11.20.2006

S.D.N.Y. Discusses Jurisdictional Disagreement Among Circuits Re Consideration of Forum Non Conveniens Doctrine

Per Turedi v. Coca Cola Co., --- F.Supp.2d ----, 2006 WL 3187156 (S.D.N.Y. Nov. 2, 2006):

As a preliminary matter, the Court considers whether it must address the jurisdictional objections raised by Defendants' motions before reviewing their grounds to dismiss under the doctrine of forum non conveniens. This question presents two issues that, with conflicting results, have arisen with some frequency in this context. First is whether a dismissal warranted by forum non conveniens constitutes a merits-based decision and therefore, consistent with the bounds of Article III of the federal Constitution, the doctrine cannot be applied without a prior adjudication of the court's subject matter jurisdiction. The second issue is whether, even if the rule implicates no determination on the merits of dispute, the Court nonetheless must address the forum question sequentially after confirming that it possesses jurisdiction over the subject matter and over the parties. A substantial Circuit Court split now exists concerning these questions.

In Dominguez-Cota v. Cooper Tire & Rubber Co., the Fifth Circuit ruled that it was unable to characterize forum non conveniens as a "non-merits" issue because in assessing a motion for dismissal on forum non conveniens grounds the court necessarily " 'becomes entangled in the merits' " of a dispute, and therefore a forum non conveniens determination could not be made before the court confirmed its subject matter jurisdiction. 396 F.3d 650, 654 (5th Cir.2005) (quoting Van Cauwenberghe v. Biard, 486 U.S. 517, 528 (1987)). In an earlier case examining the same issue, the D.C. Circuit reached an opposite result. See In re Papandreou, 139 F.3d 247 (D.C.Cir.1998). It concluded that a finding of forum non conveniens is "merits-free," and therefore a dismissal on such grounds before the Court's determination of subject matter jurisdiction "makes no assumption of law-declaring power that violates the separation of powers principles." Id. at 255.

The Second Circuit pronounced its position on these questions in Monegasque de Reassurances S.A.M. v. NAK Naftogaz of Ukraine, 311 F.3d 488 (2d Cir.2002). Subscribing to the reasoning in Papandreou, it held that neither it nor district courts in this Circuit are barred from bypassing questions of jurisdiction and proceeding directly to rule on an invocation of forum non conveniens, at least where any jurisdictional challenge does not implicate a threshold constitutional question. See id. at 497 (citing Fama v. Commissioner of Corr. Servs., 235 F.3d 804, 816 n. 11 (2d Cir.2000)). More recently, in Dattner v. Conagra Foods, Inc., the Second Circuit, noting the Circuit split on these issues and disagreeing with the contrary view articulated by the Fifth Circuit, reaffirmed its finding in Monegasque that a forum non conveniens dismissal "is a non-merits decision akin to dismissal for lack of personal jurisdiction," and hence requires no antecedent verification of jurisdiction. 458 F.3d 98, 102 (2d Cir.2006) (per curiam). . . .

Recently, the Third Circuit staked out another course, essentially departing from these courts on both counts. Rejecting the Fifth Circuit's reasoning, it ruled that forum non conveniens "is a non-merits ground for dismissal." Malaysia Int'l Shipping Corp. v. Sinochem Int'l Co. Ltd., 436 F.3d 349, 359 (3d Cir.2006), cert. granted, --- U.S. ----, No. 06-102, 2006 WL 2055541 (Sept. 26, 2006). At the same time, disagreeing with the D.C. Circuit and the Second Circuit, the Third Circuit declared that a ruling on a forum non conveniens "presumes that the court deciding this issue has valid jurisdiction (both subject matter and personal jurisdiction) and venue." Id. at 361. It held that district courts "must have jurisdiction before they can rule on which forum, otherwise available, is more convenient to decide the merits." Id. at 363-64; see also Kamel v. Hill-Rom Co., 108 F.3d 799 (7th Cir.1997); Patrickson v. Dole Food Co., 251 F.3d 795 (9th Cir.2001), aff'd in part, cert. dismissed in part, 538 U.S. 468 (2003).

Nonetheless, Monegasque represents the law in this Circuit on this subject, and the Court accordingly follows it in proceeding below to consider directly Defendants' invocation of forum non conveniens.

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