Raytheon Engineers v. H L H & Associates ( 1998 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 97-20187
_____________________
RAYTHEON ENGINEERS AND CONSTRUCTORS, INC., doing
business as Litwin Panama Incorporated, doing business
as Litwin Engineers & Constructors, Incorporated,
Plaintiff-Appellant,
v.
H L H & ASSOCIATES INCORPORATED; CROSS CARIBBEAN
SERVICES LIMITED; CROWLEY AMERICAN TRANSPORT
INCORPORATED; M/V BROCKEN; M/V FALCON; M/V HAWK,
Defendants-Appellees.
_________________________________________________________________
Appeals from the United States District Court
for the Southern District of Texas
(H-95-CV-5772)
_________________________________________________________________
April 17, 1998
Before KING, EMILIO M. GARZA, and DeMOSS, Circuit Judges.
PER CURIAM:*
Plaintiff-appellant Raytheon Engineers and Constructors,
Inc. appeals the district court’s dismissal of its suit on the
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
basis of forum non conveniens. Finding that the dismissal was
not warranted, we reverse.
I. FACTUAL & PROCEDURAL BACKGROUND
In 1994 plaintiff-appellant Raytheon Engineers and
Constructors, Inc. (Raytheon)1 was involved in constructing a
plant in Panama. Raytheon entered into a time charter and
contract with defendant-appellee HLH & Associates, Inc. (HLH)
that provided for the shipment of various components of the plant
from Houston, Texas to Las Minas, Panama. The parties agree that
the contract was executed in Houston and that HLH was acting on
behalf of defendant-appellee Cross Caribbean Services, Ltd.
(Cross Caribbean).2 Because many of the plant components were
very large, the shipment also included two trucks and two
transporters3 that were necessary to move the components from the
ship to the job site. The parties dispute whether the original
1
Raytheon does business as Litwin Panama, Inc. and
Litwin Engineers & Constructors, Inc. Raytheon is a Delaware
corporation with an office and place of business in Houston,
Texas.
2
HLH serves as Cross Caribbean’s vessel agent in
Houston. HLH is a Texas corporation with an office and place of
business in Houston, Texas. Cross Caribbean is a foreign
corporation that operates ocean going vessels which call on the
Port of Houston.
3
Raytheon leased the trucks and transporters from Joe D.
Hughes, Inc.
2
contract provided for the return of the trucks and transporters
to Houston.4
The trucks and transporters were shipped to Panama on the
M/V CARIBBEAN INTREPID, a vessel owned by Cross Caribbean. After
they were used to transport the components to the plant, the
trucks and transporters were returned to Las Minas and loaded
onto the M/V BROCKEN, another Cross Caribbean vessel, for the
return trip to Houston. En route to Houston, the M/V BROCKEN ran
aground and returned to Cristobol, Panama for repairs. Someone
then arranged for an alternate booking on the M/V FALCON, a barge
belonging to defendant-appellee Crowley American Transport, Inc.
(Crowley)5 that was docked in Las Minas.
Raytheon then hired Panalpina, S.A. (Panalpina)6 to take the
trucks and transporters overland from Cristobol to Las Minas.
The parties dispute whether the trucks and transporters arrived
in Las Minas undamaged. Crowley relies on the affidavit of Jose
Castillo, its claim supervisor in Las Minas, which states that
4
Cross Caribbean contends that the original Raytheon/HLH
contract did not provide for return shipment of the trucks and
transporters. It argues that it gratuitously agreed to return
the trucks and transporters to Houston as part of an informal and
unwritten agreement. In contrast, Raytheon asserts that the
original contract included the return of the equipment to
Houston.
5
Crowley is a Delaware corporation with an office and
place of business in Houston, Texas.
6
Panalpina is a Panama corporation and is not a party to
this lawsuit.
