Court Opinion

ID: 23127
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:06:21+00
Date Added: 2024-06-11T08:58:07.521991
License: Public Domain

UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT

                             No. 99-31379

         CHARLES TURAN; DEEP OCEAN RESOURCE DEVELOPERS, INC.,

                                                Plaintiffs-Appellants,

                                versus

     UNIVERSAL PLAN INVESTMENTS LIMITED; TYSON FOODS, INC.,

                                                 Defendants-Appellees.

            Appeal from the United States District Court
                for the Eastern District of Louisiana
                             (99-CV-1096)

                           January 24, 2001

Before BARKSDALE and BENAVIDES, Circuit Judges, and VELA, District
Judge.1

PER CURIAM:2

     In this Louisiana diversity action, Louisiana resident Charles

Turan and his Louisiana corporation, Deep Ocean Resource Developers

(Deep Ocean), appeal the dismissal of Universal Plan Investments

Limited    (Universal   Investments)     for   lack   of   in   personam

jurisdiction and Universal Investments’ parent, Tyson Foods, Inc.

(Tyson), for forum non conveniens.     Among other things, Appellants

     1
      District Judge of the Southern District of Texas, sitting by
designation.
     2
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
contend:      the district court should have imputed to Universal

Investments (Tyson’s subsidiary) Tyson’s jurisdictional contacts

with   the   forum   state,   Louisiana;     and,   concerning   Tyson,   the

district court failed to properly balance private and public

interest factors, including not affording appropriate deference to

Appellants’     choice   of   forum.        We   AFFIRM,   but   REMAND   for

modification of the judgment.

                                       I.

       In October 1990, Turan, a Louisiana resident, and Deep Ocean,

his Louisiana corporation, entered into an agreement with Shanghai

Fish Processing Factory (Shanghai Fish) of Shanghai, People’s

Republic of China, to create a joint venture for the processing and

marketing of fish products.       In furtherance of the joint venture,

Appellants created Universal Investments and incorporated it in

Hong Kong.    In March 1991, Universal Investments and Shanghai Fish

agreed to establish a joint venture corporation, Ocean Wealth Fish

Products Corporation (Ocean Wealth).

       Arctic Alaska Fisheries Corporation (Arctic Alaska), a deep-

sea fishery located in Seattle, Washington, was attracted by the

marketing of Ocean Wealth’s fish-processing services.            By November

1991, Arctic Alaska had acquired 80 percent ownership of the newly

formed Universal Investments, with Turan retaining the remaining 20

percent.     In 1992, Tyson acquired all the shares of Arctic Alaska,

including its interest in Universal Investments.

                                       2
     According to Appellants: Tyson assumed control over Universal

Investments and the Ocean Wealth joint venture, and operated them

solely for its benefit; and in April 1997, Tyson caused Universal

Investments to issue, without notice to Appellants, approximately

24,000 shares of voting stock and approximately 6,000 shares of

non-voting stock to Tyson’s subsidiaries, reducing Turan’s former

20 percent interest in Universal Investments to less than one

percent.

     Appellants     claim   a   breach      of   fiduciary   duties     from

mismanagement and waste and/or breach of contract and quasi-

contractual obligations, and continuing tortious conduct.               They

claim this caused them damages in the form of lost profits from the

Ocean   Wealth    joint   venture,   lost    value   in   their    Universal

Investments investment, and lost opportunity for profits from other

projects.   These damages are allegedly the result of Appellees’

setting the price of Ocean Wealth’s fish processing so low that

Universal Investments did not receive a profit.

     Based on numerous grounds, pursuant to Rule 12 of the Federal

Rules of Civil Procedure, Appellees moved to dismiss.             Pursuant to

a comprehensive and well-reasoned opinion, the motion was granted

as to Universal Investments for lack of personal jurisdiction; as

to Tyson, for forum non conveniens.         Turan v. Universal Plan Inv.

Ltd., 70 F. Supp. 2d 671 (E.D. La. 1999).

                                     3
                                    II.

     These bases for the dismissals are contested here. Therefore,

at issue is:        whether the district court erred by dismissing

Universal    Investments   for    lack    of   personal     jurisdiction;      and

whether it clearly abused its discretion by dismissing Tyson for

forum non conveniens.

                                     A.

     Absent any dispute as to relevant facts, the district court’s

jurisdictional ruling is reviewed de novo.                Marathon Oil Co. v.

