Opinion
No. C-01-4203 MMC, (Docket No. 56)
November 10, 2003
ORDER GRANTING MOTION TO DISMISS ON GROUNDS OF FORUM NON CONVENIENS; VACATING HEARING
Before the Court is the motion to dismiss filed August 29, 2003 by defendants Sabaté SA ("Sabaté France") and Sabaté USA, Inc. ("Sabaté USA") on grounds of forum non conveniens. Having considered the papers filed in support of, and in opposition to, the motion, the Court finds the matter appropriate for decision without oral argument (see Civ. L.R. 7-1(b)) and hereby VACATES the November 14, 2003 hearing on the motion. For the reasons set forth below, the motion is GRANTED.
BACKGROUND
The instant action arises from the sale of cork-based closures used in bottling wine. Plaintiff Chateau des Charmes Wines Ltd. ("Chateau des Charmes"), a Canadian wine maker, allegedly purchased cork-based closures from defendants Sabaté France, a French cork manufacturer, and Sabaté USA, Sabaté France's American distributor, based on defendants' representations that such closures were of high quality and would not "taint" the wine with undesirable aromas and flavors. (See Compl. ¶ 11, 22, and 24.) Chateau des Charmes alleges that, contrary to defendants' representations, the closures damaged the smell, character and drinkability of Chateau des Charmes' wines. (See id. ¶ 28.) Chateau des Charmes alleges six causes of action: (1) Breach of Express Warranty, (2) Breach of Implied Warranties, (3) Breach of Contract, (4) Misrepresentation, (5) Strict Liability/Negligence, and (6) Violation of False Advertising and Practices Statutes, Cal. Bus. Prof. Code § 17200, et. seq. and § 17500, et seq.
DISCUSSION
Defendants now move to dismiss the action, based on the doctrine of forum non conveniens.A. Legal Standard: Forum Non Conveniens
Under the doctrine of forum non conveniens, the district court has discretion to dismiss an action, even if jurisdiction and venue are property established, when (1) a foreign country also has jurisdiction to hear the case, and either (2) trial in the chosen American forum would establish oppressiveness and vexation to a defendant out of all proportion to plaintiffs convenience; or (3) the chosen American forum is inappropriate because of considerations affecting the court's own administrative and legal problems. See American Dredging Co. v. Miller. 510 U.S. 443, 447-49 and n. 2 (1994): see also Piper Aircraft v. Reyno. 454 U.S. 235, 241 (1981).
The Court considers a list of private interest factors and public interest factors in deciding whether to dismiss an action for forum non conveniens. See Piper Aircraft. 454 U.S. at 241. Private interest factors include the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; the possibility of view of the premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. See id., n. 6 (citingGulf Oil Corp. v. Gilbert. 330 U.S. 501, 508 (1947)). Public interest factors include the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty. See id. (citing Gulf Oil. 330 U.S. at 509.)
At the outset of any forum non conveniens inquiry, the Court must determine whether there exists an alternative forum. See id at 254 n. 22. Ordinarily, this requirement will be satisfied when the defendant is amenable to process in the foreign jurisdiction.See id. Where the remedy offered by the other forum is so unsatisfactory that it is no remedy at all, however, this initial requirement may not be satisfied, and the district court may conclude that dismissal would not be in the interests of justice. See id Dismissal would not be appropriate, for example, where the foreign forum does not permit litigation of the subject matter of the dispute. See id A showing that the foreign law would merely be less favorable to the plaintiff is not to be given substantial weight in the forum non conveniens inquiry, however. See id. at 247.
The doctrine of forum non conveniens is designed in part to help courts avoid the need to conduct complex exercises in comparative law.See id at 251. Public interest factors point toward dismissal where the court would be required "to untangle problems in conflict of laws, and in law foreign to itself." See id (citing Gilbert. 330 U.S. at 509) (internal quotation omitted). Thus, the need to apply foreign law favors dismissal.See id.-at 260 n. 29. This factor alone is not sufficient, however, to warrant dismissal when a balancing of all relevant factors shows that the plaintiffs chosen forum is appropriate.See id.
