Monsanto Intern. v. Hanjin Container Lines

• Decision Date: 25 June 1991
• Docket Number: No. 88 Civ. 1673 (KMW).,88 Civ. 1673 (KMW).
• Parties: MONSANTO INTERNATIONAL SALES CO., INC., et al., Plaintiffs, v. HANJIN CONTAINER LINES, LTD., Defendant. HANJIN CONTAINER LINES, LTD., Defendant and Third-Party Plaintiff, v. M/V K.H. ENTERPRISE and/or ORIENTAL FAITH, their engines, boilers, etc., et al., Third-Party Defendants.
• Court: U.S. District Court — Southern District of New York

770 F. Supp. 832

MONSANTO INTERNATIONAL SALES CO., INC., et al., Plaintiffs, v. HANJIN CONTAINER LINES, LTD., Defendant.

HANJIN CONTAINER LINES, LTD., Defendant and Third-Party Plaintiff, v. M/V K.H. ENTERPRISE and/or ORIENTAL FAITH, their engines, boilers, etc., et al., Third-Party Defendants.

No. 88 Civ. 1673 (KMW).

United States District Court, S.D. of New York.

June 25, 1991.

COPYRIGHT MATERIAL OMITTED

Caspar R. Ewig and Timothy D. Ford (Hill Rivkins Loesberg O'Brien Mulroy & Hayden), New York City, for plaintiffs.

Lawrence V. Cichanowicz, Joseph F. De May, Jr. (Cichanowicz, Callan & Keane), New York City, for defendant and third-party plaintiff.

James L. Ross and Barbara G. Carnevale (Freehill, Hogan & Mahar), New York City, for third-party defendant Kien Hung Shipping Co., Ltd.

Arthur J. Blank, Jr. and John J. Tomaselli (Hill, Betts & Nash), New York City, for third-party defendant Oriental Overseas Container Lines, Ltd.

OPINION AND ORDER

KIMBA M. WOOD, District Judge.

Defendants move to dismiss this case on the ground of forum non conveniens. Alternatively, third-party defendant Kien Hung Shipping moves to dismiss for lack of personal jurisdiction. On July 31, 1990 the court referred this case to Magistrate Judge Lee for a report and recommendation on all substantive motions. Magistrate Judge Lee issued her recommended decision orally on October 4, 1990, and filed her written Report and Recommendation on November 7, recommending that (1) the court grant third-party defendant's motion to dismiss for lack of jurisdiction without allowing for discovery on the issue, and (2) the court conditionally grant defendant's motion to dismiss for forum non conveniens. Plaintiffs timely filed written objections to the Magistrate Judge's Report; defendant and third-party plaintiff, Hanjin Container Lines, filed an objection to two findings of fact made by the Magistrate Judge. For the reasons set forth below, the court adopts the recommended decision of Magistrate Judge Lee, and grants defendants' motion to dismiss.

Background

This case arises out of the loss of cargo resulting from a collision between two ships in the China Sea, in international waters off Taiwan. Plaintiffs are consignees and holders of bills of lading issued by defendant Hanjin Container Lines ("Hanjin") in connection with the shipment of cargo from a number of United States ports to Hong Kong. The cargo was not intended to go directly from this country to Hong Kong, however. As part of an apparently common practice in the cargo shipping industry, see Parnass Int'l. Trade and Oil Corp. v. Sea-Land Service, 595 F.Supp. 153 (S.D.N.Y.1984), Hanjin transported the cargo in its own ship from the United States to Keelung, Republic of China. There, Hanjin transferred the cargoes to a smaller vessel, the M/V K.H. Enterprise, owned by third-party defendant Kien Hung Shipping Company ("Kien Hung"), for delivery to Hong Kong. En route to her final destination, the M/V Enterprise collided with another ship and sank, with plaintiffs' cargo aboard. Plaintiffs commenced this action to recover for the loss of their cargo.

Discussion

Because defendants' motions are dispositive within the meaning of F.R.Civ.P. 72(b), the court reviews Magistrate Judge Lee's recommendations regarding these motions de novo. 28 U.S.C. § 636(b)(1)(B); 12 C. Wright & A. Miller, Federal Practice and Procedure, § 3076.5 (1991 Supp.).

Plaintiffs object to the following aspects of the Magistrate Judge's Report and Recommendations: (1) her recommendation that the court dismiss plaintiffs' claim against Kien Hung on the ground of lack of personal jurisdiction, or alternatively, on the ground of forum non conveniens; (2) her recommendation that the court dismiss plaintiffs' claim based on the Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C.App. § 1300, et seq., on the ground of forum non conveniens; (3) the Magistrate Judge's refusal to allow plaintiffs' discovery on the issue of jurisdiction; and (4) her failure to condition the forum non conveniens dismissal on an agreement by defendants to waive the statute of limitations in any alternative forum.

