Otto Candies, LLC v. Citigroup, Inc. ( 2020 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-12663
________________________
D.C. Docket No. 1:16-cv-20725-DPG
OTTO CANDIES, LLC, et al.,
Plaintiffs - Appellants,
versus
CITIGROUP, INC.,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 1, 2020)
Before JORDAN and NEWSOM, Circuit Judges, and HALL,∗ District Judge.
JORDAN, Circuit Judge:
∗Honorable James Randal Hall, Chief United States District Judge for the Southern District of
Georgia, sitting by designation.
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Two American plaintiffs. Thirty-seven foreign plaintiffs. One American
defendant. A fraudulent scheme allegedly taking place here and in Mexico, with the
American defendant allegedly engaging in fraudulent activity in the United States.
Assumptions, but no evidence, about where the key documents and witnesses are
located.
The district court, faced with this paradigm, granted the American defendant’s
motion to dismiss for forum non conveniens. After reviewing the record, and with
the benefit of oral argument, we reverse and remand for further proceedings. First,
the district court mistakenly gave only “reduced” deference to the American
plaintiffs’ choice of forum. Second, the American defendant—which had the burden
of persuasion—did not support its claims that most of the relevant documents and
witnesses are located in Mexico.
I
In reviewing a motion to dismiss for forum non conveniens, we accept as true
the factual allegations in the complaint to the extent they are uncontroverted by
affidavits or other evidence, or have not been challenged in the context of an
evidentiary hearing. We also draw all reasonable inferences in favor of the plaintiffs.
See Delong Equip. Co. v. Washington Mills Abrasive Co., 840 F.2d 843, 845 (11th
Cir. 1988) (reviewing Rule 12(b) motions to dismiss for ineffective service of
process, lack of personal jurisdiction, and improper venue). See also Shi v. New
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Mighty U.S. Tr., 918 F.3d 944, 948 (D.C. Cir. 2019) (accepting the plaintiffs’
allegations of facts as true on a motion to dismiss for forum non conveniens); Aguas
Lenders Recovery Grp. v. Suez, S.A., 585 F.3d 696, 697 (2d Cir. 2009) (explaining
that, on appeal from a forum non conveniens dismissal without a factual hearing, the
court accepts the plaintiff’s facts as true). The following facts are taken from the
plaintiffs’ amended complaint and have not been contested by affidavits or other
evidence. We set them out in detail because of their importance.
A
Oceanografía S.A. de C.V., a now-bankrupt Mexican company, provided oil
drilling services to Petròleos Mexicanos S.A. (“Pemex” for short), Mexico’s state-
owned oil and gas company. Grupo Financiero Banamex S.A. de C.V. (the
“Banamex Group”) is a wholly owned subsidiary of Citigroup and has its principal
place of business in Mexico. Banco Nacional de México, S.A. (“Banamex” for
short), also based in Mexico, is a wholly owned subsidiary of the Banamex Group.
Banamex is therefore an indirect subsidiary of Citigroup.
In 2008, Citigroup established credit facilities within Banamex to provide
cash advances to Oceanografía and fund its operations with Pemex. A division of
Citigroup based in New York, called the Institutional Clients Group, was responsible
for developing and overseeing the credit facilities, and Citigroup supervised the
entire arrangement. In exchange for the cash advances, Citigroup charged
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Oceanografía a high interest rate and obtained the right to collect repayment directly
from Pemex. Because Pemex is state-owned (and perhaps unlikely to default),
Citigroup’s credit facility was profitable and low risk. Citigroup increased its cash
advances on several occasions, bloating Oceanografía with debt up to half of its
annual net revenues and far exceeding the value of the underlying Pemex contracts.
Citigroup was aware that Oceanografía was overleveraged because
Oceanografía sent audited financial statements and documents detailing its
operational and financial condition. For each increase of the credit facility,
Citigroup prepared a memorandum based on credit application forms that
Oceanografía provided. The forms included work estimates for the Pemex contracts,
as well as Pemex’s signed authorizations, and were supposed to be subject to
Citigroup’s internal review procedures. Citigroup did not perform the review
procedures, however, and granted advances knowing they were based on
authorization documents with forged Pemex signatures.
Citigroup saved Oceanografía’s credit forms to its internal network. Because
Citigroup and Oceanografía communicated directly through Citigroup’s servers in
the United States, the falsified Pemex documents and related communications are
also located in the United States and are in Citigroup’s possession. Several Citigroup
employees who oversaw the program and approved the cash advances are (or were)
located in Miami and New York.
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Citigroup knew about Oceanografía’s unstable financial condition not only
through the cash advance program, but also because it became intimately involved
in other aspects of Oceanografía’s business. Citigroup acted as the trustee and
paying agent on Oceanografía’s 2008 bond issuance, advised Oceanografía on plans
to acquire assets, represented the company in pursuing investors, and supervised the
creation of payment trusts for the benefit of its trade creditors.
In 2014, the Mexican government discovered that Oceanografía had failed to
provide insurance policies for its Pemex contracts and banned it from executing new
contracts with Pemex. The government then learned of the cash advance scheme
and investigated further. Mexican banking regulators found that ten Citigroup
employees had violated Mexican criminal laws, and Mexican authorities pursued
charges against Citigroup employees for causing Banamex to violate banking laws.
The scandal began to unfold in Mexico but reverberated in the United States.
It prompted Citigroup to conduct an internal review of its cash advance program,
and Samuel Libnic, based in Miami as Citigroup’s head of legal matters for Latin
America, led the project with support from at least one other Miami-based employee.
Citigroup publicly admitted that some its employees had been criminally involved
in the fraudulent scheme and announced that it had terminated employees both
“inside and outside” of Mexico.
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The scandal also led the SEC and the Justice Department to open domestic
investigations into Citigroup. Citigroup disclosed these investigations in its SEC
annual report, stating that they had “included requests for documents and witness
testimony.” Several plaintiffs have now filed civil actions in the United States
related to the fraudulent scheme.
B
In this case, thirty-nine plaintiffs—two American and thirty-seven foreign—
sued Citigroup (and only Citigroup) in federal court. They claim that the fraudulent
cash advances lured them into investing in or contracting with Oceanografía and that
“Citigroup and/or Oceanografía” knowingly misrepresented Oceanografía’s
financial stability. They assert substantive and conspiracy claims under the RICO
Act, 18 U.S.C. §§ 1962(c)–(d), as well as state-law claims for fraud, aiding and
abetting fraud, conspiring to commit fraud, and breach of fiduciary duty. The
plaintiffs allege that some of the misrepresentations were made during meetings in
the United States, on telephone calls to and from the United States, in emails located
on servers in the United States, and in written materials reviewed, revised, or
approved by Citigroup personnel in the United States.
Some of the plaintiffs are shipping companies which leased vessels to
Oceanografía. They allege that Citigroup’s fraudulent misrepresentations and
omissions induced them to transact with Oceanografía while it was financially
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unstable, causing them to lose substantial amounts of money on their leases. One of
those shipping lessors, Otto Candies, LLC, is a citizen of the United States and
alleges that it received fraudulent communications in Louisiana.
Another group of plaintiffs comprises Oceanografía bondholders. They claim
that Citigroup’s fraudulent misrepresentations and omissions induced them to
purchase Oceanografía bonds issued in the United States on which Oceanografía
eventually defaulted. One of those bondholders, Waypoint Asset Management LLC,
is an investment company based in the United States. It acquired bonds in part based
on allegedly fraudulent communications made in New York.
Citigroup moved to dismiss the original complaint for forum non conveniens
or, in the alternative, under Rules 9(b) and 12(b)(6) of the Federal Rules of Civil
Procedure. In response, the plaintiffs moved for limited discovery concerning
factual allegations that Citigroup had made in its motion—namely, that all of the
witnesses and evidence germane to the claims are located in Mexico, that the cash
advance contracts were negotiated and executed in Mexico, and that none of the
alleged misconduct took place in the United States. The plaintiffs argued that
Citigroup’s assertions contradicted or misrepresented the allegations in the
complaint or were not supported by evidence. Citigroup opposed discovery, arguing
that its grounds for forum non conveniens dismissal were based entirely on
information in the complaint. The district court denied the plaintiffs’ motion,
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concluding that the plaintiffs failed to establish good cause for discovery and that
their requests were overbroad.