Although ordinarily there exists a strong presumption in favor of the plaintiffs choice of forum, this presumption applies with less force when the plaintiff is foreign. See id at 255. If the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court, dismissal is proper. See id at 256 n. 23.
In sum, the party seeking to dismiss for forum non conveniens bears the burden of demonstrating (1) the existence of an adequate alternative forum and (2) that the balance of relevant private and public interest factors favors dismissal. See Creative Technology. Ltd, v. Aztech System PTE. Ltd., 61 F.3d 696, 698 (9th Cir. 1995).
B. Timeliness
Chateau des Charmes argues that defendants' motion is untimely, for two reasons. First, Chateau des Charmes argues that the motion violates Rule 12(g) of the Federal Rules of Civil Procedure because defendants failed to raise their forum non conveniens argument in their previous motion to dismiss. Second, Chateau des Charmes argues that the motion is untimely because, after the case was filed, defendants waited twenty months to bring their forum non conveniens challenge.
Rule 12(b)(3) expressly permits a defendant to file a motion to dismiss "for improper venue," Fed.R.Civ.P. 12(b)(3); the motion must be brought "before pleading if a further pleading is permitted," Fed.R.Civ.P. 12(b). Rule 12(g) provides, in relevant part:
If a party makes a motion under this rule but omits therefrom any defense or objection then available to the party which this rule permits to be raised by motion, the party shall not thereafter make a motion based on the defense or objection so omitted[.]
Fed.R.Civ.P. 12(g). Additionally, Rule 12(h)(1) specifies that "[a] defense of . . . improper venue . . . is waived (A) if omitted from a motion in the circumstances described in subdivision (g), or (B) if it is neither made by motion under [Rule 12] nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course." Fed.R.Civ.P. 12(h)(1).
The instant action was filed on November 9, 2001. On December 11, 2001, defendants filed a motion to dismiss the complaint pursuant to Rule 12(b)(3), arguing that a forum selection clause required the action to be filed in France. Defendants did not raise their current forum non conveniens argument in that motion. Chateau des Charmes argues that a motion to dismiss for forum non conveniens is a Rule 12(b)(3) motion to dismiss for improper venue, and therefore was required to be included in defendants' first challenge to the complaint.
A motion to dismiss based on forum non conveniens is not the same as a motion to dismiss for improper venue. The United States Supreme Court has held that under the doctrine of forum non conveniens, a court has the discretion to dismiss a case "even if jurisdiction and proper venue are established." American Dredging Co., 510 U.S. at 448. The doctrine of forum non conveniens is based on the inconvenience of the chosen venue, not the impropriety of venue under the federal venue statutes. See id at 448-49. Indeed the doctrine of forum non conveniens can never apply if there is . . . mistake of venue." See Gulf Oil Corp. v. Gilbert. 330 U.S. 501, 504 (1947): see also Timberlane Lumber Co. v. Bank of America National Trust and Savings Ass'n. 549 F.2d 597, 616 (9th Cir. 1976) (noting that in applying doctrine of forum non conveniens, proper venue is assumed). As a result, a defendant's failure to bring a motion to dismiss on grounds of forum non conveniens before answering the complaint does not result in a waiver of the issue under Rules 12(g) and (h) because such motion is not a motion to dismiss "for improper venue" under Rule 12(b)(3). See Abiola v. Abubakar. 267 F. Supp.2d 907, 918 (N.D. Ill. 2003) (finding forum non conveniens argument raised in summary judgment motion not waived by failure to raise issue before answering complaint).
Alternatively, Chateau des Charmes argues that the Court should deny the instant motion because it was not brought within a reasonable amount of time. "[A] defendant must assert a motion to dismiss for forum non conveniens within a reasonable time after the facts or circumstances which serve as the basis for the motion have developed and become known or reasonably knowable to the defendant." Trivelloni-Lorenzi v. Pan American Airways. Inc. (In re Air Crash Disaster Near New Orleans. Louisiana on July 9, 1982). 821 F.2d 1147, 1165 (5th Cir. 1987). "While untimeliness will not effect a waiver, it should weigh heavily against the granting of the motion because a defendant's dilatoriness promotes and allows the very incurrence of costs and inconvenience the doctrine is meant to relieve." Id.
