Airflow Catalyst Systems, Inc., v. Huss Technologies GmbH,
Filing
14
DECISION AND ORDER denying 4 Motion to Dismiss. Defendant shall file and serve an answer to the Complaint within twenty days of the date of this Decision and Order.Signed by Hon. Charles J. Siragusa on 11/2/11. (KAP)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
AIRFLOW CATALYST SYSTEMS, INC.,
Plaintiffs,
DECISION AND ORDER
-v11-CV-6012 CJS
HUSS TECHNOLOGIES GmbH,
Defendants.
APPEARANCES
For Plaintiffs
David J. Edwards, Esq.
Harris Beach LLP
99 Garnsey Road
Pittsford, New York 14534
For Defendant:
Y. David Scharf, Esq.
Morrison Cohen, LLP
909 Third Avenue
New York, New York 10022
INTRODUCTION
This is an action for breach of contract, in which Plaintiff maintains that Defendant
sold it defective cement substrates for use in manufacturing catalytic converters. Now
before the Court is a motion to dismiss, for forum non conveniens, by Defendant, which is
headquartered in Germany.1 For the reasons that follow, the application is denied.
1
28 U.S.C. § 1404(a) replaced the com m on law doctrine of forum non conveniens with regard to
cases in which transfer to another United States District Court is sought, but not with regard to cases in which
the alternative forum is in a foreign country. Crosman Corp. v. Heckler & Koch, Inc., No. 08-CV-6034 (CJS),
2008 W L 4347528 at *3 (W .D.N.Y. Sep. 17, 2008).
BACKGROUND
The following facts are taken from the Complaint, declarations, affidavits, and exhibits
presently before the Court.2 Plaintiff manufactures diesel catalytic converters, and is a
Delaware Corporation with its corporate office in Rochester, New York, and a manufacturing
facility in Wayland, New York. Plaintiff has fourteen (14) employees at its manufacturing
facility. Affidavit of Thomas Roberts [#7-1] (“Roberts Aff.”), ¶ 2. Defendant makes cement
substrates used in manufacturing catalytic converters, and is a German company with its
main offices located in Nuremberg, Germany. Defendant employs sales staff in the United
States, and maintains offices in Palm Desert, California, and Hartland, Michigan. Plaintiff
does not maintain staff or offices outside of the United States.
In August 2009, Plaintiff’s Product Development Manager, Thomas Roberts
(“Roberts”), attended a trade conference in Dearborn, Michigan, where Defendant had a
sales booth manned by its Sales Manager, Alan Pittel (“Pittel”). Pittel provided Roberts with
sales materials concerning Defendant’s products. In November 2009, Pittel traveled to
Rochester to make a sales presentation to Plaintiff. Some of Defendant’s other staff in
Germany participated in the presentation by conference call.3 Roberts Aff. ¶ ¶ 4-5.
Subsequently, at Plaintiff’s request, Defendant sent a sample of its product to Plaintiff in
2
In ruling upon a m otion to dism iss for forum non conveniens, the Court m ay consider the pleadings,
affidavits, and exhibits. See, Kitaru Innovations, Inc. v. Chandaria, 698 F.Supp.2d 386, 389 (S.D.N.Y. 2010)
(“In considering Defendants' m otion to dism iss on . . . forum non conveniens grounds, this Court m ay
consider affidavits, affirm ations and exhibits subm itted in connection with the m otion.”) (citation om itted).
3
Defendant identifies the two Germ an em ployees as Dr. HansJoerg Rem bor and Stephen Hess.
Holdschuh Reply Aff. at ¶ 7. Defendant downplays Pittel’s involvem ent in the negotiations, since he
purportedly was “only a sales representative” and not involved in the design or m anufacture of the substrates,
while indicating that com pany representatives in Germ any “had direct telephone contact with Airflow
representatives with respect to the parties’ negotiations.” Holdschuh Reply Aff. at
2
¶ ¶ 5-7
Rochester. In February 2010, Defendant sent additional product samples to Plaintiff. In
March 2010, Roberts traveled to Germany, where he met with Defendant’s representatives.
