Flynn et al v. National Asset Management Agency et al
Filing
95
MEMORANDUM OPINION re: 28 FIRST MOTION for Preliminary Injunction filed by Joseph Sheehan, Lakebridge Limited, Blackrock Medical Corporation, Leona Flynn, Trefton Limited, The Bloomsday Trust, Aruba Properties Limited, Eyrin Deve lopments Limited, John Flynn, Sr., Bellpark Developments Limited, Bluecrown Limited, Mountville Developments Limited, James Flynn, Stonewood Developments, Mallia Properties Limited, Anna Livia, LLC, Elaine Flynn, Komady & Michael O 039;Reily, Fox Rock LLC, John Flynn, Jr., Island Associates Limited, Benray Limited, 44 CROSS MOTION to Dismiss for Lack of Jurisdiction filed by National Asset Management Agency, Michael Hoey, Niall White, Barry O'Brie n, Laura Mulrooney, Brendan McDonagh, Michael Foley, Aideen O'Reilly, Frank Daly, 73 MOTION to Dismiss for Lack of Jurisdiction and Failure to State a Claim filed by Alan Dukes, Arthur Michael Royal Aynsley, 64 MOTION t o Dismiss filed by Byrne Wallace. [T]here is no algorithm that assigns precise weights to the factors that inform forum non conveniens determinations. The decision whether to dismiss a case on the ground of forum non conveniens lies predomin antly within the discretion of the district court, which is obliged to apply the governing legal standards and then to balance the various pertinent factors. In my view,the balance of factors warrants dismissal. Defendants' motions to dismiss [D I 44, 64, 73] are granted to the extent that they seek dismissal on the ground of forum non conveniens and denied without prejudice in all other respects. This dismissal is conditional upon the filing on behalf of all moving defendants, on or before August 12, 2014, of a document tolling the running of time from the date of commencement of this action until the thirtieth day after the date of such filing for purposes of determining the timeliness of any action subsequently commenced by plaintiffs in the courts of Ireland with respect to any of the matters asserted in the amended complaint. The plaintiffs' motion for a preliminary injunction [DI 28] is denied without prejudice. (Signed by Judge Lewis A. Kaplan on 7/29/2014) (cd)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------------x
JOHN FLYNN, SR., et al.,
Plaintiffs,
-against-
13-cv-09035 (LAK)
NATIONAL ASSET MANAGEMENT AGENCY/
NATIONAL ASSET MANAGEMENT LIMITED, et al.,
Defendants.
-----------------------------------------x
MEMORANDUM OPINION
Appearances:
Leonard Zack
LEONARD ZACK & ASSOCIATES
Lawrence Daniel O’Neill
Attorneys for Plaintiffs
Richard A Beran
Thomas J. Goodwin
MCCARTER & ENGLISH, LLP
Attorneys for National Asset Management Agency
Defendants
Anthony P. Callaghan
Robert C. Brady
Jonathan D. Klein
GIBBONS P.C.
Attorneys for Defendants Arthur Michael Royal
Aynsley and Allan Dukes
Jean-Marie L. Atamian
Michelle J. Annunziata
MAYER BROWN LLP
Attorneys for Defendant Byrne Wallace
LEWIS A. KAPLAN, District Judge.
This is an action by five members of the Flynn family (the “Flynns”) and fifteen or
more entities to which they have some connection (the “Entities”) against twenty three individuals
and entities arising out of the Flynns’ borrowing from an Irish bank1 of more than $200 million to
finance the Flynn plaintiffs’ real estate activities. The amended complaint asserts claims under the
Racketeer Influenced and Corrupt Organizations Act (“RICO”) and on theories of fraud, trespass
to chattels, conversion, unjust enrichment, constructive trust, civil conspiracy, breach of fiduciary
duty, breach of the implied covenant of good faith and fair dealing, and negligence. Now before the
Court are the plaintiffs’ motion for a preliminary injunction2 and motions by various defendants to
dismiss the case for lack of subject matter and personal jurisdiction, on the ground of forum non
conveniens, for failure to plead fraud with the requisite particularity, and for failure to state a claim
upon which relief may be granted.3 As the Court has concluded that the action should be dismissed
on the ground of forum non conveniens, it is unnecessary to address most of the defendants’
arguments.4
1
The case has been dismissed as to two plaintiffs.