Although the instant action was filed nearly two years ago, most of that time has been consumed by appellate proceedings. On March 12, 2002, this Court granted defendants' Rule 12(b)(3) motion to dismiss the action for improper venue, based on a forum selection clause contained in the invoices sent to Chateau des Charmes in connection with each shipment of corks. Judgment was entered the same day, at which point no further proceedings took place before this Court until after the Ninth Circuit reversed the judgment, in an opinion filed May 5, 2003, and the mandate of the Ninth Circuit had been filed herein, which did not occur until July 11, 2003. Defendants filed the instant motion to dismiss for forum non conveniens shortly thereafter, on August 29, 2003. The Court finds defendants have raised the issue of forum non conveniens within a reasonable time.
The Court notes that the Ninth Circuit's decision was based on the United States Convention on Contracts for the International Sale of Goods, a treaty the parties never mentioned in the briefing before this Court, or in their appellate briefs. Consequently, in light of the forum selection clause, it was reasonable for defendants to rely exclusively on Rule 12(b)(3) until such time as the Ninth Circuit alerted the parties to the applicability of that treaty, under which the Ninth Circuit held "the forum selection clauses were not part of any agreement between the parties." See Chateau des Charmes Wines Ltd, v. Sabaté USA. Inc., 328 F.3d 528, 531 (9th Cir. 2003).
Accordingly, the Court finds that the instant motion to dismiss for forum non conveniens was timely filed.
C. The Merits
1. Alternative forum in foreign country
"At the outset of any forum non conveniens inquiry, the court must determine whether there exists an alternative forum." Piper Aircraft Co., 454 U.S. at 254 n. 22. "Ordinarily, this requirement will be satisfied when the defendant is `amenable to process' in the other jurisdiction." id. Defendants state in their reply that they "are amenable to, or will stipulate to service of process in France, and will agree to service of process in Canada." (Def. Reply at 7.)
"In rare circumstances, however, where the remedy offered by the other forum is clearly unsatisfactory, the other forum may not be an adequate alternative, and the initial requirement may not be satisfied."Piper Aircraft Co., 454 U.S. at 254 n. 22. In the instant case, the Ninth Circuit has held that the international sales contracts at issue are governed by the United Nations Convention on Contracts for the International Sale of Goods ("CISG"). See Chateau des Charmes Wines Ltd, v. Sabaté USA. Inc., 328 F.3d 528, 530 (9th Cir. 2003). The United States, Canada, and France are all contracting states to the CISG.See id. Consequently, the remedies available for breach of contract are identical in all three countries. See id. Art. 45 (setting forth remedies). The parties have not addressed Chateau des Charmes' other causes of action, and thus have not established that the remedies available in France or Canada are so unsatisfactory that those countries cannot be considered adequate alternative fora.
Accordingly, the Court finds defendants have demonstrated that an alternative forum exists in both Canada and France.
2. Private interest factors
a. Relative ease of access to sources of proof
The vast majority of relevant evidence appears to be located in either France or Canada. The Altec cork closures at issue in the instant lawsuit were manufactured by Sabaté France in France and shipped directly to Chateau des Charmes in Canada. (See Baudonnet Decl. ¶ 3.) They did not pass through the United States. (See id.) The Altec manufacturing facility, the machinery used to make the Altec closures, the cork material, packaging material, shipping containers and counter samples are all located at Sabaté France headquarters in Céret, France. (See id.) The allegedly damaged bottles of wine, the unused Altec closures, and Chateau des Charmes' winemaking facilities are all located in Canada. (See id.)
Sabaté France's invoices were generated in France and sent directly to Canada, and payment was remitted from Chateau des Charmes to Sabaté France by wire to the latter's Canadian bank accounts. (See Def. Request for Judicial Notice, Ex. E, Marc Sabaté Decl. ¶ 6.) According to Chateau des Charmes' initial disclosures, all of its relevant documents are located at its winery in Ontario, Canada, and at the Liquor Control Board of Ontario. (See Szczepanski Decl., Ex. E at 6-7.)
