LOUISIANA-PACIFIC CORPORATION et al v. AKZO NOBEL COATINGS, INC. et al
Filing
59
MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE JOE L. WEBSTER signed on 2/7/2014. Defendants have satisfied their burden to demonstrate that the Canadian forum is substantially more convenient. Therefore, this Court RECO MMENDS that the motion to dismiss pursuant to the doctrine of forum non conveniens (Docket Entry 26 ) be GRANTED and the action be DISMISSED, without prejudice to refilling in Canada. Further RECOMMENDING that, in the event the Court adopts this Recommendation, Defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(2) (Docket Entry 24 ) be DENIED AS MOOT. (Daniel, J)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CA,ROLINA
LOU
IÂN,4.-P,{.CIFI C
CORPORATION and LOUISIANAI
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S
PACIFIC CANADA LTD.,
Plaintiffs,
V
AKZO NOBE.L COATINGS, INC.,
LLC, AKZO NOBEL COATINGS,
LTD. andJOHN DOES 1-10,
Defendants.
1,:1,2CY625
MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This matter is before the court on Defendants' motion to dismiss fot lack of personal
jurisdiction pursuant to Federal Rule
of Civil Procedure 12þ)Q) (Docket E.rtty 24) and
motion to dismiss on the gtounds of þrurz
non conueniens.
(Docket Etrtry 26.) Platntiffs have
fìled responses in opposition to the motions. (Docket Entries 32,33.) On Decembet 18,
2013, a hearing was held regarding Defendants' motions. The matter was taken under
advisement. For the following reasons, the coutt will recommend that Defendants'motion
to dismiss on the grounds of þraru
I.
non conueniensbe granted.
FACTUAL BACKGROUND
The Complaint identifies Louisiana-Paciftc Cotporation ("Louisiana-Paciftc") as a United
States-based company
employees in
with facilities in Roating River, North Carohna and having ovet
500
Notth Carolina. (Compl. fl 6, Docket Entry 4.) Louisia¡t-Paciftc CanadaLtd.
("LP Canada") is identified
as
a Canada-based entity that makes and sells ptefinished siding
and other similar products used
Coatings,
in the construction industry. Qd. n 7.) Âkzo Nobel
Inc. ("Akzo Nobel Coatings') is identified in the complaint as a
Delaware
corpotation with its principal place of business in Kentucky. (1d.1110.) Akzo Nobel ("Akzo
Nobel") is identified as a
foteþ entity; it is undisputed that it is a Canadian
with its headquattets and pdncipal place of business in Ontado.
Berthiaume,
I
(See
corpotation
Affidavit of Denis
3, Docket E.ttty 25-1,.)
This case adses out of the alleged premature fatlure of wood coating supplied by
Akzo Nobel to LP Canada. (Compl. IT 1-3; Wananty at
1.) LP
1., attached
to Berthiaume Aff., Ex.
Canada man:ufactutes and sells CanExel siding, a ptefìnished extetiot siding made
from compressed wood, fìber, resin and wax. (Compl.
II
5-8, 17-18.) Akzo Nobel began
manufactuting and suppþing coating for CanExel siding in the 1980s. In
200"1.,
after several
yeats of testing, a new custom dual resin coating ("CanExel Dual Resin M") was apptoved
by LP Canada fot use on its new hatdwood siding. The coatings supplied by Akzo Nobel
for use on CanExel siding were manufactued in Quebec, Canada. @etthiaume Aff. fl 4.)
In
2003,
LP
Canada and Akzo Nobel agreed
to a 1.5-year wartaLîty related to the
performance of the CanExel Dual Resin M coating on the hardwood CanExel siding. (Id.lt
12.) The warcanty was
entered into by the ¡wo Canadian companies and by its tetms is
govetned by the laws of Nova Scotia, Cznada. Qd.)
