Windt v. Qwest Communications Intern., Inc.

Decision Date28 March 2008
Docket NumberCivil Action No. 04-3026 (GEB).
Citation544 F.Supp.2d 409
PartiesMarcel WINDT and E.T. Meijer, Plaintiffs, v. QWEST COMMUNICATIONS INTERNATIONAL, INC., et al., Defendants.
CourtU.S. District Court — District of New Jersey

Melvyn H. Bergstein, Esq., Walder, Hayden & Brogan, Roseland, NJ, for Plaintiffs.1

Thomas R. Curtin, Esq., Graham, Curtin & Sheridan, PC, Morristown, NJ, for Defendant Qwest Communications International, Inc.

Andrew T. Berry, Esq. and Joseph T. Boccassini, Esq., McCarter & English, LLP, Newark, NJ, for Defendants John A. McMaster and Robert S. Woodruff.

Joel M. Silverstein, Esq., Stern & Kilcullen, Roseland, NJ, for Defendant Joseph P. Naccio.


Typographical corrections entered have no bearing on the holding and dicta contained herein

GARRETT E. BROWN, JR., Chief Judge.

This matter is before the Court on Defendants' motions to dismiss Plaintiffs'" complaint (hereinafter "Complaint") on the grounds of forum non conveniens.2

The procedural history of the case, while lengthy, appears to have little bearing on the issue at bar. Therefore, it shall suffice to note that the Complaint (seeking a jury trial and alleging numerous claims related to securities fraud, breaches of fiduciary duty and various forms of intentional misrepresentation) was filed on June 29, 2004, see Docket Entry No. 1, and this Court issued an order dated June 17, 2005, refusing to compel arbitration and stay the instant proceedings. See Docket Entry No. 46. Following this decision, Plaintiffs sought discovery, see Docket Entries No. 53, 59, 75-76, and limited discovery was conducted. On February 21, 2006, Defendant Qwest Communications International, Inc. (hereinafter "Qwest") filed the instant motion (hereinafter "Motion"), see Docket Entry No. 66, and on April 13, 2006, the remaining Defendants filed their joint statement in support of Qwest's Motion to dismiss Plaintiffs' Complaint. See Docket Entry No. 68. Plaintiffs filed their opposition to Qwest's Motion (hereinafter "Opposition") on April 18, 2006, see Docket Entry No. 69, and Qwest filed its reply (hereinafter "Reply") on May 10, 2006. See Docket Entry No. 71.

The matter was transferred to the undersigned on August 7, 2006. This Court has reviewed all documents filed and submitted, and has decided the pending motions without oral arguments pursuant to Rule 78 of Civil Procedure. For the following reasons, Defendants' motions to dismiss will be granted.


Plaintiffs are Dutch attorneys acting as bankruptcy trustees after being appointed by a Dutch court to represent the estate of (a) KPNQwest N.V. (hereinafter "KPNQwest," a Dutch corporation established as a joint-venture between Koninklijke KPN N.V., a telecommunication company having its seat in Hoofddorp, Netherlands, and Qwest, a Delaware-incorporated entity having its principal place of business in Denver, Colorado), and (b) KPNQwest's wholly-owned Netherlands-based and European subsidiaries.3 See Compl. ¶¶ 1, 3, 20-22.

Plaintiffs brought this action against four identified Defendants, namely, Qwest, two former KPNQwest's directors and KPNQwest's former CEO.4 See id. ¶¶ 22-25. In their Complaint, Plaintiffs alleged that KPNQwest was injured by "fraud, deceit, corporate mismanagement and other misconduct of Defendants]," id. ¶ 1, and clarified that (a) "Defendants' fraud and mismanagement result[ed] in KPNQwest's resulting increasing insolvency and bankruptcy," id. at 67-96, and (b) KPNQwest's injuries were amplified by Defendants' "fraud and looting."5 Id. at 97-103. Plaintiffs based their choice of venue on the domicile of two Defendants, that is, KPNQwest's former CEO and one of the directors, and asserted that the United States was the proper forum because: (1) "[significant U.S. interests are at stake in this dispute [since] much of the ... alleged [wrongdoing] occurred in the United States"; (2) four KPNQwest Board meetings took place somewhere in the U.S.; and (3) while being at unidentified locations somewhere in the U.S., Defendants participated in five conference calls of non-U.S. KPNQwest's Board's meetings. See id. ¶¶ 23, 25, 28.

