Baumgart v. Fairchild Aircraft Corp.

• Decision Date: 22 January 1993
• Docket Number: No. 91-5784,91-5784
• Citation: 981 F.2d 824
• Parties: , 23 Bankr.Ct.Dec. 1483, Bankr. L. Rep. P 75,125 Gertrude BAUMGART, et al., Plaintiffs-Appellants, v. FAIRCHILD AIRCRAFT CORPORATION and Swearingen Aviation Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 824

981 F.2d 824

61 USLW 2453, 23 Bankr.Ct.Dec. 1483,

Bankr. L. Rep. P 75,125

Gertrude BAUMGART, et al., Plaintiffs-Appellants, v. FAIRCHILD AIRCRAFT CORPORATION and Swearingen Aviation

Corporation, Defendants-Appellees.

No. 91-5784.

United States Court of Appeals, Fifth Circuit.

Jan. 22, 1993.

Tom H. Davis, Byrd, Davis & Eisenberg, Austin, TX, Steven R. Pounian, Blanca I. Rodriguez, Kreindler & Kreindler, New York City, for Gertrude Baumgart, et al.

David T. Moran, Robert F. Ruckman, Jackson & Walker, Dallas, TX, for defendants-appellees.

Appeal from the United States District Court for the Western District of Texas.

Before REYNALDO G. GARZA, GARWOOD, Circuit Judges, and WERLEIN ^*, District Judge.

WERLEIN, District Judge:

These consolidated cases arise from the crash near Kettwig, Germany of a Fairchild Metroliner III Aircraft owned and operated by Nurenburger Flugdienst ("NFD"), a German airline. Plaintiffs are nineteen German citizens who originally sought recompense for their injuries in the Texas state courts. Defendant Fairchild Aircraft Corporation ("Fairchild"), after filing a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Western District of Texas, removed all nineteen cases to federal court. Fairchild then moved the court to dismiss the cases under the doctrine of forum non conveniens, arguing that Germany is the proper forum for the resolution of Plaintiffs' claims. Fairchild's motion was granted, and Plaintiffs appealed.

The major issue on appeal is whether the Bankruptcy Amendments and Federal Judgeship Act of 1984, 28 U.S.C. § 157(b)(5), prohibits the district court from dismissing under the doctrine of forum non conveniens a bankruptcy-related wrongful death case that arose in a foreign country. We hold that the Act does not prohibit a forum non conveniens dismissal.

I. FACTS

On February 8, 1988, a Fairchild Metroliner III Aircraft, owned by the German airline NFD and operated as NFD Flight 108, was making a regularly scheduled flight from Hanover Airport in Hanover, Germany to Lohausen Airport in Dusseldorf, Germany. Approximately seven nautical miles away from landing, the aircraft was struck by lightning, lost electrical power, entered an uncontrolled descent, and flew in and out of the clouds for several minutes before finally crashing near Kettwig, Germany. The two pilots and all nineteen passengers perished.

Personal representatives of the deceased passengers, all of them citizens and residents of Germany, filed nineteen separate lawsuits against Fairchild ¹ in sixteen different state district courts of Bexar County, Texas, alleging causes of action based on strict liability, breach of warranty, and negligence. Plaintiffs sought damages for wrongful death and survival, pre-judgment interest, and exemplary damages under Texas state law.

Fairchild, for reasons unrelated to the personal injury suits, ² filed a voluntary Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Western District of Texas. Fairchild subsequently removed all nineteen state court actions to the bankruptcy court, alleging that the actions related to its bankruptcy proceeding as contemplated by 28 U.S.C. § 1334(b).

Plaintiffs, in turn, moved for discretionary abstention under 28 U.S.C. § 1334(c)(1) or, alternatively, for remand of the nineteen cases to state court pursuant to 28 U.S.C. § 1452(b). The Honorable Emilio M. Garza, then United States District Judge, after conducting a de novo review of the Bankruptcy Judge's recommendation that Plaintiffs' motion be denied, adopted the recommendation in its entirety. The Court consolidated all nineteen actions in the district court and issued an Order lifting the automatic stay imposed by 11 U.S.C. § 362.

Fairchild then moved to dismiss the consolidated cases on the grounds of forum non conveniens, alleging that Plaintiffs' home country of Germany where the airline crash occurred is the proper forum for the resolution of Plaintiffs' claims. Plaintiffs replied that 28 U.S.C. § 157(b)(5) deprived the district court of any discretion to dismiss bankruptcy-related wrongful death actions pursuant to the doctrine of forum non conveniens. The Honorable Edward C. Prado, United States District Judge, dismissed the consolidated cases and ordered Plaintiffs to file suit in Germany within 120 days. ³ It is from this ruling granting Fairchild's Motion to Dismiss that Plaintiffs now appeal.