A.G. Ruhrgas, 182 F.3d 291, 294 (5th Cir. 1999).                   When alleged

jurisdictional facts are disputed, we resolve all conflicts in

favor of the party seeking to invoke the court’s jurisdiction.

Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 418 (5th

Cir. 1993).

     Two requirements must be met before a district court can

exercise personal jurisdiction over a nonresident defendant:                   that

defendant must be amenable to service of process under the forum

state’s     long-arm   statute;     and    the        assertion    of   personal

jurisdiction must be consistent with the Due Process Clause of the

Fourteenth Amendment.      E.g., Dickson Marine Inc. v. Panalpina,

Inc., 179 F.3d 331, 336 (5th Cir. 1999). Because Louisiana’s long-

arm statute extends to the limits of due process, we need only

decide    whether   subjecting    Universal          Investments   to   suit    in

Louisiana would offend due process.            Id.

                                     4
     It will not be offended if the nonresident has “certain

minimum contacts with [the forum state] such that the maintenance

of the suit does not offend ‘traditional notions of fair play and

substantial justice’”.      International Shoe Co. v. Washington, 326
U.S. 310, 316 (1945) (emphasis added) (quoting Milliken v. Meyer,

311 U.S. 457, 463 (1940)).         The nonresident’s contacts with the

forum state should be such that it “reasonably should anticipate

being haled into court there”.          Marathon Oil Co., 182 F.3d at 295

(quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286

(1980)).     The “minimum contacts” requirement is satisfied if the

contacts give rise to either “specific” or “general” personal

jurisdiction.    Id.    Neither basis is present in this case.

                                        1.

     “Specific” jurisdiction exists when a nonresident corporation

“has purposefully directed its activities at the forum state and

the litigation results from alleged injuries that arise out of or

relate to those activities”.           Kelly v. Syria Shell Petroleum Dev.

B.V., 213 F.3d 841, 854 (5th Cir.) (citation omitted; emphasis in

original),    cert.    denied,   121    S.   Ct.   426   (2000).   Appellants

maintain specific jurisdiction exists for Universal Investments

because of its business meetings in Louisiana and its telephone,

mail, and facsimile communications with Appellants during and after

its formation.

                                        5
     Business     meetings    in    the     forum   state     and      related

communications,   however,    are   not    sufficient    to   establish    the

requisite “minimum contacts” unless Appellants’ claims arose from

those   activities.     See   Marathon     Oil   Co., 182 F.3d    at   295.

Appellants’ claims did not so arise; instead, they arose out of the

alleged   wrongful    acts    committed     by   Appellees    in     Universal

Investments’ office in Seattle, Washington. Universal Investments’

contacts with Louisiana rested on nothing more than the mere

fortuity that Appellants happened to be residents there.                   See

Patterson v. Dietze, Inc., 764 F.2d 1145, 1147 (5th Cir. 1985).

Further, Universal Investments could not reasonably anticipate

being sued in Louisiana as a result of attending business meetings

there, as well as sending various communications to Appellants,

because those contacts concerned its business in Hong Kong.                See

Marathon Oil Co., 182 F.3d at 295.        Universal Investments has never

done business in Louisiana.

                                    2.

     “General” jurisdiction exists if a nonresident’s contacts with

the forum state are “continuous, systematic, and substantial”. Id.

                                    a.

     Appellants offer no evidence that Universal Investments had

any contact with Louisiana other than those discussed above.

Needless to say, they do not constitute the requisite “continuous”

and “systematic” contacts.      See id.

                                    6
                                      b.

      Apparently, because of the lack of such contacts, Appellants

maintain   that,     for   general    jurisdiction,    Tyson’s    substantial

contacts with Louisiana should be imputed to Universal Investments,

its subsidiary.      They rely primarily upon Hargrave v. Fibreboard

Corp., 710 F.2d 1154 (5th Cir. 1983).

      Hargrave delineated the factors that must be considered in

determining whether a parent can be held amenable to personal

jurisdiction because of the acts of its subsidiary.                   Dickson

Marine, 179 F.3d at 338.       Generally, what is required is evidence

that the parent asserts such control over its subsidiary that the

subsidiary is, in reality, the parent’s agent or alter ego.                Id.

The Hargrave factors include:

            (1) amount of stock owned by the parent of the
            subsidiary; (2) did the two corporations have
            separate headquarters; (3) did they have
            common officers and directors; (4) did they
            observe corporate formalities; (5) did they
            maintain separate accounting systems; (6) did
            the parent exercise complete authority over
            general policy; (7) did the subsidiary
            exercise   complete   authority   over   daily
            operations.

