Vivendi Sa v. T-Mobile Usa Inc.

• Decision Date: 02 November 2009
• Docket Number: No. 08-35561.,08-35561.
• Citation: 586 F.3d 689
• Parties: VIVENDI SA; Vivendi Holding I Corp., Plaintiffs-Appellants, v. T-MOBILE USA INC.; T-Mobile Deutschland GmbH T-Mobile International AG; Deutsche Telekom AG; Zygmunt Solorz-Zak, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

586 F.3d 689

VIVENDI SA; Vivendi Holding I Corp., Plaintiffs-Appellants, v. T-MOBILE USA INC.; T-Mobile Deutschland GmbH T-Mobile International AG; Deutsche Telekom AG; Zygmunt Solorz-Zak, Defendants-Appellees.

No. 08-35561.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted August 3, 2009.

Filed November 2, 2009.

Lanny J. Davis, Garret G. Rasmussen, Adam W. Goldberg, Orrick, Herrington & Sutcliffe LLP, Washington, D.C., for the appellants.

Samuel A. Keesal, Jr., Ben Suter, Robert J. Bocko, Keesal, Young & Logan, San Francisco, CA, for the appellees.

Appeal from the United States District Court for the Western District of Washington, James L. Robart, District Judge, Presiding. D.C. No. 2:06-cv-01524-JLR.

Before: HARRY PREGERSON, JOHN T. NOONAN, and CARLOS T. BEA, Circuit Judges.

BEA, Circuit Judge:

This appeal concerns a French corporation's allegations that a German corporation and a Polish billionaire colluded fraudulently in Europe to wrest control of a Polish wireless telephone company from the French corporation. The French corporation sought a remedy¹ for these alleged wrongs in—of all places—the United States District Court for the Western District of Washington. The district court dismissed the case on the ground of forum non conveniens. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

The Parties

Vivendi S.A. and Vivendi Holding I Corp.² (Vivendi Holding) (collectively Vivendi) appeal the district court's order dismissing their complaint on forum non conveniens grounds. Vivendi S.A. is a French corporation. Vivendi Holding is a Delaware corporation.

Vivendi filed suit against Deutsche Telekom AG, T-Mobile International AG, T-Mobile Deutschland GmbH, T-Mobile USA, Inc. (collectively T-Mobile), and Zygmunt Solorz-Zak (Solorz) in the Western District of Washington, asserting a claim under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962, and a claim for common-law fraud. Deutsche Telekom, T-Mobile Deutschland, and T-Mobile International are German corporations. T-Mobile USA is a Delaware corporation with its principal place of business in Bellevue, Washington. Solorz is a Polish citizen.

Factual and procedural background

The facts in this case, spanning ten years of European business transactions and litigation, could be difficult to follow. Therefore, we relate here only those facts essential to the disposition of this appeal.³

I. The battle for control of Polska Telefonia

In 1999, both T-Mobile Deutschland and Vivendi S.A. took an interest in the Polish wireless telephone company, Polska Telefonia Cyfrowa Sp. z o.o. (Polska Telefonia). At the time, Polish law precluded foreign investors from holding more than 49% of the shares of any Polish telecommunications company.⁴ The German company T-Mobile Deutschland, which at the time held a 22.5% interest in Polska Telefonia, acquired an additional 26.5% interest from other shareholders, for a total of 49%.

While T-Mobile Deutschland was buying up shares, so was Vivendi S.A., a French corporation. To facilitate its intended takeover of Polska Telefonia, Vivendi S.A. partnered with a Polish company, Elektrim S.A. Vivendi S.A. and Elektrim established a joint venture that operated through a holding company called Telco. Over time, Vivendi S.A. invested $2.5 billion to acquire a 51% interest in Telco. Pursuant to the joint venture agreement, Elektrim transferred its 37.1% interest in Polska Telefonia to Telco, along with an additional interest it acquired from other shareholders, for a total of 51% of the Polska Telefonia stock.

On December 7, 2000, T-Mobile Deutschland initiated arbitration against Elektrim in Vienna. T-Mobile Deutschland claimed that Elektrim's transfer of its shares to Telco materially breached Polska Telefonia's shareholder agreement.⁵ The shareholder agreement bound all Polska Telefonia shareholders and provided certain shareholders, including T-Mobile Deutschland, the option to buy the shares of any shareholder who materially breached the agreement.

In 2003, while the arbitration was pending, Solorz purchased a controlling interest in Elektrim, which at the time held a joint venturer's interest in Telco's Polska Telefonia shares. Vivendi alleges that Solorz secretly agreed to help T-Mobile Deutschland gain control of Polska Telefonia. To this end, Elektrim terminated its joint venture agreement with Vivendi S.A. Vivendi S.A. and Elektrim, however, retained their joint ownership of Telco.

