Guimei v. General Electric Co.

• Citation: 91 Cal. Rptr. 3d 178,172 Cal.App.4th 689
• Decision Date: 26 February 2009
• Docket Number: No. B201021.,No. B201212.,No. B201023.,No. B201016.,B201016.,B201021.,B201023.,B201212.
• Court: California Court of Appeals
• Parties: ZHANG GUIMEI et al., Plaintiffs and Appellants, v. GENERAL ELECTRIC CO. et al., Defendants and Respondents.

172 Cal.App.4th 689

91 Cal. Rptr. 3d 178

ZHANG GUIMEI et al., Plaintiffs and Appellants, v. GENERAL ELECTRIC CO. et al., Defendants and Respondents.

No. B201016.

No. B201021.

No. B201023.

No. B201212.

Court of Appeals of California, Second District, Division Seven.

February 26, 2009.

Lieff, Cabraser, Heimann & Bernstein, Robert J. Nelson, David L. Fiol; Law Offices of Michael S. Yu and Kenneth K. Tanji for Plaintiffs and Appellants.

O'Melveny & Myers, W. Mark Wood, Wallace M. Allan, Haley M. McIntosh, Cynthia A. Merrill; Allen Matkins Leck Gamble Mallory & Natsis, A. Kristine Floyd, Julie W. Russ; Munger, Tolles & Olson, Joseph D. Lee, Joshua P. Groban and Kevin A. Goldman for Defendants and Respondents.

Fred J. Hiestand for Civil Justice Association of California as Amicus Curiae on behalf of Defendants and Respondents.

OPINION

JACKSON, J. —

INTRODUCTION

Plaintiffs Zhang Guimei (B201016), Sri Huntati (B201021), Shi Haiyan (B201023) and Xiang Cheng (B201212) appeal from an order staying their consolidated actions on the ground of forum non conveniens. The order was made on the motion of defendants General Electric Co., Bombardier, Inc., Bombardier Aerospace Corporation and China Eastern Airlines Co., Ltd. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Parties and the Airplane Crash

On November 21, 2004, China Eastern Yunnan Airlines (CEYA) flight No. MU5210, flying from Baotou in Inner Mongolia to Shanghai, crashed into a lake shortly after takeoff. Forty-seven passengers, six crew members and two people on the ground were killed. With the exception of one Indonesian passenger, all of the victims were Chinese citizens. All of the passengers purchased their tickets in China. All of the crew members were licensed by the General Civil Aviation Administration of China.¹

CEYA's hub of operations and repair and maintenance facilities were located at Wu Jia Ba Airport in Kunming, Yunnan, China. The airplane involved in the crash was operated and maintained in China exclusively. In May 2005, defendant China Eastern Airlines Co., Ltd. (CEA), acquired CEYA's assets. CEA is a commercial airline incorporated in China, with its principal place of business, engineering and maintenance facilities in Shanghai, China.

The airplane was a Bombardier CRJ200 LR Regional Jet, designed, manufactured, assembled and tested in Canada by defendant Bombardier, Inc. (Bombardier). Bombardier is a Canadian corporation with its principal place of business in Montreal, Quebec, Canada. Bombardier does not conduct business in California. It sold the airplane to China Aviation Supplies Import and Export Corporation in Quebec in 2002.

Defendant Bombardier Aerospace Corporation (Bombardier Aerospace) is a Delaware corporation with its principal place of business in Richardson, Texas. It did not design, manufacture, assemble, sell or service the airplane.

The airplane was powered by two model CF34 turbojet engines designed and manufactured by defendant General Electric Co. (GE). GE is incorporated in New York and has its principal place of business in Fairfield, Connecticut. The engines were not designed, manufactured, assembled, tested or shipped in California.

B. The Complaints and the Forum Non Conveniens Motion

On August 17, 2005, Huntati filed suit against GE, Bombardier, Bombardier Aerospace and CEA as the surviving spouse, and guardian ad litem of the minor child of one of the crash victims. On November 21, 2005, Cheng and other relatives of one of the crash victims filed suit against GE, Bombardier, Bombardier Aerospace and CEA on their behalf and on behalf of the decedent's minor child. Also on November 21, Guimei and other relatives of crash victims filed suit against GE, Bombardier, Bombardier Aerospace and CEA.

These three cases were ordered related to one another and assigned to the same judge on January 31, 2006. They were ordered consolidated on February 27, 2006.

On February 24, 2006, CEA moved to dismiss, or in the alternative stay, the actions on the ground of forum non conveniens (Motion). CEA claimed California was not a convenient forum for trial of the actions, and China provided an adequate alternative forum for trial. GE, Bombardier and Bombardier Aerospace joined in the motion to dismiss.