Dickson Marine, 179 F.3d at 339 (citing Hargrave, 710 F.2d at

1160).     Although Hargrave analyzed the elements necessary to

subject a parent to personal jurisdiction because of the activities

of   its   subsidiary,     “the   same     legal   principles    apply”    when

jurisdiction    is    sought   over    the    subsidiary   because    of   the

                                       7
activities of its parent.        Walker v. Newgent, 583 F.2d 163, 167

(5th Cir. 1978) (based on agency relationship between parent and

its subsidiary, parent’s contacts with forum state may be imputed

to subsidiary), cert. denied, 441 U.S. 906 (1979).

     Courts   presume   the   institutional       independence      of   related

corporations when determining if one’s contacts with a forum state

can be the basis for a related corporation’s contacts.                   Dickson

Marine, 179 F.3d at 338.      This presumption may only be overcome by

clear evidence, with the “burden ... on the proponent of the

agency/alter ego theory”.       Id.

     Appellants have not shown, by the requisite clear evidence,

such a relationship between Tyson and Universal Investments. Tyson

owns a substantial amount of Universal Investments’ stock, and,

thus,   exercises   authority    over      its   general   policy   and   daily

operations.     However, the corporations have different corporate

headquarters.    Further, Appellants have not shown:          that Tyson and

Universal Investments share common officers or directors; that they

have failed to observe corporate formalities; or that they do not

maintain separate accounting systems.

                                      B.

     Pursuant to the doctrine of forum non conveniens, a federal

district court can decline to exercise jurisdiction “where it

appears that the convenience of the parties and the court and the

interests of justice indicate that the action should be tried in

                                      8
another forum”.    In re Air Crash Disaster Near New Orleans, La.,

821 F.2d 1147,   1153-54   (5th   Cir.   1987)    (en   banc)   (citations

omitted), vacated on other grounds sub nom. Pan Am. World Airways,

Inc. v. Lopez, 490 U.S. 1032 (1989).        No single private or public

interest factor is given conclusive weight; instead, and not

surprisingly, the central focus of the inquiry is convenience.

Dickson Marine, 179 F.3d at 342.

     A dismissal for forum non conveniens may not be reversed

unless there has been a clear abuse of discretion.          Piper Aircraft

Co. v. Reyno, 454 U.S. 235, 257 (1981).            We review the district

court’s decision-making process and conclusion and determine if it

is reasonable.     In re Air Crash Disaster, 821 F.2d at 1167.

Restated, we cannot perform a de novo analysis and make the initial

determination for the district court.        Id.

                                    1.

     Before applying the doctrine, the district court must first

determine whether an available and adequate foreign forum exists.

Id. at 1165.   For Hong Kong, the district court found:           Hong Kong

is available, because Appellees consented to the service of process

and to the jurisdiction of a Hong Kong court; and, Hong Kong is

adequate, because Appellants can pursue relief for their claimed

injuries under Hong Kong law.       Turan, 70 F. Supp. 2d at 676-77.

Appellants do not contest these findings.

                                    9
                                        2.

      If, as in this case, the district court makes a positive

available-and-adequate-foreign-forum             finding,    it    should     then

consider the following private interest factors, weighing in the

balance the relevant deference given the plaintiff’s initial choice

of forum:

            the relative ease of access to sources of
            proof; availability of compulsory process for
            attendance of unwilling, and the costs of
            obtaining attendance of willing, witnesses;
            probability of view of premises, if view would
            be appropriate to the action; and all other
            practical problems that make trial of a case
            easy, expeditious and inexpensive. There may
            also be questions as to the enforc[ea]bility
            of a judgment if one is obtained.

In re Air Crash Disaster, 821 F.2d at 1162.                 When analyzing the

private interest factors, the court must also consider whether the

motion to dismiss was timely filed.            Id. at 1165.

      Citing Dickson Marine, the district court concluded that the

balancing of private interest factors favored dismissal because

Hong Kong was a more convenient forum than Louisiana and was the

focal point of the litigation.          Turan, 70 F. Supp. 2d at 677.           It

found:      Hong    Kong   is   the    focal   point,   because        Appellants’

allegations, like those in Dickson Marine, necessitate examining

witnesses,    documents,        and    records     relating       to     Universal

Investments’ Chinese operations; Appellants’ choice of forum does

not   outweigh     the   unnecessary    burdens    of   trying    Appellees     in

                                        10
Louisiana for activities focused in Hong Kong; Appellants can

enforce a judgment against Universal Investments in Hong Kong; and,

Appellees timely moved to dismiss.           Id.