2
DI 28.
3
DI 44-45, 64, 67, 73, 74.
4
The jurisdictional issues here raise considerable factual and legal questions, including
whether and how the Foreign Sovereign Immunities Act applies to NAMA and the extent
of the New York connections of each of more than twenty defendants. Determining forum
non conveniens issue first will save the Court and the parties unnecessary delay and expense.
See Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 127 S. Ct. 1184, 1186-87 (2007)
2
Facts
The Background of the Lawsuit
Beginning in or about 1994, plaintiffs borrowed over $200 million from the Anglo
Irish Bank Corporation (the “Bank”) in 84 loan transactions to purchase and develop real estate in
Ireland, the United Kingdom, and the United States.5 Most were guaranteed by the Flynns
personally.6 Some allegedly were negotiated, at least in part, in the United States.7
In 2008, at the time of the well known financial crisis, the Bank was failing. The
Republic of Ireland (“Ireland”) allegedly injected capital into it, guaranteed its liabilities and, in
January 2009, became its sole shareholder.8
Plaintiffs allege that the Bank in 2010 sold €35 billion of loans – including those of
the plaintiffs – to something they call NAMA/NAML, which they allege is a for-profit company
(“A district court therefore 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.”); Magi XXI, Inc. v. Stato della
Citta del Vaticano, 714 F.3d 714, 720, n.6 (2d Cir. 2013) (same); Seales v. Panamanian
Aviation Co., 356 F. App’x 461, 462-63 (2d Cir. 2009) (“We need not construe the
preemptive scope of the Montreal Convention because we think the ‘less burdensome
course’ in this case, which was dismissed only in part on this ground, is to address the clearer
forum non conveniens inquiry first.”); BFI Grp. Divino Corp. v. JSC Russian Aluminum, 298
F. App’x 87, 89 (2d Cir. 2008) (“RUSAL moved to dismiss under Fed.R.Civ.P. 12(b)(6) on
several grounds including jurisdiction and forum non conveniens. The district court granted
the motion and dismissed the suit for forum non conveniens, choosing not to address the
jurisdictional argument pursuant to Sinochem . . . .”).
5
Amended complaint [DI 19] (“Cpt.”) ¶¶ 41-42.
6
Id. ¶ 44.
7
Id. ¶ 45.
8
Id. ¶ 56.
3
created by the Irish National Asset Management Agency Bill of 2009.9 In fact, however, Ireland
created the National Asset Management Agency (“NAMA”) on December 21, 2009 pursuant to the
National Asset Management Agency Act (Establishment Day) Order 2009 and the National Asset
Management Agency Act, 2009 (the “NAMA Act”).10 NAMA is an agency of the Irish government
and has no private ownership.11 National Asset Management Limited (“NAML”) is a special
purpose vehicle that financed NAMA’s acquisition of loans from Irish financial institutions.12
Plaintiffs claim to have discovered in 2010 that the Bank – which by then was or
shortly thereafter became a predecessor in interest to NAMA upon NAMA’s purchase of the
plaintiffs’ loans from the Bank – had been overcharging them for interest for over a decade.13 They
allege, on information and belief, that the Bank then entered into a conspiracy with
“NAMA/NAML” and the Irish government “to cover up the fraudulent charges and intimidate the
Flynn Plaintiffs into silence” in order to preserve the assets of the Bank and its successors.14 And
the story goes on from there, the plaintiffs asserting broadly that NAMA and other defendants
continue fraudulently to overcharge them and have mounted a campaign to coerce them into
dropping their claims and keeping silent by suing them in Irish courts, threatening asset seizures,
9
Id. ¶ 57.
