“Gol” Court Grants Defendants’ Motion to Dismiss on Grounds of Forum Non Conveniens, Finding Brazilian Forum “Significantly Preferable”
August 11, 2008
Lyndall M. "Lyndy" Lambert- Miami
Lindsay H. Tasher- New York
On July 2, 2008, the United States District Court for the Eastern District of New York conditionally granted motions to dismiss based on forum non conveniens in the multidistrict litigation claims for wrongful death brought on behalf of family members of passengers and crew in the Gol Linhas Inteligentes S.A. Boeing 737 flight (Gol), which crashed in the Amazon rainforest after a mid-air collision with a private Embraer Legacy aircraft on September 29, 2006.1 All 154 passengers and crew aboard the Gol aircraft were killed, but the Legacy aircraft landed safely with minor damage. The plaintiffs and their decedents were all Brazilian citizens and residents; none were residents or citizens of the United States.
The plaintiffs brought suit in New York, Florida and elsewhere against Honeywell, the designer of the aircraft avionics components in the Gol aircraft; ExcelAire, the New York owner of the Legacy aircraft involved in the collision; and New York pilots Joseph Lepore and Jan Paladino, who were in control of the ExcelAire aircraft at the time of the accident. The other defendants were Raytheon, Lockheed Martin and AmazonTech, all of whom allegedly worked on the radar system for the Amazon region; and ACSS, the alleged manufacturer of the traffic alert and collision avoidance system on the ExcelAire jet.
Determining the Forum
The modern standard for forum non conveniens was established by Piper Aircraft v. Reyno2 and subsequently refined into a three-step test by the Second Circuit in Iragorri v. United Tech. Corp.3 In systematically analyzing the standards from both of those cases, the Court concluded that Brazil was a more appropriate venue for this litigation and conditionally dismissed the lawsuits. As Iragorri held, a court, when deciding a motion to dismiss for forum non conveniens, must determine (1) the degree of deference properly accorded the plaintiffs’ choice of forum; (2) whether the defendants’ proposed alternative forum is available and adequate to adjudicate the parties’ dispute; and (3) the balance between the public and private interests implicated in the choice of forum.4 Further, the party making the motion bears the burden of persuasion on each element, and the extent of the defendants’ burden will be determined by the amount of deference granted the plaintiffs’ choice of forum.5
The Court rejected the plaintiffs’ argument that their choice of forum was entitled to full deference because Brazil and the United States had entered into a treaty guaranteeing Brazilian citizens equal access to U.S. courts. Relying on the treatment of a comparable Venezuelan treaty in other litigation, the Court reasoned that the language in such treaties does not necessarily provide Brazilians who are not located in the United States with the right to bring suit in U.S. courts for events that took place abroad. The Court concluded that the plaintiffs were entitled to only the reduced deference afforded an ordinary, foreign-citizen plaintiff.
After finding that the plaintiffs’ choice of forum in this case was “decidedly inconvenient” based on their residence, the Court turned its attention to the next Iragorri factor: whether Brazil is an available and adequate forum in which to litigate these cases. Two important issues in this analysis are whether all defendants are amenable to service of process in the alternative forum, and whether that forum permits litigation of the subject matter of the dispute.6 All of the defendants consented to jurisdiction in Brazil, though the two ExcelAire pilots (who face criminal prosecution in Brazil) did not agree to appear in person in Brazil.7
As to the adequacy requirement, the plaintiffs had argued that litigation in Brazil would be highly fragmented and protracted. The Court was not persuaded, holding that, in order to establish successfully the inadequacy of a forum, a plaintiff would have to show that they are highly unlikely to obtain basic justice in the foreign jurisdiction.8 A mere showing of some inconvenience and delay in the courts of the alternative forum is not sufficient to preclude dismissal based on forum non conveniens.
Consideration of Private- and Public-Interest Factors
The Court next analyzed the private and public interest
factors regarding a U.S. forum versus a Brazilian forum.
Private Interest Factors
The private interest factors to be weighed are (1) the relative ease to access to sources of proof; (2) the availability of compulsory process for attendance of unwilling witnesses; (3) the cost of obtaining attendance of willing witnesses; (4) issues concerning the enforceability of a judgment; and (5) all other practical problems that make trial of a case easy, expeditious and inexpensive.9 In applying these private interest factors to the Gol case, the Court noted that multiple Brazilian entities involved in the accident, such as Gol and the Brazilian air traffic controllers, were not subject to personal jurisdiction in New York. Further, the parties might have difficulty compelling testimony, accessing evidence and sources of proof, and enforcing judgments in the United States from and against Brazilian entities. In the event any defendants were found liable in the United States, contribution litigation would then likely ensue in Brazil against the Brazilian entities who were not subject to U.S. jurisdiction. Finally, because civil litigation was already underway against Gol in Brazil, the Court found that the private interest factors weighed in favor of dismissal on the grounds of forum non conveniens.
