[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
APRIL 30, 2002
THOMAS K. KAHN
CLERK
No. 01-11072
D. C. Docket No. 00-01662 CV-SH
PATRICIA ESFELD,
DONALD ESFELD, her husband,
Plaintiffs-Appellants,
versus
COSTA CROCIERE, S.P.A.,
a foreign corporation doing business
in Miami-Dade County, Florida,
Defendant-Appellee.
No. 01-11073
D. C. Docket No. 00-01661 CV-SH
ELEANOR COHON,
JULIAN COHON, her husband,
Plaintiffs-Appellants,
versus
COSTA CROCIERE, S.P.A.,
a foreign corporation,
Defendant-Appellee.
No. 01-11074
D. C. Docket No. 99-01914 CV-SH
BELLE BESTOR,
STANLEY BESTOR, her husband,
Plaintiffs-Appellants,
versus
COSTA CROCIERE, S.P.A.,
a foreign corporation doing business
in Miami-Dade County, Florida,
Defendant-Appellee.
Appeals from the United States District Court
for the Southern District of Florida
(April 30, 2002)
2
Before BIRCH and WILSON, Circuit Judges, and DOWD*, District Judge.
BIRCH, Circuit Judge:
Plaintiff-Appellants Belle and Stanley Bestor, Eleanor and Julian Cohon,
and Patricia and Donald Esfeld challenge the district court’s dismissal of their
diversity suits brought against Costa Crociere, S.P.A. (“Costa”), for personal
injuries that they sustained while on a guided van tour of Vietnam. The question
on appeal is whether, under the Erie1 doctrine, state or federal law on forum non
conveniens should apply in diversity cases. Since we disagree with the district
court’s conclusion that state law should apply, we REVERSE.
I. BACKGROUND
A. The Automobile Accident in Vietnam
These consolidated cases arise out of an accident that occurred during a
guided van tour through the Da Nang area of Vietnam. Appellants are three
elderly married couples who were injured in the accident, which occurred in
January of 1994. All three couples are United States citizens, the Bestors residing
in the State of California, and the Cohons and Esfelds residing in the State of
Washington. At the time of the accident, the Appellants were on a Western Pacific
*
Honorable David D. Dowd, Jr., U.S. District Judge for the Northern District of Ohio,
sitting by designation.
1
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817 (1938).
3
cruise that had begun in Singapore and was set to terminate in Hong Kong. The
cruise ship upon which they were traveling, the Ocean Pearl, was owned and
operated by Costa.
The three couples had contracted with Costa in 1993 to take the 13-night
cruise of the Western Pacific aboard the Ocean Pearl. Although Costa is an Italian
corporation,2 the Appellants have argued throughout this litigation that all of
Costa’s marketing, advertising, and sales for the United States are done through an
office in Miami with over 110 employees. These marketing and sales activities,
the Appellants assert, generate between 30,000 and 52,000 United States customers
per year. They also argue that Costa advertises in all major United States markets,
runs an Internet site from Miami, and issues cruise brochures that list Miami as its
address. According to the Appellants, the advertising was successful with respect
to them, for they contracted for the Western Pacific cruise only after receiving
uninvited solicitations in the United States from Costa, through American travel
agents. The travel agents booked the cruise for them, and arrangements for the trip
then were made through a company affiliated with Costa that was located in South
Florida. It is as a result of these Miami-based sales activities by Costa, the
2
After the accident in this case, Costa was acquired in part by Carnival Corporation,
which is headquartered in Miami, Florida.
4
Appellants maintain, that they contracted for the Western Pacific cruise that took
them to Vietnam.
The 13-night cruise upon the Ocean Pearl began smoothly, but events
changed for the worse on or about 19 January 1994, when the cruise ship was
docked in the Vietnam port of call. The Appellants made arrangements through
Costa staff to take a guided van tour into the Da Nang area. The Appellants allege
that they paid Costa for the excursion and that, as a result, Costa staff made all the
necessary preparations for the tour, including selection of a van driver. During the
tour, the van driver lost control of the vehicle, causing the vehicle to slam into an
embankment and to roll over into a ditch. Severely injured, the Appellants
discontinued the rest of their cruise trip. They then returned home to the United
States for medical treatment.
B. The Florida State Court Proceedings
After returning to the United States, the Bestors, the Cohons, and the Esfelds
filed separate personal injury actions against Costa in the state court in and for
Miami-Dade County, Florida.3 Costa moved to dismiss the three lawsuits based on
3
The Appellants sued several other entities as well, but none of these entities were parties
to the subsequent federal litigation at issue in this appeal.
5
the doctrine of forum non conveniens,4 but the trial court denied the motion in each
case. Costa filed an interlocutory appeal to challenge the denial of its motion in the
Bestors’ case, but it chose not to file an appeal in either the Cohons’ case or the
Esfelds’ case. On appeal, Florida’s Third District Court of Appeal (the “Third
District”) reversed the trial court, concluding that the Bestors’ case should be
dismissed on forum non conveniens grounds. See Pearl Cruises v. Bestor, 678 So.
2d 372 (Fla. Dist. Ct. App. 1996). The Third District ruled that Italy provided a
more proper forum for the litigation, since Costa had consented to the jurisdiction
of the Italian courts and had agreed to waive reliance on any statute of limitations.
The Third District stated in conclusion that the Bestors were “free to bring suit in
any other jurisdiction which [would] entertain it.” Id. at 373.
