HEGRENES et al v. NILSEN et al
OPINION fld. Signed by Judge Jose L. Linares on 6/23/16. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JOHN HEGRENES, LIFECLUB
INTERNATIONAL, S.A. and LIFECLUB
Civil Action No.: 16-2271 (JLL)
MORTEN NILSEN, BAARD JORDAL,
ORION TRADING INSTITUTION, ORION
TRADING MANAGEMENT, TOP UNIT
MANAGEMENT and KIMYA NILSEN,
Linares, District Judge.
This matter comes before the Court by way of a motion to dismiss forforurn non conveniens
filed by Defendants Morten Nilsen and Kimya Nilsen (the “Moving Defendants” or the
“Nilsens”). (ECF No. 6, “Defs.’ Mov. Br.”). Corporate Plaintiffs LifeClub International, S.A.,
LifeClub International Ltd. (collectively, “LifeClub”) and individual Plaintiff John Hegrenes have
opposed this motion (ECF No. 14, “Pis.’ Opp. Br.”). Defendants have replied to same. (ECF No.
15, “Defs.’ Reply Br.”).
This case arises out of allegations that Defendants misappropriated Plaintiffs’ investment
funds in the foreign exchange market in violation of United States securities laws among other
common law doctrines. The Moving Defendants seek dismissal of this case under the doctrine of
forum non conveniens, arguing that Spain is a more appropriate forum. The Court decides this
matter without oral argument pursuant to F ederal Rule of Civil Procedure 78. Having reviewed
the papers filed in support of and in opposition to the pending motion, and for the reasons stated
below, the Court denies the Moving Defendants’ motion to dismiss.
Plaintiffs LifeClub International, S.A. and LifeClub International Ltd. (collectively
“LifeClub”) are foreign corporations incorporated under the laws of Panama and the United
Kingdom, respectively. (ECF No. 1, Compi.
4). According to the Complaint, “LifeClub is
an organization that consists of members who pool their assets for the purposes of investment.”
Plaintiff John Hegrenes is both a member and manager of LifeClub, who is authorized to
pursue claims on behalf of LifeClub’s members. (Compl.
of Norway who currently resides in Spain.
14-17). Mr. Hegrenes is a citizen
(ECF No. 14-2, Certification of John Hegrenes,
Plaintiffs have named Morten Nilsen, Kimya Nilsen and Baard Jordal as individual
Defendants, and have named Orion Trading Institution (“OTT”), Orion Trading Management, and
Top Unit Management as corporate Defendants. (Compl.
Defendants Kimye Nilsen and
Morten Nilsen are married. (ECF No. 6-1, Certification of Morten Nilsen, “Nilsen Cert.”
The Nilsens reside in Montclair, New Jersey. (Compl.
5-6). The parties disagree over Mr.
Jordal’s residency. While the Complaint alleges that Mr. Jordal resides in Spain (Compi.
Plaintiffs now state that Mr. Jordal is not a resident of Spain and in fact only vacations in the
‘The facts as stated herein are taken as alleged in Plaintiffs Complaint. (ECF No. 1, “Compl.”). For purposes of
this Motion to Dismiss, these allegations are accepted by the Court as true. See Phillips v. County ofAIlehenv. 515
F.3d 224. 228 (3d Cir. 2008) (“The District Court, in deciding a motion [to dismiss under Rule] 12(b)(6), was
required to accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the
light most favorable to [the plaintiff].”).
Country. (Hegrenes Cert.
14-15). Mr. Nilsen, on the other hand, alleges that Mr. Jordal “lived
in Spain at least from 2008-2011.” (ECF No. 15-1, Nilsen Reply Cert.
Plaintiffs allege that each of the three Corporate Defendants “is an entity organized under
the laws of a foreign country and transacts business in the State of New Jersey.” (Compi.
10). However, Mr. Nilsen has certified that “[t]he Corporate Defendants have not been operating
since approximately late 2011-2012.” (Nilsen Reply Cert.
Plaintiffs also allege that “Baard
Jordal and Morten Nilsen were officers and directors of [the Corporate Defendants]” and that
“Morten Nilsen was the Chief Financial Officer of [Orion Trading Institution].” (Id.
According to the Plaintiffs, “[t]he Corporate Defendants were totally dominated and controlled by
Morton Nilsen and Baard Jordal.” (Compl.
