Precision Weather Solutions Inc. v. Farmers Edge Inc. ( 2023 )

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 22-1070
PRECISION WEATHER SOLUTIONS INC.,
Plaintiff - Appellant,
v.
FARMERS EDGE INC.; FARMERS EDGE (US), INC.,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern District of Virginia, at
Alexandria. Liam O’Grady, Senior District Judge. (1:21-cv-00821-LO-IDD)
Submitted: November 28, 2022 Decided: February 22, 2023
Before THACKER, HARRIS, and HEYTENS, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ON BRIEF: Donald E. Stout, FITCH, EVEN, TABIN & FLANNERY LLP, Washington,
D.C.; Mark L. Hogge, R. Tyler Goodwyn IV, Nicholas H. Jackson, Elissa C. Jeffers, Song
K. Jung, DENTON US LLP, Washington, D.C., for Appellant. Tiffany R. Caterina, Los
Angeles, California, Glenda Dieuveille, FRANKFURT KURNIT KLEIN + SELZ PC,
New York, New York; Edward John Steren, EPSTEIN BECKER GREEN, Washington,
D.C., for Appellees.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
This case began as a contract dispute between two Canadian companies, Precision
Weather Solutions Inc. and Farmers Edge Inc. When a Canadian court denied Precision
Weather a preliminary injunction against Farmers Edge, Precision Weather filed a similar
suit in federal court in the Eastern District of Virginia. That court dismissed Precision
Weather’s case under the doctrine of forum non conveniens, and Precision Weather now
appeals. For the reasons given below, we affirm.
I.
Precision Weather Solutions Inc. is a Canadian corporation based in the province of
Manitoba, offering weather forecasting services to its clients through a software platform.
Farmers Edge Inc., also a Canadian corporation with its principal place of business in
Manitoba, entered into a series of agreements with Precision Weather to license its software
platform.
Disputes soon emerged and Farmers Edge sued Precision Weather in Canadian court
in Manitoba. Precision Weather counterclaimed, alleging that Farmers Edge had
misappropriated its intellectual property and incorporated it into its own software platform.
In March 2021, the Canadian court denied Precision Weather a preliminary injunction.
Soon after, Precision Weather filed the instant suit in the Eastern District of
Virginia. Precision Weather’s action was based on the same underlying events as the
Canadian action and raised similar claims, though it also added new claims for
misappropriation of trade secrets under federal and Virginia state law. See 18 U.S.C.
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§ 1386; Va. Code §§ 59.1-336-59.1-343. Precision Weather also added a second
defendant: Farmers Edge (US), Inc., a Minnesota subsidiary of Farmers Edge. According
to Precision Weather, the district court had personal jurisdiction over its case because the
two defendants conducted business in the Eastern District of Virginia, and venue was
proper because some part of its injuries also arose in that district.
The defendants moved to dismiss Precision Weather’s action on multiple grounds,
including lack of personal jurisdiction and improper venue. The upshot of their argument
was that the original court in Manitoba, Canada, and not the Eastern District of Virginia,
remained the appropriate venue for adjudication of the case: Precision Weather’s claims
involved disputes between two Canadian companies, based on conduct that occurred
primarily in Canada; as a result, all the key documents and witnesses were in Canada; and
the current action was duplicative of the still-pending Canadian litigation.
After initial proceedings and a first ruling that need not be detailed here, Precision
Weather moved to disqualify the district court judge. According to Precision Weather, the
judge’s “impartiality might reasonably be questioned,” see 28 U.S.C. § 455(a), because he
held a bank account at a financial institution that Precision Weather might want to call as
an expert witness, to opine on the valuation of Farmers Edge.
Ultimately, the district court dismissed Precision Weather’s action under the
doctrine of forum non conveniens, a common-law doctrine that allows for dismissal “when
an alternative forum exists, is available and is more convenient for the parties.” Precision
Weather Sols. Inc. v. Farmers Edge Inc., No. 1:21-cv-00821 (E.D. Va. Jan. 12, 2022),
J.A. 1919 (citing BAE Sys. Tech. Sol. & Servs., Inc. v. Republic of Korea’s Def. Acquisition
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Program Admin., 884 F.3d 463 (4th Cir. 2018)). The district court’s decision rested on
two independent and alternative grounds. J.A. 1919–21.
First, the court relied on a forum-selection clause in a confidentiality agreement
between Precision Weather and Farmers Edge, which provided that “the parties submit to
the exclusive jurisdiction of the Courts of Manitoba.” J.A. 1916. That clause, the court
concluded, was properly construed as mandatory, exclusive, and applicable to the pending
complaint. J.A. 1918. Under well-established Fourth Circuit precedent, the court finished,
such clauses control in all but the most exceptional cases, and Precision Weather had done
nothing to meet its burden of overcoming that presumption. J.A. 1919; see BAE Sys.,
884 F.3d at 470–71 (4th Cir. 2018) (describing the modified forum non conveniens
standard triggered by a mandatory forum-selection clause).
