Banco Mercantil, SA v. Hernandez Arencibia

• Decision Date: 21 May 1996
• Docket Number: Civil No. 94-1699 (HL).
• Citation: 927 F. Supp. 565
• Parties: BANCO MERCANTIL, S.A., Plaintiff, v. Rene HERNANDEZ ARENCIBIA, Defendant.
• Court: U.S. District Court — District of Puerto Rico

927 F. Supp. 565

BANCO MERCANTIL, S.A., Plaintiff, v. Rene HERNANDEZ ARENCIBIA, Defendant.

Civil No. 94-1699 (HL).

United States District Court, D. Puerto Rico.

May 21, 1996.

Juan A. Ramos-Diaz, San Juan, PR, for plaintiff.

Edgardo L. Rivera-Rivera, San Juan, PR, for defendant.

OPINION AND ORDER

LAFFITTE, District Judge.

Before the Court is Defendant's second motion to dismiss on the grounds of forum non conveniens and Plaintiff's opposition thereto. (Dkt. Nos. 48, 53, 57). The Court denied the first motion to dismiss on these grounds because Defendant did not present any evidence that the Dominican Republic was an adequate alternative forum and sufficiently more convenient than the Puerto Rico forum. See Opinion and Order, March 19, 1996, Dkt. No. 43. In his second round, Defendant has stocked his arsenal with heavier artillery. After weighing the evidence presented by both Defendant and Plaintiff, the Court finds that the Dominican Republic is an adequate, alternative forum and more convenient than the Puerto Rico forum. Consequently, the Court hereby grants Defendant's motion to dismiss on the grounds of forum non conveniens.

DISCUSSION¹

Only under exceptional circumstances shall this Court grant a defendant's motion to dismiss under the doctrine of forum non conveniens. Normally, the Court strongly favors the plaintiff's choice of forum, especially when the defendant is a domiciliary and resident of that forum. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947); Mercier v. Sheraton Int'l, Inc., 981 F.2d 1345, 1354 (1st Cir.1992), cert. denied, 508 U.S. 912, 113 S.Ct. 2346, 124 L.Ed.2d 255 (1993). Defendant, Rene Hernandez Arencibia ("Hernandez"), appropriately points out, however, that a foreign plaintiff's choice of forum does not receive this same level of deference. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256, 102 S.Ct. 252, 266, 70 L.Ed.2d 419 (1981) ("a foreign plaintiff's choice of forum deserves less deference"); Lony v. E.I. Du Pont de Nemours & Co., 935 F.2d 604, 609 (3d Cir.1991) (although foreign plaintiff's choice is given less deference, that choice is still entitled to "some weight"). Consequently, because Plaintiff is a foreign corporation, the Court shall not strongly favor its selection of the Puerto Rico forum. Rather, the Court shall accord its choice some deference.²

Defendant must not only overcome this slight deference toward the Puerto Rico forum but also bears the burden of demonstrating that the Dominican Republic forum is an adequate alternative choice and sufficiently more convenient than the Puerto Rico forum. Mercier, 981 F.2d at 1349. The Dominican Republic courts would be considered inadequate if Plaintiff could not acquire an adequate remedy there, if the courts did not permit this type of dispute, or if Plaintiff demonstrated that there were significant legal or political obstacles hindering its action there. Id.; Piper Aircraft Co., 454 U.S. at 255 n. 22, 102 S.Ct. at 265 n. 22.

Hernández submits a sworn affidavit of Fausto A. Martínez Hernández ("Martínez") in support of his argument that the Dominican Republic is an adequate alternative forum. See Def.Mot., Dkt. No. 47, Ex. 1. Martínez, an attorney practicing law in the Dominican Republic for thirty-seven years, maintains that Plaintiff may acquire an adequate remedy for its allegations in the Dominican Republic. Martínez, in fact, claims that he is representing Hernández in a similar suit against Plaintiff to recover dividends. Furthermore, he states that the twenty year statute of limitations for collecting loans will not bar Plaintiff's action. Finally, Martínez asserts that there are no obstacles preventing the Dominican Republic courts from acquiring personal jurisdiction over Hernández.

