Fresh Results, LLC v. ASF Holland, B.V. , 921 F.3d 1043 ( 2019 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-11595
________________________
D.C. Docket No. 0:17-cv-60949-BB
FRESH RESULTS, LLC,
a Delaware limited liability company,
Plaintiff-Appellant,
versus
ASF HOLLAND, B.V.,
a Dutch corporation,
Defendant-Appellee,
TOTAL PRODUCE, PLC,
an Irish public limited company,
Defendant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(April 22, 2019)
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Before WILLIAM PRYOR and NEWSOM, Circuit Judges, and ROSENTHAL, *
District Judge.
WILLIAM PRYOR, Circuit Judge:
The main issue presented by this appeal is whether the district court abused
its discretion when it dismissed a complaint for forum non conveniens because it
failed to consider all relevant public factors for each forum after determining that
the private factors for the litigants were not in equipoise. Fresh Results, an
American company, arranged bulk shipments of blueberries for ASF Holland, a
Dutch company that repacks wholesale produce to sell to European customers.
ASF Holland created reports about the results of its inspection of the shipments,
and those reports determined the final price it paid for the blueberries. Fresh
Results filed a complaint against ASF Holland in the Southern District of Florida,
alleging that it had falsified the reports and fraudulently deflated the price. ASF
Holland moved to dismiss the complaint on the ground that the Netherlands was a
more convenient forum for the suit, and the district court agreed. After concluding
that the interests of the litigants—the so-called “private factors”—were not in
equipoise, the district court ruled that it need not consider all relevant “public
factors” for each forum and dismissed the complaint so that the litigation could
proceed in the Netherlands. The district court derived the equipoise standard from
*
Honorable Lee H. Rosenthal, Chief United States District Judge for the Southern District of
Texas, sitting by designation.
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dicta in our precedent, La Seguridad v. Transytur Line, 707 F.2d 1304, 1307 (11th
Cir. 1983), that we have since recited in dicta in other cases. Fresh Results
contends that the district court abused its discretion when it weighed the private
factors in favor of dismissal and when it failed to consider the relevant public
factors. Because we agree that the district court abused its discretion when it failed
to consider the relevant public factors and committed two errors in its analysis of
the private factors, we vacate and remand.
I. BACKGROUND
This appeal concerns a blueberry deal that soured. Fresh Results, an
American company, acts as a sales agent for growers of produce in South America.
In 2015, Fresh Results arranged bulk shipments of blueberries for two seasons for
ASF Holland, a Dutch company that buys wholesale produce to repack and sell to
customers in Europe.
To initiate a shipment, ASF Holland would request blueberries from Fresh
Results at a reference price that purportedly reflected its anticipated net returns.
When Fresh Results received the request, it would coordinate with the growers to
fulfill the order. The growers would send the blueberries from South America
directly to the Netherlands by air freight. When the shipment arrived, ASF Holland
was responsible for inspecting, sorting, and repacking the blueberries in a timely
manner. It would then send Fresh Results several reports on the shipment, with
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details of its inspection, sorting, sales prices, and expenses. Fresh Results used the
reports to adjust the reference price and create an invoice for ASF Holland with the
final price. ASF Holland would remit the invoice amount to Fresh Results in
Florida.
During the second season, one of the growers hired an auditor to make an
unannounced inspection of a blueberry shipment at ASF Holland’s facility in the
Netherlands. The auditor allegedly discovered that the blueberries were still in
their original freight package, even though ASF Holland had reported to Fresh
Results that the shipment had been inspected, sorted, and repacked. After learning
of the auditor’s inspection, Fresh Results demanded that ASF Holland pay the
market price for each shipment of blueberries it had received, but ASF Holland
refused.
Fresh Results filed a complaint, which it later amended, against ASF
Holland in the Southern District of Florida. Fresh Results asserted claims of breach
of contract, negligent misrepresentation, fraud, conversion, and tortious
interference with its business relationship with the growers. It alleged that ASF
Holland fraudulently promised a high reference price but then deflated the actual
price it paid by sending false reports. According to Fresh Results, ASF Holland
manipulated the price by understating the amount paid by its European customers
and by falsely inflating its expenses in the reports. ASF Holland informed the
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district court that it would pursue counterclaims against Fresh Results for sending
substandard blueberries.
