Court Opinion

ID: 4156908
Source: CourtListenerOpinion
Date Created: 2017-03-30 20:00:55.446672+00
Date Added: 2024-06-11T14:26:54.016093
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            MAR 30 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

CITY OF ALMATY, a foreign state,                 No.   15-56627

              Plaintiff-Appellant,               D.C. No.
                                                 2:14-cv-03650-FMO-CW
 v.

ELVIRA KHRAPUNOV, an individual,                 MEMORANDUM*
AKA Elvira Balmadani, AKA Elvira
Kudryashova; et al.,

              Defendants-Appellees.

CITY OF ALMATY, a foreign state,                 No.   15-56628

              Plaintiff-Appellant,               D.C. No.
                                                 2:15-cv-02628-FMO-CW
 v.

VIKTOR KHRAPUNOV, an individual; et
al.,

              Defendants-Appellees.

                    Appeal from the United States District Court
                       for the Central District of California
                   Fernando M. Olguin, District Judge, Presiding

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                        Argued and Submitted March 6, 2017
                               Pasadena, California

Before: PREGERSON, PAEZ, and BERZON, Circuit Judges.

      In two related cases, the City of Almaty, Kazakhstan (“Almaty”) alleged that

Defendants conspired to abuse Defendant Viktor Khrapunov’s mayoral office in

Almaty for personal gain. Defendants allegedly invested their ill-gotten gains in

shell companies and real estate in the United States. Almaty alleged claims under

18 U.S.C. §§ 1962 and 1964, as well as claims for breach of fiduciary duty,

conversion and conspiracy to convert, fraud and conspiracy to defraud, and for an

accounting and imposition of a constructive trust and equitable lien. The district

court dismissed the actions on the basis of forum non conveniens.

      Almaty appeals. “We review the district court’s order dismissing the

lawsuit[s] on the basis of forum non conveniens for an abuse of discretion,”

Carijano v. Occidental Petroleum Corp., 643 F.3d 1216, 1224 (9th Cir. 2011), and

we reverse.

      1.      “To prevail on a motion to dismiss based upon forum non conveniens,

a defendant bears the burden of demonstrating an adequate alternative forum, and

that the balance of private and public interest factors favors dismissal.” Id.

                                           2
      2.     It was an abuse of discretion for the district court to conclude that

Switzerland would provide an adequate alternative forum. “An alternative forum

is deemed adequate if: (1) the defendant is amenable to process there; and (2) the

other jurisdiction offers a satisfactory remedy.” Id. at 1225. Here, Defendants

failed to establish amenability to service of process.1 Defendants did not agree to

submit to service of process in Switzerland, and they failed to present evidence on

this issue. See Dole Food Co. v. Watts, 303 F.3d 1104, 1118-19 (9th Cir. 2002).

In addition, Defendants failed to establish that Switzerland offers a satisfactory

remedy. To establish a remedy, Defendants relied solely on Swiss Code provisions

pertaining to “adhesive” civil claims that may be asserted in connection with

criminal proceedings. Defendants did not submit an expert declaration explaining

how those provisions would apply in this instance. Nor did Defendants offer any

explanation as to how Almaty could assert “adhesive” civil claims when no

criminal charges have been filed. Accordingly, on this record, Defendants failed to

demonstrate that a Swiss remedy is available to Almaty. See Ceramic Corp. of Am.

      1
        Although Defendants argue that Almaty waived this issue, it was
Defendants’ burden to establish their amenability to service of process in the first
instance. See Carijano, 643 F.3d at 1225. Almaty had no obligation affirmatively
to challenge Defendants’ amenability to service of process because Defendants
made no showing on that issue in their motions to dismiss, as they were obliged to
do.
                                           3
v. Inka Maritime Corp., 1 F.3d 947, 949 (9th Cir. 1993) (“[T]he alternative forum

must provide some potential avenue for redress.”).

      3.       Even if Defendants had properly established the adequacy of

Switzerland as an alternative forum, reversal would be warranted because the

district court inverted Defendants’ burden regarding the public and private interest

factors.2 Contrary to the district court’s conclusion, the proper standard is not

whether Almaty’s convenience outweighs the public and private interest factors

favoring Switzerland, but rather, whether Defendants have established that the

public and private interest factors strongly outweigh the plaintiff’s convenience.

See Boston Telecommunications, 588 F.3d at 1206, 1212. In this case, the private

      2
          The private interest factors are as follows:
      (1) the residence of the parties and the witnesses; (2) the forum’s
      convenience to the litigants; (3) access to physical evidence and other
      sources of proof; (4) whether unwilling witnesses can be compelled to
      testify; (5) the cost of bringing witnesses to trial; (6) the enforceability
      of the judgment; and (7) all other practical problems that make trial of
      a case easy, expeditious and inexpensive.
Carijano, 643 F.3d at 1229 (quoting Boston Telecommunications Grp., Inc. v.
Wood, 588 F.3d 1201, 1206-07 (9th Cir. 2009)). The public interest factors
include: “(1) the local interest in the lawsuit, (2) the court’s familiarity with the
governing law, (3) the burden on local courts and juries, (4) congestion in the
court, and (5) the costs of resolving a dispute unrelated to a particular forum.” Id.
at 1232 (quoting Boston Telecommunications, 588 F.3d at 1211).
                                             4
and public interest factors do not sufficiently favor Switzerland to permit

dismissal.

      4.     As to the private interest factors, two individual Defendants reside in

California, and three corporate entity Defendants are incorporated in California.

See, e.g., Carijano, 643 F.3d at 1230-31. Some witnesses and evidence are located

abroad. However, no party argues that Kazakhstan is an appropriate forum, and

Defendants did not demonstrate that Switzerland is superior to California in terms

of securing witnesses and evidence. See Boston Telecommunications, 588 F.3d at

1210; Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1181 (9th Cir. 2006).

Moreover, the district court failed to consider whether a judgment against

Defendants could be enforced in Switzerland, and erroneously deemed the issue

undisputed.3 See Carijano, 643 F.3d at 1231-32.

      5.     With regard to the public interest factors, the district court criticized

Almaty for failing to demonstrate that California “has a stronger local interest in

the lawsuit than Switzerland.” With this public interest factor, however, “we ask

only if there is an identifiable local interest in the controversy, not whether another

      3
        Before the district court, Almaty argued that “Defendants have not
established that, if Almaty were to prevail in a Swiss court, Almaty would be able
to obtain a judgment against the embezzled funds that Defendants have brought to
the United States and are using here.”
                                           5
forum also has an interest.” Tuazon, 433 F.3d at 1182. Almaty’s challenge

focuses on allegedly unlawful activities that occurred within California, which

vests California with an interest in the dispute. See Boston Telecommunications,
588 F.3d at 1212. In addition, United States law governs the resolution of

Almaty’s federal claims, and California law governs Almaty’s common law

claims. Finally, the fact that this case may impose added burdens on the Central

District of California is of little relevance without a comparison to the congestion

of Swiss courts. Cf. Carijano, 643 F.3d at 1233.

      6.     In sum, as we concluded in Ravelo Monegro v. Rosa, 211 F.3d 509,

514 (9th Cir. 2000), “[t]he record in this case indicates the district court

misunderstood [the applicable] standard: rather than treating forum non conveniens

as an exceptional tool to be employed sparingly, the district court perceived it as a

doctrine that compels plaintiffs to choose the optimal forum for their claim.” It

was an abuse of discretion for the district court to deny Almaty its choice of the

Central District of California as the forum for resolving its claims. See id.

      REVERSED.

                                            6