Tang et al v. Synutra International, Inc. et al, No. 8:2009cv00088 - Document 24 (D. Md. 2010)
Court Description: MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 3/29/10. (sat, Chambers)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : JIALI TANG, et al. : v. : Civil Action No. DKC 09-0088 : SYNUTRA INTERNATIONAL, INC., et al. : MEMORANDUM OPINION Presently pending and ready for resolution in this products liability action International, are Inc., motions and filed Synutra, by Inc., Defendants to dismiss Synutra on the ground, inter alia, of forum non conveniens (paper 8), and to file under seal their response to a notice of recent development filed by Plaintiffs Jiali Tang, et al. (paper 20),. The issues are fully briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, both motions will be granted. I. Background In September 2008, amid reports of widespread illness among infants in the People s Republic of China related to the consumption of powdered milk formula and similar products, the Chinese Administration of Quality Supervision, Inspection and Quarantine ( AQSIQ ) initiated an emergency testing program of the country s dairy supplies. Later that month, AQSIQ announced that certain lots of infant formula were found to contain melamine, a chemical commonly used as an industrial component in plastics, adhesives, countertops, Melamine is not a food additive. dishware, and whiteboards. It is not fit for human consumption and has never been approved for such purpose by any national authority. By December 1, 2008, approximately 300,000 Chinese infants were found to have ingested dairy products contaminated with melamine. As a result, at least six infants have died and scores of others have required medical treatment for maladies associated with kidney damage. AQSIQ found varying amounts of melamine in sixty-nine batches of infant milk powder produced by twenty-two companies, including certain lots of the U-Smart brand produced by Sheng Yuan Nutritional Food Co., Ltd. ( Sheng Yuan ), a Chinese subsidiary of Defendant Synutra, Inc. In response conjunction to with this the crisis, China the Dairy Chinese government, Industry in Association, established a compensation program administered by China Life Insurance Company based on medical information provided by the Ministry of Health and compensation program ). other government agencies ( the The compensation program is funded by the twenty-two dairy companies that produced the contaminated milk products and totals approximately $160 million. a lump-sum payment to the families 2 of affected It offers children according to the extent of injury, as well as compensation for related medical expenses. To date, the families of approximately ninety-five percent of the injured children have reportedly accepted the remedies provided by the plan. Of those who have not, some have not yet been located and others have opted instead to bring suits in Chinese courts. As discussed herein, the adequacy of the Chinese courts to adjudicate these suits is a significant point of contention between the parties; indeed, it is the critical factor of the forum non conveniens analysis in this case. Plaintiffs, one hundred Chinese citizens residing in China, bring this suit on their own behalf as parents and on behalf of fifty-three minor children who allegedly suffered adverse health conditions, predominantly the development of kidney stones, as a result of ingesting Defendants contaminated Chinese International, Inc., milk products subsidiaries. a publicly produced Defendant traded holding by Synutra company incorporated in Delaware, owns all or substantially all of the equity in nine operating subsidiaries in China through Synutra, Inc., its wholly-owned subsidiary incorporated in Illinois. The principal place of business of both Synutra International, Inc., and Synutra, Inc., is in Maryland. Plaintiffs filed their complaint in this court on January 15, 2009, on the basis of diversity 3 jurisdiction, asserting claims of negligent infliction of personal injury, negligent infliction of emotional distress, intentional injury or gross negligence, intentional battery, breach infliction warranty, of misrepresentation. of emotional fraud, and distress, negligent Plaintiffs seek compensatory damages of at least $5.5 million for each child and $1.5 million for each parent, as well as a collective punitive damages award of $500 million. (Paper 1, at 36-42). dismiss on April conveniens, 1, failure 2009, to 12(b)(6), and 12(b)(7). on state Plaintiffs the motion filed a to the a to join grounds claim a of forum non under Fed.R.Civ.P. under Fed.R.Civ.P. (Paper 8).1 After failure Defendants filed their motion to dismiss Notice of party had Recent been briefed Development, in full, asserting that one of three Chinese lawyers and scholars who submitted Declarations in support of Plaintiffs Opposition [to Defendant s motion to dismiss], was arrested from his home in Beijing on July authorities. 29, 2009, at 5:00 (Paper 17, at 1).2 a.m., by Chinese police According to Plaintiffs, this 1 Because the court will dismiss the case on forum non conveniens grounds, it will not consider the alternative grounds for dismissal. 2 Neither party has identified any authority for the filing of their respective notices of recent development in relation to Defendants motion to dismiss. Plaintiffs initial notice . . . Continued 4 scholar was the Initiative, a driving Chinese force behind advocacy the group Open that Constitution has taken on sensitive cases, including those of the families of children who were injured or killed in the melamine-tainted milk scandal. (Id. at 2). Plaintiffs offer this as proof that China does not provide an available and adequate forum for their suit, which, as will be seen, is the critical issue in the forum non conveniens analysis. Plaintiffs supplemental filing prompted a response from Defendants, who advised in their Notice of Recent Development, through a supplemental Chinese court had declaration recently of accepted a Weiguo Zhang, melamine that a contamination suit against Sheng Yuan, thereby purporting to demonstrate that the Chinese Plaintiffs December 18, forum is claims. 