ASF Holland then moved to dismiss the complaint for failure to state a claim
and forum non conveniens. It argued that the Netherlands was a more convenient
forum for the dispute. ASF Holland presented an affidavit from Ronald Jongbloed,
its managing director, in which he asserted that the important documents and
witnesses are in the Netherlands. And it presented an affidavit from Sebastiaan
Moolenaar, a Dutch lawyer, in which he asserted that Fresh Results can obtain
relief for all its claims in the Netherlands and that the United States has no treaty
with the Netherlands for the reciprocal enforcement of judgments.
The district court granted the motion on the ground that forum non
conveniens warranted dismissal. Although it explained that a strong presumption
favors Fresh Results’ choice of forum, the court ruled that the private factors
weighed in favor of dismissal. It reasoned that most sources of proof needed to
prove Fresh Results’ claims are in the Netherlands, where the blueberries were
delivered, repacked, and sold and where the reports were allegedly falsified.
Although Fresh Results contended that the South American growers were willing
to participate in litigation only in the United States and not in the Netherlands, the
district court disregarded the growers’ testimony as a source of proof because they
were not parties. And it weighed in favor of dismissal the possibility for view of
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ASF Holland’s facility in the Netherlands. Because the United States has no treaty
with the Netherlands for the reciprocal enforcement of judgments, the court
concluded that Fresh Results would inevitably have to litigate in the Netherlands to
enforce a judgment if it obtained one, so it weighed the enforceability of a
judgment in favor of dismissal.
The district court decided that it need not consider the public factors if the
private factors were not “in equipoise or near equipoise,” relying on King v.
Cessna Aircraft Company, 562 F.3d 1374, 1382 (11th Cir. 2009) (quoting La
Seguridad, 707 F.2d at 1307). It then concluded that all “the private interest factors
align in favor of Defendant’s position and are thus not [in] equipoise, [so] it need
not engage in an exhaustive analysis of all public interest[] factors.” The court also
concluded that “[n]onetheless, the public interest factors favor dismissal as well,”
but it discussed only one public factor, choice of law, and weighed that factor in
favor of dismissal because Dutch law would likely apply. The court dismissed the
complaint for forum non conveniens and declined to decide the other grounds for
dismissal asserted by ASF Holland.
II. STANDARD OF REVIEW
Because “[t]he forum non conveniens determination is committed to the
sound discretion of the trial court,” we review for abuse of discretion. Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981). “[W]here the court has
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considered all relevant public and private interest factors, and where its balancing
of these factors is reasonable, its decision deserves substantial deference.” Id.
III. DISCUSSION
Under the doctrine of forum non conveniens, a district court may decline to
exercise its jurisdiction when a foreign forum is better suited to adjudicate the
dispute. See Kolawole v. Sellers, 863 F.3d 1361, 1369 (11th Cir. 2017). The
“central purpose” of forum non conveniens is “to ensure that the trial is
convenient.” Id. (citation and internal quotation marks omitted). The doctrine
should not be invoked “lightly . . . because it effectively deprives the plaintiff of
his favored forum,” id., and so a defendant bears the burden of justifying dismissal
based on forum non conveniens, La Seguridad, 707 F.2d at 1309. To satisfy this
burden, the defendant must establish that “(1) an adequate alternative forum is
available, (2) the public and private factors weigh in favor of dismissal, and (3) the
plaintiff can reinstate his suit in the alternative forum without undue inconvenience
or prejudice.” Tazoe v. Airbus S.A.S., 631 F.3d 1321, 1330 (11th Cir. 2011)
(quoting Leon v. Millon Air, Inc., 251 F.3d 1305, 1310–11 (11th Cir. 2001)).