Ir
2007,
LP
Canada began
CanExel siding, which
it
to teceive an incteasing number of claims related to its
atttibuted to the Akzo Nobel coating. LP Canada advised Akzo
Nobel of the claims in 2008, and the companies wotked togethet to investigate the causes of
the inctease
in claims. Plaintiffs contend that they suffered injuries due to the ptemature
2
failing of the CanExel Dual Resin M coating as applied to LP Canada's CanExel siding in
Canada. On July 5, 2012, LP Canada, together with its United States affthate LouisianaPacific, filed this lawsuit in this district, asserting claims for (1) fraudulent inducement; (2)
bteach of express wananLy) (3) bteach of implied w^tra'nty of metchantability; (4) breach
of
implied w^n^nLy of fìtness for a paricular putpose; (5) bteach of contrâct; (6) declat^tory
judgment; and (7) violation of the North Carohna Unfait and Deceptive Trade Practices ,\ct
(UDTP¡,).
II.
DISCUSSION
Defendants have filed two motions, one a motion to dismiss pursuant
to Federal
Rule of Civil Procedure 12þ) Q) for lack of personal jurisdiction, and the second a motion to
dismiss pursuant
to the doctrine of þran
non conueniens. While Defendants have raised
jurisdictional issues in their Rule 12þ)(2) motion, the coutt will fìrst address ther forum
conueniens
motion. "r\ disffict court . . .
dismissal, bypassing questions
of
may dispose
non
of an action by a forurz non tvnueniens
personal judsdiction, when considetations of
convenience, fafuness, and judicial ecoflomy so warrant." Sinocltem Int'/ Co. u. Ma/a1sia Iat'/
S hþping
Corþ., 549 U.S. 422, 432 Q007).
A. Forzm Non Conueniens Genenlly
A paty seeking to dismiss a case fot þran
non conuenieur must show
that "the
alternative fotum is available to the plaintiff, that the altetnaive forum is adequate, and that
the alternative forum is mote convenient in light of the public and pnvate intetests
involved."
DiFrederico u. Marriolt Int'|., 1nc.,71,4 F.3d
796,799 (4th Cir. 201,3). In analyzing
such a claim, the Court must consider every m^terial factor and hold defendants to their
)
butden of petsuasion on all elements of the analysis. Galøstian u. Peter,591 F.3d 724,731.
(4th Cir. 201,0). The movingpatq, therefore, bears the burden of showing that an adequate
alternaive fotum exists. 1/.
B. Plaintiffs Choice of Fotum
Ordinarily a sttong favorable ptesumption is applied to a plainttf?s choice of forum.
"fU]nless the balance is stongly in favor of the defendant, the plaintiffs choice of forum
should rarely be distutbed." Galf Oil Corp. u. Gilbert,330 U.S. 501, 508 (1947). Flowevet,
whete the teal panies in interest are foreign corporations, the choice of a foteign forum is
not entitled to heightened deference.
See
Sinochem 549 U.S.
^t
430 ('lWhen the plaintiffs
choice is not its home forum, howevet, the ptesumption in the plaintiffs favor applies with
less
force. ."; Pþer Airraft
Co. u. Re1no,454 U.S. 235, 255-56, 261 (1981);
lYireless, Inc. u. paahomm, Inc.,7'1.
see also
CTE
F. Supp. 2d51,7,519 @,.D. Ya. 1,999) (noting that "when
a
plaintiff chooses a foreign forum and the cause of action bears little ot no relation to that
forum, the plaintifPs chosen venue is not entitled to such substantial weight.") (intemal
quotation omitted). 'Vlhere "the plaintiff has not chosen to bdng the case
in his home
country, the coutt need give little defetence to the plaintiffls choice of forum." Calastian,
591 F.3d
at732. One exception would be in a case where dismissal tnderforam non conueniens
may cause a pla:nlJ:ff
to "lose out completely, through the running of the statute of
limitations in the fotum fìnally deemed appropriate." In re Volkswagen of Am., Inc., 545 F.3d
304,3"1.3, n. 8 (5th
Cir.2008) (quoting Norwood
u.
Kirkpatrick,349 U.S. 29,31. (1955).
Hete, Defendants have agteed to waive any statute
negating one
of limitations defense,
thus
of the primary reasorìs for giving deference to a plaintiffls choice of forum.