B. Pertinent Facts
According to the Complaint, “LifeClub entered into written agreements with OTI wherein
OTT as the asset manager would invest LifeClub pooled funds in the foreign currency market,
futures and options, indexes, and commodities.” (Id.
12). Specifically, Plaintiffs allege that
LifeClub members invested almost 20 million euros with the Defendants, based on Defendants’
alleged misrepresentations that they had success in trading in the foreign exchange markets. (Id.
Plaintiffs state that in November 2011 “Defendants advised LifeClub and its members
that the Defendants had lost nearly 98% of the monies invested with the Defendants as a result of
trading in the Forex market,” amounting to a loss of over 1$ million euros. (Id.
In summary, Plaintiffs accuse the Defendants of operating a Ponzi scheme out of New
Jersey, and of misappropriating Plaintiffs’ investment money to “pay for lavish personal expenses,
extravagant vacations and expensive motor vehicles.” (Id.
13 9-140). Plaintiffs allege that
they were continually misled and defrauded by Defendants’ representations concerning Plaintiffs’
investments in the market, and that such representations were made by Defendants in New Jersey.
Against this backdrop, Plaintiffs filed the pending action in the Superior Court of New
Jersey on March 15, 2016. Plaintiffs assert violations of federal securities laws and the New Jersey
RICO statute, as well as a number of common law claims including breach of contract, breach of
fiduciary duty, fraud, conversion, unjust enrichment, conspiracy and negligence. In addition to
other relief, Plaintiffs seek an order of attachment of personal and real property owned by the
¶ 93) and have filed notices of us pendens on the Nilsens’
properties located in
Essex County, New Jersey. (Pls.’ Opp. Br. at 3). On April 22, 2016, pursuant to 2$ U.S.C.
the Nilsen’s removed this matter to the United States Federal Court for the District of New Jersey
based upon federal question jurisdiction. (See Notice of Removal).
The Nilsens filed the instant motion on May 13, 2016, arguing that the case should be
dismissed in favor of jurisdiction in the Spanish courts. Plaintiffs have opposed this motion, and
the Nilsens have replied to that opposition. This motion is now ripe for the Court’s review.
A district court maintains “substantial flexibility in evaluating a forum
motion.” Van Catiwenberghe v. Biard, 486 U.S. 517, 529 (1988). In determining whether to
dismiss Plaintiffs’ claims on forum non-conveniens grounds, a district court applies a three-step
analysis. See Windt v. Qwest Communs Int’l, Inc., 529 F.3d 183, 189—90 (3d Cir. 2008).
the court must “determine whether an adequate alternative forum can entertain the
case.” Id. Assuming the existence of an adequate alternative forum, “the district court must then
determine the appropriate amount of deference to be given the plaintiffs choice of forum.” Id. at
190. Third, the “court must balance the relevant private and public interest factors.” Id. It is well
settled that the burden of persuasion as to each of the three elements of the forttm non conveniens
analysis is borne by the defendant. See Lacey v. Cessna Aircraft Co., 862 f.2d 38, 43-44 (3d Cir.
19$8).see also Kroger, Inc. v. O’Donnell, No. 07-cv-3091, 2007 WL 3232586, at *2 (D.N.J. Oct.
Dismissal on the grounds of fàrum non conveniens may be warranted “when trial in the
chosen forum ‘would establish
oppressiveness and vexation to a defendant
out of all
proportion to plaintiffs convenience,’ or when ‘the chosen forum [is] inappropriate because of
considerations affecting the court’s own administrative and legal problems.” Piper Aircraft Co.
v. Reyno, 454 U.S. 235, 241 (1981) (quoting Koster v. Lumbermens Mitt. Cas. Co., 330 U.S. 518
(1947)). That said, “the plaintiffs choice of forum should rarely be disturbed, unless the balance
of factors is strongly in favor of the defendant.” Lacey, 862 F.2d at 4243.
Adequate Alternative forum
In order to demonstrate that an adequate alternative forum exists, the Moving Defendants
must show that (1) they are “amenable to process in the alternative forum,” and (2) that the subject
matter of this action is “cognizable in the alternative forum in order to provide [Plaintiffs]
appropriate redress.” Kttltttr Int’l films Ltd. v. Covent Garden Pioneer, FSP., Ltd., $60 F.Supp.
1055, 1063 (D.N.J. 1994); see also Piper Aircraft Co., 454 U.S. at 255 n.22.
Amenability of Parties to Service of Process in Spain
The Nilsens argue that they meet the first prong of the adequate forum analysis. (Defs.’
