Tropp v. Corporation of Lloyd's

08-2332-cv
Tropp v. Corporation of Lloyd’s
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT . CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT ’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT , A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER ”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL .
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 19 th day of July, two thousand ten.
5
6 PRESENT: DENNIS JACOBS,
7 Chief Judge,
8 RICHARD C. WESLEY,
9 DENNY CHIN,
10 Circuit Judges.
11
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13 Richard A. Tropp, individually, and on
14 behalf of all others similarly situated,
15 Plaintiff-Appellant,
16
17 -v.- 08-2332-cv
18
19 Corporation of Lloyd’s, also known as
20 The Society of Lloyd’s,
21 Defendant-Appellee.
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23
24 APPEARING FOR APPELLANT: RICHARD A. TROPP, pro se, New York,
25 NY.
26
27 APPEARING FOR APPELLEE: JOHN W. BREWER, Fried, Frank,
28 Harris, Shriver & Jacobson LLP,
29 New York, NY.
30
1 Appeal from a judgment of the United States District
2 Court for the Southern District of New York (Buchwald, J.).
3 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
4 AND DECREED that the judgment of the district court be
5 AFFIRMED.
6 Plaintiff, Richard Tropp, pro se, appeals from an order
7 of the United States District Court for the Southern
8 District of New York (Buchwald, J.) dismissing his action
9 against defendant, the Corporation of Lloyd’s (“Lloyd’s”),
10 on the grounds of improper venue and failure to state a
11 claim. We assume the parties’ familiarity with the
12 underlying facts, the case’s procedural history, and the
13 issues presented for review.
14 “Where the district court has relied on pleadings and
15 affidavits to grant a Rule 12(b)(3) motion to dismiss on the
16 basis of a forum selection clause, our review is de novo.”
17 Altvater Gessler-J.A. Baczewski Int’l (USA) Inc. v. Sobieski
18 Destylarnia S.A., 572 F.3d 86, 89 (2d Cir. 2009) (internal
19 quotation marks omitted). The party seeking enforcement of
20 a forum selection clause must demonstrate that: “(1) the
21 clause was reasonably communicated to the party resisting
22 enforcement; (2) the clause was mandatory and not merely
23 permissive; and (3) the claims and parties involved in the
24 suit are subject to the forum selection clause.” Id.25 Once the party seeking enforcement has established
26 these conditions, the burden shifts to the party resisting
27 enforcement to rebut the presumption of enforceability by
28 “making a sufficiently strong showing that ‘enforcement
29 would be unreasonable or unjust, or that the clause was
30 invalid for such reasons as fraud or overreaching.’”
31 Phillips v. Audio Active, Ltd., 494 F.3d 378, 383-84 (2d
32 Cir. 2007) (quoting M/S Bremen v. Zapata Off-Shore Co., 407
33 U.S. 1, 15 (1972)). “The Supreme Court has construed this
34 exception narrowly.” Roby v. Corporation of Lloyd’s, 996
35 F.2d 1353, 1363 (2d Cir. 1993).
36 Tropp’s primary challenge to the district court’s Rule
37 12(b)(3) holding is that the forum selection clause is
38 unenforceable because United Kingdom law deprived him of any
39 remedy, See, e.g., Roby v. Soc’y of Lloyd’s, 992 F.2d 135340 (2d Cir. 1993) (A forum selection clause is unreasonable “if
41 the fundamental unfairness of the chosen law may deprive the
42 plaintiff of a remedy.”), and that his experiences in UK
2
1 courts provide a record of this deprivation that was
2 unavailable to the courts that have previously upheld the
3 forum selection clause contained in Lloyd’s General
4 Undertaking agreement.
5 True, at least some claims against Lloyd’s are now
6 precluded by conclusions reached in unrelated UK litigation.
7 See Laws v. Soc’y of Lloyds, [2003] EWCA (Civ) 1887, [65].
8 However, the UK courts did not dismiss Tropp’s counterclaims
9 on that basis. Moreover, although Tropp was unsuccessful in
10 his attempts to assert defenses and counterclaims against
11 Lloyd’s in the UK courts, his experiences do not cause us to
12 revisit our holding that the Lloyd’s forum selection clauses
13 (of which this is one) are valid because UK remedies are
14 available. See, e.g., Roby, 992 F.2d at 1365-66.