4
Additionally, a review of the record indicates that the rcal paries in intetest hete are two
Canadian cotpotations,
LP
Canada and
.,\þo Nobel. Thetefote, in weighing the televant
factors, the Coutt gives "little deference" to Plaintiffs' choice of
Noth
Carohna as a fotum
fot this suit.
C. Applicatton of Forzm Non
Conaeniens
1,. Available Fotum
Defendants here argue thatCanadais an avallable alternative forum. A
foteþ forum
is "avatlable" "when the defendant is 'amenable to process' in the othet judsdiction." Pþer
Aircraft,454 U.S. at 255 n. 22 (quo:.jlng Gi/bert,330 U.S. at 506-07). In this case, at least one
plaintiff and one defendant are Ca¡adian corporations. Additionally, Defendants have
agreed
to submit to
service
of ptocess in Ca¡ada and to waive any statute of limitations
defense that might arise as a result
of te-filing in a Canadtan court. Thetefote,
Canada is
available as a potential forum.
2. Adequacy
"r\
foreign forum is adequate when '(1) all patties can come within that fotum's
jurisdiction, and Q) the patties will not be depdved of all remedies or treated unfairly, even
though they may not enioy the same benefìts as they might teceive in an American colrrt."
Jiali Tang
u. Slnatra Irut'l,
lnc.,656 F'.3d 242, 248 (4th Cit. 201,1) (quoting Fid. Ban,ë PLC
u.
N.
Fox Shþping N.V., 242 F. Âpp'* 84, 90 (4th Cir. 2007) (unpublished)) (internal quotation
matks omitted.) Flere, where nvo of the paties to the lawsuit are Canadian cotporations,
these patties can come within the judsdiction
of the
Canadian
coutts. As noted
Defendants have agreed to submit to submit to service of ptocess in Canada.
5
above,
lØhen a foreign fotum has jurisdiction, it is inadequate only "[i]n tare circumstances
. . . whete the remedy offeted by the other forum is cleatly unsatisfactory."
U.S. at 254 n.
PþerAirnaft,454
22. Plaintiffs contend that Canadtan courts ate inadequate
because they
ptovide diffetent dghts, remedies and procedures than Notth Carolina courts. This
argument has been tejected by coutts throughout this country.
SureTech Cornpletions
(USA) Inc., Civi, Action No. H-13-0492,
(S.D. Tex. June 10, 2013); DTEX,
I I C u. BBVA
Bancomer,
See, e.!., Lngau
201.3
WL
Int'l Inc. u.
3005592, at *3-4
5.A.,508 F.3d 785, 797 (5th Cu.
2001). .{dequacy does not require that the alternative fotum provide identical relief, eithet
substantive or procedural, as an r{.merican court.
See, e.g.,
Civil Action No. 2:1.3cv1,8, 201.3 WL 6705188,
x2 (8.D. Va. Dec.
Coutt has noted that a dismissal onþran
the law applicable
non conuenieøs grounds
u. Passcouery Co.,
1.9, 20'1,3).
"^uy
Ltd.,
The Supteme
be granted even though
in the altetnative fotum is less favorable to the plaintiffs chance of
recoverry." Pþer Aircraft,454 U.S. at 250;
Bosþ.alis Westminster
^t
ElcomSoft,Ltd.
see
also Cornpania Nauiera Joanna
SA
u. Koninkl/ke
N.V.,569 F'.3d 189,202-04 (4th Clr. 2009). "An inadequate forum based
on substantive law arises 'whete the altetnative forum does not permit litigation of the
subject llnatter of the dispute."' Compania Nauiera,569 F.3d at 205 (quoting Pþer Aircraft, 454
U.S. at 254 n.22).
Plaintiff argues that "Canadian courts would not be adequate fot adjudicating LP's
Notth
Carohna claims because LP would
not have the benefit of cdtical aspects of the
American legal system þecause] there is generally no dght to a civil
English fee-shifting applies, and discovery is limited." (Pl.'s Br. at
þry
1."1.,
:r.ial
in Canada,
Docket F,ntry
32.)
