Stroitelstvo Bulgaria Ltd. v. Baef

• Decision Date: 24 February 2009
• Docket Number: No. 08 C 3056.,08 C 3056.
• Citation: 598 F.Supp.2d 875
• Parties: STROITELSTVO BULGARIA LTD., Plaintiff, v. The BULGARIAN-AMERICAN ENTERPRISE FUND, and The Bulgarian-American Credit Bank, Defendants.
• Court: U.S. District Court — Northern District of Illinois

598 F.Supp.2d 875

STROITELSTVO BULGARIA LTD., Plaintiff, v. The BULGARIAN-AMERICAN ENTERPRISE FUND, and The Bulgarian-American Credit Bank, Defendants.

No. 08 C 3056.

United States District Court, N.D. Illinois, Eastern Division.

February 24, 2009.

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Philip M. Musolino, Musolino & Dessel, Washington, DC, Sylvia Jiva Rolinski, Danielle M. Espinet, Rolinski & Suarez, L.L.P., Gaithersburg, MD, for Plaintiff.

Brian Douglas Sieve, Karen Natalie Walker, Brian Douglas Sieve, Eunnice H. Eun, Samantha A Gingold, Stephanie A Brennan, Kirkland & Ellis LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

RUBEN CASTILLO, District Judge.

Stroitelstvo Bulgaria Ltd. ("Plaintiff"), a Bulgarian company, seeks to recover for damages to its business and property allegedly caused by the Bulgarian-American Enterprise Fund ("BAEF") and the Bulgarian-American Credit Bank ("Bank") (collectively "Defendants"). (R. 22, Pl.'s First Am. Compl. ¶ 2.) Plaintiff alleges violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1964, along with claims for breach of contract, intentional interference with contract, intentional interference with prospective advantage, breach of fiduciary duty, abuse of process, violation of Bulgarian law, and civil conspiracy. (Id. ¶¶ 3-4, 55-113.) Defendants move to dismiss based on lack of personal jurisdiction, improper venue, insufficient process, insufficient service of process, failure to state a claim for relief, and alternatively, under the doctrine of forum non conveniens. (R. 58, 59, 60.) For the following reasons, the Court dismisses this action under the doctrine of forum non conveniens.

RELEVANT FACTS

Plaintiff is a corporation organized under the laws of Bulgaria. (R. 22, Pl.'s First Am. Compl. ¶ 5.) BAEF is a nonprofit corporation established pursuant to the Support for East European Democracy Act ("SEED Act"),¹ 22 U.S.C. §§ 5402, 5421. (Id. ¶ 6.) BAEF commenced its operations in 1992 with $58 million in funding from the American government. (Id.) BAEF is based in Chicago, and at all pertinent times also maintained an office in Sofia, Bulgaria. (Id.) BAEF is the parent company of the Bank, a Bulgarian joint stock company registered under the Bulgarian Trade Act. (Id. ¶ 7.) The Bank commenced operations in May 1997, and its sole purpose is to lend money to small and medium sized enterprises in Bulgaria. (Id.)

Plaintiff designed and undertook a residential construction project in Sofia and on March 24, 2005, executed a loan agreement with the Bank to help finance this project ("Loan Agreement"). (Id. ¶¶ 9-10.) The Loan Agreement was executed in Sofia, and provides that it is to be governed by and construed in accordance with Bulgarian law. (Id. ¶ 10 & Ex. A § 17.07.) Plaintiff alleges that on November 11, 2005, the Bank wrongfully and without cause suspended credit and asserted a default under the Loan Agreement, along with the right to recover 970,438 euro. (Id. ¶ 19.) As a result of these actions, Plaintiff alleges substantial injuries, including the withdrawal of project unit purchasers from their contracts and the loss of members of its construction team. (Id. ¶¶ 25-29.) On December 12, 2005, the Bank, proceeding ex parte, obtained a decree of execution from the Sofia City Court in the amount of 970,438 euro, which the Bank used to attach and freeze Plaintiffs assets. (Id. ¶¶ 31, 36-37.) On May 9, 2006, under the alleged "duress" created by the Bank's improper suspension of credit and the Sofia City Court's enforcement of the judgment, Plaintiff took out another loan from the Bank in order to repay the amount ordered by the decree of execution. (Id. ¶¶ 34-35.) Plaintiff alleges that the Bank's actions constituted "extortion, blackmail, bank fraud and predatory lending" and that the Bank has engaged in "a pattern of racketeering activity as defined in 18 U.S.C. § 1961(l)." (Id. ¶ 38.) Plaintiff further claims that BAEF had a duty to supervise the actions of the Bank, and that in failing to do so, permitted the improper use of U.S. funds. (Id. ¶¶ 49, 52-53.)

PROCEDURAL HISTORY

On April 4, 2007, Plaintiff filed this action in the U.S. District Court for the District of Columbia. (R. 1, Pl.'s Compl.) Defendants moved to dismiss under Federal Rules of Civil Procedure 9(b), 12(b)(2), 12(b)(6) and the doctrine of forum non conveniens, or alternatively, to transfer the case to the Northern District of Illinois pursuant to 28 U.S.C. § 1404(a). (See R. 10-12.) Shortly thereafter, Plaintiff filed an amended complaint. (R. 22, First Am. Compl.) On April 29, 2008, the District Court granted Defendants' motion to transfer the case to this Court. (R. 38, Order.)

