Warwick Cal. Corp. v. Applied Underwriters, Inc., No A155523 (D1d4 Jan. 7, 2020)
This is a multi-party insurance coverage dispute where most of the claims are stayed on non conveniens grounds pending a litigation in Nebraska. But the Court declined to stay the case for two California-based plaintiffs. It held a bench trial on their claims, ultimately issuing a statement of decision against them. But the Court did not enter a judgment.
Plaintiffs appealed anyway. They shouldn’t have done that because a statement of decision is not an appealable order. It is true that the trial court could have entered a partial judgment, notwithstanding the stay of the other plaintiffs’ claims. See Code Civ. Proc. § 578; Cal. R. Ct 3.1591. But it didn’t, apparently because there was a possibility that the Nebraska litigation could have some potential effect on this case.
Appeal dismissed.
Showing posts with label forum non conveniens. Show all posts
Showing posts with label forum non conveniens. Show all posts
Thursday, January 16, 2020
Friday, May 17, 2019
What, Exactly, Are We Waiving?
Global Fin. Distribs. v. Superior Court, No. 291814 (D2d7 May 13, 2019)
The Code of Civil Procedure has two different statutes addressed to motions to dismiss or stay for forum nonconveniens—§§ 418.10 and 410.30.
The Code of Civil Procedure has two different statutes addressed to motions to dismiss or stay for forum nonconveniens—§§ 418.10 and 410.30.
Wednesday, February 20, 2019
State Civil Procedure in the Shadow of the Oar of Admiralty
Korman v. Princess Cruise Lines, No. B290681 (D2d4 Feb. 14, 2019)
This is kind of interesting. Admiralty law is basically a body of federal common law. So it makes sense that, under 28 U.S.C. § 1333, federal courts have subject matter jurisdiction in admiralty cases. But that statute also has language—something called the “saving to suitors” clause—that has been read to preserve concurrent state court jurisdiction for in personam (but not in rem) admiralty cases. And while there’s some debate, many courts—including the Ninth Circuit—say the savings to suitors clause creates a procedural, but not a jurisdictional, bar to removal of admiralty cases to federal court if there’s not an independent basis for federal subject matter jurisdiction. See Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1069 (9th Cir. 2001).
This is kind of interesting. Admiralty law is basically a body of federal common law. So it makes sense that, under 28 U.S.C. § 1333, federal courts have subject matter jurisdiction in admiralty cases. But that statute also has language—something called the “saving to suitors” clause—that has been read to preserve concurrent state court jurisdiction for in personam (but not in rem) admiralty cases. And while there’s some debate, many courts—including the Ninth Circuit—say the savings to suitors clause creates a procedural, but not a jurisdictional, bar to removal of admiralty cases to federal court if there’s not an independent basis for federal subject matter jurisdiction. See Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1069 (9th Cir. 2001).
Tuesday, January 8, 2019
Fairwell to California-Forum Going-Private Litigation
Drulias v. 1st Century Bancshares, Inc., No. H045049 (D6 Dec. 21, 2018)
Most public companies are incorporated in Delaware. Which means that, under the internal affairs doctrine, Delaware law governs the relations between the company, its officers and directors, and its stockholders. But the modern understanding of the internal affairs doctrine does not generally require litigation over those issues to be brought in the courts of the state of incorporation. Indeed, California’s codification of the doctrine in Corporations Code § 2116 specifically says that duties arising under the corporate law of out of state corporations “may be enforced in the courts of this state.”
Part of the Delaware brand, however, is the Court of Chancery, a special court of super smart corporate law savvy judges who have the reputation of being able to resolve emergency disputes over Delaware corporate law in like three days by issuing a 300 page opinion with 523 footnotes. I have litigated there. It’s impressive. So most Delaware companies would prefer to resolve their shareholder cases in Delaware, instead of some random state court that is less laser focused on the finer points of Delaware corporate law.
Plaintiffs, however, don’t always agree. Especially when a Delaware court would likely toss a case on the pleadings. So Delaware companies started amending their bylaws to require shareholder disputes to be litigated in Delaware courts. And several years ago Delaware’s courts—ever protective of their brand—held that was a valid thing to do. But up till now no published California decision had addressed whether a Delaware forum selection bylaw was adequate to curtail litigation that was nonetheless filed in California state court.
