Mercier v. Sheraton Intern., Inc.

• Decision Date: 10 August 1990
• Docket Number: Civ. A. No. 90-10067-MA.
• Citation: 744 F. Supp. 380
• Parties: George E. MERCIER and Susan Y. Mercier, Plaintiffs, v. SHERATON INTERNATIONAL, INC. a/k/a ITT-Sheraton International, Inc., Defendant.
• Court: U.S. District Court — District of Massachusetts

744 F. Supp. 380

George E. MERCIER and Susan Y. Mercier, Plaintiffs, v. SHERATON INTERNATIONAL, INC. a/k/a ITT-Sheraton International, Inc., Defendant.

Civ. A. No. 90-10067-MA.

United States District Court, D. Massachusetts.

August 10, 1990.

Francis Joseph Bousquet, Herlihy & O'Brien, Boston, Mass., James M. Hartman, Harris, Beach & Wilcok, Rochester, N.Y., for plaintiffs.

David S. Mortensen, Hale & Dorr, Boston, Mass., for defendant.

MEMORANDUM AND ORDER

MAZZONE, District Judge.

This case comes before me on defendant's motion to dismiss based on the doctrine of forum non conveniens, or, alternatively, plaintiffs' failure to state a claim upon which relief can be granted. Fed.R. Civ.P. 12(b)(6). The plaintiffs, Susan Y. Mercier and her father George E. Mercier ("plaintiffs" or "Merciers"), have filed suit against Sheraton International, Inc. ("Sheraton") alleging breach of two contracts and conspiracy with a third party to "interfere with and induce a breach of the contracts aforesaid." Sheraton has filed this motion claiming that the suit should be adjudicated in the Republic of Turkey.

Although the central issues concerning contract formation and performance are in dispute — and otherwise beyond the scope of this memorandum —, there appears to be little disagreement over the following facts. Sheraton is a Delaware corporation headquartered in Boston, Massachusetts. It operates hotels and resorts throughout the world. At all relevant times during this case, Sheraton has operated the Istanbul Sheraton Hotel in Istanbul, Turkey (the "Hotel") through its Merkezi Boston Turkiye Subesi Istanbul division. Sheraton leases the Hotel from Taksim Otelcilik A.S., a Turkish-Moslem investment company affiliated with Vakiflar, a Turkish bank.

During the summer of 1982, Susan Mercier operated a casino aboard a Greek registered cruise ship. This ship regularly called at the Port of Istanbul. During one of these stops, Mercier came into contact with William A. Bauer, the general manager of the Hotel. According to Mercier, Bauer suggested to her that she form a partnership with Fethi Deliveli, a citizen of Turkey, to operate a casino the Hotel was planning to open on the premises.¹ Sometime in 1983, Mercier and Deliveli drafted and signed with Bauer, acting as representative for the Hotel, an undated "Memorandum of Understanding". The gist of this document was that Mercier, her father George, and Deliveli would rent space in the Hotel to operate a casino. The memorandum further outlined the obligations and responsibilities of each party. Finally, it stated that the agreement would take effect "only after approval of the Sheraton Corporation in Boston has been obtained" and "subject to the Merciers and Deliveli obtaining the necessary permits from the Turkish Government."

Following the signing of this agreement, George Mercier began efforts to obtain financing for slot machines which were to be used in the casino. The Merciers also entered into a formal partnership with Deliveli called Lidya Turistik Tesisler Isletmesi A.S. ("Lidya"). Lidya was owned primarily by Deliveli's family but George Mercier apparently contributed substantial capital to the organization in exchange for which he and Susan were to actually operate the casinos at both the Hotel and another hotel on the coast of Turkey.

On March 3, 1984, Lidya, through Deliveli, signed a Protocol with Sheraton, which was again represented by Bauer. The substance of this document was that Sheraton and Lidya agreed that Lidya would place slot machines in certain areas of the Hotel; the parties further agreed as to their individual duties and responsibilities to each other in the operation of the casino. The Protocol also stated: "This agreement will come to force subject to approval of the concept of gambling by Taksim Otelcilik A.S. and after the realization of Mercier participation in Lidya." Finally, it stipulated "this agreement will be governed by Turkish laws and the jurisdiction will sic Istanbul, Turkey."