The contract between Chateau des Charmes and Sabaté France was negotiated primarily by Gail Mildred, who is a resident of British Columbia.(See Geraldi Decl. ¶ 3.) Mildred is an independent contractor retained by Sabaté France for the purpose of negotiating cork sales in Canada, and has no contractual employment relationship with Sabaté USA. (See Geraldi Supp. Decl. ¶ 3-4; see also Marc Sabaté Decl. ¶ 4.) Sabaté USA did not negotiate the sale of Altec closures to Chateau des Charmes and was never a party to the contract between Chateau des Charmes and Sabaté France. (See Mercier Decl. ¶ 2.)
The two laboratories that have conducted analyses of the Altec closures and the allegedly damaged wines are located in Ontario, Canada and Céret, France. (See Geraldi Decl. ¶ 7.)
Chateau des Charmes argues that defendants nonetheless cannot claim to be inconvenienced by litigating the matter in this district, because defendants are already involved in several other lawsuits in California with respect to the Altec closures, in which they have not challenged venue on convenience grounds. None of these other cases involves a foreign plaintiff, however, or Altec closures that never entered the United States. In Davis Bynum Winery Inc. v. Sabaté USA. Inc., C-03-1991 CW, a case pending in this district before Judge Wilken, the plaintiff is a Sonoma County winery. (See Szczepanski Decl., Ex. B.) Similarly, in BR Cohn Winery. Inc. v. Sabaté USA. Inc., C-03-3478 SI, a case pending in this district before Judge Illston, the plaintiff likewise is a Sonoma County winery. (See Szczepanski Decl., Ex. C.) In Sapphire Hills Vineyard LLC v. Sabaté USA. Inc., No. 26-16501, a consolidated action filed in the Superior Court for the County of Napa, three of the plaintiff wineries were located in California and the fourth was located in the state of Washington. (See Geraldi Decl. fl 3.) In each of those actions, the wineries had entered into contracts with Sabaté USA, not Sabaté France, and the allegedly defective Altec closures were shipped from Sabaté USA's warehouse in Napa, California.(See id ¶ 13; see also Szczepanski Decl., Ex. D.) Consequently, each of the other California actions has a significant connection with California that is lacking in the instant case.
Chateau des Charmes also points to Sabaté USA. Inc. v. Chubb Ins. Co. of Europe S.A., No. 26-16501, in which Sabaté USA and Sabaté France are suing their European insurance company in the Napa County Superior Court. (See Szczepanski Decl. Ex. D.) Chateau des Charmes argues that the opposition by Sabaté USA and Sabaté France to the insurer's motion to dismiss for forum non conveniens demonstrates that California is a convenient forum for the instant action. Chateau des Charmes neglects to mention that the coverage action was filed as a cross-complaint in the Sapphire Hills action, and thus relates to alleged problems with Altec closures shipped from Sabaté USA's Napa warehouse to local wineries. (See Geraldi Decl. ¶ 4.)
As the majority of the relevant evidence is located in either Canada or France, this factor favors dismissal.
b. Availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses
Many of the key witnesses reside in Canada or France, but the majority of them are officers and/or high-level employees of the parties, and thus can either be compelled to testify or expected to cooperate in testifying in this district. See e.g., Fed.R.Civ.P. 45(c)(3);see also Lueck v. Sundstrand Corp., 236 F.3d 1137, 1147 (9th Cir. 2001) (noting that where documents and witnesses are under the control of the parties, "they can be brought to court, no matter the forum").
All of the witnesses associated with Chateau des Charmes are located in Canada. Paul Bosc and Pierre-Jean Bosc, the principals of Chateau des Charmes, live in Niagara-on-the-Lakes, Ontario, Canada. (See Baudonnet Decl. at 5.) Chateau des Charmes also identifies several other employee witnesses located in Canada. (See Szczepanski Decl. Ex. E at 1-2.) In addition, Chateau des Charmes identifies three Canadian witnesses on scientific matters, presumably expert witnesses that Chateau des Charmes would make available to testify wherever the lawsuit is heard. (See Szczepanski Decl. Ex. E at 1-2.) Of the non-employee witnesses, Chateau des Charmes seeks to depose two witnesses from the Liquor Control Board of Ontario, neither of whom could be compelled to testify in California. (See id. at 3.) Even if all of these Canadian witnesses could be compelled to testify in California, however, it would be far more convenient and less costly for them to testify in Canada.
