Galley Schuler et al v. Rainforest Alliance, Inc. et al

Filing 67

OPINION AND ORDER granting 34 Motion for Judgment on the Pleadings. Signed by Chief Judge Christina Reiss on 2/11/2016. (law)

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
ALAIN PASCAL BERNARD GALLEY
SCHULER and JEAN CHRISTIAN
PHILIPPE GALLEY SCHULER,
Plaintiffs,
v.
RAINFOREST ALLIANCE, INC.,
Defendant.

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ZOI1i FEB II Pr1 lt: 21

Docket No.: 2:14-cv-226

OPINION AND ORDER GRANTING DEFENDANT'S RULE 12(c) MOTION
FOR JUDGMENT ON THE PLEADINGS WITH RESPECT TO PLAINTIFFS'
FIRST AMENDED COMPLAINT
(Doc. 34)
Pending before the court is a motion for judgment on the pleadings filed by
Defendant Rainforest Alliance, Inc. ("RA"). RA seeks judgment as a matter of law in its
favor on all claims set forth in the First Amended Complaint filed by Plaintiffs Alain
Pascal Bernard Galley Schuler and Jean Christian Philippe Galley Schuler (the
"Galleys"). The grounds for RA's motion are twofold. First, RA requests that the court
decline jurisdiction pursuant to the doctrine of international comity. Second, RA asks
that the Galleys' negligence, defamation, and slander of title claims be dismissed for
failure to state a claim.
The Galleys oppose the motion, arguing that international comity should not bar
this court's jurisdiction and asserting that they have alleged plausible claims for relief. In
adjudicating the pending motion, the Galleys have requested the court to take judicial
notice of thirteen exhibits which supplement or provide context for the factual allegations
set forth in their First Amended Complaint. Pursuant to an Entry Order Granting in Part
and Denying in Part Plaintiffs' Request for Judicial Notice dated February 10, 2016 (Doc.
66), the court took judicial notice of certain facts which are incorporated herein.

The court heard oral argument on RA's motion on October 13, 2015. Thereafter,
the court permitted supplemental briefing on the issues of whether this court is authorized
to determine title to real estate located in Mexico, whether all or some of the Galleys'
claims must be adjudicated in accordance with Mexican law, and whether this court
should take judicial notice of certain information submitted by the Galleys. This
supplemental briefing was completed on January 27, 2016.
RA is represented by RobertS. DiPalma, Esq. The Galleys are represented by
Ann L. Al-Bahish, Esq. and Thomas P. Aicher, Esq.

I.

The First Amended Complaint and RA's Answer.
A.

The Parties.
1

The Galleys are foreign nationals who, since 1992, have owned five contiguous
parcels, consisting of approximately 8,076 acres/3,268.41 hectares, in Campeche, Mexico
(the "Galley Property"). They allege that they "purchased this land for commercial
reasons and to gain economic benefit from the land" and that the deeds for the Galley
Property "are properly filed in the Public Registry of Property and Commerce in
Campeche, Mexico." (Doc. 22 at 4,

~

17.)

RA is a global nonprofit corporation which is registered to do business in Vermont
and which has its "Forestry Headquarters" in Richmond, Vermont. RA is accredited to
perform Forest Stewardship Council ("FSC") sustainability and certification analyses and
is in the business of providing landowners with independent certification services for
forestry operations and products. The Galleys allege that RA "is the leading certifier for
the FSC Forest Management Certification." Id.

at~

16. The Galleys further assert that,

at all relevant times, RA transacted business within the State of Vermont and published
the alleged defamatory statements here.
In addition to their claims against RA, the Galleys originally alleged claims
against Defendant Forest Stewardship Council-US, which is the trade name for a
nonprofit organization that does business in Vermont, and against Defendant U.S.
1

Through an assignment of her interest, the Galleys pursue claims on behalf of Anne Joelle
Viguier-Galley as well.

2

Working Group, Inc., which is a nonprofit organization that owns the Forest Stewardship
Council-US. The Galleys refer to these Defendants collectively as "FSC" and allege that
FSC "is a national office of the internationally headquartered Forest Stewardship
Council, A. C., which sets global standards for forest management and promotes the
marketing of certified products and products that come from certified forests." !d. at 2,
~

6. The Galleys allege that "FSC, together with related entities, directs and supervises

certifiers' application of the FSC standards" and "promotes entities that have received
FSC certifications and/or the right to use the FSC logo." !d. at 3, ~ 14. The Galleys have
voluntarily dismissed FSC without prejudice.

B.

The Mexican Land Dispute.

On or about April 13, 2003, non-party Agropecuaria Santa Genoveva, S.A.P.I. de
C.V. ("AGSA"), which owns property adjacent to the Galley Property, allegedly entered
the Galley Property without notice or permission and took possession and control of over
1,547.11 hectares (approximately 3,823 acres) (the "Disputed Parcel"). In response, on
April16, 2003, the Galleys filed two lawsuits in Mexico; one against AGSA and the
other against Consorcio Agroindustrial Guepell, S.A. de C.V. ("CAG") to recover
possession of the Disputed Parcel. The two lawsuits were consolidated into a single
action (the "Trespass Action").
On January 15, 2010, the Mexican trial court issued a decision in the Trespass
Action (the "2010 Order")? The 2010 Order concludes that the Galleys failed to prove
that CAG was in possession of the Disputed Parcel and that "the suit for recovery of
possession [by the Galleys] is declared inadmissible" and that "therefore, [CAG] is
acquitted of all compensation claimed by the plaintiff." (Doc. 36-17 at 14.)
With regard to AGSA, the 2010 Order provides in relevant part:
... we proceed to the study of the main action in this proceeding, taking
into consideration that the suit for recovery of possession is incumbent on
2

Both RA and the Galleys have submitted translations of the 2010 Order which vary in nonmaterial ways. For ease of reference and for purposes of adjudicating the pending motion, the
court has taken judicial notice of the Galleys' certified translation of the 2010 Order. (Doc. 3617.)

3

[the party] who does not have possession ofthe thing owned ... [to] prove:
a).- Ownership ofthe property in this suit; b).- Possession by the
respondent of the property pursued, and c).- Its identity, that is, there can
be no doubt as to the thing it is intended to recover and to which lawsuit
supporting documents make reference to, specifying location, area and
boundaries, facts demonstrated by any of the evidence acknowledged by
law. Once the elements in the suit for recovery of possession have been
identified, we will analyze each of them to determine whether the plaintiff
properly credited said elements. Regarding the FIRST ELEMENT
(ownership of that which is claimed), [the Galleys] ... are the owners of
the properties stated in their corresponding deeds .... However,
although with the aforementioned title deeds, the plaintiff certified as to
owning the property mentioned in said deeds, for the suit for recovery of
possession at issue, we should indicate that the respondent presented, as a
defense, the categorical denial of the alleged invasion of measurements of
which plaintiff complains, arguing completely opposite facts, as he states as
important argument, that there are flaws in the original title deeds covering
the areas of land claimed by the plaintiff, by virtue of which the plaintiff
omits the exact location of their properties, and that ... there is a
topographical surveying ... producing a surplus of 1,601-77-00 hectares, in
favor of [CAG] no document determines where the surplus is located, so
the question arises as to the property it is intended to recover possession of
in the suit, and also as to the authenticity of the lawsuit supporting
documents. As a preface, it should be noted that, as can be seen, there
are a number of contradictions between what is intended by the
plaintiff, based on his respective property titles, and what is opposed
by the respondent; and that given the magnitude of the area in
litigation, and the visible differences with respect to the exact location
to date of the land that was split up, its boundaries, adjacencies,
directions, among others, [more evidence is needed.]