2009, available (Paper by filing 18). yet and adequate Plaintiffs another to adjudicate responded, Notice of on Recent Development containing the declaration of Fafu Qiu (paper 19), purporting to refute Defendants notice, and Defendants moved, (paper 17) appears to be in the nature of a surreply, but a party is permitted to file a surreply only upon obtaining leave of the court, see Local Rule 105.2(a), and leave was neither requested nor granted in this case. To the extent that the parties, without objection from the other side, have supplemented their position papers, the material has been considered. Plaintiffs initial filing, however, lacks evidentiary reliability for reasons that will be discussed later. 5 on December 29, to file under seal papers containing sensitive information with regard to the pending Chinese suit in reply to Plaintiffs opposition papers (papers 20, 21). II. Motion to Seal Defendants motion must comply with Local Rule 105.11, which provides: Any motion seeking the sealing of pleadings, motions, exhibits or other papers to be filed in the Court record shall include (a) proposed reasons supported by specific factual representations to justify the sealing and (b) an explanation why alternatives to sealing would not provide sufficient protections. The Court will not rule upon the motion until at least 14 days after it is entered on the public docket to permit the filing of objections by interested parties. Materials that are the subject of the motion shall remain temporarily sealed pending a ruling by the Court. If the motion is denied, the party making the filing will be given an opportunity to withdraw the materials. There is also a well-established common law right to inspect and copy judicial records and documents. See Nixon Communications, Inc., 435 U.S. 589, 597 (1978). v. Warner If competing interests outweigh the public s right of access, however, the court may, in its discretion, seal those documents from the public s view. See In re Knight Publishing Co., 743 F.2d 231, 235 (4th Cir. 1984). Furthermore, prior to sealing any documents, the court must provide notice of counsel s request to seal and an opportunity 6 to object Either to notifying docketing issue the the will request the before persons motion making present its in decision. the reasonably the satisfy in courtroom requirement. notice advance Id. of or deciding the Id. at 234. Finally, the court should consider less-drastic alternatives, such as filing redacted versions of the documents. If the court decides that sealing is appropriate, the court should provide reasons, supported by specific factual findings, decision to seal and for rejecting alternatives. Here, response Defendants to move Plaintiffs to seal opposition to their for its Id. at 235. reply papers in Defendants notice of recent development because they contain information about the medical records Defendants of assert an that infant in China. they do not (Paper believe that 20, ¶ 1). there are effective alternatives to filing under seal and that because [t]hese materials relate to individuals who are in China and not before this Court[,] . . . the confidentiality rights, if any, of the individuals . . . would not be protected adequately by alternatives such as a protective order to filing under seal. (Id. at ¶ 3). Plaintiffs oppose the motion to seal, primarily contesting the evidentiary value of the Chinese case to that before the court, but further asserting that there are manifestly less drastic alternatives available to protect [the 7 privacy interests of the deceased child and his family], such as modest redaction of the papers filed. Although relevance insofar to as Defendants the papers the court s they sought to be sealed analysis of the contain motion to (Paper 22, at 3). seal confidential will be are of critical medical granted. little issues, records, Because this opinion neither references nor relies on the sealed materials, it will not be filed under seal. III. Motion to Dismiss for Forum Non Conveniens A. Standard of Review In Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947), the Supreme Court of the United States explained that [t]he principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute. In reaffirming and restating the doctrine, which is now largely limited to cases in which the alternative forum is outside the United States, the Court has instructed that it applies where trial in the plaintiff s chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any choice. specific reasons of convenience supporting his Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249 (1981). The defendant ordinarily bears a heavy burden in opposing the plaintiff s chosen forum, but where, as here, the plaintiff 8 brings suit outside its home forum, the presumption in the plaintiff s favor applies with less force, for the assumption that the chosen forum is appropriate is in such cases less reasonable. Sinochem Int l Co. Ltd. v. Malaysia Int l Shipping Corp., 549 U.S. 422, 430 (quoting Piper Aircraft Co., 454 U.S. at 255-56). At the outset of any forum non conveniens inquiry, the court must determine whether there exists an alternative forum. Piper Aircraft Co., 454 U.S. at 254 n.22. the burden of available to available to these issues, establishing all parties the that and plaintiff. the the that alternative forum is adequate remedy is an Although availability and The defendant bears some adequacy courts of the conflate supposed forum are