In its ruling, the Third District relied on Kinney System, 674 So. 2d at 93, in
which the Florida Supreme Court adopted federal forum non conveniens law as the
appropriate standard for Florida state courts. In the Bestors’ case, however, the
4
Forum non conveniens is an ancient common law doctrine that permits a court to decline
jurisdiction over a case, even if personal jurisdiction and venue are otherwise proper, when there
is a more convenient forum for the case to be litigated. See American Dredging Co. v. Miller,
510 U.S. 443, 448, 114 S. Ct. 981, 985 (1994); Charles A. Wright et al., Federal Practice and
Procedure, § 3828 at 278 (2d ed. 1986). The doctrine has been adopted by Florida, and the
Florida Supreme Court has broadened the scope of its application over time. Compare Houston
v. Caldwell, 359 So. 2d 858, 861 (Fla. 1978) (holding that Florida’s forum non conveniens
doctrine does not apply in suits where either party is a Florida resident), with Kinney Sys., Inc.
v. Continental Ins. Co., 674 So. 2d 86, 93 (Fla. 1996) (overruling Houston and adopting the more
expansive federal forum non conveniens doctrine as the state standard).
6
Third District applied that standard in a manner different from how federal courts
have applied it. Specifically, the Third District, in addressing the forum non
conveniens issue, focused on Florida’s connection to and interest in the case,
concluding that the Bestors’ lawsuit had “no meaningful relationship to Florida
whatever” and that “Florida’s interests in [the] litigation [were] next to non-
existent.” Bestor, 678 So. 2d at 372. In contrast, federal courts, in the forum non
conveniens context, do not focus on the connection between the case and a
particular state, but rather on the connection of the case to the United States as a
whole. See La Seguridad v. Transytur Line, 707 F.2d 1304, 1308 (11th Cir. 1983)
(focusing on the relation between the claims and issues raised by the plaintiffs and
the United States). Thus, unlike a federal court, the Third District dismissed the
Bestors’ lawsuit without considering whether the suit had any important
connections with a United States jurisdiction located beyond Florida’s borders.
Upon dismissal of their lawsuit, the Bestors petitioned the Florida Supreme
Court for review, but their petition was denied. See Bestor v. Pearl Cruises, 689
So. 2d 1068 (Fla. 1997). With the Bestors’ case successfully dismissed, Costa
renewed its motion to dismiss on forum non conveniens grounds in the two cases
brought by the Cohons and the Esfelds, respectively. The trial court again denied
the motions. The court reasoned that since Costa could have filed an interlocutory
7
appeal from the denial of its first motion in the Cohons’ and the Esfelds’ cases,
Costa had waived its forum non conveniens objection.
The Third District consolidated the suits of the Cohons and the Esfelds on
appeal and reversed the trial court, concluding that its forum non conveniens
analysis in the Bestors’ case was controlling. See Pearl Cruises v. Cohon, 728 So.
2d 1226 (Fla. Dist. Ct. App. 1999) (per curiam). In reaching this result, the Third
District specifically noted that in the forum non conveniens context, Florida courts,
unlike federal courts, are only permitted to consider the contacts that a lawsuit has
with the State of Florida, given that “Florida courts’ territorial jurisdiction is
confined to the state boundaries.” Id. at 1228 n.*; see also Fla. R. Civ. Pro. 1.061
(explaining that “[a]n action may be dismissed on the ground that a satisfactory
remedy may be more conveniently sought in a jurisdiction other than Florida”)
(emphasis added). The Third District concluded by stating that “[a]s in Bestor, the
plaintiffs [were] free to refile in Italy or in any other jurisdiction which [would]
entertain the cases.” Cohon, 728 So. 2d at 1228. The Florida Supreme Court then
denied the petition of the Cohons and the Esfelds for review. See Cohon v. Pearl
Cruises, 744 So. 2d 453 (Fla. 1999).
C. The Federal District Court Proceedings
1. The District Court’s Forum Non Conveniens Decision
8
The Florida Supreme Court having denied review, the Bestors filed a
diversity action against Costa in the United States District Court for the Southern
District of Florida, alleging the same personal injury torts raised in the Florida state
court proceedings.5 Costa responded by filing a motion to dismiss on several
grounds. Among other things, Costa asserted in its motion that the Bestors’ federal
lawsuit should be dismissed based either on the doctrine of collateral estoppel or
on the doctrine of forum non conveniens. The district court, in an order written by
Chief Judge Edward B. Davis, denied the motion to dismiss.
In its order, the district court first turned to the collateral estoppel issue. The
court noted that under Florida law, collateral estoppel bars parties from relitigating
issues that already have been decided in a previous lawsuit only if there are
identical parties and issues in both lawsuits. See West Point Constr. Co. v. Fidelity
& Deposit Co. of Maryland, 515 So. 2d 1374, 1376 (Fla. Dist. Ct. App. 1987). The
district court concluded that the forum non conveniens issues raised in the previous
Florida state case and in the instant federal diversity case were not identical. The
court reached this conclusion because Florida’s Third District, in its forum non
conveniens analysis, focused on the connections between the Bestors’ suit and the
5
The Cohons and the Esfelds each filed separate federal lawsuits against Costa. At the
time the district court initially ruled on the forum non conveniens issue in the Bestors’ case, the
Cohons and Esfelds had not yet filed their federal suits.
9
state of Florida. In contrast, the district court noted that, under federal law, it was
required to focus on the connections between the Bestors’ suit and the whole
United States. For this reason, the court rejected Costa’s contention that the
Bestors were collaterally estopped from bringing a personal injury suit under the
auspices of federal diversity jurisdiction.
