Court Opinion

ID: 9468009
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:01:44.642593+00
Date Added: 2024-06-11T17:40:37.957285
License: Public Domain

MALETZ, Judge,
dissenting:
In my view the district court exceeded its discretion in dismissing on the ground of forum non conveniens. Therefore, I respectfully dissent.
At the outset, it will be noted that Cities maintains offices in both New York City and Tulsa, with its main office in Tulsa. Significantly, Cities’ motion for dismissal did not urge Tulsa as the more convenient forum. Instead, Cities seeks to defend this action away from both its home city, Tulsa, and its home country, the United States. Indeed, the heart of Cities’ argument is that the relevant witnesses, the pertinent evidence and the applicable law are all Brazilian and that this action should therefore be tried in Brazil. In short, Cities makes no claim that Tulsa is a more convenient forum than New York City; on the contrary, it insists that Brazil is more appropriate than any forum in the United States. *416Therefore, any difference in convenience between Tulsa and New York City is of no relevance here. Rather the analysis must turn on the suitability of a United States forum as compared to a Brazilian forum and not on the suitability of a New York City forum as compared to a Brazilian forum.
Of course, whether this action should be dismissed on the ground of forum non conveniens is a question to be answered by weighing the “private interest[s] of the litigant[s]” and the “factors of public interest.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). “But unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.” Id. at 508, 67 S.Ct. at 843. See also, e. g., Alcoa S.S. Co. v. M/V Nordic Regent, 654 F.2d 147, 151 (2d Cir. 1980), cert. denied, - U.S. -, 101 S.Ct. 248, 66 L.Ed.2d 116. This same strong showing is required even though plaintiff PPSA is a foreign corporation. Id. at 866, 872.
I
This case does not present a typical forum non conveniens dispute where all that need be decided is which party should bear the inconvenience of travelling to the other’s home forum. What is involved here is whether Cities should be allowed at its behest to litigate this case in a Brazilian forum where it will enjoy significant procedural advantages. Specifically, the record shows that no discovery would be available to PPSA in Brazil. See Joint Appendix (hereafter “App.”) 121-2, 173. Added to that, Cities was successful in obtaining a stay of discovery in the court below.1 Hence, dismissal here brings to an end any possible discovery by PPSA. And absent discovery PPSA will be under a marked handicap in attempting to prove the corporate misconduct it alleges.
Moreover, in Brazil the officers, directors and agents of a corporate litigant usually cannot testify. App. 121, 174. This means that in all likelihood PPSA could not offer testimony of either its or Cities’ officers or employees. Nor is process available in Brazil to readily compel the production of documentary evidence at trial. App. 174. Coupled with the absence of discovery, these characteristics of Brazilian law would materially prejudice PPSA’s claim.
To be sure, all judicial systems do not have to mirror our own; indeed, it may be appropriate in a given case to dismiss an action so that it may be refiled in a convenient forum, albeit one dissimilar to our own. See, e. g., Alcoa at -, n.16. But given the circumstances of this case, the procedures mandated by Brazilian law provide Cities with a distinct advantage. Such advantage should not be lightly disregarded for the doctrine of forum non conveniens exists not only to promote the “easy, expeditious and inexpensive” decision of eases, Gilbert, 330 U.S. at 508, 67 S.Ct. at 843, but also to serve as an “instrument of justice,” Williams v. Green Bay & W.R. Co., 326 U.S. 549, 554, 66 S.Ct. 284, 286, 90 L.Ed. 31 (1946), protecting the right of litigants to “a fair trial.” Gilbert at 508, 67 S.Ct. at 843. Thus, it is not enough for Cities to show that it would be cheaper and more convenient for it to try the case in Brazil; it must show that it would be so inconvenienced by defending in the United States as to render it fair and just that PPSA be subjected to the procedural handicaps of a Brazilian forum.
II
It is in this setting that the respective advantages and disadvantages of a Brazilian forum vis-a-vis a United States forum must be weighed. In accordance with the Gilbert factors, I consider first the private interests of the litigants starting with the location of the witnesses. As to this, PPSA *417alleges that Cities has so controlled and manipulated Copebras as to deny PPSA dividends to which it is entitled. The management decisions complained of were made in the United States by Cities’ executives who determined Copebras’ policies, including its investment and expansion strategy, dividend policy and accounting practices. The decisions of Cities’ executives were implemented by Cities’ representatives who constituted the controlling majority on a Consultative Board which managed Copebras. App. 8. All these executives and representatives of Cities are United States citizens and residents who speak English and whose attendance at trial would obviously be facilitated by a United States forum. App. 100. Further, from 1965 to 1979, the Consultative Board held 58 of its 74 meetings in the United States. App. 100. This in itself is strong evidence that a United States trial would not unduly burden Cities’ executives and representatives.