Roberts Aff. at ¶ 10. In July 2010, Pittel sent Plaintiff a sales proposal and proposed
contract, which Plaintiff accepted. In that regard, Plaintiff’s representatives signed the
contract in Rochester and forwarded it to Michigan, where Pittel apparently signed it.
Affidavit of Steffanie LaBarr (“LaBarr Aff.”) at ¶ 5; see also, Affidavit of Claus Holdschuh
(“Holdschuh Aff.”) at ¶ 6 & Ex. 2. The contract, which called for Plaintiff to buy 121 catalytic
converter substrates4 from Defendant, included an international trade term, “EXW,” whereby
Defendant arranged for shipment to Plaintiff in Wayland, New York,5 and Plaintiff paid the
shipping cost. The contract did not include a forum selection clause or choice of law
provision.
The contract did include a warranty provision, indicating that Defendant’s
products would be free from defects “as shipped and packaged at” Defendant’s facility in
Germany, and that Defendant warranted the product from twelve months from time of
delivery. As per the contract, Plaintiff made payment by wire transfer to Defendant’s bank
in Germany. Defendant shipped seventy-two of the substrates to Plaintiff, but Plaintiff
determined that they did not meet the required specifications. Roberts Aff. at ¶ 16.6
On November 10, 2010, Plaintiff commenced this action in New York State Supreme
Court, Monroe County. The Complaint asserts claims for breach of contract, and breach
4
Plaintiff planned to use the substrates to m anufacture catalytic converters for a client in Norway.
5
According to Plaintiff, “Huss was responsible for arranging transit to the United States (via its norm al
shipping agent), while AirFlow was obligated to pay for shipping as an expense not included in the cost of
m anufacture.” Pl. Mem o of Law [#7] at 4.
6
Plaintiff m aintains that the substrates crack when heated, due to the presence of a contam inant
called cristobalite in the cem ent used to m ake them . See, Affidavit of Dr. Licio Pennisi.
3
of express and implied warranties. On December 14, 2010, Plaintiff served the Summons
and Complaint on Alan Pittel, the Sales Manager at Defendant’s office in Hartland, Michigan.
On December 15, 2010, Plaintiff served the Summons and Complaint on Phil Surma, the
Managing Director at Defendant’s office in Palm Desert, California. On January 11, 2011,
Defendant removed the action to this Court, on the basis of diversity jurisdiction.
On February 28, 2011, Defendant filed the subject motion to dismiss for forum non
conveniens. Defendant maintains that the following facts support its application: 1)
Defendant is located in Germany, and it manufactured and shipped the subject product in
Germany; 2) Roberts traveled to Germany prior to executing the contract; 3) pursuant to the
contract, purchase orders were to be emailed to Defendant in Germany; 4) payment was
made through a German bank; 5) three of Defendant’s anticipated witnesses are located in
Germany; 6) some of the unshipped product remains in Germany; 7) German law should
apply to this dispute; and 8) judgments are executed in Germany through a separate court
proceeding, and there is a possibility that a German court might refuse to enforce a
judgment against Defendant, if it is found that this Court did not have jurisdiction.7
On October 27, 2011, counsel for the parties appeared before the undersigned for
oral argument.
DISCUSSION
The legal principles to be applied on a motion to dismiss for forum non conveniens
are well settled:
7
As discussed further below, on this last point, Defendant relies on an affidavit from Dr. Friedhelm
Nickel, a Germ an lawyer who is apparently a m em ber of the sam e law firm which attem pted to collect the
outstanding contract balance from Plaintiff. See, LaBarr Aff. at Ex. H.
