Opinion
No. 00 Civ. 1188 (CBM)
July 15, 2002
MEMORANDUM OPINION AND ORDER
Plaintiff Philip J. Wesoke ("Wesoke") and his company, Walco On-Street Parking Corp. ("Walco"), brought this action against defendants Contract Services, Ltd., TFM Contract Services Limited, TFM Facilities Services Limited, Total Facilities Management (UK) Limited, and TFM Parking Services, Sp. Z.O.O., alleging nine counts of breach of contract and related torts. Defendants moved to dismiss plaintiffs' complaint on the ground offorum non conveniens, arguing that litigating this matter in the United States would be unduly inconvement and burdensome and that the case should have been brought in the United Kingdom. For the reasons set forth below, defendants' motion is hereby DENIED.
BACKGROUND
This action arises out of a failed joint venture agreement to obtain a contract from Polish authorities to develop a parking project in Warsaw. Wesoke, a resident of Florida, is a businessman who contracts with government entities throughout eastern and central Europe to develop parking systems. Cplt. ¶ 11. Wesoke owns and controls Walco, which was located in New York City at the times relevant to plaintiffs' complaint but has since relocated to Florida. Id. ¶ 12. Defendant Contract Services, Ltd. ("CSL"), now called TFM Contract Services, Ltd. ("TFM"), Hurst AfF. ¶ 1, is a British company based in London that provides and manages onstreet and off-street parking facilities throughout the United Kingdom and Europe. Hurst. AfF. ¶ 7. Defendant TFM Parking Services, Sp. Z.O.O. ("TFM Warsaw"), is a dormant subsidiary of TFM that was incorporated in Poland in 1997 for the sole purpose of entering into a parking contract with the City of Warsaw, but has never engaged in any business activity. Id. ¶ 8. Defendant Total Facilities Management (U.K.) Ltd., now known as TFM Facilities Serves Ltd., is also a British company based in the United Kingdom.
In 1996, plaintiffs submitted a bid on a contract to the Warsaw Parking Authority for the construction and management of a series of underground parking garages in Warsaw. Cplt. ¶ 27. Plaintiffs were awarded the contract, but conditioned acceptance on the development of an onstreet regulation scheme which would eliminate free on-street parking and create incentives for drivers to park in garages. Id. ¶ 28. The Authority indicated that the contract for the underground garages would have to be awarded first, but agreed that construction of the garages would not begin until a contract for on-street parking was awarded. Id. ¶ 26. The garage contract contemplated construction and operation of an underground parking garage at Plac Powstancow in downtown Warsaw and envisioned construction and operation of additional garages at other sites in the city. Id. ¶ 38.
According to plaintiffs, defendant CSL approached Wesoke in April 1997 expressing a desire to become involved in the garage contract. Id. ¶ 30. While plaintiffs do not indicate where or how that initial contact occurred, the record reflects that the parties met in Warsaw from April 4 through April 7, 1997. See Hurst Aff. ¶ 26; Spanos Aff. ¶ 5; Sharp Aff. ¶ 11. Plaintiffs allege that on April 5, 1997, the parties entered into an oral agreement through which: (1) CSL agreed to support the garage contract, and (2) the parties agreed to formalize their relationship as a joint venture in anticipation of submitting a formal bid for the on-street parking contact in June 1997. Plaintiffs state that under the agreement CSL would pay supphers, consultants, and construction companies involved in construction of the Plac Powstancow garage and manage the garage once construction was completed. Cplt. ¶ 31, 39. Meanwhile, the parties would negotiate, in good faith, the terms of the prospective joint venture. Id. ¶ 32. Defendants deny that anybinding oral agreements was ever consummated. Hurst Aff. ¶ 16.
On April 7, 1997, CSL's chairman, Patrick Hurst, drafted a memorandum of agreement stating: (1) that plaintiffs and CSL would perform the garage contract together, and (2) that plaintiffs and CSL had formed a joint venture in order to win the on-street parking contract. Cplt. ¶ 33. According to plaintiffs, the parties again agreed to enter into a written contract formalizing the terms of their joint venture. Id. Plaintiffs claim that as a result of this initial agreement with defendants they terminated ongoing discussions with another company, Central Parking Systems. Id. ¶ 35.