Cities stresses, however, that its defense will include testimony of Brazilian witnesses as to Brazilian accounting practices and the genera] condition of the Brazilian economy. But this alone scarcely requires trial in Brazil. The United States executives of Cities are the primary actors here and it is they as well as Cities’ representatives on the Consultative Board who must explain what they did and why they did it. And Cities has submitted no witness list nor otherwise identified the names of potential Brazilian witnesses or indicated the relevance of their testimony.
It is almost a truism “that litigants generally manage to try their cases with fewer witnesses than they predict in such motions as this.” Gilbert at 511, 67 S.Ct. at 844. For that reason, this Circuit has required parties seeking transfer of an action under 28 U.S.C. § 1404(a) on account of the convenience of witnesses to “clearly specify the key witnesses to be called and ... [to] make a general statement of what their testimony will cover.” Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978), cert. denied, 440 U.S. 908, 99 S.Ct. 1215, 59 L.Ed.2d 455 (1979). See also Jenkins v. Wilson Freight Forwarding Co., 104 F.Supp. 422, 424 (S.D.N.Y.1952). Such specificity is also favored by other Circuits. See Plum Tree, Inc. v. Stockment, 488 F.2d 754, 756-57 (3d Cir. 1973); Chicago R.I. & Pac. R. Co. v. Hugh Breeding, Inc., 232 F.2d 584, 588 (10th Cir. 1956), cert. dismissed, 355 U.S. 880, 78 S.Ct. 138, 2 L.Ed.2d 107 (1957); Headrick v. Atchison, T. & S.F. Ry., 182 F.2d 305, 310-11 (10th Cir. 1950). Here all we have is Cities’ unsubstantiated allegation that it will call witnesses relating to Brazilian accounting practices and the Brazilian economy.
Nor is there anything in the record to justify the assumption that the number of Brazilian witnesses will even approach, let alone exceed, the number of American witnesses, or that the cost of transporting these witnesses would exceed the cost of transporting Cities’ executives to Brazil and keeping them away from their positions during trial. Manu International, S.A. v. Avon Products, Inc., 641 F.2d 62, 66 (2d Cir. 1981). In short, Cities has not shown that its burden of bringing witnesses to New York from Brazil would be any greater than defendant’s burden was in Manu where this Court found that the transportation of witnesses from Taiwan to New York did not impose an unacceptable inconvenience.
But even if Cities were to show, as it has not, that it had a significant number of Brazilian witnesses, that consideration alone would not be decisive. In Manu', this Court endorsed the “recent sentiment in this Circuit for evaluating the forum non conveniens factors in light of the increased speed and ease of travel and communication which makes, especially when a key issue is the location of witnesses, no forum as inconvenient today as it was in 1947.” Id. at 65. Here, where the amount in controversy is estimated at $10,000,000, it is not realistic to expect that the burdens of travel are likely to impede Cities in presenting its case.
Considering next the availability of documentary evidence, in view of the fact that Copebras was managed by Cities from the *418United States, the necessary inference, which is unrebutted here, is that the records of Cities’ management decisions are in the United States and are in English. Moreover, to the extent that the records of Cope-bras are relevant, Cities maintains in the United States, already translated into English, a partial second set of Copebras’ financial records. App. 227. Cities argues, however, that the minutes of Copebras’ Board of Directors are in Portuguese. While that may be true, PPSA maintains, and Cities has not shown otherwise, that the Copebras Board of Directors functioned largely as a rubber stamp for the Consultative Board. And Cities does not deny that the Consultative Board’s records are in English.
In any event, assuming that some Brazilian documents are relevant, we are faced with a situation where documents may be found in both the United States and Brazil. Those in Brazil are in Portuguese and those in the United States are.in English and one set or the other will require translation, copying and shipment. No doubt transfer of documents from Brazil to the United States may be expensive, but “[i]t will often be quicker and less expensive to transfer a witness or a document than to transfer a lawsuit.” Manu at 65. Here, Cities has failed to show why both the lawsuit and the United States documents should be transferred to Brazil as opposed to the transfer to New York of only the Brazilian documents.
Other private factors relevant here are the residence of the parties and their expectation as to where litigation might take place. See Alcoa at 159. As for the residence of the parties, this case presents the “somewhat unusual fact that it is the forum resident who seeks dismissal.” Schertenleib v. Traum, 589 F.2d 1156, 1164 (2d Cir. 1978). And “[although the residence of the parties is no longer considered dispositive in forum non conveniens cases, it remains a significant factor.” Manu at 67. “[P]laintiff chose this forum and defendant resides here. This weighs heavily against dismissal.” Schertenleib at 1164. What this Court said in Manu at 67 is applicable:
It would be odd if not unfair to force the plaintiff, a Belgian who chose this forum, to go to Taiwan at the behest of Avon, who has its own home office right in this forum, when most of the actors involved in the case are not located in Taiwan but in or closer to New York.
