Nicolette Lewis v. Lmic

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NICOLETTE LEWIS; ALEXIS LEWIS; No. 18-16140
MARGRETT LEWIS; JEFFREY LEWIS,
Plaintiffs-Appellants, D.C. No.
3:18-cv-01138-
v. WHO
LIBERTY MUTUAL INSURANCE
COMPANY; LIBERTY INTERNATIONAL OPINION
UNDERWRITERS,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
William Horsley Orrick, District Judge, Presiding
Argued and Submitted December 5, 2019
San Francisco, California
Filed March 30, 2020
Before: Eugene E. Siler,* Richard R. Clifton,
and Jay S. Bybee, Circuit Judges.
Opinion by Judge Bybee
*
The Honorable Eugene E. Siler, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
2 LEWIS V. LIBERTY MUTUAL INS. CO.
SUMMARY**
Forum Selection
The panel affirmed the district court’s dismissal on the
grounds of forum non conveniens of a diversity insurance
coverage action.
Plaintiffs obtained a $45 million judgment in a products
liability suit brought against EcoSmart, Inc. When EcoSmart
declared bankruptcy, plaintiffs brought this action against
EcoSmart’s insurer for payment on the judgment. The district
court dismissed the suit based on a forum-selection clause in
the insurance policy designating Australian courts as the
exclusive forum.
The panel held that under California law because the
plaintiffs stood in the shoes of EcoSmart, their third-party
creditors’ rights were derivative of the rights and limitations
held by the bankrupt insured, and thus the forum-selection
clause applied. The panel further held that the plaintiffs had
not shown that the clause violated California public policy or
that Australia was an inadequate forum for suit. The panel
rejected plaintiffs’ arguments that Cal. Ins. Code § 11580, or
Cal. Ins. Code § 678.1, precluded litigation in Australia.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
LEWIS V. LIBERTY MUTUAL INS. CO. 3
COUNSEL
Leslie R. Perry (argued) and Deborah S. Bull, Perry Johnson
Anderson Miller & Moskowitz LLP, Santa Rosa, California,
for Plaintiffs-Appellants.
Jack DiCanio (argued), Skadden Arps Slate Meagher & Flom
LLP, Palo Alto, California; James R. Carroll, Skadden Arps
Slate Meagher & Flom LLP, Boston, Massachusetts; for
Defendants-Appellees.
OPINION
BYBEE, Circuit Judge:
Plaintiffs Nicolette Lewis and her family (the Lewis
family or the Lewises) were awarded more than $45 million
in a products liability suit brought against EcoSmart, Inc.
(“EcoSmart”). When EcoSmart declared bankruptcy, the
Lewises brought a direct action against EcoSmart’s insurer,
Liberty Mutual Insurance Company (“LMIC”), for payment
on the judgment. LMIC argued that its insurance policy with
EcoSmart had a forum-selection clause designating
Australian courts as the exclusive forum, so the suit must be
dismissed on the grounds of forum non conveniens. The
district court granted LMIC’s motion to dismiss.
We conclude that, because the Lewises stand in the shoes
of EcoSmart, their third-party creditors’ rights are derivative
of the rights and limitations held by the bankrupt insured, and
thus the forum-selection clause applies. We further conclude
that the Lewises have not shown that the clause violates
California public policy or that Australia is an inadequate
4 LEWIS V. LIBERTY MUTUAL INS. CO.
forum for suit. Thus, we affirm the judgment of the district
court.
I. BACKGROUND
The facts of this case are truly tragic. Nicolette Lewis
was severely burned after lighter fluid in a container caught
fire and spewed over her. Nicolette’s twin sister, Alexis, and
parents, Jeffrey and Margrett, also sustained burns and
emotional trauma. The family brought tort claims against
EcoSmart, and its corporate parent, The Fire Company, Pty,
Ltd. (“TFC”), in California state court. TFC, an Australian
company, did not file an answer. The Superior Court of
California for Sonoma County found EcoSmart liable and
awarded damages exceeding $45 million.