10
MacDonncha Decl. [DI 46] ¶¶ 4-6.
11
Smyth Decl. [DI 47] ¶¶ 4-5.
12
Cpt. ¶¶ 57-58.
13
Id. ¶¶ 49-52.
14
Id. ¶¶ 65, 55.
4
tampering with witnesses, and so on. According to plaintiffs, the defendants also are threatening
to dispose of Flynn assets at inadequate prices and otherwise to take advantage of them.
The Irish Litigation
On February 19, 2013, and thus months before the commencement of this action,15
Leona Flynn commenced an action in the High Court in Dublin, seeking a declaration that she has
no personal obligation under the so-called Belfield Park Loan, one of the loans that is the subject
of this action.16 Her statement of claim asserted that she is “a lady with a residence” in Dublin.17
On May 8, 2013, also well before the commencement of this action, National Asset
Loan Management Limited, the relevant NAMA subsidiary and the defendant in that action, filed
a counterclaim against all five of the Flynns seeking recovery of €22 million said to be owed by
them on the Belfield Park Loan.18
The Parties
The plaintiffs commenced this action on December 20, 2013. Their amended
15
The Flynns previously filed a substantially similar action in this Court on June 6, 2013.
Flynn v. Irish Bank Resolution Corp., 13 Civ. 3882 (LAK). That action was stayed in
consequence of the placement of the Irish Bank Resolution Corp. into special liquidation
in Ireland and the filing in the United States on behalf of its liquidators of a proceeding
under Chapter 15 of our Bankruptcy Code. It has not been reactivated.
16
Smyth Decl. ¶ 15 & Ex. B.
17
Id. Ex. B, at 2 of 12.
18
Id. ¶ 16 & Ex. C.
5
complaint seeks, among other things, damages, rescission of all of the loan agreements and personal
guarantees, and an injunction restraining defendants from an action “(a) to recognize or enforce any
debt, including any personal guarantees by Plaintiffs as security; (b) to obtain judgment in any court,
tribunal, or agency anywhere (here or abroad) regarding the debt or guarantees; and/or (c) to attach
or seize Plaintiffs’ assets (or those of Plaintiffs’ subsidiaries or co-venturers).”19 As the Court
already has summarized the nature of plaintiffs’ claims, it remains, in light of the forum non
conveniens issues, principally to outline the connections of the relevant parties to Ireland and the
United States.
Plaintiffs
The Flynns plainly have substantial connections to Ireland as well, in most instances,
to Florida:
•
James Flynn concededly is domiciled and permanently resides in Ireland.20
•
John Flynn, Sr., is a legal permanent resident (“LPR”) of the United States
and claims a Palm Beach, Florida, domicile.21 The fact that he is an LPR,
however, necessarily implies that he is an alien, and there is unrebutted
evidence that he is a citizen of Ireland and maintains a Dublin address.22
19
Cpt. at 29-30.
20
Id. ¶ 15.
21
Id. ¶ 11.
22
Smyth Decl. [DI 47] ¶¶ 18, 21 & Exs. C, D, and H.
6
•
Leona Flynn is a natural born U.S. citizen who claims a Palm Beach, Florida,
domicile at the same address as John Flynn, Sr.23 As noted, however, Ms.
Flynn asserted in her statement of claim in her Irish action that she is “a lady
with a residence” in Dublin.24
•
Neither John Flynn, Jr., nor Elaine Flynn claims U.S. citizenship. Both
claim a Palm Beach, Florida area residence, as distinguished from domicile.25
Both hold Irish driving licenses that list their permanent addresses as being
in Dublin.26 John Flynn, Jr., is listed in the Flynns’ pleadings in the Irish
action as a London resident.27
Plaintiffs concede that all but three of the Entities “resid[e] outside of the United
States.”28 Two of the other three Entities are limited liability companies and the third a trust, in each
case said to be organized under Florida law.29 Plaintiffs, however, have provided almost no
information as to the identities or places of residence, domicile or business of the members of the
LLCs or the trustee. They allege only that the Flynns either control or have guaranteed obligations
23
Cpt. ¶ 12; L. Flynn Decl. [DI 82] ¶¶ 4-5.