4
Forum non conveniens is a discretionary device permitting a court in rare
instances to dismiss a claim even if the court is a permissible venue with
proper jurisdiction over the claim. The doctrine authorizes courts to dismiss
cases where an alternative forum has jurisdiction to hear the case, and when
trial in the chosen forum would establish oppressiveness and vexation to a
defendant out of all proportion to plaintiff's convenience. Courts may decline
to exercise jurisdiction under this doctrine when it is determined that, weighing
relative advantages and obstacles to fair trial in the alternative fora, and the
practical considerations of which forum will make trial of a case more easy,
expeditious and inexpensive, the balance is strongly in favor of the
defendant's request for dismissal in favor of a more convenient forum.
In deciding whether to dismiss for forum non conveniens, courts in this Circuit
undertake a three-step analysis. First, courts determine the degree of
deference due the plaintiff's choice of forum. Second, courts examine whether
there is an adequate alternative forum for the dispute. Third, courts engage
in a balanced assessment of the competing private interests of the parties in
the choice of forum, and the public interests of the alternative fora under
consideration. Throughout this analysis, the defendant bears the burden of
showing that each step tilts strongly in favor of trial in the foreign forum. The
action should be dismissed only if the chosen forum is shown to be genuinely
inconvenient and the selected forum significantly preferable.
1. The Degree of Deference Accorded a Plaintiff's 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. However, the strength of this
presumption, and the degree of deference due the plaintiff's selection, varies
with the circumstances. The degree of deference to be accorded the plaintiff's
choice of forum is not determinative of the final outcome; rather, it merely
re-calibrates the scales for the remaining two steps of the analysis. The
greater the degree of deference to which the plaintiff's choice of forum is
entitled, the stronger a showing of inconvenience the defendant must make
to prevail in securing forum non conveniens dismissal. Conversely, where
less deference is due, 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.
5
A plaintiff's choice of forum is generally entitled to great deference when the
plaintiff has sued in the plaintiff's home forum. The reason great deference
is generally afforded a plaintiff's choice of its home forum is because it is
presumed to be convenient. By contrast, the choice of a United States forum
by a foreign plaintiff is entitled to less deference, for the presumption that the
choice is convenient is much less reasonable.
Courts must also consider whether the plaintiff's choice of forum appears to
be motivated by desire to impose tactical disadvantage on the defendant.
Additionally, where indicia of forum shopping are present, the presumption in
favor of the plaintiff's choice of forum may not apply, either at all or with full
force. Indicia of forum shopping may include: attempts to win a tactical
advantage resulting from local laws that favor the plaintiff's case and the
inconvenience and expense to the defendant resulting from litigation in that
forum.
2. Adequacy of the Alternate Forum
After determining the appropriate degree of deference to accord plaintiff's
choice, the court must consider whether an adequate alternative forum exists.
The movant bears the burden to demonstrate the adequacy of the alternate
forum. Ordinarily, this requirement will be satisfied when the defendant is
amenable to process in the other jurisdiction. In rare circumstances, however,
where the remedy offered by the other forum is clearly unsatisfactory, the
other forum may not be an adequate alternative, and the initial requirement
may not be satisfied. The mere fact that the substantive law in the alternative
forum is less favorable to the plaintiffs is not sufficient to show that the
alternative forum is inadequate. However, proposed alternative fora have
been ruled inadequate where the alternative forum does not permit litigation
of the subject matter of the dispute, and where a statute of limitations bars the
bringing of a case in a foreign forum that would be timely in the United States.
However, it is the plaintiff that carries the burden of proof when contesting the
adequacy of the alternate forum on the basis that the court system is corrupt
or inefficient, because considerations of comity preclude a court from
adversely judging the quality of a foreign justice system absent a showing of
inadequate procedural safeguards. Courts are reluctant to assume the
responsibility for supervising the integrity of the judicial system of another
6
sovereign nation. Consequently, the ‘alternative forum is too corrupt to be
adequate’ argument does not enjoy a particularly impressive track record.