While the Lewises’ products-liability action was ongoing,
EcoSmart sought indemnification and the provision of a
defense from LMIC, its insurer. LMIC had provided
insurance policies to EcoSmart and TFC. The insurance
policy in place from April 30, 2013 to April 30, 2014 likely
would have covered the Lewises’ claims (the 2013–14
Policy). But the fire occurred on June 8, 2014. By that point,
a new policy had been issued (the 2014–15 Policy). The
2014–15 Policy, however, significantly reduced the policy
limits and excluded coverage of claims for any product
holding fuel unless it was fitted with a “flame arrester.” The
Lewises’ products-liability claim was based on EcoSmart’s
failure to supply a flame arrester on the product sold to the
Lewis family. Both insurance policies had forum-selection
and choice-of-law clauses designating Australian courts as
the exclusive forum and Australian law as governing. Citing
the 2014–15 Policy, LMIC declined to defend EcoSmart or
LEWIS V. LIBERTY MUTUAL INS. CO. 5
provide indemnification. EcoSmart then declared
bankruptcy.
The Lewis family sought recovery from LMIC in
California state court, alleging that the 2013–14 Policy
remained in effect for an additional sixty days—which would
have covered the accident—because LMIC had failed to give
EcoSmart adequate notice of the change in the policy, as
required by California insurance law. LMIC removed the
case to federal court and promptly filed a motion to dismiss
the claim on the basis of the forum-selection clause and forum
non conveniens, asserting that under the forum-selection
clause Australia was the exclusive forum for the suit. The
plaintiffs countered that they were not bound by provisions in
a contract to which they were not parties. But LMIC
responded that the Lewis family stood in EcoSmart’s shoes
and, hence, assumed any terms and conditions that would
bind EcoSmart in making a claim under the policy.
The district court found the facts and posture of this case
troubling. Nevertheless, the court concluded that “plaintiffs’
claims for damages are derivative of EcoSmart’s,” meaning
that they “have to stand in EcoSmart’s shoes to recover.”
Thus, the court felt compelled to honor the forum-selection
clause. The court also determined that the clause was neither
unreasonable nor unjust. Following dismissal on forum non
conveniens grounds, the Lewis family brought this appeal.
II. STANDARD OF REVIEW
We review the district court’s dismissal “on the basis of
forum non conveniens for an abuse of discretion.” Carijano
v. Occidental Petroleum Corp., 643 F.3d 1216, 1224 (9th Cir.
2011). The district court abuses its discretion if it identifies
6 LEWIS V. LIBERTY MUTUAL INS. CO.
an incorrect legal standard, applies the correct standard
“illogically, implausibly, or in a manner without support in
inferences that may be drawn from facts in the record.” Id.In the context of forum non conveniens, the district court
abuses its discretion if it “‘strike[es] an unreasonable balance
of relevant factors.’” Id. (quoting Ravelo Monegro v. Rosa,
211 F.3d 509, 511 (9th Cir. 2000)). The validity of a forum-
selection clause is governed by federal law. Petersen v.
Boeing Co., 715 F.3d 276, 280 (9th Cir. 2013).
III. DISCUSSION
The Lewis family raises three arguments. First, they
contend that, as non-signatories to the insurance policy, they
are not bound by the forum-selection clause. Second, they
argue that, even if the forum-selection clause applies to them,
enforcement of the forum-selection clause would violate
California’s strongly held public policy, as codified in
§§ 678.1 and 11580 of the California Insurance Code. And,
third, the Lewises argue that Australia is an inadequate forum
in which to pursue their claims, and it was an abuse of
discretion for the district court to grant LMIC’s motion to
dismiss.
A. The Forum-Selection Clause Is Binding on the Plaintiffs
At first glance, the Lewises’ claim that they are not bound
by the terms of the insurance policy appears entirely sensible.
They never had the opportunity to negotiate or assent to the
terms of LMIC’s policy. They are merely tort creditors
looking to recover a judgment. But the Lewises’ argument
collides with a basic premise of California law governing
insurance contracts.