Second, the district court conducted what it termed the “traditional analysis of forum
non conveniens,” J.A. 1919 – that is, the analysis that applies in the absence of a forum-
selection clause. The threshold question, the court explained, was whether there was an
“available and adequate” alternative forum for the action. Id. at 1920. Here, the court
concluded, the Canadian forum clearly was available, as the parties already were litigating
there. Id. And even if, as Precision Weather alleged, certain remedies it sought would not
be available in Canadian court, that would not by itself render the Canadian forum
“inadequate.” Id. (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 258 (1981)). The court
then considered the “ultimate inquiry” of where trial would “best serve the convenience of
the parties and the ends of justice.” Id. (quoting DiFederico v. Marriot Int’l., Inc., 714 F.3d
796, 804 (4th Cir. 2013). The court had little difficulty in determining that the balance of
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public and private factors favored the Canadian forum: the parties are two Canadian
companies and a subsidiary of a Canadian company; it would be “clearly more convenient”
for the case to be litigated in Canada, and decidedly inconvenient for the parties to litigate
a “duplicative proceeding” in Virginia; and Canada has a “local interest in having localized
controversies decided at home.” Id. (internal quotation marks omitted).
Accordingly, the district court dismissed Precision Weather’s case with prejudice
on forum non conveniens grounds alone. J.A. 1923. 1 Precision Weather noted its appeal
the next day. A few weeks after that, the district court issued an order regarding Precision
Weather’s recusal motion, explaining that the motion was denied because nothing about
holding a bank account at an institution that might (or might not) be called as an expert
witness could call into question the court’s impartiality. Precision Weather Sols. Inc. v.
Farmers Edge Inc., No. 1:21-cv-00821 (E.D. Va. Feb. 4, 2022), J.A. 1926–27.
II.
On appeal, Precision Weather primarily challenges the dismissal of its action on
forum non conveniens grounds. It also argues that the district court improperly denied its
motion to recuse. Substantially for the reasons given by the district court, we affirm.
1
As the district court explained, its forum non conveniens determination made it
unnecessary to address the defendants’ alternative grounds for dismissal. J.A. 1921; see
Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 432 (2007) (court may
dismiss on threshold forum non conveniens grounds without resolving underlying
jurisdictional issues).
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A.
We begin with the district court’s forum non conveniens determination, which is
“committed to the sound discretion of the trial court.” Piper Aircraft, 454 U.S. at 257; see
Tang v. Synutra Int’l., Inc., 656 F.3d 242, 248, 253 (4th Cir. 2011) (applying abuse of
discretion standard). We discern no abuse of discretion in the district court’s finding that
a traditional forum non conveniens inquiry favors a Canadian forum. We therefore affirm
the district court on that ground alone, without addressing the potential effect of the
contractual forum-selection clause.
The forum non conveniens analysis requires a court to consider whether an
alternative forum was “available” and “adequate,” and, if so, whether it was “more
convenient in light of the public and private interests involved.” Tang, 656 F.3d at 248
(setting out standard). Ordinarily, there is a strong presumption in favor of the plaintiff’s
choice of forum, but “because the central purpose of any forum non conveniens inquiry is
to ensure that the trial is convenient,” the choice of a foreign plaintiff like Precision
Weather “deserves less deference.” Piper Aircraft, 454 U.S. at 256. And as the district
court explained, a court retains the authority to dismiss on forum non conveniens grounds
even when, as here, a defendant has not sought that remedy, at least in so many words.
J.A. 1920–21; see also United States v. Moussaoui, 483 F.3d 220, 236 (4th Cir. 2007)
(discussing inherent authority of courts to dismiss sua sponte on grounds of forum non
conveniens); cf. J.A. 58–60, 1546–47 (Farmers Edge arguing that Canadian forum is
available and would be more convenient in seeking dismissal on venue grounds).
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As the district court recognized, the threshold forum non conveniens inquiry is into
the “availability” and “adequacy” of an alternative forum. J.A. 1920. “Availability will
ordinarily be satisfied when the defendant is amenable to process in the other jurisdiction,”
Tang, 656 F.3d at 249 (internal quotation marks omitted), and here, as the district court
explained, parallel litigation already has commenced in Canadian court. 2 Precision
Weather focuses primarily on “adequacy,” arguing that its Canadian forum is not
“adequate” because Canadian law does not recognize its newly-alleged claims for trade
secret appropriation and will limit it to recovery on its other claims. But as the district
court explained, that specific causes of actions or remedies may be unavailable in a foreign
venue does not, without more, render that forum inadequate. See Piper Aircraft, 454 U.S.
at 247, 250 (holding that application of “less favorable” law in alternative forum does not
by itself preclude forum non conveniens dismissal and generally should not be given
“substantial weight” in analysis); Tang, 656 F.3d at 250 (explaining that foreign forum is
not “inadequate” merely because the plaintiffs “may not enjoy the same benefits as they
might receive in an American court” (internal quotation marks omitted)). Nor is this a case
2
Precision Weather suggests, for the first time on appeal, that the Canadian court
might lack jurisdiction over new defendant Farmers Edge (US), the Minnesota subsidiary
of Farmers Edge. Ordinarily we do not consider arguments that the parties did not press
before the district court. See In re Under Seal, 749 F.3d 276, 285 (4th Cir. 2014). In any
event, the core of Precision Weather’s claim is against Farmers Edge, based on that
Canadian company’s alleged theft of proprietary information in Canada. If Farmers Edge
(US) is meaningfully implicated in that conduct in some way independent of Farmers Edge,
then we do not doubt that a Canadian court could assert jurisdiction over the entire dispute,
notwithstanding Farmers Edge (US)’s American domicile – as even the cases cited by
Precision Weather suggest. See Club Resorts Ltd. v. Van Breda, [2012] 1 S.C.R. 572(Can.).
