Kinney System, Inc. v. Continental Ins. Co.

• Decision Date: 25 January 1996
• Docket Number: No. 84329,84329
• Citation: 674 So.2d 86
• Parties: 21 Fla. L. Weekly S43 KINNEY SYSTEM, INC., Petitioner, v. The CONTINENTAL INSURANCE COMPANY, Respondent.
• Court: Florida Supreme Court

Page 86

674 So.2d 86

21 Fla. L. Weekly S43

KINNEY SYSTEM, INC., Petitioner, v. The CONTINENTAL INSURANCE COMPANY, Respondent.

No. 84329.

Supreme Court of Florida.

Jan. 25, 1996.

Rehearing Denied May 16, 1996.

Arthur J. England, Jr. and Charles M. Auslander, of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, for petitioner.

Raoul G. Cantero, III and Jared Gelles of Adorno & Zeder, P.A., Miami, for respondent.

Joel S. Perwin of Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin, P.A., Miami, for amicus curiae Academy of Florida Trial Lawyers.

Wendy F. Lumish of Popham, Haik, Schnobrich & Kaufman, Ltd., Miami, for amicus curiae Product Liability Advisory Council, Inc.

Mitchell W. Berger and Leonard K. Samuels of Berger, Shapiro & Davis, P.A., Fort Lauderdale, for amicus curiae Florida Chamber of Commerce.

Mark A. Cohen and Fred O. Goldberg of Mark A. Cohen & Associates, P.A., Miami, for amici curiae AT & T Corp., Amoco Corporation, The Dow Chemical Company, Northern Telecom (CALA) Corporation, Phelps Dodge International Corporation, Shell Oil Company, Texaco, Inc. and Motorola, Inc.

Robin C. Nystrom, Tallahassee, for amicus curiae State of Florida, Department of Commerce.

Jeffrey B. Crockett of Aragon, Martin, Burlington & Crockett, P.A., Miami, for amici curiae Carnival Corporation, Harris Corporation, Home Shopping Network, Inc. and Ivax Corporation.

KOGAN, Justice.

We have for review the following question certified to be of great public importance:

Is a trial court precluded from dismissing an action on the basis of forum non conveniens where one of the parties is a foreign corporation that:

(a) is doing business in Florida?

(b) is registered to do business in Florida?

(c) has its principal place of business in Florida?

Continental Ins. Co. v. Kinney System, Inc., 641 So.2d 195, 197 (Fla. 4th DCA 1994). The opinion below also expressly and directly conflicts with the opinion of the Third District in National Rifle Association of America v. Linotype Co., 591 So.2d 1021 (Fla. 3d DCA 1991), and with other opinions of the district courts. We have accepted jurisdiction pursuant to article V, section 3(b)(3) and (4), Florida Constitution, to resolve the conflict and address this important question affecting private international law.

Continental Insurance Company became embroiled in a dispute with Kinney System, Inc., about workers compensation insurance premiums. The underlying contract with Continental was negotiated in the New York area to cover Kinney's employees in a variety of different states, including Florida. Continental is a New Hampshire corporation with central operations located in New Jersey. Kinney is a Delaware corporation with headquarters in New York. Continental, moreover, is registered to do business in Florida and operates a Fort Lauderdale claims office. Kinney has a regional office and operates parking garages in Dade County. Based on these Florida connections, Continental sued Kinney in Florida circuit court. However, the trial judge dismissed based on the doctrine of forum non conveniens.

On appeal, the Fourth District reversed. It cited its own precedent in National Aircraft Service, Inc. v. New York Airlines, Inc., 489 So.2d 38, 39 (Fla. 4th DCA 1986), for the proposition that forum non conveniens does not apply where one of the corporate parties to the action is "licensed to do business in Florida, with a place of business in Florida." Addressing a similar problem, however, the Third District has held that, for purposes of Florida's forum non conveniens doctrine, corporate residency is determined by the corporation's principal place of business. National Rifle Ass'n.