LEWIS V. LIBERTY MUTUAL INS. CO. 7
Although the Lewises are not insured under the LMIC
policy, they are, as they concede, third-party judgment
creditors of EcoSmart, which was insured under the LMIC
policy. “[I]t is well-settled contract law that the scope of a”
third-party’s rights can be “defined by the contract.” TAAG
Linhas Aereas de Angl. v. Transamerica Airlines, Inc.,
915 F.2d 1351, 1354 (9th Cir. 1990). Under California law,
“the injured third person [bringing a tort claim against an
insurance company] stands in the shoes of the insured tort
feasor” and “gets no greater rights than the tort feasor” would
have if the tort feasor sought indemnification from the
insurance company. Olds v. Gen. Accident Fire & Life
Assurance Corp., 155 P.2d 676, 681 (Cal. Dist. Ct. App.
1945), disapproved on other grounds by Barrera v. State
Farm Mut. Auto Ins. Co., 456 P.2d 674 (Cal. 1969). In other
words, “if the tort feasor could not recover, neither can the
injured third person.” Id.; accord Home Indem. Co. of N.Y.
v. Standard Accident Ins. Co. of Detroit, 167 F.2d 919, 930
(9th Cir. 1948) (explaining that any limitations that would
preclude the insured from receiving indemnification “will
likewise bar the injured person from recovering against the
insurer should the judgment in his favor and against the
[in]sured remain unsatisfied” (quoting Valladao v. Fireman’s
Fund Indem. Co., 89 P.2d 643, 646 (Cal. 1939))).
More pertinent to this case, California courts have
explained that “a judgment creditor who has prevailed in a
lawsuit against an insured party may bring a direct action
against the insurer subject to the terms and limitations of the
policy.” W. Heritage Ins. Co. v. Superior Court, 132 Cal.
Rptr. 3d 209, 216 (Cal. Ct. App. 2011) (emphasis added).
And “in a suit by an injured third person against the
tortfeasor’s insurer, the insurer may raise any defense against
the injured person that it could have raised against the
8 LEWIS V. LIBERTY MUTUAL INS. CO.
insured.” Shapiro v. Republic Indem. Co. of Am., 341 P.2d
289, 290 (Cal. 1959) (emphasis added).
Nevertheless, the Lewis family asserts that California law
precludes application of any contractual provisions against
third parties that are not intended to benefit the specific third
party. They reason that, as plaintiffs, they may choose their
own venue unless LMIC can show that the forum-selection
clause was adopted for their benefit. This turns California
law on its head. In Murphy v. Allstate Insurance Co., the
California Supreme Court explained that a third party creditor
can only enforce the rights of a contract that were specifically
created for the third party. 553 P.2d 584, 588 (Cal. 1976).
The principle prevents, for example, a judgment creditor from
bringing a direct action against an insurance company for
satisfaction of the judgment against the insured and for
violation of the duty to defend the insured. California courts
have held that the latter claim is for the benefit of the insured
alone and can only be brought by a judgment creditor if it was
received through assignment of the claim. Id. at 589–90; see
Clark v. Cal. Ins. Guar. Ass’n, 133 Cal. Rptr. 3d 1, 6–7 (Cal.
Ct. App. 2011); San Diego Hous. Comm’n v. Indus. Indem.
Co., 116 Cal. Rptr. 2d 103, 121–22 (Cal. Ct. App. 2002).
That principle limits what claims the third party can make; it
does not deprive the insurer of any protections it has under
the policy.
Under California law, the provisions of the insurance
contract that bind the insured will also bind a third-party
judgment creditor. As a result, the plaintiffs here are bound
by the terms of the insurance policy—including the forum-
selection clause—unless California insurance law prevents its
operation or Australia is an inadequate or inconvenient
forum.
LEWIS V. LIBERTY MUTUAL INS. CO. 9
B. Dismissal for Forum Non Conveniens Was Proper
“[T]he appropriate way to enforce a forum-selection
clause pointing to a state or foreign forum is through the
doctrine of forum non conveniens.” Atl. Marine Constr. Co.
v. U.S. Dist. Court for the W. Dist. of Tex., 571 U.S. 49, 60
(2013). In a case in which there is no forum-selection clause,
“a defendant bears the burden of demonstrating an adequate
alternative forum, and that the balance of private and public
interest factors favors dismissal.” Carijano, 643 F.3d at
1224. However, “[w]hen parties agree to a forum-selection
clause, they waive the right to challenge the preselected
forum as inconvenient or less convenient for themselves or
their witnesses, or for their pursuit of the litigation.” Atl.