24
Smyth Decl. Ex. B, at 2 of 12.
25
Id. ¶¶ 13-14.
26
Smyth Decl. ¶ 19 & Ex. E.
27
Id. ¶ 21 & Ex. H ¶ 1(a) (admitting that John Flynn, Jr., is a London resident).
28
Id. ¶ 19.
29
Id. ¶¶ 16-18.
7
of twelve of the fifteen,30 but there is no information as to which they control and for which they
have provided guarantees.
Defendants
NAMA and NAML both are Irish entities having their only offices in Dublin. With
the exception of defendant Arthur Michael Royal Aynsley and, arguably, Bryne Wallace, all of the
remaining defendants live in Ireland.31 Aynsley resides in London.32 Byrne Wallace, according to
plaintiffs, is “an Irish solicitors law firm” but is said to have a New York City office.33
Discussion
District courts have considerable discretion in applying the principle of forum non
conveniens. The Second Circuit, however, has established:
“a three-step process to guide the exercise of [a district court’s] discretion [in doing
so]. At step one, a court determines the degree of deference properly accorded the
plaintiff’s choice of forum. At step two, it considers whether the alternative forum
proposed by the defendants is adequate to adjudicate the parties’ dispute. Finally, at
step three, a court balances the private and public interests implicated in the choice
30
Id. ¶ 19.
31
Id. ¶¶ 22-35.
32
Id. ¶ 28.
33
Id. ¶ 30.
Byrne Wallace “is an Irish law firm, organized under Irish law, with its principal place of
business in Dublin.” Prendergast Decl. [DI 65] ¶ 2. The firm “maintains de minimis office
services at 415 Madison Avenue in New York.” Id. ¶ 9. The “‘office’ is monitored by a
third-party answering service.” Id. ¶ 11. It asserts that it “has no lawyers or other employees
in New York.” Id. ¶ 3.
8
of forum.”34
Degree of Deference to Plaintiffs’ Choice of Forum
“Any review of a forum non conveniens motion starts with ‘a strong presumption in
favor of the plaintiff’s choice of forum.’”35 But the strength of that presumption, and thus the degree
of deference, varies with circumstances. It is strongest where the plaintiff chooses the plaintiff’s
home forum, but the deference due to a foreign plaintiff’s choice of a U.S. forum is less.36 “These
presumptions, however, may not apply, either at all or with full force, to forum choices in particular
cases.”37 As our circuit said in Iragorri:
“The more it appears that a domestic or foreign plaintiff’s choice of forum has been
dictated by reasons that the law recognizes as valid, the greater the deference that
will be given to the plaintiff’s forum choice. Stated differently, the greater the
plaintiff’s or the lawsuit's bona fide connection to the United States and to the forum
of choice and the more it appears that considerations of convenience favor the
conduct of the lawsuit in the United States, the more difficult it will be for the
defendant to gain dismissal for forum non conveniens . . . . On the other hand, the
more it appears that the plaintiff’s choice of a U.S. forum was motivated by
forum-shopping reasons . . . the less deference the plaintiff’s choice commands and,
consequently, the easier it becomes for the defendant to succeed on a forum non
conveniens motion by showing that convenience would be better served by litigating
in another country’s courts.”38
Thus, this Court is obliged to assess the totality of circumstances in determining the weight to be
34
Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 153 (2d Cir. 2005) (citing
Iragorri v. United Technologies Corp., 274 F.3d 65, 73-74 (2d Cir. 2001) (en banc)).
35
Id. at 154 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981)).
36
Id.
37
Id.
38
Irragori, 274 F.3d at 71-72.