The second part of the forum non conveniens analysis—the balancing of the
private and public factors—is a “comparative inquiry [that] requires the district
court to weigh the ‘relative’ advantages and disadvantages of each respective
forum.” Id. at 1331. The private factors “pertain to the interests of the participants
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in the litigation.” Id. One of these factors is “the relative ease of access to sources
of proof,” which includes the “availability of compulsory process for attendance of
unwilling, and the cost of obtaining attendance of willing, witnesses.” Gulf Oil
Corp. v. Gilbert, 330 U.S. 501, 508 (1947); see also Piper Aircraft, 454 U.S. at
241 n.6. Other factors are the “possibility of view of premises, if view would be
appropriate to the action” and the enforceability of a judgment, if one is obtained,
Gulf Oil, 330 U.S. at 508. And a court may consider “all other practical problems
that make trial of a case easy, expeditious and inexpensive.” Id. The public factors
“pertain to the relative interests of the two fora.” Tazoe, 631 F.3d at 1333. Among
other things, the public factors consider “the administrative difficulties flowing
from court congestion,” “the ‘local interest in having localized controversies
decided at home,’” and “the unfairness of burdening citizens in an unrelated forum
with jury duty.” Piper Aircraft, 454 U.S. at 241 n.6 (quoting Gulf Oil, 330 U.S. at
509). A court may also consider what law will govern the action, including “the
avoidance of unnecessary problems in conflicts of laws” and “the application of
foreign law.” Id.
Fresh Results challenges the balancing of the private and public factors by
the district court. Fresh Results argues that the district court abused its discretion
both when it weighed the private factors in favor of dismissal and when it failed to
consider all the relevant public factors. We agree.
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We divide our discussion in two parts. First, we explain that the district court
abused its discretion when it failed to consider the public factors after determining
that the private factors were not in equipoise. Second, we explain that the district
court committed two errors in its analysis of the private factors.
A. The District Court Abused Its Discretion when It Failed to Consider the
Relevant Public Factors After Determining that the Private Factors Were
Not in Equipoise.
Fresh Results argues that the district court abused its discretion when it
failed to consider all relevant public factors after concluding that the private factors
were not in equipoise. The equipoise standard employed by the district court comes
from dicta in our caselaw. Although our holdings are precedential, our dicta are
not. See United States v. Caraballo-Martinez, 866 F.3d 1233, 1244 (11th Cir.
2017). Dicta refer to “those portions of an opinion that are not necessary to
deciding the case then before us.” Id. (citation and quotation marks omitted). In
contrast, our holdings “constitute the precedent, as a point necessarily decided” in
that case. Bryan A. Garner et al., The Law of Judicial Precedent § 4, at 44 (2016)
(emphasis omitted); accord Powell v. Thomas, 643 F.3d 1300, 1304–05 (11th Cir.
2011) (explaining that “a holding is comprised both of the result of the case and
those portions of the opinion necessary to that result by which we are bound”
(citation and internal quotation marks omitted)). And we have explained that,
“regardless of what a court says in its opinion, the decision can hold nothing
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beyond the facts of that case.” Edwards v. Prime, Inc., 602 F.3d 1276, 1298 (11th
Cir. 2010).
Our first mention of the equipoise standard occurred in dicta in La
Seguridad v. Transytur Line, 707 F.2d 1304, 1307 (11th Cir. 1983). In that
decision, we quoted at length from a general description of the forum non
conveniens analysis from a decision of the District of Columbia Circuit, Pain v.
United Technologies Corporation, 637 F.2d 775, 784–85 (D.C. Cir. 1980). One
sentence in our block quotation from Pain stated that “[i]f the trial judge finds [the]
balance of private interests to be in equipoise or near equipoise, he must then
determine whether or not factors of public interest tip the balance in favor of a trial
in a foreign forum.” La Seguridad, 707 F.2d at 1307 (quoting Pain, 637 F.3d at
784–85). We never drew particular attention to that sentence, and the equipoise
standard was of no particular relevance in the context of our discussion. But, in the
next paragraph, we explained that “controlling weight cannot be given to any one
factor in the balancing process or the doctrine would lose much of the flexibility
that is its essence.” Id. And we made no further mention of the equipoise standard
anywhere else in our decision.
Nor was the equipoise standard a point necessarily decided. Because the
parties in La Seguridad kept shifting their theories of liability and defenses, we
held that “the case [was not in] a posture in which the forum non conveniens
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motion could be resolved.” Id. at 1309. So “there [was] simply no basis for a forum
non conveniens determination other than sheer speculation.” Id. Because we
vacated and remanded on that basis, we had no occasion to adopt Pain’s equipoise
standard as a holding.