Marine, 571 U.S. at 64. In a case that can be transferred
within the federal system, “the plaintiff must bear the burden
of showing why the court should not transfer the case to the
forum to which the parties agreed.” Id.; see Yei A. Sun v.
Advanced China Healthcare, Inc., 901 F.3d 1081, 1087–88
(9th Cir. 2018). “[T]he same standards should apply to
motions to dismiss for forum non conveniens in cases
involving valid forum-selection clauses pointing to state or
foreign forums.” Atl. Marine, 571 U.S. at 66 n.8.
We have held that
a forum-selection clause [is] controlling
unless the plaintiff [makes] a strong showing
that: (1) the clause is invalid due to “fraud or
overreaching,” (2) “enforcement would
contravene a strong public policy of the forum
in which suit is brought, whether declared by
statute or by judicial decision,” or (3) “trial in
the contractual forum will be so gravely
10 LEWIS V. LIBERTY MUTUAL INS. CO.
difficult and inconvenient that [the plaintiff]
will for all practical purposes be deprived of
his day in court.”
Yei A. Sun, 901 F.3d at 1088 (quoting M/S Bremen v. Zapata
Off-Shore Co., 407 U.S. 1, 15, 18 (1972)). The Lewises do
not claim that the forum-selection clause was the product of
fraud or overreaching, but they do argue that (1) enforcement
of the forum-selection clause would contravene California
policy, and (2) Australia is an inadequate and inconvenient
forum for litigation in which they will be deprived of their
day in court.
1. Enforcement of the Forum-Selection Clause Is Not
Foreclosed by California Law
The Lewis family asserts that California law forecloses
operation of the forum-selection clause. When a forum-
selection clause violates “a strong public policy of the forum
in which suit is brought,” then it “should be held
unenforceable.” M/S Bremen, 407 U.S. at 15. We have
referred to such policies as “unwaivable public rights.”
Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1292 (9th Cir.
2006) (en banc) (internal quotation marks omitted). The
Lewises point to two California provisions—§§ 678.1(d) and
11580 of the California Insurance Code. They contend that
these sections create unwaivable public rights violated by the
forum-selection clause.
California, through § 11580, provides a direct cause of
action against an insurer for anyone who has secured a
judgment for bodily injury against the insured. See Cal. Ins.
Code § 11580(b)(2) (2019). In § 678.1(d), California requires
an insurer to give an insured at least sixty-days’ notice of
LEWIS V. LIBERTY MUTUAL INS. CO. 11
material changes in the policy; if the insurer fails to do so, the
original policy continues in effect for sixty days. Cal. Ins.
Code § 678.1(d) (2019). The Lewises allege that LMIC
failed to give EcoSmart the requisite notice of the change in
coverage and, accordingly, the 2013–14 Policy continued in
effect for sixty days, which would cover the incident.1 By
contrast, the Lewises claim Australian law provides no such
equivalent protection.2 Plaintiffs therefore conclude that
litigating this case in an Australian forum under Australian
law would preclude their exercise of these non-waivable
statutory rights and, hence, violate California’s public policy.
Beginning with § 11580, we fail to see how litigating this
claim in Australia will contradict the policies undergirding
that statute. States, of course, have “a manifest interest in
providing [their] residents with a forum for reaching
insurance companies who refuse to honor legitimate claims.”
Haisten v. Grass Valley Med. Reimbursement Fund, Ltd.,
784 F.2d 1392, 1399 (9th Cir. 1986). This interest is
especially strong “with regard to companies that insure
against loss from liability for personal injury, whose actions
implicate the safety of the state’s residents.” Id. To help
ensure recovery,
1
The accident occurred on June 8, 2014, which is less than sixty days
from the expiration of the 2013–14 Policy on April 30, 2014.