3
the trucks and transporters were already damaged when Panalpina
delivered them to Las Minas. In contrast, Raytheon argues that
Crowley’s issuance of clean bills of lading for the two
transporters and the two trucks for shipment from Las Minas to
Lake Charles, Louisiana is prima facie evidence that the
equipment was damaged while under Crowley’s control. Both the
trucks and the transporters were delivered to Lake Charles in a
damaged condition, and they were repaired at Raytheon’s expense.
In addition, Raytheon claims that both shipments7 were delivered
in an untimely manner, thereby causing it to incur excess
demurrage charges.
In December 1995, Raytheon brought this suit for breach of
contract and cargo damage against HLH, Cross Caribbean, Crowley
and each of the vessels involved in shipping the trucks and
transporters (collectively, Defendants). Crowley moved for
dismissal on forum non conveniens grounds in November 1996.
Cross Caribbean filed a separate motion to dismiss for forum non
conveniens in December 1996. HLH did not join either motion.8
In January 1997, the district court dismissed the suit, and
Raytheon filed a motion for reconsideration and a notice of
7
For reasons that are unclear, the trucks and
transporters were shipped back to the United States on different
ships. The trucks were shipped on the M/V FALCON as planned, but
the transporters were shipped on the M/V HAWK.
8
HLH did file a summary judgment motion on different
grounds, but it later withdrew that motion.
4
appeal in February 1997. The district court denied the motion
for reconsideration, and Raytheon filed a timely amended notice
of appeal.
II. STANDARD OF REVIEW
We review a district court’s dismissal of a case on forum
non conveniens grounds for abuse of discretion. Piper Aircraft
Co. v. Reyno, 454 U.S. 235, 257 (1981). A district court “abuses
its discretion when it fails to address and balance the relevant
principles and factors of the doctrine of forum non conveniens.”
In re Air Crash Disaster Near New Orleans, 821 F.2d 1147, 1166
(5th Cir. 1987) (en banc), vacated on other grounds sub nom. Pan
Am. World Airways, Inc. v. Lopez, 490 U.S. 1032 (1989), opinion
reinstated and modified on other grounds, 883 F.2d 17 (5th Cir.
1989) (en banc).
III. DISCUSSION
Raytheon argues that Defendants failed to carry their burden
of proving all of the elements necessary for dismissal on forum
non conveniens grounds. It asserts that the district court
failed to properly weigh the private and public interest
factors.9 Thus, it contends that the district court erred in
9
Additionally, Raytheon asserts that even if the court
did not abuse its discretion in finding that Panama was an
available and adequate forum, it erred in failing to place
safeguards on the dismissal so as to insure that it would be able
to reinstate the case in Panama. As we find that the dismissal
was not warranted, we need not address this issue.
5
dismissing its suit on forum non conveniens grounds. Defendants
respond that the district court’s decision was not an abuse of
discretion and therefore should be affirmed.
Under the forum non conveniens doctrine, a district court
may, in the exercise of its sound discretion, dismiss a case
“when an alternative forum has jurisdiction to hear the case, and
when trial in the chosen forum would ‘establish . . .
oppressiveness and vexation to a defendant . . . out of all
proportion to plaintiff’s convenience.’” Piper Aircraft, 454
U.S. at 241 (quoting Koster v. Lumbermens Mut. Cas. Co., 330 U.S.
518, 524 (1947)) (omissions in original). The Supreme Court has
recognized, however, that “there is ordinarily a strong
presumption in favor of the plaintiff’s choice of forum,”
especially when a United States plaintiff has chosen the home
forum. Id. at 255.
We therefore have established a two-part framework under
which a district court’s analysis of the forum non conveniens
issue should proceed. See In re Air Crash, 821 F.2d at 1165-66.
First, the district court must determine whether there is an
available and adequate alternative forum in which to try the
case. Id. at 1165. An alternative forum is “available” when
“the entire case and all parties can come within the jurisdiction
of that forum” and is “adequate” when “the parties will not be
deprived of all remedies or treated unfairly . . . even though
6
they may not enjoy the same benefits as they might receive in an
American court.” Id.