***
3. Balancing Public and Private Factors
With respect to the third stage of a forum non conveniens analysis, the first set
of factors courts must consider are the relative conveniences to the parties of
litigating in plaintiff's chosen forum or in the alternative forum proposed by
defendant. These factors encompass: the relative ease of access to sources
of proof; availability of compulsory process for attendance of unwilling
witnesses, and the cost of obtaining attendance of willing witnesses and all
other practical problems that make trial of a case easy, expeditious and
inexpensive. In undertaking this analysis, courts should examine the specifics
of the claims: rather than simply characterizing the case as one in negligence,
contract, or some other area of law, the court should focus on the precise
issues that are likely to be actually tried. However, courts need not undertake
to identify all the rights, remedies, and procedures available under the law that
would be applied in each forum.
The second set of factors courts must balance are those of public
convenience. Public interest factors include: court congestion; the interest of
forums in having local disputes decided at home; and, the interest in having
issues of law decided by courts of the nation whose law is involved.
In re Ski Train Fire in Kaprun Austria on November 11, 2000, 499 F.Supp.2d 437, 441-444
(S.D.N.Y.2007) (emphasis added, citations, footnotes and internal quotation marks omitted),
aff’d sub nom Geier v. Omniglow Corp., 357 Fed.Appx. 377 (2d Cir. 2009), cert den. 131
S.Ct. 1491 (2011).
Significantly, “[w]hen an American citizen residing in the United States sues foreign
defendants, the entire United States—rather than the particular state in which the plaintiff
resides—is considered the home forum for the purposes of a forum non conveniens
analysis.” Constellation Energy Commodities Group Inc. v. Transfield ER Cape Ltd., No. 10
7
Civ. 4434(SHS), 2011 WL 3251803 at *3 (S.D.N.Y. Jul. 29, 2011) (citing Guidi v. InterContinental Hotels Corp., 224 F.3d 142, 146 n. 4 (2d Cir. 2000), other citations omitted).
Plaintiff’s Choice of Forum Is Entitled to Great Deference
Ordinarily, a plaintiff’s choice of forum is entitled to a great amount of deference,
where, as in the instant case, he sues in his home forum, and where there is no indication
that his choice involved forum shopping or an attempt to gain an improper tactical
advantage. However, in this case Defendant maintains that Plaintiff’s choice should receive
less deference, since Plaintiff is a “corporation which chose to do business abroad.” For
support, Defendant cites various cases, including Carey v. Bayerische Hypo-Und
Vereinsbank AG, 370 F.3d 234 (2d Cir. 2004) (“Carey”), Cortec Corp. v. Erste Bank Ber
Oesterreichischen Sparkassen AG, 535 F.Supp.2d 403 (S.D.N.Y. 2008) (“Cortec”), and First
Union Nat. Bank v. Paribas, 135 F.Supp.2d 443 (S.D.N.Y. 2001). In general, though, those
cases are factually inapposite. For example, in Carey, the Court declined to give strong
deference to the Plaintiff’s choice of forum in the United States, because although she was
a U.S. citizen, she was suing concerning a mortgage loan which she had taken out in
Germany while she was living and working in Germany. See, Carey, 370 F.3d at 238.
Similarly, the facts of the Cortec case are completely dissimilar from this one. See, Cortec,
535 F.Supp.2d at 405 (“Underlying this action is a lawsuit between an affiliate or subsidiary
of plaintiff and an affiliate or subsidiary of defendant concerning a loan that has been
recalled. That lawsuit is being litigated in Croatia, where the loan was executed and where
both subsidiaries reside and do business. Now, however, the parents are getting involved;
and they have brought this all-Croatian fight more than 4000 miles, to New York City.
8
Neither Plaintiff nor Defendant has any contact with this forum, and the matters in suit did
not take place here, either.”)8
Nonetheless, in Guidi v. Inter-Continental Hotels Corp., 224 F.3d 142, 147 (2d Cir.