In response to Plaintiffs' Complaint, Defendants' Motion asserts that (1) one group of Plaintiffs' allegations is, effectively, a Racketeer Influenced and Corrupt Organizations ("RICO") claim "expressly barred by the Private Securities Litigation Reform Act of 1995 (`PSLRA')," 18 U.S.C. § 1964(c), Mot., Mem. at 1, and (2) all other claims are

Dutch law claim[s that belong in] the Netherlands, where KPNQwest was organized and headquartered[,] and where a Dutch court oversees its bankruptcy.... The events preceding KPNQwest's bankruptcy are already the subject of a separate litigation, an arbitration, and an investigatory proceeding that are all pending in the Netherlands.

Mot., Mem. at 2. Defendants further state that, regardless of whether or not the RICO claim is deemed viable,6 Defendants are entitled to dismissal on the grounds of forum non conveniens since: (1) "this case is about the demise of a Dutch company that did business in the Netherlands, not in New Jersey," id. at 10; (2) "the majority of the relevant documents and witnesses are in the Netherlands," id.; (3) "the Netherlands [has interest in] resolution of the issues relating to the causes of KPNQwest's bankruptcy, [and] certain Dutch KPNQwest['s] shareholders have [already] initiated proceedings [against the Defendants named in this action, as well as against numerous Dutch parties, like KPNQwest's accountants, auditors controlling banks and KPNQwest's Dutch officers and directors] before ... a commercial [division of the] court in the Netherlands [on the basis of] allegations of corporate mismanagement," the very claim set forth in the case at bar, id. at 10-11 (citing Decl. of Maarten Das ¶ 9 (hereinafter "Das Decl."));7 and (4) Plaintiffs, Dutch attorneys, have no interest in pursing their claims in New Jersey. See id. at 11.

I. Doctrine of Forum Non Conveniens

Forum non conveniens is Latin for "inconvenient forum." The common law doctrine of forum non conveniens arose from the doctrine of forum non competens developed in Scotland in the early 19th century as a discretionary device designed to allow trial courts to decline to exercise jurisdiction when it appeared that the convenience of the parties and the interests of justice would be better served if another court heard the action. Similarly, the modern doctrine of forum non conveniens is a common law principle that gives courts the discretion to decline exercising jurisdiction over certain cases where the underlying principles of justice and convenience favor dismissal. In 1947, the United States Supreme Court announced the factors to be considered in applying the doctrine of forum non conveniens in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055. In 1981, the Court further explained the doctrine in Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981).

The Piper decision responded to the world's legal and economic developments. See id. at 244-49, 102 S.Ct. 252. The Court in Piper addressed foreign forum shoppers by giving little deference to their decision to litigate in the United States and redefined the doctrine as a balancing test. See id. at 249-50, 102 S.Ct. 252. Basically, the Piper Court utilized a twoprong analysis: (1) whether an adequate alternate forum was available; and (2) if so, whether the balancing of the private and public convenience factors weighed heavily in favor of litigation in the alternate forum.8 See Piper, 454 U.S. at 247-52, 102 S.Ct. 252. The defendant, as the moving party, bears the burden of proof on both these matters. See id. at 258, 102 S.Ct. 252 ("Of course, defendants must provide enough information to enable the District Court to balance the parties' interests"). Once the defendant has satisfied the threshold requirement by illustrating that an adequate alternate forum is available, the courts should balance convenience interests. See id. at 247-52, 102 S.Ct. 252. When considering this second prong, the courts utilize the balancing test introduced in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), which was later reaffirmed in Piper. See Piper, 454 U.S. at 248-52, 255-56, 102 S.Ct. 252. In a nutshell, the courts weigh the potential burden of litigation on the parties and on the chosen forum against dismissal. See id. at 255,102 S.Ct. 252. The Court in Gilbert categorized the convenience factors pertaining to the parties as private interests and those relating to the forum as public interests.9 See id. at 241 n. 6, 102 S.Ct. 252 (discussing the Gilbert decision). If an adequate alternate forum is available and these private and public interests favor dismissal, the court will grant the motion for dismissal under the doctrine of forum non conveniens. See id. at 241, 102 S.Ct. 252.

The courts, however, do not conduct their analysis in a vacuum. They conduct their balancing in light of the degree of deference the plaintiffs choice of forum deserves. The court's deference for the plaintiff plays a significant role in defining the weight of the defendant's burden in satisfying the second prong. See id.

Generally, courts view the plaintiffs choice of forum with great deference. See id. at 255,102 S.Ct. 252. Where a plaintiff sues in plaintiffs home forum, it is presumed that the plaintiff chose the forum for the sake of convenience. See id. at 255-56, 102 S.Ct. 252. The defendant may rebut this presumption, however, and a court may exercise its discretion to dismiss the case where: (1) an alternative forum with jurisdiction over the case exists; and (2) to litigate in the plaintiffs chosen forum would result in "oppressiveness and vexation to a defendant ... out of all...

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