The Court of Appeal does so here. It explains that the enforcibility of the forum selection is an issue of Delaware law, which has been resolved. Nor are there any valid reasons for a California court to refrain from honoring that selection. Although § 2116 permits California courts to assume jurisdiction over cases arising under the corporate law of other states, it does not give stockholders an absolute right to litigate here. Nor are there any fairness concerns that overwhelm the bylaw’s choice of Delaware forum. When an investor decides to invest in a Delaware corporation, it is perfectly reasonable for him or her to expect that the corporation will require shareholder disputes to be resolved in the Courts of the jurisdiction that best knows the law that governs the dispute.
Affirmed.
Most public companies are incorporated in Delaware. Which means that, under the internal affairs doctrine, Delaware law governs the relations between the company, its officers and directors, and its stockholders. But the modern understanding of the internal affairs doctrine does not generally require litigation over those issues to be brought in the courts of the state of incorporation. Indeed, California’s codification of the doctrine in Corporations Code § 2116 specifically says that duties arising under the corporate law of out of state corporations “may be enforced in the courts of this state.”
Part of the Delaware brand, however, is the Court of Chancery, a special court of super smart corporate law savvy judges who have the reputation of being able to resolve emergency disputes over Delaware corporate law in like three days by issuing a 300 page opinion with 523 footnotes. I have litigated there. It’s impressive. So most Delaware companies would prefer to resolve their shareholder cases in Delaware, instead of some random state court that is less laser focused on the finer points of Delaware corporate law.
Plaintiffs, however, don’t always agree. Especially when a Delaware court would likely toss a case on the pleadings. So Delaware companies started amending their bylaws to require shareholder disputes to be litigated in Delaware courts. And several years ago Delaware’s courts—ever protective of their brand—held that was a valid thing to do. But up till now no published California decision had addressed whether a Delaware forum selection bylaw was adequate to curtail litigation that was nonetheless filed in California state court.
The Court of Appeal does so here. It explains that the enforcibility of the forum selection is an issue of Delaware law, which has been resolved. Nor are there any valid reasons for a California court to refrain from honoring that selection. Although § 2116 permits California courts to assume jurisdiction over cases arising under the corporate law of other states, it does not give stockholders an absolute right to litigate here. Nor are there any fairness concerns that overwhelm the bylaw’s choice of Delaware forum. When an investor decides to invest in a Delaware corporation, it is perfectly reasonable for him or her to expect that the corporation will require shareholder disputes to be resolved in the Courts of the jurisdiction that best knows the law that governs the dispute.
Affirmed.
Thursday, July 5, 2018
Have at It, Court of Chancery . . .
Bushansky v. Soon-Shiong, No. D072213 (D4d1 May 25, 2018)
Over the past decade, it has become increasingly prevalent for corporations to enact what are called forum-selection bylaws. These require stockholders who sue the company or its directors in stockholder litigation to bring their claims only in the state of incorporation, usually Delaware. Because bylaws are, more or less, a contractual arrangement between the company and its stockholders, the theory is that the bylaws are an enforcible forum selection contract. The Delaware Supreme Court agrees, and has held that they are enforceable. I’m not aware of a reported California appellate decision that’s given a thumbs-up, but the parties in this case seem to agree that the bylaw here is valid and enforceable. They just disagree that it applies.
Over the past decade, it has become increasingly prevalent for corporations to enact what are called forum-selection bylaws. These require stockholders who sue the company or its directors in stockholder litigation to bring their claims only in the state of incorporation, usually Delaware. Because bylaws are, more or less, a contractual arrangement between the company and its stockholders, the theory is that the bylaws are an enforcible forum selection contract. The Delaware Supreme Court agrees, and has held that they are enforceable. I’m not aware of a reported California appellate decision that’s given a thumbs-up, but the parties in this case seem to agree that the bylaw here is valid and enforceable. They just disagree that it applies.
Friday, April 27, 2018
Toto, I’ve a Feeling We’re Not in Delaware Anymore...
Quanta Computer Inc. v. Japan Commc’ns Inc., No. B280042 (D2d5 Mar. 16, 2018)
TaiwanCo contracted to make some phones in Taiwan and sell them to JapanCo in Japan. Presumably to pick a neutral forum, the contract chose California law and laid exclusive forum in California, despite the fact that there’s basically no connection here.
TaiwanCo contracted to make some phones in Taiwan and sell them to JapanCo in Japan. Presumably to pick a neutral forum, the contract chose California law and laid exclusive forum in California, despite the fact that there’s basically no connection here.