2
We have declarations in the record from Australian solicitors in
support of the Lewis family and LMIC. Although a precise understanding
of Australian law is not critical to our judgment here, it appears that
Australian law provides some comparable protection for an insured,
although not as generous as § 678.1. For purposes of this appeal, we will
assume that the Lewises would not prevail on their claims if Australian
law controls which LMIC policy applies.
12 LEWIS V. LIBERTY MUTUAL INS. CO.
Section 11580 requires every liability policy
issued in California to contain a provision that
whenever judgment is secured against the
insured in an action based upon bodily injury,
death, or property damage, for which the
insurer is liable, then an action may be
brought by the judgment creditor against the
insurer to recover on the judgment.
Sanchez v. Truck Ins. Exch., 26 Cal. Rptr. 2d 812, 815 (Cal.
Ct. App. 1994).
In § 11580, California has announced that an insurance
policy must allow for some kind of action to seek recovery
when judgment is rendered against the insured. See Cal. Ins.
Code § 11580(b)(2); see also Clark, 133 Cal. Rptr. 3d at 4
(explaining that “all policies issued in the state must contain”
such a provision and “[i]f the provision is absent from the
policy, the policy will be construed as containing the
provision”). California’s courts are an available forum for
executing judgments against insurance companies. But
nothing in the statute suggests that California has made its
own courts the exclusive jurisdiction for such claims. Rather,
§ 11580 simply provides “that whenever judgment is secured
against the insured . . . based upon bodily injury, death, or
property damage, then an action may be brought against the
insurer.” Cal. Ins. Code § 11580(b)(2) (emphasis added).
We do not read § 11580 to abrogate non-California
forum-selection clauses. Instead, the provision says that a
plaintiff looking to enforce a judgment from a bodily-injury
claim against an insurance company will have some forum to
LEWIS V. LIBERTY MUTUAL INS. CO. 13
seek judicial recourse.3 Nothing in the statute prevents
setting non-Californian tribunals as designated fora. Indeed,
the statute allows insurance contracts to place conditions on
a right of action. It says, “[A]n action may be brought against
the insurer on the policy and subject to its terms and
limitations.” Cal. Ins. Code § 11580(b)(2) (emphasis added).
To the extent plaintiffs claim that § 11580 alone mandates
that their claim be heard here, they stretch the statute’s
protection too far. Thus, because the Lewises are not
foreclosed from raising their claim in an Australian court,
their argument that § 11580 precludes litigation in Australia
gains no traction.
Likewise, § 678.1 provides no haven here. Under that
provision, California law requires insurers to give the insured
at least sixty-days’ notice of certain conditions for renewal of
the contract. Cal. Ins. Code § 678.1(c). If the insurer fails to
provide such notice, then the provisions of the terms of the
prior insurance policy remain in effect “for a period of
60 days after the insurer gives the notice.” Id. § 678.1(d). To
obtain coverage under the more generous 2013–14 Policy, the
Lewis family alleges that EcoSmart only received notice of
the significant reductions in coverage seventy-two hours
before the 2013–14 Policy was due to lapse. If true, then the
2013–14 Policy’s provisions would still have been in effect
3
If the effect of an insurance policy were to completely deprive the
plaintiff of recourse to the courts in seeking to recover a judgment, then
the contract would likely contravene § 11580. See Sanchez, 26 Cal. Rptr.
2d at 816, 818 (holding that where the insurer declined to defend the
insured and the insured settled with the plaintiff, § 11580 prevented the
insurer’s reliance on a “no action” clause requiring that any judgment
result from “actual trial”); see also Haisten, 784 F.2d at 1399 (“[T]he state
has a manifest interest in providing its residents with a forum for reaching
insurance companies . . . .” (emphasis added)).
14 LEWIS V. LIBERTY MUTUAL INS. CO.
at the time of injury by operation of § 678.1(d). But if
Australian law applies to the exclusion of § 678.1, the Lewis
family appears to be out of luck. Thus, they need § 678.1 to
constitute an unwaivable right that is incorporated in the
contract.
However, “an antiwaiver provision [in a state statute] by
itself does not supersede a forum-selection clause.” Yei A.