2000) (“Guidi”), the Second Circuit referred, as part of its forum non conveniens analysis,
to “a corporation doing business abroad and [which] can expect to litigate in foreign courts,”
and indicated that “courts partially discount citizenship when plaintiff does extensive foreign
business.” (emphasis added). Four years after Guidi, the Second Circuit issued the Carey
decision, which Defendant cites. In Carey, the Second Circuit seemingly explained its earlier
statement in Guidi, stating:
For an individual of modest means, the obligation to litigate in a foreign
country is likely to represent a considerably greater obstacle than for a large
business organization – especially one maintaining a business presence in
foreign countries. For this reason, such an individual’s choice of the home
forum may receive greater deference than the similar choice made by a large
organization which can easily handle the difficulties of engaging in litigation
abroad.
Carey, 370 F.3d at 238 (emphasis added). Consequently, it appears that when conducting
a forum non conveniens analysis, the forum choice of a corporation, which is large enough
that it can easily handle the difficulties of litigating abroad, and especially if it maintains a
presence in foreign countries, is entitled to less deference than a forum choice made by
individual of modest means. However, the Court does not understand the Second Circuit
to have indicated that every corporation which does business abroad, no matter how limited,
8
The Cortec decision indicates that less deference is given to a plaintiff’s chosen forum when the suit
does not involve a tort, see, ICC Industries Inc. v. Israel Discount Bank, Ltd., 170 Fed. Appx. 766, 767 (2d Cir.
Mar. 16, 2006), but this point does not appreciably change the Court’s view that Plaintiff’s choice in this case
is entitled to relatively strong deference.
9
is entitled to reduced deference in its choice of forum.9 Here, the record indicates that
Plaintiff is a corporation which has engaged in exactly two foreign deals: 1) a contract to buy
substrates from a German company solicited by the German company’s U.S. sales
representative; and 2) a contract to sell a limited number of catalytic converters to a
company in Norway. The record further indicates that Plaintiff’s manufacturing plant
employs just fourteen workers. Accordingly, the Court does not view Plaintiff as “a large
organization which can easily handle the difficulties of engaging in litigation abroad.”
Therefore, the Court does not agree with Defendant’s contention that Plaintiff “is not entitled
to much if any deference for its choice of forum.” Def. Reply Memo of Law at p. 4. Instead,
the Court finds that Plaintiff’s choice of forum is entitled to a substantial amount of
deference, similar or perhaps only slightly less than that which is usually given to an
individual U.S. citizen who sues in his home forum.
Germany Is An Adequate Alternate Forum
There does not appear to be any reason why Germany would not be an adequate
forum to resolve this dispute. In that regard, it appears that Defendant is subject to being
sued in Germany, and that the German courts are capable of handling the matter. Plaintiff
does not dispute that Germany is an adequate forum. At most, Plaintiff maintains that
Defendant has not made a sufficient showing that Germany is an adequate alternative
forum, since the proof that it initially submitted on this point consists of unsworn letters from
9
Defendant, while acknowledging that the deference due to a plaintiff’s choice of forum is analyzed
using a sliding scale, nevertheless m aintains, essentially, that any corporation doing business abroad should
be given less deference. Defendant does not argue that Plaintiff is “a large organization” nor does it attem pt
to quantify Plaintiff’s financial resources or the am ount of business that Plaintiff does abroad.
10
a German lawyer who apparently represents Defendant.10 However, Defendant has now
resubmitted that information in the form of a sworn affidavit. Therefore, the Court finds, for
purposes of this analysis, that Germany would be an adequate alternative forum.
The Public and Private Factors Do Not Strongly Favor Defendant
With regard to the public factors identified above, Defendant maintains that three are
relevant here: 1) the interest in avoiding problems of applying foreign law; 2) the interest in
having disputes decided locally; and 3) the interest in avoiding burdening jurors with cases
that do not affect their community. In connection with these points, Defendant maintains
that German law must be applied to the parties’ dispute, regardless of where it is litigated,
and that the “conduct at issue” in the case took place in Germany, and that accordingly, U.S.
jurors should not be burdened with the case. The Court, though, disagrees with each of
these points.