Thursday, January 4, 2018
Procedural Perfection Is a Lot to Expect
Laboratory Specialists Int'l, Inc. v. Shimadzu Sci. Indus., No. G054056 (D4d3 Nov. 21, 2017)
The contract in this commercial dispute selected Maryland law and a county in Maryland for venue. Defendant first demurred on forum nonconveniens, and after the court noted that was improper, it filed a proper motion to dismiss or stay under Code of Civil Procedure § 410.30. The court granted the motion, and Plaintiff appeals.
Plaintiff mostly lays its appeal on a technical argument that Defendant forfeited its chance to raise forum non by raising the issue in a demurrer. It points to § 418.10(e)(3), which says you forfeit the right to raise FNC if you don’t make a motion “at the time of filing a demurrer.” But Defendant did, in fact, raise the convenience of the forum at the time it filed a demurrer, so there’s no forfeiture. The fact that it did so in the demurrer—instead of a separate motion filed at the same time—is sufficiently substantial compliance to avoid a forfeiture. That’s the case even though forum non is not an appropriate grounds to demur. It was well within the trial court’s discretion to treat the request in the demurrer as a separate request to stay or dismiss under § 410.30.
So far as the merits of the motion go, the court finds that the forum clause was mandatory and that it covered the claims filed by Plaintiff. Which means the only question is whether enforcing the clause is unfair or unreasonable. Which it wasn’t. Finally, Plaintiff claims that the trial court erred by dismissing the action instead of just staying it. But Plaintiff didn’t make that complaint to the trial court, so the Court of Appeal declines to reach it.
Affirmed.
The contract in this commercial dispute selected Maryland law and a county in Maryland for venue. Defendant first demurred on forum nonconveniens, and after the court noted that was improper, it filed a proper motion to dismiss or stay under Code of Civil Procedure § 410.30. The court granted the motion, and Plaintiff appeals.
Plaintiff mostly lays its appeal on a technical argument that Defendant forfeited its chance to raise forum non by raising the issue in a demurrer. It points to § 418.10(e)(3), which says you forfeit the right to raise FNC if you don’t make a motion “at the time of filing a demurrer.” But Defendant did, in fact, raise the convenience of the forum at the time it filed a demurrer, so there’s no forfeiture. The fact that it did so in the demurrer—instead of a separate motion filed at the same time—is sufficiently substantial compliance to avoid a forfeiture. That’s the case even though forum non is not an appropriate grounds to demur. It was well within the trial court’s discretion to treat the request in the demurrer as a separate request to stay or dismiss under § 410.30.
So far as the merits of the motion go, the court finds that the forum clause was mandatory and that it covered the claims filed by Plaintiff. Which means the only question is whether enforcing the clause is unfair or unreasonable. Which it wasn’t. Finally, Plaintiff claims that the trial court erred by dismissing the action instead of just staying it. But Plaintiff didn’t make that complaint to the trial court, so the Court of Appeal declines to reach it.
Affirmed.
Thursday, June 8, 2017
No Presumptions of Convenience for Foreign Plaintiffs
Fox Factory, Inc. v. Superior Court, No. H043648 (D6 Apr. 27, 2017)
Plaintiff is a Canadian who was hurt in a mountain biking accident in British Columbia. He filed two lawsuits over his accident. In one, filed in Santa Clara County, he sued a bunch of U.S. manufacturers if the components of his bike, including Fox, a California company that made the forks. The other case was filed in Canada and brought against a Canadian bike shop and a bunch of John Does, who appear to be the companies sued in the California action.
Plaintiff is a Canadian who was hurt in a mountain biking accident in British Columbia. He filed two lawsuits over his accident. In one, filed in Santa Clara County, he sued a bunch of U.S. manufacturers if the components of his bike, including Fox, a California company that made the forks. The other case was filed in Canada and brought against a Canadian bike shop and a bunch of John Does, who appear to be the companies sued in the California action.
Friday, May 26, 2017
Venue Victor Is No Prevailing Party
DisputeSuite.com v. Scoreinc.com, No. S226652 (Cal. Apr. 4, 2017)
The Supreme Court granted review of this case, which I wrote about back in 2015. The issue is whether a defendant can get an award of contractual attorneys’ fees under Civil Code § 1717 as a prevailing party, when what it prevailed upon was a motion to dismiss for forum non-conveniens. The Court of Appeal said the trial court didn’t abuse its discretion for saying no. Generally, it is reasonable to find that such an award would be premature because the merits of the case would be litigated elsewhere.