***

[In light of the dispute, the parties offered expert evidence which is
described.] In accordance with said expert opinions it is appraised that it
was not possible to locate the areas that are covered by the property
titles exhibited by the plaintiff, due to the incongruity that, given the
directions the title deeds reveal, margins of error were found to exist
outside the angular and linear tolerance, errors affecting their areas,
perimeters and, hence, their geoll\etric shape, except for property Tucan
1.

***

[I]n this case, we have [the] property titles displayed by the plaintiff, in
their capacity of foundational property titles for the action for recovery of
4

possession, do not correspond to the area of land he claims the
respondent has in his possession.

***

In turn, regarding the property Tucan 1, ... [i]t can be seen ... that in no
way was the material occupation that is claimed against the
neighboring property shown[.] ... Under these circumstances, we have
that in the specific case of Tucan 1, the alleged possession by the
company named [AGSA] was not proven, as the second constituent
element of the suit for recovery of possession; it is therefore meaningless,
to initiate the study of these elements, with regard to the rest of the
properties claimed by the plaintiff[.]

***

For the reasons and legal considerations set forth, and by failing to
demonstrate the elements of the suit for recovery of possession, the
claim for recovery of possession is dismissed, the suit brought on by
[the Galleys] against [AGSA and others], and, therefore the respondent
is hereby absolved of all compensation claimed by the plaintiff.
!d. at 18-24 (emphasis supplied).
The Galleys allege that the 20 10 Order "proved that they were the owners of the
property stated in their deeds," (Doc. 22 at 5, ~ 23), but acknowledge that the Mexican
trial court found that the Galleys "had not met their burden t? prove all of the elements of
the Trespass Action." !d. at 6, ~ 24. The Galleys appealed the 2010 Order, which was
affirmed by a Mexican appellate court. They point out that although the Mexican courts
did not find they had title to the Disputed Parcel, those courts also did not affirmatively
find that AGSA owned it.
The Galleys allege that AGSA submitted to RA a "20 11 Mexico Court Order titled
'Amparo directo 48/2011 en materia civil"' (the "2011 Order") regarding the Disputed
Parcel, and that the "20 11 Order likewise did not hold that AGSA is the legal owner of
the [Disputed Parcel]" and that AGSA "wrongfully claimed that the Order proved that it
owned the [Disputed Parcel], and [RA] accepted that claim without performing any due
diligence to verify its veracity." !d. at 5-6,~~ 23-24.

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C.

RA 's Certification of the Disputed Parcel.

In 2006, AGSA initiated the process of obtaining FSC Forest Management
Certification ("FSC certification") from RA. On or about November 6, 2006, Plaintiff
Alain Pascal Bernard Galley Schuler notified RA and Forest Stewardship Council, A.C.
that he opposed FSC certification because AGSA's request for certification included the
Disputed Parcel and because AGSA's forestry operations did not comply with FSC
principles. Notwithstanding his objection, on or about August 28, 2009, RA issued its
first FSC Forest Management Certificate to AGSA for property AGSA purportedly
owned in Campeche, Mexico. This Certificate did not include the Disputed Parcel and
was valid for five years with annual audits. The Galleys do not identify any false or
defamatory statements in this initial FSC certification, which is available on FSC's
website.
FSC Principles and Criteria for Forest Stewardship ("FSC Principles") provide
that "[t]he goal ofFSC is to promote environmentally responsible, socially beneficial and
economically viable management of the world's forests, by establishing a worldwide
standard of recognized and respected Principles of Forest Stewardship." (Doc: 36-14 at
4.) "FSC and FSC-accredited certification organizations will not insist on perfection in
satisfying [FSC Principles]. However, major failures in any individual Principles will
normally disqualify a candidate from certification, or will lead to decertification." !d.
FSC Principles leave this determination to "individual certifiers[.]" !d. FSC Principles
further provide:
Appropriate mechanisms shall be employed to resolve disputes over tenure 3
claims and use rights. 4 The circumstances and status of any outstanding
disputes will be explicitly considered in the certification evaluation.
3

"Tenure" is defined as: "Socially defined agreements held by individuals or groups, recognized
by legal statutes or customary practice, regarding the 'bundle of rights and duties' of ownership,
holding, access and/or usage of a particular land unit or the associated resources there within
(such as individual trees, plant species, water, minerals, etc[.])." (Doc. 36-14 at 14.)
4

"Use Rights" are defined as: "Rights for the use of forest resources that can be defined by local
custom, mutual agreements, or prescribed by other entities holding access rights. These rights
may restrict the use of particular resources to specific levels of consumption or particular
harvesting techniques." !d.

6

Disputes of substantial magnitude involving a significant number of
interests will normally disqualify an operation from being certified.

!d. at 6.
In 2010 and 2011, RA conducted subsequent audits related to AGSA's FSC
Certification. The Galleys allege no false or defamatory statements in either of these
audits. In its 2012 audit, however, RA expanded the scope of AGSA's FSC Certification
to include the Disputed Parcel (the "2012 Audit'?). 5 The 2012 Audit states in relevant
part:
The certified area increased from 10,035.81 hectares to 11,584.90 hectares
because AGSA proved possession of 1,54 7.11 hectares that were in dispute
with its neighbors and which AGSA lawfully owns. The change in the
certified area is due to the inclusion of planted areas plus roads.

***

Evidence provided by the Organization: Lower-court decision declaring
the LEGAL ACTIONS CLAIMING OWNERSHIP filed by Mr. Galley
INADMISSIBLE. Obs~rvation of the work in question in the field.
Findings from evaluation of evidence: [AGSA] has performed
maintenance on and cleaned the roads located inside the area ( 1,54 7.11
hectares), thus demonstrating possession of the land that was in dispute.
These roads connect lots 11, 12 and 21 and are now serviceable. It was
also observed that cedar trees were planted alongside the road and they are
now part of conservation areas, meaning that enrichment planting work has
been done.
(Doc. 34-3 at 2-3.) The Galleys allege that RA's 2012 Audit "was electronically
uploaded to the certificate database" and that "FSC's summary and endorsement ofthe
report is available on the FSC website." (Doc. 22 at 7, ,-r 28.)
The Galleys claim that FSC's publication and endorsement ofRA's 2012 Audit
harmed them because AGSA does not own the Disputed Parcel and because FSC
Certification "has interfered, and continues to interfere, with the Galleys' business and
economic interests related to the Galley Property." !d. at 8, ,-r 32. The Galleys also
5

In their briefing, the Galleys assert that RA certified land beyond any land addressed in the
Mexican litigation. This claim is not considered as it is outside the scope of the Galleys' First
Amended Complaint, which alleges only that "[RA] extended the scope of the AGSA
Certification to include the [Disputed Parcel]." (Doc. 22 at 6, ~ 25.)

