Memorandum
SUBJECT: Forum Non Conveniens
I. Question Presented
Should the court grant Communico’s motion to dismiss on the ground of forum non conveniens where the case involves two foreign corporations licensed to do business in Florida, most of the documents and witnesses are abroad, there was no choice of forum clause in the agreement and the alternative forum in El Salvador gives the Salvadoran plaintiff a remedy?
II . Short Answer
Yes. In this case, the results of the balance of conveniences approach set forth in Kinney System, Inc. v. The Continental Insurance Company, 674 So. 2d 86 (Fla. 1996) weigh in favor of litigation in El Salvador. The alternative forum is adequate as to its jurisdiction over the parties and of the subject matter, the private interests such as litigation expenses and availability of witnesses favor the alternative forum in spite of the plaintiff’s choice, the public interest demands that the case be litigated elsewhere because El Salvador has a greater interest in the outcome of the case and there is no apparent undue prejudice or inconvenience if the case is re-filed in El Salvador.
III. Statement of Facts
Telemobile, Inc. sued Communico Corp. on November 19, 2006, for damages based on breach of fiduciary duty, unjust enrichment, fraud and breach of contract, arising from a Technical Services Agreement (“Agreement”) that was entered into by Telemobile and Communico, whereby Communico was to give technical advice to Telemobile on its acquisition of equipment and technology.
Telemobile, Inc. (“Telemobile”) is a foreign corporation organized under the laws of El Salvador and has its principal place of business there. It is also registered to do business in Florida and maintains an office there. It is currently the largest provider of long distance calls from El Salvador to Florida.
Communico Corp. (“Communico”) is a foreign corporation organized under the laws of the Grand Duchy of Luxembourg. It is an international operator of cellular phone services in Latin America, including El Salvador. Communico operates in Latin America and the United States through its many subsidiaries and holding companies. One of these companies is based in Florida.
The Agreement, written in Spanish, stipulated that payments are to be made according to Luxembourg law and that it was to be performed exclusively in El Salvador. Nearly all of Telemobile’s documents relating to the Agreement and Communico’s services are located in El Salvador. The parties dispute whether the Agreement was signed in El Salvador or in Costa Rica. The Agreement was discussed in Miami, Florida and in Luxembourg. The agreement did not contain any choice of forum clause.
The complaint alleges that Communico breached its fiduciary duty by receiving secret profits from separate agreements with Telemobile’s equipment provider, Northern Networks, Inc. (“Northern”), a Florida-based company. Telemobile alleged Communico paid three out of five board members of Telemobile to convince the board to enter into an agreement for Telemobile to purchase wireless loop equipment from Northern for US $100 million.
In exchange for its efforts to secure the Telemobile-Northern deal, Northen would grant Communico a 25% discounted rate on the latter’s equipment purchases from the former. This was pursuant to an oral agreement, which Communico and Northern discussed in Florida.
Communico filed a motion to dismiss the case on the ground of forum non conveniens, arguing that the case should be litigated in El Salvador because the Agreement was to be performed there and most of Telemobile’s witnesses and documents are located in Latin America. Telemobile opposes this motion, saying that El Salvador does not recognize claims for unjust enrichment (no affidavit was presented on this point). Even so, El Salvador recognizes claims that are the equivalent of breach of fiduciary duty, fraud and breach of contract, and additional claims that are not available in Florida.
IV. Discussion
The plaintiff’s choice of forum must, first and foremost, be respected. A strong presumption exists in favor of such choice. A dismissal based on forum non conveniens[1] will be granted only if the court finds that there is a compelling reason to allow such transfer of forum based on the balancing of conveniences approach or the Kinney factors. Under this test, the court must determine: (1) Whether an adequate alternative forum exists which possesses jurisdiction over the whole case; (2) Whether all relevant factors of private interest favor the alternative forum, weighing in the balance of a strong presumption against disturbing plaintiff’s initial forum choice; (3) If the balance of private interests is at or near equipoise[2], whether the court further finds that factors of public interest tip the balance in favor of trial in the alternative forum; and (4) whether the plaintiffs can reinstate their suit in the alternative forum without undue inconvenience or prejudice. Kinney System, Inc. v. The Continental Insurance Company, 674 So. 2d 86 (Fla. 1996). The burden of proving that the alternative forum is more convenient lies with the party seeking for the dismissal.
A. An adequate alternative forum exists which possesses jurisdiction over the whole case.
As a rule, a defendant “satisfies the first prong of the [forum non conveniens] analysis by showing that it is amenable to process in the other jurisdiction.” Del Monte Fresh Produce Co vs. Dole Food Co., Inc. # 00-1171-CIV (2001) quoting Panama v. BCCI Holdings, 119 F.3d at 951. In this case, there is no question about Communico’s consent to be governed by the laws and processes of El Salvador because both corporations are doing business in El Salvador and by entering into a contract in El Salvador, even stipulating that the agreement was to be exclusively performed in El Salvador, the parties are deemed to be aware of the laws and processes in such jurisdiction. They have, in fact, accepted that Salvadoran law will govern the rights and obligations under the Agreement save that of payment, which was to be governed by Luxembourg law.
The courts of El Salvador have jurisdiction over the parties because: (1) Telemobile is a corporation established Salvadoran law; (2) both corporations are licensed to do business in El Salvador and; (3) by contracting with a Salvadoran corporation, Communico submitted itself to Salvadoran jurisdiction. El Salvador also has jurisdiction over the subject matter because the Telemobile-Communico Agreement was entered into and performed exclusively in El Salvador.