The Supreme Court basically agrees. Under its prior precedent, a defendant that wins a complete victory is entitled to a § 1717 award as a matter of law. See Hsu v. Abbara, 9 Cal. 4th 863 (1995). But winning an FNC motion isn’t a complete victory, just a interim decision about where a case should be brought. While it might be possible that an FNC dismissal could completely kill off a claim, that wasn’t the case here. So the Court of Appeal was correct to hold that there was no abuse of discretion in denying a § 1717 award.
Court of Appeal affirmed.
The Supreme Court granted review of this case, which I wrote about back in 2015. The issue is whether a defendant can get an award of contractual attorneys’ fees under Civil Code § 1717 as a prevailing party, when what it prevailed upon was a motion to dismiss for forum non-conveniens. The Court of Appeal said the trial court didn’t abuse its discretion for saying no. Generally, it is reasonable to find that such an award would be premature because the merits of the case would be litigated elsewhere.
The Supreme Court basically agrees. Under its prior precedent, a defendant that wins a complete victory is entitled to a § 1717 award as a matter of law. See Hsu v. Abbara, 9 Cal. 4th 863 (1995). But winning an FNC motion isn’t a complete victory, just a interim decision about where a case should be brought. While it might be possible that an FNC dismissal could completely kill off a claim, that wasn’t the case here. So the Court of Appeal was correct to hold that there was no abuse of discretion in denying a § 1717 award.
Court of Appeal affirmed.
Monday, September 14, 2015
Do Not Go Gently into the Tribunal de Grande Instance
Auffret v. Capitales Tours, S.A., No. H040630 (D6 Aug. 21, 2015)
This is a forum nonconveniens case is similar to the Schmidt case we discussed back in February and the Diaz-Barbra case from April. California law affords a trial court two options if it decides that a California forum is inconvenient—it can stay or it can dismiss. Either way, a key to the analysis is that the alternative forum is “suitable.” Sometimes, a foreign forum is suitable on a theoretical basis, but there are contingencies—such a foreign court’s interpretation of its own procedure—that could potentially deprive the plaintiff of any remedy at all. If that’s the case, a stay until it’s clear that the foreign forum will hear plaintiff’s claim is the preferred course.
This is a forum nonconveniens case is similar to the Schmidt case we discussed back in February and the Diaz-Barbra case from April. California law affords a trial court two options if it decides that a California forum is inconvenient—it can stay or it can dismiss. Either way, a key to the analysis is that the alternative forum is “suitable.” Sometimes, a foreign forum is suitable on a theoretical basis, but there are contingencies—such a foreign court’s interpretation of its own procedure—that could potentially deprive the plaintiff of any remedy at all. If that’s the case, a stay until it’s clear that the foreign forum will hear plaintiff’s claim is the preferred course.
Friday, June 19, 2015
Too Clever a Joinder
David v. Medtronic, No. B254914 (D2d8, as modified Jun. 26, 2015)
It’s my practice not to comment on cases where Kirkland & Ellis represents a party. So I’ll just note that this is an interesting opinion regarding what happens when a nominal defendant is joined for the purpose of keeping forum stuck in California state court. And say congrats to my colleagues . . . .
It’s my practice not to comment on cases where Kirkland & Ellis represents a party. So I’ll just note that this is an interesting opinion regarding what happens when a nominal defendant is joined for the purpose of keeping forum stuck in California state court. And say congrats to my colleagues . . . .
Tuesday, June 16, 2015
Employer: Texas Venue Same as Calfironia (Yeah, that's the Ticket ...)
Verdugo v. Alliantgroup, L.P. No. G049139 (D4d3 as modified June 25, 2015)
Plaintiff, a Californian, is suing her Texas-headquartered employer. Plaintiff’s employment contract has a Texas choice of law and lays venue in Austin. But Plaintiff’s wage-and-hour claims arise from California statutes that can’t be waived. Under the circumstances, the usual presumption—that a court will enforce a contractual choice of venue—gets reversed. The venue provision will only be enforced if the moving party can show that the contractual venue will not diminish Plaintiff’s unwaivable statutory rights in any way.
In assessing whether Defendant met its burden, the court of appeal here pauses to part company with Hall, v. Superior Court, 150 Cal. App. 3d 411, 416 (1983) and America Online, Inc. v. Superior Court, 90 Cal. App. 4th 1, 11 (2001), which hold that the analysis does not entail a comparison between California law and the substantive law of the contractual state. Even given, however, that a moving party can meet its burden by showing that the contractual forum would definitely apply California law or identical standards under its own state law, Defendant didn’t satisfy that burden here. The most it would say was that a Texas court would probably apply California law. But Defendant also “carefully preserved its ability to argue to a Texas court that it should apply Texas law,” and even “hinted at its intention to do so by seeking to downplay the significance of the statutory rights [plaintiff] seeks to enforce through this action.” Moreover, Defendant did not establish that substantive Texas law affords statutory rights identical to the California Labor Code provisions on which plaintiff’s suit is based.