The plaintiffs then filed an amended complaint, and Citigroup again moved to
dismiss on the same grounds. The district court heard argument and granted
Citigroup’s motion to dismiss for forum non conveniens.
II
Forum non conveniens, a common law doctrine, provides that a district court
has inherent power to decline to hear a case in which there is proper jurisdiction and
venue. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947). It is a flexible tool,
used to prevent litigation that would “establish oppressiveness and vexation to a
defendant out of all proportion to [the] plaintiff’s convenience” or that is unsuitable
for the domestic forum because of “the court’s own administrative and legal
problems.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981) (quoting Koster
v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)) (alterations omitted).
Because the plaintiff’s forum choice “should rarely be disturbed,” Gulf Oil,
330 U.S. at 508, a forum non conveniens dismissal is subject to three conditions.
First, as a threshold matter, a court should not dismiss an action for forum non
conveniens unless there is an adequate and available alternative forum. See Leon v.
Millon Air, Inc., 251 F.3d 1305, 1310–11 (11th Cir. 2001). Second, the balance of
the relative private and public interests must weigh in favor of dismissal to justify
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invocation of the doctrine. See id. Private interests include the parties’ relative ease
of access to sources of proof, access to witnesses, ability to compel testimony, the
possibility of viewing the premises, and the enforceability of a judgment. See Gulf
Oil, 330 U.S. at 508. Public interests include a sovereign’s interests in deciding the
dispute, the administrative burdens posed by trial, and the need to apply foreign law.
See id. at 508–09. Third, the plaintiffs must be able to reinstate their suit in the
alternative forum without undue inconvenience or delay. See Leon, 251 F.3d at
1310–11. “A defendant has the burden of persuasion as to all elements of a forum
non conveniens motion[.]” Id. at 1311.1
With respect to the private interests, courts begin with the presumption that a
domestic plaintiff has chosen a sufficiently convenient forum, and it is therefore
incumbent upon the defendant “to prove vexation and oppressiveness that are out of
all proportion to the plaintiff’s convenience.” Id. at 1314 (internal quotation marks
and citation omitted). A defendant invoking forum non conveniens with respect to
a domestic plaintiff therefore “bears a heavy burden in opposing the plaintiff’s
chosen forum.” Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S.
422, 430 (2007). The defendant must offer “positive evidence of unusually extreme
1
The district court concluded that Mexico was an adequate and available alternative forum,
and that the plaintiffs would not be subject to undue inconvenience or delay if they had to refile
there. The plaintiffs do not challenge these conclusions on appeal, so we do not address them
further.
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circumstances,” and the district court must be “thoroughly convinced that material
injustice is manifest before exercising any such discretion as may exist to deny a
United States citizen access to the courts of this country.” SME Racks, Inc. v.
Sistemas Mecánicos Para Electrónica, 382 F.3d 1097, 1101 (11th Cir. 2004)
(quoting Burt v. Isthmus Dev. Co., 218 F.2d 353, 357 (5th Cir. 1955)).
Foreign plaintiffs are also entitled to a presumption in favor of their forum
choice, albeit a presumption that “applies with less force.” Sinochem Int’l, 549 U.S.
at 430 (quoting Piper Aircraft, 454 U.S. at 255–56). Reduced deference is “not an
invitation to accord a foreign plaintiff’s selection of an American forum no deference
since dismissal for forum non conveniens is the exception rather than the rule.”
Lacey v. Cessna Aircraft Co., 862 F.2d 38, 45–46 (3d Cir. 1988) (citation omitted).
Accord R. Maganlal & Co. v. M.G. Chem. Co., 942 F.2d 164, 168 (2d Cir. 1991). 2
We review a forum non conveniens dismissal for abuse of discretion,
recognizing that a district court has wide latitude to assess the relevant private and
public interest factors. See Piper Aircraft, 454 U.S. at 257. We may reverse when
the district court makes a clear error of judgment or applies the wrong legal standard,
2
The initial presumption is an important mooring for an otherwise flexible doctrine. See
Simon v. Republic of Hungary, 911 F.3d 1172, 1182 (D.C. Cir. 2018) (“The forum non conveniens
doctrine comes with ground rules. The starting point is a strong presumption in favor of the
plaintiff’s choice of the forum in which to press her suit.”); 14D Charles Alan Wright, Arthur R.
Miller, Edward H. Cooper, & Richard D. Freer, Federal Practice and Procedure § 3828 (4th ed.
2013) (“Without knowing the level of deference to accord the plaintiff’s choice of forum, it is not
clear how one would assess whether the Gulf Oil factors outweigh the plaintiff’s choice.”) (italics
added).
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such as an incorrect presumption regarding the plaintiff’s forum choice. See SME
Racks, 382 F.3d at 1102 (reversing forum non conveniens dismissal because the
district court “failed to articulate the relevant standards and failed to apply any
presumption in its analysis”).
III
Before assessing the private and public interest factors in this case, the district
court acknowledged that the two American plaintiffs ordinarily would be entitled to
a strong presumption in favor of their forum choice, whereas the remaining thirty-
seven foreign plaintiffs would not be entitled to the same level of deference. But
because all the plaintiffs had decided to invest in Oceanografía, a Mexican company
doing business in Mexico, the district court determined that the plaintiffs could not
“feign surprise at potentially having to litigate a resulting dispute in Mexico.” It
therefore applied only a “reduced” deference to the two domestic plaintiffs’ forum
choice, just as it did for the foreign plaintiffs. This, we conclude, was incorrect.
A
The deference owed to the forum choice of domestic plaintiffs cannot be
reduced solely because they chose to invest in a foreign entity and may have
expected to litigate abroad on certain matters. Neither the Supreme Court nor the
Eleventh Circuit has adopted a “foreign investment” standard, and such a rule would
be in tension with existing precedent. After all, “the central purpose of any forum
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non conveniens inquiry is to ensure that the trial is convenient[.]” Piper Aircraft,
454 U.S. at 256. See also King v. Cessna Aircraft Co., 562 F.3d 1374, 1383 (11th
Cir. 2009) (“[T]he appropriate inquiry is indeed convenience.”).
A court begins with the reasonable assumption that “[w]hen the plaintiff has
chosen the home forum . . . this choice is convenient.” Piper Aircraft, 454 U.S. at
255–56. That a plaintiff invested in a foreign entity or country does not mean that
the chosen domestic forum will be inconvenient, or even that it should be presumed
to be inconvenient. It is possible that the most significant events giving rise to the
plaintiff’s claims took place in the United States or that most of the relevant
documents or witnesses would be located here, even though foreign investment is
involved. See 14D Charles Alan Wright, Arthur R. Miller, Edward H. Cooper, &
Richard D. Freer, Federal Practice and Procedure § 3828 (4th ed. 2013) (“In some
instances, controversies that at first blush appear to be foreign actually have a
meaningful connection with the United States or its domestic policies because there
have been relevant transnational contacts.”). In short, investment in a foreign entity
or country alone is not enough to dilute the threshold presumption that an American
citizen has chosen the most convenient forum. And—except where there is a valid
forum-selection clause, see Atl. Marine Constr. Co. v. U.S. Dist. Court, 571 U.S. 49,
63 (2013)—the plaintiff’s reasonable expectations are beside the point.