7

appear to assert claims based on RA's and FSC's decision to allegedly wrongfully permit
AGSA to display the "FSC" and "Rainforest" logos on its products and promotional
materials, thereby misleading consumers. They allege that AGSA's destruction of
archeological sites and clear cutting of indigenous rainforests is contrary to FSC
Principles.
In their First Amended Complaint, the Galleys assert negligence, defamation, and
slander of title claims and seek compensatory and punitive damages, as well as a
declaratory judgment6 that:
( 1) the opinion in the Mexico court in the Trespass Action does not indicate
or establish that AGSA owns title to the properties in question or the timber
thereon; (2) that the FSC certifications awarded to AGSA on the [Disputed
Parcel] are invalid and should be publicly revoked; (3) that [RA] failed to
follow proper certification guidelines in issuing the certifications of the
entire geographic area to AGSA; (4) that the certification awarded to
AGSA on its other lands is invalid and should be publicly revoked; ( 5) that
the Galleys own title to the [Disputed Parcel] in question and the timber
thereon; and ([ 6]) that the Galleys are entitled to seek certification for any
timber located on the [Disputed Parcel].

!d. at 10-11, ~ 43.
In its Answer, RA admitted that it added 1,547.11 hectares of land to AGSA's
FSC certification, but denied that the land was "invaded property[.]" (Doc. 31 at 4,

~

25.)

RA further denied that it was negligent in issuing FSC certification to AGSA or that the
statements made in its 20 12 Audit were false, defamatory, or slandered the Galleys' title
6

The Galleys' request for a declaratory judgment relies upon the Vermont Declaratory Judgment
Act, 12 V.S.A. § 4711. However, "[t]he propriety of granting declaratory relief in federal court
is a procedural matter." DeFeo v. Procter & Gamble Co., 831 F. Supp. 776, 779 (N.D. Cal.
1993). "Therefore, the [federal] Declaratory Judgment Act is implicated even in diversity cases,
whether an action is originally filed in federal court or is properly removed there by defendant."
!d.; see also Aetna Life Ins. Co. of Hartford v. Haworth, 300 U.S. 227, 240 (1937) (recognizing
"the operation of the Declaratory Judgment Act is procedural only."). "State substantive law
addressing [the subject of declaratory judgments] is simply inapposite." Nat 'l R.R. Passenger
Corp. v. Canso!. Rail Corp., 670 F. Supp. 424,429 n.7 (D.D.C. 1987). A request for a
declaratory judgment is not a separate cause of action. See Nat 'l Union Fire Ins. Co. of
Pittsburgh v. Karp, 108 F .3d 17, 21 (2d Cir. 1997) ("The DJA is procedural in nature, and
merely offers an additional remedy to litigants.") (citing Wilton v. Seven Falls Co., 515 U.S. 277,
287 (1995)). Accordingly, the court does not address that requested remedy as a separate claim.

8

to the Disputed Parcel. After the Galleys were granted leave to amend their Complaint
and did so, RA filed the pending motion for judgment on the pleadings, asking that the
Galleys' claims against it be dismissed.

II.

Conclusions of Law and Analysis.
A.

Standard of Review.

"In deciding a Rule 12(c) motion, [the court] employ[s] the same standard
applicable to dismissals pursuant to Fed. R. Civ. P. 12(b)(6)." Hayden v. Paterson, 594
F.3d 150, 160 (2d Cir. 2010) (internal quotation marks omitted). The court "accept[s] all
factual allegations in the complaint as true and draw[ s] all reasonable inferences in
[plaintiffs'] favor." !d. (internal quotation marks omitted). "Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice."

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "A pleading that offers labels and
conclusions or a formulaic recitation of the elements of a cause of action will not do." !d.
(internal quotation marks omitted).
The court "considers the complaint, the answer, any written documents attached to
them, and any matter of which the court can take judicial notice for the factual
background of the case." L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir.
2011) (internal quotation marks omitted). "A complaint is [also] deemed to include any
... materials incorporated in it by reference, and documents that, although not
incorporated by reference, are 'integral' to the complaint." !d. (internal quotation marks
omitted).
The district court's role "is merely to assess the legal feasibility of the complaint,
not to assay the weight of the evidence which might be offered in support thereof."

DiFalco v. MSNBC Cable L.L. C., 622 F .3d 104, 113 (2d Cir. 201 0) (internal quotation
marks omitted); see also Glob. Network Commc'ns, Inc. v. City ofNew York, 458 F.3d
150, 155 (2d Cir. 2006) ("The purpose of Rule 12(b)(6) is to test, in a streamlined
fashion, the formal sufficiency of the plaintiffs statement of a claim for relief without
resolving a contest regarding its substantive merits."). "Judgment on the pleadings is

9

appropriate if, from the pleadings, the moving party is entitled to judgment as a matter of
law." Burns Int'l Sec. Servs., Inc. v. Int'l Union, 47 F.3d 14, 16 (2d Cir. 1995).
Although the court has taken judicial notice of certain facts proffered by the
Galleys, the Galleys cannot transform the allegations of their First Amended Complaint
through the submission of numerous extraneous documents of questionable reliability.
See Keywell L.L.C. v. Pavilion Bldg. Installation Sys., Ltd., 861 F. Supp. 2d 120, 127

(W.D.N.Y. 2012) ("Generally, a motion for judgment on the pleadings must be based
upon the pleadings, and not on additional evidence submitted by any party"). They also
cannot oppose RA' s motion by asserting that at some point in the future, they may
present additional evidence in support of their claims. 7 The court's analysis is therefore
focused on the allegations of the First Amended Complaint and whether they state claims
against RA for which relief may be granted. Fed. R. Civ. P. 12(b)(6); 12(c).
Because the court's jurisdiction over this case is based upon diversity of
citizenship, it analyzes the Galleys' tort claims in accordance with Vermont law. See
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78-79 (1938); Omega Eng'g, Inc. v. Omega,
S.A., 432 F.3d 437, 443 (2d Cir. 2005).

B.

Whether RA is Entitled to Judgment in its Favor with Regard to the
Galleys' Negligence Claim.

In support of their negligence claim, the Galleys allege that RA, which "claim[ s]
to adhere to suitable processes and safeguards in [its] decision-making in order to issue

7

The Galleys assert that: "Perhaps most importantly, though, Plaintiffs believe and will submit
evidence that Defendant has certified Galley lands that were not even arguably addressed in the
proceedings before any court in Mexico." (Doc. 36 at 12.) Their reliance on Sheppard v.
Beerman, 18 F.3d 147 (2d Cir. 1994) and Conley v. Gibson, 355 U.S. 41 (1957) for the
proposition that a complaint should not be dismissed on the pleadings unless it appears beyond
doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him
to relief is misplaced. That proposition was abrogated by Bell Atlantic Corp. v. Twombly. 550
U.S. 544, 562-63 (2007) ("We could go on, but there is no need to pile up further citations to
show that Conley's 'no set of facts' language has been questioned, criticized, and explained away
long enough ... and after puzzling the profession for 50 years, this famous observation has
earned its retirement. The phrase is best forgotten as an incomplete, negative gloss on an
accepted pleading standard: once a claim has been stated adequately, it may be supported by
showing any set of facts consistent with the allegations in the complaint.").