II. DISCUSSION

A court's authority to effect foreign transfers through the doctrine of forum non conveniens "derives from the court's inherent power, under Article III of the Constitution, to control the administration of the litigation before it and to prevent its process from becoming an instrument of abuse, injustice, or oppression." In re Air Crash Disaster Near New Orleans, La., 821 F.2d 1147, 1155 (5th Cir.1987), aff'd in part, vacated in part, 490 U.S. 1032, 109 S.Ct. 1928, 104 L.Ed.2d 400 (1989), vacated sub nom. Pan Am World Airways, Inc. v. Lopez, 883 F.2d 17 (5th Cir.1989), citing Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 530, 67 S.Ct. 828, 835, 91 L.Ed. 1067 (1947). Through this power a federal trial court may decline to exercise its jurisdiction, even though the court has jurisdiction and venue, when it appears that the convenience of the parties and the court and the interests of justice indicate that the action should be tried in another forum. Id., citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 250, 102 S.Ct. 252, 263, 70 L.Ed.2d 419 (1981); Koster, 330 U.S. at 530, 67 S.Ct. at 835; Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 67 S.Ct. 839, 842, 91 L.Ed. 1055 (1947).

The court's interest in controlling a crowded docket also provides a basis for the court's inherent power to dismiss on grounds of forum non conveniens: "the 'chosen forum is inappropriate because of considerations affecting the court's own administrative and legal problems.' " Id., citing Reyno, 454 U.S. at 241, 102 S.Ct. at 258 (quoting Koster, 330 U.S. at 524, 67 S.Ct. at 831). "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 people of a community which has no relation to the litigation." Id., citing Gulf Oil Corp., 330 U.S. at 590-91, 67 S.Ct. at 921. Although the doctrine "arose in the areas of admiralty and equity," this Court has observed that the doctrine "is now applied in a wide spectrum of cases in both federal and state courts." Id., citing Syndicate 420 at Lloyd's London v. Early American Ins Co., 796 F.2d 821, 825 (5th Cir.1986) (maritime insurance contracts case); Watson v. Merrell Dow Pharmaceuticals, 769 F.2d 354, 359-60 (6th Cir.1985) (strict liability pharmaceuticals case).

After examining the cases spawned by the crash in Germany of NFD Flight 108, the district court determined that the convenience of the parties and the court and the interests of justice would be better served if the wrongful death actions were tried in Germany. While Appellants also take issue with the district court's findings as a substantive matter, Appellants' primary focus is their legal argument that the doctrine of forum non conveniens is not available to district courts in bankruptcy-related wrongful death actions. Appellants contend that the statutory language and legislative purpose of 28 U.S.C. § 157(b)(5) are inconsistent with and thus preclude a forum non conveniens dismissal. The question appears to be one of first impression.

A. Effect of § 157(b)(5) on the Doctrine of Forum Non Conveniens

Title 28 U.S.C. § 157(b)(5) provides that

[t]he district court shall order that personal injury tort and wrongful death claims shall be tried in the district court in which the bankruptcy case is pending, or in the district court in the district in which the claim arose, as determined by the district court in which the bankruptcy is pending.

28 U.S.C. § 157(b)(5) (West 1991). Appellants insist that the plain meaning and legislative history of the words, "[w]rongful death claims shall be tried in the district court....," render the doctrine of forum non conveniens inapplicable to bankruptcy-related wrongful death cases. Thus, argue Appellants, the district court is required to try these cases even if the convenience of the parties and the ends of justice would be better served by hearing the cases in a foreign forum in which the claims arose.

Although Appellants are correct in stating that the United States Supreme Court and this Court have held that the doctrine of forum non conveniens is inapplicable when the language and legislative purpose of a statute are inconsistent with forum non conveniens dismissal, the cases cited by Appellants for application of this proposition are quite different from the case at bar. United States v. National City Lines, Inc., 334 U.S. 573, 596, 68 S.Ct. 1169, 1181, 92 L.Ed. 1584 (1948) ("National City Lines I" ), held that a district court could not employ the doctrine of forum non conveniens to accomplish a domestic transfer of venue in an antitrust suit. ⁴ The National City Lines cases, as well as the third case cited by Appellants, Industrial Investment Development Corp. v. Mitsui & Co., 671 F.2d 876 (5th Cir.1982), vacated on other grounds, 460 U.S. 1007, 103 S.Ct. 1244, 75 L.Ed.2d 475 (1983) (a case also involving violations of the Sherman Act), ⁵ apply only in the limited context of antitrust actions. As explained in Kempe, there is a "crucial point" of difference between antitrust suits and other types of cases:

[A]ntitrust cases are unlike litigation involving contracts, torts, or other matters recognized in some form in every nation. A plaintiff who seeks relief by means of one of these types of actions may appropriately be sent to the courts of another nation where presumably he will be granted, at least approximately, what he is due. But the antitrust...