Flowever, as noted by another court, "[t]hat Plaintiffs recovery may be less in Canada than
6
it
would hope to recover hete does not rendet the Canadian court inadequate. Similatly, the
absence
of a right to ttial by i"ty does not render the Canadian court inadequate."
L,ogan
Int'l
Inc. u. / 556t11 Alberta Ltd., 929 F. Supp. 2d 625, 633 (S.D. Tex. 201.2) (intemal citation
omitted).
Defendants have presented affidavits of two Canadian lawyets indicating that Nova
Scotia and Quebec courts would have jurisdiction ovet these claims and would ptovide an
avallable and adequate fotum
for Plaintiffs to litigate their claims against Defendants. (See
Def.'s Reply, Exs. 4,5,.,\ff. of John P. Merdck, Docket Entty 42-4 and.,\ff. of Robert E.
Chatbonneau, Docket Entry 42-5). Moteover, Canadian law would likely apply
claims even
if they ate litigated in this country.
to
these
Undet the tetms of the w^rr^nty agteed
upon by the patties, any legal issues atising ftom the 'waLn^nÍy
^re
to be governed by the laws
of the Ptovince of Nova Scotia, Canada. By theit agreement to the teffis of this wàffanty,
LP
Canada acknowledged that Canadtan law ptovides adequate temedies and darnages
fot
claims adsing under thewananty. Moreover, the possibility that Canadtan law might differ
ftom the law applied in this forum is no basis fot find.ing Canadato be an inadequate fotum.
As the Supteme Court noted in Pþer Aiwaf| "if conclusive ot substantial weight wete given
to the possibility of a
change
in law, theþram
non conueniens
doctine would become vittually
useless" because the forum selected by a plaintiff will almost always be one in which the law
is mote advantageous than that
of
any alternative forums. PþerAirnaft,454 U.S. at250
Defendants have ptesented evidence that a Canadian forum allows Plaintiffs tedress
fot its claims.
Because Plaintiffs
"will not be depdved of all remedies" in
Canada, and
because "all patties can come within [Canada's] judsdiction," this Coutt finds that Canada is
7
both an avallable and an adequate alternative forum. Tang 656 F.3d at 248 (alteratton
ptovided) (quoting Fid. Bank PLC, 242 tr. App'" at 90 (unpublished) (intetnal quotations
marks omitted)).
3. Convenience
a. ltgal standard
The Court must next determine which forum is best suited for the litigation between
these parties. Because Canada "is both available and adequàte," the Coutt "must weigh the
public and private interest factors" televant to determining convenience. Tang 656 F'.3d at
249
b.
Pablic Factors
The public factors to be considered by the coutt
difficulties flowing ftom coutt congestion;"
are: (1) "the administtative
Ø "the local intetest in having locahzed
controversies decided at home;" (3) "the interest in having the ttial
of a diversity
case
in
a
forum that is at home with the law that must goverri the act)on;" (4) "the avoidance of
unrìecessary problems
unfairness
in conflict of laws, or in the application of foteign law;" and (5) "the
of butdening citizens in an unrelated forum with jury drty." Pþer Aircraft, 454
U.S. at 241 n.6 (quoting Gilbert,330 U.S.
^t
509 (intetnal quotation matks omitted)).
lØith tegard to the fìrst factor, thete is no evidence in the tecord as to docket
conditions in Canada compared to North Carohna. Therefore, this factot is neutral.
\ùØith tespect
to the second and third factors, the real parties in intetest in this matter
arc Canadian companies. ,{s a result, "home" for the purposes of this analysis ís Canada,
which clearly has a strong interest in adjudicating this dispute involving the manufactute, sale
8
and distdbution
Resin
M
of
allegedly defective products thtoughout Canada. The CanExel Dual
coating was marìufactured and sold
company. (Berthiaume Aff.
11
in
Canada
by Akzo Nobel, a Canadian
11.) The coating was then shipped from Quebec to Nova
Scotia, whete LP Canada's plant was located. Qd.) The CanExel siding was manufactuted
and the coating was applied in Canada by LP Canada.
(Id.)