10

and publish impartial and independent forestry certifications, owed legal duties to the
Galleys[.]" (Doc. 22 at 9, ~ 35l They assert that RA allegedly breached those duties
"despite having express and/or implied knowledge of the Galleys' title to the [Disputed
Parcel] and the other legal issues surrounding the properties in question." !d. They claim
that, as a result ofRA's alleged breach of duty to them, they "have suffered actual harm
and damages as a result of [RA's] actions and have incurred significant expenses in
counteracting [RA's] inaccurate, false, and misleading publications." !d.

at~

36. They

argue that because RA participates in the FSC certification process, it "clearly has
voluntarily assumed an obligation to assess and address any instance where competing
ownership rights are at issue." (Doc. 36 at 20.) RA seeks dismissal of the Galleys'
negligence claim, contending that the Galleys have failed to plausibly allege that RA
owed a legal duty to them that was breached and caused their injuries.
Under Vermont law, "[c]ommon law negligence has four elements: a legal duty
owed by defendant to plaintiff, a breach of that duty, actual injury to the plaintiff, and a
causal link between the breach and the injury." Demag v. Better Power Equip., Inc.,
2014 VT 78,

~

6, 197 Vt. 176, 179, 102 AJd 1101, 1105 (quoting Zukatis v. Perry, 682

A.2d 964, 966 (Vt. 1996)) (internal quotation marks omitted). "The existence of a duty
'is primarily a question of law."' !d. (quoting Endres v. Endres, 2008 VT 124, ~ 11, 185
Vt. 63, 68, 968 A.2d 336, 340); see also Buxton v. Springfield Lodge No. 679, 2014 VT
52,~

7, 196 Vt. 486, 490, 99 A.3d 171, 174 (stating that the court determines "whether a

duty is owed, as well as the scope of any duty that is owed").
The Vermont Supreme Court has adopted§ 324A of the Restatement (Second) of
Torts which "delineates when an undertaking to render services to another may result in

8

The Galleys assert that "it is inappropriate to even engage in duty analysis at this stage of the
litigation[,]" and that discovery may reveal "duties [RA] has assumed with respect to AGSA[.]"
(Doc. 36 at 20.) However, in filing suit against RA, the Galleys are deemed to have asserted
only those "claims [that are] warranted by existing law or by a nonfrivolous argument for
extending, modifying, or reversing existing law or for establishing new law[.]" Fed. R. Civ. P.
ll(b)(2).

11

liability to a third person." Derosia v. Liberty Mut. Ins. Co., 583 A.2d 881, 883 (Vt.
1990) ("Embracing§ 324A formally" as a matter of Vermont law).
Under§ 324A it is not an actor's undertaking alone which subjects him to
liability, but rather it is the actor's "failure to exercise reasonable care to
protect his undertaking," resulting in either (a) an increased risk of physical
harm to the third person, (b) the assumption by the actor of a duty owed by
the second person to the third person, or (c) harm to the third person
resulting from reliance on the undertaking by the second or third person.

!d. at 883-84. The duty arises from a party undertaking "the responsibility of [providing
services] in such a manner as to increase the risk of harm or create reliance to another's
detriment." Id. at 885 (quoting Thompson v. Bohlken, 312 N.W.2d 501, 507 (Iowa
1981)).
The Vermont Supreme Court has never recognized a duty under the first prong of
9

§ 324A where there is no "increased risk of physical harm[.]" ld. at 883. Because this
case does not involve physical harm, in order to fall within§ 324A's remaining two
prongs, the Galleys must either plausibly allege that RA assumed a duty owed to them by
a second person or caused harm to them when they relied on RA's participation in the
FSC certification process for AGSA to their detriment. Neither circumstance is alleged
here.
The Galleys allege no contractual, business, or other relationship between
themselves and RA. They also do not allege that they relied on any act or omission of
RA to their detriment or that their alleged economic and reputational injuries are "harm to
the [Galleys] resulting from reliance[.]" Derosia, 583 A.2d at 884. Instead, they cite
FSC's Principles and argue that they "clearly required [RA] to take competing land
claims seriously." (Doc. 36 at 21.) They, however, make no plausible claim that they are
See, e.g., Buxton v. Springfield Lodge No. 679,2014 VT 52,~ 11, 196 Vt. 486,491-92, 99 A.3d
171, 175-76 (bar room scuffle injuries); Murphy v. Sentry Ins., 2014 VT 25, ~ 27, 196 Vt. 92,
101-02, 95 A.3d 985, 992 (workplace death); Kennery v. State, 2011 VT 121, ~ 12, 191 Vt. 44,
51-52, 38 A.3d 35, 39-40 (death by hypothermia); Perry v. Green Mountain Mall, 2004 VT 69,
~ 10, 177 Vt. 109, 113, 857 A.2d 793,796-97 (upper body injuries). Hempsteadv. General Fire
Extinguisher Corp., 269 F. Supp. 109 (D. Del. 1967) and FNS Mortgage Service Corp. v. Pacific
General Group, Inc., 29 Cal. Rptr. 2d 916 (Cal. Ct. App. 1994), on which the Galleys rely, fall
within§ 324A's first prong as both cases involved plaintiffs who suffered physical harm.

9

12

entitled to enforce those standards and recover monetary damages if they are violated.

See Bradfordv. BARGE B-10, 1999 WL 1256248, at *3 (S.D.N.Y. Dec. 27, 1999) (ruling
that in the absence of a contractual or employment relationship, a defendant is "not liable
to plaintiff for an alleged breach of OSHA regulations or of [defendant's] own internal
safety policies").
To the extent the Galleys claim RA made representations to consumers regarding
the nature and quality ofFSC products, the Galleys make no plausible claim that these
representations create any form of enforceable legal duty owed to them. See Duffin v.