Mov. Br. at 4). Specifically, Mr. Nilsen has certified that both he and Mrs. Nilsen are amenable
to process in Spain. (Id. at 4; Nilsen Cert.
12). Additionally, the Nilsens maintain that the
remaining Defendants are amenable to service of process in Spain because (1) the Complaint
alleges that Mr. Jordal is a resident of Spain and (2) the Corporate Defendants’ “client base and
trading activities took place in Spain (among other foreign jurisdictions).” (Defs.’ Mov. Br. at 4).
The Moving Defendants also note that it remains unclear whether this Court has jurisdiction over
any Defendant Jordal. (Defs.’ Reply Br. at 3).
In response, Plaintiffs argue that “[t]here is nothing showing that [the Non-Moving
Defendants have acquiesced to Spanish jurisdiction,” and furthermore, that “Mr. Nilsen does not
have the authority to speak for co-defendant, Kimya Nelsen” who herself has not acquiesced to
service of process in Spain. (Pls.’
Opp. Br. at 13-14).
Case law counsels that an alternative forum is not “adequate” unless all defendants are
amenable to service of process in the desired jurisdiction. See, e.g., Dole foods Co., Inc. v. Watts,
303 F.3d 1104, 1118-19 (9th Cir. 2002) (finding that “it is unclear whether there is an alternative
forum in The Netherlands” where only one of the two defendants had agreed to submit to
jurisdiction there); see also In the Matter of the Application ofMount Whitney Investments, LLLP,
15-cv-4479, 2016 WL 1737109, *3 (S.D.N.Y. May 2, 2016) (“First, all defendants must be
amenable to service of process in the alternative forum.”); see also VIA Techn., Inc. v. ASUS
Computer Int’l, 14-cv-03586, 2015 WL 3809382, *7 (N.D. Cal. June 18, 2015). At this juncture,
and given the disputed facts as to Mr. Jordal’s residency and the status of the Corporate Defendants,
it is unclear whether these Non-Moving Defendants are amenable to jurisdiction either in this
Court or in Spain, and the Court will not speculate on this issue which is not squarely before the
Even if the Court was satisfied that all of the Non-Moving Defendants were amenable to
jurisdiction in Spain, the Court notes that of the two Moving Defendants, only one—Mr. Nilsen—
has consented to Spain’s jurisdiction. The Court will not accept Mr. Nilsen’s certification that Mrs.
Nilsen has also consented to jurisdiction in Spain. (See Nilsen Cert. 1 12). Accordingly, the Court
finds that the Nilsens have not carried their burden of showing that they are amenable to Spain’s
Spain’s Ability to Grant Redress
Notwithstanding the above finding, the Court considers whether the Nilsens have shown
that Plaintiffs may seek adequate redress in the Spanish courts. “In determining whether the
proposed alternative forum offers an adequate remedy, this Court need not undertake an in-depth
analysis of the remedies available to the Plaintiff in the foreign jurisdiction compared with the
remedies available in this forum.” Miller v. Boston Scientflc Corp., 380 F. Supp. 2d 443, 448
(D.N.J. 2005); see also Piper Aircraft Co., 454 U.S. at 254. An alternative forum should not be
deemed “inadequate” simply because the laws in the original forum are more favorable towards
the plaintiff than those of the proposed jurisdiction. PiperAircraft Co., 454 U.S. at 254. However,
“if the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it
is no remedy at all, the unfavorable change in law may be given substantial weight; the district
court may conclude that dismissal would not be in the interests ofjustice.” Id.
Mr. Nilsen has certified that “[t]o the best of [his] knowledge, Spanish law recognizes
causes of action for fraud, breach of fiduciary duty, and unjust enrichment.” (Nilsen Cert.
The Nilsens have also cited to a section of the Spanish Civil Code, which they state provides
remedies for breach of contract and fraud. (Defs.’ Mov. Br. at 5). In response, Plaintiffs note that
Mr. Nilsen’s “self-serving lay certification.
that Spanish civil law allows for claims related to
three of the Plaintiffs’ causes of action does not meet defendants’ burden of showing that Spain is
an alternate adequate forum.” (Pls.’ Opp. Br. at 12). Further, Plaintiffs maintain that there is
nothing in the record to indicate that Spain would exercise jurisdiction over this matter to begin
with, as the Complaint alleges wrongdoing in the United States rather than Spain. (Id. at 13).