9
given to the plaintiff’s choice of forum.
“To facilitate totality review, Iragorri identified factors frequently relevant
to determining whether a forum choice was likely motivated by genuine
convenience: ‘[1] the convenience of the plaintiff’s residence in relation to the
chosen forum, [2] the availability of witnesses or evidence to the forum district, [3]
the defendant’s amenability to suit in the forum district, [4] the availability of
appropriate legal assistance, and [5] other reasons relating to convenience or
expense.’ [Iragorri, 274 F.3d] at 72. Circumstances generally indicative of forum
shopping, that is, plaintiff’s pursuit not simply of justice but of “justice blended with
some harassment,” Gulf Oil Corp. v. Gilbert, 330 U.S. at 507, 67 S. Ct. 839, include
‘[1] attempts to win a tactical advantage resulting from local laws that favor the
plaintiff's case, [2] the habitual generosity of juries in the United States or in the
forum district, [3] the plaintiff’s popularity or the defendant’s unpopularity in the
region, or [4] the inconvenience and expense to the defendant resulting from
litigation in that forum.’ Iragorri v. United Techs. Corp., 274 F.3d at 72; see
generally Paxton Blair, The Doctrine of Forum Non Conveniens in Anglo–American
Law, 29 Colum. L. Rev. 1, 34 & n. 155 (1929) (advocating forum non conveniens
dismissal when plaintiffs attempt ‘to sue where verdicts are largest’ or ‘to avoid
some principle of law which would impede recovery in the proper forum’).”39
We start with the questions whether and to what extent plaintiffs could be said to
have brought this action in their respective home fora. In one case, that is easy – James Flynn is a
citizen and domiciliary of Ireland40 and thus has elected to sue in a forum that, to him, is entirely
foreign.
The picture as to John Flynn, Jr., and Elaine Flynn is slightly less clear. Neither
claims U.S. citizenship or domicile, and both claim residences in Ireland and Florida (and John
Flynn, Jr., in London as well). Nevertheless, it seems fair to say – in the absence of any claim of
U.S. domicile – that the extent to which the United States could be characterized as a “home” forum
to either is limited.
39
Norex, 416 F.3d at 155.
40
Cpt. ¶ 15.
10
John Flynn, Sr., and Leona Flynn present the strongest home forum cases, as both
claim (and the Court for purposes of this motion assumes) Florida domicile. In addition, one is a
U.S. citizen and the other a legal permanent resident. Nevertheless, even in their cases, the home
forum argument does not clear the boards. Both claim residence also in Ireland, and Leona Flynn
brought the first action against NAMA in the Irish courts, where she gave as her residence an Irish
address.
The situation of the Entities is considerably weaker. The plaintiffs acknowledge that
twelve of the fifteen are resident outside the United States. Three are said to be organized under
Florida law, but that is neither here nor there because plaintiffs have not disclosed where they do
business, maintain offices, or even what the precise connection of the Flynns to each may be.
But the “home” forum determination is not a matter of checking boxes and
mechanically coming to some dispositive conclusion. As Iragorri and Norex made clear, the forum
non conveniens determination at bottom is an assessment of the relative convenience of alternative
fora. In this case, (1) even John Flynn, Sr., and Leona Flynn have substantial connections to Ireland
as well as to the United States and, in the case of Leona Flynn, has demonstrated the convenience
to her of Irish litigation by commencing an action there against NAMA, (2) the Irish connections
of John Flynn, Jr., and Elaine Flynn appear to be at least as strong as their U.S. connections, (3)
James Flynn has no apparent connections to the United States and the strongest of connections to
Ireland, and (4) most of the Entities are entirely foreign or nearly so, and (5) the other three are
connected to the United States only by their organization under Florida law and either the Flynns
influence over them or their guarantees of certain of their obligations. In the last analysis, then, the
Court would be disposed to afford some intermediate level of deference at least to the choice of
forum of all of the Flynns other than but James and some lesser degree of deference to that of the
11
Entities were there no indication of forum shopping. But that factor is very much present here and
reduces the deference that is appropriate.