better seen as raising independent issues that warrant separate consideration by the court. Arthur R. Miller & Edward H. 14D Charles A. Wright, Cooper, Federal Practice & Procedure § 3828.3 (3d ed. 2007). Ordinarily, element by a showing alternative forum. defendant that it can is amenable alternative to the availability process in the Piper Aircraft Co., 454 U.S. at 254 n.22 (internal quotation marks omitted). the satisfy forum is so Where the remedy offered by clearly inadequate or unsatisfactory that it is no remedy at all, however, the court may conclude that dismissal would not be in the interests of 9 justice. Id. at 254. While courts have strictly required defendants to demonstrate that the alternative forum offers at least some defendants relief, do much they to have refute not always allegations inefficiency in the alternative forum. of required that partiality and Leon v. Millon Air, Inc., 251 F.3d 1305, 1311 (11th Cir. 2001). Many courts have presumed the adequacy of the alternative forum and placed at least the burden of production on the plaintiff to establish otherwise. See Leon, 251 F.3d at 1312; Vaz Borralho v. Keydril Co., 696 F.2d 379, 393-94 (5th Cir. 1983), overruled on other grounds by In re Air Crash Disaster Near New Orleans, 821 F.2d 1147 (5th Cir. 1987)). These courts, moreover, have rejected generalized and conclusory allegations by plaintiffs as being insufficient to carry this burden, requiring instead that an evidentiary showing be made in alternative forum is inadequate. support of claims that the See El-Fadl v. Central Bank of Jordan, 75 F.3d 668, 678 (D.C. Cir. 1996); Mercier v. Sheraton Int l, Inc., 981 F.2d 1345, 1351 (1st Cir. 1992), cert. denied, 113 S.Ct. 2346 (1993). As the United States Court of Appeals for the Eleventh Circuit explained in Leon, 251 F.3d at 1312, defendants have the ultimate burden of persuasion, but only where the plaintiff has substantiated his allegations of serious corruption or delay. 10 Regardless of the allocation of burden, courts generally agree that only the most perilous obstacles to conducting litigation, evidenced by a complete absence of due process in the alternative inadequate. forum, will render [the alternative] forum Gonzalez v. P.T. Pelangi Niagra Mitra Int l, 196 F.Supp.2d 482, 486 (S.D. Tex. 2002); see also Rasoulzadeh v. Associated Press, 574 F.Supp. 854, 861 (S.D.N.Y. 1983) (denying a motion to dismiss for forum non conveniens where plaintiffs would likely be shot if they pursued their claim aff d, 767 F.2d 908 (2nd Cir. 1985) (unpublished). in Iran), So long as the alternative forum offers a remedy and process for resolving the dispute, it will be deemed adequate. Compania Naviera Joanna, SA v. Koninklijke Boskalis Westminster NV, 569 F.3d 189, 204 (4th Cir. 2009). If an available and adequate alternative forum is found to exist, the defendant must then establish that certain private and public interest factors militate in favor of dismissal, principally those identified by the Supreme Court in Gulf Oil Corp., 330 U.S. at 508-09. At this stage of the analysis, the court must scrutinize the substance of the dispute between the parties to whether the evaluate pieces what of proof evidence is required, cited by the and determine parties are critical, or even relevant, to the plaintiff s cause of action and to any potential defenses to the action. 11 Van Cauwenberghe v. Baird, 486 U.S. 517, 528 (1988). This inquiry does not necessarily require extensive investigation, however, and may be resolved on Cauwenberghe, repeatedly affidavits 486 U.S. counseled, at presented 529. courts by As must the the parties. Supreme retain Van Court flexibility has in balancing the private and public interests at stake, as [e]ach case turns on its facts. Piper Aircraft Co., 454 U.S. at 249 (quoting Williams v. Green Bay & Western R. Co., 326 U.S. 549, 557 (1946)). A district objection court prior to may consider addressing any a forum other non conveniens threshold issues regarding a complaint, and may dispose of an action by a forum non conveniens dismissal, bypassing questions of subject-matter and personal jurisdiction, when considerations of convenience, fairness, and judicial economy so warrant. 549 U.S. at 432. non conveniens court. See Sinochem Int l Co., The determination to dismiss a case on forum grounds rests in the sound discretion of the Piper Aircraft Co., 454 U.S. at 257; see also Kontoulas v. A.H. Robins Co., Inc., 745 F.2d 312, 314 (4th Cir. 1984). B. Analysis Defendants argue that Plaintiffs complaint should be dismissed under the doctrine of forum non conveniens because China constitutes an available and adequate forum that is a more 12 suitable arbiter of the merits of the case than the District of Maryland, which has virtually no nexus to the relevant events. In opposing, Plaintiffs primarily dispute the adequacy of the Chinese courts to adjudicate their claims, contending that while these courts may be nominally available, in practice they have failed to respond to suits brought by those who have opted not to participate in the government s compensation contravention of Chinese procedural rules. program in Plaintiffs further argue that even if Defendants are found to have met their burden with regard to availability and adequacy, they have failed to establish that the public and private interest factors favor the Chinese forum. 1. Availability and Adequacy of the Alternative Forum Although Plaintiffs challenge both the availability and adequacy of the alternative forum to adjudicate their claims (Paper 12, at 7), there is no question that the Chinese forum is available. defendant As noted, shows that alternative forum. Here, Defendants availability it is is amenable established to where process in the the Piper Aircraft Co., 454 U.S. at 254 n.22. submit the Declaration of Weiguo Zhang, President of Synutra, International, Inc., and Synutra, Inc., who affirms that Defendants would not contest the service of process in the event the plaintiffs here were to bring their action in China. (Paper 8, Ex. 1, Zhang Dep., at ¶ 7). 