If the district court finds that the alternative forum is
both available and adequate, then it proceeds to the second step
of the analysis and considers the private and public interest
factors affected by its decision to assume or reject jurisdiction
over the matter. Id. The court must consider the following
private interest factors:
“the relative ease of access to sources of proof;
availability of compulsory process for attendance of
unwilling, and the costs of obtaining attendance of
willing, witnesses; probability of view of premises, if
view would be appropriate to the action; and all other
practical problems that make trial of a case easy,
expeditious and inexpensive. There may also be
questions as to the enforcibility [sic] of a judgment
if one is obtained.”
Id. at 1162 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508
(1947)). Unless the balance of private interest factors weighs
“strongly in favor of the defendant,” the court must also
consider the relevant public interest factors before rendering a
decision, and “the plaintiff’s choice of forum should rarely be
disturbed.” Gulf Oil, 330 U.S. at 508. The relevant public
interest factors include:
the administrative difficulties flowing from court
congestion; the local interest in having localized
controversies resolved at home; the interest in having
the trial of a diversity case in a forum that is
familiar with the law that must govern the action; the
avoidance of unnecessary problems in conflicts of law,
or in application of foreign laws; and the unfairness
of burdening citizens in an unrelated forum with jury
duty.
7
In re Air Crash, 821 F.2d at 1162-63. “[N]o one private or
public interest factor should be given conclusive weight and . .
. the plaintiff’s initial choice [of forum] is usually to be
respected.” Id. at 1163.
In this case, the district court’s entire discussion of the
forum non conveniens issue consisted of the following two
paragraphs:
It is undisputed that Panamanian law applies to
some aspects of the disputes in this case. As well,
Panamanian courts may exercise jurisdiction over all of
the parties to the dispute. And, there is no claim by
the plaintiffs that the Panamanian courts cannot
provide adequate, fair and complete relief to all
parties and all claims. Therefore, the Panamanian
forum is “available” as that term is defined in law.
The Panamanian forum also makes sense because the
claims arose there, witnesses are there, any judgment
can be enforced there, the expense of litigation as to
the entirety of the case would be less, and the public
interest factors weight in favor of it.
We have stated that, in ruling on a motion to dismiss for
forum non conveniens, “[t]he district court should explain its
decisionmaking process clearly and in sufficient detail to permit
[this court] adequately to review it, either by giving written
reasons or by dictating the reasons for its decision into the
record with the same degree of explicitness.” In re Air Crash,
821 F.2d at 1166 n.32. A district court’s failure to weigh the
relative advantages of each forum and explain its decision
constitutes an abuse of discretion. Id. at 1166; see also Lacey
8
v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir. 1988); Gates
Learjet Corp. v. Jensen, 743 F.2d 1325, 1334 (9th Cir. 1984).
In this case, the district court determined that Panama was
an available forum, but it made no adequacy determination other
than noting that Raytheon has not claimed that Panama is an
inadequate forum. In addition, the district court’s single
conclusory sentence about the benefits of the Panamanian forum
does not constitute a clear explanation of its balancing of the
private and public interest factors. Thus, the district court
abused its discretion in dismissing the case on forum non
conveniens grounds.
Moreover, our review of the record and of the briefs
submitted on appeal has persuaded us that Defendants failed to
carry their burden of proving that they were entitled to a
dismissal on the basis of forum non conveniens. The defendant’s
burden of persuasion
runs to all the elements of the forum non conveniens
analysis. Therefore, the moving defendant must
establish that an adequate and available forum exists
as to all defendants if there are several. If the
moving defendant carries this initial burden, it must
also establish that the private and public interests
weigh heavily on the side of trial in the foreign
forum.
In re Air Crash, 821 F.2d at 1164; see also Robinson v. TCI/US
West Cable Communications Inc., 117 F.3d 900, 907 (5th Cir.