Thereafter, on November 19, 2006, Haiyan and other relatives of crash victims filed suit against GE, Bombardier, Bombardier Aerospace and CEA. This action was consolidated with the other three on March 23, 2007. Defendants moved to dismiss, or in the alternative stay, this action as well on the ground of forum non conveniens.

As part of their Motion, CEA made a commitment that, if the Motion were granted, it would (1) not contest liability in the four actions in the Chinese courts; (2) completely compensate plaintiffs in accordance with Chinese law and not seek to enforce limitations on wrongful death damages; (3) waive any applicable statutes of limitations so long as the actions were refiled in China within six months of the dismissal or stay; and (4) be bound by and satisfy any judgment in the Chinese court following any appropriate appeals.

GE, Bombardier and Bombardier Aerospace similarly agreed they would (1) submit to personal jurisdiction in China; (2) waive any applicable statutes of limitations so long as the actions were refiled in China within six months of the dismissal or stay; (3) accept service of process; (4) comply with discovery orders; and (5) satisfy any final judgment in the Chinese court.

While the Motion was pending, the parties attempted to negotiate a settlement. When a dispute arose as to whether the parties had an enforceable settlement agreement, plaintiffs amended their complaints to allege that CEA breached the agreement. They later dismissed these claims, however.

C. The Trial Court's Ruling

The trial court granted defendants' Motion and stayed the consolidated actions for the purpose of permitting proceedings in China. It scheduled status conferences every six months in order to monitor the proceedings. The trial court's ruling was conditioned on the agreements set forth above.

The trial court explained that the first issue to be resolved was whether there was a suitable alternative forum in which plaintiffs could obtain a judgment against defendants, one in which defendants are subject to the court's jurisdiction and the cause of action is not barred by the statute of limitations. (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 752, fn. 3 [1 Cal.Rptr.2d 556, 819 P.2d 14].) Here, defendants unquestionably are subject to the jurisdiction of the Chinese courts, and they agreed to waive the statute of limitations. This makes China a suitable forum, even if California law is more favorable to plaintiffs or recovery would be more difficult in China. (Shiley Inc. v. Superior Court (1992) 4 Cal.App.4th 126, 133 ; Stangvik, supra, at pp. 753-754.)

An exception to this rule arises if the remedy provided by the alternative forum is so inadequate as to amount to no remedy at all. This exception may arise where the alternative forum is in a foreign country controlled by a totalitarian regime in which there is no independent judiciary or due process of law. (Piper Aircraft Co. v. Reyno (1981) 454 U.S. 235, 254 & fn. 22 [70 L.Ed.2d 419, 102 S.Ct. 252]; Shiley Inc. v. Superior Court, supra, 4 Cal.App.4th at pp. 133-134 & fn. 4.) The question before the court was whether the exception applies here. Plaintiffs claimed it did, and that they could not get a fair trial in China.

The trial court rejected this claim. It noted that plaintiffs "present evidence from distinguished academics providing anecdotal evidence, or evidence about the Chinese judicial system's record on issues of human rights and political dissidents, and cases involving challenges to governmental actions. Plaintiffs present evidence that CEA is a government-owned entity, the government is seeking to encourage foreign companies like Bombardier and GE to invest, the courts are under Communist Party leadership, cases are often subject to local protectionism, trials are not public in the sense we understand openness, lower courts seek advice or instruction from a higher court without informing the parties, there is corruption among judges, and judges are often uneducated."

The trial court agreed that "[s]ome or all of these factors may be serious problems in the Chinese judicial system." It was not persuaded to the contrary by defendants' evidence "that this case is likely to be filed in Shanghai, a sophisticated jurisdiction with educated judges and numerous lawyers, China follows the rule of law, state-owned enterprises lose many civil suits in China, plaintiffs prevail in 20-40% of administrative claims against the government, litigants in Shanghai often perceive their case to properly turn on facts and law and not improper influences, and local protectionism is a problem that is less likely in Shanghai."

The trial court was not persuaded by the "general evidence" submitted by both sides. The evidence "shows a legal system in the growing stages, not a fully mature legal system endowed with judges and juries who follow the rule of law where ever it leads." But this did not establish that plaintiffs would be unlikely to get basic justice if the case were to be tried in China. Plaintiffs failed to present evidence of a personal injury or wrongful death case against a government owned or controlled entity "that has been the subject of the manipulation and interference they fear. Nor have they presented admissible evidence that they are likely to be mistreated."

The trial court acknowledged that plaintiffs presented evidence that their "lawyers were interrogated by local police officials when they interviewed prospective clients." This was "some evidence of local protectionism." But, the trial court concluded, it "pales compared to the strong evidence that Plaintiffs will receive fundamental justice in China. The best...