Defendants now move to dismiss on numerous grounds, including lack of proper service under the Hague Convention, lack of personal jurisdiction over the Bank, and failure to state a claim for relief. (R. 59, BAEF's Mot. to Dismiss; R. 60, Bank's Mot. to Dismiss.) Defendants also jointly move for dismissal under the doctrine of forum non conveniens, arguing that the parties' dispute should be litigated in Bulgaria rather than in the United States. (R. 58, BAEF's Mot. to Dismiss.)²

ANALYSIS

The common law doctrine of forum non conveniens allows the Court to dismiss a case over which it would normally have jurisdiction if doing so "best serves the convenience of the parties and the ends of justice." Kamel v. Hill-Rom Co., Inc., 108 F.3d 799, 802 (7th Cir.1997) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 67 S.Ct. 839, 91 L.Ed. 1055 (1947)). In Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007), the U.S. Supreme Court expanded the doctrine, concluding that "a district court has discretion to respond at once to a defendant's forum non conveniens plea, and need not take up first any other threshold objection," including questions of personal or subject matter jurisdiction, if it determines that "a foreign tribunal is plainly the more suitable arbiter of the merits of the case." Id. at 425, 127 S.Ct. 1184. Put simply, a court can bypass jurisdictional issues and proceed directly to a forum non conveniens motion where it is appropriate to do so. Id. Indeed, where it is easier to consider the issue of forum non conveniens than to determine jurisdiction, it is proper to take the "less burdensome course." Id. at 436, 127 S.Ct. 1184. Because that is the case here, the Court proceeds directly to Defendants' forum non conveniens motion.

I. Forum Non Conveniens Analysis

"Dismissal for forum non conveniens reflects a court's assessment of a range of considerations, most notably the convenience to the parties and the practical difficulties that can attend the adjudication of a dispute in a certain locality." Sinochem, 549 U.S. at 429, 127 S.Ct. 1184. Under the doctrine of forum non conveniens, a case may be dismissed only when two conditions are met: (1) there is an available and adequate alternative forum that has jurisdiction over the case; and (2) the balance of private and public interest factors weighs in favor of dismissal. Clerides v. Boeing Co., 534 F.3d 623, 628 (7th Cir.2008); In re Bridgestone/Firestone, Inc., 420 F.3d 702, 703-04 (7th Cir.2005). The defendant bears the burden of persuading the Court that a case should be dismissed on forum non conveniens grounds. In re Ford Motor Co., 344 F.3d 648, 652 (7th Cir.2003). There is typically a strong presumption in favor of a plaintiffs choice of forum, especially when the plaintiff has chosen her home forum, and thus, a defendant seeking dismissal on grounds of forum non conveniens "bears a heavy burden." Sinochem, 549 U.S. at 430, 127 S.Ct. 1184.

Nevertheless, when a foreign plaintiff has chosen to litigate in the United States, this presumption applies with considerably less force, and the assumption that the chosen forum is appropriate is "less reasonable." Id.; see also Clerides, 534 F.3d at 628 ("[A foreign plaintiffs] choice of the United States as a forum should be accorded less deference than if the choice is made by a United States plaintiff."). Here, Plaintiff is not a U.S. citizen or corporation, but is instead a Bulgarian company with its offices located in Bulgaria. This district is not Plaintiff's "home" forum, and thus, Plaintiffs decision to litigate in the United States is entitled to less deference. See U.S.O. Corp. v. Mizuho Holding Co., 547 F.3d 749, 751 (7th Cir.2008) ("A foreign company that chooses to sue in the United States rather than in its own country is unlikely to experience inconvenience if the court invokes forum non conveniens against it."). With this in mind, the Court turns to an analysis of the specific factors governing dismissal under the doctrine of forum non conveniens.

A. Alternative Forum

The Court must first determine whether an alternative forum exists for this dispute. Clerides, 534 F.3d at 628; Bridgestone, 420 F.3d at 704. In making this determination, both the availability and the adequacy of the proposed alternative forum should be assessed. Bridgestone, 420 F.3d at 703.

1. Availability

A forum is considered to be "available" if "all parties are amenable to process and are within the forum's jurisdiction." Bridgestone, 420 F.3d at 703. It appears that under Bulgarian law, Defendants would be amenable to process in Bulgaria and within the jurisdiction of the Bulgarian courts, and Plaintiff does not argue otherwise. Although BAEF is headquartered in Chicago and incorporated in Delaware, it asserts that it is in fact subject to jurisdiction in Bulgaria, given that Bulgarian courts have jurisdiction over corporations that transact business in Bulgaria, as well as entities that have caused injuries to a party in Bulgaria. (R. 58, BAEF's Mot. at 6; id., Ex. 2 ¶¶ 16-18.) To remove any doubt, BAEF has agreed to consent to the jurisdiction of the Bulgarian court...