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Alcoa Steamship Co. v. Regent

January 10, 1979


Appellant's motion for rehearing following affirmance of district court's judgment dismissing complaint on ground of forum non conveniens having been granted and reconsideration had, order of affirmance withdrawn and judgment appealed from reversed.

Before Waterman, Timbers and Van Graafeiland, Circuit Judges.

Author: Timbers; Van Graafeiland


We granted reargument because of appellant's contention that Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947), cited as authoritative precedent by both the district court and this Court,*fn1 does not, and should not, establish the correct standard for determining when American citizens should have access to their country's admiralty courts. Appellant argued also that our decision in this case conflicts with prior decisions of this Court. A thorough analysis of Gulf Oil, placed in its proper historical setting, convinced us that appellant's contentions had merit and that our holding should be re-examined.

Long before Gulf Oil, there existed a well-recognized rule of law that a court possessing jurisdiction had to exercise it unless there were compelling reasons why it should not. See, e.g., Kline v. Burke Construction Co., 260 U.S. 226, 234, 43 S. Ct. 79, 67 L. Ed. 226 (1922); Chicot County v. Sherwood, 148 U.S. 529, 534, 13 S. Ct. 695, 37 L. Ed. 546 (1893); Cohens v. Virginia, 19 (6 Wheat.) U.S. 264, 403, 5 L. Ed. 257 (1821). This appears also to have been the law of England. See Gibb, International Law of Jurisdiction, 212-13 (1926), cited in Williams v. Green Bay & W.R.R., 326 U.S. 549, 554 n. 4, 66 S. Ct. 284, 90 L. Ed. 311 (1946). Article III, section 2 of the Constitution extends the judicial power of the United States "to all Cases of admiralty and maritime Jurisdiction," and Congress by its various enabling enactments has placed admiralty and maritime jurisdiction in the district courts. See 28 U.S.C. ยง 1333. Nonetheless, from an early date, district judges have exercised their discretion in deciding whether to accept jurisdiction in an admiralty suit between foreigners. See Canada Malting Co. v. Paterson Steamships, Ltd., 285 U.S. 413, 421-23, 52 S. Ct. 413, 76 L. Ed. 837 (1932). However, the rule mandating retention of jurisdiction was generally followed where the plaintiff was an American citizen seeking vindication of his own rights.*fn2 See Norwood v. Kirkpatrick, 349 U.S. 29, 41-42, 75 S. Ct. 544, 99 L. Ed. 789 (1955) (Clark, J., dissenting); The Neck, 138 F. 144, 148 (W.D.Wash.1905); The Falls of Keltie, 114 F. 357, 358 (N.D.Wash.1902). An American plaintiff was seldom if ever deprived of the opportunity to seek justice in the courts of his own country. See Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 697, 70 S. Ct. 861, 94 L. Ed. 1206 (1950); Braucher, The Inconvenient Federal Forum, 60 Harv.L.Rev. 908, 921 (1947). Outside the field of admiralty law, even in cases where dismissal would not deprive the plaintiff of an American forum, it was generally assumed that a plaintiff had an absolute right of access to the courts of his place of residence. See Norwood v. Kirkpatrick, supra, 349 U.S. at 41, 75 S. Ct. 544 (Clark, J., dissenting); Barrett, The Doctrine of Forum Non Conveniens,J 35 Cal.L.Rev. 380, 390 (1947).

This, then, was the general state of the law when Gulf Oil was decided. Because that case was a common law negligence action brought in the Southern District of New York by a Virginia resident against a Pennsylvania corporation, the Court did not undertake to modify the settled practice of giving favored jurisdictional treatment to resident plaintiffs. The Court's citation of Gregonis v. Philadelphia & Reading Coal & Iron Co., 235 N.Y. 152, 139 N.E. 223 (1923), which held that New York courts could not refuse to exercise jurisdiction in a tort action by a resident against a non-resident, demonstrated the Court's recognition of the fact that, as of that date, forum non conveniens was applied generally to non-resident plaintiffs. This was demonstrated further by the Court's statements that "[the] principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction" and that "the open door may admit those who seek not simply justice but perhaps justice blended with some harassment." 330 U.S. at 507, 67 S. Ct. at 842 (emphasis added). In short, Gulf Oil dealt with a situation in which the plaintiff was a non-resident, and the Court's holding should be considered in this light.*fn3

On the same day that the Court decided Gulf Oil it also decided Koster v. Lumbermens Mutual Casualty Co., 330 U.S. 518, 67 S. Ct. 828, 91 L. Ed. 1067 (1947). This case had also been dismissed below on the ground of forum non conveniens. It was a derivative action brought in the Eastern District of New York by a policyholder of the nominal corporate defendant against the corporation's president and others. The plaintiff was a resident of the Eastern District of New York and the defendants were all domiciled in Illinois. Because of the peculiar nature of derivative actions the Court affirmed the dismissal of the New York action, stating that the plaintiff was only one of "hundreds of potential plaintiffs, all equally entitled voluntarily to invest themselves with the corporation's cause of action and all of whom could with equal show of right go into their many home courts" and therefore the balance of conveniences indicated that it would be proper to have this case tried in Illinois rather than in the Eastern District of New York.

While so stating and so ruling, the Court observed, however, in an observation pertinent to the case before us that "[where] there are only two parties to a dispute, there is good reason why it should be tried in the plaintiff's home forum if that has been his choice", and that plaintiff should not be deprived of his choice except upon a clear showing of such oppressiveness and vexation to the defendant as to be out of all proportion to plaintiff's convenience. Id. at 524, 67 S. Ct. at 831.