Idaho Crop Improvement Ass 'n, 895 P.2d 1195, 1201 (Idaho 1995) (permitting
purchasers of certified seed to assert claim against certifying entity that "held itself out as
having expertise in the performance of a specialized function ... [and] knows that seed is
sold at a higher price based on the fact that it is certified. Indeed, it has engaged in a
marketing campaign ... the very purpose of which is to induce reliance by purchasers on
the fact that seed has been certified.") (emphasis supplied). The Galleys neither allege
they are FSC product consumers, nor do they assert facts that would confer standing to
assert claims on consumers' behalf. See Kowalski v. Tesmer, 543 U.S. 125, 130 (2004)
(considering whether party asserting right to third-party standing can show a '"close'
relationship with the person who possesses the right" and "whether there is a 'hindrance'
to the possessor's ability to protect his own interests").
The Galleys gain no greater traction by arguing that "by voluntarily agreeing to
provide AGSA with a certification, [RA] should have foreseen that the Galleys could
have been injured by [RA] failing to comply with appropriate FSC principles and by
failing to ensure that AGSA had proper title." (Doc. 36 at 19.) The Vermont Supreme
Court has rejected the notion that foreseeability alone is sufficient to create a duty for
purposes of a negligence claim. See Hamill v. Pawtucket Mut. Ins. Co., 2005 VT 133,
~

6, 179 Vt. 250, 253-54, 892 A.2d 226, 228 ("Generally, whether there is a cognizable

legal duty that supports a tort action depends on a variety of public policy considerations
and relevant factors, only one of which is foreseeability.") (citing with approval

13

Charleston Dry Cleaners & Laundry, Inc. v. Zurich Am. Ins. Co., 586 S.E.2d 586, 588
(S.C. 2003) ("Foreseeability of injury, in and of itself, does not give rise to a duty.")).
To the extent the Galleys seek recognition of a new duty under Vermont law
outside the scope of§ 324A, this court must proceed with caution. As the Second Circuit
has explained:
our role as a federal court sitting in diversity is not to adopt innovative
theories that may distort established state law. Instead we must carefully
predict how the state's highest court would resolve the uncertainties that we
have identified. In making this prediction, we give the fullest weight to
pronouncements of the state's highest court ... while giving proper regard
to relevant rulings of the state's lower courts.
Runner v. NY. Stock Exch., Inc., 568 F.3d 383, 386 (2d Cir. 2009) (quoting Travelers Ins.
Co. v. Carpenter, 411 F.3d 323, 329 (2d Cir. 2005) (internal quotation marks, citations,
and alterations omitted)).
The Vermont Supreme Court has opined that a court "should not recognize a new
cause of action or enlarge an existing one without first determining whether there is a
compelling public policy reason for the change." Langle v. Kurkul, 510 A.2d 1301,
1305-06 (Vt. 1986). 10 The Galleys cite no compelling public policy in Vermont that
would give rise to a legal duty extending from an entity that audits FSC certifications to
landowners who oppose a third party's certification and who claim that their property and
economic interests are adversely affected by it. This is especially true when the
certification pertains to the harvesting of wood products in a foreign country. Moreover,
far from protecting "the business and economic interests" (Doc. 22 at 8,

~

32), which the

10

In addition to foreseeability, the Vermont Supreme Court has considered the following factors
in determining whether a duty to third persons exists:
the degree of certainty that the plaintiff suffered injury, the closeness of the
connection between the defendant's conduct and the injury suffered, the moral
blame attached to the defendant's conduct, the policy of preventing future harm,
the extent of the burden to the defendant and consequences to the community of
imposing a duty to exercise care with resulting liability for breach, and the
availability, cost, and prevalence of insurance for the risk involved.

Langle v. Kurkul, 510 A.2d 1301, 1305 (Vt. 1986) (internal quotation marks omitted) (quoting
Rowlandv. Christian, 443 P.2d 561, 564 (Cal. 1968)).

14

•

Galleys claimed were harmed as a result ofRA's wrongful certification, Vermont's
negligence law generally fails to redress purely economic harm. See Hamill, 2005 VT
133, ~ 7 (observing that "negligence law does not generally recognize a duty to exercise
reasonable care to avoid economic loss unless the alleged tortfeasor 's conduct has
inflicted some accompanying physical harm") (emphasis supplied).
For the foregoing reasons, this court has little difficulty in predicting that the
Vermont Supreme Court would not recognize a legal duty based on the facts and
circumstances of this case. See Carvalho v. Grzankowski, 622 F. App'x 8, 9 (2d Cir.
20 15) (ruling that district court correctly predicted no duty would be recognized under
Vermont law). In the absence of a legal duty, a negligence claim cannot be asserted
against RA under Vermont law. See Hamill, 2005 VT 133, ~ 12 (affirming "trial court's
refusal to find a cognizable legal duty under the circumstances" and concluding that
dismissal of plaintiffs negligence claim was appropriate). Because the Galleys have not
plausibly alleged that RA owed them a legal duty, an essential element of their
negligence claim, RA's motion for judgment on the pleadings with regard to the Galleys'
negligence claim is GRANTED and the claim is hereby DISMISSED.

C.

Whether the Court Should Dismiss the Galleys' Defamation Claim.

In support of their defamation claim, the Galleys allege that RA "inaccurately
characterized the resolution of the Trespass Action as stating that AGSA demonstrated
ownership of the [Disputed Parcel,]" (Doc. 22 at 6, ~ 25), published these allegedly false
statements in its reports and audits knowing FSC would republish them in its certification
database, and thereby "made false and defamatory statements to third parties about the
Galleys and their property." !d. at 12, ~52. The Galleys further assert that RA
"maliciously made the false statements under circumstances evidencing personal ill will,
insult, and oppression with a reckless or wanton disregard of the Galleys' rights" and
"with actual knowledge ofthe falsity of the statements made." !d. at 14, ~ 65. The
Galleys do not seek damages for a reputational injury, but instead seek them for
"financial injury, injury to lands, diminished property value, and loss of business." !d. at

15

14, ~ 64; see also Doc. 57 at 17 ("Here, the Galleys have pled that they suffered 'injury to
lands' ... caused by [RAJ's negligent and defamatory certification of their property.").
Although defamation need not be pleaded with particularity, the Galleys'
allegations are arguably insufficient for federal pleading purposes. See Bloom v. Fox
News of Los Angeles, 528 F. Supp. 2d 69, 74 (E.D.N.Y. 2007) ("[F]ederal courts do

require that the alleged defamatory statements be pleaded with sufficient specificity to
put the defendants on notice. In assessing whether a defamation claim has been plead
with sufficient particularity, courts look to whether said complaint references the alleged
defamatory statement, identifies who made the statement, when it was made, the context
in which it was made, whether it was made orally or in writing and whether it was made
to a third party.") (internal citations and quotation marks omitted); cf Solomon v. Atlantis
Dev., Inc., 516 A.2d 132, 137-38 (Vt. 1986) (construing Vt. R. Civ. P. 8(a) and

concluding "[a]lthough the defendant failed to plead the defamatory statements in haec
verba, he fully informed the plaintiff of the nature and subject matter of the [defamation]

counterclaim"). However, because the Galleys allege that the defamatory statements
were made in RA's "audits and reports" and because only RA's 2012 Audit has been
identified and submitted to the court, the Galleys' defamation claim appears to be
confined to the statements set forth therein. Of those statements, only two address
AGSA's ownership and the resolution of the Galleys' trespass claim: ·
The certified area increased from 10,035.81 hectares to 11,584.90 hectares
because AGSA proved possession of 1,547.11 hectares that were in dispute
with its neighbors and which AGSA lawfully owns. The change in the
certified area is due to the inclusion of planted areas plus roads.

***

Evidence provided by the Organization: Lower-court decision declaring
the LEGAL ACTIONS CLAIMING OWNERSHIP filed by Mr. Galley
INADMISSIBLE. Observation of the work in question in the field.