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We acknowledge that at least one case supports the proposition which the
district court applied and which Citigroup now urges us to adopt. In EIG Energy
Fund XIV, L.P. v. Petróleo Brasileiro S.A., 246 F. Supp. 3d 52, 78 (D.D.C. 2017),
the district court discounted the presumption in favor of the forum choice of
domestic plaintiffs because their decision to invest abroad “put them on notice that
they might be required to litigate disputes in a foreign forum,” such that litigation
abroad was “reasonably foreseeable.” Nevertheless, the court ultimately denied the
defendants’ motion to dismiss for forum non conveniens. See id. at 83.
In our view, the district court in EIG misread prior cases in deducing a broad
rule that “plaintiffs involved in disputes arising from international commerce receive
less choice-of-forum deference than plaintiffs engaging in domestic transactions.”
Id. at 78 (citing DTEX, LLC v. BBVA Bancomer, S.A., 508 F.3d 785, 795 (5th Cir.
2007), Intec USA, LLC v Engle, 467 F.3d 1038, 1040 (7th Cir. 2006), and Guidi v.
Inter–Continental Hotels Corp., 224 F.3d 142, 147 (2d Cir. 2000)). Of the cases
relied on by the district court in EIG, the Fifth Circuit’s decision in DTEX is the only
one arguably on point, and even that case did not reduce the deference given to the
domestic plaintiff’s forum choice solely because of foreign investment.3
3
The two other cases cited in EIG are not on point. The Second Circuit in Guidi reversed a
forum non conveniens dismissal in part because the “failure to grant [the plaintiff’s] choice of an
American forum significant deference was unsound.” 224 F.3d at 146. The Seventh Circuit in
Intec USA offered some thoughts about forum non conveniens and expressed “doubt” that the
threshold deference “has controlling force in litigation among firms all of which trade worldwide,”
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In DTEX, the operative fact was not that the plaintiff did business with a
foreign entity, but that it sued for an “injury occurring in a foreign country” and that
the “alleged torts all occurred in Mexico.” 508 F.3d at 795, 802. This is an important
distinction, and one that appears in other international commerce cases.
For example, in Sussman v. Bank of Israel, 801 F. Supp. 1068 (S.D.N.Y.
1992), aff’d, 990 F.2d 71 (2d Cir. 1993), the district court explained that “[w]here
an American plaintiff chooses to invest in a foreign country and then complains of
fraudulent acts occurring primarily in that country, the plaintiff’s ability to rely
upon citizenship as a talisman against forum non conveniens dismissal is
diminished.” Id. at 1073 (emphasis added). In that case, the plaintiffs invested in
an Israeli financial institution, alleged that they were defrauded “in Jerusalem” by
the Israeli defendants, and “[a]ccording to [the] plaintiffs’ theory, it was in Israel
that the defendants hatched their illegal scheme,” notwithstanding some “peripheral”
activities in the United States. See id. at 1071, 1074. Given these allegations, the
plaintiffs’ citizenship and residence “d[id] not constitute the powerful, near-decisive
factors for which they contend[ed],” although the ultimate burden of persuasion still
rested with the defendant. See id. at 1074. See also Howe v. Goldcorp Investments,
Ltd., 946 F.2d 944, 951 (1st Cir. 1991) (because the “relevant events” surrounding
but it ultimately vacated the forum non conveniens dismissal because the district court lacked
subject-matter jurisdiction. See 467 F.3d at 1040, 1044.
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the plaintiff’s claims took place in Canada, it was “not surprising” that most of the
documents and witnesses were in Canada as well); Reid-Walen v. Hansen, 933 F.2d
1390, 1395 (8th Cir. 1991) (“When an American corporation doing extensive foreign
business brings an action for injury occurring in a foreign country, many courts have
partially discounted the plaintiff’s United States citizenship.”). The rule described
in cases like Sussman is therefore narrower and more nuanced than the one which
Citigroup asks us to adopt.
As Citigroup acknowledges, moreover, neither the Supreme Court nor the
Eleventh Circuit has squarely addressed whether it would be appropriate to reduce
deference to a domestic plaintiff’s forum choice in cases like Sussman. Nor have
we considered whether some form of intermediate deference is ever permissible for
American plaintiffs. Compare Carijano v. Occidental Petroleum Corp., 643 F.3d
1216, 1228 (9th Cir. 2011) (rejecting intermediate deference), with Iragorri v.
United Techs. Corp., 274 F.3d 65, 71 (2d Cir. 2001) (establishing “sliding scale”
deference).
We need not answer those questions here. Although Citigroup vigorously
argues that the claims here “arise from” foreign business dealings, the plaintiffs do
not complain of conduct or injuries occurring primarily in Mexico. Taking the
plaintiffs’ allegations as true, Citigroup directed a scheme and engaged in acts in
furtherance of that scheme from the United States, where it is based. The
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Institutional Clients Group was responsible for administering the allegedly
fraudulent cash advance program from New York. Several employees involved in
the alleged fraud were based in New York or Miami. And several of the allegedly
fraudulent communications occurred in meetings on United States soil or in emails
or calls directed to or maintained in the United States. As we read the complaint,
this is a dispute focused on Citigroup’s conduct in the United States, and so one
would presume—at least initially—that a trial here would be more convenient (or
would at least not be inconvenient).
Citigroup argues that the fraud against the plaintiffs was really perpetrated by
Mexican entities in Mexico. But Citigroup did not present any evidence to support
this contention, and its argument mischaracterizes the complaint, the thrust of which
is, again, that Citigroup directed the scheme and caused the plaintiffs’ injuries from
its offices in the United States. Accepting that Banamex and Oceanografía were key
players in the scheme, the plaintiffs still allege that the Institutional Clients Group
“developed and oversaw” the credit facility program, approved fraudulent credit
applications with knowledge of the risks, and circumvented internal review
procedures—all in the United States.
Citigroup points to obscurities in the complaint regarding who committed
certain acts, noting that the plaintiffs frequently allege that Citigroup “and/or”
Oceanografía made fraudulent misrepresentations. Citigroup argues that the more
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specific allegations in the complaint confirm that Oceanografía and its controlling
shareholder, Amado Yáñez, made “nearly all of the alleged misrepresentations.”
With respect to the domestic plaintiffs, Citigroup points out that they allege that “Mr.
Yáñez and/or other Oceanografía principals traveled on dozens of occasions to
Louisiana” to make the fraudulent misrepresentations to Otto Candies. Citigroup
also submits that Waypoint’s claims are “overwhelmingly directed towards”
Oceanografía and Mr. Yáñez.
These points have some force, but the complaint’s primary allegations are
about Citigroup’s involvement in the scheme qua administrator and supervisor.
And, as Citigroup concedes, there are allegations in the complaint that Citigroup
communicated directly with some of the plaintiffs in the United States. For example,
the plaintiffs allege that Citigroup and Otto Candies discussed over email the
mechanics of the cash advance facility and that Citigroup misrepresented
Oceanografía’s financial situation in those communications. The plaintiffs also
allege that Citigroup misrepresented Oceanografía’s financial situation to other
plaintiffs and, for example, induced them to renegotiate their loans with
Oceanografía. Citigroup’s response is that the specific allegations about its conduct
are not relevant to the causes of action and therefore immaterial to the forum non
conveniens analysis. For reasons we explain later, however, we have no basis at this
stage to assess which allegations are material and which are superfluous.
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Significantly, the plaintiffs chose to sue Citigroup—and no one else—for its
alleged role in the fraud. They did not sue Mexican nationals—Banamex or
Oceanografía, or their respective employees or agents—who according to Citigroup
caused their injuries. We take no position on Citigroup’s alternative grounds for
dismissal under Rules 9(b) and 12(b)(6), but we note that when Citigroup argues for
forum non conveniens dismissal because the complaint “directly implicate[s] an
alleged fraud carried out by Mexican nationals in Mexico,” it improperly assumes
that it did not carry out the fraud. This is an argument on the merits, and not
necessarily on whether the facts as alleged should be litigated in the United States.
