Archangel Diamond Corp. Liquidating Trust v. OAO Lukoil

• Decision Date: 09 February 2016
• Docket Number: No. 14–1510.,14–1510.
• Citation: 812 F.3d 799
• Parties: ARCHANGEL DIAMOND CORPORATION LIQUIDATING TRUST, Plaintiff–Appellant, v. OAO LUKOIL, Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

812 F.3d 799

ARCHANGEL DIAMOND CORPORATION LIQUIDATING TRUST, Plaintiff–Appellant,

v.OAO LUKOIL, Defendant–Appellee.

No. 14–1510.

United States Court of Appeals, Tenth Circuit.

Feb. 9, 2016.

Bruce S. Marks, of Marks & Sokolov, LLC, Philadelphia, PA, (Chad M. McShane, of Robinson Waters & O'Dorisio, P.C., Denver, CO, with him on the briefs), for Plaintiff–Appellant.

Frederick J. Baumann, of Lewis Roca Rothgerber LLP, Denver, CO, (Douglas B. Tumminello, of Lewis Roca Rothgerber, LLP, Denver, CO, and Michael K. Swan of Akin Gump Strauss Hauer & Feld, L.L.P., Houston, TX, with him on the brief), for Defendant–Appellee.

Before BRISCOE, MATHESON, and BACHARACH, Circuit Judges.

BRISCOE, Circuit Judge.

Plaintiff Archangel Diamond Corporation Liquidating Trust, as successor-in-interest to Archangel Diamond Corporation (collectively, "Archangel"), appeals the dismissal of its civil case against defendant OAO Lukoil ("Lukoil"), in which it alleged claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), breach of contract, and commercial tort law. The district court dismissed the case for lack of personal jurisdiction over Lukoil and under the doctrine of forum non conveniens. Archangel appeals the dismissal on both grounds. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and, finding no abuse of discretion in the district court's dismissal under forum non conveniens, we affirm.

I

Archangel Diamond Corporation was a Canadian company and is now bankrupt. The liquidating trust is located in Colorado. In 1993, Archangel entered into an agreement with State Enterprise Arkhangelgeology ("AGE"), a Russian state corporation, regarding a potential license to explore and develop diamond mining operations in the Archangelsk region of Russia. Archangel provided funding, and AGE bid on and won the license. Then, in 1994, Archangel and AGE agreed that Archangel would provide additional funds and that the license would be transferred to their joint venture company. However, the license was never transferred and remained with AGE. In 1995, AGE was privatized and became Arkhangelskgeoldobycha ("AGD"), and the license was transferred to AGD.

In 1996, diamonds worth an estimated $5 billion were discovered within the license region. For the next several years, Archangel alleges, AGD alternated between promising to transfer the license and refusing to do so, causing Archangel to lose its investment and, ultimately, to become insolvent. In 1997, Archangel moved its principal place of business to Colorado, though it remained a Canadian company. In 1998, Lukoil acquired a controlling stake in AGD, and in 2000 or 2001, Lukoil acquired the remaining interest in AGD; thus, AGD is now a wholly owned subsidiary of Lukoil.

In August 1998, Archangel initiated arbitration proceedings against AGD and Lukoil. Pursuant to their agreement, the arbitration took place in Stockholm, Sweden. In this first arbitration, the arbitrators concluded that they had jurisdiction to hear Archangel's claims only against AGD, but not those asserted against Lukoil. In July 1999, while the arbitration with AGD was still pending, AGD and Archangel agreed that AGD would transfer the license to their joint venture, resolving the dispute. However, AGD did not honor the 1999 agreement and did not transfer the license. When AGD failed to honor the agreement, Archangel reactivated the Stockholm arbitration, but the arbitrators this time concluded that they lacked jurisdiction to arbitrate the dispute even as to AGD.

In November 2001, Archangel sued AGD and Lukoil in Colorado state court. The complaint alleged breach of contract and a variety of torts, including fraud and intentional interference with contractual obligations. AGD and Lukoil then removed the case to federal district court in Colorado. The district court remanded the case, concluding that it lacked subject-matter jurisdiction, as all of the claims were state law claims.

In 2002, the state trial court dismissed the case against both AGD and Lukoil based on lack of personal jurisdiction and forum non conveniens. See Archangel Diamond Corp. Liquidating Trust v. OAO Lukoil, 75 F.Supp.3d 1343, 1354–55 (D.Colo.2014) (discussing procedural history of the case). Later that year, Archangel—which was running out of money—moved its principal place of business back to Canada. In 2004, the Colorado Court of Appeals affirmed the dismissal. Archangel Diamond Corp. v. Arkhangelskgeoldobycha, 94 P.3d 1208, 1210 (Colo.Ct.App.2004). The court did not rule on forum non conveniens, concluding that the trial court should not have proceeded to consider the issue after concluding the dismissal was appropriate for lack of jurisdiction. Id. at 1220.