Thete is no allegaton that any
North Carohna consumers wete injuted by the CanExel Dual Resin M coating.
Plaintiffs contend that,\kzo Nobel Coatings, the U.S.-based entity with facilities in
High Point,
Noth
Carohna, was involved
CanExel Dual Resin
in the development, research and testing of
M coating at its Noth Carolina faclhty. These
based on the affidavits of
the
allegations arc largely
Bill Camp, a former employee of LP Ca¡ada and David Ritter,
a
current Louisiana Pacific employee who tesides in Tennessee. (Docket Entty 34,35.) These
affidavits make many assettions about the intetnal workings of .,{.kzo Nobel which appear to
not be based on petsonal knowledge and are conclusory in natute. On the othet hand, the
affìdavits
of
Akzo Nobel employees and offìcers appear
process responsible for formulation of CanExel Dual Resin
of the Noth
Carohna facility
to more
accurately reflect the
M and the limited involvement
in its development.l North Catolina's minimal interest in
adjudicating this dispute which only tangentially involves this state is cleatly oulweighed by
the interests of Canada.
See
Tang 656 F'.3d at 252;
NLA
Diagnostics
Ll,C a. Theta Tecb. Ltd.,
No. 3:12CV00087, 2012 WL 3202274, *5 CX/.D.N.C. Aug. 3, 201.2). This factot
t
clearly
Fo, example, in his affidavit, Akzo Nobel's General Manager in Quebec acknowledges that Akzo
Nobel requested and considered data and advice from its U.S. affiliate which had othet dual tesin
coatìng systems. @erthiaume Aff. '1T 10.) Likewise, Akzo Nobel acknowledges that the coating was
applied to test fences at the High Point, Noth Czroltna facility of Akzo Nobel Coatings.
@erthiaume Supp. Âff. T 9, Docket Ertry 41-3.) Flowever, accotding to Berthiaume, "the number
of test fences in Quebec and Nova Scotia is significantly gteater than in Noth Caroltna." (Id.)
9
favors tdal
in Canada. Moreover,
w^rna;rtty as
as
outlined above, LP Canada and Akzo Nobel agreed to
a
to the coating's performance when applied to the siding, and the two companies
agreed that Nova Scotia law would apply.
Fourth, while not controlling, as noted, ttial in this district would necessadly involve
application of foteign law, as the parties agteed that Nova Scotia law would be controlling.
This concetn would obviously not be present in Canada.
"1.:09CY92,2009
ìøL
See, e.g.,
Il/olf u. Ztp.ca,lør., No.
1628887, at *3 (N4.D.N.C. June L0, 2009) ('-,\lthough this does not rule
out headng the case in North Carohna, the coutt would be applying
foreþ
laws in a dispute
involving the financial problems of a Canadtan baseball team. This mattet is best handled by
the courts in Ottawa. Accotdingly, the court will tecommend dismissal of the action on
-fo**
non cvnueniezr
Finally, the
gtounds."). This factor, therefore, favors dismissal.
fìfth factor, "the
unfairness of burdening citizens
in an unrelated fotum
with jury duty," weighs in favor of dismissal. This is, at its heart, a dispute between two
Canadia¡ companies tegarding activities that took place pdmadly
in
Canada. Jurots in this
district would have little or no relationship with this case. Thus, this factot also favors
dismissal.
c. Priuate Factors
The pdvate factors that the Court must considet for determining whether to dismiss
a case for forurn
"avallablltty
non conaenieør
of compulsory
include (1) "the relative ease of access to sources of ptoof; Q)
process
for attendance of unwilling, and the cost of obtaining
attendance of willing, witnesses;" (3) "the possibility of view of ptemises,
if view would be
appropriate to the action;" and (4) any "othet ptacttcal problems" that must be addtessed in
10
order to "make trial of a case easy, expeditious, and inexpensive." PþerAircraft,454 U.S. at
241,
n.6 (quoting Gilbert,330 U.S. at 509) (intemal quotation omitted).
The pdvate factors in this case favor dismissal. As noted by Defendants, because the
coating was developed, manufactured, and sold tn Canada, it appears that the vast maiotrtt¡
of relevant documents are maintained it Canada. (Berthiaume Âff.