The Court finds that the Nilsens have not provided adequate support for their position that
Plaintiff may be able to seek redress in the Spanish courts. As Plaintiffs explain, the Moving
have provided no affidavits or information from Spanish legal authorities showing that
Spanish law would cover the defalcation alleged, or even provide Plaintiffs with the
imposition of a constructive trust on property in New Jersey or elsewhere. There is no
authority offered showing that Spanish law recognizes causes of action for off-shore
fraudulent conveyances or securities violations, the underpinning of Plaintiffs’ causes of
action. There is no authority offered that Spain can provide the Plaintiffs with any remedies
at all, including but not limited to, imposing a constructive trust on New Jersey real
property and New Jersey bank accounts.
Opp. Br. at 12).
The Court agrees. “Where there is a legitimate dispute concerning
the adequacy of a foreign remedy, a defendant seeking a forum non conveniens dismissal must
generally provide record evidence indicating that the plaintiff could obtain proper redress in the
alternative forum.” Miller, 380 F. Supp. 2d at 449. Such a showing “is crucial, because an
American court cannot condition dismissal on the consent of the foreign court to provide plaintiff
with an opportunity to obtain such redress.” Id. at 440-50. The Nilsens have failed to make this
Thus, even if the Nilsens had shown that they were amenable to suit in Spain, the Court
finds that they have not demonstrated that Plaintiffs could seek redress in that jurisdiction.
Accordingly, the Court finds that Spain is not an adequate forum for Plaintiffs’ claims and will
deny the pending motion to dismiss. In any event, as discussed below, even if the Nilsens had
sufficiently demonstrated that Spain is an adequate forum, the Court finds that deference would be
given to Plaintiffs’ choice of forum in the United States and that a review of the public and private
interest factors further support a denial of the Moving Defendants’ motion to dismiss.
The Deference Given to Plaintiffs’ Choice of Forum
While great deference is normally given to a plaintiffs choice of forum, less deference is
given when the plaintiff is foreign to the chosen forum. Lony v. E.I. Dtt Font de Nemours & Co.,
886 F.2d 628, 633 (3d Cir. 1989). However, “because the reason for giving a foreign plaintiffs
choice less deference is not xenophobia, but merely a reluctance to assume that the choice is a
convenient one, that reluctance can readily be overcome by a strong showing of convenience.” Id.
at 634. Stated differently, “[t]he district court must assess whether the considerable evidence of
convenience has in this case overcome any reason from extending full deference to the foreign
plaintiffs choice of forum.” Id.
At the outset, the court finds suspect any argument from the Nilsens—who happen to reside
in the same county in which the undersigned sits and certainly no more than thirty miles from this
Courthouse—that litigation across the Atlantic Ocean would be more convenient. See Lony, 935
F.2d at 608 (“Here, in contrast, Du Pont, which is headquartered in Wilmington, Delaware, and is
the largest employer in that state, seeks to move the action against it to a forum more than 3,000
miles away. It is, as Alice [in Wonderland] said, ‘curiouser and curiouser.”). In any event, the
Moving Defendants maintain that Plaintiffs have “no nexus” to the United States, and that “[t]here
is no evidence in New Jersey relative to the dispute and there are no witnesses in New Jersey
beyond Mr. and Mrs. Nilsen.” (Defs.’ Mov. Br. at 6-7). The Nilsens contend that they did not
engage in trading in the United States or even have a business presence in this Country, and further
that they had no customers in this Country. (Id. at 7).
The Nilsens also argue that Spain is a more convenient forum because “LifeClub’s
headquarters and only office was located in Spain, and its annual meetings were held in Spain.”
(Nilsen Reply Cert. ] 13). The Nilsens further argue that it is unlikely that any material witnesses
would be subject to this Court’s jurisdiction or willingly participate in this litigation. (Defs.’ Mov.
Br. at 8).
From the Plaintiffs’ viewpoint, New Jersey is a convenient forum given the fact that
Plaintiffs’ claims arise out of the Moving Defendants’ allegedly wrongful conduct in this State.
(Pls.’ Opp. Br. at 4-6).
Specifically, the Plaintiffs allege that Mr. Nilsen and the Corporate
Defendants were operating from New Jersey during the time period in question; that Mr. Nilsen
made misrepresentations from New Jersey; and that the Nilsens diverted Plaintiffs’ investment
money into their accounts located in New Jersey. (Compi. ¶1 44-45). To that end, after filing the
Complaint, Plaintiffs filed New Jersey notices of/is pendens on the Nilsens’ properties located in
Essex County, New Jersey. (Pls.’
