Binder v. Shepard's Inc.

• Decision Date: 14 March 2006
• Docket Number: No. 97822.,97822.
• Citation: 133 P.3d 276,2006 OK 17
• Parties: David F. BINDER; Edward A. Dauer; Roger W. Haines Jr.; Ann M. Haralambie; Michael B. Mushlin; Sheldon H. Nahmod; James T. O'Reilly; Daniel W. Shuman; Frank F. Skillern; Harold Weinstock; Weinstock, Manion, Reisman, Shore & Neumann; and Robert P. Wilkins, Plaintiffs/Appellants, v. SHEPARD'S INC., Defendant, and The McGraw-Hill Companies, Inc., Defendant/Appellee.
• Court: Oklahoma Supreme Court

Page 276

133 P.3d 276

2006 OK 17

David F. BINDER; Edward A. Dauer; Roger W. Haines Jr.; Ann M. Haralambie; Michael B. Mushlin; Sheldon H. Nahmod; James T. O'Reilly; Daniel W. Shuman; Frank F. Skillern; Harold Weinstock; Weinstock, Manion, Reisman, Shore & Neumann; and Robert P. Wilkins, Plaintiffs/Appellants, v. SHEPARD'S INC., Defendant, and The McGraw-Hill Companies, Inc., Defendant/Appellee.

No. 97822.

Supreme Court of Oklahoma.

March 14, 2006.

As Corrected March 21, 2006.

On Certiorari to the Court of Civil Appeals, Division IV.

¶ 0 The plaintiffs brought this contract action in the District Court of Oklahoma County. The district court, Bryan C. Dixon, Trial Judge, dismissed the plaintiffs' claims against one of two defendants on the grounds of forum non conveniens and the plaintiffs appealed. The Court of Civil Appeals, Division IV, reversed and remanded, instructing the district court to dismiss the action only upon the defendant's agreement to waive certain defenses in the alternate forum. On certiorari previously granted, we conclude that the district court abused its discretion in granting the dismissal without determining that an alternate forum was available.

THE COURT OF CIVIL APPEALS' OPINION IS VACATED, THE DISTRICT COURT'S ORDER IS REVERSED, AND THE MATTER IS REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.

Don G. Holladay and Heidi J. Long, Holladay, Chilton & degiusti, P.L.L.C., Oklahoma City, OK, and Jon R. Pearce, Johnston & Nathanson, P.L.C., Iowa City, IA, pro hac vice for Plaintiffs/Appellants.

Sidney G. Dunagan, Myra P. Kaufman, and Joseph T. Thai, Gable & Gotwals, Oklahoma City, OK, for Defendant Shepard's Inc., and Defendant/Appellee The McGraw-Hill Companies, Inc.

Charles W. Adams, University of Tulsa College of Law, Tulsa, Oklahoma, amicus curiae.

PER CURIAM.

¶ 1 Plaintiffs, David F. Binder, Edward A. Dauer, Roger W. Haines Jr., Ann M. Haralambie, Michael B. Mushlin, Sheldon H. Nahmod, James T. O'Reilly, Daniel W. Shuman, Frank F. Skillern, Harold Weinstock, and Robert P. Wilkins, are authors of law-related books and computer software.¹ They each entered publishing contracts with Shepard's Inc., a subsidiary of The McGraw-Hill Companies, Inc. Shepard's subsequently sold most of the assets of its topical publishing unit, including Plaintiffs' works and related contracts, to Thomson Legal Publishing, Inc.²

¶ 2 Plaintiffs filed this lawsuit against Shepard's and McGraw-Hill, alleging that Shepard's breached the contracts by failing to pay one-time royalties on the sale and that McGraw-Hill is liable for the unpaid royalties as the guarantor of Shepard's pre-sale liabilities. McGraw-Hill moved to dismiss on the grounds of forum non conveniens because (1) all of the events occurred outside of Oklahoma; (2) the only Oklahoma connection to any of the parties was that McGraw-Hill was registered as a foreign corporation; (3) there were no witnesses or evidence in Oklahoma; and (4) other forums were more convenient and had a greater relationship to the conflict. Plaintiffs admitted these assertions but argued that the statute of limitations had already run in the alternate forums suggested by McGraw-Hill. The district court granted McGraw-Hill's motion to dismiss.

¶ 3 Plaintiffs appealed and argued that the district court erred in granting the motion without requiring McGraw-Hill's agreement to waive any limitations defense it may have in the alternate forum of Plaintiffs' choice. The Court of Civil Appeals agreed with the district court that Oklahoma is an inconvenient forum, but reversed and remanded with instructions to dismiss the action only on the condition that McGraw-Hill accept service and waive the statute of limitations in the alternate forum.³ We granted McGraw-Hill's petition for certiorari to clarify and expand the fundamentally sound reasoning of the Court of Civil Appeals. We, therefore, vacate the opinion of the Court of Civil Appeals, reverse the order of the district court, and remand for further proceedings consistent with this opinion.

