de Melo v. Lederle Laboratories, Div. of American Cyanamid Corp.

• Citation: 801 F.2d 1058
• Decision Date: 24 September 1986
• Docket Number: No. 85-5339,85-5339
• Parties: Cleonilde Nunes DE MELO, Appellant, v. LEDERLE LABORATORIES, a DIVISION OF AMERICAN CYANAMID CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1058

801 F.2d 1058

Cleonilde Nunes DE MELO, Appellant, v. LEDERLE LABORATORIES, a DIVISION OF AMERICAN CYANAMID

CORPORATION, Appellee.

No. 85-5339.

United States Court of Appeals,

Eighth Circuit.

Submitted April 14, 1986.

Decided Sept. 24, 1986.

Kenneth P. Griswold, St. Paul, Minn., for appellant.

Peter W. Sipkins, Minneapolis, Minn., for appellee.

Before JOHN R. GIBSON, Circuit Judge, SWYGERT, ^* Senior Circuit Judge, and FAGG, Circuit Judge.

JOHN R. GIBSON, Circuit Judge.

Cleonilde Nunes de Melo, a citizen of Brazil, appeals the judgment of the district court ¹ dismissing her products liability claims against Lederle Laboratories on grounds of forum non conveniens. De Melo argues on appeal that the district court abused its discretion in concluding that Brazil was an adequate alternative forum for this litigation, and that on balance, this litigation would be more convenient for the parties and the available fora if tried in Brazil. We affirm.

Lederle Laboratories, a division of American Cyanamid Corporation, developed, tested, patented, and manufactured the drug Myambutol. American Cyanamid is a Maine corporation with headquarters in New Jersey; Lederle is a New York corporation, and maintains its main laboratories, where Myambutol was developed and manufactured, in New York. Both American Cyanamid and Lederle are licensed to do business in Minnesota. American Cyanamid also licenses the foreign manufacture of Myambutol. Under a licensing agreement, Myambutol is manufactured, marketed and distributed in Brazil by a Brazilian corporation, Cyanamid Quimica de Brasil (CQB), a wholly-owned subsidiary of American Cyanamid.

De Melo, a school teacher in her forties, was treated in Brazil for pulmonary tuberculosis. In 1976, in the course of that treatment, de Melo's Brazilian physicians prescribed Myambutol. After a few months of ingesting the drug, de Melo developed optic atrophy, and became permanently blind. The package insert to Myambutol manufactured by CQB, containing information about the appropriate uses and hazards of the product, is a Portuguese translation of an English version prepared by Lederle for domestic distribution. In 1976, the English-language package insert warned of possible permanent vision loss; the Portuguese version, however, warned only of temporary vision loss. In late 1975, Lederle sent a circular to foreign manufacturers of the drug, including CQB, advising that the package insert be amended to include a statement that repeated ingestion of the drug could cause irreversible reduced visual acuity.

De Melo filed suit in federal district court in Minnesota, seeking recovery under theories of strict liability, negligence, failure to warn, breach of express and implied waranties, and fraudulent concealment. The thrust of de Melo's claims is that Lederle had complete control over the manufacture, packaging, and labeling of Myambutol produced and distributed by CQB; that Lederle knew or should have known that Myambutol causes permanent, not temporary, loss of vision; and that it intentionally or negligently failed to provide the appropriate warnings with Brazilian manufactured Myambutol.

Lederle moved to dismiss the action on the ground of forum non conveniens, suggesting that Brazil was the more appropriate forum. The district court, applying the balancing test set forth by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), granted the motion contingent upon Lederle's acceptance of four conditions: first, Lederle consent to suit and accept service of process in Brazil in any civil action brought by de Melo on her claim; second, Lederle agree to make available any documents or witnesses within its control necessary for the fair adjudication of any such claim; third, Lederle consent to pay any judgment rendered against it by a Brazilian court in any such action; and fourth, Lederle agree to waive any statute of limitations defense which did not exist at the time de Melo filed the present action.

The district court first found that Brazil presented an adequate alternative forum to resolve this dispute. The court noted that Lederle had consented to jurisdiction and service of process in Brazil, and found, based upon letters from Brazilian attorneys submitted by Lederle, that de Melo's claims stated a cause of action under Brazilian law. The court also rejected de Melo's argument that the lack of contingency fee arrangements in Brazil, delays in civil courts, and absence of punitive damages or recovery for pain and suffering, made meaningful recovery so unlikely as to render Brazil an inadequate forum for this litigation. The court found that de Melo had recourse to legal assistance through contingency fee arrangements or indigent legal services, and would therefore be able to prosecute her suit. It also concluded, based on the Supreme Court's decision in Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981), that the limitations on damages did not render the forum inadequate.