Admittedly, it can sometimes be difficult to disentangle the merits of a
complaint from a forum non conveniens inquiry. Whoever is ultimately responsible
for the plaintiffs’ alleged injuries may be a strong indicator of where the most
convenient forum is. If Citigroup is correct that in the end only the Mexican entities
can be liable, then the plaintiffs should have sued those entities instead, in which
case Mexico would have been the presumptively most convenient forum. But, again,
the plaintiffs sued Citigroup, and not the Mexican entities. Cf. 7 Charles Alan
Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1623
(3d ed. 2019) (explaining that plaintiffs may sue one or more joint tortfeasors
without joining others, and need not join every coconspirator if joinder is not
feasible). If, on the other hand, the plaintiffs are correct that Citigroup is
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independently liable for its alleged role in overseeing, directing, or participating in
the scheme, then presumably the United States would be the most convenient forum.
Because at this stage we accept the complaint’s allegations as true, we determine the
applicable presumption from the plaintiffs’ perspective, and not Citigroup’s. See
Delong Equip., 840 F.2d at 845; Shi, 918 F.3d at 948.
Even as the parties quarrel over the nature of the complaint and the locus of
events, there remains an elephant in the room—Citigroup. It is the only defendant
in this case, and it is based in the United States. Not only that, it has offices in Miami
and conducts substantial activities throughout the United States, including New
York—where the Institutional Clients Group is based. One would therefore think
that it would be more convenient for Citigroup to litigate in the Southern District of
Florida than in Mexico.
This is yet another reason to leave the presumption for the plaintiffs’ chosen
forum in place and require that Citigroup demonstrate—with positive evidence—
why litigating on its home turf would be so oppressive and vexatious that a federal
court should decline jurisdiction. When an American plaintiff sues an American
defendant for conduct allegedly occurring in the United States, it should not be easy
for the defendant to obtain a forum non conveniens dismissal. See, e.g., Galustian
v. Peter, 591 F.3d 724, 732 (4th Cir. 2010) (providing greater deference in favor of
a domestic forum where “the defendant is a resident and citizen of the forum he
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seeks to have declared inconvenient for litigation”); Peregrine Myanmar Ltd. v.
Segal, 89 F.3d 41, 46 (2d Cir. 1996) (in weighing the Gulf Oil factors, “the court
starts with a presumption in favor of the plaintiff’s choice of forum, especially if the
defendant resides in the chosen forum, as here”); Lony v. E.I. Du Pont de Nemours
& Co., 935 F.2d 604, 608 (3d Cir. 1991) (“This case is puzzling in that frequently
the forum non conveniens issue is raised by a defendant sued away from home who
seeks to convince the court that the balance of relevant factors should be tipped
against requiring it to defend in a forum far from its home jurisdiction.”). Cf. Piper
Aircraft, 454 at 256 n.24 (citing Pain v. United Techs. Corp., 637 F.2d 775, 797
(D.C. Cir. 1980), for the proposition that “citizenship and residence are proxies for
convenience”).
B
We now turn to Citigroup’s argument that “where foreign plaintiffs
significantly outnumber domestic plaintiffs, diminished deference should be applied
to all of the plaintiffs’ forum choice.” Appellee’s Br. at 17. Though addressed
preemptively by the plaintiffs in their initial brief, the district court did not reduce
deference to the American plaintiffs based on the presence of foreign plaintiffs. It
was only because the American plaintiffs invested in a foreign entity that the district
court discounted the initial deference and placed them on par with their foreign
counterparts. Because that was error, the district court on remand will need to afford
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the requisite deference to the American plaintiffs. It will then have to deal with a
mixed group of foreign and domestic plaintiffs, potentially turning Citigroup’s
argument into a live issue. We therefore provide a few observations.
We have not found any cases holding that reduced deference to American
plaintiffs is warranted when they sue alongside foreigners, but we have located a
couple that state the opposite. In Carijano, 643 F.3d at 1228, the Ninth Circuit
rejected the argument that Piper Aircraft stands for the proposition that “when both
domestic and foreign plaintiffs are present, the strong presumption in favor of the
domestic plaintiff’s choice of forum is somehow lessened.” And in Simon, 911 F.3d
at 1183, the D.C. Circuit explained that “the addition of foreign plaintiffs does not
render for naught the weighty interest of Americans seeking justice in their own
courts.” Citigroup cites two unpublished district court cases in support of its
argument, but neither is convincing.4
4
In Takiguchi v. MRI Int’l, Inc., No. 2:13-cv-01183, 2015 WL 6661479, at *3 (D. Nev. Oct.
29, 2015), the plaintiffs were entitled to limited deference not because the foreign plaintiffs
outnumbered the American plaintiffs, but because the latter conceded that they were actually
residents of Japan and Canada, and that one was a resident of Texas (not of Nevada, where the
district court was located). The district court, in any event, denied the motion to dismiss for forum
non conveniens.
In Fasano v. Juoqing Li, No. 16-cv-8759, 2017 WL 6764692, at *6 (S.D.N.Y. Dec. 29,
2017), vacated and remanded sub nom., Fasano v. Yu Yu, 921 F.3d 333 (2d Cir. 2019), the district
court stated that “[b]ecause the foreign plaintiffs outnumber the domestic plaintiff, and because
their financial interest in the action is much greater than the domestic plaintiff’s interest, the Court
accords diminished deference to Plaintiffs’ choice of forum.” But the Fasano district court did
not cite any cases in support of that proposition, and its decision was vacated and remanded for
failure to consider a forum selection clause in the contract at issue.
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There also does not appear to be any practical or doctrinal basis to reduce
deference to domestic plaintiffs who sue alongside foreign plaintiffs, particularly
when they all sue a single American defendant for conduct that they allege occurred
in the United States. For one, the presence of foreign plaintiffs does not change the
otherwise domestic nature of a complaint—here, that Citigroup committed wrongs
in or from the United States, where it is based. Cf. In re Air Crash Off Long Island,
N.Y., on July 17, 1996, 65 F. Supp. 2d 207, 217 (S.D.N.Y. 1999) (acknowledging
that “the presence of foreign plaintiffs (who chose to sue in the United States) [did]
not change the essentially American character of [the] case, which involve[d] a flight
originating in the United States, a United States carrier, United States manufacturing
defendants, and predominantly United States domiciliaries as passengers”).
In addition, the purpose of forum non conveniens is to prevent the defendant
from facing harassing and vexatious litigation out of all proportion to the plaintiffs’
convenience. From Citigroup’s perspective, then, the presence of numerous foreign
plaintiffs may not make the case more difficult to litigate in the United States.
Citigroup may wish to take numerous depositions because of the sheer number of
plaintiffs, but that would be true if there were thirty-nine American plaintiffs. What
is significant for our purposes is that the presence of foreign plaintiffs would not
necessarily lead to unwarranted burdens or additional travel for Citigroup to depose
those plaintiffs. The district court has broad discretion over the location of
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depositions, see DeepGulf, Inc. v. Moszkowski, 330 F.R.D. 600, 609 (N.D. Fla. 2019)
(collecting cases), and the general rule is that plaintiffs are required to make
themselves available for examination in the district in which they bring suit. See 8A
Charles Alan Wright, Arthur R. Miller, & Richard L. Marcus, Federal Practice and
Procedure § 2112 (3d ed. 2010) (collecting cases). At the same time, the foreign
plaintiffs will not be able to drag Citigroup to all corners of the globe to take
corporate depositions, as there is a presumption that a defendant will be deposed in
the district of its residence or principal place of business. See DeepGulf, 330 F.R.D.
at 607 (collecting cases). All else being equal, the ratio of domestic to foreign
plaintiffs does not necessarily have a bearing on Citigroup’s convenience.5
There may be instances of blatant gamesmanship—for example, where a
domestic plaintiff is added at the eleventh hour to strengthen the other plaintiffs’
connections to the United States—such that reduced deference may be appropriate
for all the plaintiffs. See Vivendi SA v. T-Mobile USA Inc., 586 F.3d 689, 694–96
(9th Cir. 2009). But at this juncture, we see no evidence of improper forum
shopping. Indeed, it would be ironic to fault the foreign plaintiffs for their
willingness to travel to the United States to sue Citigroup in its country of
citizenship.