Chateau des Charmes also identifies various California winemakers as potential witnesses. (See id. at 4-5.) Defendants have submitted evidence, however, indicating that such testimony could be elicited from employees of numerous wineries in either Canada or France, as Sabaté France has sold Altec closures to more than 110 wineries in Canada and more than 2720 wineries in France. (See Baudonnet Supp. Decl. ¶ 2.) Moreover, as defendants point out, Gail Mildred herself sold the Altec closures to at least 109 of the Canadian wineries, whose employees are likely to provide testimony that is at least as relevant, if not more so, as the testimony that might be provided by California winemakers. (See id.) Consequently, it does not appear that the testimony of California winemakers is essential to the instant litigation, as similar or better evidence is conveniently available from Canadian or French winemakers.
Chateau des Charmes also identifies four potential witnesses who are or were associated with defendants: Gail Mildred, Marc Sabaté, Eric Mercier, and Francois Sabaté. (See id at 3-4.) Defendants attest that Gail Mildred, the chief negotiator for Sabaté France with respect to the contract between Chateau des Charmes and Sabaté France, has never been an employee of Sabaté USA or Sabaté France, and lives in British Columbia. (See Baudonnet Decl. ¶ 5; see also Geraldi Supp. Decl. ¶ 3-4.) As Mildred is not an employee of either defendant, she cannot be compelled to testify in California. Moreover, as she resides in Canada, it would be more convenient for her to testify in Canada than in California or France.
Chateau des Charmes also submitted evidence that Jay Kaluaratchi of Sabaté USA sent at least one letter to Chateau des Charmes. (See Zuffranieri Decl. Ex. A.) Chateau des Charmes does not argue, however, that Kaluaratchi is an important witness in this litigation.
Marc Sabaté, former co-president and former chief executive officer of Sabaté France, is no longer an employee of Sabaté France. (See Baudonnet Decl. 6.) Marc Sabaté lives in France, (see id), and thus cannot be compelled to testify in California. It would be more convenient for Marc Sabaté to testify in either France or Canada than to testify in California.
Eric Mercier and Francois Sabaté are current employees of Sabaté USA and both reside in this district. (See Baudonnet Decl. fl 7.) According to declarations submitted by defendants, these individuals had little involvement in the events at issue, other than to investigate Chateau des Charmes' complaint about the Altec closures. (See id.; See also Geraldi Supp. Decl. ¶ 5.) In particular, defendants submit evidence that Francois Sabaté and Eric Mercier "were not personally involved in: (1) negotiating the contract for the sale of Altec closures to Chateau des Charmes; (2) manufacturing the Altec closures; [or] (3) delivering the Altec closures." (Baudonnet Decl. ¶ 7.)
Chateau des Charmes submits evidence that Mercier and Francois Sabaté were perhaps more involved in sales to Chateau des Charmes than defendants currently admit. In opposition to the previous motion to dismiss, Pierre-Jean Bosc attested that Mercier and Mildred contacted him several times between 1998 and early 2000 to discuss Altec closures and Chateau des Charmes' potential purchase of them, including multiple personal visits by Mercier. (See Szczepanski Decl., Ex. A, ER 89 ¶¶ 2-3, 7.) Chateau des Charmes also submits copies of several emails between Mildred and Mercier concerning sales to Chateau des Charmes and its subsequent problems with the Altec closures. (See id. Ex. G.) Chateau des Charmes has also submitted a supplemental declaration containing additional documents indicating that Francois Sabaté made telephone calls to Chateau des Charmes. (See Zuffranieri Decl. Ex. A.) Although Mercier has submitted a declaration, he does not address his role with respect to the sale of Altec closures to Chateau des Charmes, and Francois Sabaté has not submitted a declaration.