1997); Lacey, 862 F.2d at 43-44. In order to carry this burden,
the defendant “must provide enough information to enable the
9
District Court to balance the parties’ interests.” Piper
Aircraft, 454 U.S. at 258. Although the level of detail required
is dependent on the facts of each particular case, see In re Air
Crash, 821 F.2d at 1165 n.28, the defendant must at least allege
detailed facts in its motion for dismissal which, if not
controverted, are sufficient to support a forum non conveniens
dismissal, see Camejo v. Ocean Drilling & Exploration, 838 F.2d
1374, 1380 (5th Cir. 1988). In this case, Defendants failed to
carry their burden, and the district court therefore should not
have granted the motion to dismiss. See Lacey, 862 F.2d at 43
(“[T]he district court abuses its discretion if it does not hold
the defendants to their proper burden on the forum non conveniens
motion . . . .”).
First, we are not convinced that Defendants carried their
burden of proving that Panama was an available and adequate
forum. “The burden on a defendant moving to dismiss in favor of
a foreign court . . . is a strong one. The cases phrase the
matter in varying ways, but they make it clear that dismissal is
to be the exception, not the rule, and that there must be a
strong showing that the alternative forum would be significantly
more convenient.” 15 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND
PROCEDURE § 3828, at 291-92 (2d ed. 1986). Defendants assert that
the Panamanian forum is available because each defendant has
included in its appellate brief an agreement to submit to the
10
jurisdiction of the Panamanian courts.10 When the motion was
presented to the district court, however, there was no indication
that HLH was willing to submit to the jurisdiction of a
Panamanian court. See Perusahaan Umum Listrik Negara Pusat v.
M/V Tel Aviv, 711 F.2d 1231, 1238 n.19 (5th Cir. 1983) (“[T]he
alternative forum must be available at the time of dismissal.
Only with this understanding of the availability requirement do
we respect the explanation provided by the Court in [Gulf Oil
Corp. v.] Gilbert that forum non conveniens is a ‘choice between
forums.’”). However, as we rest our decision on other grounds,
whether HLH’s post hoc appellate concession of jurisdiction can
retroactively justify the district court’s determination that the
Panamanian forum was available is an issue that we need not
reach. In addition, although we are also skeptical as to whether
Defendants have demonstrated that Panama is an adequate forum, we
need not reach that issue either.11
10
In addressing whether the alternate forum is available,
our courts have sometimes required that the moving party also
substantiate its claim of availability. See, e.g., Robinson, 117
F.3d at 907-08 (finding that an affidavit submitted by an English
barrister stating that English courts would take jurisdiction and
including a claim-specific rationale supporting jurisdiction and
a citation to relevant authority was sufficient proof to
establish that the forum was available); Baris, 932 F.2d at 1549
(rejecting as inadequate the defendants’ attempts to establish
the availability of a forum by submitting proof that they were
being sued by other parties in the alternate forum).
11
In this case, Defendants offered only the unsworn
declaration made under penalty of perjury of Primo Ernesto
Gonzalez-Avila, a Panamanian attorney, who stated, with no
substantiation or citation of Panamanian legal authority, that
11
Even assuming that the district court correctly determined
Panama was an available and adequate forum at the time of the
dismissal, Defendants failed to allege uncontroverted facts
weighing in favor of dismissal sufficient to overcome the
deference due to the plaintiff’s choice of forum. See Camejo,
838 F.2d at 1380. In their motion to dismiss for forum non
conveniens, Defendants alleged that the following private
interest factors weighed in favor of pursuing the litigation in
Panama: (1) they claim that the damage occurred in Panama and
that the primary issue in the case is who had custody of the
equipment when the damage occurred; (2) they have several
employees in Panama who will testify at trial; (3) they wish to
join Panalpina as a third party defendant and it is not amenable
to suit in the United States but is amenable to suit in Panama;
the Panamanian court would take jurisdiction of the case and that
it is familiar with cargo damage cases and is experienced in
dealing with English-speaking witnesses. “[W]e require a
defendant to put forth unequivocal, substantiated evidence
presented by affidavit testimony in order for the district court
to satisfy the standard enunciated in Gulf Oil Corp. v. Gilbert.”
