German Free State of Bavaria v. Toyobo Co., Ltd.

• Decision Date: 26 March 2007
• Docket Number: No. 1:06-CV-407.,1:06-CV-407.
• Parties: GERMAN FREE STATE OF BAVARIA, et al., Plaintiffs, v. TOYOBO CO, LTD., et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

480 F.Supp.2d 948

GERMAN FREE STATE OF BAVARIA, et al., Plaintiffs, v. TOYOBO CO, LTD., et al., Defendants.

No. 1:06-CV-407.

United States District Court, W.D. Michigan, Southern Division.

March 26, 2007.

COPYRIGHT MATERIAL OMITTED

Daniel K. Reising, Mark Joseph Fucile, Fucile & Reising LLP, Portland, OR, for Plaintiffs.

Fred K. Herrmann, Kerr Russell & Weber PLC, Detroit, MI, Konrad L. Cailteux, Weil Gotshal & Manges LLP, New York, NY, Scott R. Dayton, Weil Gotshal & Manges LLP, Houston, TN, for Defendants.

OPINION

RICHARD ALAN ENSLEN, United States Senior District Judge.

This matter is before the Court on Defendants Toyobo Co., Ltd. and Toyobo America, Inc.'s Motion to Dismiss based on Forum non Conveniens. The Motion has been fully briefed and the Court discerns no reason for oral argument. W.D. MICH. LCIVR 7.2(d).

I. BACKGROUND

This action was brought by Plaintiffs German Free State of Bavaria ("Bavaria") and German Free State of North Rhine-Westphalia ("NRW") (collectively "Plaintiffs") against Defendants Toyobo Co., Ltd. ("Toyobo Japan"), Toyobo America, Inc. ("Toyobo America"), Mark Steven Pickett, and Thomas Edgar Bachner, Jr.¹ to recover damages arising out of the sale of defective bulletproof vests to Plaintiffs by Second Chance Body Armor, Inc. ("SCBA") and its wholly owned subsidiary Second Chance Body Armor GmbH ("SCBA Germany"). Plaintiffs allege thirteen different Counts against Defendants in their Amended Complaint including: innocent, negligent, and intentional misrepresentation; conspiracy; aiding and abetting in misrepresentations; breach of fiduciary duties; aiding and abetting in the breach of fiduciary duties; violation of Racketeering Influenced and Corrupt Organizations ("RICO"), 18 U.S.C. § 1962; violations of the Michigan Consumer Protection Act; breach of warranties; violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301 et seq.; violations of Michigan's Uniform Commercial Code; and exemplary damages. (Am.Compl.¶¶ 105-48.)

Plaintiffs' action arises from the allegation that Toyobo Japan and Toyobo America conspired' and colluded with SCBA, SCBA Germany, and their employees Mark Pickett and Thomas Bachner to intentionally or negligently misrepresent facts and induce Plaintiffs to purchase approximately 60,000 defective bulletproof vests from SCBA Germany.² Toyobo Japan is a Japanese Company and Toyobo America is a subsidiary of Toyobo Japan and is a New York corporation. (Id. ¶¶ 5-7.) Defendant Bachner, a resident of Michigan, was an officer and director of SCBA. (Id. ¶ 8.) Defendant Pickett, a resident of Michigan, served as director of SCBA Germany and was also an employee of SCBA. (Id. ¶ 9.) Plaintiffs assert that beginning in May 1996, Toyobo Japan and Toyobo America began an informal partnership with SCBA to develop defective bulletproof vests which incorporated a synthetic PBO fiber ("Zylon"). (Id. ¶ 17.)

The Court has previously determined that it lacks personal jurisdiction over Toyobo America and that Defendant Mark Pickett's service of process in this action was insufficient. For these reasons, Toyobo America and Mark Pickett have been dismissed as Defendants in this action.

II. LEGAL STANDARD

The doctrine of forum non conveniens is a doctrine of inherent authority and provides that a court may dismiss a pending suit in deference to proceedings in a foreign jurisdiction for reasons of convenience, judicial economy and justice. See Chambers v. NASCO, Inc., 501 U.S. 32, 44, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991); Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-08, 67 S.Ct. 839, 91 L.Ed. 1055 (1947). As this Court has previously stated, the doctrine is to be used guardedly, as it conflicts with the common law doctrine of judex tenetur impertiri judicium suum — a court with jurisdiction is bound to decide matters within that jurisdiction. See Higgins v. SPX Corp., 2006 WL 1008677 at *4 (W.D.Mich. Apr.18, 2006); see also England v. La. State Board of Med. Exam'rs 375 U.S. 411, 415, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964); Hyde v. Stone, 61 U.S. (20 How.) 170, 175, 15 L.Ed. 874 (1857); Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404, 5 L.Ed. 257 (1821); Mostyn v. Fabrigas, 98 Eng. Rep. 1021, 1027 (K.B.1774) (on appeal from Court of Common Pleas) (decision of Lord Mansfield); Scottish Ins. Corp. Ltd. v. Wilsons & Clyde Coal Co. Ltd., 1949 S.L.T. 230, 239 (H.L.) (on appeal from 1st Div.) (decision of Lord Norman); contra Societe du Gaz de Paris v. Societe Anonyme de Navigation "Les Armateurs Francais" Paris, 1926 S.L.T. 33, 36-38 (H.L.1925) (on appeal from 2nd Div.) (decision of Lord Sumner). But also see Lubbe & Others v. Cape Plc., [2000] 2 Lloyd's Rep. 383, 394-95 (H.L.) (on multiple appeals) (decision of Lord Bingham) (reversing grant of stay on forum non conveniens grounds where stay would "lead to denial of justice").