     Appellants maintain that Tyson did not meet its burden of

production.    Overly detailed affidavits are not required; what is

required is “enough information to enable the District Court to

balance the parties’ interests”.         Reyno, 454 U.S. at 258; In re Air

Crash Disaster, 821 F.2d   at    1164-65.      Obviously,    the   detail

required depends on the facts of each case.                   In re Air Crash

Disaster, 821 F.2d at 1165 n.28.

     Appellants note that Appellees did not submit affidavits; but,

they did cite to Appellants’.          Along this line, Appellants assert

that Tyson has not identified specific witnesses in Hong Kong.

However, the Supreme Court has excused such detail in cases where

crucial witnesses are difficult to identify or interview.                     See

Reyno, 454 U.S. at 258; In re Air Crash Disaster, 821 F.2d at 1164-

65 & n.28.      Based upon the record (specifically, Appellants’

complaint     and   affidavits),       the   district    court    had    enough

information to decide the forum non conveniens issue.

     Appellants’     contention       that   the   district    court    did   not

properly weigh the requisite private interest factors is without

merit. Hong Kong is the focal point of this litigation, because it

involves the internal governance of a Hong Kong corporation,

Universal Investments.      See Dickson Marine, 179 F.3d at 343; see

                                       11
also Koster v. (American) Lumbermens Mut. Cas. Co., 330 U.S. 518,

527 (1947) (although no rule requires dismissal upon mere showing

that trial will involve issues relating to internal affairs of

foreign corporation, it is factor which may “show convenience of

parties or witnesses, the appropriateness of trial in a forum

familiar with the law of the corporation’s domicile, and the

enforceability of the remedy if one be granted”).

     Moreover, Appellants seek damages in the form of lost profits

from the Ocean Wealth joint venture and lost opportunity for

profits from other joint projects with the Chinese government.

This requires examining witnesses and evidentiary materials related

to Universal Investments’ Chinese operations.           For example, and as

noted,   Appellants    allege   that    Appellees,    among   other      things,

surreptitiously       diluted   Appellants’      interest     in    Universal

Investments and manipulated the price for fish processing charged

by the Ocean Wealth joint venture.          The propriety of Chinese fish

processing prices must necessarily be proved, at least in part, by

Chinese witnesses.

     Appellants protest that many key witnesses and documents are

located either in Louisiana or elsewhere in the United States.

However, this essentially concerns the quantum of Appellees’ proof

rather   than   its   substance,   “a    basis   on   which   we   are    highly

reluctant to find an abuse of discretion”. Robinson v. TCI/US West

Communications Inc., 117 F.3d 900, 909 (5th Cir. 1997).               Further,

                                       12
nothing in the record suggests this case should be tried in

Louisiana (as opposed to the State of Washington, where the alleged

wrongdoing occurred).    Id. at 908-09.

     Appellants also contend that the district court failed to give

sufficient deference to their choice of forum.           That choice is

entitled to greater deference when, as here, the plaintiff has sued

in his home forum.      Reyno, 454 U.S. at 249.      Thus, “[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”.         Id. at 256 n.23

(quoting Koster, 330 U.S. at 524).    However, “[a] citizen’s forum

choice should not be given dispositive weight”.           Id. (emphasis

added). Although a resident plaintiff deserves more deference than

a foreign plaintiff, “dismissal should not be automatically barred

when a plaintiff has filed suit in his home forum”.       Id. (emphasis

added).   Instead, “if the balance of conveniences suggests that

trial in the chosen forum would be unnecessarily burdensome for the

defendant or the court, dismissal is proper”.      Id.

     The district court gave Appellants’ forum-choice the deference

Reyno demands: “Although Louisiana plaintiffs initially selected a

Louisiana forum ..., their choice of forum does not outweigh the

unnecessary burdens of trying non-resident defendants in Louisiana

for activities focused in Hong Kong”.     Turan, 70 F. Supp. 2d at 677

(emphasis added).    Further, Appellants made no “real showing of

                                 13
convenience”.    The district court found that, even if some of the

witnesses and evidentiary materials were not easily accessible in

Hong Kong, Appellants did not assert that the majority of witnesses

and documents were in Louisiana. Id. Also, because Louisiana does

not have personal jurisdiction over the other named defendant,

Universal Investments (pursuant to our earlier holding), it clearly

is not a convenient forum.       See Calavo Growers of Calif. v.