Indeed, our instructions to the district court on remand made clear that we
could not have adopted the equipoise standard as a holding. Despite our suggestion
that a court need not always consider the public factors, we instructed the district
court to consider on remand “the interest, if any, of the forum in having a United
States court applying controlling United States statutes to shipping contracts that
generate much local revenue and employment”—a public factor. Id. at 1310. And
we instructed the district court that it “must weigh the advantages of the United
States forum in the balance, such as its familiarity with the law that will govern the
suit”—another public factor. Id. (emphasis added); see also Gulf Oil, 330 U.S. at
509. Because we “still [did] not know the underlying nature of” the claims and
defenses and were “left only to speculate as to what witnesses and documents
might be relevant and where they might be located,” we could not have known
whether the private factors were or were not in equipoise when we issued these
instructions about the public factors. La Seguridad, 707 F.2d at 1308. The
equipoise standard was “not essential to the reasoning behind that decision.”
Garner et al., supra § 4, at 44.
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After La Seguridad, we clarified that the public factors do not “enter the
equation only when the private interest factors are at or near equipoise.” Leon, 251
F.3d at 1311 (internal quotation marks omitted). Although “the private factors are
generally considered more important than the public factors,” we explained that the
public factors are not superfluous, even when the private factors are far from
equipoise. Id. And we opined that “the better rule is to consider both factors in all
cases,” which “has been our approach in recent cases.” Id.; see also SME Racks,
Inc. v. Sistemas Mecanicos Para Electronica, S.A., 382 F.3d 1097, 1100 n.5 (11th
Cir. 2004) (“We have clarified that . . . courts should consider both public and
private factors in all cases.” (citation and internal quotation marks omitted)).
The equipoise standard is hard to square with Supreme Court precedent. As
one commentator has observed, “there is no sound basis in either Gulf Oil or the
Supreme Court’s later decision in Piper Aircraft Company v. Reyno for such an
approach.” 14D Charles Alan Wright et al., Federal Practice and Procedure
§ 3828.4 (4th ed. 2009). In Gulf Oil, the Supreme Court set forth the balancing test
and provided a nonexhaustive list of both private and public factors, albeit without
mention of how the factors fit together. 330 U.S. at 508–09. Then, in Piper
Aircraft, the Court explained that we should not disturb a district court’s forum non
conveniens decision when it “considered all relevant public and private interest
factors, and where its balancing of these factors [was] reasonable.” 454 U.S. at 257
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(emphasis added). The Court also explained that a district court may dismiss for
forum non conveniens “when trial in the chosen forum would ‘establish
oppressiveness and vexation to a defendant out of all proportion to plaintiff’s
convenience’ or when the ‘chosen forum is inappropriate because of
considerations affecting the court’s own administrative and legal problems.’” Id. at
241 (alterations adopted) (emphasis added) (quoting Koster v. Lumbermens Mut.
Cas. Co., 330 U.S. 518, 524 (1947)). That is, a court may dismiss because of either
the private factors, which pertain to the interests of the litigants, or the public
factors, which pertain to the interests of the fora. See id. So the Court has at least
suggested that the public factors may warrant dismissal on their own accord. See
id.
We now expressly disavow the equipoise standard. In the light of Piper
Aircraft, the District of Columbia Circuit, which we quoted in our first mention of
the standard, has since abandoned it. See Nemariam v. Fed. Democratic Republic
of Ethiopia, 315 F.3d 390, 393 (D.C. Cir. 2003) (explaining that Piper Aircraft
“overrul[ed] the third part of the Pain test”—that is, the equipoise standard). And
we too recognize that our dicta about that standard are inconsistent with Piper
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Aircraft and hold that a district court must consider all relevant public factors when
conducting a forum non conveniens analysis.
We acknowledge that after ruling that the private factors were not in
equipoise and so no “exhaustive analysis of the public interest factors” was
required, the district court stated that “[n]onetheless, the public interest factors
favor[ed] dismissal as well,” but we cannot conclude based on this conclusory
statement that the district court considered all the relevant public factors. To be
sure, the district court discussed the public factor of choice of law, which also
touches on aspects of other public factors, see Piper Aircraft, 454 U.S. at 241 n.6,
but it did not mention any other public factor. And we cannot be sure that this
factor was the only one the district court would have considered relevant had it not
been misled by the equipoise standard.