Plaintiff disputes Martínez' characterization of the judicial system in the Dominican Republic. In its memorandum opposing Hernández' motion, Plaintiff argues that Martínez is making sweeping conclusory statements without any documentary support. See Pls.Memo, Dkt. No. 53, at 11. Moreover, Plaintiff argues that there are legal obstacles preventing it from bringing a successful lawsuit in the Dominican Republic. Plaintiff presents an affidavit of a distinguished attorney from the Dominican Republic, Ramón Tapia Espinal ("Tapia"), and numerous newspaper articles suggesting that the judicial system is corrupt. See Pls. Supp.Mot., Dkt. No. 57, Exs. I & II. Tapia, a legal consultant for Plaintiff in the Dominican Republic, asserts that the system is so corrupt that bribery has "turned the courts into markets where judgments are sold" and a "fair and impartial administration of justice cannot be expected." Id. at Ex. I. Tapia also asserts that Hernández does not have substantial assets in the Dominican Republic from which it may recover its loan.³

Hernández has satisfied his heavy burden of demonstrating that the Dominican Republic courts provide an adequate alternative forum. Plaintiff does not dispute Hernández' contention that it may seek an appropriate remedy for Hernández' alleged failure to repay a loan. Plaintiff also does not dispute that its claims are not prohibited by the statute of limitations. Finally, Plaintiff does not dispute that Hernández is amenable to process in the Dominican Republic courts. Instead, in order to dispute Hernández' claim that the Dominican Republic is an adequate forum, Plaintiff relies on its allegation that the Dominican Republic courts are corrupt.

Plaintiff supports its claim that the Dominican Republic courts are corrupt with the affidavit by Tapia and a myriad of newspaper articles and editorials discussing the alleged corruption in the Dominican Republic judicial system. Plaintiff's pronouncement is strikingly similar to an argument rejected by the Second Circuit Court of Appeals. See Blanco v. Banco Indus. de Venezuela, S.A., 997 F.2d 974, 981-82 (2d Cir.1993). In Blanco, several parties were attempting to keep a contractual dispute in the New York forum. They argued that the Venezuela forum, the location of the housing project that spurned the contractual dispute, had a biased and corrupt judicial system. Id. at 981. In essence, Plaintiff is making the same argument.

In this case, as the Second Circuit similarly concluded with the Venezuela forum, however, it is anomalous for a Dominican Republic corporation to enter into a contract with an individual doing business in the Dominican Republic that is governed entirely by the laws of the Dominican Republic, and "then to argue to an American court that the Dominican Republic system of justice is so endemically incompetent, biased, and corrupt as to not provide an adequate forum for the resolution of such contractual disputes." Id.

This Court is not entirely unsympathetic to the trials and tribulations that Plaintiff may face should their allegations about the Dominican Republic judicial system turn out to be true. Unfortunately for Plaintiff, however, "`it is not the business of our courts to assume the responsibility for supervising the integrity of the judicial system of another sovereign nation.'" Chesley v. Union Carbide Corp., 927 F.2d 60, 66 (2d Cir.1991) (quoting authority omitted). Moreover, if the Court held that the Dominican Republic was an inadequate forum due to the alleged corruption that plagues its judicial system, the gates to the federal courts of the United States would be wide open to a myriad of Dominican Republic disputes having no connection with the United States except for the fact that one party is domiciled in a jurisdiction within the United States. Inevitably, this would undermine the doctrine of forum non conveniens.

Having satisfied his burden of proving that the Dominican Republic forum is an adequate alternative to Puerto Rico, Hernández presented evidence that it would be immeasurably more convenient to resolve the dispute in the Dominican Republic forum. Undoubtedly, the private interest factors favor dismissing this case: (1) the relative ease of access to the sources of proof; (2) the location of the witnesses and the availability of compulsory process for the attendance of these witnesses; (3) the cost of obtaining the attendance of the witnesses; and (4) all the other practical problems that are part of a jury trial. Gilbert, 330 U.S. at 508, 67 S.Ct. at 843.

The sworn affidavit of Martínez as well as the witness list submitted by Hernández indicates that all the documentary evidence and the witnesses are located in the Dominican Republic.⁴ The agreement which is the subject of this dispute was negotiated, written, and signed in the Dominican Republic. Moreover, unlike the District Court of Puerto Rico, the Dominican Republic courts have the ability to compel the residents of that country to testify in court regarding the contract dispute. See Fed.R.Civ.P. 45(b)(2); see also Howe v. Goldcorp Investments, Ltd., 946 F.2d 944, 951 (1st Cir.1991) (trial outside country where most of the witnesses and the documentary evidence were present would hinder fair resolution of the dispute). This is a critical factor supporting the dismissal of this case.⁵ Finally, all the additional problems that involve a trial, including the production of documents, deposition disputes, settlement conferences, status conferences, evidentiary hearings,⁶ and the transportation of witnesses, demonstrate that the Dominican Republic forum is much more convenient than the Puerto Rico forum.

Similarly, the public interest factors also demonstrate that the Dominican Republic forum is more convenient to resolve this dispute. See Piper Aircraft Co., 454 U.S. at 259-260, 102 S.Ct. at 268; Mercier, 981 F.2d at 1354. While two public interest factors, the comparative congestion of the court dockets and fairness of imposing jury duty on Puerto Rico citizens, do not require the dismissal of this case, the two remaining public interest factors, the strong Dominican Republic...