The district court then proceeded to address whether the Bestors’ federal suit
should be dismissed under the federal forum non conveniens doctrine, employing
the analysis we outlined in La Seguridad.6 The court first considered whether an
adequate alternative forum existed outside the United States where the Bestors
could bring suit. Costa argued that Italy provided such a forum.7 The district court
concluded, however, that even though Costa had agreed to waive the applicable
6
In La Seguridad we noted that district courts should employ the following methodology
in forum non conveniens cases:
As a prerequisite, the court must establish whether an adequate
alternative forum exists which possesses jurisdiction over the
whole case. Next, the trial judge must consider all relevant factors
of private interest, weighing in the balance a strong presumption
against disturbing plaintiffs' initial forum choice. If the trial judge
finds this balance of private interests to be in equipoise or near
equipoise, he must then determine whether or not factors of public
interest tip the balance in favor of a trial in a foreign forum. If he
decides that the balance favors such a foreign forum, the trial judge
must finally ensure that plaintiffs can reinstate their suit in the
alternative forum without undue inconvenience or prejudice.
La Seguridad, 707 F.2d at 1307 (quoting, with emphasis added, Pain v. United Technologies
Corp., 637 F.2d 775, 784-85 (D.C. Cir. 1980)).
7
It is interesting to note that Costa has never argued that Vietnam, the actual site where
the accident occurred, is the proper forum for the lawsuits brought by the Appellants.
10
statute of limitations, it was unclear under Italian law whether a defendant could
effectuate such a waiver.
Having decided that it was unclear whether Italy could serve as an
alternative forum for the Bestors’ lawsuit, the district court weighed the private and
public interests at stake. The court began by deciding that any witnesses located in
Italy or Europe could easily be made accessible to the parties in the United States.
According to the district court, Costa — a company involved in the international
travel industry — would be able, if necessary, to secure its foreign employees’
cooperation in traveling to the United States to provide testimony. Even if Costa
had difficulty in this regard, the court noted that the employees’ testimony could be
obtained through admissions or depositions. Furthermore, the district court
pointed out that the Costa employee who arranged for the Vietnam guided van tour
resides in Florida.
The district court also considered several other factors that militated in favor
of keeping the Bestors’ lawsuit in the United States. The court pointed out that the
Bestors are United States citizens, that several potential eyewitnesses to the vehicle
accident reside in the United States, that the physicians who treated the Bestors
reside in the United States, and that Costa transacts a significant amount of
business in the United States. After taking into account these factors, the district
11
court concluded that the balance weighed in favor of a United States forum, rather
than an Italian one. This was the proper result, the court reasoned, given that there
is “a strong presumption against disturbing plaintiffs’ initial forum choice.” La
Seguridad, 707 F.2d at 1307.
2. The District Court’s Erie Decision
A few months after the district court ruled in favor of the Bestors on the
forum non conveniens issue, the Cohons and the Esfelds filed separate federal
lawsuits against Costa. Chief Judge Davis having retired from the bench, the
Bestors’ case was transferred and consolidated with the Cohons’ and the Esfelds’
cases before Judge Shelby Highsmith. As it had done with respect to the Bestors’
lawsuit, Costa moved to dismiss the lawsuits filed by the Cohons and the Esfelds.
Like in the Bestors’ case, Costa alleged, among other things, that the lawsuits
should be dismissed on collateral estoppel or forum non conveniens grounds.
The district court, pursuant to Chief Judge Davis’s reasoning and the law of
the case doctrine, rejected Costa’s collateral estoppel and forum non conveniens
arguments. Other bases for dismissal raised by Costa were rejected as well. The
court, however, then proceeded to raise a new issue sua sponte, without benefit of
briefs or argument from the parties. Specifically, the district court addressed
whether, under the Erie doctrine, federal or state law on forum non conveniens
12
should apply in diversity cases. As part of its analysis, the court noted that a vast
majority of the other federal circuit courts of appeal that have addressed the Erie
issue have concluded that federal law on forum non conveniens should apply in the
diversity context.8 The district court noted, furthermore, that in the diversity case
of Sibaja v. Dow Chemical Co., 757 F.2d 1215 (11th Cir. 1985), we specifically
held that federal law on forum non conveniens was applicable. Nevertheless, the
court distinguished the existing case law and concluded that state law should apply
in the present litigation.
Concluding that state law should apply, the district court consequently found
that Chief Judge Davis had erred by not applying Florida law on forum non
conveniens. The court then turned to the two prior decisions by Florida’s Third
District dismissing the Appellants’ cases. Based on these decisions, the district
8
See Monegro v. Rosa, 211 F.3d 509, 511-12 (9th Cir. 2000), cert. denied, 531 U.S.1112
(2001); Rivendell Forest Prods., Ltd. v. Canadian Pac. Ltd., 2 F.3d 990, 992 (10th Cir. 1993);
Royal Bed & Spring Co. v. Famossul Industria e Comercio de Moveis Ltda., 906 F.2d 45, 50 (1st
Cir. 1990); In re Air Crash Disaster near New Orleans, 821 F.2d 1147, 1154-59 (5th Cir. 1987)
(en banc), vacated on other grounds, 490 U.S. 1032, 109 S. Ct. 1928, and reinstated in part, 883
F.2d 17 (5th Cir. 1989) (en banc). But see Weiss v. Routh, 149 F.2d 193, 195 (2d Cir. 1945)
(holding that state law should control). We note, however, that it seems unlikely that Weiss is
still good law in the Second Circuit. See Schertenleib v. Traum, 589 F.2d 1156, 1162 n.13 (2d
Cir. 1978) (treating the question of whether federal or state forum non conveniens law should
apply in diversity context as unsettled); Gilbert v. Gulf Oil Corp., 153 F.2d 883, 885 (2d Cir.
