Court Opinion

ID: 2996152
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:25:46.672237+00
Date Added: 2024-06-11T11:45:28.397940
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 02-1564
ISI INTERNATIONAL, INC.,
                                            Plaintiff-Appellant,
                               v.

BORDEN LADNER GERVAIS LLP and
BORDEN ELLIOT SCOTT & AYLEN,
                                         Defendants-Appellees.
                         ____________
       Appeal from the United States District Court for the
         Northern District of Illinois, Eastern Division.
          No. 98 C 7614—Suzanne B. Conlon, Judge.
                         ____________
  ARGUED DECEMBER 3, 2002—DECIDED JANUARY 21, 2003
                   ____________

 Before EASTERBROOK, MANION, and EVANS, Circuit
Judges.
   EASTERBROOK, Circuit Judge. The first time this case
was here, we reversed the district court’s decision that
it lacked personal jurisdiction over the defendant, a Cana-
dian law firm, and remanded so that the judge could evalu-
ate other arguments. See ISI International, Inc. v. Borden
Ladner Gervais LLP, 256 F.3d 548 (7th Cir. 2001). The
district judge then dismissed the case a second time, in-
voking the doctrine of forum non conveniens and relegat-
ing plaintiff to the Canadian forum (where the law firm
has already filed an action to keep the dispute warm). The
judge determined that the balance of convenience tips so
2                                              No. 02-1564

strongly in Canada’s favor that it overcomes the strong
presumption in favor of honoring the plaintiff’s choice of
forum. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255
(1981); Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).
Appellate review of this decision is deferential.
  Only a brief recap is necessary, given our earlier opin-
ion. Bert Reitsma, a Dutch national living in Canada,
invented a medical device that he licensed to ISI Surgical
Instruments Canada, Ltd. (incorporated in Ontario). ISI
Canada was acquired by ISI International (incorporated
and with headquarters in Illinois) in order to combine
Reitsma’s invention with an innovation owned by Jokari/
US, Inc. (a Texas corporation). Reitsma had a falling out
with other principals of ISI International and asked Scott
& Aylen, a partnership of solicitors based in Ottawa, to
withdraw pending patent applications and warn ISI Inter-
national’s customers that it lacked any rights to Reitsma’s
invention. Scott & Aylen did so, and ISI International’s
business crumpled. It sued Reitsma, who was ordered to
pay $290 million in damages; the judgment also confirmed
that ISI International, not Reitsma, owns the intellectual
property. (It reinstated the patent applications and since
our last decision has received a U.S. patent on Reitsma’s
invention.) In this suit, begun against Scott & Aylen and
continued against its successors, ISI International con-
tends that Scott & Aylen violated not only U.S. trademark
law but also fiduciary duties that the law firm owed to ISI
International as a client. Scott & Aylen replies that ISI
International was never its client and that it owed ISI
International no duty of loyalty.
  The district judge concluded that the suit should pro-
ceed in Ontario not only because more potential witnesses
are located in Canada than the United States but also
because a Canadian court best knows the Canadian law of
lawyer-client relations. Neither of these reasons is strong.
Travel between Ontario and Illinois requires only a short
No. 02-1564                                              3

and inexpensive journey; Ottawa is closer to Chicago than
is New York City. Moreover, the district judge’s need to
learn Canadian fiduciary law has a mirror image: if the
suit proceeds in Canada, the Canadian judge may need to
learn and apply the U.S. rules under the Lanham Act,
which supplied the basis of federal jurisdiction. The Cana-
dian law of attorney-client relations is hardly such an
alien body of doctrine that only a judge steeped in its
tradition could fathom its tenets. Nor is a U.S. judge’s
desire to avoid the burden of mastering a new legal sub-
ject an adequate reason to send litigants packing. And
although procedure in Canada departs in some respects
from that in the United States, so there is a chance that
some evidence admissible here would be inadmissible
there, this also is a mirror image—not only with respect
to admissibility questions but also with respect to com-
pulsory process (some witnesses who could be compelled
to appear in the United States could not be compelled
to give live testimony in Canada, and the reverse). None
of these considerations so strongly supports the Cana-
dian venue that the plaintiff’s choice must be overridden.
  Nonetheless, two additional considerations lead us to
conclude that the district court did not abuse its discre-
tion in relegating ISI International to the Canadian
forum. First, Scott & Aylen no longer exists. It was suc-
ceeded as part of a merger by Borden Elliot Scott &
Aylen, and although this partnership continues to exist
all of its partners practice through Borden Ladner Gervais
LLP, the survivor. The parties dispute which among the
entities, and who among the individual partners, is liable
for Scott & Aylen’s debts. The district judge was unable
to resolve this question, the parties have not reached
agreement on it, and an Ontario court may have to do so
no matter what, if an effort is made to collect in Ontario
any eventual judgment. If this aspect of the parties’ dis-
pute is going to land in Ontario no matter what, why not
handle the whole suit there?
4                                                No. 02-1564

  Second, and more important, the Lanham Act claim
that justified the presence of this case in federal court
turns out to be untenable. ISI International contends
that Scott & Aylen violated §43(a)(1)(B), 15 U.S.C.
§1125(a)(1)(B), by sending letters misleadingly assert-
ing that ISI International lacks any right to license or
practice Reitsma’s invention and falsely asserting that
Reitsma himself had a patent. (Scott & Aylen concedes
knowing that Reitsma never obtained a patent in his
own name, although it represented otherwise in the let-
ters sent to ISI International’s clients.) After our first
decision in this case, First Health Group Corp. v. BCE
Emergis Corp., 269 F.3d 800 (7th Cir. 2001), held that
letters sent to customers do not come within the scope
of §43(a)(1)(B)—which is limited to false or misleading
“commercial advertising or promotion” and does not cov-
er all deceitful business practices. Recognition that ISI
International’s Lanham Act claim fails on the merits
does not deprive the district court of jurisdiction, for the
claim was not frivolous, see Bell v. Hood, 327 U.S. 678
(1946), but it does deprive ISI International of any sub-
stantial interest in having the remainder of the suit
resolved in federal court. Indeed, even if we were to de-
clare that the district court abused its discretion by using
the doctrine of forum non conveniens, that court would
be free to relinquish supplemental jurisdiction now that
the claim under federal law has been resolved, see 28
U.S.C. §1367(c)(3), a step that would have the same prac-
tical effect as the use of forum non conveniens. (One of
Scott & Aylen’s partners is a U.S. citizen domiciled in
Canada; she has no state citizenship, so the diversity
jurisdiction is unavailable. See Newman-Green, Inc. v.
Alfonzo-Larrain, 490 U.S. 826, 829 (1989).)
  Because no claim under U.S. federal law remains in the
case, and the parties are not of diverse citizenship, the most
appropriate place for this litigation is Ontario (for, as the
No. 02-1564                                             5

first appeal showed, it could be difficult to obtain per-
sonal jurisdiction over Scott & Aylen or its successors
in any state court). Accordingly, the judgment of the dis-
trict court is
                                               AFFIRMED.

A true Copy:
      Teste:

                       ________________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit

                  USCA-02-C-0072—1-21-03