on the ground that plaintiffs selected a forum inconvenient to defendants. To begin with, we are skeptical that the commencement of a suit in an inconvenient forum may be the basis of Rule 11 sanctions where venue was not improper. Attorneys are not under an affirmative obligation to file an action in the most convenient forum; their only obligation is to file in a proper forum. Newton v. Thomason, 22 F.3d 1455, 1463-64 (9th Cir.1994) (reversing order imposing sanctions for an 'unnecessary and frivolous' choice of venue, where district court found venue tenuous but not improper). In any event, defendants' assertion that the choice of forum here was without any rational basis lacks support in the district court's findings and in the record. Though the court stated that New York was a highly doubtful venue, 154 F.R.D. at 70-71, it did not conclude that venue in New York was improper. Nor could it have concluded that there was no objectively reasonable basis for placing venue in New York, for plaintiffs alleged that BOI had used the New York branch of Bank Hapoalim in order to facilitate and conceal from plaintiffs BOI's improper participation in the NAB manipulations. See 28 U.S.C. Sec. 1391(d), (f) (1988) (alien may be sued in any district; foreign state may be sued in any district in which a substantial part of events giving rise to the claim occurred). While the court found the branch-bank involvement to be a tangential contact with New York, and found this and other New York connections sufficiently outweighed by other factors to warrant the court's exercise of its discretion to dismiss for forum non conveniens, that exercise of discretion did not make venue in New York improper. 39 In sum, far from having found either plaintiffs' claims or their choice of forum frivolous, the court exercised its properly invoked jurisdiction to grant plaintiffs relief designed to ensure their opportunity to have those claims addressed on their merits in the Israeli action. The award of sanctions here cannot be upheld on the basis that the complaint or the choice of forum was not well grounded.