April 29, 2011
What's the Alternative?: 9th Circuit Opinion Shows Flaws With Forum Non Conveniens Analysis; Professor Suggests Solution
In its opinion in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947), in which the Supreme Court first laid out the test for forum non conveniens, the Court noted that "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." In preparing to teach Civil Procedure again this spring, I had to look askance at this conclusion because it didn't accord with what I had seen in most forum non conveniens cases, including a recent one from the Ninth Circuit. Trying to find empirical evidence on the subject I came across the excellent recent article, When Is An Alternative Forum Available? Rethinking the Forum Non Conveniens Analysis, 85 Ind. L. J. (2010), by Joel H. Samuels, a professor at the University of South Carolina School of Law. Not only does the article propose a new framework for properly and effectively resolving forum non conveniens cases, but it also conducts an empirical analysis of every published federal court decision since 1982 that has considered the doctrine of forum non conveniens. So, what was the Ninth Circuit case, and what's the matter with forum conveniens (can't you tell that it's out of style)?
The Ninth Circuit case was Cariajano v. Occidental Petroleum Corp., 626 F.3d 1137 (9th Cir. 2010). In Cariajano, the plaintiffs were (1) several dozen adult and child members of the Achuar tribe, indigenous people who have long resided along the rivers of the northern Peruvian rainforest; and (2) Amazon Watch, a nonprofit corporation. The defendant was Occidental Petroleum Corp., a petroleum and oil exploration company. The plaintiffs sues the defendant in Los Angeles County Superior Court, asserting various causes of action relating to the defendant's environmental contamination and release of hazardous waste in Peru. The defendant removed the action to the United States District Court for the Central District of California and got the court to dismiss under the forum non conveniens doctrine.
To grant this motion under current forum non conveniens doctrine, the Central District of California had to reach two conclusions: First, it had to find that the defendant satisfied its burden of proving that an available alternative forum -- in this case Peru -- existed for the action. And second, if such a forum existed, the court had to weigh a variety of private and public interest factors to determine whether the case should have been dismissed. Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981)
The Ninth Circuit found that the Central District of California did not properly balance the public and private interest factors, but it really took the court to task for its conclusion that Peru was an adequate alternate forum. Specifically, the Ninth Circuit concluded that
-"The district court abused its discretion by accepting at face value Occidental's “stipulation and consent to jurisdiction in Peru” without considering the glaring absence of a waiver of the statute of limitations, which Occidental's own expert suggests may have run."
-"In assessing whether Peru afforded Plaintiffs a satisfactory remedy, the district court erroneously failed to weigh Plaintiffs' expert testimony, which unequivocally asserts that Peru provides no practical remedy at all for Plaintiffs." To wit,
-The district court focused upon the claim of the plaintiff's expert that the plaintiffs' action could proceed against the defendant in Peruvian court but ignored the fact that "there [wa]s no evidence that Plaintiffs could be entitled to anything more than nominal damages, which would mean that Peru would offer "no practical remedy for the plaintiff's complained of wrong."
-"Moreover, the district court did not consider whether Peruvian law provides any remedy at all for Amazon Watch's California Unfair Competition claim."
-The district court found that the plaintiffs failed to make a sufficient showing of corruption in Peru to avoid dismissal, ignoring evidence from the defendant's own expert of a Peruvian judiciary undergoing a transition that is, at best, volatile: he noted that the Peruvian Office of Judgeship Control, which investigates misconduct, requested the dismissal of 126 judges in 2007, up from 94 in 2006. The Office's investigations resulted in the temporary suspension of 86 judges in 2007, up from 36 in 2006. The Office issued 1,263 disciplinary sanctions in 2007, and admonished 473 judges and 443 court officers, while fining 84 judges and 67 court officers. Meanwhile, in the same period the Office brought 1,505 disciplinary processes that ended in exonerations and another 940 that were declared inadmissible.
So, was the Central District of California's opinion an anomaly, the exception to Gilbert's general rule that "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Or, were the plaintiffs exceedingly lucky that the Ninth Circuit stepped up and actually dug into the issue of whether Peru was truly an adequate alternative forum?