1946) (applying federal forum non conveniens law in a diversity case), rev’d on other grounds,
330 U.S. 501, 67 S. Ct. 830 (1947); see also Rivendell, 2 F.3d at 992 n.3 (suggesting that Weiss
has been implicitly overruled).
13
court held that it was clear that the Appellants’ suits should be dismissed under
Florida forum non conveniens law. Accordingly, the court dismissed the
Appellants’ suits “without prejudice to their refiling in an appropriate forum (i.e.,
the courts of Italy, Vietnam, or Plaintiffs respective home states).” R2-52-20. It is
this dismissal that the Appellants now challenge.
II. DISCUSSION
A. The Multi-Step Analysis under the Erie Doctrine
Against this procedural backdrop, we now address the issue of whether,
under the Erie doctrine, state or federal law on forum non conveniens should apply
in federal diversity cases.9 The question of which jurisdiction’s law to apply is a
legal one that we review de novo. Shaps v. Provident Life & Accident Ins. Co.,
244 F.3d 876, 881 (11th Cir. 2001). Under the doctrine enunciated in Erie and its
progeny, “federal courts sitting in diversity apply state substantive law and federal
procedural law.” Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427, 116
S. Ct. 2211, 2219 (1996); see also Rules of Decision Act, 28 U.S.C. § 1652.10 Yet,
9
The Supreme Court has expressly left unresolved whether state or federal law on forum
non conveniens should apply in diversity cases. See Piper Aircraft Co. v. Reyno, 454 U.S. 235,
249 n.13, 102 S. Ct. 252, 262 n.13 (1981). However, in the admiralty context, the Court has
stated that “the doctrine of forum non conveniens is nothing more or less than a supervening
venue provision, . . . a matter that goes to process rather than substantive rights.” American
Dredging Co., 510 U.S. at 453, 114 S. Ct. at 988.
10
The Act states: "The laws of the several states, except where the Constitution or
treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded
14
the distinction between substance and procedure can be far from self-evident, and
“ever since Erie, the [Supreme] Court has struggled to provide criteria to determine
when federal law may be used in diversity cases.” Erwin Chemerinsky, Federal
Jurisdiction § 5.3 at 314-15 (3d ed. 1999). Because of the difficulties associated
with the application of the Erie doctrine, we have adopted a multi-step analysis for
determining whether state or federal law should apply to a particular issue raised in
a diversity case. See, e.g., Alexander Proudfoot Co. World Headquarters L.P. v.
Thayer, 877 F.2d 912, 917-19 (11th Cir. 1989).
The first step of the analysis is to determine whether state and federal law
conflict with respect to the disputed issue before the district court. If no conflict
exists, then the analysis need proceed no further, for the court can apply state and
federal law harmoniously to the issue at hand. See Chemerinsky, supra, § 5.3 at
515. However, if the applicable state and federal law conflict, the district court
must ask whether a congressional statute or Federal Rule of Civil Procedure covers
the disputed issue. Hanna v. Plumer, 380 U.S. 460, 469-70, 85 S. Ct. 1136, 1143
(1965). If a federal statute or rule of procedure is on point, the district court is to
as rules of decision in civil actions in the courts of the United States, in cases where they apply."
28 U.S.C. § 1652.
15
apply federal rather than state law. Id. at 471, 85 S. Ct. at 1144.11 If no federal
statute or rule is on point, then the court must determine whether federal judge-
made law, rather than state law, should be applied. Alexander Proudfoot, 877 F.2d
at 917.
In making this determination respecting federal judge-made law, the district
court should begin its inquiry by deciding whether failure to apply state law to the
disputed issue would lead to different outcomes in state and federal court.
Guaranty Trust Co. v. York, 326 U.S. 99, 109, 65 S. Ct. 1464, 1470 (1945). That
is, with respect to the state law standard at issue, the court must ask: “Would
application of the standard have so important an effect upon the fortunes of one or
both of the litigants that failure to apply it would unfairly discriminate against
citizens of the forum State, or be likely to cause a plaintiff to choose the federal
court?” Gasperini, 518 U.S. at 428, 116 S. Ct. at 2220 (internal punctuation
omitted).12 If the answer is “no,” then the district court should apply federal judge-
11
The Hanna Court did note that even if a federal statute or rule covers the issue, the
statute or rule should not be applied if it is unconstitutional. Hanna, 380 U.S. at 471, 85 S. Ct. at
1144. The Court also stated that a federal procedural rule should not be applied if it violates the
Rules Enabling Act, 28 U.S.C. § 2072. Id.
12
Framing the question in this way helps ensure that the district court takes into account
what Hanna, 380 U.S. at 468, 85 S. Ct. at 1142, termed the “twin aims” of Erie, “discouragement
of forum-shopping and avoidance of inequitable administration of the laws.” See Gasperini, 518
U.S. at 428 n.8, 116 S. Ct. at 2220 n.8 (connecting the question of whether state law is outcome
determinative to the “twin aims” discussed in Hanna).