5
We say “necessarily” because at this point Citigroup has not put forward any evidence to
the contrary.
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Rather than reduce or enhance the deference owed to domestic or foreign
plaintiffs, some courts have conducted a separate forum non conveniens analysis for
each group. A bifurcated analysis may be appropriate, for example, where foreign
and domestic plaintiffs filed separate lawsuits that were consolidated for
administrative purposes, or where parties can be dropped or claims can be severed
under Rule 21. See Kolawole v. Sellers, 863 F.3d 1361, 1372 (11th Cir. 2017); Tazoe
v. Airbus S.A.S., 631 F.3d 1321, 1335 (11th Cir. 2011); King, 562 F.3d at 1383–84;
Banco Latino v. Gomez Lopez, 17 F. Supp. 2d 1327, 1333 (S.D. Fla. 1998).
We leave it to the district court to determine whether a bifurcated analysis is
permissible or warranted in this case once the domestic and foreign plaintiffs are
afforded their appropriate deference on remand. But we note that—procedural
issues aside—a split analysis might be problematic in some respects. If the domestic
plaintiffs are permitted to move forward in the district court, then dismissing the
foreign plaintiffs would force Citigroup to defend against two actions (assuming the
foreign plaintiffs refile in Mexico). That could defeat the purpose of forum non
conveniens, particularly if the parties intend to rely on the same documents and
witnesses in both countries. See In re Assicurazioni Generali S.p.A. Holocaust Ins.
Litig., 228 F. Supp. 2d 348, 370 (S.D.N.Y. 2002) (declining to dismiss a foreign
plaintiff with no bona fide connection to the chosen forum because the domestic
plaintiffs in the consolidated action were permitted to move forward, and therefore
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the bulk of evidence would already be in the United States). Then again, this
potential problem would be moot if the claims of the domestic plaintiffs are
dismissed for forum non conveniens. These matters are for the district court to
consider on remand.
Finally, we address and reject Citigroup’s argument that the two American
plaintiffs are only “nominal” litigants entitled to reduced deference. The district
court found that these two plaintiffs were American citizens for purposes of its forum
non conveniens analysis and said no more about whether their role in the lawsuit was
legitimate. There has not been discovery on this issue and there is no evidence that
these entities are not real parties-in-interest or that they otherwise lack standing to
assert their claims.
C
In sum, it was inappropriate for the district court to discount or reduce the
deference owed to the chosen forum of the American plaintiffs based on their
decision to invest or transact business abroad. Nor was there any other reason to
deviate from the normal rule that an American plaintiff suing in the United States is
presumed to have chosen the most convenient forum. A remand is therefore
warranted. See SME Racks, 382 F.3d at 1102 (reversing a forum non conveniens
dismissal due to the district court’s failure to afford the proper deference owed to
domestic plaintiffs).
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Our decision today does not guarantee that plaintiffs can avoid forum non
conveniens dismissal by making vague allegations, or by strategically joining
foreign plaintiffs together with domestic ones and suing a single domestic defendant.
The plaintiff-friendly, facial reading of the complaint leads only to an initial
presumption. That presumption is not dispositive, and a defendant can always
marshal positive evidence to overcome it. See, e.g., Contact Lumber Co. v. P.T.
Moges Shipping Co., 918 F.2d 1446, 1449 (9th Cir. 1990) (“Although a defendant
must meet an almost impossible burden in order to deny a citizen access to the courts
of this country, the cases demonstrate that defendants frequently rise to the
challenge.”) (internal quotation marks and citation omitted). Citigroup had the
opportunity to engage in limited discovery related to forum non conveniens and to
present evidence in support of its motion. But, as explained below, Citigroup
opposed discovery and failed to carry its burden.
IV
We now consider the Gulf Oil private and public interest factors. Although
the district court had wide latitude to weigh the evidence and determine whether
those factors pointed clearly toward dismissal, the threshold error on the deference
owed to the domestic plaintiffs tainted its analysis. The error in effect switched the
burden of persuasion and allowed Citigroup to obtain a forum non conveniens
dismissal without presenting any evidence on these factors.
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As noted earlier, Citigroup bore the burden of persuasion on all elements of
its forum non conveniens motion. See Leon, 251 F.3d at 1311. A strong presumption
in favor of the American plaintiffs should have forced Citigroup to offer “positive
evidence of unusually extreme circumstances” and “material injustice” to oust those
plaintiffs from their chosen domestic forum. See SME Racks, 382 F.3d at 1101(quoting Burt, 218 F.2d at 357). Yet Citigroup opposed discovery and offered no
evidence on the private interest factors.
The district court also erred with respect to the foreign plaintiffs. Even though
they were entitled to “somewhat” less deference than their domestic counterparts,
that lesser degree of deference should not have removed Citigroup’s burden entirely.
By failing to proffer any positive evidence of private inconvenience, Citigroup failed
to carry its burden as to both the domestic and foreign plaintiffs.
A
We begin with Piper Aircraft, which involved only foreign plaintiffs and
therefore established the floor of a defendant’s forum non conveniens burden. That
case arose from a plane crash in Scotland. See 454 U.S. at 238–39. The plane was
subject to Scottish air traffic control and operated through a Scottish air taxi service,
and the pilot and passengers were all Scottish subjects and residents. See id. at 239.
The Supreme Court held that, under these circumstances, the defendant’s burden to
demonstrate private inconvenience was not particularly heavy; the defendant was
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not required to “submit affidavits identifying the witnesses they would call and the
testimony these witnesses would provide if the trial were held in the alternative
forum.” Id. at 258. At the same time, the defendant was required to “provide enough
information to enable the [d]istrict [c]ourt to balance the parties’ interests.” Id. The
Supreme Court did not explain what would constitute “enough” information, so it is
useful to examine the facts and history of the case to better delineate its holding.
Before the case reached the Supreme Court, the Third Circuit had reversed the
district court’s dismissal for forum non conveniens, concluding that the defendant
did not “set[ ] forth the requisite specific information” of private inconvenience. See
Reyno v. Piper Aircraft Co., 630 F.2d 149, 161 (3d Cir. 1980), rev’d, 454 U.S. 235(1981). But the district court had in fact relied on affidavits, including one that
attested to the defendant’s witnesses and their testimony on certain topics, albeit in
broad strokes. See Piper Aircraft, 454 U.S. at 259 & n.27. The relevant affidavit
did not identify witnesses by name, but offered general categories of witnesses—for
example, by occupation or by role in the incident in question—as well as some
expected topics of testimony. See id. See also Petition for Writ of Certiorari, Piper
Aircraft Co. v. Reyno, Nos. 80-848 & 80-883 (filed Nov. 25, 1980), at Ex. F
(Affidavit of Charles J. McKelvey). On that record, the Supreme Court held that
“sufficient information was provided” to allow the district court to assess the
relevant interests. See Piper Aircraft, 454 U.S. at 258–59. We therefore do not read
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Piper Aircraft as holding that any less information would have sufficed under the
circumstances.6
When American plaintiffs sue in federal court, the defendant’s burden is
heavier. As we have long held, a defendant must come forward with “positive
evidence of unusually extreme circumstances” such that the district court is
“thoroughly convinced that material injustice is manifest before exercising any such
discretion as may exist to deny a United States citizen access to the courts of this
country.” SME Racks, 382 F.3d at 1101 (quoting Burt, 218 F.2d at 357). 7
6
The affidavit provided, for example, that the defendant “would call as witnesses the owners
and employees of the Scottish air-taxi company which owned and operated the aircraft and hired
the pilot,” that their testimony “would concern the cause of and liability for this accident,” and that
all “such persons are residents and citizens of Scotland.” The affidavit also provided that the
defendant “would call as witnesses the persons who were responsible for the training and licensing
of the pilot of this aircraft,” that their testimony “would concern the cause of the accident and the
liability thereof,” and that those witnesses also were residents and citizens of Scotland. The
affidavit continued like this for five categories of witnesses. See Petition for Certiorari, Piper
Aircraft Co. v. Reyno, Nos. 80-848 & 80-883 (filed Nov. 25, 1980), at Ex. F.