With regard to the expectation of the parties as to where litigation might take place, the 1965 Agreement was negotiated, drafted and executed in New York City. None of the parties signing the document was Brazilian and the Agreement contains no provision indicating that it was to be enforced in the courts of Brazil. It thus would appear that the parties expected the Agreement to be enforceable in the United States.
Ill
We turn next to the public factors outlined in Gilbert. Cities emphasizes that questions of Brazilian corporation law are present in this case. But the mere fact that a case presents issues of foreign law “is not a sufficient ground for a federal court to decline to exercise its jurisdiction to decide a case properly before it.” Williams v. Green Bay & W. R. Co., 326 U.S. at 553, 66 S.Ct. 284, 286, 90 L.Ed. 31. Furthermore, New York contract law is also involved. For the record shows that pursuant to the Civil Code of Brazil, the liability of a defendant in a contract action is governed by the law of the place where the contract was entered into. App. 175. Thus, foreign law is implicated whether this case is tried in New York or in Brazil.
Cities also argues that this case will present issues of Brazilian accounting. But there is no reason to believe that Brazilian accounting practices are more difficult to comprehend than American accounting practices which juries in this country are routinely called upon to understand. And in all probability a jury — which PPSA has sought — would be no more familiar with American as opposed to Brazilian accounting practices. Moreover, American accounting practices are equally involved in this case. This is because Cities keeps two *419sets of books: one in accordance with Brazilian accounting practices which are kept in Brazil and one in accordance with American accounting procedures which are kept in the United States. PPSA claims that the books kept in the United States more accurately reflect Copebras’ profits upon which dividends are to be based. Hence, trial of the suit in Brazil will require a Brazilian court to examine Cities’ American books and to master American accounting practices. Accordingly, foreign accounting practices will be involved irrespective of where the case is tried.
On a further aspect, the 1965 Agreement provides that “future [dividend] policy may be affected by the industrial, fiscal and political situation in Brazil .. .. ” Relying on this provision, Cities sets out a potpourri of factors which it claims would be more easily understood by a Brazilian court than an American court. Among the factors so set out are the dramatic growth in the Brazilian economy since 1965; the high Brazilian inflation; the fiscal means adopted by the Brazilian government and Brazilian businesses to deal with it; the military seizure of the government; the tripling of the gross national product from 1963 to 1977; the increase in industrial production by 221%; and the increase in population by 48%. With all this, however, Cities has failed to explain how these factors have any bearing on Copebras’ failure to pay dividends. All that is before the court are bare allegations that these factors are relevant — a claim all too easy to make whenever a case involves a foreign corporation. Such unsubstantiated allegations made willy-nilly do not support remitting a plaintiff to a far away forum. And even if it were to be assumed that one or more of these factors has any relevance, the very fact that Cities’ executives based first in New York and then in Tulsa managed Copebras demonstrates that one does not' have to-be in Brazil to comprehend the relevant events.
Cities further argues that under Brazilian exchange control laws, dividends above a limited amount paid to a foreign shareholder may not be taken from Brazil except upon payment of a tax. However, Brazil’s tax interests may readily be accommodated here. For example, the district court could limit any recovery by PPSA against Cities to the net amount after Brazilian taxes that PPSA would have received had the dividends been paid in Brazil. The balance would remain with Cities and Copebras subject to Brazil’s collection of the appropriate tax. Alternatively, the district court could award damages equal to the pre-tax amount of dividends on the condition that PPSA post a bond in Brazil to insure that Brazil could be certain of collecting its taxes. Thus, Brazil’s tax interest is hardly an insurmountable problem.
Essentially this is a dispute about dividend policy between two non-Brazilian shareholders of a Brazilian corporation. It is not a case which “touch[es] the affairs of many persons [in Brazil where] there is reason for holding the trial in their view.” Gilbert at 509, 67 S.Ct. at 843. No doubt there is “a local interest in having localized controversies decided at home,” id. at 509, 67 S.Ct. at 843, but it has not been shown that this controversy is “localized” in Brazil.
It may be that in this case the trial court would need to hear evidence and decide issues concerning the internal affairs of a foreign corporation. “But a federal court which undertakes to decide such . .. question^] does not trespass on a forbidden domain.” Williams, 326 U.S. at 553, 66 S.Ct. at 286. “There is no rule of law . . . which requires dismissal of a suitor from the forum on a mere showing that the trial will involve issues which relate to the internal affairs of a foreign corporation.” Koster v. Lumbermens Mutual Co., 330 U.S. 518, 527, 67 S.Ct. 828, 833, 91 L.Ed. 1067 (1947). The fact that this case may involve “complicated affairs of a foreign corporation is not alone a sufficient reason for a federal court to decline to decide it.” Williams at 556-57, 66 S.Ct. at 287-288.
