Kisano Trade & Invest Ltd. v. Lemster

• Decision Date: 12 December 2013
• Docket Number: No. 13–1759.,13–1759.
• Citation: 737 F.3d 869
• Court: U.S. Court of Appeals — Third Circuit
• Parties: KISANO TRADE & INVEST LIMITED; Trasteco Ltd; Vadim Shulman, Appellants v. Dev LEMSTER; Steel Equipment Corp; Akiva Sapir; Sapir Entities 1–100.

737 F.3d 869

KISANO TRADE & INVEST LIMITED; Trasteco Ltd; Vadim Shulman, Appellants

v.Dev LEMSTER; Steel Equipment Corp; Akiva Sapir; Sapir Entities 1–100.

No. 13–1759.

United States Court of Appeals, Third Circuit.

Argued Oct. 8, 2013.

Opinion Filed: Dec. 12, 2013.

Bruce S. Marks, Esq. (argued), Thomas C. Sullivan, Esq., Maria Temkin, Esq., Marks & Sokolov, Philadelphia, PA, for Appellants.

Larry K. Elliott, Esq. (argued), David F. Russey, Esq., Julie W. Vanneman, Esq., Curt Vazquez, Esq., Cohen & Grigsby, Pittsburgh, PA, for Appellees.

Before: FUENTES, GREENBERG and BARRY Circuit Judges.

OPINION OF THE COURT

BARRY, Circuit Judge.

I. Introduction

In June of 2011, Kisano Trade & Invest Limited (“Kisano”) and Trasteco Ltd. (“Trasteco”), two companies owned by Vadim Shulman, filed suit in the U.S. District Court for the Western District of Pennsylvania against Dev Lemster and his company, Steel Equipment Corp. The complaint alleged violations of the Racketeer Influenced Corrupt Organizations Act (“RICO”), intentional interference with contract, unjust enrichment, and breach of fiduciary duty. After discovering evidence of what Shulman believed to be fraud perpetrated by his business partner, Akiva Sapir, an amended complaint added Shulman as a plaintiff, Sapir and certain of his entities as defendants, and several claims of fraud.

Between then and now, we vacated the grant of a preliminary injunction, and the parties moved forward on Sapir's motions to dismiss the complaint for failure to state a claim and on forum non conveniens grounds, the latter motion offering Israel as an alternative forum. The motions were referred by the District Court to the Magistrate Judge to issue a Report and Recommendation (the “R & R”). The R & R recommended that the action be dismissed on forum non conveniens grounds, reasoning that Israel would be the more appropriate forum, and declined to reach the motion to dismiss for failure to state a claim, leaving that to be addressed, if appropriate, by the Israeli court. The District Court adopted the R & R, and granted the motion to dismiss for forum non conveniens “on the understanding that the case may be refiled in Israel and that the defendants waived certain statute of limitations defenses.” (A00060.) Plaintiffs now appeal. We will affirm.

II. Jurisdiction and Standard of Review

The District Court had jurisdiction pursuant to 28 U.S.C. § 1331 and 18 U.S.C. § 1964(c), as the underlying claim asserts recovery under RICO. We have jurisdiction pursuant to 28 U.S.C. § 1291. “ ‘[W]here the court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonable, its decision deserves substantial deference.’ ” Lony v. E.I. Du Pont de Nemours & Co., 886 F.2d 628, 631–32 (3d Cir.1989) (“Lony I ”) (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)) (alteration in original). Thus, “we do not perform a de novo resolution of forum non conveniens issues,” and instead review the District Court's dismissal on grounds of forum non conveniens for an abuse of discretion. Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir.1988).

III. Forum Non Conveniens

This case, at its core, involves plaintiffs' allegations of numerous claims of fraud—the Warren equipment “fraud,” the Trasteco “secret deal,” the Kisano “secret deal,” the Plama “secret deal,” the Veolia “secret deal,” and the New York real estate“fraud.” The parties, at great length, have set forth those facts that plaintiffs believe, on the one hand, support those claims, and defendants believe, on the other, defeat them. At the end of the day, however, the sole issue before us for review is the dismissal on grounds of forum non conveniens. We, therefore, will refer only to those facts necessary to our analysis of that issue.

Although a plaintiff's choice of forum should rarely be disturbed, “[w]hen an alternative forum has jurisdiction to hear the case, and when trial in the plaintiff's chosen forum would ‘establish ... oppressiveness and vexation to a defendant ... out of all proportion to plaintiff's convenience,’ or when the ‘chosen forum [is] inappropriate because of considerations affecting the court's own administrative and legal problems,’ the court may, in the exercise of its sound discretion, dismiss the case.” Windt v. Qwest Commc'ns Int'l, Inc., 529 F.3d 183, 189 (3d Cir.2008) (quoting Koster v.(Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518, 524, 67 S.Ct. 828, 91 L.Ed. 1067 (1947)) (second alteration in original). We have identified the following four factors to guide a district court's exercise of discretion: (1) the amount of deference to be afforded to plaintiffs' choice of forum; (2) the availability of an adequate alternative forum where defendants are amenable to process and plaintiffs' claims are cognizable; ¹ (3) relevant “private interest” factors affecting the convenience of the litigants; and (4) relevant “public interest” factors affecting the convenience of the forum. See id. at 189–90.

Private interests to consider include the ease of access to sources of proof; ability to compel witness attendance if necessary; means to view relevant premises and objects; and any other potential obstacle impeding an otherwise easy, cost-effective, and expeditious trial. Delta Air Lines, Inc. v. Chimet, S.p.A., 619 F.3d 288, 296 (3d Cir.2010) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 91 L.Ed. 1055 (1947)). Public interests include administrative difficulties arising from increasingly overburdened courts; local interests in having the case tried at home; desire to have the forum match the law that is to govern the case to avoid conflict of laws problems or difficulty in the application of foreign law; and avoiding unfairly burdening citizens in an unrelated forum with jury duty. Id. (citing Piper Aircraft, 454 U.S. at 241 n. 6, 102 S.Ct. 252).

A. Level of Deference

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, 102 S.Ct. 252;see also Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430, 127 S.Ct. 1184, 167 L.Ed.2d 15 (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, 102 S.Ct. 252 (“[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...