At the outset, it appears that U.S. law would likely apply to this dispute.11 New York’s
choice of law rules, which the parties agree control, are well settled. Specifically,
[t]he New York Court of Appeals has held, in contract cases, that the “center
of gravity” or “grouping of contacts” analysis is to be applied in choice of law
situations. [In re Allstate Ins. Co. (Stolarz)], 81 N.Y.2d [219,] 226, 597
N.Y.S.2d 904, 613 N.E.2d 936 (1993). The “center of gravity” or “grouping of
contacts” choice of law theory allows a court to consider a “spectrum of
significant contacts.” Stolarz, 81 N.Y.2d at 225-26, 597 N.Y.S.2d 904, 613
N.E.2d 936. In Stolarz, the New York Court of Appeals listed several factors
10
The Germ an lawyer, Dr. Friedhelm Nickel, generally describes the procedures followed in the
Germ an court system , and indicates that this case could be adjudicated there.
11
Moreover, even where a case will involve the application of foreign law, this factor alone does not
require dism issal under the doctrine of forum non conveniens. See, Peregrine Myanmar Ltd. v. Segal, 89 F.3d
41, 47 (2d Cir. 1996) (“[I]t is well-established that the need to apply foreign law is not alone sufficient to
dism iss under the doctrine of forum non conveniens.”) (citation om itted).
11
which should be considered in a conflict of law analysis in a contract case.
These factors include “the place of contracting, negotiation and performance;
the location of the subject matter of the contract; and the domicile of the
contracting parties.” Id. at 227, 597 N.Y.S.2d 904, 613 N.E.2d 936 (citing
Restatement (Second) of Conflict of Laws, § 188(2) (1971)).
Beth Israel Medical Center v. Horizon Blue Cross and Blue Shield of New Jersey, Inc., 448
F.3d 573, 583 (2d Cir. 2006). Considering the last of these factors first, the domicile of the
parties does not strongly favor either party. Similarly, the location of the subject matter of
the contract does not favor either party, since half of the substrates are now in the U.S., and
half remain in Germany.
As for where the contract was performed, the Court finds that it was performed in both
the U.S. and Germany, since Defendant manufactured the substrates in Germany and
shipped them to the U.S., and Plaintiff made payment in the U.S. via an electronic transfer
to a bank in Germany. However, Defendant contends that it performed entirely in Germany,
for two reasons. First, Defendant argues that the substrates were made there, and second,
Defendant argues that the contract indicated that the substrates were being sold “EXW,” a
term utilized by the International Chamber of Commerce, meaning that the seller delivers
the product when he places that goods at the buyer’s disposal at the sellers’ premises,
which in this case was Germany. See, NML Capital, Ltd. v. Republic of Argentina, 2011 WL
1533072 at *4 (S.D.N.Y. Apr. 22, 2011); see also, Nickel Reply Aff. at ¶ ¶ 26-35. The actual
terms of the contract, though, indicate that Defendant’s performance under the contract
does not end with making the substrates available at its manufacturing plant. Instead, the
contract indicates Defendant will deliver the product to Plaintiff in the U.S. See, Contract [#47] at 2 (“These filters are to be delivered to Wayland, New York.”); id. (“Quoted prices are
12
EXW Huss Technologies GmbH Grossroehrsdorf]”); id. (“Shipment to arrive in Wayland,
New York, USA.”); id. at 3 (“Quoted delivery times are subject to manufacturing capacity and
may change accordingly. Ocean freight would be the standard method of delivery.
Airfreight is an alternative, if needed to meet expedited timing.”). Consequently, as the
contract indicates, “EXW” appears to be a “pricing” term, meaning that Defendant was not
responsible for taxes or the cost of shipping. See, Contract [#4-7] at 2 (“Quoted prices are
EXW Huss Technologies GmbH Grossroehrsdorf]”).