On or about April 11, 1997, CSL submitted, on behalf of the joint venture, a PreQualification Submission ("PQS") to the Warsaw Parking Authority. Cplt. ¶ 36. The PQS was a prerequisite to obtaining certification to bid for the on-street parking contract. Id. Wesoke indicated that he would not proceed fi.irther with the bid until written contracts were produced. See id. ¶ 42-43. On or about April 22, 1997, Hurst informed Wesoke that defendants no longer intended to pursue a joint venture with plaintiffs, but instead would pay plaintiffs a finder's fee should the on-street parking contract be awarded. Id. ¶ 44; Hurst Aff. ¶ 28. Hurst states that he made this decision in light of the findings of an investigation into Wesoke's background and credentials. Hurst Aff. ¶ 28; Sharp Aff. ¶ 12. Wesoke rejected this proposed new arrangement, announcing his intention to cancel the joint venture's PQS and to resubmit a new bid without defendants. Cplt. ¶ 45. According to plaintiffs, Hurst then reconsidered his position and promised Wesoke that defendants would honor the original agreement and negotiate a final joint venture agreement in good faith. Id. ¶ 45.
On June 14, 1997, Wesoke, his attorney (Jeffrey C. Miller), and two CSL executives produced three contracts, set forth in the form of letter agreements, relating to the joint venture. Cplt. ¶ 47. The delivery of the contracts was preceded by approximately twenty hours of negotiating and drafting in Miller's New York office. Wesoke Aff. ¶ 16. The first letter, called "Re: Warsaw On-Street Parking Project" (the "Principal Agreement"), obligated defendants: (1) to perform in good faith all acts reasonably required to secure the on-street parking contract; (2) to make escrow arrangements relating to the on-street parking contract, to be paid once the contract was awarded; (3) to manage the on-street parking contract once it was awarded; and (4) to pay plaintiffs 15% of the monthly gross revenues obtained from the awarded on-street parking contract, minus certain specified deductions. Id. ¶ 48; Cplt. Exh. A. The agreement also stated that it superseded all other agreements and understandings, whether written or oral. Id. Cplt. Exh. A ¶ 18. By its provisions, it was to "be interpreted and enforced in accordance with the laws of the United Kingdom." Cplt. Exh. A ¶ 16.
The second letter agreement, called "Re: Central/Eastern European Development," (the "RD Agreement") obligated plaintiffs to establish a new "market creation" entity to develop future opportunities for on-street parking in conjunction with governmental agencies throughout central and eastern Europe, including Russia. Id. ¶ 54; Cplt., Exh. B ¶ 2. Under the terms of the RD Agreement, defendants would retain plaintiffs in return for information about business prospects. Id. ¶ 55; Cplt. Exh. B ¶ 3. Defendants would not be obligated to participate in joint projects if mutually agreeable terms could not be reached. Cplt. Exh. B. ¶ 4. However, defendants would be prohibited from engaging other persons or entities to perform substantially the same work as the RD company. Id. ¶ 7. As with the Principal Agreement, the initial term of the RD Agreement would commence only upon the signing of the on-street parking contract. Id. ¶ 6. Additionally, the RD Agreement would supersede all prior agreements and understandings, whether written or oral, and would be interpreted in accordance with British law. Hurst Aff. ¶ 13; Cplt. Exh. B ¶¶ 14-16.
The third letter agreement, called "Re: Warsaw On-Street Parking Project," (the "Expense Agreement"), obligated defendants to pay certain travel expenses incurred by plaintiffs in obtaining. the on-street parking contract. Cplt. Exh. C.