Sun, 901 F.3d at 1090. Rather, there must be “a statute or
judicial decision that clearly states such a strong public
policy,” precluding enforcement of the forum-selection
clause. Id.; see id. (identifying “the strong federal policy of
enforcing forum-selection clauses”). Nothing on the face of
§ 678.1 indicates that the statute embodies such a strong
policy. See Cal. Ins. Code § 678.1(d). And no reported
California case indicates that § 678.1 qualifies as a strong
policy. Absent such authorities, we will not read § 678.1 to
thwart the forum-selection clause here. Thus, California law
does not prevent operation of an otherwise valid forum-
selection clause.
2. Australia Is Not an Inadequate or Inconvenient Forum
We now consider the Lewises’ remaining claims that
Australia is an inadequate or inconvenient forum. We
conclude that these arguments fail.
The Lewis family levels several charges against the
Australian forum. Most seriously, they contend that litigating
the case in Australia will mean, in all practical effect, that
they cannot recover. The Lewis family highlights differences
in substantive law between California and Australia. These
differences, they claim, will preclude relief. Recall that there
are two insurance policies at issue here. The 2013–14 Policy
LEWIS V. LIBERTY MUTUAL INS. CO. 15
would cover the injuries suffered, but the 2014–15 Policy
apparently would not. Although the fire occurred after the
2014–15 Policy went into effect, the Lewises contend that
under California law, the 2013–14 Policy should still control
because LMIC did not provide EcoSmart with sufficient
notice of material changes between the two policies.
Meanwhile, the Lewises argue that Australian law apparently
would require a court to enforce the 2014–15 Policy. Thus,
the Lewis family fears that because Australian courts are
likely to apply Australian law, they will effectively be
deprived of any remedy.
We have long recognized that “dismissal on grounds of
forum non conveniens may be granted even though the law
applicable in the alternative forum is less favorable to the
plaintiff’s chance of recovery.” Piper Aircraft Co. v. Reyno,
454 U.S. 235, 250 (1981); see Creative Tech., Ltd. v. Aztech
Sys. Pte, Ltd., 61 F.3d 696, 701–02 (9th Cir. 1995) (“A court
may dismiss on forum non conveniens grounds even though
the foreign forum does not provide the same range of
remedies as are available in the home forum.”); Lockman
Found. v. Evangelical All. Mission, 930 F.2d 764, 768–69
(9th Cir. 1991) (affirming that a forum was adequate even
though it would foreclose bringing RICO and Lanham Act
claims). What is critical is not whether a party will be
disadvantaged by the forum-selection clause, but whether the
forum will be adequate: whether “an alternative forum is
available where the defendant is amenable to service of
process and the forum provides ‘some remedy’ for the wrong
at issue.” Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d
1163, 1178 (9th Cir. 2006) (citation omitted); see Lueck v.
Sundstrand Corp., 236 F.3d 1137, 1144 (9th Cir. 2001)
(explaining that a forum is adequate if it offers some
“practical remedy for the plaintiff’s complained of wrong”).
16 LEWIS V. LIBERTY MUTUAL INS. CO.
When there is a forum-selection clause, we “must enforce
[the] forum-selection clause unless the contractually selected
forum affords the plaintiffs no remedies whatsoever. . . . ‘It
is the availability of a remedy that matters, not predictions of
the likelihood of a win on the merits.’” Yei A. Sun, 901 F.3d
at 1092 (quoting Weber v. PACT XPP Techs., AG, 811 F.3d
758, 774 (5th Cir. 2016)). To the extent the Lewis family
asserts inadequacy simply because Australian law may be less
favorable to them, we must reject their argument.
We further emphasize that the forum may not make any
practical difference here. Both insurance policies include a
choice-of-law clause favoring Australian law. Thus, even if
this case remained in the district court in California, the court
would likely still apply Australian law—leading to the same
result the Lewises see as inevitable if forced to litigate in
Australia. It would be especially inappropriate for us to find
a foreign forum inadequate when a California court might
very well reach the same conclusion based on the choice-of-
law provision. More importantly, we have not heard any
argument that Australian courts would be unwilling to
entertain the Lewises’ argument that California
law—specifically, § 678.1—might apply to an insurance
contract enforceable in California. These are complicated
questions that we are not prepared to answer but that can be
addressed in any litigation brought in Australia. See Piper
Aircraft, 454 U.S. at 251 (“The doctrine of forum non
conveniens . . . is designed in part to help courts avoid
conducting complex exercises in comparative law.”).