Regarding the remedies, Telemobile alleged that it filed the case in Florida because El Salvador does not award money claims for unjust enrichment but it has been shown that El Salvador allows other similar claims that may answer for the damage caused by Communico, including claims that are not available under the laws of Florida. Regardless of the possible differences in nomenclature or designation, these remedies will allow Telemobile claims to be adequately satisfied with less costs for litigation than in Florida.
The issue of whether the compulsory process in the Salvadoran forum to require the attendance of witnesses located outside the State is adequate or not was never alleged in the pleadings. This being the case, the court will not entertain the issue due to the want of facts.
B. All relevant factors of private interest favor the alternative forum, weighing in the balance of a strong presumption against disturbing plaintiff’s initial forum choice.
The facts show that most of the material documentary evidences are found in El Salvador. Likewise, most of the material witnesses, namely the board members of Communico, are in Latin America and even though some of the witnesses, namely the board members of Northern, are located in Miami, there has been no allegation of proof that these witnesses may not be compelled to attend the trials in El Salvador. Since El Salvador is closer to Guatamala, Columbia, Argentina and Costa Rica where four material witnesses reside, it would be reasonable to assume that acquiring the testimonies of these persons will be less costly if the case is decided by an El Salvadoran forum than having the case decided by a court in Florida.
In Corinthian Colleges v. Philadelphia Indemnity Insurance Company, # 4D05-2200 (2006) the court ruled that the case may continue in the forum of choice even if the material witnesses and documents are located elsewhere. However, that ruling has no application in this case because Corinthian involved purely questions of law while the opposite is true in this case. This case between Telemobile and Communico requires the determination of certain facts that can only be proven by evidences that area mostly outside Florida’s jurisdiction.
All these factors strongly weigh in favor of a forum non conveniens dismissal because if the case is allowed to continue in Florida, both parties will suffer undue inconvenience and expenses. The analysis of private interests shows that both parties will be able to litigate more conveniently in El Salvador.
C. Analysis of Public Interests
A close look at the facts shows that the party-litigants have no reasonable connection with the State of Florida. The mere fact that both Telemobile and Communico are authorized to do business in Florida does not preclude the court from allowing a dismissal of the case due to forum non conveniens. The main question to be asked is “whether the case has a general nexus with the forum sufficient to justify the forum’s commitment of judicial time and resources to it.” Kinney System, Inc. v. The Continental Insurance Company, 674 So. 2d 86 (Fla. 1996).
Technically, the State has jurisdiction over a case that involves two corporations licensed to do business in Florida. The State also has an interest in persecuting the alleged fraud that was committed in its jurisdiction. Nevertheless, Florida has less interest in the outcome of the case than the State of El Salvador because the controversy involves the private interests of foreign corporations pursuant to a Salvadoran contract. The use of the resources of the people of Florida for the determination of these types of cases is unjustifiable. The State has no interest in settling the quarrels of foreign corporations over foreign contracts that do not affect the Floridian public in any substantial manner.
There was never any agreement to be bound by the laws of Florida with respect to the contract in question. The contract did not contain any choice of forum clause with respect to its breach. Unlike the case of Telemundo Network Group, LLC. v. Azteca International Corporation, # 3D05-259, 2006 WL 931919 (Apr. 12, 2006) where a choice of forum clause was stipulated in the contract, the Agreement between Telemobile and Communico did not contain such a clause. The Agreement stipulated that Luxembourg law will be used to govern the payment but nothing was said concerning the rest of the contract. Based on the significant relationships test, “the rights and liabilities of the parties are to be determined by the law of the country that has the most significant relationship to the occurrence and the parties.” Del Monte Fresh Produce Co vs. Dole Food Co., Inc. # 00-1171-CIV (2001). In this case, El Salvador has the most significant relationship with the occurrence and the parties because the Agreement, upon which the causes of action are based, was perfected and performed in El Salvador.
The opposite is true in the case of Del Monte Fresh Produce Co vs. Dole Food Co., Inc. # 00-1171-CIV (2001) where the court declined a forum non conveniens dismissal because the alternative forum had no authority to decide on the case involving a cause of action based on U.S. law. In the Del Monte case, the plaintiff’s forum of choice was more competent in deciding on the laws upon which the contract was based while in this case, the courts of El Salvador, being the more competent forum to decide on matters involving Salvadoran law, is the more convenient forum.
Although Telemobile offers telecommunication services between El Salvador and Florida, the subject matter of the case basically involves a breach of contract which does not affect the State of Florida in any substantial manner that will justify the use of the State’s resources to decide the case. El Salvador’s interest in the resolution of the case outweighs the interests of the State of Florida over the same. Public interest demands that the case be litigated in El Salvador.
The plaintiffs can reinstate their suit in the alternative forum without undue inconvenience or prejudice.
There was no allegation that the re-filing of the case in El Salvador will cause undue inconvenience or prejudice to the parties. It is not necessary for the court to rule on a matter not raised before it.
[1] Forum non conveniens is a common law doctrine addressing the problem that arises when a local court technically has jurisdiction over a suit but the cause of action may be fairly and more conveniently litigated elsewhere. Forum non conveniens also serves as a brake on the tendency of some plaintiffs to shop for the “best” jurisdiction in which to bring suit – a concern of special importance in the international context. Kinney System, Inc. v. The Continental Insurance Company, 674 So. 2d 86 (Fla. 1996), p. 3.
[2] Equipose simply means that the advantages and disadvantages of the alternative forum will not significantly undermine or favor the “private interests” of any particular party, as compared with the forum in which the suit was filed. In sum, the competing private interests are substantially in balance in either forum. Kinney System, Inc. v. The Continental Insurance Company, 674 So. 2d 86 (Fla. 1996), p. 13.