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in which it can be said that the remedy provided by the foreign forum is so empty that it
amounts to “no remedy at all,” Piper Aircraft, 454 U.S. at 254, given that Precision
Weather already has asked the Canadian court to grant it meaningful relief – damages and
an injunction – on its claims of fraud in the inducement, conversion, and unjust enrichment,
all arising from the same alleged misappropriation of intellectual property.
That leaves the final weighing of the relevant private and public interest factors to
determine “where trial will best serve the convenience of the parties and the ends of
justice.” DiFederico, 714 F.3d at 804 (internal quotation marks omitted). Again, we find
eminently reasonable the district court’s conclusion that these factors favor a Canadian
forum. As the district court explained the parties to this case are two Canadian corporations
and one of their subsidiaries, which means that it “clearly is more convenient” to continue
litigating the case in Canada: As Farmers Edge argued before the district court, Canada,
not Virginia, is where the witnesses and documentary evidence are located. J.A. 1920; see
Tang, 656 F.3d at 252 (identifying “relative ease of access to sources of proof” as key
private interest factor (internal quotation marks omitted)). By the same token, litigating a
“duplicative proceeding concerning the same factual questions” in Virginia, where no party
is domiciled and no misappropriation of technology is alleged to have occurred, would be
cumbersome and inconvenient. J.A. 1920. And finally, as the district court recognized, in
this Canada-centric case – alleging that one Canadian corporation entered into Canadian
contracts to access another Canadian corporation’s technology and then misappropriated
that technology in Canada – Canada has a “local interest in having [this] localized
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controvers[y] decided at home.” Piper Aircraft, 454 U.S. at 260 (internal quotation marks
omitted).
B.
Precision Weather also argues that its motion to disqualify the district court judge
was improperly denied. Again, we disagree.
We review a district court’s recusal decision for abuse of discretion. See Kolon
Indus. Inc. v. E.I. DuPont de Nemours & Co., 748 F.3d 160, 167 (4th Cir. 2014). Under
28 U.S.C. § 455(a), a district judge shall disqualify himself from “any proceeding in which
his impartiality might reasonably be questioned.” Here, Precision Weather sought
disqualification because the district court judge had a “financial relationship” with
Raymond James Ltd. – in the form of a bank account – which was a problem because
Precision Weather might want to depose Raymond James, a Farmers Edge underwriter, as
an expert witness regarding Farmer Edge’s valuation.
We perceive no “reasonable basis . . . for doubting the judge’s impartiality.” In re
Beard, 811 F.2d 818, 827 (4th Cir. 1987) (denying writ of mandamus to disqualify district
court judge). First, as the district court explained, a bank account is not the kind of
“financial interest” that may give rise to a perceived conflict of interest here, in that its
value would not be affected by the financial well-being of Raymond James. J.A. 1927; see
28 U.S.C. § 455(d)(4) (defining “financial interest” for recusal purposes). Moreover, again
as the district court explained, there also is no account for how Raymond James itself could
be affected by litigation in which it participated only as an expert witness. J.A. 1926. And
finally, we see no abuse of discretion in the district court’s determination that Precision
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Weather’s “speculative musing that Raymond James could be a possible witness during
discovery” was in any event too “hypothetical” to mandate recusal. Id. at 1927.
Though Precision Weather’s argument on this point is not well developed, its main
contention appears to be that the district court erred by ruling on its motion only after an
appeal was noticed. It is true that once Precision Weather took an appeal from the dismissal
of its case, the district court likely would have been divested of authority to adjudicate the
motion to disqualify. See Doe v. Public Citizen, 749 F.3d 246, 258 (4th Cir. 2014)
(observing that a timely notice of appeal generally transfers jurisdiction of case to court of
appeals). Here, however, we understand the district court to have ruled on the motion
before the notice of appeal, denying that motion implicitly when it did not recuse itself and
instead dismissed Precision Weather’s case with prejudice. See Hause v. Witkowski,
98 F.3d 1334, at *1 (4th Cir. 1996) (unpublished table decision) (finding that although the
district court had not “explicitly ruled” on a recusal motion, its dismissal of the action was
an “implicit denial” of that motion). Although the court’s explanation for its decision came
later, in other words, the court’s adjudication of the recusal motion came before the
divestiture rule shifted authority to this court. See United States v. Jenkins, 22 F.4th 162,
168 n.5 (4th Cir. 2021) (divestiture rule does not apply where district court decides matter
before notice of appeal but dockets explanatory order after appeal).
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III.
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED
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