A Tale of Two Doctrines

This article first appeared in The New York Law Journal, January 14, 2013 by Edward Flanders, Ranah L. Esmaili and Peter Ostrovski

It’s 5 p.m. on a Friday and you are unpredictability in results and put packing up to leave on a long-planned litigants in a state of uncertainty as weekend getaway…when the phone they attempt to ascertain whether rings. The caller ID displays the their case can be brought in New familiar number of a client, the York federal court and whether it general counsel of a New York will remain there. To understand corporation. She has what she the roots of this tension, it may Edward Flanders suggests is a quick legal question help to review each doctrine. for which she needs a quick answer. Litigation The international comity ab-stention Her company has a lawsuit pending +1.212.858.1638 doctrine arises from respect for the against a French corporation in [email protected] courts of foreign nations, but also French court, but progress on it fairness to litigants and judicial has been slow. Her company is efficiency. District courts thus have considering bringing suit in New an obligation to exercise jurisdiction York federal court as well, without where they can and to only abandoning the French proceedings. surrender it when “exceptional Would she be able to do so, or would circumstances” exist. In conducting a challenge to the action lead to such an analysis, courts weigh a its dismissal from a New York number of factors and look at the federal court? totality of the circumstances. Issues Ranah L. Esmaili Consider These Doctrines to consider include, but are not Litigation limited to, the similarity of the +1.212.858.1526 Two doctrines, international parties, the similarity of the issues, [email protected] comity abstention and forum non the order in which the actions were conveniens, provide guidance for filed, the adequacy of the alternate determining the answer. Your client forum, the potential prejudice to would likely face a motion to dismiss either party, the convenience of based on both. While the two look the parties, the connection between to similar factors for guidance, an the litigation and the United States, analysis under each can lead a judge and the connection between to reach opposite, and seemingly the litigation and the foreign inconsistent, conclusions. For jurisdiction. See, e.g., Royal and instance, a judge examining the Sun Alliance Ins. Of Canada v. Peter Ostrovski same set of facts could find that the Century Intern. Arms, 466 F.3d 88, Litigation policy underlying the international 93-95 (2d Cir. 2006) +1.212.858.1464 comity abstention doctrine supports [email protected] keeping the case in New York while Forum non conveniens focuses on at the same time dismissing the case convenience of the parties while pursuant to the policy goals of forum according respect to a plaintiff’s non conveniens. This may lead to choice of forum. The examination

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thus begins with a presumption in twice—once when considering how Nevertheless, the district court favor of the plaintiff’s choice, with much weight to afford the plaintiff’s declined jurisdiction on forum the strength of that presumption choice of forum and then again non conveniens grounds: Plaintiff’s tied to the plaintiff’s and the when considering its public interest initial choice of forum was given lawsuit’s connection to the United factors. Similarly, the potential only minimal deference (plaintiff States. Courts next examine the prejudice and party convenience was from Barbados and the contract availability of an adequate alternate elements of international comity at issue was executed in Kenya and forum, a benchmark satisfied when abstention look to the same facts did not invoke New York law), and the defendant is subject to service that underlie an analysis of the the district court found that Canada of process in the foreign court and private interest factors of forum served as an adequate alternative whether the court allows litigation non conveniens. Moreover, both forum, none of the evidence or of the subject matter at issue. doctrines gauge the adequacy of the witnesses were in the United States alternative forum. In fact, the only and most were in Canada, and the Finally, courts consider numerous point of division comes from the public interest factors highlighted private interest and public interest abstention doctrine’s focus on the lack of connection between factors. For private interests, they whether there is a parallel litigation New York and the litigation. The look at the ease of access to the and thus the similarity of the parties court thus dismissed the case on evidence, the availability of and issues, along with the order in the basis of forum non conveniens compulsory process for the which the actions were filed. notwithstanding the fact that attendance of unwilling witnesses, consideration of many of the same the cost of willing witnesses’ The two doctrines have yielded underlying facts did not rise to the attendance, and any other factors conflicting results at least once in level of “exceptional circumstances” that might make the trial quicker or recent years. In Kitaru Innovations to decline jurisdiction under less expensive. On the public side, v. Chandaria, the plaintiff faced a the international comity courts give weight to administrative motion to dismiss on both grounds abstention doctrine. difficulties associated with court from defendants who were U.S. congestion, the unfairness of citizens residing in Kenya. 698 F. Analysis and Application imposing jury duty on a community Supp. 2d 386 (S.D.N.Y. 2010). The So what do you tell your client? with no relation to the litigation, plaintiff in Kitaru was a corporation For starters, you would tell her that, the local interest in having localized in Barbados that already had a if the potential defendant invokes controversies decided at home, lawsuit pending in Canada, both doctrines on a motion to and avoiding difficult problems regarding the same subject matter, dismiss, courts may potentially regarding conflict of laws and the a U.S. patent. The district court first engage in completely separate application of foreign law. See, e.g., analyzed a potential dismissal under analyses without consideration of DiRienzo v. Philip Services, 294 F. 3d an abstention approach and found the overlap between them, as was 21, 29-31 (2d Cir. 2002). that it should retain jurisdiction. the case in Kitaru. The fundamental While the parallel Canadian consequence of this approach Similar Factors, but Results proceeding involving the same would be to effectively negate May Differ parties and essentially the same the “exceptional circumstances” A comparison with the factors issues would potentially prejudice threshold under the international listed in the international comity defendants by forcing them to comity abstention doctrine in favor abstention discussion reveals a litigate in two forums of dismissal under the less stringent significant amount of overlap. Both simultaneously, the court found forum non conveniens doctrine. consider ties between the litigation that these concerns are present Put differently, the defendant would and the United States and the with any parallel action and are not face an uphill battle trying to meet foreign jurisdiction. The forum non enough to meet the “exceptional the “exceptional circumstances” conveniens analysis in fact does this circumstances” requirement. threshold of international comity