Plaintiffs claim that following the execution of the formal written agreements defendants attempted to undermine the joint venture arrangement by meeting with Polish officials and with plaintiffs' contacts, notably Tadeusz Nowak, thereby reducing their need for plaintiffs' involvement. Cplt. ¶ 62. Plaintiffs state that defendants pressured them to abandon significant contractual rights, demanding that they accept only half the fees due under the Principal Agreement and that RD Agreement be rescinded. Cplt. ¶ 66-67, 72. Plaintiffs claim that defendants sabotaged the on-street contract by taking steps likely to ensure its rejection, such as refusing to allow plaintiffs to review submissions to the Warsaw city authorities. Id. ¶¶ 65, 76. According to Hurst, defendants altered their submissions because the city officials in Warsaw had modified the project, rendering it far less profitable than originally anticipated. Hurst Aff. ¶ 30.
Defendants pursued the contract as TFM Contract Services Limited, not the joint venture, and submitted a final bid without plaintiffs' input on February 19, 1998. Cplt. ¶ 76-79. On or about March 3, 1998, the Warsaw Parking Authority declared the TFM submission to be invalid and disqualified defendants and the joint venture as bidders for the on-street parking contract. Id. ¶ 80. Plaintiffs contend that defendants refused to cooperate in the preparation of additional materials to correct the errors of its earlier submission and refused to appeal the disqualification decision. Id. ¶¶ 81-82. Plaintiffs also claim that defendants failed to make payments to supphers as required under their initial agreement and attempted to insert unacceptable language in the garage contract. Id. ¶ 84. Plaintiffs claim that as a result of defendants' refusal to carry out its obligations, plaintiffs were forced to cancel their garage contract with the Warsaw Parking Authority. Id. ¶ 85.
Plaintiffs brought this suit against defendants in February 2000 seeking $61 million in damages. They assert claims for breach of the initial agreement, the Principal Agreement, the RD Agreement, and the Expense Agreement, as well as claims for breach of fiduciary duty, breach of the covenant of good faith, tortious interference with prospective economic advantage, negligent misrepresentation, and promissory estoppel. Cplt. ¶¶ 86-136. The case was originally assigned to Judge Batts.
In August 2000, defendants brought the instant motion to dismiss on the ground offorum non conveniens, arguing that the United Kingdom is the appropriate forum for this litigation. Judge Batts referred the motion to Magistrate Judge Ehis, who issued a thoughtful opinion in March 2001 recommending that the motion be granted. See Wesoke v. Contract Services Ltd., No. 00 Civ. 1188, 2001 WL 327759 (Mar. 31, 2001). Judge Ehis did not have the benefit, however, of the Second Circuit's recent opinion in Iragorri v. United Technologies Corp.. 274 F.3d 65 (2d. Cir. 2001) (en banc), which was handed down after Judge Ehis issued his recommendation. Iragorri clarified the state offoru, n non conveniens doctrine with respect to the deference owed to a United States plaintiffs choice of a United States forum outside of the district in which the plaintiff resides.
The case was transferred from Judge Batts to the undersigned in March 2002. The court then ordered the parties to submit supplemental briefs regarding the application of the principles espoused in Iragorri to defendants' pendingforum non conveniens motion.
DISCUSSION
In 1947, the Supreme Court handed down a pair of decisions laying out the appropriate framework forforum non conveniens analysis. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947); Koster v. American Lumbermens Mut. Cas. Co., 330 U.S. 518 (1947). Under Gilbert and Koster, forum non conveniens is a discretionary device permitting a court in rare instances to "dismiss a claim even if the court is a permissible venue with proper jurisdiction over the claim." PT United Can Co. v. Crown Cork Seal Co.. 138 F.3d 65, 73 (2d Cir. 1998). In assessing whetherforum non conveniens dismissal is appropriate, courts engage in a two-step process. The first step is to determine if an adequate alternative forum exists. See, e.g., Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n. 22 (1981); Gilbert, 330 U.S. at 506-07. Here, the court assumes arguendo for purposes of resolving the instant motion that the United Kingdom constitutes an adequate alternative forum. The task thus becomes to balance a series of factors involving the private interests of the parties in maintaining the litigation in the competing fora and any public interests that may be at stake. See Id. at 508-09. Defendants have the burden of establishing that the pertinent factors tilt strongly in favor of trial in the foreign forum because, as the Supreme Court has instructed, "the plaintiffs choice of forum should rarely be disturbed." Gilbert, 330 U.S. at 508.