16
made law. If the answer is “yes,” meaning that state law is outcome-determinative,
the court must apply the state law standard, unless affirmative “countervailing
federal interests” are at stake that warrant application of federal law. Id. at 432,
116 S. Ct. at 2222; Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525, 537, 78 S.
Ct. 893, 901 (1958). These steps, when taken together, constitute the proper
analysis that a district court should employ in cases involving Erie issues. See
Chemerinsky, supra, § 5.3 at 315 (summarizing the multi-step Erie analysis).
B. Application of the Erie Doctrine to the Present Case
Mindful of this multi-step Erie analysis, we turn to the instant consolidated
diversity actions. It is clear from the decisions of Florida’s Third District in these
consolidated cases that Florida and federal forum non conveniens law differ in
application. As we have explained, Florida law looks to the contacts between the
lawsuit and Florida, while federal law looks to the contacts between the lawsuit
and the whole United States. Florida law, therefore, conflicts with federal law on
the forum non conveniens issue. Moreover, there is no congressional statute or
Federal Rule of Civil Procedure on point; the forum non conveniens doctrine is
judge-made law. The parties, furthermore, do not dispute that Florida law is
outcome-determinative in this context. It follows, then, that the primary question
in these consolidated cases is whether there is a federal countervailing interest at
17
stake that trumps the application of Florida law on forum non conveniens in
diversity cases.
1. The Sibaja Decision
We need not address this question sui generis, however, because our
precedent of Sibaja v. Dow Chemical Co. is directly on point. In that case, the
plaintiffs were Costa Rican agricultural workers who had brought a personal injury
suit in Florida state court after allegedly being exposed, while in Costa Rica, to
pesticides that the defendants manufactured. The defendants removed the case to
federal court, arguing that federal forum non conveniens law should apply in
diversity cases and that the plaintiffs’ suit thus should be dismissed.13 We agreed
with the defendants and concluded that federal forum non conveniens law was
applicable to the diversity suit.
In reaching this conclusion, we called attention to the fact “that the
application of the federal, rather than the state, forum non conveniens rule alters the
outcome of this case.” Sibaja, 757 F.2d at 1219. Even though the application of
state law would be outcome-determinative, we decided that countervailing federal
13
At the time Sibaja was decided, the Florida forum non conveniens doctrine precluded
the dismissal of an action under the doctrine when one of the parties was a resident of the state.
See Caldwell, 359 So. 2d at 861. Florida law subsequently was revised to allow for dismissal
under the doctrine even when one of the parties involved is a state resident. See Kinney Sys.,
674 So. 2d at 93.
18
interests trumped this concern. Specifically, we linked the federal forum non
conveniens doctrine to “the court’s inherent power, under article III of the
Constitution, to control the administration of the litigation before it and to prevent
its process from becoming an instrument of abuse, injustice and oppression.” Id. at
1218; see also Hanna, 380 U.S. at 472-73, 85 S. Ct. at 1145 (noting that “matters
which relate to the administration of legal proceedings [are matters over] which
federal courts have traditionally exercised strong inherent power, completely aside
from the powers Congress expressly conferred in the [Federal Rules of
Procedure]”) We opined that the federal doctrine is but “one manifestation” of a
“court’s inherent power to protect the integrity of its process,” and we also
connected the doctrine to a “[c]ourt’s interest in controlling its crowded docket.”
Sibaja, 757 F.2d at 1218. Essentially, our court in Sibaja indicated that the federal
judiciary has a unique supervisory interest in the management and administration
of a uniform, national system of Article III courts, and we held that this interest
trumps state law. Put differently, the case made clear that the federal judiciary
traditionally has exercised a certain level of discretionary power to oversee access
to its courts, and that this interest in federal oversight tilts the balance against
applying state law.
The Sibaja opinion, in fact, did more than point out the federal
19
countervailing interests that override the need for applying state law. Our court
also made a foray into the murky waters of the substance/procedure dichotomy.
Because the federal forum non conveniens doctrine concerns control over which
parties are entitled to have federal courthouse access in the first instance, we stated
that the doctrine involves “a decision that occur[s] before, and completely apart
from, any application of state substantive law.” Id. at 1219. We explained that the
federal doctrine is a matter of procedure (“a rule of venue, not a rule of decision”),
and that it does not involve “a decision going to the character and result of the
controversy.” Id. For these reasons, we decided that it was appropriate for the
district court to apply federal forum non conveniens law and to dismiss the
diversity suit of the Costa Rican plaintiffs.
In light of Sibaja, the district court in the present litigation erred by applying
Florida law rather than federal law on forum non conveniens. We discern no
principled distinction between Sibaja and the situation here. The initial order
issued in the Bestors’ federal lawsuit — in which Chief Judge Davis employed the
federal forum non conveniens doctrine and concluded that the case should not be
dismissed — was the proper mode of analysis that should have been followed by
the district court once the Appellants’ cases were transferred and consolidated.
Instead, the district court chose to sua sponte raise the Erie issue and to apply
20
Florida forum non conveniens law, a decision inconsistent with the teachings of
Sibaja.
2. The District Court’s Rejection of Sibaja
As part of its sua sponte analysis under Erie, the district court addressed
Sibaja and attempted to distinguish it from the present consolidated cases. In its
order, the district court asserted that our court in Sibaja took great effort to limit
the decision to the specific circumstances of that case. The district court focused
on two passages in Sibaja, one stating that “under the circumstances presented
here, [the district court’s decision] whether to exercise its jurisdiction and decide
the case was not a decision going to the character and result of the controversy.”