7
For cases reversing forum non conveniens dismissals because the defendant failed to proffer
sufficient evidence in light of the circumstances of the case, see Lacey, 862 F.2d at 44 (holding
that the evidence was insufficient because the defendants “submitted no evidence to support their
contentions,” whereas the plaintiff produced a report that the cause of a crash was a defective
product manufactured in the United States, and submitted affidavits “that various witnesses on the
product liability issue are located in Pennsylvania and throughout the United States and are
available to testify here”), and Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1550 (5th Cir. 1991)
(rejecting bare allegations of private inconvenience and holding that “in order to fulfill the
requirements of Gulf Oil, a more detailed presentation must be made by the defendants concerning
the private interest factors”).
For cases holding that there was sufficient evidence of inconvenience, see Interface
Partners Int’l Ltd. v. Hananel, 575 F.3d 97, 105 (1st Cir. 2009) (affirming forum non conveniens
dismissal where the defendant “adequately identified the twenty-nine witnesses he intend[ed] to
call in the proceedings[,] . . . indicated the relevance of at least ten” of those witnesses, and offered
“affidavits from those ten” witnesses that they would testify to “various facts disputing the
allegations of misconduct asserted”), Delta Air Lines, Inc. v. Chimet, S.p.A., 619 F.3d 288, 300 (3d
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We have not set out strict rules on what constitutes “unusually extreme
circumstances,” and it probably does not make sense to do so. That is because the
quantum and quality of evidence needed will depend on the unique facts and
circumstances of the given case. See, e.g., Lacey, 862 F.2d at 44 (holding that “on
the particular facts of this case, the defendants did not submit sufficient information
to allow the district court properly to undertake the forum non conveniens analysis”).
In complex commercial cases—with elaborate legal claims and allegations involving
transnational communications, or with multiple international and domestic parties—
the locus of events may be difficult to pinpoint.
B
Because this is a complex commercial dispute with domestic and foreign
plaintiffs, Citigroup should have offered some evidence of inconvenience and
certainly no less than what the defendant provided in Piper Aircraft. After a
thorough review of the record, we find very little if any positive evidence of
Citigroup’s inconvenience, especially regarding the location of documents and
witnesses.
Cir. 2010) (affirming a forum non conveniens dismissal because the defendant “identified the
witnesses it intended to depose and proffered in oral argument the information that it expected to
obtain”), and Gschwind v. Cessna Aircraft Co., 161 F.3d 602, 610 (10th Cir. 1998) (holding that
the defendants, who “c[a]me forward with documentary evidence,” offered the “bare minimum of
evidence necessary,” although the court “certainly would have benefitted from additional evidence
in the record”).
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In its forum non conveniens motion, Citigroup argued that “key individuals
identified in the [amended complaint] that would be critical to Citigroup’s defense
include former Banamex employees located in Mexico.” But it did not identify any
of the former Banamex employees by name or position, attest to their residence in
Mexico with affidavits, anticipate the basic topics of their testimony, or explain how
these unidentified witnesses would be critical to its case. Citigroup also asserted
that its defense would be based on corporate and banking records and
communications in Mexico, including documents belonging to Citigroup’s alleged
Mexican co-conspirators. Again, however, it did not identify these documents,
generally or specifically. Citigroup also speculated—again without details or
evidence—that “[t]here is no reason to doubt that equally critical witnesses from
[Oceanografía] and Pemex . . . are also located in Mexico.”
The plaintiffs, on the other hand, allege that Citigroup employees involved in
the cash advance program are in the United States and identify some of these
employees by name. The plaintiffs also refer to Citigroup’s public statement that it
fired individuals involved in the fraud both “inside and outside” of the United States.
We not only accept these allegations as true at this stage, we also draw from them
appropriate reasonable inferences. See Delong Equip., 840 F.2d at 845; Shi, 918
F.3d at 948. One reasonable inference is that these domestic witnesses have material
information and are available or subject to compulsory process in the United States.
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Citigroup made some factual assertions in its motion, but it did so by either
misconstruing the complaint or by contradicting the plaintiffs’ allegations without
discrete evidentiary support. For example, Citigroup argued that “Mexico is where
the cash advance contracts were negotiated and executed,” which implies that
material evidence will be located there. The paragraph of the complaint to which
Citigroup cited, however, alleges that “Citigroup, through Banamex, and
Oceanografía entered into a Cash Advance Contract in September 2012.” Nowhere
do the plaintiffs allege that the cash advance program was negotiated and executed
exclusively in Mexico. Indeed, they sought discovery on that very point (and
others). Citigroup may be correct, but it had the burden to rebut the plaintiffs’
allegations on these matters with positive evidence. No evidence, by definition, is
an absence of positive evidence.
Even if we were to accept its unsupported factual claim that the cash advance
program was negotiated and executed in Mexico, Citigroup did not rebut the
plaintiffs’ plausible allegations that it would have collected and stored the relevant
documents during the SEC and Justice Department investigations. The plaintiffs,
we note, allege that a Citigroup employee in Miami led an internal audit into the
cash advance program. Citigroup did not contest this factual allegation with an
affidavit from a corporate representative or otherwise explain why documents from
that audit would not be available in the United States.
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Citigroup argued below that “Mexico is where [Oceanografía’s] alleged
falsification of Pemex work estimates and authorizations took place.” This may be
true, but the plaintiffs allege that the ordinary business practice was for Oceanografía
to send those work estimate documents to Citigroup in the United States. Based on
this unrebutted allegation, it is not clear why Citigroup does not already have—or
could not easily access—the allegedly falsified work estimates and authorization
documents, even if they were originally created in Mexico. The plaintiffs also
plausibly allege that Citigroup controls all the email servers of its subsidiaries,
including Banamex, from the United States. Given the absence of evidence to the
contrary, it should be relatively easy for Citigroup to access the relevant documents
from those servers. If that is not so, Citigroup should explain why not. See Simon,
911 F.3d at 1186 (explaining that “[d]igitization . . . has eased the burden of
transcontinental document production and has increasingly become the norm in
global litigation”); Maggie Gardner, Retiring Forum Non Conveniens, 92 N.Y.U. L.
Rev. 390, 414 (2017) (arguing that, because of modern technology and digitization,
“transnational evidence collection is far less burdensome today than it was even at
the time of Piper,” such that the defendant’s burden of proving hardship should be
harder to meet).
Citigroup’s contentions about the location of key evidence and witnesses may
well be plausible. They may even be correct. But Citigroup failed to support those
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contentions with positive evidence on the Gulf Oil private interest factors, and
therefore failed to carry its burden.8
C
Citigroup makes a more sweeping argument on appeal. It contends that the
district court viewed the complaint as a whole and reasonably concluded that the
relevant evidence would be in Mexico. Citigroup relies on Ford v. Brown, 319 F.3d
1302, 1308 (11th Cir. 2003), for the proposition that district courts must analyze the
elements of the plaintiffs’ causes of action, consider what evidence is required to
8
Citigroup did provide some positive evidence at the forum non conveniens stage, but its
evidence did not speak to the location of documents and witnesses.
First, Citigroup cited to an expert affidavit and a copy of a complaint that a Mexican
affiliate of Otto Candies had filed in Mexico against Banamex and Citibank, N.A. (a subsidiary of
Citigroup not named in this case). Those documents tended to show that Mexico was an adequate
and available forum. As noted above, the plaintiffs do not challenge this conclusion on appeal,
and so this evidence is not relevant for our purposes.