Let's go to Professor Samuels for the answer. As noted, Professor Samuels reviewed each of the 1447 published federal court decision since the Supreme Court's landmark 1982 opinion in Piper Aircraft that has considered the doctrine of forum non conveniens. The results? From 1982, only 18% of forum non conveniens motions were granted. But, from 1982 to 2007, 42% of such motions were granted, and the percentage of dismissals is increasing with 54% of such motions being granted in 2008 (although only 30% were granted in 2007).
So, dismissals pursuant to forum non conveniens are for from rare, but what about the Central District of California's threadbare analysis of whether Peru was an adequate alternative forum? Well, according to Professor Samuels' data set, the plaintiffs were lucky that the Central District of California even conducted an adequate alternative forum (AAF) analysis. According to his data, 31% of courts hearing and 24% of courts granting forum non conveniens motions did not even conduct AAF analyses, and 24% of courts granting such motions. Moreover, the deck was actually more stacked against the plaintiffs at the circuit level, where federal circuit courts in 38% of cases failed to conduct AAF analyses.
But, when courts do conduct such AAF analyses, do they usually do so in a more thorough manner than the Central District of California? According to Professor Samuels, the answer is "sometimes." In other cases,
-"Courts sometimes bypass AAF decisions by “assuming” that the AAF is adequate;"
-"Other courts consider AAF without any meaningful review or analysis;" and
-"As lower courts struggle to apply the two-part Piper inquiry, they often blend the AAF test into the balancing of private and public factors that should take place only after the court has established that an AAF exists."
The fact that many courts have been insouciant to the question of whether alternative forums are truly adequate is not surprising given the fact that the Court in Piper Aircraft held that the requirement of an alternative forum is ordinarily satisfied if the defendant is amenable to service of process in another jurisdiction except in "rare circumstances" when "the remedy offered by the other forum is clearly unsatisfactory." But when is an alternative forum adequate? This is the question that many courts either have ignored or dealt with inconsistently, and it is the question that "lies at the heart of whether it is reasonable to dismiss a case on this basis."
So, what's the solution? Well, according to Professor Samuels, the answer is "a new framework for properly and effectively resolving forum non conveniens cases, focusing on the first prong of the two-prong analysis: establishing whether an AAF exists for the case." According to Professor Samuels, in determining whether it should dismiss an action under the doctrine of forum conveniens so that it can be brought in forum 2 (F2), a court (forum 1 of F1) should apply
a six-factor test for determining whether an alternative forum is available. Each factor, like the entire analysis for forum non conveniens, should be evaluated with the burden of persuasion on the party moving for the forum non conveniens dismissal. The factors courts should consider are: (1) whether all defendants are subject to the jurisdiction of F2 according to the law of F2; (2) whether F2 provides a meaningful remedy; (3) whether the plaintiff will be treated fairly in F2; (4) whether all plaintiffs have practical access to the courts of F2; (5) whether F2 provides procedural due process; and (6) whether F2 is a stable forum. If the court hearing the forum non conveniens motion determines that any one of the six factors is not true for F2, then it should find the alternative forum unavailable.
Based upon these factors (which Professor Samuels explains in more detail in his article), it is easy to see why the the Central District of California should have denied the defendant's motion to dismiss in Cariajano. Of course, application of this six-factor test would be quite time consuming, so Professor Samuels proposes another solution:
Because the test for an AAF proposed in this Article is comprehensive, applying it will be time consuming for any court....
However, the court need not always conduct an in-depth inquiry into the availability of an alternative forum. Such an inquiry is important when a case is going to be dismissed, it is entirely unnecessary when a court intends to deny the motion and keep the case in F1 (the American forum). The detailed six-factor inquiry laid out above does not matter when a court will balance the private and public interest factors and conclude that the forum non conveniens motion should be denied.
I think that Professor Samuels' solution is fascinating and one that courts should adopt. I also think that the article is essential for Civil Procedure professor teaching students what is actually going on with the doctrine of forum non conveniens in cases across the country. And, he's not done. He promises that "[a] subsequent article, titled An Empirical Analysis of Forum Non Conveniens Cases in the Federal Courts Since Piper, will explore the data more comprehensively in search of broader lessons to be gleaned from the treatment of forum non conveniens motions by federal courts since 1982." I'm definitely looking forward to it.
April 29, 2011 | Permalink