This Court should look to the reasoning of Koster, rather than of Gulf Oil, in determining the rights of a resident plaintiff. See Swift & co. Packers v. Compania Colombiana Del Caribe, S.A., supra, 339 U.S. at 697, 70 S. Ct. 861. Moreover, where dismissal of plaintiff's suit will relegate him to litigation in the courts of a foreign country, the Koster standards should be strictly applied. That is the courts which this Court and other circuits have followed. Before a resident citizen suing in his own right will be dispatched to the courts of a foreign country, there must be positive evidence of unusually extreme circumstances making it materially unjust to the defendant that jurisdiction be retained in the American courts. Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1326, 1344 (2d Cir.1972); Mobil Tankers Co., S.A. v. Mene Grande Oil Co., 363 F.2d 611, 614 (3d Cir.), cert. denied, 385 U.S. 945, 87 S. Ct. 318, 17 L. Ed. 2d 225 (1966); Burt v. Isthmus Development Co., 218 F.2d 353, 357 (5th Cir.), cert. denied, 349 U.S. 922, 75 S. Ct. 661, 99 L. Ed. 1254 (1955). Inconvenience to the defendant will not satisfy this criterion without a further showing of an intent by the plaintiff to vex or harass. Thomson v. Palmieri, 355 F.2d 64, 66 (2d Cir.1966); Founding Church of Scientology v. Verlag, 175 U.S.App.D.C. 402, 409, 536 F.2d 429, 436 (D.C.Cir.1976); Hoffman v. Goberman, 420 F.2d 423, 426 (3rd Cir.1970); Altman v. Central of Ga. R.R., 124 U.S. App. D.C. 155, 157, 363 F.2d 284, 286 (D.C.Cir.), cert. denied, 385 U.S. 920, 87 S. Ct. 231, 17 L. Ed. 2d 144 (1966); Mobil Tankers Co., S.A. v. Mene Grande Oil Co., supra, 363 F.2d at 614. As this Court stated in Thomson v. Palmieri, supra, 355 F.2d at 66, "we should respect plaintiff's choice of forum as long as no harassment is intended." See Top Form Mills, Inc. v. Sociedad Nationale Industria Applicazioni Viscosa, 428 F. Supp. 1237, 1253 (S.D.N.Y.1977).

Suit in an American court could not have come as a surprise to defendant. When defendant accepted the benefits attending the use of American port facilities, it must have been familiar with the age-old maritime tradition that gives libelants in rem jurisdiction where the vessel is found. See Kloeckner Reederei Und Kohlenhandel v. A/S Hakedal, 210 F.2d 754, 756 (2d Cir.), appeal dismissed per stipulation, 348 U.S. 801, 75 S. Ct. 17, 99 L. Ed. 633 (1954); Motor Distributors, Ltd. v. Olaf Pedersen's Rederi A/S, 239 F.2d 463, 467 (5th Cir.1956), cert. denied, 353 U.S. 938, 77 S. Ct. 816, 1 L. Ed. 2d 760 (1957); cf. Article I(1)(b) of the Brussels Convention of 1952. Even if plaintiff were a foreigner, defendant would not have been entitled to dismissal of the district court suit unless it established that otherwise it would be unfairly prejudiced. Kloeckner Reederei Und Kohlenhandel v. A/S Hakedal, supra, 210 F.2d at 756. Plaintiff is in fact a United States citizen, and its choice of a local forum is entitled therefore to greater consideration than if it were made by a non-resident alien. Swift & Co. Packers v. Compania, Colombiana Del Caribe, S.A., supra, 339 U.S. at 697, 70 S. Ct. 861. American courts "are maintained to give redress primarily to their own citizens." United States Merchants' & Shippers' Ins. Co. v. A/S Den Norske Afrika Og Australie Line, supra, 65 F.2d at 392; see Burt v. Isthmus Development Co., supra, 218 F.2d at 356. They should consider the convenience of American citizens, whose taxes keep the courts in existence. Douglas v. new York, N.H. & H.R.R., 279 U.S. 377, 387, 49 S. Ct. 355, 73 L. Ed. 747 (1929).

In the instant case, appellant's convenience will be served by suit in the United States because its damaged dock is being repaired by a United States contractor under the supervision of appellant's United States employees. This was sufficient to negate any charge of vexation, oppression, or harassment, and the district court made no finding that appellant had any such intention. The district court's weighing-of-inconvenience test, which led it to conclude that the litigation could be conducted "most expeditiously and inexpensively in Trinidad", was an improper basis for dismissal.

Upon reconsideration, the judgment appealed from is reversed.

TIMBERS, Circuit Judge, dissenting:

Until today's majority decision on a petition for rehearing addressed to the panel, the issue throughout this litigation in this Court has been whether the district court abused its discretion, within the meaning of Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 91 L. Ed. 1055, 67 S. Ct. 839 (1947), in dismissing the action on the ground of forum non conveniens. That was the issue which was fully briefed and argued before us on April 4, 1978. That was the issue to which all three opinions were addressed in our 2-1 panel decision of August 31, 1978 affirming the district court's exercise of discretion. 654 F.2d 165 (2 Cir.1978).*fn1a

Now on a petition for rehearing -- after the most cursory briefing*fn2a and no oral argument at all -- the present majority holds for the first time that the Gilbert standard "does not, and should not, establish the correct standard for determining when American citizens should have access to their country's admiralty courts." 654 F.2d at 170. The majority then proceeds to carve out for those litigants who invoke the admiralty and maritime jurisdiction of the federal courts an absolute immunity from dismissal on the ground of forum non conveniens -- no matter how conclusively the long recognized balancing factors may point toward another more appropriate forum. This special privilege which the majority creates in the courts of the United States in ...

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