A central element of plaintiffs’ resistance to forum non conveniens dismissal is the
contention that Ireland is not an adequate alternative forum because:
“(i) there is no provision in Irish Law which is analogous to the RICO statute, (ii)
Irish law does not provide any civil right of action for criminal wrongs and (iii)
several of the core counts in the First Amended Complaint, in particular wire fraud
and mail fraud, do not exist at all in Irish law.”41
The statement that Irish law does not provide any civil right of action for criminal wrongs is at best
misleading. Ireland shares with the United States a well developed body of tort law largely derived
from our common English antecedent. As even the most cursory glance through leading treatises
on Irish law quickly reveals, Ireland affords civil causes of action for tort damages very much like
our own for all or substantially all of the wrongs alleged by the plaintiffs.42 Thus, the argument
comes down to the possible availability in the United States of a civil racketeering suit.43 Putting
to one side, for the moment, the question whether the availability of different legal remedies here
makes a foreign forum inadequate (as we shall see, it rarely if ever does), the plaintiffs’ heavy
reliance on RICO as a reason to retain the action here suggests a desire to benefit from whatever in
41
Pl. Mem. [DI 78] at 20.
42
E.g., EOIN QUILL, TORTS IN IRELAND (3d ed. 2009) (discussing Irish tort liability for
negligence (at 17), breach of the duty of care (at 19), trespass to chattels (at 205), fraud (at
299), conversion (at 338), conspiracy (at 328)); ANDREW TETTENBORN, LAW OF
RESTITUTION IN ENGLAND AND IRELAND (3d ed. 2002) (discussing the Irish causes of action
for unjust enrichment (at 4) and breaches of fiduciary duties (at 252)).
43
There is no private right of action for violation of the mail and wire fraud statutes except
to the extent that RICO in some circumstances makes mail and wire fraud predicate acts and
thus may afford a remedy in some instances.
12
terrorem effect that statute has by virtue of the word “racketeering” and the threat of treble
damages.44 When this is combined with “the habitual generosity of juries in the United States,”45
the obvious inconvenience and expense to all of these Irish defendants of litigating this case in New
York, and the debatable convenience to the plaintiffs of doing so, especially in light of Leona
Flynn’s institution in Ireland of the first of the lawsuits relating to this controversy, the Court
concludes that the institution of this case in the United States was at least as much a result of forum
shopping as it was of any substantial concern with convenience. The degree of deference due to
plaintiffs’ choice of this forum is limited.
Adequacy of Alternative Forum
As noted, plaintiffs argue that Ireland does not provide an adequate forum, essentially
because it does not have a counterpart to civil RICO. The argument is without merit.
In Piper Aircraft Co. v. Reyno,46 the Supreme Court reiterated that “[t]he possibility
of a change in substantive law [in consequence of a change to an alternate forum] should ordinarily
not be given conclusive or even substantial weight in the forum non conveniens inquiry.”47 The
Second Circuit, moreover, repeatedly has said that “[a]n alternate forum is adequate if the
44
See Norex, 416 F.3d at 155 (noting, even in the absence of a district court finding,“that the
possibility of a RICO treble damages award might have made the choice of a United States
forum attractive to Norex regardless of convenience.”)
45
Id.
46
454 U.S. 235 (1981).
47
Id. at 247.