Sibaja, 757 F.2d at 1219. The other passage referenced by the district court states:
“[T]he district court’s application of the doctrine of forum non conveniens in this
case did not operate as a state substantive rule of law and thus transgress Erie’s
constitutional prohibition.” Id. Based on the phrases “under the circumstances
presented here” and “in this case,” the district court concluded that Sibaja left room
for future cases involving the Erie doctrine and forum non conveniens to be
decided differently.
Upon reaching this conclusion, the district court then proceeded to
distinguish Sibaja from the present litigation. The court noted that in Sibaja, the
21
state forum non conveniens standard at issue was less restrictive of the court’s
docket than the federal standard.14 Hence, the district court maintained, the federal
interest at stake in Sibaja was a federal court’s inherent power to police and control
its own docket against a floodgate of foreign lawsuits. This federal interest is not
relevant to the present litigation, the court asserted, since the current Florida forum
non conveniens standard is more restrictive of the court’s docket than the federal
standard, given that it does not consider the contacts a lawsuit might have with
states other than Florida. Without this interest in restricting the federal docket at
stake, the district court concluded that there was no countervailing federal interest
that trumped the application of the outcome-determinative Florida forum non
conveniens standard:
When the state standard is more restrictive than the
federal standard, rather than more liberal, the danger of
the district court becoming a de facto open forum, under
the guise of diversity jurisdiction, dissipates. Thus,
under the unique circumstances presented here, there is
no compelling federal interest of self-regulation, which
would warrant application of the federal standard over
the state standard.
R2-52-17.
The district court decided that this narrow reading of Sibaja effectuates the
14
See supra note 13.
22
dual aims of Erie, the prevention of forum shopping and of the inequitable
administration of the laws. See Hanna, 380 U.S. at 468, 85 S. Ct. at 1142
(delineating the aims of the Erie doctrine). The court explained that its restricted
reading of Sibaja discourages widespread forum shopping by plaintiffs, who would
have an incentive to forum shop if contrary forum non conveniens standards
applied in state courts and in federal courts sitting in the same state. Contrary
standards also would discriminate between plaintiffs who can invoke diversity
jurisdiction and those who cannot. The district court consequently rejected Sibaja
as controlling precedent and dismissed the Appellants’ lawsuits.
3. Errors in the District Court’s Analysis
The district court’s narrow reading of Sibaja is unpersuasive. As an initial
matter, we reject the court’s contention that the phrases “under the circumstances
presented here” and “in this case” were meant to circumscribe the opinion’s ambit.
As discussed, Sibaja places the forum non conveniens doctrine within the larger
context of the federal judiciary’s “inherent power . . . to control the administration
of the litigation before it” and to oversee access to its courts. Sibaja, 757 F.2d
1218. That is, forum non conveniens is a particular species contained within the
larger genus of inherent powers held by the federal courts to supervise the
administration and management of their proceedings. Read against this backdrop,
23
the word “circumstances” in the phrase “under the circumstances presented here”
refers to forum non conveniens. That is, the Sibaja court meant that forum non
conveniens was the particular circumstance of the federal judiciary’s inherent
power to administer and manage its proceedings that was at issue in that case. The
phraseology in no way implies that in one instance federal courts should apply the
federal forum non conveniens standard, in the other a particular state standard,
based on the particular results that will obtain.
Additionally, we read the phrase “in this case” as words of description, not
words of limitation. Put differently, the phrase is descriptive, not normative. It
serves to contextualize the opinion, but it in no way signals that district courts
ought to revisit, on a case-by-case basis, the question of whether state or federal
law on forum non conveniens should apply in diversity cases, especially in light of
the strong countervailing federal interests identified by the Sibaja opinion.
Aside from our concerns over how the district court parsed the text of
Sibaja, we take issue with the district court’s crabbed reading of the federal
interests at stake in the forum non conveniens context. Indeed, the district court
circumscribed the federal interests involved, stating in effect that there is only one
federal interest at stake that need be considered. The court found that the sole
interest of a federal court in this area is its interest in restricting access to the
24
federal court docket to prevent a floodgate of foreign suits best filed elsewhere.
We reject this reductionist model. While the result of the forum non
conveniens doctrine may be to restrict access to the federal docket, this result is
reached only after a complex inquiry that takes into account several competing
public and private interests at stake, including the private interest of the plaintiff in
having access to a federal forum. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508,
67 S. Ct. 839, 843 (1947) (noting that the forum non conveniens analysis should
include inquiry into “the private interest of the litigant”). The district court’s
constricted account of the doctrine erases this multifaceted inquiry and reduces the
issue to one of mere docket policing. Several cases buttress the fact that forum non
conveniens is a multi-sided doctrine in which no one interest is dominant or
dispositive of the analysis. See Piper Aircraft, 454 U.S. at 249-50, 102 S. Ct. at
263 (noting that “[i]f central emphasis were placed on any one factor, the forum
non conveniens doctrine would lose much of the very flexibility that makes it so
valuable”); La Seguridad, 707 F.2d at 1307 (stating that “controlling weight cannot
be given to any one factor in the balancing process”). In light of such precedent, it
is clear that the district court’s analysis is flawed because it tries to pigeonhole
forum non conveniens: the doctrine takes into account the interest in preventing
federal docket congestion, but it cannot be reduced to that. See Piper Aircraft, 454
25
U.S. at 241 n.6, 102 S. Ct. at 258 n.6 (listing “the administrative difficulties
flowing from court congestion” as only one of the considerations taken into
account under the federal forum non conveniens doctrine).