(Doc. 34-3 at 2-3.) Of these statements, the only allegedly false and defamatory
statement identified by the Galleys is that "AGSA lawfully owns" the 1,54 7.11 hectares

16

comprising the Disputed Parcel.

11

The Galleys allege that this statement is untrue

because "AGSA does not own the property and does not legally possess it" and that "the
Galleys are defamed because [RA] is stating that they do not own their land." (Doc. 36 at
23.)
RA seeks dismissal of the defamation claim, arguing that they cannot establish
that RA made any false or defamatory statements regarding the Galleys. RA further
asserts that the Galleys have not alleged either a per se claim or special damages and
have thus failed to allege the essential elements of a defamation claim.
Under Vermont law, "the familiar elements of defamation, which comprises libel
and slander," are:
( 1) a false and defamatory statement concerning another; (2) some
negligence, or greater fault, in publishing the statement; (3) publication to
at least one third person; (4) lack of privilege in the publication; (5) special
damages, unless actionable per se; and (6) some actual harm so as to
warrant compensatory damages.

Russin v. Wesson, 2008 VT 22,

~

5, 183 Vt. 301, 303, 949 A.2d 1019, 1020 (citing Lent

v. Huntoon, 470 A.2d 1162, 1168 (Vt. 1983) (footnote omitted)). "A defamatory
statement is one that tends to 'blacken the reputation of the plaintiff and expose her to
public hatred, contempt or ridicule."' Davis v. Am. Legion, Dep 't of Vt., 2014 VT 134,
~

22, 114 A.3d 99, 106 (quoting Kinsley v. Herald & Globe Ass 'n, 34 A.2d 99, 101 (Vt.

1943)).

11

The 2012 Audit states that the change in the certified area is not only because of the outcome
of the Galleys' trespass claim, but because of AGSA's activities on the Disputed Parcel. It is not
clear whether this refers to RA's determination that AGSA has established adverse possession of
the Disputed Parcel. The remaining statements do not appear to provide a factual basis for the
Galleys' defamation claim. Although the Galleys claim that the outcome of the Trespass Action
is mischaracterized, they concede in their First Amended Complaint that the 2010 Order
concluded that they "had not met their burden to prove all of the elements of the Trespass
Action." (Doc. 22 at 6, ~ 24.) They also acknowledge that AGSA "took possession and control
of over 1,547.11 hectares ofland (approximately 3,823 acres) from the Galley Property[.]" Id at
4, ~ 18.

17

RA is correct that Vermont law requires that the allegedly false and defamatory
statement be "concerning another" and not concerning another's property. 12 Russin, 2008
VT 22, ,-r 5; see also Restatement (Second) of Torts § 564 ("[a] defamatory
communication is made concerning the person to whom its recipient correctly, or
mistakenly but reasonably, understands that it was intended to refer.") (emphasis
supplied). Indeed, "an individual plaintiff must be clearly identifiable [in an allegedly
defamatory statement] to support a claim for defamation." Algarin v. Town of Wallkill,
421 F.3d 137, 139 (2d Cir. 2005) (internal quotation marks omitted). This requirement is
constitutional in nature. SeeN Y. Times Co. v. Sullivan, 376 U.S. 254, 292 (1964)
(holding that where there is no evidence connecting the statements with the respondent,
"the evidence was constitutionally insufficient to support a finding that the statements
referred to respondent.").
In this case, the allegedly false statement pertains to AGSA and its ownership of
the Disputed Parcel. Although the statement contains a reference to AGSA prevailing in
a dispute with its "neighbors," "[a] defamation claim is insufficient if a statement merely
makes reference to the plaintiff as a member of a group[.]" Abramson v. Pataki, 278 F.3d
93, 102 (2d Cir. 2002). In any event, the Galleys concede that AGSA did prevail in their
dispute in the Mexican courts. See Doc. 57 at 3 (observing that "minor discrepancies in
land definition prevented the Galleys from prevailing in the Mexican court ejectment
proceeding"). Accordingly, the gist of the challenged statement is true. See Weisburgh v.
Mahady, 511 A.2d 304, 306 (Vt. 1986) ("For the defense of truth to apply, 'it is now
generally agreed that it is not necessary to prove the literal truth of the accusation in
every detail, and that it is sufficient to show that the imputation is substantially true, or,
as it is often put, to justify the 'gist,' the 'sting,' or the 'substantial truth' of the
defamation."') (quoting W. Prosser & W. Keeton, The Law of Torts§ 116, at 842 (5th
ed. 1984) (footnotes omitted)).

12

The Galleys argue that "people are referenced" but concede "it just happens that the
defamation relates to property ownership." (Doc. 36 at 23.)

18

Even if the alleged defamatory statement is deemed an implied statement that the
Galleys do not own the Disputed Parcel, the Galleys do not allege that this exposed them
to "public hatred, contempt or ridicule[,]" Davis, 2014 VT 134, ~ 22, or "harm[ed] the
reputation of [the Galleys] as to lower [them] in the estimation of the community or to
deter third persons from associating or dealing with [them]." We is burgh, 511 A.2d at
306 (internal quotation marks omitted) (quoting Restatement (Second) of Torts § 559).
As a result, even if the Galleys could establish that the statements in the 2012 Audit are
false and about them, they could not further establish that they are defamatory. 13
As for the Galleys' argument that dismissal of their defamation claim would be
premature because they have not yet conducted discovery, they do not explain how
discovery will alter the content of the statement at issue and render it a false and
defamatory statement about them. No amount of discovery is thus likely to supply the

missing essential elements of their defamation claim.
Because the Galleys fail to allege a plausible claim of defamation under Vermont
law, judgment on the pleadings in RA's favor is appropriate and the Galleys' defamation
claim is hereby DISMISSED. See Fed. R. Civ. P. 12(b)(6); 12(c).

D.

Whether the Court Should Dismiss the Galleys' Slander of Title Claim.

The Galleys assert a slander of title claim, alleging that RA "published false
statements about the Galleys' title to the [Disputed Parcel]." (Doc. 22 at 13, ~ 62.) They
assert that these false statements adversely affected their use of the Galley Property and
"encouraged AGSA to continue its illegal invasion of, and illegal harvesting of wood
from, the Galleys' Property" which they claim proximately caused them to suffer
"financial injury, injury to lands, diminished property value, and loss of business." !d. at
14, ~~ 63-64. As with their defamation claim, they assert that RA "maliciously made the

13

"It is the function of the court to determine whether an expression of opinion is capable of
bearing a defamatory meaning because it may reasonably be understood to imply the assertion of
undisclosed facts that justify the expressed opinion about the plaintiff or his conduct[.]"
Restatement (Second) ofTorts § 566 cmt. c; see also Blouin v. Anton, 431 A.2d 489,491 (Vt.
1981) (trial court properly ruled.statements "did not constitute libelous statements as a matter of
law.").