13
defendants are amenable to service of process there, and if it permits litigation of the subject matter
of the dispute.”48 With specific reference to RICO, it has written:
“[W]e note the well-established principle that ‘[t]he availability of an adequate
alternative forum does not depend on the existence of the identical cause of action
in the other forum,’ nor on identical remedies. PT United Can Co. v. Crown Cork &
Seal Co., 138 F.3d at 74. The principle pertains with particular force to civil RICO
actions because few foreign jurisdictions provide such an expansive civil vehicle for
parties injured by ongoing criminal schemes; even more rare are foreign provisions
for the recovery of treble damages. Nevertheless, most foreign jurisdictions provide
alternative legal actions to address the wrongdoing encompassed by civil RICO. See,
e.g., Transunion Corp. v. PepsiCo. Inc., 811 F.2d 127, 129 (2d Cir.1987) (per
curiam) (rejecting RICO plaintiff’s objection to forum non conveniens dismissal,
holding that foreign fraud action was an adequate substitute).”49
As noted earlier, Irish law provides alternative legal actions to address the
wrongdoing alleged by these plaintiffs. Indeed, apart from their unsubstantiated and misleading
assertion referred to above, plaintiffs have not contended otherwise. Accordingly, the Irish courts
are an adequate alternative forum.
Private and Public Interests
Private
“The private interest factors [pertinent to the forum non conveniens analysis] include:
(1) ease of access to evidence; (2) the availability of compulsory process for the attendance of
48
Figueiredo Ferraz E Engenharia de Projeto Ltda. v. Republic of Peru, 665 F.34d 384, 390
(2d Cir. 2011) (quoting Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 75 (2d
Cir. 2003)); Norex, 416 F.3d at 157 (quoting id.).
49
Norex, 416 F.3d at 158; see also PT United Can Co. Ltd. v. Crown Cork & Seal Co., Inc.,
138 F.3d 65, 74 (2d Cir. 1998) (noting that the district court did not abuse its discretion in
dismissing a RICO action on forum non conveniens grounds where the plaintiffs could
challenge the same underlying conduct through a fraud claim in the alternate forum).
14
unwilling witnesses; (3) the cost of willing witnesses’ attendance; (4) if relevant, the possibility of
a view of premises; and (5) all other factors that might make the trial quicker or less expensive.”50
Plaintiffs here contend that the Bank (which no longer exists) overcharged them for
interest for a lengthy period. When they discovered the alleged overcharges, the Bank allegedly
entered into a conspiracy with NAMA, NAML and the Irish government to cover up the
overcharges, to coerce the Flynns to drop their claims, to intimidate or tamper with witnesses, and
to sell the Flynns’ assets at inadequate prices.
While the parties have not addressed in detail the evidence that will be needed to
litigate the Flynns’ claims, the nature of those claims demonstrates that the vast bulk of it is in
Ireland. NAMA, NAML, all but one of the other defendants,51 and all of the relevant officials and
agencies of the Irish government are located in Ireland. Except to the extent that this Court may
have personal jurisdiction over some of the defendants,52 none is subject to compulsory process here.
Certainly the Irish government – which, given the conspiracy allegations, is likely to be the source
of considerable non-party evidence – is not.
Nor does it seem likely that many (if any)
knowledgeable former employees of the Bank, which no longer exists, will be found in the United
States.53 Thus, it seems quite likely that litigation of this case in New York would be heavily
50
DiRienzo v. Philip Services Corp., 294 F.3d 21, 29-30 (2d Cir. 2002).
51
The exception, defendant Aynsley, resides in London. Cpt. ¶ 28.
52
The Court of course does not now determine the personal jurisdiction question but it does
note that none of the individual defendants resides in this country, that quite a few have not
even been served with process, and that others are challenging personal jurisdiction.