13 An agreement by the defendant to submit to the jurisdiction of the foreign forum typically satisfies the availability requirement, see Gonzalez, 196 F.Supp.2d at 486 (citing Aguinda v. Texaco, Inc., 142 F.Supp.2d 534, 539 (S.D.N.Y. 2001)), and Plaintiffs do not allege that Defendants are not amenable to jurisdiction in China. In Kontoulas, 745 F.2d at 316, the United States Court of Appeals for the Fourth Circuit held that expiration of the statute of limitations in the alternative forum may render the alternative forum unavailable. Defendants have addressed that concern, however, through the Declaration of Mingxing Qian, a law professor at Peking University School of Law, who opines that Plaintiffs will have two years from the date they knew or should have known of the alleged damages to bring tort claims for damages caused by defective products in Chinese courts. (Paper 8, Ex. 2, Qian Dep., at § 1.3.2). Plaintiffs opposition papers do not challenge this assertion. Accordingly, Defendants have carried their burden of establishing that China is available as an alternative forum. The question of whether China constitutes an adequate forum is the primary issue in dispute. the parties Professor competing Qian, opines It is addressed primarily by declarations. that Chinese Defendants courts are declarant, adequate to resolve Plaintiffs dispute and describes in detail the method 14 by which their claims would be adjudicated. He asserts that Chinese law provides standing for foreign plaintiffs, causes of action for personal injury and products liability, a right to present evidence and argument in court, the power to compel witness testimony, and a right to appeal. Quian Decl., at §§ 1.2-1.4). (Paper 8, Ex. 2, Moreover, according to Professor Qian, plaintiffs are entitled to recover compensatory damages for expenses such as loss of income, related travel expenses, food subsidies, living expenses for dependents, as well as compensation for emotional damages, but not punitive damages. (Id. at §§ 2.2, 2.3). Professor Qian further affirms that the compensation program was established for the benefit of victims of the milk contamination crisis; that it has resolved the claims of almost 300,000 injured children with lump-sum payments ; and that it will be used to provide ongoing treatment for the injured children until they reach the age of eighteen. (Id. at § 4). He states that the Chinese courts remain open to those choosing victims not to accept compensation under the program, citing reports in China that there have been suits filed by about 100 persons in the range of 0.03 percent of the injured children which are still at the pleading stage (with the courts directing claimants to remedy the filings to comply with the pleading requirements discussed above). 15 (Id.). Plaintiffs submit three declarations in rebuttal. Li, an experienced litigation volunteer in attorney China, attorneys practicing affirms who that have he tried to civil is and one represent Jinglin criminal of several tainted-milk victims in China, including some of the plaintiffs listed in this action. (Paper 12, Ex. 4, Li Decl., at ¶¶ 1, 2).3 Mr. Li avers that on September 22, 2008, following media reports of AQSIQ finding melamine, that several milk supplies volunteer had been attorneys contaminated were summoned with to a meeting held at the Beijing Bureau of Justice, a government entity, where an official demanded all attorneys to withdraw from representation Despite the on pressure tainted-milk to cases. withdraw, Mr. Li (Id. at states ¶ that 5). he submitted a Motion of Complaint with the Intermediate People s Court of Qingdau on March 2, 2009, representing 54 victims seeking damages against Sheng Yuan. Chinese procedural rules, the (Id. at ¶ 6). court was required Pursuant to either to accept or reject the case within seven days, allowing for an 3 Plaintiffs initially did not elaborate as to whether any of them has actually attempted to file suit in China; rather, their opposition papers allude to having consulted with Chinese attorneys who had been thwarted in their prior attempts to do so. (Paper 12, at 11). The supplemental material refers to one such case. (Papers 18 and 19). The newspaper reports cited in Plaintiffs first supplemental filing cannot be considered. It is inappropriate for judicial notice and otherwise lacks evidentiary support. 16 appeal if the complaint was rejected, but seven days passed without notice of any action. Mr. Li avers that when he inquired as to the status of the case he was told there was no update available and was denied permission to speak with the Chief Judge of the (Id. at ¶¶ 9, 10). Intermediate People s Court of Qingdao. Thereafter, he submit[ted] a Motion of Complaint with the High People s Court of Shandong Province, the highest local court in the ShanDong Province, on behalf of 73 Synutra victim families against Synutra, but that court has similarly taken no action on his motion. (Id. at §§ 11, 12). By failing to accept or reject these complaints, Mr. Li opines, the Chinese courts have denied litigants access to the courts, as well as the right to appeal an adverse ruling; consequently, all Synutra victim families are left with no legal redress, but infinite waiting. (Id. at §§ 13, 14).4 Plaintiffs also present the Declaration of Zhiyong Xu, a law professor at Beijing University of Posts and Telecommunications and a delegate of the 13th and 14th People s Congress for the Haidian District of Beijing, China. 