The district court next found that the balance of private interests favored litigation in Brazil. While the court acknowledged that evidence relating to the adequacy of the warnings is located predominantly in the United States, it concluded that litigation in this country would leave Lederle without access to compulsory process to secure evidence in Brazil relating to the manufacture and distribution of Myambutol in Brazil and the circumstances surrounding de Melo's treatment. The converse problem would not exist in Brazil, the court noted, because judgment was conditioned on Lederle's agreement to supply all relevant witnesses and documents in Brazil. The court also noted that suit in the United States would prevent Lederle from impleading potential third party defendants, such as de Melo's physicians or CQB, and thereby prevent resolution of all claims in one trial.

Finally, the district court found that the public interest factors weighed in favor of Lederle. Relying on similar district court cases, the court concluded that Brazil had the strongest interest in regulating a drug that was manufactured, distributed, and ingested in that country, and that had harmed one of its citizens. The court noted, moreover, that under Minnesota choice of law rules, Brazilian law would govern the litigation. The district court, thus, concluded that its lack of familiarity with Brazilian law and that country's greater interest in resolving a "local" controversy both strongly suggested that Brazil was the appropriate forum.

De Melo argues that the district court abused its discretion in dismissing this action on the basis of forum non conveniens. She contends that Brazil is not an adequate alternative forum for tort litigation of this kind because recovery is severely limited, because she is without the financial ability to maintain the suit absent a contingency fee arrangement, which she contends is rare in Brazil, and because the legal system in Brazil generally is "archaic." She further argues that the district court erred in concluding that the balance of private and public interests weighed in favor of a Brazilian forum.

A.

Under the doctrine of forum non conveniens, federal district courts have inherent power to resist the imposition of jurisdiction even where authorized by statute if "the litigation can more appropriately be conducted in a foreign tribunal." Gulf Oil Corp. v. Gilbert, 330 U.S. at 504, 67 S.Ct. at 840 (quoting Canada Malting Co. v. Paterson Steamships, Ltd., 285 U.S. 413, 422-23, 52 S.Ct. 413, 415, 76 L.Ed. 837 (1932)). In Gilbert, the Supreme Court set out a series of considerations to guide the district court in applying the doctrine: initially, the district court must find that there exists an adequate alternative forum for the litigation; the court must then balance factors relative to the convenience of the litigants, referred to as the private interests, and factors relative to the convenience of the forum, referred to as the public interests, to determine which available forum is most appropriate for trial and resolution. Piper Aircraft Corp. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419. The district court's decision to dismiss an action on the grounds of forum non conveniens may be reversed only if it is found to be an abuse of discretion. Id. at 257, 102 S.Ct. at 266. "[W]here the court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonable, its decision deserves substantial deference." Id. ²

B.

The doctrine of forum non conveniens "presupposes at least two forums in which the defendant is amenable to process * * *." Gilbert, 330 U.S. at 506-07, 67 S.Ct. at 842. Thus, "[a]t the outset of any forum non conveniens inquiry, the court must determine whether there exists an alternative forum." Piper Aircraft, 454 U.S. at 254 n. 22, 102 S.Ct. at 265 n. 22. This requirement is satisfied, ordinarily, if the defendant is amenable to process in the alternative jurisdiction, id.; Gilbert, 330 U.S. at 506-07, 67 S.Ct. at 842. Here, the district court ensured this by conditioning dismissal on Lederle's concession to jurisdiction and service of process in Brazil. However, "in rare circumstances," the remedy provided in the alternative forum may be "so clearly inadequate or unsatisfactory that it is no remedy at all * * *." Piper Aircraft, 454 U.S. at 254, 102 S.Ct. at 265. In such cases, the alternative forum is not adequate, for "dismissal would not be in the interests of justice." Id.

De Melo contends that the unavailability under Brazilian law of punitive damages and recovery for pain and suffering suggests that any recovery she may obtain in Brazil will be grossly inadequate to compensate her for her injuries and deter future misconduct by multinational corporations like the defendant. Moreover, she argues, she is financially unable to...