19

false statements under circumstances evidencing personal ill will, insult, and oppression
with a reckless or wanton disregard of the Galleys' rights" and "with actual knowledge of
the falsity of the statements made." !d. at 14, ~ 65.
Under Vermont law, which follows the Restatement, "[t]he particular form of
injurious falsehood that involves disparagement of the property in land, chattels, or
intangible things, is commonly called 'slander of title[,]'" a cause of action
distinguishable from a defamation claim. Restatement (Second) of Torts § 624 cmt. a.
"To prove slander of title, a plaintiff must prove that a defendant falsely published a
statement concerning plaintiffs title that caused special damages to the plaintiff and that
defendant acted with malice." Wharton v. Tri-State Drilling & Boring, 2003 VT 19,
~

14, 175 Vt. 494, 497, 824 A.2d 531, 537. "The essence of the tort is the publication of

an assertion that is derogatory to the plaintiffs title to property in an effort to prevent
others from dealing with the plaintiff." !d.
In order to maintain an action for slander of title, the plaintiff must "have a
transferrable ownership interest capable of disparagement." Sullivan v. Stear, 2011 VT
37, ~ 11, 189 Vt. 442,446,23 A.3d 663, 666; Restatement (Second) of Torts§ 624 cmt. c
("Any kind of legally protected interest in land, chattels or intangible things may be
disparaged if the interest is transferable and therefore salable or otherwise capable of
profitable disposal"). If a plaintiff cannot establish "a transferrable ownership interest
capable of disparagement[,]" the defendant is entitled to judgment as a matter of law in
its favor. See Sullivan, 2011 VT 37, ~~ 10-12.
RA contends that any statements it made, even if false, did not "concern" the
Galleys' title because the Mexican courts rejected the Galleys' claim to ownership ofthe
Disputed Parcel, a necessary predicate to their slander of title claim. The Galleys counter
that the Mexican courts determined that they own the property contained in their deeds
and never reached the question of who owns the Disputed Parcel. Both arguments find
support in the 2010 Order but merely serve to underscore the conclusion that the Galleys'
title to the Disputed Parcel has not yet been established.

20

Based on the expert evidence presented, the Mexican court ruled that, "it was not
possible to locate the areas that are covered by the property titles exhibited by [the
Galleys], ... except for property Tucan 1" and that "[the] property titles displayed by [the
Galleys], in their capacity of foundational property titles for the action for recovery of
possession, do not correspond to the area of land [they] claim[] the respondent has in his
possession." (Doc. 36-17 at 21.) The Mexican courts rejected the Galleys' claims with
regard to the Tucan 1 property because "regarding the property Tucan 1, ... [i]t can be
seen ... that in no way was the material occupation that is claimed against the
neighboring property shown" and ' [u]nder these circumstances, we have that in the
specific case ofTucan 1, the alleged possession by the company named [AGSA] was not
proven, as the second constituent element of the suit for recovery of possession[.]" ld. at
22-23.
Although the Galleys point out that the 20 10 Order does not foreclose them from
establishing ownership of the Disputed Parcel in this lawsuit, they have alleged a claim
that requires them to establish title before they can claim it has been slandered. They
therefore ask this court to declare "that the Galleys own title to the [Disputed Parcel] in
question and the timber thereon." (Doc. 22 at 11, ~ 43.) Vermont law governs how the
Galleys may establish ownership of the Disputed Parcel, which, in turn, requires
consideration of Vermont's choice of law jurisprudence. See Forest Park Pictures v.
Universal Television Network, Inc., 683 F.3d 424, 433 (2d Cir. 2012) (citing Klaxon Co.
v. Stentor Elec. Mfg. Co., 313 U.S. 487,496-97 (1941)).
Vermont "has adopted the Restatement (Second) of Conflicts [of Laws] for
choice-of-law questions in both tort and contract cases." McKinnon v. F.H Morgan &
Co., 750 A.2d 1026, 1028 (Vt. 2000). According to the Restatement, "[w]hether a
conveyance transfers an interest in land and the nature of the interest transferred are
determined by the law that would be applied by the courts of the situs." Restatement
(Second) of Conflict of Laws§ 223(1). Deeds are construed in accordance with the law
identified therein for that purpose or, "[i]n the absence of such a designation, the
instrument is construed in accordance with the rules of construction that would be applied
21

by the courts of the situs." !d. § 224(2). The "courts of the situs" are in Mexico. This
court must therefore apply Mexican law to determine whether the Galleys own the
Disputed Parcel. RA asks the court to consider the doctrine of international comity in
deciding whether to undertake this task.

E.

Whether the Court Should Decline Jurisdiction as a Matter of
International Comity.

RA asks the court to dismiss this entire lawsuit on international comity grounds
because it requires the court to second-guess the Mexican courts and their interpretation
of Mexican deeds, Mexican law, and acts that have occurred on Mexican real estate. RA
argues, in the alternative, that even if this court finds that the Mexican courts did not fully
resolve the issue of who owns the Disputed Parcel, in order to adjudicate the Galleys'
claims, this court will need to make that determination in accordance with Mexican law.
It urges the court to refuse to make this determination on the grounds of international

comity and because AGSA and any other claimant to the Disputed Parcel are necessary
parties to any title determination and must be provided with notice and an opportunity to
be heard.
The Galleys respond that their claims are in personam, not in rem, and this case
has "very little" to do with the decisions of the Mexican courts because those courts
never determined ownership to the Disputed Parcel. (Doc. 57 at 3.) They assert that they
plan to amend the First Amended Complaint to add Mexican real property which RA
allegedly also wrongfully certified and which "was never addressed in any respect by the
Mexican court." !d.
"(T]he generally recognized principle of international comity [is] that one nation
affords recognition 'within its territory to the legislative, executive, or judicial acts of
another nation."' United States v. Federative Republic of Brazil, 748 F.3d 86, 91 (2d Cir.
2014) (quoting Hilton v. Guyot, 159 U.S. 113, 143 (1895)). Under the strain of
international comity known as "comity among courts" or "adjudicatory comity," the court
has discretion "to decline to exercise jurisdiction in a case properly adjudicated in a

22

Disputed Parcel and any other lands the Galleys intend to allege RA wrongfully certified
are primarily located in Mexico. The Galleys do not explain how this court could readily
compel the production of evidence located in Mexico or the testimony of Mexican
witnesses, or authorize a survey of the Galleys' lands by Mexican surveyors.
The Galleys also do not claim that they cannot bring their slander of title claim in
Mexico, or that that claim has any particular relevance to RA's activities in Vermont. 16
Instead, the vast majority of harm they allege took place in Mexico based upon activities
that allegedly occurred and continue to occur there.
Although RA has not affirmatively consented to jurisdiction in Mexico, the
Galleys allege facts that may support a conclusion that RA may be subject to jurisdiction
there. In its 2012 Audit, RA indicates that it has visited the Disputed Parcel and bases it
certification on how AGSA is maintaining and improving it in support of its forestry
operations. These facts also weigh in favor of deferring to Mexico as the most
appropriate forum. See Jota v. Texaco Inc., 157 F.3d 153, 160 (2d Cir. 1998) ("When a
court dismisses on the ground of comity, it should normally consider whether an adequate
forum exists in the objecting nation and whether the defendant sought to be sued in the
United States forum is subject to or has consented to the assertion of jurisdiction against
it in the foreign forum.").
Finally, the Galleys assert no plans to join AGSA in this lawsuit. If this court
determines title to the Disputed Parcel, AGSA may "claim[] an interest relating to the
subject of the action and is so situated that disposing of the action in the person's absence
may ... as a practical matter impair or impede the person's ability to protect the
interest[.]" Fed. R. Civ. P. 19(a)(l)(B); 19(a)(l)(B)(i). Because AGSA's and RA's
interests are not "aligned in all respects[,]" it is doubtful that the court could craft its
judgment so as "to alleviate any prejudice that may exist to [AGSA]." Marvel