12, Ex. 5, Xu Decl., at ¶ 1). (Paper Professor Xu affirms that he also 4 The remainder of Mr. Li s declaration details similarlythwarted attempts to bring suits on behalf of victims of other contaminated-milk suppliers. He further claims that his refusal to comply with governmental pressure to withdraw from such representation resulted in his dismissal from the law firm at which he was employed. (Paper 12, Ex. 4, Li Dep., at ¶¶ 15-29). 17 served as a volunteer attorney representing victim families, including those who contracted symptoms after ingesting Sheng Yuan milk products. Like Mr. Li, Professor Xu recounts his efforts to file complaints on behalf of the victims, which were met by Chinese courts with inaction accept filings without explanation. or outright refusal to Professor Xu further avers that he has filed motions of complaint with the Supreme People s Court of China, the country s highest court, but has received no response. (Id. at ¶¶ 10, 11). Even after the Supreme People s Court of China reportedly made a public announcement on March 2, 2009, indicating that the courts were ready to process civil lawsuits for tainted-milk cases, his filings on behalf of the victims have been met with inaction. (Id. at ¶¶ 16-20). Notably, Professor Xu states that after repeated efforts the Basic People s Court of Xinghua District accepted two of the 63 victims that complaint[s], the court would but that no longer he was accept subsequently any case advised filed by tainted-milk victims from outside of Hebei Province, requiring instead that all plaintiffs shall file his or her case in a people s court domicile. having jurisdiction (Id. at ¶¶ 23, 24). over the plaintiff s This procedure, Professor Xu opines, is contrary to the express language of Chinese civil procedure. compensation (Id. at ¶ 25). program Professor Xu further opines that the pursuant 18 to which the families of children who died are allotted damages of approximately $29,000, families of seriously sickened children receive $4,400, and those suffering from other kidney problems receive $292 is not a legal remedy, but rather a settlement offer made by these 22 dairy companies, including Synutra (Sheng Yuan) to all tainted-milk victims. (Id. at ¶¶ 28, 29). Finally, Plaintiffs submit the Declaration of Pingan Tian, a law professor at the Southwest University of Political Science and Law in Chongqing, China, who opines that plaintiffs in the above-styled case do not have meaningful access to the judicial system in China and remedies in China. thus cannot receive meaningful legal (Paper 12, Ex. 6, Tian Decl., at ¶ 6). After explaining the process by which such suits are typically initiated, Professor Tian cites reports indicating that none of the motions of complaint filed by contaminated-milk victims in accordance with this law has been either accepted or formally denied (Id. at ¶ 24), resulting in the cases remaining perpetually in limbo. Professor Tian further opines that the government-sanctioned settlement is fundamentally different from a legal remedy under Chinese law, that it is inadequate and unfair, compensation but to Chinese courts. stands victims as due the to the (Id. at ¶¶ 41-47). 19 only realistic obstruction hope presented for by In reply, Professor Qian affirms on behalf of Defendants that Plaintiffs declarants do not provide a fair or accurate description of the [Chinese] legal system. Qian Decl., at ¶ 4). (Paper 16, Ex.1, According to Professor Qian, Plaintiffs speculate that the courts are acting in a passive manner, and thereby delaying the process, but delays are not uncommon and often occur during the period required for the courts to assess whether the lawsuit. opining complaint meets the requirements of a civil (Id. at ¶ 16 (internal quotation marks omitted)). that the Chinese courts are adequate to In adjudicate Plaintiffs claims, he cites the March 2, 2009, public statement of the Supreme People s Court, the country s highest court, that the people s courts were ready to accept melamine cases and Professor Xu s acknowledgement since that time in support. experienced by Plaintiffs that cases have been accepted He further suggests that the delay declarants is due to certain procedural defects in these filings rather than an unwillingness of the courts to adjudicate such matters. (Id. at ¶¶ 15-27). As to the compensation program, Professor Qian acknowledges that [c]ompensation amounts for personal lawsuits in China, which is still a developing country, are not as high as those in more developed countries ; nevertheless, he opines, [c]onsidering the average income available in China, the [] plan provides compensation that is fair and 20 reasonable compared with compensation amounts available in other personal injury lawsuits in China. (Id. at ¶¶ 35, 36). The dispute as to the adequacy of the Chinese forum to adjudicate these claims, therefore, boils down to the competing declarations of the parties. The picture painted by Defendants is that China has a well-developed legal system with procedural safeguards similar to those provided by courts of the United States, that the country s highest court has expressly announced that the lower courts are ready to accept melamine cases, and that several cases have been accepted since that time. Plaintiffs do not dispute that there is a legal process in place in China for handling their claims. They contend, however, that the Chinese courts are deviating from this process with respect to melamine claims representation unfortunate victims pressuring lawyers to these of and claimants, thereby forcing into a Hobson s choice withdraw between the pursuing futile litigation or accepting the meager remedy provided by the compensation program. In an unpublished decision, Fidelity Bank PLC v. M/T TABORA, No. 08-1706, 2009 WL 1668619, at *3 (4th Cir. June 16, 2009), the Fourth Circuit was presented with the question of whether a forum non conveniens dismissal