The majority stresses that PPSA has sought an injunction and suggests that the requested relief would involve interferences with the affairs of a foreign corporation. *420Not surprisingly PPSA proceeded in customary fashion and requested all forms of relief: damages, declaratory and injunctive relief. But if PPSA’s expressed willingness to abandon its request for injunctive relief counts for anything at all, it is an indication that sufficient relief may be afforded even in the absence of an injunction. Indeed, as Cities itself points out in its brief here [br. 19], “the decision on damages would in all likelihood . .. dictate the future . .. dividend ... policies of Copebras.” Thus, this dispute appears resolvable without an injunction. And even if an injunction were necessary, this would not compel dismissal. What was stated in Williams at 556-57, 66 S.Ct. at 287-288 bears repetition:
The fact that the claim involves complicated affairs of a foreign corporation is not alone a sufficient reason for a federal court to decline to decide it. The same may be true even where an injunction is sought. [Emphasis added.]
This case might be different if Cities had shown that resolution of the controversy required injunctive relief and that such relief could not be enforced by a United States court. Cities has not made such a showing but apparently assumes that these conclusions follow from the mere fact the Copebras is a Brazilian corporation. These conclusions are somewhat less than self-evident when it is considered that this is a dispute between two shareholders, neither of whom is Brazilian and that any injunction would apply to Cities rather than Cope-bras. Furthermore, the issuance of an injunction rests in the sound discretion of the trial court. Should that court determine that an injunction would be unenforceable, it could decline to provide such relief. And if PPSA wishes to maintain a suit in Cities’ home forum, knowing that the Brazilian aspects of this case may result in the denial of injunctive relief, it should be permitted to run that risk.
IV
In summary, I believe that the district court exceeded its discretion in granting Cities’ motion to dismiss. As for the private factors, the inconvenience to Cities of a trial in New York is exceeded by the inconvenience to PPSA of a trial in Brazil. Moreover, Cities is domiciled in the United States and its directors, executives, offices and records are in the United States. Thus, if this action were to proceed in the United States, Cities would enjoy all the substantial advantages which ■ usually accompany litigation in one’s home forum. See, e. g., Koster v. Lumbermens Mutual Co., 330 U.S. at 529, 67 S.Ct. at 834. On the other hand, trial in Brazil would subject PPSA to a forum which has procedural features singularly ill-suited to the fair presentation of its case. Here, as in Manu at 67:
It is almost a perversion of the forum non conveniens doctrine to remit a plaintiff, in the name of expediency, to a forum in which, realistically, it will be unable to bring suit when the defendant would not be genuinely prejudiced by having to defend at home in the plaintiff’s chosen forum.
With regard to the public factors, substantial questions of foreign law will be present no matter where this case is tried. And this case is not localized in Brazil. On the contrary, since Cities orchestrated the challenged conduct from its offices in the United States, “the substance of the controversy . .. not only touches other locales besides .. . [Brazil], but has a particular nexus with the . .. [United States].” Manu at 66. Further, as noted earlier, it has not been shown that injunctive relief will necessarily be required in order to do justice between the parties.
In a case such as this, having such drastic consequences for PPSA, particular care must be taken to insure that the allegations of Cities reflect the presence of genuine and substantial facts demonstrating actual inconvenience to it and not merely its reliance upon the doctrine of forum non conveniens to obtain a tactical advantage. Healthy skepticism is in order where, as here, a defendant seeks to have a cause tried away from both its home city and country.
In the last analysis, the forum non conveniens doctrine was designed to prevent *421plaintiffs from burdening defendants by the choice of unsuitable forums. As the Supreme Court said in Gilbert at 507, 67 S.Ct. at 842, the open court house door,
may admit those who seek not simply justice but perhaps justice blended with some harassment. A plaintiff sometimes is under temptation to resort to a strategy of forcing the trial at a most inconvenient place for an adversary, even at some inconvenience to himself.
While the doctrine of forum non conveniens permits the courts to prevent such abuse, its misapplication can work the very evils it was designed to prevent. Defendants are not less subject to the “temptation [to force trial] at a most inconvenient place for an adversary.” And a court misled into concluding that a lawsuit is best tried elsewhere may in fact relegate a plaintiff to as harassing and vexatious a forum as any a defendant was ever subjected to. Because I believe that is what happened here, I respectfully dissent.

. Although in the Southern District of New York forum non conveniens motions are often decided on affidavits, Alcoa at 158, extensive discovery' on such motions has been permitted in complex cases. See Farmanfarmaian v. Gulf Oil Corp., 437 F.Supp. 910, 924-5 (S.D.N.Y.1977), aff’d, 588 F.2d 880 (2d Cir. 1978). Such discovery would have better enabled the court to determine whether Cities’ forum non conveniens allegations had a valid basis.