• Forum Non Conveniens Dismissal Granted Despite Co-Defendant's Objection
  • September 10, 2007
  • Law Firm: Holland & Knight LLP - Tampa Office
  • Recently, the United States District Court for the Southern District of New York issued an opinion that may function as a cautionary tale to plaintiffs who attempt to circumvent litigating a case in the most obvious, appropriate and convenient forum. Esheva v. Siberia Airlines1 was a personal-injury and wrongful-death airline case with a very unusual pre-trial agreement between the plaintiffs and one defendant, accompanied by the plaintiffs’ apparent overconfidence in their ability to forum-shop.

    Plaintiffs sued Siberia Airlines (Sibir), the sublessee of the aircraft (based in Russia), and Airbus Leasing (Airbus), the lessor of the aircraft (based in Delaware). None of the passengers were United States citizens or residents, and none of the passenger tickets involved transportation to, from, or with intermediate stops in, the United States. Procedurally, the pre-trial agreement between the plaintiffs and Airbus added significant complications to the case but help explain the Court’s decision to grant Sibir’s motion for a forum non conveniens dismissal. The pre-trial agreement between the plaintiffs and Airbus was that the plaintiffs would agree to do the following: (1) waive punitive damages against Airbus, (2) not sue any other Airbus entity in the action, (3) not sue Airbus except in France and (4) dismiss all claims against Airbus if their claims against Sibir were dismissed in the action. In exchange, Airbus agreed to do the following: (1) sue Sibir in New York, (2) refrain from moving to dismiss the plaintiffs’ claims filed in New York on the ground of forum non conveniens, and (3) oppose Sibir’s efforts to sever or dismiss the New York action.

    As per the pre-trial agreement, Airbus filed cross-claims against Sibir. However, those claims were subsequently resolved when Sibir agreed to indemnify Airbus.

    Ultimately, Sibir moved to dismiss the action on the ground of forum non conveniens. In a relatively short opinion, the Court granted Sibir’s motion. The dismissal was conditioned on Sibir’s (1) conceding liability if sued in Russian courts by any plaintiff in the actions within six months of entry of the court’s Opinion and Order, (2) waiving any statute of limitations in such actions and (3) paying full compensatory damages as determined by a Russian court to all such plaintiffs. The plantiffs have filed a notice of appeal.

    In granting Sibir’s motion to dismiss, the Court, in addition to citing the forum adequacy standard set forth by the Supreme Court in Piper Aircraft Co. v. Reyno,2 also applied the analysis that the 2nd Circuit Court of Appeals described in Iragorri v. United Techs. Corp.3 The analysis involves three steps: 1) determining the degree of deference, 2) evaluating adequacy of the proposed alternative forum and 3) balancing private- and public-interest factors.

    The following is an overview of these three steps.

    1) Determining the degree of deference

    The court must determine the degree of deference properly accorded the plaintiff’s choice of forum. Factors to be considered include the following: (1) the convenience of the plaintiff’s residence in relation to the chosen forum; (2) the availability of witnesses or evidence in the forum district; (3) the defendant’s amenability to suit in the forum district; (4) the availability of appropriate legal assistance; and (5) other reasons relating to convenience or expense.

    2) Evaluating the adequacy of the alternative forum

    The court is to consider whether the alternative forum proposed by the defendants is adequate to adjudicate the parties’ dispute or, instead, offers a remedy that “is clearly unsatisfactory,” such as “where the alternative forum does not permit litigation of the subject matter in dispute.”

    3) Balancing private- and public-interest factors

    The court must balance multiple private- and public-interest factors implicated in the choice of forum. Private factors to be considered include, but are not limited to, the

    following: (a) the relative ease of access to sources of proof; (b) the availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; and (c) the possibility of the view of the premises, if a view would be appropriate to the action. Public-interest factors may include, but are not limited to, the following: (a) administrative inefficiency in trying a case in a busy court and away from the locus of the injury; (b) the burden that jury duty may impose on the community if the case is tried in a venue with no connection to the issues in dispute; and (c) a community’s interest in having a local case decided at home.

    Here, the application of all three factors led the Court to its conclusion that Russia was the most convenient forum for the plaintiffs. Judge Cote found that the foreign plaintiffs’ choice of a New York forum was entitled to “substantially reduced deference,” that Russia was an adequate alternative forum, and that the public- and private-interest factors favored dismissal. Although co-defendant Airbus had asserted third-party claims against Sibir and had objected to forum non conveniens dismissal, the court determined that the third-party claims were no longer significant to the motion since (1) Siberia had agreed to indemnify Airbus, and (2) Airbus had accepted Sibir’s offer of judgment. Notably, the court stated in a footnote, that Airbus was, in any event, “absolutely immune” from derivative liability in the United States under 49 U.S.C. section 44112(b), which provides that a lessor “is liable for personal injury, death or property loss or damage ... only when a civil aircraft … is in the actual possession or control of the lessor ...”

    Judge Cote’s opinion chided the plaintiffs for various flaws in their arguments in favor of a United States forum. In the discovery context, she raised the plaintiffs’ failure to produce adequate information in response to damage-discovery requests and their failure to provide evidence that Airbus was not subject to suit in Russia. She also questioned whether or not some of the plaintiffs were even participating in the litigation, as they had apparently not appointed personal representatives to pursue the actions. Finally, towards the end of her opinion, she rejected the plaintiffs’ attempt to keep the case out of Russia by plaintiffs’ offering to cover the costs of the Russian defendants’ transportation and translation, pointing out that those costs would “simply be added to the settlement demands made in the litigation.”

    The Court subtly made two other interesting points. First, it appears that the plaintiffs’ multi-faceted pre-trial agreement with Airbus to aid the forum selection backfired; the Court stated that the plaintiffs’ argument that a forum non conveniens dismissal would keep them from suing Airbus anywhere except France was a result “of their own creation” and that “it would be inappropriate to have this Court’s hands tied by the plaintiffs’ consensual arrangements.” Second, the Court emphasized that efforts to have other nations’ systems of jurisprudence declared “inadequate” and “corrupt” require a substantial presentation of evidence, as well as some serious convincing that it would be appropriate for our courts to classify them as such. Furthermore, Judge Cote cited case law where Russia’s legal system was held to be adequate and pointed out that the plaintiffs were “unable to cite any decision that has found Russia to be an inadequate forum for this reason.”

    This case raises some interesting questions, including the following four:

    1) Since such allegations of inadequacy may be appropriate in some cases, how should a party go about satisfying the burden of proving that a nation’s system of jurisprudence is inadequate?

    2) In future cases arising out of foreign accidents, will we see efforts to arrange similar agreements between plaintiffs and certain defendants designed to undermine the ability of other defendants to obtain forum non conveniens dismissals?

    3) Will a defendant’s insurers object to such agreements when they are likely to substantially increase the plaintiffs’ overall recovery from other insured defendants?

    4) Will such agreements be likely to succeed in blocking forum non conveniens dismissals in the future?

    1 2007 WL 1879179 (S.D.N.Y. June 28, 2007).

    2 454 U.S. 245 (1981).

    3 274 F.3d 65 (2d Cir. 2001).