Second, Citigroup referred to the same expert affidavit to show that it would be difficult to
compel Mexican witnesses to testify in the United States and that Mexican banking laws would
prevent Banamex from sharing information absent permission from the Mexican banking
regulator. These contentions, however, presuppose (1) that material witnesses are in Mexico, and
not in the United States, and (2) that Citigroup does not already have domestic access to the
Banamex documents apparently protected by Mexican banking secrecy laws. Citigroup did not
offer any evidence to establish these two implicit and necessary premises.
Third, Citigroup submitted various SEC filings to demonstrate that the Institutional Clients
Group was a “business segment,” not a legal entity, and that the Group had employees all over the
world, including at subsidiaries such as Banamex. The district court did not rely on these
documents, and it is not clear how the Group’s status as a business segment rather than a distinct
legal entity changes the forum non conveniens analysis. The complaint does not depend on that
distinction, and instead focuses on the role that the Group played in developing and overseeing the
credit facilities. The fact that the Group is a business segment with employees at Banamex,
moreover, could be a double-edged sword. It might make it more plausible that New York-based
executives of the Group directed the alleged scheme from the United States through their
subordinates in Mexico. That would be consistent with the plaintiffs’ claims, and it would also
mean that evidence of the fraudulent conduct would be accessible in the United States.
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prove and disprove each element, and make a reasoned assessment about the location
of relevant evidence.
There are two problems with Citigroup’s argument. The first is that the
district court did not delineate the elements of each claim in order to sort through the
relevant and irrelevant evidence. The second is that the court did not have positive
evidence to sort through in the first place. This case is therefore similar to La
Seguridad v. Transytur Line, 707 F.2d 1304, 1306–07, 1310 (11th Cir. 1983), where
we reversed a forum non conveniens dismissal because the district court “did not
attempt to go beyond [the] representations of counsel to ascertain the underlying
facts of the case” and “did not attempt to pin counsel down to their theories of the
case, and the facts that would support their theories.” Likewise, the district court
here stated—without further explanation—that it would be necessary for the
plaintiffs to establish the “underlying fraud” in Mexico. It also accepted the
contention of Citigroup that its defense would require documents in Mexico, even
though Citigroup did not describe with any particularity the defense or the evidence
necessary to establish it.
Citigroup assumes that the district court must have “appreciated” which facts
would be relevant to the litigation, and therefore tries to reconstruct what it sees as
the court’s implicit reasoning. But that is not enough for us evaluate the factual and
legal issues of the case. See id. at 1308 (“Without delineating the elements of the
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claims and the defenses thereto, we simply cannot know the factual issues raised by
these claims, and are left only to speculate as to what witnesses and documents might
be relevant and where they might be located.”).
Even if we were to accept Citigroup’s reconstructed argument—that the RICO
claims would require the plaintiffs to establish an “enterprise” with foreign entities
and that the aiding and abetting fraud claims would require the plaintiffs to establish
an underlying fraud in Mexico—it is still not clear why it wouldn’t be just as easy
to develop these theories in the United States. First, based on their allegations, it is
plausible that the plaintiffs could establish the RICO enterprise and underlying fraud
with documents already in Citigroup’s possession. Indeed, the plaintiffs contend
that there is no real dispute concerning the events in Mexico, so it seems they believe
they can prove their case without resorting to additional documents or witnesses
there. Second, the plaintiffs intend to prove that Citigroup controlled and directed
the enterprise from the United States, so it is not clear why the bulk of evidence
wouldn’t be in the United States, even if some documents tending to establish the
global enterprise could also be found in Mexico. Third, Citigroup’s argument
ignores the plaintiffs’ direct fraud and fiduciary duty claims, which appear at first
glance to require investigation into Citigroup’s conduct in the United States. In any
event, no matter how we try to dissect the various claims, this is a “fragmentary
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record” on which it is “impossible to make a sound determination of relative
convenience.” That requires us to remand for further development. See id.The district court erred in concluding that the “ease of access to evidence”
factor supported dismissal. That conclusion was based on unsupported findings that
the material documents and evidence “are all located in Mexico,” and that “all of the
key players in this dispute . . . will be available in Mexico.” The court also erred in
concluding that the “availability of witnesses and compulsory process” factor favors
dismissal. That conclusion was based on the unsupported contention of Citigroup
that it needed to rely on witnesses in Mexico for its defense. On this record, these
errors were fatal to the Gulf Oil private interest analysis. See Ford, 319 F.3d at 1308(“Perhaps the most important ‘private interest’ of the litigants is access to
evidence.”); 17 James Wm. Moore et al., Moore’s Federal Practice
§ 111.74[3][c][iii] (3d ed. 2020) (“Of all the private interest factors . . . the relative
ability of the forums to compel the attendance of significant unwilling witnesses at
trial often is considered the most important factor, because the presentation of live
testimony often is ‘essential to a fair trial.’”).
D
The district court also concluded that the public interest factors weighed in
favor of litigation in Mexico. Although Citigroup is the only named defendant, the
case involved “four primary players, three of which are unquestionably Mexican
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entities”—Banamex, Oceanografía, and Pemex. The court reasoned that Mexico
“clearly has a substantial interest in this case being litigated in Mexico as evidenced
by numerous parallel proceedings underway and the fact that one of the key players
in this dispute is owned by the Mexican government.”
The district court did not ultimately find “such meaningful connections
between any of the parties and [the Southern District of Florida] that would outweigh
the clear interest Mexico has over this litigation.” But that conclusion is
questionable because the plaintiffs allege that Citigroup conducts substantial
business in the Southern District of Florida and that two of its Miami-based
employees audited the cash advance program after the scandal unfolded in Mexico.
There is therefore some local interest in the case. On the other hand, there does not
appear to be any local need to have the case dismissed. The district court did not
cite, for example, any administrative difficulties or docket congestion in the
Southern District that warranted a forum non conveniens dismissal.
But even if the district court adequately considered the administrative interests
of the Southern District, it failed to consider the sovereign interests of the United
States. See SME Racks, 382 F.3d at 1104 (explaining that although the district court
“recognized that Florida had in interest in [that case], it failed to recognize any
federal interest”). The United States has a stake in this litigation, and that should
factor into the public interest analysis. See Republic of Panama, v. BCCI Holdings
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(Luxembourg) S.A., 119 F.3d 935, 953 (11th Cir.1997) (“Relevant public interest
factors include the sovereigns’ interests in deciding the dispute[.]”).
As explained above, the plaintiffs opted to sue Citigroup for its alleged role in
the fraud. If they succeed in proving the facts and legal claims, as alleged, then
Citigroup—a United States corporation—would be liable to two American plaintiffs
for causing them injuries from its United States offices. We have observed that “a
sovereign has a very strong interest when its citizens are allegedly victims and the
injury occurs on home soil.” SME Racks, 382 F.3d at 1104. See also Esfeld v. Costa
Crociere, S.P.A., 289 F.3d 1300, 1311 (11th Cir. 2002) (“There is a strong federal
interest in making sure that plaintiffs who are United States citizens generally get to
choose an American forum for bringing suit, rather than having their case relegated
to a foreign jurisdiction.”). As further evidence that the United States has a
substantial interest in this case, the Justice Department and SEC conducted domestic
investigations into Citigroup for the cash advance program at issue. See Carijano,
643 F.3d at 1232 (explaining that the United States has a “significant interest in
providing a forum for those harmed by the actions of its corporate citizens”). On
remand, the district court must consider the interests of the United States in
analyzing the Gulf Oil public interest factors.
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V
We now turn to the discovery conditions that the district court imposed in its
order, as the parties dispute their propriety and efficacy. Because we are reversing
on other grounds, we do not directly address whether the conditions, as phrased,
were appropriate. But we provide some thoughts for the district court and the parties
to consider on remand.