As for the remaining Stolarz factors, the Court finds that they favor application of New
York law, since the contract was executed here, and also largely negotiated here. In that
regard, as noted earlier the contract was signed by Pittel and Roberts in the U.S. Moreover,
the contract came about because Defendant employed sales staff in the United States,
including Pittel, who maintained a sales booth at a trade event in Michigan, presumably for
the purpose of soliciting business from U.S. companies. Moreover, Pittel later traveled to
Rochester to makes a sales presentation, and directed various communications to Plaintiff
by telephone and email.
Defendant maintains, though, that certain of Defendant’s
employees in Germany also participated in telephone calls with Plaintiff’s staff, and that their
participation was necessary because Pittel does not have technical expertise concerning the
manufacturing of the substrates. Defendant also points out that Roberts made a trip to
Defendant’s offices in Germany as part of the negotiation process. Nevertheless, the Court
finds that the contract was primarily negotiated in the U.S. Accordingly, based on the Stolarz
factors, the Court finds that New York law would apply to the parties’ contract dispute.
Moreover, the case obviously has a significant connection to the U.S. and to the State of
13
New York, since it involves a U.S. corporation doing business here. Based on all of the
foregoing, the Court finds that the public factors cited by Defendant do not strongly favor
dismissal.
As for the private factors, Defendant maintains that the following are relevant: 1) the
relative ease of access to sources of proof; 2) the cost for witnesses to attend trial; and 3)
the enforceability of a judgment if one is obtained. Def. Memo of Law [#4-1] at 11.
Defendant contends that the first of these factors favors Germany, since Defendant’s
records concerning the substrates, as well as the unshipped substrates, are located there.
Defendant states that the second factor also favors Germany, since most of its witnesses,
except for Pittel, are located there. Defendant further contends that the third factor favors
Germany, since even assuming that Plaintiff obtains a judgment against Defendant in the
U.S., Plaintiff will still have to commence a separate action in Germany to enforce the
judgment, and there is a chance that a German court would not enforce this Court’s
judgment.
As for the first two of these factors, the Court finds that they do not strongly favor
Defendant, since Plaintiff’s documents and witnesses are located here. The Court similarly
finds that Defendant has not made a strong showing on the last factor that it cites. On this
point, Defendant merely indicates that there is a risk that a German court might not enforce
this Court’s judgment if it determined that “a German Court already had jurisdiction under
private international law,” and in that regard, explains that the various factors which would
affect such a determination are found in the German Civil Code, ZPO § 328. See, Nickel
Reply Aff. [#10] at ¶ ¶ 41-45. More specifically, Defendant appears to maintain that under
14
international law applicable to this transaction, a German court would find, based on the
“EXW” term in the contract, that jurisdiction should be in Germany, since that is where
Defendant fulfilled the contract. See, Nickel, Aff. [#10] at ¶ ¶ 35, 37-38.
However, as
discussed above, it appears that Defendant’s performance under the contract did not end
in Germany, and that “EXW” was primarily a pricing term. Moreover, Defendant does not
offer an opinion concerning the actual likelihood of a German court refusing to enforce a
judgment.12 See, Nickel Aff. [#10] at ¶ 3 (“[T]here is a possibility that any judgment obtained
12
The Court is not at all fam iliar with Germ an law. However, the Court’s own research on this issue
suggests that Germ an courts m ight not enforce a judgm ent from this Court if Defendant does not own property
in New York State, or if this Court’s personal jurisdiction is based on long-arm jurisdiction, which Germ an
courts apparently do not recognize. See, John R. Schm ertz & Mike Meier, Supreme Court of German Land
Denies Enforcement of W isconsin Judgment Because, According to German Rules, W isconsin Federal Court
Lacked Jurisdiction Over Any Assets Belonging to German Defendant, 4 Int’l L. Update 29 (1998)
(“Enforcem ent of a foreign judgm ent is im perm issible if the courts of the foreign state, under Germ an rules,
did not have jurisdiction. Under ZPO Rule 23, only a state where the defendant had assets may acquire
jurisdiction over the defendant. The G erm an defendant, however, has never had any assets in W isconsin.