We point out, furthermore, that there are several affirmative federal interests
undergirding the federal forum non conveniens doctrine that cannot be explained
away as concern over restricting access to the federal courts. Even if we ignore the
countervailing federal interest in restricting access to the federal docket, the federal
interests that we are about to discuss are sufficient, standing alone, to trump
outcome-determinative state law on forum non conveniens.
We first point out the federal interest in ensuring that, as a general rule,
United States citizens have access to the courts of this country for resolution of
their disputes. There is a strong federal interest in making sure that plaintiffs who
are United States citizens generally get to choose an American forum for bringing
suit, rather than having their case relegated to a foreign jurisdiction. This interest
is taken into account by the federal forum non conveniens standard. See Koster v.
(American) Lumbermens Mut. Cas. Co., 330 U.S. 518, 524, 67 S. Ct. 828, 831-32
(1947) (stating that “there is good reason why . . . [a case] should be tried in the
plaintiff’s home forum if that has been his choice” and that “a real showing of
convenience by a plaintiff who has sued in his home forum will normally outweigh
26
the inconvenience the defendant may have shown”); Gilbert, 330 U.S. at 508, 67 S.
Ct. at 843 (noting that “unless the balance is strongly in favor of the defendant, the
plaintiff’s choice of forum should rarely be disturbed”).15 This federal interest is
reflected in La Seguridad, where we noted that there is “a strong presumption
against disturbing plaintiffs’ initial forum choice.” La Seguridad, 707 F.2d at
1307. It also motivated our statement in that case that before a plaintiff’s forum
choice can be unsettled, the district court must evaluate and determine that “an
adequate alternative forum exists which possesses jurisdiction over the whole
case.” Id.
The district court’s position is inconsistent with the federal interest we have
delineated. As noted, the district court’s position is that courts are only to consider
the federal interest in restricting access to the docket in deciding whether to apply
state or federal forum non conveniens law. If that position were adopted, it would
mean that the federal standard only applies when it is more likely than the state
standard to lead to dismissal of the plaintiff’s diversity suit. Conversely, the state
standard only would apply when it is more likely than the federal standard to lead
to dismissal. In addition to the patent unfairness of such a scheme, the district
15
We note that the bias towards the plaintiff’s choice of forum is much less pronounced
when the plaintiff is not an American resident or citizen. See Piper Aircraft, 454 U.S. at 255–56,
102 S. Ct. at 265-66.
27
court’s approach would defeat the federal judiciary’s interest in making sure that
American plaintiffs normally have access to a forum in this country to resolve their
disputes. We refuse to countenance such a result.
We now turn to another important federal interest at stake in the forum non
conveniens context, the federal government’s interest in foreign relations. The
unique interest of the federal government in the area of foreign relations has been
reiterated time and again by the Supreme Court.16 It is clear, moreover, that
foreign relations are implicated in the forum non conveniens calculus. See
Rivendell, 2 F.3d at 992 (noting the “important federal interest[]” involved as a
result of “the foreign policy implications of forum non conveniens decisions”);
Exxon Corp. v. Chick Kam Choo, 817 F.2d 307, 320 (5th Cir. 1987), rev’d on
other grounds, 486 U.S. 140 (1988) (referring to “the transnational and
international nature of the interests at stake in a forum non conveniens inquiry”).
Several examples demonstrate how foreign relations come into play in the
forum non conveniens context. For instance, in deciding whether a case should be
16
See, e.g. Atherton v. FDIC, 519 U.S. 213, 226, 117 S. Ct. 666, 674 (1997) (stating that
federal common law controls the United States’ “relationships with other countries”); Banco
Nacional de Cuba v. Sabbatino, 376 U.S. 398, 424-27, 84 S. Ct. 923, 938-40 (1964) (holding that
states are not free to develop their own “act of state” doctrine because federal law controls);
United States v. Pink, 315 U.S. 203, 233, 62 S. Ct. 552, 567 (1942) (noting that “[p]ower over
external affairs is not shared by the States; it is vested in the national government exclusively”);
United States v. Belmont, 301 U.S. 324, 331, 57 S. Ct. 758, 761 (1937) (“[I]n respect of our
foreign affairs generally, state lines disappear.”).
28
dismissed because a foreign jurisdiction is more suitable, federal courts necessarily
must analyze the interest that the foreign country has in the dispute, an analysis
that may raise issues of international comity. Federal courts also must consider
whether the foreign jurisdiction provides an adequate alternative forum for the
plaintiff, which may require a court to consider whether the law of the foreign
country provides more than a “remedy . . . [that] is so clearly inadequate or
unsatisfactory that it is no remedy at all.” Piper Aircraft, 454 U.S. at 254, 102 S.
Ct. at 265. In some cases, moreover, federal courts may have to address arguments
presented by a foreign sovereign that has intervened or filed an amicus brief. In
such cases, the sovereign may allege that the case will impair its national economic
or policy interests if the case is allowed to proceed in the United States. These are
but a few of the ways in which issues of foreign relations arise in the forum non
conveniens area. The presence of such issues militates in favor of a federal
standard for the doctrine in diversity cases. See Rivendell, 2 F.3d at 992 (adopting
federal standard in part because of the foreign affairs implications of forum non
conveniens). Given the dominant federal role in the foreign relations arena, the
federal judiciary needs to have the flexibility to fashion its own forum non
conveniens doctrine that takes full account of the foreign policy concerns at stake,
irrespective of whether a given case comes before the court on federal question or
29
diversity grounds.