15 We review de novo the district court’s dismissal for
16 failure to state a claim pursuant to Federal Rule of Civil
17 Procedure 12(b)(6). See, e.g., Selevan v. N.Y. Thruway
18 Auth., 584 F.3d 82, 88 (2d Cir. 2009). We “assume all
19 ‘well-pleaded factual allegations’ to be true, and
20 ‘determine whether they plausibly give rise to an
21 entitlement to relief.’” Id. (quoting Ashcroft v. Iqbal,
22 129 S. Ct. 1937, 1950 (2009)).
23 Whether a foreign judgment is domestically enforceable
24 is a matter of state law. Fed. R. Civ. P. 69(a)(1). New
25 York’s Recognition Act applies to “any foreign country
26 judgment which is final, conclusive and enforceable where
27 rendered.” N.Y. C.P.L.R. 5302. A judgment that
28 satisfies 5302 “is enforceable by an action on the judgment,
29 a motion for summary judgment in lieu of complaint, or in a
30 pending action by counterclaim, cross-claim or affirmative
31 defense.” N.Y. C.P.L.R. 5303. “A foreign country judgment
32 is not conclusive if,” inter alia, “the judgment was
33 rendered under a system which does not provide impartial
34 tribunals or procedures compatible with the requirements of
35 due process of law.” N.Y. C.P.L.R. 5304(a). “A foreign
36 country judgment need not be recognized if,” inter alia,
37 “the cause of action on which the judgment is based is
38 repugnant to the public policy of this state.” N.Y.
39 C.P.L.R. 5304(b).
40 Tropp argues that Lloyd’s UK judgment is unenforceable
41 because UK law employs a “sub-system” for claims like his,
42 that denies due process to aggrieved Names. The New York
43 Court of Appeals however, upholding the recognition of a
3
1 default English judgment, held that the “relevant inquiry
2 under C.P.L.R. 5304(a)(1) is the overall fairness of
3 England’s legal ‘system,’ which is beyond dispute.” See
4 CIBC Mellon Trust Co. v. Mora Hotel Corp. N.V., 792 N.E.2d
5 155, 160 (N.Y. 2003).
6 Tropp contends that recognition of the UK judgment
7 would be repugnant to various elements of New York’s public
8 policy. But Society of Lloyd’s v. Grace, 718 N.Y.S.2d 3279 (N.Y. App. Div. 2000) involved a litigant in Tropp’s
10 circumstances--in particular, the UK court “entered summary
11 judgment without allowing defendants to present their fraud
12 claim or challenge the amount sought by Lloyd’s”--and the
13 First Department concluded that “since the underlying
14 English judgments are procedurally sound and do not violate
15 any public policy of New York or the United States, they are
16 entitled to comity.” Id. at 328.
17 Finally, Tropp argues that, if the UK judgment does not
18 violate the Recognition Act, then the Recognition Act itself
19 violates his federal constitutional due process rights. He
20 contends, as does the brief amicus curiae, that the case is
21 controlled by Tumey v. Ohio, 273 U.S. 510 (1927), which
22 holds that it “certainly violates the Fourteenth Amendment
23 and deprives a defendant in a criminal case of due process
24 of law to subject his liberty or property to the judgment of
25 a court, the judge of which has a direct, personal,
26 substantial pecuniary interest in reaching a conclusion
27 against him in his case.” Id. at 523. In this case
28 however, Tropp is not facing criminal charges, but rather a
29 civil judgment for breach of contract relating to his
30 voluntary relationship with Lloyd’s. More importantly,
31 although the UK courts gave conclusive effect to Lloyd’s
32 calculation of Tropp’s liability, the UK courts themselves
33 had no financial interest in the outcome of Tropp’s case.
34 Finding no merit in Tropp’s remaining arguments, we
35 hereby AFFIRM the district court’s judgment.
36 FOR THE COURT:
37 CATHERINE O’HAGAN WOLFE, CLERK
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