There is much dispute about what took place in subsequent years. Of especial importance are the facts that Deliveli and the Merciers went their separate ways sometime in 1985; that the Merciers then entered into some form of contractual relationship with Leisure Investments, P.L.C. ("Leisure")² in late 1985-early 1986 to operate the Casino at the Hotel; and finally, that Susan Mercier fled Turkey in the spring of 1986, apparently after a violent altercation with a Turkish citizen resulted in her being accused of attempted murder. Plaintiffs claim that after these events, Sheraton entered into a separate agreement with Leisure to operate the casinos without the Merciers.

As stated, Sheraton seeks to dismiss this action on the grounds of forum non conveniens, or, alternatively failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The doctrine³ of forum non conveniens essentially allows a court to dismiss a case on the grounds that the action would be more appropriately brought in another forum. The ultimate inquiry in any forum non conveniens analysis is determining where trial will best serve the convenience of the parties and the ends of justice. Koster v. Lumbermens Mutual Casualty Co., 330 U.S. 518, 527, 67 S.Ct. 828, 833, 91 L.Ed. 1067 (1947); Lacey v. Cessna Aircraft Co., 862 F.2d 38, 42 (3rd Cir.1988).

Modern forum non conveniens jurisprudence is rooted firmly in the principles set forth by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947) and its companion Koster. In Gilbert, the Supreme Court determined that the Federal District Court in New York had the inherent authority to dismiss an action brought by a Virginia plaintiff against a Pennsylvania defendant which did business in New York over an event which took place in Virginia. In reaching that conclusion, the Court articulated a set of substantive guidelines which have since formed the criteria by which forum non conveniens motions are measured.

The first guideline is that in all cases in which the doctrine of forum non conveniens comes into play, there is a presumption that at least two fora exist where defendant is amenable to process. Gilbert, 330 U.S. at 506-07, 67 S.Ct. at 842; Tramp Oil & Marine, Ltd. v. M/V Mermaid I, 743 F.2d 48, 50 (1st Cir.1984).⁴ Dismissal in one forum is only proper upon a supported finding that another adequate forum exists where plaintiff can litigate essentially the same claim. Id. at 50; Lacey, 862 F.2d at 43.

The Court next acknowledged that it was extremely difficult to categorize specific circumstances which justify dismissal on forum non conveniens grounds. "The doctrine leaves much to the discretion of the court to which plaintiff resorts." Gilbert, 330 U.S. at 508, 67 S.Ct. at 843. It went on to specify certain factors which should guide a district court now known popularly as "private interest" factors and "public interest" factors. Private interest factors were defined as follows:

An interest to be considered, and the one likely to be most pressed, is the private interest of the litigant. Important considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.

Id. at 508, 67 S.Ct. at 843.

Added to this list of considerations was the question of whether a judgment obtained in another forum is enforceable. Id. at 508, 67 S.Ct. at 843. The Court defined public interest factors as follows:

Factors of public interest also have a place in applying the doctrine. Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the community which has no relation to the litigation.... There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.

Id. at 508-09, 67 S.Ct. at 843.

The Court reminded lower courts that "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Id. at 508, 67 S.Ct. at 843.

These principles have withstood the test of time. In 1981, the Supreme Court revisited Gilbert and reaffirmed its approach to forum non conveniens issues. In Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981), the Court ruled that plaintiffs from Scotland who were suing American manufacturers in strict liability for an alleged defect in an airplane which was assembled in Pennsylvania but was owned and operated by a British concern and ultimately crashed in Scotland could have their action dismissed from a Pennsylvania Federal Court on forum non conveniens grounds.

The District Court in Piper Aircraft granted defendants' motions to dismiss forum non conveniens. Id. at 238, 102 S.Ct. at 257. The Court of Appeals for the Third Circuit reversed, in part because it concluded that an adequate alternative forum could not exist where the substantive law in that forum was less favorable to the plaintiff than the law in the forum plaintiff had brought suit. Id. at 238, 102 S.Ct. at 257. The Appeals Court also believed that the District Court had misapplied Gilbert. Id. at 244, 102 S.Ct. at 260.

The Supreme Court first rejected the Third Circuit's conclusion about less favorable substantive law, saying "the possibility of a change in substantive law shall ordinarily not be given conclusive or even substantial...