A. The De ree of Deference Owed to Plaintiffs' Choice of Forum
Sitting en bane, the Second Circuit recently held in Iragorri that "the degree of deference given to a plaintiffs forum choice varies with the circumstances" according to a "sliding scale." 274 F.3d at 71. As the court explained:
The more it appears that a domestic or foreign plaintiffs choice of forum has been dictated by reasons that the law recognizes as valid, the greater the deference that will be given to the plaintiffs forum choice. Stated differently, the greater the plaintiffs or the lawsuit's bona fide connection to the United States and to the forum of choice and the more it appears that considerations of convenience favor the conduct of the lawsuit in the United States, the more difficult it will be for the defendant to gain dismissal for forum non conveniens. Thus, factors that argue againstforum non conveniens dismissal include the convenience of the plaintiffs residence in relation to the chosen forum, the availability of witnesses or evidence to the forum district, the defendant's amenability to suit in the forum district, the availability of appropriate legal assistance, and other reasons relating to convenience or expense. On the other hand, the more it appears that the plaintiffs choice of a U.S. forum was motivated by forum-shopping reasons — such as attempts to win a tactical advantage resulting from local laws that favor the plaintiffs case, the habitual generosity ofjuries in the United States or in the forum district, the plaintiffs popularity or the defendant's unpopularity in the region, or the inconvenience and expense to the defendant resulting from litigation in that forum — the less deference the plaintiffs choice commands and, consequently, the easier it becomes for the defendant to succeed on a forum non conveniens motion by showing that convenience would be better served by litigating in another country's courts.
Id. at 72. Courts therefore must "consider a plaintiffs likely motivations in light of all the relevant indications" and "give greater deference to a plaintiffs forum choice to the extent that it was motivated by legitimate reasons, including the plaintiffs convenience and the ability of a U.S. resident plaintiff to obtain jurisdiction over the defendant, and diminishing deference to a plaintiffs forum choice to the extent that it was motivated by tactical advantage." Id. at 73.
Here, the court has little trouble concluding that plaintiffs' chose this forum for legitimate reasons, not in order to obtain an improper tactical advantage. Plaintiffs' papers make clear that their main purpose in bringing this action in the United States was to avoid the substantial (and in all likelihood prohibitive) expense of litigating in the United Kingdom — expenses generally associated with litigating a case overseas coupled with the particular requirement in the United Kingdom that a plaintiff post a substantial bond to guarantee the payment of attorneys' fees. Plaintiffs apparently chose this judicial district, as oppose to the Florida district in which they reside, because here they knew they could establish personal jurisdiction over defendants and proper venue.
As discussed above, the Iragorri court identified several "forum shopping reasons" why litigation in a particular United States district might not be legitimate see 274 U.S. at 72, none of which applies here. Plaintiffs concede that British law governs their claims against defendants, and it therefore cannot be said that local law somehow favors plaintiffs. Neither plaintiffs nor defendants have any particular popularity or unpopularity in this district. Juries in this district are not particularly known for their generosity to plaintiffs. Finally, while litigating in this district undoubtedly will be more expensive for defendants than litigating in the United Kingdom, there is no reason to believe that plaintiffs chose this forum for the specific purpose of imposing excessive costs on defendants — especially given that plaintiffs might have filed suit in Florida, which likely would have been even more expensive for defendants.
Accordingly, the court holds that plaintiffs' choice of this forum was not motivated by any improper purpose and thus is entitled to considerable deference.
B. The Private Interest Factors
Having determined that plaintiffs' choice of forum is entitled to considerable deference, the court must proceed to conduct the analysis set forth in Gilbert, Koster, and Piper. First, the court must balance the so-called "private interest factors," which generally pertain to the convenience of the litigants. These 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; and "all other practical problems that make trial of a case easy, expeditious and inexpensive." Gilbert, 330 U.S. at 508. In considering these factors, the court is "necessarily engaged in a comparison between the hardships defendant would suffer through the retention of jurisdiction and the hardships the plaintiff would suffer as the result of dismissal and the obligation to bring suit in another country." Iragorri 275 F.3d at 74.
