Mercier v. Sheraton Intern., Inc.

• Decision Date: 07 January 1991
• Docket Number: ITT-S,No. 90-1888,90-1888
• Citation: 935 F.2d 419
• Parties: George E. MERCIER, et al., Plaintiffs, Appellants, v. SHERATON INTERNATIONAL, INC., a/k/a,heraton International, Inc., Defendant, Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 419

935 F.2d 419

George E. MERCIER, et al., Plaintiffs, Appellants, v. SHERATON INTERNATIONAL, INC., a/k/a, ITT-Sheraton International, Inc., Defendant, Appellee.

No. 90-1888.

United States Court of Appeals First Circuit.

Heard Jan. 7, 1991.

Decided June 4, 1991.

James M. Hartman with whom Harris Beach & Wilcox and Mary Ann Campany were on brief, Rochester, N.Y., for plaintiffs, appellants.

David S. Mortensen with whom Stephen C. Reilly and Hale and Dorr were on brief, Boston, Mass., for defendant, appellee.

Before CAMPBELL and CYR, Circuit Judges, and POLLAK, Senior District Judge. ^*

LOUIS H. POLLAK, Senior District Judge.

Susan and George Mercier appeal the district court's dismissal of their diversity breach of contract suit against Sheraton International, Inc. ("Sheraton International"). The district court dismissed the diversity action on grounds of forum non conveniens, concluding that the Republic of Turkey was a more suitable alternative jurisdiction in which to pursue this suit.

I. Facts and Procedural History

At all times relevant to this suit, Susan and George Mercier--daughter and father--were United States citizens. At the time the suit was brought, Susan Mercier was a New York citizen; her father was a Florida citizen. Sheraton International is a Delaware corporation with its principal place of business in Massachusetts.

According to the complaint, this dispute had its incipience in 1982, when Susan Mercier was operating a casino on a Greek cruise ship that made weekly stops in Istanbul. In the course of her visits to Istanbul, Susan Mercier met George Bauer, manager of the Istanbul Sheraton Hotel. Bauer and Susan Mercier entered into discussions regarding the possibility that Susan Mercier would undertake to operate a casino in the Istanbul Sheraton. Concomitant with these discussions, Bauer apparently introduced Susan Mercier to a Turkish national, Fethi Deliveli, with the thought that Susan Mercier and Deliveli might become business partners, thereby satisfying a Turkish law requiring foreigners doing business in Turkey to have Turkish partners.

Many of the remaining events remain murky. Apparently negotiations commenced between Susan Mercier, George Mercier and Deliveli regarding the terms of their partnership while at the same time negotiations continued between the Merciers and Bauer regarding the casino operation. The Merciers assert that at least some of these negotiations occurred when Bauer visited the United States and that these negotiations included contacts between Bauer and other potential American investors in the casino project.

Sometime in 1983, Susan Mercier, Deliveli and Bauer (on behalf of Sheraton International) signed a Memorandum of Understanding that provided the basic terms for the establishment and operation of a casino in the Istanbul Sheraton. The Memorandum essentially provided that in return for an annual fee paid to Sheraton International, the Merciers and Deliveli would be permitted to operate a casino in the hotel. There is disagreement about whether all terms of the Memorandum were satisfied.

In March 1984, Bauer and Deliveli ¹ signed a Protocol establishing the terms and conditions for operation of a casino at the Istanbul Sheraton. Sheraton contends that this agreement superseded the earlier Memorandum; the Merciers contend that the earlier Memorandum remained in effect.

Among other things, the Protocol provided that (1) the Protocol would come into force only after Sheraton's "owning company"--the company that owned the hotel site on which the Istanbul Sheraton was located--approved the concept of gambling; (2) if such approval was not forthcoming within ninety days of the Protocol's signature, the Protocol would be null and void; and (3) the Protocol was to be "governed by Turkish laws and the jurisdiction will Istanbul, Turkey" [sic].

Susan Mercier settled in Turkey and began to prepare for the casino's opening. In January 1986, however, she was involved in a violent altercation with a Turkish national who had served as her translator. Susan Mercier claims that the Turkish national attacked her when she rejected his marriage proposal; however, it appears that her alleged attacker filed charges with the Turkish authorities. As a result, Susan Mercier fled Turkey. An October 1986 State Department telex reported that Susan Mercier had been charged with assault, a felony, and would probably be arrested if she reentered Turkey. Appendix, at 91.

