Neslund, Christina

English

University of Denver

Denver Journal of International Law & Policy Volume 10 Number 2 Winter Article 15 May 2020 Forum Non Conveniens: Limiting Access to Federal Courts for Transnational Disputes Christina Neslund Follow this and additional works at: https://digitalcommons.du.edu/djilp Recommended Citation Christina Neslund, Forum Non Conveniens: Limiting Access to Federal Courts for Transnational Disputes, 10 Denv. J. Int'l L. & Pol'y 379 (1981). This Comment is brought to you for free and open access by the University of Denver Sturm College of Law at Digital Commons @ DU. It has been accepted for inclusion in Denver Journal of International Law & Policy by an authorized editor of Digital Commons @ DU. For more information, please contact jennifer.cox@du.edu,dig-commons@du.edu. 8 DEVELOPMENTStrict court uses on remand to decide the validity of the claimed "bfoq"exception, Sumitomo will have the advantage of the uniqueness of itstreaty rights and its requirements as a Japanese company to bolster itsargument for an exception to Title VII standards, at least for some of theexecutive positions in question. This conclusion is premised on the factorscited in the appellate opinion as worthy of consideration: linguistic andcultural skills; knowledge of Japanese products, markets, customs, andbusiness practices; familiarity with the parent enterprise in Japan; andacceptability to those persons with whom the company or branch doesbusiness.3 4To predict the outcome on remand would be mere speculation, but inlight of precedent and the uniqueness of its treaty reights, Sumitomo willhave a good argument for the validity of the "bfoq" exception eventhough the court has spoken out in favor of a strong commitment to anti-discrimination principles.Christine J. JobinForum Non Conveniens: Limiting Access toFederal Courts for Transnational DisputesUnited States citizens conducting business abroad should be aware ofrecent court decisions restricting access to United States courts for re-dress of grievances against foreign nationals." The federal appeals courtsin these cases have allowed the trial courts broad discretionary power todismiss transnational suits based upon the doctrine of forum non con-veniens. The courts' application of the doctrine effectively remits aUnited States citizen's claim to a foreign country's jurisdiction: theramifications of this ouster are serious for U.S. litigants. The decisionsrepresent a shift from the traditional preference for upholding the plain-tiff's choice of forum toward allowing the court to dismiss an action basedupon judicial efficiency and convenience. The courts in Pain v. UnitedTechnologies Corp.' and Alcoa Steamship Co., Inc. v. M/V Nordic Re-gents adopted a new basis for dismissal of actions brought in UnitedStates courts which is ideologically inconsistent with the concept of theright of access to United States courts.434. 638 F.2d at 559.1. Pain v. United Technologies Corp., 637 F.2d 775 (D.C. Cir. 1980); Alcoa S.S. Co., Inc.v. M/V Nordic Regent, 636 F.2d 860 (2d Cir. 1980).2. 637 F.2d 775 (D.C. Cir. 1980).3. 636 F.2d 860 (2d Cir. 1980).4. See Comment, Forum Non Conveniens and American Plaintiffs in Federal Courts,47 U. CHI. L. REV. 373 (1980) (discussing Cohens v. Virginia, 19 U.S. (6 Wheat) 264 (1821)).1981JOURNAL OF INTERNATIONAL LAW AND POLICYA. Recent Interpretations of the Doctrine of Forum Non Conveniens1. Pain v. United Technologies Corp.The district court in Pain v. United Technologies Corp.5 simplifiedthe standards to be applied by the trial court when dismissing an actionbased upon forum non conveniens, requiring that 1) the action be an "im-position upon [the court's] jurisdiction" and 2) an "alternative forum" beavailable. Within these parameters the court must weigh the "relative ad-vantages and obstacles to fair trial," a function which lies within thesound discretion of the court and is not readily accessible to attack. Ac-ceptance of a standard allowing the dismissal of an action based uponinconvenience to the court is a clear departure from the traditional appli-cation of doctrine of forum non conveniens, the purpose of which waspreviously to prevent hardship to the litigants rather than to the court.7The action in Pain arose from a helicopter crash in the North Seawhich killed passengers of different nationalities, including an Americancitizen. The defendant in the action, United Technologies Corp. (U.T.C.)was a Delaware corporation with its principal place of business in Con-necticut. A subsidiary of U.T.C. which designed and manufactured thehelicopter involved in the crash was owned and operated by a Norwegiancorporation. The trial court dismissed the action based upon stipulationsthat U.T.C. consent to: "personal jurisdiction in the foreign court whereplaintiffs might subsequently bring suit;" and that U.T.C. agree "to waiveany defense of statute of limitation were such a suit to be brought withinone year of the date of dismissal," and agree to "proceed directly to trialonly on the issues of damages without