53
For example, defendants Sean Fitzpatrick and Tiarnan O’Mahoney, who allegedly worked
for a time in the Bank’s former New York office, concededly reside in Ireland. Id. ¶¶ 23-
15
burdened by the need to conduct depositions in Ireland which in turn would require either the
agreement of the witnesses to testify or the issuance and enforcement through the Irish courts of
letters rogatory. That suggests, moreover, that any New York trial would depend significantly on
deposition testimony of absent Irish witnesses as opposed to live testimony from persons subject to
compulsory process or willing to travel to New York.54
In the last analysis, then, the balance of private interest factors tips quite decidedly
against a New York forum and in favor of Ireland. On the one hand, the Flynns claim no connection
to New York, have connections to Ireland at least comparable to their connections to the United
States, and readily could litigate there as evidenced by, among many other things, the fact that the
first lawsuit relating to this controversy was commenced by Leona Flynn in Dublin. On the other
hand, all of the defendants and all or most of the non-party witnesses and evidence sources are in
Ireland or in one instance, England, and this Court could not compel the production of Irish
documents or the testimony of Irish witnesses. Litigation here thus would be quite inconvenient for
any Irish defendants subject to this Court’s personal jurisdiction, and the difficulties of obtaining
and presenting proof before this Court quite likely would be substantial.
Public
The “public interest factors to be weighed in the forum non conveniens inquiry [are]:
(1) administrative difficulties associated with court congestion; (2) the unfairness of imposing jury
24. As noted, defendant Aynsley, also said once to have worked in that New York office,
resides in London.
54
There is a strong preference for live testimony. Iragorri, 274 F.3d at 75; GlaxoSmithKline
Biologicals, S.A. v. Hospira Worldwide, Inc., 13 Civ. 1395 PKC, 2013 WL 2244315, at *5
(S.D.N.Y. May 21, 2013) (collecting cases).
16
duty on a community with no relation to the litigation; (3) the ‘local interest in having localized
controversies decided at home;’ and (4) avoiding difficult problems in conflict of laws and the
application of foreign law.”55
The Court foresees neither administrative difficulties associated with court
congestion nor any difficult conflict of laws or foreign law problems were this case to be litigated
here. Courts in this district regularly deal with choice of law and foreign law issues. To whatever
extent Irish law might govern, the Court would anticipate no problems in dealing with the law of
that jurisdiction, which shares so much with our own. On the other hand, this controversy has
virtually nothing to do with New York, even granting the some of the 84 loans at issue were partly
negotiated here. There is little reason to accept the possibility of imposing on New York jurors to
decide this case if it were to go to trial. And while the loans in question here financed real estate
operations in several parts of the world, including the United States, the controversy concerns the
administration of the loans by an Irish bank and its successors and, just as significant, the plaintiffs’
allegations of a broad conspiracy involving the Irish government and two or more Irish government
entities which, if it occurred, took place in Ireland. Plaintiffs’ allegations thus charge a controversy
that has much to do with Ireland and little to do with New York or the United States save to the
extent that some of the Flynns have connections to Palm Beach, Florida, in addition to substantial
connections to Ireland.
Conclusion
“[T]here is no algorithm that assigns precise weights to the factors that inform forum
55
DiRienzo, 294 F.3d at 31.
17
non conveniens determinations.”56 The decision whether to dismiss a case on the ground of forum
non conveniens lies predominantly within the discretion of the district court,57 which is obliged to
apply the governing legal standards and then to balance the various pertinent factors. In my view,
the balance of factors warrants dismissal. Defendants’ motions to dismiss [DI 44, 64, 73] are granted
to the extent that they seek dismissal on the ground of forum non conveniens and denied without
prejudice in all other respects. This dismissal is conditional upon the filing on behalf of all moving
defendants, on or before August 12, 2014, of a document tolling the running of time from the date
of commencement of this action until the thirtieth day after the date of such filing for purposes of
determining the timeliness of any action subsequently commenced by plaintiffs in the courts of
Ireland with respect to any of the matters asserted in the amended complaint. The plaintiffs’ motion
for a preliminary injunction [DI 28] is denied without prejudice.
SO ORDERED.
Dated:
July 29, 2014
56
First Union Nat’l Bank v. Paribas, 135 F. Supp. 2d 443, 448 (S.D.N.Y. 2001).
57
See, e.g., Iragorri, 274 F.3d at 72; Scottish Air Int’l, Inc. v. British Caledonian Group, PLC,
81 F.3d 1224, 1232 (2d Cir. 1996).
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?