Generali Belgium, 632 F.2d 963, 966 (2d Cir. 1980), cert. denied,

449 U.S. 1084 (1981).

     Finally, Appellants assert that the district court failed to

find Hong Kong law offered either a mechanism for compelling non-

Chinese residents to testify, or that there is a procedural device

for perpetuating such testimony for trial-use.           However, the

district court was only required to analyze relevant private

interest factors.    In re Air Crash Disaster, 821 F.2d at 1164.

Because the non-Chinese witnesses identified by Appellants are

affiliated either with them or with Appellees, and the court

ordered Appellees to stipulate to litigating, receiving service of

process,   and   participating   in   discovery,   all    within   the

jurisdiction of Hong Kong, it was not required to make such a

finding.   See Turan, 70 F. Supp. 2d at 678.

                                 3.

     If, as here, the private interest factors weigh in favor of

dismissal, no further inquiry is required.         In re Air Crash

                                 14
Disaster, 821 F.2d at 1165.    On the other hand, if the district

court concludes that the private interest factors do not weigh in

favor of dismissal, it must consider the following public interest

factors:

           the administrative difficulties flowing from
           court congestion; the local interest in having
           localized controversies resolved at home; the
           interest in having the trial of a diversity
           case in a forum that is familiar with the law
           that must govern the action; the avoidance of
           unnecessary problems in conflicts of law, or
           in application of foreign law; and the
           unfairness of burdening citizens in an
           unrelated forum with jury duty.

Id. at 1162-63.

     Although, as discussed, the district court found the balance

of private interest factors favored dismissal, it did consider the

public interest factors.      Turan, 70 F. Supp. 2d at 678.     It

concluded they, too, favored dismissal because “litigation in the

Eastern District of Louisiana would prove unduly burdensome on the

community and further no community interest”.        Id. (emphasis

added).

     This conclusion was not unreasonable.   Hong Kong law applies

to at least some of Appellants’ claims.   See Duckworth Woods Tire

Serv., Inc. v. Johnson, 557 So. 2d 311, 313 (La. Ct. App. 1990)

(“We agree that it was not proper for the trial court to apply

Louisiana corporate law to the internal activities of an out-of-

state corporation which itself had no connection with Louisiana.”

                                 15
(emphasis added)). The need to apply foreign law favors dismissal.

Reyno, 454 U.S. at 260.                Further, Louisiana does not have an

interest   in     the      litigation    other       than    Appellants’     Louisiana

residency.      See Dickson Marine, 179 F.3d at 343 (dismissing case

for forum non conveniens despite plaintiffs’ Louisiana residency).

     In    sum,      the    district    court    did        not   clearly   abuse   its

discretion      by    dismissing       Tyson    on    the     basis   of    forum   non

conveniens.       See In re Air Crash Disaster, 821 F.2d at 1165-66

(“[E]ven when the private conveniences of the litigants are nearly

in balance, a trial court has discretion to grant forum non

conveniens dismissal upon finding that retention of jurisdiction

would be unduly burdensome to the community, that there is little

or no public interest in the dispute or that foreign law will

predominate if jurisdiction is retained.” (quoting Pain v. United

Techs. Corp., 637 F.2d 775, 792 (D.C. Cir. 1980), cert. denied, 454
U.S. 1128 (1981))).

                                          4.

     If the district court concludes the action should be dismissed

in favor of trial in a foreign forum, it must ensure:                               the

plaintiff can reinstate his action in the alternative forum without

undue inconvenience or prejudice; and, if the defendant obstructs

such reinstatement, the plaintiff can return to the American forum.

Id. at 1166.      The district court did so:                “The Court ... reserves

the right of the plaintiffs to return to this forum if the

                                          16
defendants prevent them from reinstating their claims in Hong Kong

or if the plaintiffs suffer undue inconvenience or prejudice in

doing so.”       Turan, 70 F. Supp. 2d at 678.               In addition, the

district court conditioned the dismissal on Appellees’ consent to

“litigate, submit to service of process, engage in discovery, and

consent to   the    enforceability        of   a     judgment,   all    within    the

jurisdiction of Hong Kong”.         Id.

     The judgment, however, does not include these conditions and

contingencies.       In   the    alternative,         Appellants       request    its

modification of the judgment to incorporate them. We agree that it

should be so modified.

                                     III.

     For   the    foregoing     reasons,       the     dismissals      of   the   two

defendants are AFFIRMED, with this matter to be REMANDED to the

district court for modification of the judgment.

                                           AFFIRMED as to dismissals;
                                REMANDED for modification of judgment

                                      17