contesting liability in any suit filedby plaintiffs outside the United States." Not only was an alternative for-eign forum available to the plaintiff, but the court also ensured the coop-eration of the defendant in an action to be brought outside the UnitedStates.9In Pain, dismissal of the action was justified, in light of the fact thatthe United States court was without personal jurisdiction over the Nor-wegian corporation and would therefore have had to proceed solelyagainst the American defendant. However, the doctrine of forum non con-veniens could have been applied consistent with traditional standards ofAt common law, U.S. courts subscribed to the general rule that if a court was of competentjurisdiction it was required to hear a case brought before it. The doctrine of forum nonconveniens was initially adopted by the courts to avoid unnecessary involvement in the in-ternal affairs of a corporation foreign to that jurisdiction where the domicile of the corpora-tion would be the more appropriate forum. See Rogers v. Guaranty Trust Co., 288 U.S. 123,130-31 (1933); Williams v. Green Bay & W.R. Co., 326 U.S. 549 (1946).5. 637 F.2d at 775.6. 637 F.2d at 779, quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).7. For the historical development of forum non conveniens and its application in Amer-ican courts, see Braucher, The Inconvenient Federal Forum, 60 HARv. L. REv. 908, 912(1947).8. 637 F.2d at 780.9. Id.VOL. 10:379DEVELOPMENTSconvenience of litigation. Instead, the court reconciled apparent inconsis-tencies in prior cases-Gulf Oil Corp. v. Gilbert0 and Koster v. (Ameri-can) Lumbermens Mutual Casualty Co."-and applied the rule of AlcoaSteamship Co., Inc. v. M/M Nordic Regent"2 that the domestic standardsof forum non conveniens are to be applied to transnational disputes insuch a way as to establish a liberal precedent allowing the trial courtbroad power to dismiss a case brought in its court by an Americanplaintiff.2. The Standards: Gulf Oil v. Gilbert and Koster v. (American)Lumbermens Mutual Casualty Co.Gulf Oil Corp. v. Gilbert is recognized as having established guide-lines for a trial court to consider in a motion to dismiss on the ground offorum non conveniens. 8 With any application of the doctrine goes thepresumption that "at least two forums are available in which the defen-dant is amenable to process." Beyond this fundamental requirement, theuse of the doctrine rests primarily within the discretion of the court.14Factors for the court to consider include: the private interests of litigants;access to evidence; availability of witnesses; expense of litigation; advan-tages and obstacles to a fair trial; and public policy, including recognitionof the problem of excess litigation in congested centers rather than in theorigins of the cause of action. These discretionary considerations are to bebalanced against the rule that the plaintiff's choice of forum should rarelybe disturbed.15 The priority of the plaintiff's choice of forum has beenlost in recent decisions along with other factors which the courts, beforeAlcoa and Pain, had established as controlling dismissal of an action toanother jurisdiction.The Supreme Court emphasized different criteria to be consideredwhen depriving a plaintiff of his choice of forum in Koster v. (American)Lumbermens Mutual Casualty Co.' s Koster adhered to the balancing ofinterests set forth in Gilbert but implied an additional requirement thatthe defendant show harassment before the plaintiff's choice of forum isdisturbed. Regarding the application of the doctrine of forum non con-veniens the Court stated the general rule:Where there are only two parties to a dispute, there is good reasonwhy it should be tried in the plaintiff's home forum if that has beenhis choice. He should not be deprived of the presumed advantages ofhis home jurisdiction except upon a clear showing of the facts whicheither (1) establish such oppressiveness and vexation as to defendant10. 330 U.S. 501 (1947).11. 330 U.S. 518 (1947).12. 637 F.2d at 775.13. 636 F.2d at 863.14. 330 U.S. at 507.15. Id. at 508. See generally Recent Decisions, Civil Practice-Forum Non Conveniens,39 BRooKLYN L. Rzv. 218 (1972).16. 330 U.S. at 518.1981JOURNAL OF INTERNATIONAL LAW AND POLICYas to be out of all proportion to the plaintiff's convenience, which maybe shown to be silent or non-existent, or (2) make trial in the chosenforum inappropriate because of considerations affecting the court'sown administrative and legal problems.17The concern in Koster was whether the court had the power to disturbthe plaintiff's choice of forum. Pain approaches the problem of forum nonconveniens from a different perspective and considers the more objectivequestion of where the action should be brought, independent of the plain-tiff's choice of forum.3. Alcoa Steamship Co., Inc. v. M/V Nordic RegentPain was based primarily upon Alcoa Steamship Co., Inc. v. M/VNordic Regent.18 Alcoa was an admiralty action brought in New York bya New York corporation against a Liberian shipping corporation for dam-ages sustained