ASF Holland contends that district courts should not be required to address
all public factors in all cases because it would include “numerous and unnecessary
public factors that will have no bearing on the court’s ultimate determination,” but
this argument misses the mark. Under the correct forum non conveniens analysis, a
district court must consider all relevant public factors, not all public factors, as
ASF Holland suggests. See id. at 257; see also Van Cauwenberghe v. Biard, 486
U.S. 517, 528–29 (1988) (explaining that “some factors may not be relevant in the
context of a particular case”). Our rejection of the equipoise standard means that a
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district court may not bypass the public factors, even when the private factors are
not at or near equipoise. We vacate the dismissal of the complaint and remand for
the district court to consider all relevant private and public factors.
B. The District Court Must Correct Two Errors when It Reweighs the
Private Factors on Remand.
Fresh Results also argues that the district court abused its discretion when it
weighed the private factors in favor of dismissal. Because we vacate that dismissal,
the district court should also reweigh the private factors on remand. Although it
may reach the same result, the district court must correct two errors that it made in
its analysis of the private factors.
First, when considering the factor of relative ease of access to sources of
proof, the district court disregarded the testimony of the South American growers
because they are not parties to this suit, but the relative ease of access to sources of
proof is not limited to evidence from the parties. See, e.g., Ford v. Brown, 319 F.3d
1302, 1308 n.18 (11th Cir. 2003) (considering access to governmental
investigations in a suit where the government was not a party). Indeed, the
description of the private factors in Piper Aircraft expressly contemplated access to
nonparty witnesses, including the “availability of compulsory process for
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attendance of unwilling . . . witnesses” and “the cost of obtaining attendance of
willing[] witnesses.” 454 U.S. at 251 n.6 (quoting Gulf Oil, 330 U.S. at 508).
Although Fresh Results presented an affidavit asserting that the South
American growers were willing to testify in the United States but not in the
Netherlands, the district court disregarded the importance of their testimony
because “the Growers are not parties to this lawsuit.” That the growers are
nonparties is an inadequate basis for ignoring them as a source of proof. To be
sure, the district court may find on remand that the importance of the growers’
testimony is insubstantial compared to the location of other sources of proof
accessible in the Netherlands. See Van Cauwenberghe, 486 U.S. at 528 (explaining
that a district court may consider whether pieces of evidence “are critical, or even
relevant,” and weigh them accordingly). But it cannot categorically disregard their
testimony solely because they are nonparties.
Second, the district court was distracted by a red herring when it reasoned
that the enforceability of a possible judgment favored dismissal because no treaty
exists between the United States and the Netherlands that governs the reciprocal
enforcement of judgments. “There is no bilateral treaty or multilateral convention
in force between the United States and any other country on reciprocal recognition
and enforcement of judgments.” Enforcement of Judgments, U.S. Dep’t of State,
https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/internl-
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judicial-asst/Enforcement-of-Judges.html (last visited Apr. 22, 2019) (emphasis
added). Relying solely on the absence of a treaty—when no such treaty exists for
the United States—was an erroneous basis to weigh this factor in favor of
dismissal. And the one-sided reasoning that Fresh Results “would be required to
commence new proceedings in Holland to enforce its judgment” overlooked that
the enforcement of a judgment may require a separate proceeding no matter in
which forum the suit proceeds. For example, if the suit proceeds in the Netherlands
and ASF Holland obtains a judgment for its counterclaims, a proceeding in the
United States might still be required to enforce that judgment against Fresh
Results.
Although the district court must correct these two errors when it reweighs
the private factors on remand, it may well conclude that the balance of the
private—and public—factors still weighs in favor of the Netherlands as the more
convenient forum for this dispute. We express no opinion on the matter. We
commit that determination “to the sound discretion of the trial court” in the light of
our instructions. Piper Aircraft, 454 U.S. at 257.
IV. CONCLUSION
We VACATE the dismissal of Fresh Results’ complaint and REMAND for
proceedings consistent with this opinion.
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