On November 26, 2004, the Vienna arbitration panel held that Elektrim's transfer of its shares to Telco was ineffective because Elektrim transferred its shares to Telco without the consent of all of the members of Polska Telefonia's Board of Directors, as required by the Polska Telefonia shareholder agreement. The panel further held that, if Elektrim did not recover its shares from Telco within two months, Elektrim would be in material breach of the shareholder agreement, thus triggering T-Mobile Deutschland's options to buy Elektrim's shares. A Warsaw Regional Court granted Elektrim's petition for recognition of the arbitral award.

Relying on this recognition order, T-Mobile Deutschland and Elektrim took over the Polska Telefonia management board. Elektrim and T-Mobile Deutschland then secured an order from the Warsaw Regional Court changing the Polish government's official share register to show Elektrim alone, and not Vivendi S.A., as the owner of the Telco shares.

In February 2005, Everest, a Miami-based company, purchased Elektrim bonds. By this time, however, Vivendi alleged Solorz used his controlling interest in Elektrim to begin stripping Elektrim of its assets. Elektrim failed to make required payments on the bonds, and the trustee for the bonds filed a petition in Polish court to put Elektrim into bankruptcy to prevent Solorz from further reducing Elektrim's assets. The bankruptcy court issued an injunction barring any transfer of Elektrim's Polska Telefonia shares.⁶

By May 2005, Elektrim had failed to recover its Polska Telefonia shares from Telco, so T-Mobile Deutschland again initiated arbitration in Vienna. This time, T-Mobile Deutschland sought a declaration that it was entitled to exercise its option to buy Elektrim's shares. While the arbitration was pending, Deutsche Telekom approached Vivendi S.A., offering to negotiate an agreement that would allow Vivendi S.A. to recoup much of its $2.5 billion investment in Polska Telefonia.⁷ Before any agreement was reached, the Vienna arbitration panel held that T-Mobile Deutschland could exercise its option to buy Elektrim's shares.

On August 28, 2006, despite the Polish bankruptcy court's injunction barring Elektrim from transferring its Polska Telefonia shares, Elektrim transferred its shares to T-Mobile Deutschland for over 600 million euros. In light of the influx of cash to Elektrim, the trustee for the bonds withdrew the bankruptcy petition. This allowed Solorz to resume stripping Elektrim's assets, which prevented Everest from maximizing the value of the bonds.⁸

Vivendi has initiated at least twenty litigation and arbitration actions across Europe to recover its investment in Polska Telefonia.

II. The instant litigation

On October 23, 2006, Vivendi S.A. filed a complaint against T-Mobile and Solorz in the U.S. District Court for the Western District of Washington. T-Mobile filed a motion to dismiss based on, among other grounds, forum non conveniens on May 17, 2007.

Less than two weeks after T-Mobile filed its motion to dismiss, Vivendi Holding acquired from Everest its Elektrim bonds and all claims relating to the bonds. Vivendi S.A. then sought leave to amend its complaint to add Vivendi Holding as a plaintiff. The district court granted Vivendi S.A.'s motion to amend its complaint, and Vivendi filed its Third Amended Complaint on August 1, 2007. T-Mobile again filed a motion to dismiss the complaint, as did Solorz. The district court held a hearing on the motions, and, on June 5, 2008, the district court dismissed Vivendi's complaint on forum non conveniens grounds, concluding that Poland was an adequate alternative forum.⁹ Vivendi S.A. timely appealed.

Standard of Review

We review claims of error in a trial court's forum non conveniens dismissal for "clear abuse of discretion." Ravelo Monegro v. Rosa, 211 F.3d 509, 511 (9th Cir. 2000). "A district court may abuse its discretion by relying on an erroneous view of the law, by relying on a clearly erroneous assessment of the evidence, or by striking an unreasonable balance of relevant factors." Id.

Analysis

To grant a motion to dismiss on forum non conveniens grounds, a district court must determine "(1) whether an adequate alternative forum exists, and (2) whether the balance of private and public interest factors favors dismissal." Lueck v. Sundstrand Corp., 236 F.3d 1137, 1142 (9th Cir.2001) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n. 22, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)). Vivendi contends the district court abused its discretion (1) by affording insufficient deference to Vivendi's choice of forum and (2) by unreasonably balancing the public and private interest factors.

I. The district court did not err by granting little deference to Vivendi's choice of forum.

Vivendi contends the district court gave insufficient deference to its choice of forum. Under our law, foreign plaintiffs are entitled to less deference than are plaintiffs who file suit in their home forums. See Piper, 454 U.S. at 256, 102 S.Ct. 252. Vivendi S.A., a French company, filed this action related to European transactions in a forum far from its home. Therefore, the district court did not abuse its discretion when it afforded Vivendi S.A.'s choice of forum "little deference."

Moreover, this court's review of a district court's forum non conveniens determination is highly deferential. See id. at 257, 102 S.Ct. 252 ("It may be reversed only where there has...