by the New York corporation in a collision in Trinidad,West Indies. The suit was dismissed by the trial court on the ground offorum non conveniens. On appeal, the Second Circuit discussed theproper standard to determine a motion to dismiss an admiralty actionbrought by a United States resident and held that the trial court had notabused its discretion in dismissing the case but had properly consideredthe Gilbert standard."9The Alcoa court addressed the potential conflict in application of theGilbert standard without specific adherence to the Koster decision. Itsuggested that Koster did not create a new standard, but rather a prag-matic application of Gilbert in derivative actions.20 The court's reasoningis not compelling; however, the basis for its approach may be revealed ina footnote which notes the impracticality of applying the Koster require-ment that the defendant be harassed in the chosen forum before a changeof venue may be granted. There the decision cites the various treatiesbetween the United States and foreign countries which provide "for ac-cess to each country's courts on a 'national treatment' basis."" Therefore,if a court is to provide for special treatment of a resident's claim it isequally obliged to afford the same treatment to a foreign claim brought inUnited States courts.Consistent with this reasoning the court discussed the relevance ofthe U.S. citizenship of the plaintiff." In essence the court concluded that17. Id. at 524..18. 636 F.2d at 860.19. Id. at 861. The court noted that the principles of Gilbert had recently been appliedin Farmanfarmaian v. Gulf Oil Corp., 588 F.2d 880 (2d Cir. 1978). Farmanfarmaian involvedan action brought by an Iranian national in New York District Court against a U.S. corpora-tion for breach of contract. The Second Circuit affirmed the trial court's dismissal of theaction based upon the availability of an alternative forum and the trial court's wide discre-tion in the application of the doctrine of forum non conveniens.20. 636 F.2d at 865.21. Id. at 865 n.6.22. Id. at 867.VOL. 10:379DEVELOPMENTScitizenship is not a relevant factor (nor could it be, in light of the court'sdeference to treaties promising equal access to the courts). The court rec-ognized a preference for liberal application of the doctrine as evidencedby state court decisions.28 Silver v. Great American Insurance Co.u iscited as authority for a more liberal application of forum non conveniens:it represents a pronounced departure from the general rule of upholdingplaintiff's choice of forum and allows the court to disregard the residenceof the plaintiff if the litigation is clearly in an inconvenient forum."The court cites numerous cases supporting its willingness to referU.S. citizens to foreign jurisdictions.2 " Likewise, the court deemphasizesplaintiff's choice in deference to the convenience of the court. Thus thedoctrine of forum non conveniens, at one time referring to the conve-nience of the litigants, is evolving into a doctrine of convenience to thecourt. The minimum requirement at the inception of the doctrine-thatan alternative forum be available-may, based upon the wide discretionof the court and its liberal construction, be the sole determinant of rele-gability of an action to a foreign jurisdiction.B. Right of Access to United States CourtsAn American citizen does not have an absolute right of access toUnited States courts. Courts have, however, been reluctant to send Amer-icans into foreign courts.2 7 Despite the recent trend to lessen the signifi-cance of the claim brought by an American plaintiff there is considerableauthority to the contrary. To a certain extent the argument may be raisedthat the right of access to the courts is protected by the Constitution."The difficulty in applying this argument to the U.S. citizen's right tobring an action against a foreign party in U.S. courts is that the Constitu-tion's reference to jurisdiction between state and federal courts "cannot23. Id. at 868.24. 29 N.Y.2d 356, 278 N.E.2d 619, 328 N.Y.S.2d 398 (1972).25. 636 F.2d at 867. See Schertenleib v. Traum, 589 F.2d 1156, 1163 (2d Cir. 1978),which asks "should defendant and the court be burdened with [the case's] continuing there,if an alternative forum now exists so that plaintiff will not be without a remedy?"26. 636 F.2d at 869, citing, e.g., Mizokami Bros. of Arizona, Inc. v. Baychem Corp., 556F.2d 975 (9th Cir. 1977) (per curiam), cert. denied, 434 U.S. 1035 (1978); Mohr v. Allen, 407F. Supp. 483 (S.D.N.Y. 1976); Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633 (2d Cir. 1956),cert. denied, 352 U.S. 871 (1956).27. Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633 (1956). The status of a suit betweentwo non-residents is discussed in Barratt, The Doctrine of Forum Non Conveniens, 35 CAL.L. REv. 380 (1941), in a domestic context, i.e., where both parties are residents of differentstates rather than foreign countries. The general rule provides that, where a more appropri-ate forum is available, the court may dismiss the action. Some states compel the court toaccept jurisdiction where either party is a resident of the state and a dismissal for forumnon conveniens is not allowed. Id. at 410-13. See generally Bickel, The Doctrine of ForumNon Conveniens as Applied in the Federal Courts in Matters of Admiralty, 35 CoRNELLL.Q. 12 (1949). See also note 4 supra.28. See The Epson, 227 F. 158 (W.D. Wash. 1915); Note, Forum Non Conveniens: TwoViews on the Decision of the Court of Appeals for the Second Circuit in Alcoa S.S. Co.,Inc. v. M/V Nordic Regent, 12 J. MARrmIm L. 123 (1980).1981JOURNAL OF INTERNATIONAL LAW AND POLICYbe construed to interfere with the treaty-making power of the Executiveand the Senate."' " In addition, the argument has been raised that theU.S. citizen has a right of access to the courts because of his taxpayerstatus.3 0 However, in the interest of the integrity of the court there can beno necessary connection betwien paying taxes and using the courts.Moreover, the payment of taxes as a basis for access to the courts wouldbe inequitable, for a "resident alien may pay considerable Americantaxes, while a company incorporated in the United States but conductingall of its business elsewhere may pay little or none."31Taken to the extreme, it has been suggested that the doctrine of fo-rum non conveniens may be applied without any consideration of the citi-zenship of the parties.82 This argument assumes that any presumptionagainst the adequacy of a foreign court is unjustified, or that, if the forumcourt is inadequate, it is inadequate regardless of whom (alien or citizen)the court may relegate to that jurisdiction. That is, if a forum is unfairand aliens have to redress their grievances there when ousted from U.S.courts, the same should be applied to citizens.38Convenience and court efficiency are not controlling values inherentin the historical development of the judicial system in the United States.The complexities of international issues and the popular preference for afair resolution to conflicts which can be found in U.S. courts should notprovide a basis for the court to dismiss a case. Beyond the constitutionaland taxation arguments, the U.S. citizen has a right of access to thecourts based upon his right to choose his forum to litigate his grievance.The right, though limited, is consistent with the notion of freedom andjustice for United States citizens. The rule which more closely expressestraditional American values is found in The Saudades:3[A]n American court may not refuse to try a case brought by anAmerican citizen, unless it feels that injustice would be done by al-lowing him to proceed in his own court. The result of such a rule isthat the discretion of the court, so far as it has any existence, is lim-ited, and that mere inconvenience to the respondent, or to both par-ties, will not be considered a ground for exercising it to refusejurisdiction.C. ConclusionThe present trend is moving away from the plaintiff's choice to de-29. Bickel, supra note 27, at 43 n.129. For a discussion of the constitutional ramifica-tions of using forum non conveniens, see Blair, The Doctrine of Forum Non Conveniens inAnglo-American Law, 29 COLUM L. REv. 1, 3-19 (1929).30. 636 F.2d at 977 (Oakes, J., dissenting); 12 J. MARITIME L. 123 (1980), note 28 supra.31. Comment, Forum Non Conveniens and American Plaintiffs in the Federal Courts,47 U. CHi. L. RE V. 373 (1980).32. Id. at 393.33. Id. at 379.34. 67 F. Supp. 820, 821 (E.D. Pa. 1946).VOL. 10:379DEVELOPMENTSmands of public policy in determining forum non conveniens.36 The plain-tiff's access to the U.S. courts is necessarily limited. Likewise, predictablelimitations on the discretion of the trial court to dismiss the plaintiff'sclaim are necessary. As the law presently stands, the trial court has broaddiscretion to determine the viability of a U.S.-foreign action. The generalstandards, albeit ambiguous, require a showing of "inconvenience" and"public interest" to deprive an American plaintiff of an American fo-rum.36 In balancing the standards, weight is to be accorded plaintiff's citi-zenship and residency in favor of continuance in the forum wherein theplaintiff initiated the action. 7The fundamental principles underlying the doctrine of forum nonconveniens have not been abolished. But the businessperson should beaware of Pain and Alcoa which grant the trial court broad discretion todismiss a case based upon the doctrine of forum non conveniens. Thediscrepancy between the purported standards and their application alertthe prudent businessperson to a need for contractual safeguards regard-ing choice of forum and arbitration provisions in transnational agree-ments lest he find himself on an unexpected "vacation" abroad forlitigation.Christina Neslund35. 637 F.2d at 784.36. Note 31 supra, at 379.37. 637 F.2d at 795.1981

Forum Non Conveniens: Limiting Access to Federal Courts for Transnational Disputes

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Forum Non Conveniens: Limiting Access to Federal Courts for Transnational Disputes

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