Reversed.
Plaintiff, a Californian, is suing her Texas-headquartered employer. Plaintiff’s employment contract has a Texas choice of law and lays venue in Austin. But Plaintiff’s wage-and-hour claims arise from California statutes that can’t be waived. Under the circumstances, the usual presumption—that a court will enforce a contractual choice of venue—gets reversed. The venue provision will only be enforced if the moving party can show that the contractual venue will not diminish Plaintiff’s unwaivable statutory rights in any way.
In assessing whether Defendant met its burden, the court of appeal here pauses to part company with Hall, v. Superior Court, 150 Cal. App. 3d 411, 416 (1983) and America Online, Inc. v. Superior Court, 90 Cal. App. 4th 1, 11 (2001), which hold that the analysis does not entail a comparison between California law and the substantive law of the contractual state. Even given, however, that a moving party can meet its burden by showing that the contractual forum would definitely apply California law or identical standards under its own state law, Defendant didn’t satisfy that burden here. The most it would say was that a Texas court would probably apply California law. But Defendant also “carefully preserved its ability to argue to a Texas court that it should apply Texas law,” and even “hinted at its intention to do so by seeking to downplay the significance of the statutory rights [plaintiff] seeks to enforce through this action.” Moreover, Defendant did not establish that substantive Texas law affords statutory rights identical to the California Labor Code provisions on which plaintiff’s suit is based.
Reversed.
Monday, June 15, 2015
Mexican Losses Are Plaintiff’s Wins
Diaz-Barba v. Superior Court, No. D066462 (D4d1 May 21, 2015)
A California state court has two options in granting a forum non-conveniens motion: it can dismiss the case entirely or it can issue a stay pending the resolution of the action in another jurisdiction. The latter approach is particularly popular in international cases where it appears that the parties could get justice in a foreign jurisdiction, but it’s not 100 percent certain. If the foreign litigation doesn’t work out, the stay can be lifted and the case proceeds here.
A California state court has two options in granting a forum non-conveniens motion: it can dismiss the case entirely or it can issue a stay pending the resolution of the action in another jurisdiction. The latter approach is particularly popular in international cases where it appears that the parties could get justice in a foreign jurisdiction, but it’s not 100 percent certain. If the foreign litigation doesn’t work out, the stay can be lifted and the case proceeds here.
Monday, May 4, 2015
You Do Not Prevail by Moving to Florida
Disputesuite.com v. Scoreinc.com, No. B248694 (D2d2 Apr. 14, 2015)
Defendant in this case successfully got the case dismissed on forum non conveniens grounds based on a contractual provision calling for Florida venue. The contract also contained an attorney fee provision, and the defendant moved for about $85,000 in fees, which the trial court denied and the court of appeal affirms. An attorney fee provision is supposed to look to the prevailing party at the end of the litigation. Litigation that ends in California because it needs to get filed in Florida isn’t actually over. So while defendant prevailed in its forum-non motion, it hasn’t prevailed in the case and a fee award would thus be premature.
Affirmed.
Update: Review Granted August 19, 2015.
Defendant in this case successfully got the case dismissed on forum non conveniens grounds based on a contractual provision calling for Florida venue. The contract also contained an attorney fee provision, and the defendant moved for about $85,000 in fees, which the trial court denied and the court of appeal affirms. An attorney fee provision is supposed to look to the prevailing party at the end of the litigation. Litigation that ends in California because it needs to get filed in Florida isn’t actually over. So while defendant prevailed in its forum-non motion, it hasn’t prevailed in the case and a fee award would thus be premature.
Affirmed.
Update: Review Granted August 19, 2015.
Thursday, March 5, 2015
The Axis of Conveniens
Aghaian v. Minassian, No. B252326 (D2d8 Feb. 17, 2015)
This case reverses a trial court finding that the courts of Iran are a suitable alternative forum for the purposes of staying a case on forum nonconveniens grounds.
This case reverses a trial court finding that the courts of Iran are a suitable alternative forum for the purposes of staying a case on forum nonconveniens grounds.
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