may be based on only a possibility ultimately that an determined alternative that it 21 forum need not is available, grapple with but the question under the circumstances of the case. however, the court cited Bank of Credit & In so ruling, Commerce Int l (Overseas) Ltd. v. State Bank of Pakistan, 273 F.3d 241, 247 (2d Cir. 2001), as holding that a district court dismissing a case on forum non conveniens grounds should have a justifiable belief that the [alternative forum] would not decline to hear the case. Fidelity Bank PLC, 2009 WL 1668619, at *3. In that case, the United States Court of Appeals for the Second Circuit explained that a court considering such an issue must engage in a full analysis of those issues of foreign law or practice that are relevant submissions to its related decision to the and closely adequacy of the examin[e] foreign all forum. Bank of Credit & Commerce Int l (Overseas) Ltd., 273 F.3d at 248. If, in doing so, the court is unable to make a definitive finding protect as to the the adequacy non-moving but only belief the alternative reasons therefor. In the the foreign by making first asserts party conditional, that if of it forum is forum, the a adequate, it may dismissal justifiable citing its Id. at 247-48. competing declarations presented by the parties here, Defendants have established a justifiable belief that that the alternative forum is adequate. Preliminarily, the Supreme Court and Fourth Circuit have both recently found China to be an adequate forum in the context 22 of forum non conveniens dismissals, albeit under those presented here. circumstances distinguishable from See Sinochem Int l Co., Ltd., 549 U.S. at 435; Compania Naviera Joanna SA, 569 F.3d at 205. The parties do not dispute, moreover, that on March 2, 2009, the highest court in the People s Republic of China announced that the lower courts were ready to process civil lawsuits for tainted-milk cases (Paper 12, Ex. 5, Xu Decl., at ¶ 16), and that since that time at least a handful of cases have been accepted. 23). (Id. at ¶ This suggests that prior to that date the Chinese courts struggled with how such claims would be processed, but that these difficulties have since been resolved. See generally Leon, 251 F.3d at 1313 (Ecuadorian forum was not inadequate where Ecuadorian judges had gone on strike and many were removed by Congress While but Plaintiffs the instability complain of was subsequently continued delays resolved). after the announcement, Defendants observe that such delays are not out of the ordinary and may have been occasioned by procedural defects in the motions of complaint filed by Plaintiffs declarants. (Paper 16, Ex. 1, Qian Decl., at ¶¶ 24-32). In any event, the prospect of delay presented by the alternative forum does not typically render the alternative forum inadequate. See, e.g., Satz v. McDonnell Douglas Corp., 244 F.3d 1279, 1283 (11th Cir. 2001) ( fear of delays in the Argentine courts do not render Argentina an inadequate forum ); 23 Borden, Inc. v. Meiji Milk Prods. Co., 919 inconvenience or F.2d the 822, (2nd 829 unavailability of Cir. 1990) beneficial ( some litigation procedures similar to those available in the federal district courts does not render an alternative forum inadequate ); cf. Bhatnagar v. Surrendra Overseas Ltd., 52 F.3d 1220, 1228 (3d Cir. 1995) (finding delay of at least fifteen to twenty years in Indian courts rendered the remedy there clearly inadequate, under Piper Aircraft Co.). In essence, Plaintiffs ask that a value judgment be made, on the basis of the limited evidence presented, that corruption in the Chinese judiciary would systematically deny them access to a legal considering remedy there. claims, similar unpersuasive. The however, See, e.g., vast El-Fadl, majority of found them have 75 F.3d at 678 courts to be (State Department report expressing concern about the impartiality of Jordanian courts did not render that forum inadequate); Blanco v. Banco Indus. de Venezuela, S.A., 997 F.2d 974, 981 (2d Cir. 1993) (finding Venezuelan court adequate alternative forum despite allegations of corruption); Mercier, 981 F.2d at 1351 (determining plaintiff s women). that Turkish complaints of courts bias were against adequate foreign despite litigants and Moreover, courts have rightly been reluctant to cast such aspersions on foreign judicial systems absent a substantial showing of a lack of procedural 24 safeguards. See, e.g., PT United Can Co., Ltd. v. Crown, Cork & Seal Co., Inc., 138 F.3d 65, 73 (2d Cir. 1998). similar claimants have Here, Plaintiffs have demonstrated that encountered difficulties in pursuing relief in Chinese courts, but their argument that due process is completely lacking is not persuasive. Under the low threshold established by the Supreme Court in Piper Aircraft Co., Defendants have met their burden of showing that China is an adequate forum. As the Piper Court explained, dismissal on forum non conveniens grounds may be improper where the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy Piper Aircraft Co., 454 U.S. at 254 (emphasis added). at all. While the Chinese forum at issue here may not be ideal from Plaintiffs perspective, [a]n adequate forum need not be a perfect forum. Satz v. McDonnell Douglas Corp., 244 F.3d 1279, 1283 (11th Cir. 2001). Even if the Chinese courts were not open to Plaintiffs, another remedy is undisputedly available to them, namely, the compensation program. While the Plaintiffs characterize the program as a government-sanctioned settlement plan from the companies that produced the contaminated milk products, as opposed to a legal remedy (Paper 12, Ex. 5, Xu Decl., at ¶ 29), they fail to cite any authority for the proposition that the 25 available remedy need be legal in nature. Indeed, there is precedent to the contrary. In Lueck v. Sundstrand Corp., 236 F.3d 1137 (9th Cir. 2001), survivors Zealand and estates commuter of flight plane victims originated that crash and aboard crashed a New in New Zealand filed suit in the United States District Court for the District of Arizona against the Canadian manufacturer of the plane and the American manufacturer of the plane s ground proximity warning system. New Zealand law barred civil claims for damages, providing instead for a no-fault award of benefits such as medical and rehabilitative expenses, lost earnings, and quarterly allowances sanctioned insurance After district the based on disability Lueck, company. court through F.3d granted the 236 defendants a at state1141-42. motion for dismissal on the grounds of forum non conveniens, the plaintiffs appealed to the United States Court of Appeals for the Ninth Circuit, arguing principally that the district court erred in finding that New Zealand was an adequate alternative forum. In affirming, the Ninth Circuit first observed that the plaintiffs argument relie[d] on a misdirected forum non conveniens inquiry because the district court was not required to ask whether [p]laintiffs could bring this lawsuit in New Zealand, but rather, whether New Zealand offers a remedy for their losses. Id. at 1143. Observing the low threshold for 26 adequacy of the alternative forum in Piper Aircraft Co., as well as the diminished degree of deference owed to plaintiffs bringing suit in a foreign forum, the Ninth Circuit found that [a] New Zealand remedy is unquestionably available here. at 1144. Id. The court reasoned that [a]lthough New Zealand law does not permit Plaintiffs to maintain this exact suit, New Zealand, through its no-fault accident compensation scheme, has provided and continues losses. Id. to provide a remedy for Plaintiffs Significantly, as it relates to the instant case, the court further determined that [t]he forum non conveniens analysis does not look to the precise source of the plaintiff s remedy, so we will not require the alternative forum to offer a judicial remedy. Id. at 1144-45 (citing Jeha v. Arabian American Oil Co., 751 F.Supp. 122, 125 (S.D.Tex. 1990) (finding that a quasi-judicial special commission designated to handle malpractice claims in Saudi Arabia constituted an adequate alternative forum)). Plaintiffs attempt to distinguish Lueck is unpersuasive. They argue that the New Zealand compensation scheme was enacted by the legislature, and that the plaintiffs there had already collected their compensation as allowed and prescribed by the Act, whereas here the Chinese legislature has not acted to legislate the compensation plan and Plaintiffs have not accepted any compensation. (Paper 12, at 17-18). 27 Those are distinctions without substance, however. The crux of the Ninth Circuit s decision finding, in Lueck was its consistent with Piper Aircraft Co., that some remedy was unquestionably available to the plaintiffs, which rendered the alternative forum adequate. Regardless of whether it was enacted by the Chinese legislature or sanctioned compensation by the program judiciary, developed it in is undisputed China in the that wake of the the melamine contamination crisis was organized and sanctioned by government entities working in conjunction with the dairy industry and administered through an insurance provider. Even if the compensation program does not qualify as a legislative, judicial, or administrative remedy, as Plaintiffs argue, it nevertheless constitutes a remedy not dissimilar to that found to be adequate in Lueck. here have not yet Furthermore, the fact that Plaintiffs accepted compensation under the program, unlike the Lueck plaintiffs, has no bearing on the equation. the context of the Ninth Circuit s decision, the In Lueck plaintiffs acceptance of compensation merely demonstrated that a New Zealand remedy is unquestionably available here. 236 F.3d at 1144. dispute that they Lueck, Similarly, Plaintiffs in this case do not are eligible the remedy for benefits under the compensation program. To be certain, offered by the compensation program is far less lucrative than what Plaintiffs seek in the 28 District of Maryland. Under the Chinese compensation program, Plaintiffs may expect to receive, at most, a lump-sum payment of $4,400 and compensation for related medical expenses. 12, Ex. 5, comparison Xu to Decl., the at ¶28 hundreds and of Ex. A). millions That of compensatory and punitive damages they seek here. (Paper pales dollars in in The Supreme Court has made clear, however, that courts are not to compare the rights, remedies, and procedures available under the law that would be applied in each forum to determine whether the law applied by the alternative forum is as favorable to the plaintiff as the chosen forum. Compania Naviera Joanna SA, 569 F.3d at 204; see also Gonzalez v. Chrysler, 301 F.3d 377, 381-82 (5th Cir. 2002) (finding Mexican statutory cap on damages of $2,500 for wrongful death did not render the alternative forum clearly unsatisfactory ), cert. denied, 123 S.Ct. 1928 (2003); In re Compania Naviera Joanna S.A., 531 F.Supp.2d 680, 687 (D.S.C. 2007) (citing Gonzalez and Lueck for the same proposition), aff d as modified, 569 F.3d 189 (4th Cir. 2009). While the court is not unsympathetic to Plaintiffs plight, Defendants have met their burden of establishing a justifiable belief that the Chinese forum offers Plaintiffs a remedy for their injuries. Accordingly, the available and adequate. 