In 1947, the Supreme Court decided Gulf Oil Corp. v. Gilbert and its companion case, Koster v. Lumbermen Mut. Cas. Co., 330 U.S. 518, 67 S.Ct. 828, 91 L.Ed. 1067 (1947), which permitted dismissal on the basis of forum non conveniens. The Supreme Court found that although plaintiff's choice of forum should rarely be disturbed, "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 ... or when the chosen forum is inappropriate because of considerations affecting the court's own administrative and legal problems, the court may, in the exercise of its sound discretion, dismiss the case." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981) (internal citations omitted). To guide a court's discretion in the determination of whether, a dismissal under forum non conveniens is appropriate, the Supreme Court set forth a balancing test of "`private interest factors,' affecting the convenience of the litigants and `public interest factors' affecting the convenience of the forum." Id.

III. ANALYSIS

A. Initial Inquiry

The first initial inquiry in a motion to dismiss for forum non conveniens is whether an adequate and alternative forum exists. See Piper Aircraft, 454 U.S. at 255 n. 22, 102 S.Ct. 252. The Supreme Court has held that an alternative forum exists where:

the defendant is amenable to process in the other jurisdiction ... however, where the remedy offered by the other forum is clearly unsatisfactory, the other forum may not be an adequate alternative, and the initial requirement may not be satisfied. Thus, for example dismissal would not be appropriate where the alternative forum does not permit litigation of the subject matter of the dispute.

Id. (citations omitted). In the present case it is undisputed by the parties that Germany is an adequate forum for some of the claims against Toyobo Japan. (See Dkt. No. 84 at 7, stating "Plaintiffs do not dispute that German law offers them a remedy — at least on some of their claims.") Plaintiffs argue that German courts would lack jurisdiction over Defendant Bachner, a Michigan' resident, and would also lack jurisdiction over the federal claims asserted against Toyobo Japan because actions supporting the claims were committed in Michigan. However, an alternative forum exists even when a plaintiff may not be able to proceed on a particular legal theory, or the potential damages may be smaller. Piper Aircraft, 454 U.S. at 241-42, 102 S.Ct. 252 (citation omitted). Therefore, the Court finds an adequate forum exists in Germany for the claims against one Defendant, Toyobo Japan. However, it is clear that such an alternative forum does not exist for the claims against Defendant Bachner. Accordingly, if the Court determined dismissal under forum non conveniens was appropriate, a splitting of the action would be necessary: dismissing the action against Toyobo Japan and retaining the action against Defendant Bachner.

In determining whether a dismissal under forum non conveniens is appropriate, the Court must also ascertain what level of deference is afforded to Plaintiffs' choice of forum. The Supreme Court recently stated:

A defendant invoking forum non conveniens ordinarily bears a heavy burden in opposing the plaintiffs chosen forum. When the plaintiffs choice is not its home forum, however, the presumption in the plaintiffs favor "applies with less force," for the assumption that the chosen forum is appropriate is in such cases "less reasonable."

Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp., 549 U.S. ___, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) (quoting Piper Aircraft, 454 U.S. at 255-56, 102 S.Ct. 252.) In the present action Plaintiffs, two German states, have brought their action in Michigan, which is certainly not Plaintiffs home forum. Accordingly, the Court finds Plaintiffs' choice of forum is entitled to less deference.

B. Private Interest Factors

The Court must next evaluate the private, and public interest factors. The private interest factors weighed in Gilbert include the "relative case of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing witnesses; possibility of view, of premises, if view would be appropriate to the action; and all other practical problems that make trial easy, expeditious sand inexpensive." Gilbert, 330 U.S. at 508, 67 S.Ct. 839.

First, inconvenience of the parties does not appear to be at issue in this case. "It appears inevitable that one of the parties will be inconvenience[d] by having to proceed in a court in a foreign jurisdiction." Stewart v. Dow Chemical Co., 865 F.2d 103, 106-07 (6th Cir.1989). Here, as in Stewart, both parties appear to be willing to pay that cost where the German states want to proceed in Michigan and the Japanese Corporation wants to go to Germany; therefore the costs of travel or the inconvenience are non-issues., Id.

The case of access to sources of proof (including witnesses) weighs in favor of retention of the...