STANDARD OF REVIEW

¶ 4 We review a district court's decision on a motion to dismiss based on the doctrine of forum non conveniens for abuse of discretion. Conoco Inc. v. Agrico Chem. Co., 2004 OK 83, ¶ 14, 115 P.3d 829, 834.⁴

DISCUSSION

¶ 5 Plaintiffs successfully argued on appeal that the district court abused its discretion by dismissing their claims against McGraw-Hill without requiring it to demonstrate that another forum was actually available. Specifically, Plaintiffs argued that McGraw-Hill did not suggest any alternate forums until the hearing on its motion to dismiss and that their claims would be barred by the statute of limitations in most or all of the suggested alternate jurisdictions. In its petition for certiorari, McGraw-Hill has not disputed Plaintiffs' assertions, but has argued that the doctrine of forum non conveniens does not require it to waive defenses in other jurisdictions in exchange for the privilege of litigating the matter in a convenient forum. We cannot agree.

¶ 6 The balance in the doctrine of forum non conveniens is not tilted toward a defendant's right to a convenient forum, but toward a plaintiff's right to have its claims heard in the forum of its choice. Only when "`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,"'" may the court exercise its discretion to dismiss the case. Am. Dredging Co. v. Miller, 510 U.S. 443, 447-448, 114 S.Ct. 981, 985, 127 L.Ed.2d 285 (1994) (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, 102 S.Ct. 252, 258, 70 L.Ed.2d 419 (1981) (quoting Koster v. (Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518, 524, 67 S.Ct. 828, 831, 91 L.Ed. 1067 (1947))). While a plaintiff may not use its choice of forum to "vex or harass a defendant," we disturb its choice only in "exceptional cases." Conoco, 2004 OK 83, ¶ 10, 115 P.3d at 833; see also Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947).

¶ 7 The overwhelming majority of courts have concluded that the doctrine of forum non conveniens "presupposes at least two forums in which the defendant is amenable to process." Gulf Oil, 330 U.S. at 507, 67 S.Ct. at 842; Martin J. McMahon, Annotation, Forum Non Conveniens Doctrine in State Court as Affected by Availability of Alternative Forum, 57 A.L.R.4th 973. "Amenable" does not mean merely that the defendant can be successfully served, but that the defendant is "[l]egally answerable; liable to being brought to judgment." Black's Law Dictionary 80 (7th ed.1999). This Court has required a viable alternate forum from its earliest adoption of the doctrine even when the issue was not specifically raised by the parties. See St. Louis-S.F. Ry. v. Super. Ct., 1954 OK 223, 276 P.2d 773; see also Pruitt Tool & Supply Co. v. Windham, 1963 OK 56, 379 P.2d 849; Atchison, Topeka & Santa Fe Ry. v. Dist. Ct., 1956 OK 120, 298 P.2d 427; Lovett v. Wal-Mart Stores, Inc., 2001 OK CIV APP 9, 18 P.3d 387. We most recently restated this requirement in Conoco Inc. v. Agrico Chemical Co., 2004 OK 83, ¶ 11, 115 P.3d 829, 833.

¶ 8 We decline the invitation to adopt New York's rule that the existence of an alternate forum is not a prerequisite to the application of forum non conveniens. Republic of Iran v. Pahlavi, 62 N.Y.2d 474, 478 N.Y.S.2d 597, 467 N.E.2d 245, 249 (1984). Pahlavi, an effort by the revolutionary regime in Iran to impress a constructive trust on the former Shah's worldwide assets, presented a unique situation. Id. at 246-47. The New York court concentrated on the "substantial financial and administrative burden" the case would impose on the court system. It also considered that the parties had no relationship to New York except the defendant's presence for medical treatment; none of the assets were located in New York so that a constructive trust would have doubtful efficacy; and the defendant had no realistic defense available in New York because the witnesses and evidence were located in Iran under the plaintiff's control. Id. at 248-250. Ultimately, the court concluded that the lack of an alternate forum should not prevent dismissal because the lack was attributable to the plaintiff's actions⁵ and the chosen forum could not afford the relief sought.⁶ Id. at 250.

¶ 9 New York courts continue to cite Pahlavi, but McGraw-Hill cites only one additional case-also arising out of the political situation in Iran-where the court dismissed despite the lack of an alternate forum because it could not afford the relief requested.⁷ Moezinia v. Moezinia, 124 A.D.2d 571, 507 N.Y.S.2d 716 (N.Y.App.Div.1986). Other cases citing Pahlavi have either not considered the issue or declared that an alternate forum was actually available. Shin-Etsu Chem. Co. v. 3033 ICICI Bank Ltd., 9 A.D.3d 171, 777 N.Y.S.2d 69 (N.Y.App.Div.2004); Stamm v. Deloitte & Touche, 202 A.D.2d 413, 608 N.Y.S.2d 498 (N.Y.App.Div.1994); McLeod v. Lovelace, 117 A.D.2d 989, 499 N.Y.S.2d 290 (N.Y.App.Div.1986); Globalvest Mgmt. Co. v. Citibank, N.A., 801 N.Y.S.2d 234 (N.Y.Sup.Ct.2005). Moreover, Pahlavi has never been adopted outside of New York and, in practical terms, has been limited to its facts. See Shewbrooks v. A.C. & S., Inc., 529 So.2d 557 (Miss.1988), superseded by statute on other grounds as stated in S. Pac. Transp. Co. v. Fox, 609 So.2d 357 (Miss. 1992). While future international developments might require us to reconsider the Pahlavi rule in similar extreme conditions, it will not serve the purposes of justice in this rather more ordinary situation. We hold, therefore, that the existence of a viable alternate forum is a prerequisite to the application of the doctrine of forum non conveniens.

¶ 10 Further, the defendant bears the burden of establishing...