Commercial Litigation and Arbitration

Forum Non Conveniens — Less Deference Due a Foreign, as Opposed to a Domestic, Plaintiff’s Choice of Forum — Even If US Has an “Equal Access” Treaty with the Foreigner’s Country

Kisano Trade & Invest Ltd. v. Lemster, 2013 U.S. App. LEXIS 24697 (3d Cir. Dec. 12, 2013):

We first consider whether the District Court abused its discretion in affording plaintiffs' choice of forum a lesser degree of deference than would be accorded a domestic plaintiff. "Ordinarily, a strong presumption of convenience exists in favor of a domestic plaintiff's chosen forum, and this presumption may be overcome only when the balance of the public and private interests clearly favors an alternate forum." Windt, 529 F.3d at 190. When a plaintiff is foreign, however, the choice of a United States forum "deserves less deference."  Piper Aircraft, 454 U.S. at 256; see also Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430 (2007) ("When the plaintiff's choice is not its home forum, . . . the presumption in the plaintiff's favor applies with less force, for the assumption that the chosen forum is appropriate is in such cases less reasonable." (internal quotation marks omitted)). Among other reasons, courts are wary of the potential for foreign plaintiffs to seek jurisdiction in the United States because the laws may be more favorable to their claims.   See Piper Aircraft, 454 U.S. at 249 n.15 ("[D]ismissal may be warranted where a plaintiff chooses a particular forum, not because it is convenient, but solely in order to . . . take advantage of favorable law.").

Shulman is an Israeli citizen, Kisano is a Cypriot corporation, and Trasteco is a Maltese LLC. Despite their foreign citizenship, they argue that the District Court erred by granting lesser deference to their choice of forum because of the "equal access" provision of a treaty between the United States and Israel which, as relevant here, states:

   Nationals and companies of either Party shall be accorded national treatment and most-favored-nation treatment with respect to access to the courts of justice and to administrative tribunals and agencies within the territories of the other Party, in all degrees of jurisdiction, both in pursuit and in defense of their rights.

(A00553 (U.S.-Isr. Treaty, art. V(1)).) Plaintiffs invoke Blanco v. Banco Industrial de Venezuela, S.A., 997 F.2d 974 (2d Cir. 1993), as essentially their sole support for the proposition that "when a treaty with a foreign nation accords its nationals access to our courts equivalent to that provided American citizens, identical forum non conveniens standards must be applied to such nationals by American courts." Id. at 981. Acknowledging that a United States-Venezuela treaty had an equal access provision, the Second Circuit found that "no discount may be imposed upon the plaintiff's initial choice of a New York forum in this case solely because [plaintiff] is a foreign corporation." Id.

For several reasons, we reject plaintiffs' invitation to conclude that the equal access provision in the United States-Israel treaty requires us to find that plaintiffs' forum choice is entitled to the identical deference courts must afford a domestic plaintiff. First, the Second Circuit's discussion of the level of deference owed a foreign plaintiff who is a citizen of a country with an "equal access" agreement with the United States was dicta. The court dismissed the action on forum non conveniens grounds, notwithstanding the deference "owed," because of the strong private and public factors favoring a Venezuelan forum. Blanco, 997 F.2d at 981; see In re Air Crash Near Peixoto de Azeveda, Braz., on Sept. 29, 2006, 574 F. Supp. 2d 272, 280-81 (E.D.N.Y. 2008) (finding that Blanco's discussion was dicta and holding that foreign plaintiff's forum choice subject to an identical provision is afforded "reduced deference").

Moreover, Blanco's reasoning has been significantly diminished, if not altogether rejected, by a subsequent Second Circuit case.  In that case, the court held that even if a treaty entitled plaintiffs "to access American courts on the same terms as American citizens . . . [its] case law does not support plaintiffs' assertion that such a treaty would require that their choice of forum be afforded the same deference afforded to a U.S. citizen bringing suit in his or her home forum." Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 73 (2d Cir. 2003). Rather, "[p]laintiffs are only entitled, at best, to the lesser deference afforded a U.S. citizen living abroad who sues in a U.S. forum."  Id. The Second Circuit noted that the touchstone inquiry regarding the level of deference owed a plaintiff's choice of forum is not the "citizenship or residence of the parties," but the convenience of the forum. Id. The "lesser degree of deference typically afforded foreign plaintiffs . . . . is not intended to create difficulties for foreign plaintiffs, but is based instead on realistic doubts about the ultimate convenience of a foreign plaintiff's choice to litigate in the United States." Id.

The Second Circuit's more recent discussion of the issue is both more persuasive and, more importantly, consistent with the Supreme Court's and our Court's forum non conveniens case law. As the Supreme Court has explained, the presumption in favor of a domestic plaintiff's choice of forum--and the reduced deference owed a foreign plaintiff--is based on convenience:

   When the home forum has been chosen, it is reasonable to assume that this choice is convenient. When the plaintiff is foreign, however, this assumption is much less reasonable. Because the central purpose of any forum  non conveniens inquiry is to ensure that the trial is convenient, a foreign plaintiff's choice deserves less deference.

Piper Aircraft, 454 U.S. at 255-56; see also Windt, 529 F.3d at 190-91 (quoting Piper Aircraft and affording lesser deference to foreign plaintiffs). As the Pollux Holding court noted, a court considering a motion to dismiss on forum non conveniens grounds should not assign "talismanic significance to the citizenship or residence of the parties," but should give less deference to a foreign plaintiff's choice of forum because "it would be less reasonable to assume the choice of forum is based on convenience." 329 F.3d at 73 (internal quotation marks omitted); see also Lony I, 886 F.2d at 634 ("[T]he reason for giving a foreign plaintiff's choice less deference is not xenophobia, but merely a reluctance to assume that the choice is a convenient one . . . .").

The focus of the deference inquiry in the Supreme Court, in this Court, and in the Second Circuit is on convenience, not on the particular significance of a party's residence or citizenship or a party's ability to invoke a United States court's jurisdiction. That the United States and Israel have agreed to open up their judicial gates to their respective citizens does nothing to disturb the longstanding presumption that a foreign plaintiff's choice of a United States forum is less likely to be motivated by convenience. See 14D Charles Alan Wright et al., Federal Practice and Procedure § 3828.2 (3d ed. 2007) ("[I]n practice, federal courts generally hold that [treaties promising equal access to courts] do not entitle foreign plaintiffs to the same deference as United States citizens."). We, therefore, conclude that the equal access provision in the United States-Israel treaty does not change our analysis with respect to the degree of deference a district court must afford a foreign plaintiff's choice of forum.

Of course, foreign plaintiffs "may bolster the amount of deference due their choice by making a strong showing of convenience." Windt, 529 F.3d at 190 (emphasis added). In performing its forum non conveniens inquiry, a district court "must assess[, and articulate,] whether the considerable evidence of convenience has . . . overcome any reason to refrain from extending full deference to the foreign plaintiff's choice." Lony I, 886 F.2d at 634. This is not a precise inquiry, but, generally, "the greater the plaintiff's or the lawsuit's bona fide connection to the United States and to the forum of choice and the more it appears that considerations of convenience favor the conduct of the lawsuit in the United States, the more difficult it will be for the defendant to gain dismissal for forum non conveniens." Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001) (footnotes omitted).


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