In Piper Aircraft, the Supreme Court suggested that, in order to mitigate the
practical difficulties of forum non conveniens dismissals, “district courts might
dismiss subject to the condition that defendant corporations agree to provide the
records relevant to the plaintiff’s claims.” 454 U.S. at 257 n.25. The Supreme Court
did not explain, however, how district courts should enforce discovery conditions as
litigation proceeded abroad. Nonetheless, following the Piper Aircraft decision, it
became common practice for courts to include stipulations, not only regarding
discovery, but also involving the defendant’s consent to foreign jurisdiction and final
judgment, and the defendant’s waiver of foreign statutes of limitation.
With respect to discovery, district courts have imposed conditions that range
from the parties having to make “relevant” documents and witnesses available to the
parties consenting to abide by the Federal Rules of Civil Procedure. We have
approved of these types of discovery conditions and have even held that the
imposition of such conditions supported the finding of an adequate, alternative
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forum. See Satz v. McDonnell Douglas Corp., 244 F.3d 1279, 1283 (11th Cir. 2001)
(affirming the district court’s finding that the foreign court was adequate in part
because the defendant “agree[d] to conduct all discovery in accordance with the
Federal Rules of Civil Procedure”); Magnin v. Teledyne Cont’l Motors, 91 F.3d
1424, 1430–31 (11th Cir. 1996) (affirming a forum non conveniens dismissal in part
based on the condition that any domestic discovery “be done in accordance with the
Federal Rules of Civil Procedure”). 9
In this case, the district court required Citigroup to “reasonably make
available all relevant documents and witnesses within its control,” and the plaintiffs
would have been able “to move to reinstate the action within ninety (90) days of
[Citigroup] failing to comply” with that or any other condition. Given our precedent,
we do not fault the district court for imposing such a typical condition in its order.
But we urge the parties and the court to re-evaluate the limits and contours of that
condition in case the district court again dismisses for forum non conveniens.
For starters, what rules would govern the scope of “reasonableness,”
“relevance,” and “control”? Would those concepts be defined by Mexican law or
by the Federal Rules of Civil Procedure? The plaintiffs urge the latter, arguing that
9
Cases involving similar discovery conditions are voluminous. See, e.g., Mercier v.
Sheraton Int’l, Inc., 981 F.2d 1345, 1358 (1st Cir. 1992); Stewart v. Dow Chem. Co., 865 F.2d
103, 104–05 (6th Cir. 1989); Oto v. Airline Training Ctr. Arizona, Inc., 247 F. Supp. 3d 1098,
1109 (D. Ariz. 2017).
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we have “emphasized” dismissals conditioned on compliance with U.S. discovery
rules. Although we have sanctioned that type of condition, we have also approved
of a condition that only required disclosure of “relevant” documents without
reference to the Federal Rules. See Tazoe, 631 F.3d at 1330.
Either type of condition could present problems. As the plaintiffs note, the
required disclosure of “relevant” evidence is open-ended. If foreign law governs
relevance, the condition subjects the parties to some uncertainty and to the
idiosyncrasies of the foreign court, which to some extent undermines the purpose of
forum non conveniens. See Maggie Gardner, Parochial Procedure, 69 Stan. L. Rev.
941, 987 (2017) (arguing that “it is hard for judges to forecast whether the alternative
foreign forum will resolve the defendants evidentiary concerns” or “whether the
foreign court’s jurisdiction over evidence will actually translate into party access”).
Requiring the parties to follow the Federal Rules, on the other hand, may provide
them with more clarity about their ongoing obligations. But we have not given much
more thought to what mechanisms, or legal authority, the district court has at its
disposal to ensure compliance with the Federal Rules while a dismissed case is being
litigated in a foreign court. What permits the district court to adjudicate discovery
disputes in a case that it has already dismissed? Does the court need to retain some
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sort of jurisdiction? And what happens if those disputes are also pending before a
Mexican court?10
As noted, the district court included a “return jurisdiction” clause, which
permits the plaintiffs to refile in the Southern District of Florida in the event of a
breach of a condition and perhaps would encourage Citigroup’s compliance with the
discovery conditions. We have modified dismissal orders to add return jurisdiction
clauses—at least where there was some indication that the foreign court would not
assume jurisdiction. See Leon, 251 F.3d at 1316; King, 562 F.3d at 1384. But with
the understanding that a return jurisdiction clause is permissible, we still foresee
possible practical difficulties.
As one commentator has explained, the efficacy of a return jurisdiction clause
depends on a “herculean conception of [the] plaintiffs’ patience, litigiousness, and
financial resources.” Gardner, Parochial Procedure, 69 Stan. L. Rev. at 990. Some
plaintiffs may not have the resources or appetite to refile and start anew in federal
court, especially after protracted litigation abroad. That presupposes that the
10
Other courts have noted some of these issues in passing. See In re Union Carbide Corp. Gas
Plant Disaster at Bhopal, India in Dec., 1984, 809 F.2d 195, 205 (2d Cir. 1987) (explaining that a
discovery stipulation would be “subject to such approval as may be required of the [foreign] court,”
and otherwise “the parties will be limited by the applicable discovery rules of the [foreign] court
in which the claims will be pending”); Pinder v. Moscetti, 666 F. Supp. 2d 1313, 1321 (S.D. Fla.
2008) (requiring the defendants to provide all relevant evidence within their custody and control,
but recognizing that such a condition “d[id] not extend the discovery allowed under the Federal
Rules of Civil Procedure to litigation in the Bahamas,” as discovery “shall be governed by the
applicable discovery rules of the Bahamas court”).
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plaintiffs even had the resources to travel to and refile in the foreign court in the first
place. See Martin Davies, Time to Change the Federal Forum Non Conveniens
Analysis, 77 Tul. L. Rev. 309, 319 (2002) (explaining that “few plaintiffs even bother
to pursue their claim in the alternative foreign forum following forum non
conveniens dismissal from a U.S. court.”) (italics added).
For plaintiffs who do have resources for further litigation, they may actually
seek out or manufacture disputes in the hopes that even a minor discovery
disagreement could trigger a return jurisdiction clause and reopen the doors to
federal court. The plaintiffs here, for example, might want to seek extremely broad
discovery and then refile in the district court the moment that Citigroup withholds a
document on relevance grounds.
Accordingly, on remand, the district court should consider whether a single
breach would permit the plaintiffs to reinstitute their case in federal court, and
whether a breach must be material. If so, what would constitute a “material” breach,
and under whose law? Moreover, could Citigroup “cure” a breach if the plaintiffs
file a discovery motion and the district court concludes that the withheld documents
were relevant? That is, if the district court resumes jurisdiction and resolves a
discovery dispute in the plaintiffs’ favor, could Citigroup agree to produce the
withheld documents and then simply return to the Mexican court? Or does
Citigroup, like Julius Caesar, cross the Rubicon once it improperly withholds a
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relevant document? Without considering these questions (and perhaps others), the
district court may face practical problems down the road which could make litigation
less convenient for everyone involved.
VI
The district court did not apply the deference owed to the domestic plaintiffs,
and it erred in weighing the Gulf Oil private interest factors as to all the plaintiffs
because Citigroup did not satisfy its burden. We therefore reverse and remand for
further proceedings, including consideration of the United States’ interests under the
public interest factors.
The district court may in its discretion permit limited discovery, hold an
evidentiary hearing, or accept additional evidence and supplemental briefing from
the parties on the private and public interest factors. Because the plaintiffs have not
challenged the district court’s findings that Mexico is an adequate and available
forum, or that they would not be subject to undue inconvenience or delay if they had
to reinstate their case in Mexico, those findings stand. We also leave in place the
district court’s unchallenged findings with respect to the enforceability of the foreign
judgment, though we take no view on the weight of this fact in the district court’s
Gulf Oil analysis on remand.
We do not address at this time whether the district court erred in its
understandable attempt to ensure that Citigroup would provide adequate discovery
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in Mexico. We also do not take any view on Citigroup’s alternative arguments for
dismissal, which the district court did not reach.
REVERSED AND REMANDED.
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