Roughly contemporaneous with Susan Mercier's difficulties, the Mercier-Deliveli partnership foundered. In the summer of 1986, the Merciers conveyed their shares in Lidya to Deliveli and in return received 101 slot machines held by Lidya. The Merciers also succeeded to any interest and rights held by Lidya and Deliveli stemming from the Memorandum and Protocol.

Simultaneously, the Merciers entered into negotiations with Leisure Investments P.L.C. (Leisure), a British company, regarding a partnership to operate the Sheraton casino. ² However, it appears that, in the fall of 1987, Leisure and Sheraton International entered into their own agreement providing for Leisure to be the sole operator of a casino and that casino operations commenced, without the Merciers, sometime in 1988.

The Merciers first filed suit in the United States District Court for the Western District of New York against Leisure and The Sheraton Corporation, Sheraton International's parent. In October 1989, the district court dismissed the action against The Sheraton Corporation on the ground that the Merciers, in naming the parent company rather than Sheraton International, had sued an entity not a party to the agreements. The Merciers responded to the partial dismissal ³ by filing the instant Massachusetts action and naming Sheraton International as defendant. Sheraton International moved for dismissal on grounds of forum non conveniens.

The district court granted Sheraton International's motion to dismiss. 744 F.Supp 380. Undertaking a two-part analysis first set out by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), the district court first considered whether there was an adequate alternative forum for the Merciers' suit. It concluded that Turkey was such a forum. The district court then proceeded to weigh various factors related to the private interests of the parties and to the public interest. The district court concluded that private interest factors favored retaining the case, but that public interest factors counseled dismissal. Finally, the district court concluded that the public interest factors outweighed the private interest factors by such an extent that dismissal was warranted.

The Merciers now appeal that dismissal. They claim that the district court erred in concluding (1) that Turkey was an adequate alternative forum, and (2) that the balance of private and public interest factors preponderated strongly in favor of dismissal.

II. Discussion

A. Standard of Review and Governing Principles

Forum non conveniens determinations are committed to the district court's sound discretion. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 250, 102 S.Ct. 252, 263, 70 L.Ed.2d 419 (1981). This court will find an abuse of discretion only where the district court (1) failed to consider a material factor, or (2) substantially relied on an immaterial factor, or (3) assessed the appropriate factors but the district court clearly erred in weighing factors correctly considered. U.S. v. Boch Oldsmobile, Inc., 909 F.2d 657, 660 (1st Cir.1990); Independent Oil & Chemical Workers Inc. v. Procter & Gamble Mfg. Co., 864 F.2d 927, 929 (1st Cir.1988).

In Gulf Oil Corp. v. Gilbert, supra, and its companion case, Koster v. (American) Lumbermens Mut. Cas. Co., 330 U.S. 518, 67 S.Ct. 828, 91 L.Ed. 1067 (1947), the Supreme Court set out the appropriate analysis for a district court to undertake when presented with a motion to dismiss on grounds of forum non conveniens. Those cases establish that a district court exercising its sound discretion may dismiss a case

when an alternative forum has jurisdiction to hear the case, and when trial in the 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."

Piper Aircraft, 454 U.S. at 241, 102 S.Ct. at 258 (citing Koster, 330 U.S. at 524, 67 S.Ct. at 831). ⁴ Thus, a party moving for dismissal bears the burden of establishing that (1) there is an adequate alternative forum, Tramp Oil and Marine, Ltd. v. M/V Mermaid I, 743 F.2d 48, 50 (1st Cir.1984), and (2) that considerations of convenience and judicial efficiency strongly favor litigating the claim in the second forum.

A finding that there is a suitable alternative forum is usually justified as long as the defendant is amenable to process in the other forum. Gulf Oil, 330 U.S. at 506-07, 67 S.Ct. at 842. In rare circumstances--such as when the alternative forum does not permit litigation of the subject matter of the dispute--an alternative forum may be inadequate, even if service can be accomplished. Piper Aircraft, 454 U.S. at 254 n. 22, 102 S.Ct. at 265 n. 22; cf. Rasoulzadeh v. Associated Press, 574 F.Supp. 854 (S.D.N.Y.1983) (refusing to dismiss in order that claim could be litigated in Iran due to fear that plaintiff would be shot if appearing in Iran), aff'd without opinion, 767 F.2d 908 (2d Cir.1985). As stated by the Fifth Circuit, a finding that there is a satisfactory alternative forum requires that (1) all parties can come within that forum's jurisdiction, and (2) the parties will not "be deprived of all remedies or treated unfairly, even though they may not enjoy the same benefits as they might receive in an American court." In re Air Crash Disaster Near New Orleans, 821 F.2d 1147,...