29 alternative forum is both 2. Private and Public Interests Having established the availability and adequacy of the Chinese forum, the forum non conveniens inquiry turns to the analysis of the private and public interest factors at stake, including but not limited to those identified by the Supreme Court in Gulf Oil Corp., 330 U.S. at 508-09. As distilled by the Fourth Circuit, these factors include: (1) the ease of access to sources of proof; (2) the availability of compulsory process for securing the attendance of unwilling witnesses; (3) the costs of obtaining the attendance of witnesses; (4) the ability to view the premises; (5) the general facility and cost of trying the case in the selected forum; and (6) the public interest, including administrative difficulties, the local interest of having localized controversies decided at home, and the interest of trying cases where the substantive law applies. Compania Naviera Joanna, SA, 569 F.3d at 200 (citing American Dredging Co. v. Miller, 510 U.S. 443, 448 (1994) (quoting Gulf Oil, 330 U.S. at 508)). In this analysis, the defendant bears the burden of showing not only that the forum chosen by the plaintiff is not the best forum, but also that another forum is more appropriate. Kontoulas, 745 F.2d at 315. It is undisputed that Plaintiffs are citizens and residents of China filing suit for damages incurred in that country allegedly resulting from defective products produced, marketed, and sold there. Accordingly, Plaintiffs choice of forum in the 30 District of Maryland is entitled to little deference. Aircraft Co., 454 U.S. at 255-56. See Piper As the private and public interest factors here overwhelmingly favor dismissal, however, the deference accorded Plaintiffs choice of forum is of no real consequence. The private interest factors clearly support the conclusion that China is the more appropriate forum. giving rise to this action occurred Because the events primarily, if not exclusively, in China, it is reasonable to assume that there will be more Chinese witnesses than United States witnesses, and that the relevant evidence is much more likely to be found in China. 688. In re Compania Naviera Joanna S.A., 531 F.Supp.2d at Moreover, the Chinese forum would have the power to compel the testimony of unwilling witnesses and the cost of producing willing witnesses would be significantly reduced there. The present forum, by contrast, could not compel the testimony of Chinese witnesses inconvenience. and would pose substantial expense and Many of the witnesses would speak only Chinese and much of the documentary evidence would be written in that language, thereby necessitating translation of not only all the documentary evidence but also the testimony of most witnesses from Chinese Furthermore, responsible to English Defendants Chinese if the assert third a parties 31 suit were desire that to to proceed implead would be here. allegedly beyond the jurisdiction of this court. (Paper 8, at 12). While Defendants could bring indemnification or contribution claims in China if Plaintiffs were successful in the litigation here, proceeding in that manner Considering producers would also of be that unduly at least burdensome a melamine-contaminated few and cases milk inefficient. against products Chinese have been accepted for adjudication in the Chinese forum, any litigation initiated by Plaintiffs in China would be significantly aided by the experience and precedent of the Chinese courts in adjudicating related matters. The factors of public interest also weigh strongly in favor of dismissal. As Defendants observe, adjudicating Plaintiffs claims here would require the application of Chinese law. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Philip Morris Inc. v. Angeletti, 358 Md. 689, 744 (2000). In the present forum the court would be substantially burdened with attempting to untangle problems in conflict of laws, and in law foreign to itself, presented in China. while the same concerns would not be Gulf Oil Corp., 330 U.S. at 509; see also In re Compania Naviera S.A., 531 F.Supp.2d at 689. Moreover, because this case touch[es] the affairs of many persons in China and there is a local interest in having localized controversies decided at home, principles of comity militate heavily in favor of that forum resolving the dispute. 32 Gulf Oil Corp., 330 U.S. at 509. The District of Maryland has comparatively little interest in a case involving the extent of liability, if any, of an international holding company and its subsidiary for injuries inflicted abroad, and jury duty ought not to be imposed upon the people of a community which has no relation to the litigation. Id. at 508-09. In sum, Defendants have convincingly met their burden of demonstrating that the private and public interest factors at issue favor the Chinese forum and disfavor litigation in the District of Maryland. C. Conditions of Dismissal Where a forum non conveniens motion is granted, the vast majority of courts, including the Fourth Circuit, have used the conditional uncertainty dismissal that the device courts may a alternative jurisdiction over the claims. 569 F.3d at 205. as safeguard forum against will the exercise See Compania Naviera Joanna, SA, By attaching conditions to the dismissal, obviate[] the need for extensive inquiry into foreign jurisdictional law, since if the foreign court refuses to take jurisdiction, conditional nature of plaintiff the is still dismissal. protected Calavo by Growers the of California v. Generali Belgium, 632 F.2d 963, 968 (2nd Cir. 1980) (quoting Schertenleib v. Traum, 589 F.2d 1156, 1163 (2nd Cir. 33 1978)); see also Bank of Credit & Commerce Int l (Overseas) Ltd., 273 F.3d at 247-48. Here, however, because the alternative compensation plan is undisputedly available to Plaintiffs, a conditional dismissal will not be employed to protect Plaintiffs rights to pursue a judicial remedy in the alternative forum. IV. Conclusion For the foregoing reasons, Defendants motions to seal and to dismiss granted. on the ground of forum non conveniens will A separate Order will follow. ________/s/_________________ DEBORAH K. CHASANOW United States District Judge 34 be
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