Baris v. Sulpicio Lines, 932 F.2d 1540, 1550 n.14 (5th Cir. 1991)
(citation omitted). We question whether this declaration alone
amounts to the “unequivocal, substantiated evidence” that is
generally required before a forum non conveniens motion may be
granted. Id.; see also Lacey, 862 F.2d at 45 (noting that the
defendants’ “failure to provide any record support for their
contentions precluded the district court from scrutinizing the
substance of the dispute between the parties” and that the
defendants had therefore failed to carry their burden);
Perusahaan Umum Listrik Negara Pusat, 711 F.2d at 1238 (noting
that a forum non conveniens dismissal “should never be granted,
irrespective of the balance of the [Gulf Oil Corp. v.] Gilbert
factors, unless the defendant can satisfy the court that an
adequate and available alternative forum exists”).
12
(4) they claim that most of the witnesses’ testimony will be in
Spanish and therefore there will be less translation involved if
the trial is conducted in Spanish.
Raytheon responds that (1) a primary issue in the case is
whether Defendants breached any contractual obligations that they
had to Raytheon, and the contracts were formed in Houston; (2)
Defendants have not offered to stipulate that they will abide by
a Panamanian court’s decision, and any judgment will therefore
have to be enforced by a United States court; and (3) most of the
witnesses are English-speaking.
The factors emphasized by Defendants do not suffice to
overcome the presumption that we exercise in favor of a United
States plaintiff’s choice of a United States forum. Contrary to
what the district court stated, it is not clear that the claims
arose in Panama, and only some of the witnesses are in Panama,
while others are in Houston. In addition, the fact that some of
the witnesses speak Spanish carries little weight because the
United States District Court for the Southern District of Texas
has ample experience in dealing with witnesses and parties who
speak only Spanish. Further, most if not all of the witnesses
located in Panama and identified by Defendant are its employees
and therefore will be readily available to attend court in
Houston. Finally, as it is not clear where the damage occurred,
Defendants’ argument that Panama is more convenient because the
damage occurred there is not compelling. Thus, Defendants’
13
private interest arguments are insufficient to support the
district court’s finding that dismissal was appropriate.
As to the public interest factors, Defendants claim that the
fact that any claims involving the overland transportation of the
equipment by Panalpina will be governed by Panamanian law is a
public interest factor weighing in favor of dismissal. Raytheon
responds that (1) the law to be applied is United States law,
namely the Carriage of Goods by Sea Act, 46 U.S.C. §§ 1300 to
1315; (2) the case can be disposed of more quickly in the United
States; and (3) the United States District Court for the Southern
District of Texas has a greater interest in deciding matters
involving several United States companies than does a Panamanian
court. We agree. The mere possibility that Panamanian law might
apply if the damage occurred while the equipment was under the
control of Panalpina, a nonparty, is in no way sufficient to
overcome the interest that the United States courts have in
adjudicating a claim brought under the Carriage of Goods by Sea
Act by a United States company where two of the other defendants
are also United States companies.
For the reasons stated above, as a matter of law, Defendants
failed to carry their burden of showing that a dismissal on the
basis of forum non conveniens was warranted.
Finally, Defendants have moved to strike a portion of
Raytheon’s reply brief that relies on a forum-selection clause in
the contract between Raytheon and HLH. Defendants argue that
14
Raytheon may not raise this argument for the first time in its
reply brief. As we conclude for other reasons that dismissal on
the basis of forum non conveniens was inappropriate, this issue
is moot.
IV. CONCLUSION
For the foregoing reasons, we REVERSE the district court’s
judgment of dismissal. Defendants’ joint motion to strike
portions of Raytheon’s reply brief is DISMISSED as moot.
15