Even though som e com m entators argue that, in countries with various legal system s such as the U.S., the
relationship to the “country as a whole” should be decisive, the Germ an Court looks only to the law of the
individual state whose courts rendered the initial judgm ent.”) (em phasis added); see also, Dennis Cam pbell
& Dharm endra Popat, Enforcing American Money Judgments in the United Kingdom and Germany, 18 S. Ill.
U. L.J. 517, 537 (1994) (“The relevant statute for enforcing Am erican judgm ents is the Germ an Code of Civil
Procedure (the ZivilprozeBordnung), Sections 328, 722, and 733. Section 328 deals with general recognition,
while Sections 722 and 733 deal with regulating the procedure for the enforcem ent of foreign judgm ents.”)
(footnote om itted); see also, id. at 540-541 (“Under ZPO, Section 328, Paragraph 1, Num ber 1, recognition
of a foreign judgm ent will be barred where the foreign court had no jurisdiction over the case adjudicated upon
according to Germ an law. . . . The Germ an courts appraise whether criteria upon which jurisdiction is based
exist in order to support jurisdiction for a Germ an court. It is unlikely that the jurisdictional requirem ents will
create m uch of a problem for Am erican judgm ents, because Germ an jurisdictional requirem ents tend to be
less rigorous than those of the United States. However, arguments are forwarded suggesting that, due to the
numerous and limitless number of jurisdictions in the United States, American judgments regularly result in
recognition being denied if the defendant has no property in the forum state.”) (em phasis added, footnotes
om itted); Otto Sandrock & Matthias K. Hentzen, Enforcing Foreign Arbitral Awards in the Federal Republic
of Germany: The Example of a United States Award, 2 Transnat'l Law. 49, 78 (1989) (“[I]t m ust be stressed
here that a judgm ent issued in New York under som e kind of transient jurisdiction, or under a long arm statute,
is unlikely to be judicially recognized in W est Germ any.”) (em phasis added, footnote om itted); Alexander
Reus, Judicial Discretion: A Comparative View of the Doctrine of Forum Non Conveniens in the United States,
the United Kingdom, and Germany, 16 Loy. L.A. Int'l & Com p. L.J. 455, 509 (1994) (“Despite the contentions
of the doctrine's proponents, no such excessive jurisdictions are generally perm itted under Germ an law as
they are under U.S. law through the ‘transient rule,’ ‘long-arm statutes,’ or ‘m inim um contacts.’) (em phasis
added). However, the Court’s research is not conclusive, and the parties have not briefed these issues.
15
by Airflow against Huss in U.S. courts would not be enforced against Huss by German
courts.”) Accordingly, while there is a possibility that a German court might not enforce any
judgment which this Court issues, Defendant has not made a strong showing that this factor
warrants dismissing the case.13
CONCLUSION
Defendant’s motion to dismiss for forum non conveniens [#4] is denied. Defendant
shall file and serve an answer to the Complaint within twenty days of the date of this
Decision and Order.
SO ORDERED.
Dated:
November 2, 2011
Rochester, New York
ENTER:
/s/ Charles J. Siragusa
CHARLES J. SIRAGUSA
United States District Judge
13
Defendant’s argum ent on this point assum es that Plaintiff would attem pt to execute such a judgm ent
in Germ any, as opposed to attem pting to satisfy it from Defendant’s assets in the United States. At oral
argum ent, Defendant’s counsel indicated that Defendant m ay not have sufficient assets in this country to
satisfy a judgm ent in Plaintiff’s favor, but the Court does not have any evidence before it on this point.
16
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