Joe Fasano, Individually and on Behalf of All Others Similarly Situated, Altimeo Optimum Fund, Individually and on Behalf of All Others Similarly Situated, Altimeo Asset Management, Individually and on Behalf of All Others Similarly Situated, Plaintiffs-Appellants,
Peggy Yu Yu, Dangdang Holding Company Limited, E-Commerce China Dangdang, Inc., Kewen Holding Company Limited, Science & Culture International Limited, First Profit Management Limited, Danqian Yao, Lijun Chen, Min Kan, Defendants-Appellees, Guoqing Li, Ruby Rong Lu, Ke Zhang, Xiaolong Li, Defendants.
Argued: March 12, 2019
Appeal from the United States District Court For the Southern
District of New York
from a judgment of the United States District Court for the
Southern District of New York (Failla, J.),
dismissing plaintiffs-appellants' complaint on the ground
of forum non conveniens. We conclude that the
district court abused its discretion by failing to consider
the forum selection clause contained in the relevant
documents and its impact on the forum non conveniens
J. Lieberman (Ben Hutman, on the brief), Sadis &
Goldberg, LLP, New York, New York, for Plaintiffs-Appellants.
F. Rudzin (Asher L. Rivner and Seth Aronson, on the brief),
O'Melveny & Myers LLP, New York, New York, and Los
Angeles, California, for Defendants-Appellees.
Before: Wesley, Chin, and Sullivan, Circuit Judges.
Altimeo Asset Management, Altimeo Optimum Fund, and Joe
Fasano (collectively, "Plaintiffs") appeal from a
judgment of the district court entered January 2, 2018,
dismissing their complaint against defendants-appellees
E-Commerce China Dangdang, Inc. ("Dangdang") and
its directors, executives, controlling shareholders, and
affiliated companies (collectively, "Defendants").
Suing on behalf of a putative class, Plaintiffs asserted
claims for damages under federal and state law in connection
with a "going private merger" by which certain
controlling defendants purchased American Depositary Shares
("ADSs") from Dangdang's minority shareholders.
Plaintiffs contend that the consideration paid by Defendants
was below market and grossly unfair. By opinion and order
entered December 29, 2017, the district court granted
Defendants' motion to dismiss on the ground of forum
non conveniens, holding that the Cayman Islands provided
an adequate alternative forum. We assume the parties'
familiarity with the underlying facts, procedural history,
and issues on appeal.
review dismissals of a complaint for forum non
conveniens for abuse of discretion. Martinez v.
Bloomberg LP, 740 F.3d 211, 216 (2d Cir. 2014);
Norex Petroleum Ltd. v. Access Indus, Inc., 416 F.3d
146, 153 (2d Cir. 2005). Factual findings are reviewed for
clear error and legal conclusions de novo. See
Martinez, 740 F.3d at 217; Asoma Corp. v. SK
Shipping Co., 467 F.3d 817, 822 (2d Cir. 2006).
"A district court abuses its discretion
in dismissing on the ground of forum non conveniens
when its decision '(1) rests either on an error of law or
on a clearly erroneous finding of fact, or (2) cannot be
located within the range of permissible decisions, or (3)
fails to consider all the relevant factors or unreasonably
balances those factors.'" Aguas Lenders Recovery
Grp. v. Suez, S.A., 585 F.3d 696, 699-700 (2d Cir. 2009)
(quoting Pollux Holding Ltd. v. Chase Manhattan
Bank, 329 F.3d 64, 70 (2d Cir. 2003)).
general, we have recognized that when a defendant moves to
dismiss on the ground of forum non conveniens,
courts assess: (1) the deference to be accorded the
plaintiffs choice of forum; (2) the adequacy of the
alternative forum proposed by the defendants; and (3) the
balance between the private and public interests implicated
in the choice of forum. Norex Petroleum, 416 F.3d at
153. Where the parties have contractually selected a forum,
however, the forum selection clause "substantial[ly]
modifi[es]" the forum non conveniens doctrine
and the "usual tilt in favor of the plaintiffs choice of
forum gives way to a presumption in favor of the
contractually selected forum." Martinez, 740
F.3d at 218 (citing M/S Bremen v. Zapata Off-Shore
Co., 407 U.S. 1, 12 (1972)).
the presumption of enforceability is not automatic. Instead,
a district court must consider three factors in determining
whether the presumption of enforceability applies to a forum
selection clause: whether (1) the clause was reasonably
communicated to the party resisting its enforcement; (2) the
clause is mandatory or permissive; and (3) the claims and
parties to the dispute are subject to the clause. Magi
714 F.3d at 721 (citing Phillips v. Audio Active
Ltd., 494 F.3d 378, 383-84 (2d Cir. 2007)). If the
district court concludes that the presumption applies, it
must then consider a fourth factor - whether
the presumption of enforceability has been properly rebutted
by "a sufficiently strong showing that
'enforcement would be unreasonable or unjust, or that the
clause was invalid for such reasons as fraud or
overreaching."' Id. (quoting
Phillips, 494 F.3d at 384).
respect to the deference afforded to Plaintiffs' choice
of forum, Defendants acknowledge that the receipts for the
ADSs contained a mandatory forum selection clause, which
provides that certain controversies, claims, or causes of
action arising out of the ADSs "shall be litigated in
the Federal and state courts in the Borough of Manhattan, The
City of New York." J. App'x 389. If the
presumption of enforceability applies, Plaintiffs' choice
of forum controls unless Defendants can show that the forum
selection clause is unreasonable, unjust, fraudulent, or an
overreach. Cf Magi, 714 F.3d at 720-21
("[F]orum selection clauses are prima facie
valid and should be enforced unless enforcement is shown by
the resisting party to be unreasonable under the
circumstances . . . or unless the forum selection clause
'was invalid for such reasons as fraud or
overreaching'" (citation omitted)); Carey v.
Bayerische Hypo-Und Vereinsbank AG, 370 F.3d 234, 237
(2d Cir. 2004) (holding that the forum non
conveniens doctrine is a "discretionary
device" that permits dismissal "when an alternative
forum has jurisdiction to hear [a] case, and when trial in
the chosen forum would establish . . . oppressiveness and
vexation to a defendant . . . out of all proportion to
plaintiff's convenience." (internal quotation marks
omitted)). However, the district court did not address or
even mention the forum selection clause and did not consider
whether enforcement of the clause would be unreasonable or
unjust. Instead, it engaged in the traditional forum non
conveniens analysis, without any consideration of the
forum selection clause. This was an abuse of discretion.
See Aguas Lenders, 585 F.3d at 701.
appeal, Defendants make two arguments with respect to the
forum selection clause. First, they claim that Plaintiffs
waived their reliance on the forum selection clause by
failing to raise the issue in the district court. Second,
they argue that even if Plaintiffs did not waive their
reliance on the forum selection clause, the scope of the
clause does not cover the key defendants and claims here. ...