11
20
)
Additionally,
a
significant riumber, indeed, a majoirty, of the witnesses identified by the paties at this eatly
stage are residents
of Canada. Plaintiffs
whom they identi$' as residing in
have identifìed 36 potential witnesses, only five
Noth
Caroltna.2 (Âff. of Shawn M. Raitet
of
fl 7, Docket
Entry 36.) Most telling, however, is that Plaintiffs' list fails to include neaÃy all the Canadian
residents identified
in their own Complaint and afftdavits submitted in
response
to
these
motions. Defendants, on the other hand, have identifted 2l individuals with involvement in,
and first-hand knowledge of, the mattets alleged in the Complaint. This list includes all
individuals named or identified
in Plaintiffs' Complaint.
(See
Berthiaume
Aff. J[fl 15-19;
Berthiaume Supp. Âff. TI 11, Docket Entries 27-1, and 42-1,.)
Plaintiffs challenge Defendants' claims that the documents and physical evidence in
this case are located in Canada. Howevet, Plaintiffs' arguments ate conclusory and genetally
not supported by the documents they cite. Moreover, as conceded by Plaintiffs, ctitical
documents (and witnesses) are located in both North Carcltna and Catada, and can easily be
accessed
in eithet fotum. (SeePl. Mem.
at'1,4-1,5,
Docket tr'ntry 32.)
Oth.t than identi!'ing the five witnesses who Plaintiffs contend teside in Noth Carolina,Raitet
simply lists names of other witnesses, with no substantive narcatfve as to who these witnesses are or
where they reside. S.aiter Aff. T 8.) The Court notes âs well that,\kzo Nobel avets that only three
of the five witnesses identified by LouisianaPactÍtc as Notth Caroltna tesidents do in fact live in
North Caroltna. (Aff. of Forest Flemingfl 11, Docket Entry 42-2;Berrhiaume Supp. r\ff.1[ 19,
Docket Entty 42-1.)
'
11
As for the availability of compulsory process, the majotity of the essential witnesses
live in Canada and most are no longer employed by the patties. These witnesses would be
outside this Court's compulsolT process, but
it
appears that most are Canadian tesidents. As
avened by CanadtzLî attoÍneys, the courts of Nova Scotia and Quebec have procedutes by
which they can compel a witness from anothet province to appear in its court to ptovide live
testìmony. (N4etdck Aff.
I
27; Charbonneau Aff.
I
1125-26.)
The cost of compelling attendance, moreover, weighs in favor
of ttial in
Canada.
While travel to North Caroltna from Canada would most likely cost the same as travel ftom
Canada
to Noth Catohna, it appears that there are significantly more witnesses in Canada
than in North Carohna.
Regarding the third factor, neither side has indicated that a ptemises view is necessary
in this case. Finally,
as
to other "practcal ptoblems" which would make tnal of this case
expeditious and less expensive, this Coutt finds that judicial economy favots trylng this case
in Canada,where most of the witnesses and cdtical documents are, and whete the undetþing
dispute in this matter truly took place.
The pdvate and public interest factors indicate that the Canadtan fotum is
substantially more convenient alternative. As a result, dismissal
a
of this lawsuit in favor of
refiling in Canada is apptoptiate.
III.
CONCLUSION
Defendants have satisfied their butden to demonsttate that the Canadian forum is
substantially mote convenient. Therefore, this Coutt RECOMMENDS that the motion to
dismiss pursuant to the doctrine of þrum non conueniezr (Docket Entry 26) be GRANTED
1,2
aîd the action be DISMISSED, without ptejudice to tefi,ling in Canada. IT
FURTHER RECOMMENDED that, in the event the Coutt adopts
Recommendation, Defendants' motion
@ocket E.rtry 24)be
to
dismiss pursuant
L
Sterer Irf¡gi stntc Judge
13
this
to Fed. R. Civ. P. 1'2þ)Q)
DENIED AS MOOT.
Durham, North Catohna
February 7,20'1.4
IS
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