Characters, Inc. v. Kirby, 726 F.3d 119, 133-34 (2d Cir. 2013), cert. dismissed, 135 S.
16

RA's publication of the allegedly defamatory certification took place on FSC's website and
thus Vermont's interest in the resolution of this dispute is not demonstrably stronger than any
other state's.

25

foreign state[.]" 14 Maxwell Commc'n Corp. v. Societe Generate, 93 F.3d 1036, 1047 (2d
Cir. 1996). The Supreme Court has explained the doctrine's rationale as follows:
[W]here there has been opportunity for a full and fair trial abroad before a
court of competent jurisdiction, conducting the trial upon regular
proceedings, after due citation or voluntary appearance of the defendant,
and under a system of jurisprudence likely to secure an impartial
administration of justice between the citizens of its own country and those
of other countries, and there is nothing to show either prejudice in the court,
or in the system of laws under which it was sitting, or fraud in procuring the
judgment, or any other special reason why the comity of this nation should
not allow it full effect, the merits of the case should not, in an action
brought in this country upon the judgment, be tried afresh, as on a new trial
or an appeal, upon the mere assertion of the party that the judgment was
erroneous in law or in fact.
Hilton, 159 U.S. at 158.
The Galleys concede that their claims require them to establish title to real
property located in Mexico. 15 This determination requires the application of Mexican
property law with regard to which this court has no familiarity or expertise. These facts,
alone, weigh in favor of finding that international comity requires dismissal. See Loya v.
Starwood Hotels & Resorts, 2007 WL 1991163, at* 10 (W.D. Wash. July 6, 2007)
("[t]his Court is not familiar with Mexican law. The need to apply foreign law strong[ly]
favors dismissal"), aff'd sub nom. Loya v. Starwood Hotels & Resorts Worldwide, Inc.,
583 F.3d 656 (9th Cir. 2009). Other facts buttress this conclusion.
The Galleys initiated litigation against AGSA, selecting Mexico as their chosen
forum. See Fortuin v. Milhorat, 683 F. Supp. 1, 4 (D.D.C. 1988) ("[W]hen, as here, an
action features a dispute over real property, the [local] court is not only an 'adequate'
forum, ... but perhaps a superior forum for the litigation of the parties' rights and
obligations.") (internal citation omitted). Although they argue that there is wide-spread
14

The other strain of the international comity doctrine is legislative or "prescriptive" comity,
which guides American courts in determining the extraterritorial effect of federal statutes. See
Maxwell Commc'n Corp. v. Societe Generate, 93 F.3d 1036, 1047 (2d Cir. 1996).
15

See Doc. 54 at 36-37 (The court: "In order to decide whether or not your client had been
harmed, wouldn't the finder of fact have to determine that you were the owner of the land?" The
Galleys' counsel: "Yes, or superior title to the land. Yes.").

23

corruption in Mexican commerce, they make no corresponding claim that the Mexican
courts lacked jurisdiction, were corrupt, or rendered a fraudulent judgment. This is
therefore not a case in which a party was forced into an undesirable and inadequate forum
which produced an unjust result. Rather, it is one in which the party's chosen forum
produced a disappointing result which the party now seeks tore-litigate for purposes of
different claims. While this may be permissible, it will require the court to re-examine
much of the evidence presented in the Mexican courts and come to its own determination
of whether the Galleys have established title to the Disputed Parcel. The doctrine of
international comity does not favor that outcome. See Fed. Treasury Enter.
Sojuzplodoimport v. Spirits Int'l B. V, 809 F.3d 737, 743 (2d Cir. 2016) (holding

international comity prohibited district court from determining whether foreign sovereign
had violated foreign law in assignment of certain property rights and observing that
"[ e]ven an inquiry into whether Russian law permitted the [a]ssignment is a breach of
comity.").
The Galleys represent that "the fight is far from over in Mexico[,]" they "have a
complaint on file with the Supreme Court of Mexico[,]" and they "continue to make
complaints, and investigations have been opened into the local corruption issues that the
Galleys believe have impacted their property rights." (Doc. 36 at 12.) These
representations merely emphasize why their claims should proceed in Mexico rather than
on dual tracks in both countries, rendering this court's determination of title either
duplicative or potentially inconsistent with a judicial determination of that same issue in
Mexico. See Duff & Phelps, LLC v. Vitro S.A.B. de C. V, 18 F. Supp. 3d 375, 388
(S.D.N.Y. 2014) ("It would be unfortunate, and a waste of the parties' time and money,
if-after potentially extensive and expensive discovery proceedings had commencedconclusive evidence were to come to light that, in fact, the Mexican District Court had
intended all along to extinguish [the party's] right to pursue such a [claim]").
In addition to duplicative or inconsistent outcomes, there is a strong likelihood that
the Galleys' slander of title claim could proceed more efficiently in Mexico than it could
in the District of Vermont. The facts, evidence, and witnesses relevant to title to the
24

Ct. 42 (20 14 ). Were the court to declare that the Galleys own title to the Disputed Parcel,
it would therefore inevitably prejudice AGSA in the absence of its joinder in this lawsuit.

See Davidson Well Drilling, Ltd. v. Bristol-Myers Squibb Co., 2009 WL 2135396, at *4
(S.D.N.Y. July 16, 2009) ("Adjudication of a case in the absence of a party is prejudicial
when it is difficult to imagine how the issue ... would be resolved without its
participation in the litigation.") (internal quotation marks omitted). There is no evidence
that AGSA is subject to this court's personal jurisdiction.
For a claim with a minimal relationship to Vermont, and which is wholly
dependent on the resolution of title to Mexican real property under Mexican law, RA has
sustained its burden to establish that the interests of international comity support the
refusal to "exercise jurisdiction in a case properly adjudicated in a foreign state[.]"

Maxwell Commc 'n Corp., 93 FJd at 1047.
For the foregoing reasons, RA's motion to dismiss the Galleys' remaining slander
of title claim based on international comity is GRANTED.
CONCLUSION
For the reasons stated above, Defendant's Rule 12(c) Motion for Judgment on the
Pleadings with Respect to Plaintiffs' Amended Complaint (Doc. 34) is GRANTED.
SO ORDERED.
Dated at Burlington, in the District of Vermont, this t/""'day of February, 2016.

~

United States District Court

26