Public Interest Factors
The public interest factors to be weighed are (1) the administrative difficulties flowing from court congestion; (2) the local interest in having controversies decided at home; (3) the interest in having a trial in a forum that is familiar with the law governing the action; (4) the avoidance of unnecessary problems in conflict of laws or in the application of foreign law; and (5) the unfairness of burdening citizens in an unrelated forum with jury duty.10 Here, while “the local interest in this matter is much stronger in Brazil than in the United States, these cases are not so unrelated to the United States that it would be unfair to burden its citizens, in the districts in which these cases were commenced, with jury duty on this matter.” Further, the cases involved U.S. corporations, two pilot-residents of the United States, and aircraft equipment created and regularly used in the United States. Consequently, the local interest factors were inconclusive. The Court then found it likely that it would have to conduct multiple choice-of-law analyses and interpret Brazilian law if the cases remained in the United States. Avoidance of these conflict of laws issues supported dismissal.
The analysis of the private and public interest factors was not clear cut. However, the Court recognized substantial similarities with the Piper case – the lack of jurisdiction over potentially liable parties and of compulsory process over witnesses, as well as the location of much of the evidence in the alternative forum – and thus concluded that New York was “genuinely inconvenient” and a Brazilian forum was “significantly preferable.” Therefore, having fully assessed the Piper and Iragorri factors, the Court conditionally granted the defendants’ motion to dismiss on the ground of forum non conveniens.
Conditions of Dismissal
Although the defendants were said to have previously agreed to the same or similar concessions to facilitate dismissal, the Court entered the dismissal subject to four conditions: (1) if the Brazilian courts refused to exercise jurisdiction or if the defendants refused to submit to jurisdiction, the plaintiffs may move to reopen their cases in New York; (2) the defendants are precluded from raising any statute of limitations defense not available when the lawsuits were originally filed in the United States, provided that the plaintiffs file their actions in Brazil within 120 days from the date of the order; (3) the defendants are required to produce any witnesses or documents within their control that cannot be subpoenaed in Brazil, and if required by the Brazilian courts, such witnesses must appear for live testimony (except for the ExcelAire pilots, who may appear by deposition or letters rogatory); and (4) the defendants shall pay any post-appeal, enforceable judgment entered against them by a Brazilian court.
The overall tone of the opinion was generally regarded as objective and fair. But the Court had some strong words about the typical defense contention in a forum non conveniens analysis that a foreign plaintiffs’ choice of a U.S. forum is entitled to little deference because they are “forum shopping” for a generous court. The Court stated that the “often pejorative connotation inherent in the label ‘forum shopping’ is generally undeserved.” The Court acknowledged that, in cross-border litigation, plaintiffs often try to select a U.S. forum to maximize their recovery. Conversely, defendants will generally seek to dismiss the U.S. actions to a foreign forum to minimize their exposure. The Court “put little stock” in the defendants’ reliance on press releases by the plaintiffs’ attorneys advising potential clients that U.S. recoveries are up to six times greater than in Brazil. As stated by the Court, there is “nothing immoral or unsavory about plaintiffs making such choices or defendants seeking to undo them,” assuming the requirements of Federal Rule of Civil Procedure 11 are met.11
For more information, contact:
Lyndy Lambert
305.789.7767
lyndall.lambert@hklaw.com
Lindsay Tasher
212.513.3342
lindsay.tasher@hklaw.com
toll free: 1.888.688.8500
1 In
re Air Crash Near Peixoto de Azeveda, Brazil, on Sept. 29, 2006, No. 07 MD 1844 (E.D.N.Y. July 2, 2008).
2
Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981).
3
Iragorri v. United Tech. Corp., 274 F.3d 65 (2d Cir. 2001).
4
Id. at 73.
5
Id. at 71.
6
Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 75 (2d Cir. 2003) (citing Piper, supra).
7 The Court specifically noted, however, that the Brazilian federal judge overseeing the criminal case had determined that pursuant to the Mutual Legal Assistance Treaty between Brazil and the United States, the two ExcelAire pilots could be examined by way of written questions and did not need to appear in person in Brazil to testify.
8
Quoting In re Ski Train Fire in Kaprun, Aus. on Nov. 11, 2000, 499 F. Supp. 2d 437, 443 (S.D.N.Y. 2007).
9
Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).
10 Id. at 508-09.
11 Although the Court did not specify the particular portion of Federal Rule of Civil Procedure 11 on which it relies, the Court is likely suggesting that the parties must fulfill the requirements of Rule 11(b) and simply set forth non-frivolous, proper assertions as to why their particular desired forum is the most appropriate one in which to litigate.