Regardless of whether Mercier and Francois Sabaté were involved in sales to Chateau des Charmes, however, Mercier has expressly stated his willingness to testify in Canada, (see Mercier Decl. ¶ 3), and defendants' counsel attests that Francois Sabaté "is a French citizen and is willing to appear at trial of this action in France or Canada in order to accommodate the needs of the overwhelming number of witnesses in those countries," (see Geraldi Supp. Decl. ¶ 8).
As the majority of the relevant witnesses are located in Canada, it would be more convenient for the witnesses and the parties if this action were tried in Canada, rather than in California. Accordingly, this factor also favors dismissal.
c. Possibility of view of the premises, if view would be appropriate to the action
To the extent a view of the premises is relevant, it would be accomplished more easily if the action were litigated in Canada or France. Chateau des Charmes' winemaking facilities are located in Canada, and Sabaté France's Altec cork manufacturing facilities are located in France. Consequently, this factor also favors dismissal.
d. All other practical problems that make trial of a case easy, expeditious and inexpensive.
The parties do not address this factor, and the Court is unaware of any issues not otherwise addressed by the parties.
e. Balance of the private interest factors
For the reasons set forth above, all of the private interest factors favor dismissal of the action in favor of litigation in Canada or France.
3. Public interest factors
a. Administrative difficulties flowing from court congestion
The parties do not address this factor, and there is no reason to conclude the courts are significantly more congested in this district than in Canada or France.
b. Local interest in having localized controversies decided at home; unfairness of burdening citizens in an unrelated forum with jury duty.
Although there is evidence that some California residents were involved in the events that gave rise to this lawsuit, the evidence of their involvement is relatively minimal. The essence of this lawsuit is a dispute between a French cork manufacturer and a Canadian winemaker about French corks that allegedly damaged Canadian wine. As the local interest in the instant lawsuit is minimal, this factor weighs in favor of dismissal.
c. Interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; avoidance of unnecessary problems in conflict of laws, or in the application of foreign law.
Both of these factors relate to difficulties in applying foreign law. In the instant case, the Ninth Circuit has already held that the CISG applies to this case. Consequently, at least with respect to the contract claim, the same international treaty will govern the case regardless of whether it is tried here, in France, or in Canada. The parties have not addressed the law with respect to the remaining causes of action. Consequently, this factor favors neither retention of jurisdiction nor dismissal.
d. Balance of the public interest factors
In light of the limited involvement of Sabaté USA in the facts of this lawsuit, California has little interest in the outcome of the action, and there is little reason to burden California jurors with hearing the matter. The other public interest factors do not indicate a reason for retaining the case in this district. Accordingly, the Court finds that the public interest factors weigh in favor of dismissal of the action in favor of litigation in either Canada or France.
4. Balance of the public and private interest factors
Ordinarily, the plaintiffs choice of forum will not be disturbed unless the private and public interest factors strongly favor trial in a foreign country. See Lueck v. Sundstrand Corp., 236 F.3d 1137, 1145 (9th Cir. 2001) (citing Gulf Oil. 330 U.S. at 509). Because a foreign plaintiffs choice of forum merits less deference than that of a plaintiff who resides in the chosen forum, the showing required for dismissal is reduced in the instant case. See Id. Defendants need only show `the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court." See Id. (quotation and citation omitted). Here, the private and public factors both demonstrate that trial in this district would be unnecessarily burdensome for the defendants as compared with any inconvenience that may be experienced by the plaintiff if the action is tried in Canada or France.
CONCLUSION
For the reasons set forth above, defendants' motion to dismiss this action on grounds of forum non conveniens is GRANTED, and the action is DISMISSED, without prejudice to refiling in either Canada or France.
The Clerk shall close the file.
IT IS SO ORDERED.
JUDGMENT IN A CIVIL CASE
Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury has rendered its verdict.
Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.IT IS ORDERED AND ADJUDGED defendants' motion to dismiss this action on grounds of forum non conveniens is GRANTED, and the action is DISMISSED, without prejudice to refiling in either Canada or France.