Opp. Br. at 3).
From a practical standpoint, Plaintiffs note that
the majority of documents pertaining to their allegations are in English and will need to be
translated to Spanish if this case is litigated in Spain. (PIs.’ Opp. Br. at 5). In fact, Mr. Hegrenes
has certified that no relevant documents are in Spanish, no communications between the parties
were in Spanish, and that to his knowledge, no LifeClub members are Spanish citizens. (Hegrenes
Cert. ¶119). Notably, Mr. Nilsen disputes this point, and instead maintains that the majority of
relevant documents are in Norwegian and not English. (Defs.’ Rely Br. at 8).
Given that Plaintiffs’ Complaint alleges unlawful conduct by the Moving Defendants
arising out of New Jersey, that the Complaint makes no allegations pertaining to Spain, and that
two of the three individual defendants reside within the very county in which this Court sits, the
Court finds that even if the Moving Defendants were able to show that Spain is an adequate forum,
the foreign Plaintiffs’ chosen forum would nevertheless have been entitled to deference.
Balance of Private and Public Interest Factors
“A defendant seeking dismissal on forum non conveniens grounds must show that the
the public and private factors ‘tips decidedly in favor of trial in the foreign forum.”
Windt, 529 F.3d at 192 (quoting Lacey v. Cessna Aircraft Co. (“LaceylT’), 932 f.2d 170, 180 (3d
Cir. 1991). Private interest factors include:
the relative ease of access to sources of proofi availability of compulsory process for
attendance of unwilling, and the cost of obtaining attendance of willing, witnesses;
possibility of view of premises, if view would be appropriate to the action; and all other
practical problems that make trial of a case easy, expeditious and inexpensive.
Gulf Oil Corp.
Gilbert, 330 U.S. 501, 508 (1947). As noted above, the Moving Defendants
maintain that it is unlikely that this Court would be able to compel pertinent witnesses to appear
before the Court, or that these witnesses would otherwise be inclined to appear in this jurisdiction.
While this represents a valid concern, the Court notes that the Moving Defendants have not
specifically named or identified any material witnesses who present this problem, nor have they
explained why these witnesses could be compelled to appear in Spain if the matter were litigated
in that Country. In fact, to Plaintiffs’ knowledge, “[ajlthough some witnesses are in Europe and
the United States, there are no LifeClub witnesses Located
is there temporarily for work.” (Pls.’
Spain other than Mr. Kegrenes, who
Opp. Br. at 23).
The Court also notes that the parties themselves are certainly available to testify and appear
in this Court; the Moving Defendants reside in the same county as this Court sits, and Mr. Hegrenes
has certified that “[m]oving this matter to Spain would not be more convenient for LifeClub as
travel to the United States and the court in New Jersey is readily available and relatively
inexpensive.” (Hegrenes Cert.
Thus, the Court finds that the private interest factors weigh in favor of
jurisdiction in this Court.
The Court next
convenience analysis. These factors include:
to the pttblic interest factors affecting the
the administrative difficulties flowing from court congestion; the “local interest in having
localized controversies decided at home”; the interest in having the trial of a diversity case
in a forum that is at home with the law that must govern the action; the avoidance of
unnecessary problems in conflict of laws, or in the application of foreign law; and the
unfairness of burdening citizens in an unrelated forum with jury duty.
Piper Aircraft Co., 454 U.S. at 241 n. 6 (quoting Gilbert, 330 U.S. at 509). The Court finds that
these factors also militate towards maintaining jurisdiction in this Court. Specifically. New Jersey
has a strong interest in holding accountable residents who are alleged to have violated federal
securities law within its State. See Lonv 935 F.2d at 612 (3d Cir.1991) (stating that when
considering the public interest factors, district courts must “consider the locus of the alleged
and the connection of that conduct to plaintiffs chosen forum” (citation
omitted)). Accordingly, even if Spain was an adequate forum for Plaintiffs to prosecute this matter,
the Court would nevertheless find that jurisdiction is appropriately placed in the Plaintiffs chosen
For the reasons stated herein, the Court denies the Moving Defendants’ motion to dismiss
on forum non-conveniens grounds. An appropriate Order accompanies this Opinion.
IT IS SO ORDERED.
E L. LINARES
ITED STATES DISTRICT JUDGE
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