Forum non conveniens ¹ is a common law doctrine addressing the problem that arises when a local court technically has jurisdiction over a suit but the cause of action may be fairly and more conveniently litigated elsewhere. Forum non conveniens also serves as a brake on the tendency of some plaintiffs to shop for the "best" jurisdiction in which to bring suit--a concern of special importance in the international context. Commentators generally have noted a growing trend in private international law of attempting to file suit in an American state even for injuries or The attractiveness of Florida has arisen from the general belief that our opinion in Houston v. Caldwell, 359 So.2d 858 (Fla.1978), announced a forum non conveniens doctrine less vigorous than the federal doctrine first outlined in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1946), as the latter has been refined through the years. The commentators cited above, for example, expressly conclude that lawsuits filed in Florida courts can survive a forum non conveniens challenge that would result in dismissal at the federal-court level. This has led to disturbing results.

                breaches that occurred on foreign soil. 2  There already is evidence the practice is growing to abusive levels in Florida.  Michael J. Higer & Harris C. Siskind, Florida Provides Safe Haven for Forum Shoppers, Fla.B.J., Oct. 1995, at 20, 24-26 (documenting instances of abuse in Florida courts);  Linda L. Silberman, Developments in Jurisdiction and Forum Non Conveniens in International Litigation:  Thoughts on Reform and a Proposal for a Uniform Standard, 28 Tex.  Int'l L.J. 501 (1993) (Florida favored by international plaintiffs);  Jacques E. Soiret, The Foreign Defendant:  Overview of Principles Governing Jurisdiction, Venue, Extraterritorial Service of Process and Extraterritorial Discovery in U.S. Courts, 28 Tort & Ins. L.J. 533 (1993) (same)
                

Under federal law governing diversity jurisdiction, see Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), a Florida lawsuit filed against a non-Florida defendant sometimes can be mandatorily removed to federal court and there dismissed based on the federal doctrine of forum non conveniens, as happened in Sibaja v. Dow Chemical Co., 757 F.2d 1215 (11th Cir.), cert. denied, 474 U.S. 948, 106 S.Ct. 347, 88 L.Ed.2d 294 (1985). However, when a defendant is a Florida resident, removal may not be permitted. Thus, if Florida applies a less vigorous doctrine of forum non conveniens, the state actually is disadvantaging some of its own residents--a result clearly not intended by Houston.

Of greater concern, however, is the fact that the Houston doctrine is resulting in additional burdens imposed upon Florida's trial courts over and above those caused by disputes with substantial connections to state interests. We ourselves must continually ask the legislature for an expansion of judicial funding to meet the ever-increasing crush of litigation now coming into our courthouses. In light of the scarce tax-funded resources available for judicial activities, we must be mindful when doctrines adopted as common law now are leading to counterproductive results. This is a proper concern for us to address pursuant to our inherent authority to modify the common law ³ when demanded by fundamental right or public necessity. Waite v. Waite, 618 So.2d 1360, 1362 (Fla.1993). Today we find a strong public necessity requiring us to revisit our decision in Houston.

The problem clearly has been worsened by other developments in the law. For example, 1984 legislative reforms to Florida's personal jurisdiction statutes substantially expanded the trial courts' ability to hear cases arising on foreign soil. This was achieved by a lessening of traditional connexity requirements. See Ch. 84-2, § 3, Laws of Fla.; see § 48.193, Fla.Stat. (1995). Houston, in other words, was written at a time when significant jurisdictional hurdles to such actions existed that now have been eliminated; and thus, Houston did not contemplate and could not have foreseen the ease with which out-of-state or foreign plaintiffs may now access Florida's trial courts. Nothing in our law establishes a policy that Florida must be a courthouse for the world, nor that the taxpayers of the state must pay to resolve disputes utterly unconnected with this state's interests.

We are aware of arguments raised both for and against the doctrine Florida has followed Others have raised concerns about American multinational corporations going unpunished for the marketing of dangerous products or services abroad. One commentator, for example, has urged a complete abolition of the doctrine at the federal and state level as the best solution for holding American multinational corporations responsible for dangerous products and services sold abroad. Hilmy Ismail, Forum Non Conveniens, United States Multinational Corporations, and Personal Injuries in the Third World: Your Place or Mine?, 11 B.C. Third World L.J. 249 (1991).

to date. Some commentators have suggested that states using approaches similar to Florida's actually are impeding their own economic interests. As a general rule, these commentators focus on a perceived need for uniformity in transnational business regulation: Uniformity increases certainty and thereby makes interstate and transnational business easier and less expensive. Proponents of this position generally favor a uniform application of the Gilbert standard or something similar to it. Marc C. Mayfield, Dow Chemical Company v. Alfaro: Aiding the Decline of the Alternative Forum, 14 Hous. J. Int'l L. 213 (1991); Adrian G. Duplantier, Louisiana: A Forum, Conveniens Vel Non, 48 La.L.Rev. 761 (1988).

While these arguments deserve consideration, we do not agree with the assumptions made by some that the federal doctrine of forum non conveniens necessarily favors business interests or necessarily deprives plaintiffs of adequate fora. Nor are we convinced that any individual state has an absolute obligation to police the foreign actions of American multinational corporations. We certainly do not imply that Florida courts will never serve such a role, but we do believe that the general regulation of foreign activities...