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abstention but may have an easier abroad and even make some The answer to your client’s question time showing that private interest progress there, only to discover (given Monday morning after and public interest factors point the level of prejudice it faces within cancelling your weekend plans toward dismissal. This could lead that judicial system. Despite such and reading dozens of cases and to a perverse result, where a judge prejudice, the forum non treatises) is that there is no easy might uphold the jurisdiction of convenience doctrine’s focus answer. Rather, the answer will the court to hear a case in one on other factors may point to a likely depend on the particular facts breath, yet immediately take it dismissal in favor of the foreign of your case, and the willingness away in the next. proceeding, even though the plaintiff of the assigned judge to engage in might face prejudice a thorough analysis of competing The good news for your client is that in the foreign forum that would doctrines of law in order to come the interplay between the differing militate against dismissal under to the best decision. standards of the two doctrines has the international comity yet to be substantively addressed Edward Flanders is a partner at abstention doctrine. by any federal court, and is ripe for Pillsbury Winthrop Shaw Pittman, consideration. Indeed, there is a This is particularly the case because where he leads the New York good argument for why the court forum non conveniens, in its typical litigation practice and co-leads should consider the intersection incarnation, applies to dismissing an the firm’s financial services litigation of the two doctrines and engage action in favor of a potential foreign team. Ranah L. Esmaili is counsel in a meaningful analysis of such proceeding; the analysis should and Peter Ostrovski is an associate interplay in deciding whether to change when there is already a at the firm. dismiss the case. For example, foreign litigation pending. The even if the court is inclined to existence of parallel proceedings dismiss the action on forum non calls for the application of the conveniens grounds, it should doctrine more suited to deal with evaluate the impact of a dismissal multiple proceedings, namely on the court’s charge to maintain international comity abstention. jurisdiction whenever possible A strong argument exists as well under the international comity that parties to an action deserve abstention doctrine. predictability in their results and an Moreover, international comity understanding of the law that will abstention looks to the potential be applied to their case. The current prejudice of either party, which scheme, in which two almost should encourage courts to look identical doctrines have differing beyond the hardships a party would thresholds and can lead to opposite face from litigating in two actions results, undermines this desired but also consider the judicial clarity. In addition, defendants prejudice a party may face from can attempt to game the system by litigating in the foreign forum, as invoking the doctrine that is easiest the doctrine demands. For instance, to satisfy, thus slowly eroding the a party may commence an action force and effectiveness of the other.

Reprinted with permission from the January 14, 2013 edition of the New York Law Journal. © 2013 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, [email protected] or visit www.almreprints.com. Pillsbury Winthrop Shaw Pittman LLP | 1540 Broadway | New York, NY 10036 | 1.877.323.4171