In 2005, the Colorado Supreme Court affirmed the dismissal as to AGD, reversed as to Lukoil, and remanded (leaving Lukoil as the sole defendant). Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1190, 1200–01 (Colo.2005) (concluding that Archangel had failed to show personal jurisdiction over AGD, but had shown general personal jurisdiction over Lukoil). The Colorado Supreme Court therefore remanded to the state intermediate appellate court with instructions to consider any other remaining issues relating to Lukoil. Id. at 1201.

On remand, the Colorado Court of Appeals reversed the trial court's previous dismissal on forum non conveniens grounds, which it had not addressed before, and remanded to the trial court for further proceedings. Archangel Diamond Corp. v. Arkhangelskgeoldobycha, No. 02–CA–2368, 2006 WL 1768313, at *1 (Colo.Ct.App. June 29, 2006) (unpublished). With the case again before the trial court, Lukoil and AGD requested an evidentiary hearing on the issue of personal jurisdiction and renewed their motion to dismiss. The court granted their motion to hold an evidentiary hearing, and the parties engaged in jurisdictional discovery. In 2008 and early 2009, the case was informally stayed while the parties discussed settlement and conducted discovery.

By June 2009, Archangel had fallen into bankruptcy due to the expense of the litigation. In November 2009, Archangel filed an amended complaint, which added claims under RICO, 18 U.S.C. § 1961 et seq., and the Colorado Organized Crime Control Act ("COCCA"), Colo.Rev.Stat. § 18–17–104. Archangel then removed the case to federal district court in Colorado. On Lukoil's motion and over the objection of Archangel, the district court referred the matter to the bankruptcy court, concluding that the matter was related to Archangel's bankruptcy proceedings. Lukoil then moved the bankruptcy court to abstain from hearing the matter, and the bankruptcy court concluded that it should abstain. The bankruptcy court remanded the case to the Colorado state trial court.

The state trial court again dismissed the action. It concluded that, even considering the new allegations in the amended complaint, the court lacked personal jurisdiction over AGD and Lukoil. Archangel again appealed; the Colorado Court of Appeals affirmed, and the Colorado Supreme Court denied certiorari.

While these state-court appeals were still pending, Archangel filed the present action in federal district court. To establish the court's jurisdiction, Archangel alleged that Lukoil had a wide variety of jurisdictional contacts with Colorado and the United States as a whole. These included communications directed at Archangel, and general business contacts. The district court analyzed personal jurisdiction under the Colorado long-arm statute and under Federal Rule of Civil Procedure 4(k)(2). Then, the court considered forum non conveniens in the alternative. The court dismissed the case, holding in favor of Lukoil on both jurisdictional and forum non conveniens grounds. The court concluded that, while Archangel's choice of forum was owed substantial deference, dismissal based on forum non conveniens was nevertheless appropriate. 75 F.Supp.3d at 1376–77, 1381. The court summarized:

Russia is an available and adequate alternate forum to hear this case. If the case were heard here, foreign law would apply at least to part of the controversy between the parties. And, while the private interests weigh slightly in favor of [Archangel], the public interests weigh heavily in favor of Lukoil. On this record, the Court finds that Lukoil has met its heavy burden of showing that dismissal under forum non conveniens is appropriate, in light of Lukoil's affirmative representation to this Court that it consents to the jurisdiction of the Russian courts and agrees not to raise the statute of limitations as a defense to [Archangel's] claims.

Id. at 1381.

II

We review the district court's dismissal on the grounds of forum non conveniens for abuse of discretion; "where 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." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981) ; Fireman's Fund Ins. Co. v. Thyssen Mining Constr. of Can., Ltd., 703 F.3d 488, 494 (10th Cir.2012) (citing Piper Aircraft, 454 U.S. at 257, 102 S.Ct. 252 ). Having concluded that this case can be resolved on forum non conveniens grounds, we decline to address the jurisdictional issues. See Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 425, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) ("[A] court need not resolve whether it has authority to adjudicate the cause (subject-matter jurisdiction) or personal jurisdiction over the defendant if it determines that, in any event, a foreign tribunal is plainly the more suitable arbiter of the merits of the case.").

There are two threshold requirements for a forum non conveniens dismissal. First, there must be an "adequate alternative forum where the defendant is amenable to process." Fireman's Fund, 703 F.3d at 495 (quoting Gschwind v. Cessna Aircraft Co., 161 F.3d 602, 605 (10th Cir.1998) ). Second, "the court...