The Lewis family also raises a potential collateral-
estoppel concern. An Australian court, in separate litigation
in 2018 to which the Lewis family was not a party, found that
the injuries did not occur while the 2013–14 Policy was in
LEWIS V. LIBERTY MUTUAL INS. CO. 17
effect. If this prior judgment would thwart all prospect of
relief, then the Lewis family might have a valid concern.
Some courts have denied dismissal for forum non conveniens
when it was clear that a domestic forum would allow the case
to proceed, but a foreign forum would bar any prospect of
relief. See, e.g., Chang v. Baxter Healthcare Corp., 599 F.3d
728, 736 (7th Cir. 2010) (holding forum-non-conveniens
dismissal was inappropriate because the claim would be
barred by a statute of limitations); Malewicz v. City of
Amsterdam, 517 F. Supp. 2d 322, 340 (D.D.C. 2007)
(denying forum non conveniens dismissal because “Plaintiffs’
claims would be barred in the Dutch courts based on
liberative and acquisitive prescription” doctrines).
However, LMIC’s counsel assured us at oral argument
that the prior judgment will not estop the Lewis family from
raising their claims in Australia and the Lewis family will be
able to bring their claim in an Australian court. Taking LMIC
at its word, we need not be concerned that the Lewis family
will face no practical prospect of relief in Australia. Given
LMIC’s assurances, the Lewis family will be able to raise the
merits of their claims before the Australian court and have
that court consider their claims without impediment.
The Lewis family also says that the Australian court may
not even accept and hear their case. Apparently, under
Australian rules of procedure, they must first request leave of
court to file an action to recover the judgment. But this too
does not appear to impair the Lewises’ ability to air the merits
of their claim. First, plaintiffs have not shown that this is any
more than a formality or that there is any serious risk that the
Australian courts would deny leave to file suit. Second, as a
declaration from one of the Australian solicitors represents,
leave may be refused “if the insurer can prove that it is
18 LEWIS V. LIBERTY MUTUAL INS. CO.
entitled to deny liability under the contract of insurance.”
Thus, a denial of leave to proceed with a claim appears to be
tied to the merits of the suit.
Finally, the Lewis family asserts that forum-non-
conveniens dismissal was inappropriate because Australia is
a remote and inconvenient forum—stressing the high costs
and great inconvenience to their family of litigating this
matter in Australia. A forum-selection clause can be
invalidated if its enforcement “will be so gravely difficult and
inconvenient that [the plaintiff] will for all practical purposes
be deprived of his day in court.” M/S Bremen, 407 U.S. at 18.
While we do not doubt that bringing this claim in Australia
will impose burdens on the Lewis family, we are unable to
conclude that the district court abused its discretion in failing
to refuse dismissal for this reason. Australia has its own
interests in this contract and this dispute because TFC—the
parent of EcoSmart—is an Australian company, and the
insurance policies’ valuations are in Australian dollars. We
must assume that the clause “may have figured centrally in
the parties’ negotiations and may have affected how they set
monetary and other contractual terms; it may, in fact, have
been a critical factor in their agreement to do business
together in the first place.” Atl. Marine, 571 U.S. at 66.
Further, LMIC issued the insurance policies to TFC and
EcoSmart in Australia under its Australian trade name. Thus,
even if litigating in Australia will be more costly for the
Lewis family, Australia is not so remote from this insurance
dispute to justify a different outcome.
* * *
As the Lewis family has not demonstrated that they will
be deprived of their day in court if this claim is transferred to
LEWIS V. LIBERTY MUTUAL INS. CO. 19
Australia, we have no grounds to conclude that Australian
courts are an inadequate forum. Accordingly, the district
court did not abuse its discretion in dismissing this case.
IV. CONCLUSION
Although we sympathize with the Lewis family, we
cannot undo a binding obligation simply because its
application may prolong or exacerbate suffering. The law
compels us to apply the forum-selection clause.
AFFIRMED.