The record before the court demonstrates that most of the witnesses in this case are located in Europe, not the United States — twenty potential European witness compared with only four potential American witnesses. Importantly, however, eight of the twenty potential European witnesses reside in Poland, not the United Kingdom. Accordingly, while dismissing this action in favor of litigation in Great Britain would mean that fewer witnesses would be forced to travel in order to testify, the fact remains that at least half of the potential witnesses will be forced to travel in order to testify no matter where the case is tried. Nor has there been any showing by defendants that any potential witnesses would refuse to testify willingly, and thus force the litigants to resort to compulsory process, much less that any witnesses beyond the reach of this or any other court's compulsory process powers could not be compelled to testify through letters rogatory. See Overseas Programming Cos. v. Cinematogrphische Commerzanstalt 684 F.2d 232, 235 (2d Cir. 1982) ("[A]ny difficulties . . . regarding witnesses whose attendance the Court is unable to compel can most likely be resolved by the use of deposition testimony or letters rogatory.").
With respect to documentary evidence, the record before the court does not indicate where the bulk of the relevant documents are located. Even assuming that most of the relevant documents are located in Europe (as common sense would seem to dictate), defendants have not made any showing that being forced to ship relevant documents to the United States for trial would impose particularly burdensome costs. See DiRienzo v. Philip Servs. Corp.. 232 F.3d 49, 66 ("[T]he need to photocopy and ship documents is hardly unprecedented in American litigation.").
Accordingly, the court concludes that the private interest factors in this case are more or less neutral, or that they tip at most weakly in favor of litigating in the United Kingdom. The bottom line is that defendants will be inconvenienced by litigating here, while plaintiffs would be inconvenienced by litigating overseas. Apart from the fact that half of the witnesses and, presumably, a substantial portion of the documentary evidence are located in the United Kingdom, there is no reasons to surmise that litigating in the United Kingdom would be significantly less costly to the parties overall than litigating here will be.
C. The Public Interest Factors
The court also must consider various public interest factors. As the Supreme Court has explained:
Factors of public interest also have place in applying the doctrine [offorum non conveniens]. Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.
Gilbert, 330 U.S. at 508-09.
It is certainly true that this case — which involves plans to construct parking structures in Poland — is not predominantly local in character. This is not to say, however, that this case is entirely devoid of local interest. To the contrary, plaintiffs areZ United States citizens, and the contracts at issue were negotiated, drafted, and executed in this district. Surely jurors in this district have an interest — at least some interest — in redressing harm allegedly caused to United States citizens involving contractual instruments negotiated, drafted, and executed here, even if the contractual obligations were to be performed half a world away.
To be sure, the fact that British law governs plaintiffs' claims is a factor that weighs against retaining jurisdiction in the court'sforum non conveniens analysis. The court concludes that this factor weighs against retaining jurisdiction only weakly, however, because defendants have made no showing that British contract law principles are at all different from U.S. contract law principles (which, after all, were derived substantially from English common law).
Finally, although it is true that the Southern District of New York is a particularly busy court, it is also true that the undersigned maintains a relatively light docket and will be more than capable of ushering this matter to trial with dispatch without imposing any undue burden on the district as a whole.
Accordingly, the court concludes that the public interest factors favor dismissal of this matter at most weakly.
D. Weighing the Factors
In the final analysis, defendants have not come close to demonstrating that litigating in this forum would "establish . . . oppressiveness and vexation . . . out of all proportion to plaintiffs convenience." Guidi v. Inter-Contimental Hotels Corp., 224 F.3d 142, 146 (2d Cir. 2000) (quoting Piper, 454 U.S. at 255). Nor is there any particularly compelling public interest consideration that can overcome the considerable deference to which plaintiffs' choice of forum is entitled. At bottom, this is a case that must be tried on one side of the Atlantic Ocean or the other, a case in which either plaintiffs or defendants necessarily will be somewhat inconvenienced. Because defendants' cannot demonstrate that the private and public interest factors overcome the strong presumption that must be accorded plaintiffs' choice of forum, their motion to dismiss on the ground offorum non conveniens must fail.
CONCLUSION
For the foregoing reasons, defendants' motion is DENIED.