I. Motions to Dismiss for Forum Non Conveniens

"The central focus of the forum non conveniens inquiry is convenience." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249, 102 S.Ct. 252, 262, 70 L.Ed.2d 419 (1981). To guide the court in exercising its discretion in deciding a forum non conveniens motion, the court looks to the factors set forth in Justice Jackson's seminal opinion in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). The so-called Gilbert factors call upon a court to consider both "private interest factors," affecting the convenience of the litigants, and "public interest factors," affecting the convenience of the forum and the interests of justice. Id.; Travelers Indem. Co. v. S/S Alca, 710 F.Supp. 497, 500 (S.D.N.Y.1989), aff'd without opinion, 895 F.2d 1410 (2d Cir.1989). The private interest factors include the relative ease of access to sources of proof, the availability of compulsory process for attendance of unwilling witnesses, the cost of obtaining attendance of willing witnesses, as well as "all other practical problems that make trial of a case easy, expeditious, and inexpensive." Borden, Inc. v. Meiji Milk Products Co., 919 F.2d 822, 827 (2d Cir. 1990) (quoting Gilbert, 330 U.S. at 508, 67 S.Ct. at 843). The public factors include the administrative difficulties flowing from court congestion, the "local interest in having localized controversies decided at home," and the interest of having the trial of a case in a forum that is at home with the law that must govern the action. Id. In addition to this weighing of public and private factors, in a federal forum non conveniens inquiry a court must determine whether there exists an alternative forum for the litigation. Piper Aircraft, 454 U.S. at 254 n. 22, 102 S.Ct. at 265 n. 22; Borden, 919 F.2d at 828-29.

A. Private Factors

In applying these factors to the case at bar, Magistrate Judge Lee found that on the record before her "the private interests do not clearly tip in either direction, either for or against this forum." Transcript of Oral Argument Before Mag. Judge Lee ("Tr."), at 79.

Reviewing these findings de novo, this court finds that the private factor balance tips in favor of an alternative forum. The principal issues in this case are likely to involve exactly how the collision occurred, whether the K.H. Enterprise was seaworthy, and whether defendant Hanjin and third-party defendant Kien may take advantage of certain defenses available under COGSA. There is no evidence that any sources of proof necessary for deciding these issues are located in New York, or anywhere else in the United States. Documents relevant to the collision that survived the sinking are likely all located in Taiwan. Moreover, they are written in Chinese. Similarly, the records of the Kaoshuing Harbor Bureau investigation of the collision may be admissible in evidence; these records are also presumably in Chinese and, like the other relevant documents, would have to be translated at significant cost. Translation costs would result not solely from the need to translate documents that one party may intend to offer at a trial in this court. Because English-speaking lawyers would try the case here, the parties would have to translate far more documents and deposition testimony in order for trial attorneys to ascertain what they should or should not offer at trial. Such translation costs are a relevant factor in a forum non conveniens inquiry. See Schertenleib v. Traum, 589 F.2d 1156, 1165 (2d Cir.1978); Travelers Indem., 710 F.Supp. at 501.

The situation regarding non-documentary evidence is similar. Nearly all material witnesses are located in the Far East. The officers and crew of the K.H. Enterprise are all residents of Taiwan. Aff. of Wen Kuo Shih at ¶ 6. Most of the officers and crew of the M/V Oriental Faith are residents of Taiwan and the Philippines. In addition, several parties have initiated lawsuits in Korea and Taiwan involving the cargoes lost when the K.H. Enterprise sank. As a result, counsel in both nations are likely to be familiar with the intricacies of this litigation. While none of the three foreign forums may be perfect, all are far closer to the sources of proof necessary to this case. All of these factors argue in favor of a forum in the Far East.

B. Public Factors

Plaintiffs' principal objections to the Magistrate Judge's recommended ruling involve her consideration of the public factors category of the Gilbert analysis. Plaintiffs argue first that the "overriding policy concern" embodied in COGSA "of protecting the interests of shippers and consignees" militates in favor of allowing a shipper or consignee to maintain its COGSA litigation in federal court. Plntfs' Notice of Objections at 8. Plaintiffs also argue that the Magistrate Judge "overlooked and rejected the evidence that transmittal of the case to Taiwan would assure an adverse decision" because Taiwanese courts would apply a standard of proof "contrary to COGSA's obligations that would never have been applied if the case were litigated in the United States." Id. at 8-9.

In support of their argument that COGSA requires an American forum and bars dismissal on forum non conveniens grounds, plaintiffs cite several cases that interpret COGSA to invalidate forum selection clauses purporting to divest federal courts of jurisdiction in cases where COGSA applies. There is language in several of these cases that supports plaintiffs' argument. In State Establishment for Agricultural Product Trading v. M/V Wesermunde, 838 F.2d 1576, 1581 (11th Cir.), cert. denied, 488 U.S. 916, 109 S.Ct. 273, 102 L.Ed.2d 262 (1988), for example, the Eleventh Circuit held that language in a bill of lading that required foreign arbitration violated the general purpose of COGSA to...