We also draw attention to a third federal interest that is at stake— protection
of a national, unified set of venue rules within the federal judicial system. See In
re Air Crash, 821 F.2d at 1158 (adopting federal standard on forum non conveniens
for diversity cases in part to protect the “internal consistency and administration”
of the federal system). This unified set of venue rules is reflected most clearly in
28 U.S.C. § 1404(a), which states that “[f]or the convenience of parties and
witnesses, in the interest of justice, a district court may transfer any civil action to
any other district or division where it might have been brought.” 28 U.S.C. §
1404(a). Application of a state standard on forum non conveniens that is different
from the federal standard, however, leads to an analysis that is analytically
inconsistent with § 1404(a).
The analytical inconsistency can be demonstrated by focusing on the Florida
forum non conveniens standard, which only considers the contacts that a lawsuit
has with the State of Florida. The Florida standard, if applied in federal court,
would require the district court to ignore the contacts the suit might have with
other states in the determination of whether dismissal is appropriate. In contrast, a
thorough analysis under § 1404(a) necessarily requires that the district court
consider the contacts that a lawsuit has with any of the fifty states to determine if
30
the case should be transferred there. In other words, a seamless system of national
venue rules requires federal courts to look to the connections a lawsuit has with the
entire United States. Application of a state standard like Florida’s, therefore,
would require an analysis by the district court that is incongruent with the analysis
required under § 1404(a).17 See Parsons v. Chesapeake & Ohio Ry. Co., 375 U.S.
71, 73-74, 84 S. Ct. 185, 187 (1963) (noting that “different factual considerations
may be involved” in a state court’s dismissal on forum non conveniens grounds and
a federal court’s transfer of a suit under § 1404(a)). It follows that to preserve the
federal interest in having an internally consistent, national set of venue rules, the
federal forum non conveniens standard should be applied in diversity cases.
Irrespective of the federal judiciary’s interest in protecting the court docket
from a flood of foreign suits, the three countervailing federal interests we have
enunciated justify the application of federal, rather than state, law in the forum non
conveniens context. The district court, however, did provide one additional reason
for why Florida law ought to apply that we have not yet confronted. In its order,
17
Indeed, Florida’s Third District referenced § 1404 as a justification for why application
of Florida’s forum non conveniens doctrine — in contrast to its federal counterpart — should not
entail consideration of the contacts between the lawsuit and states other than Florida. The Third
District held that Florida state courts should not consider such contacts because the Florida
judicial system is not like the federal system: “The federal courts are a unitary system having
nationwide jurisdiction. If there is another more convenient forum in the United States, then the
remedy is to transfer the cause under 28 U.S.C. § 1404, rather than dismiss for forum non
conveniens.” Cohon, 728 So. 2d at 1228 n.*.
31
the district court alleged that its constricted reading of Sibaja was appropriate
because it fulfilled the dual aims of Erie, the prevention of forum shopping and of
the inequitable administration of the laws. See Hanna, 380 U.S. at 468, 85 S. Ct. at
1142 (noting the aims of Erie).
The dual aims of Erie cannot save the district court’s position. We note, as
an initial matter, that these dual aims already are incorporated into the step of the
Erie analysis that addresses whether application of state law would affect the
outcome of the suit.18 The Supreme Court in Gasperini indicated that the dual aims
of Erie were addressed through this inquiry into whether state law is outcome
determinative. See id. at 428 n.8, 116 S. Ct. at 2220 n.8. Yet, as we have
explained, even if state law is outcome determinative, federal law still may control
if there is a countervailing federal interest at stake. Id. at 432, 116 S. Ct. at 2222;
Byrd, 356 U.S. at 537, 78 S. Ct. at 901. Hence, because Sibaja and our own
analysis in this case show that strong federal interests trump state law in the forum
non conveniens context, there is no reason to revive the question of whether the
dual aims of Erie have been satisfied.
18
As noted, in addressing whether state law is outcome determinative, the district court
must inquire: “Would application of the standard have so important an effect upon the fortunes
of one or both of the litigants that failure to apply it would unfairly discriminate against citizens
of the forum State, or be likely to cause a plaintiff to choose the federal court?” Gasperini, 518
U.S. at 428, 116 S. Ct. at 2220.
32
Nevertheless, we do point out that the district court’s position does not in
itself prevent forum shopping and the inequitable administration of justice. Rather,
the court’s opinion merely replaces one form of forum shopping with another and
generates its own type of inequitable administration. The district court’s holding
still would encourage plaintiffs to forum shop, just not between state courts and
federal courts sitting in the same state. Plaintiffs instead would be encouraged to
forum shop between district courts in different states, since different forum non
conveniens standards would apply to federal districts based on the particular state
within which a district was located. Furthermore, the district court’s disposition
creates its own inequities. By concluding that state law on forum non conveniens
only applies in diversity cases when it is more restrictive than federal law, the
district court created a rule whereby federal courts are always to apply the standard
that is most hostile to the plaintiff’s forum choice. Such an outcome is particularly
inappropriate in light of the “strong presumption against disturbing plaintiffs’
initial forum choice.” La Seguridad, 707 F.2d at 1307. In sum, then, we conclude
the district court’s recourse to the dual aims of Erie does not alter our decision that
the court misconstrued Sibaja and erred by applying state forum non conveniens
law.
III. CONCLUSION
33
These consolidated cases involved the appeal of a judgment of dismissal in
which the district court held that under the Erie doctrine, the state standard on
foreign non conveniens applies in diversity cases whenever the state standard is
more restrictive, and thus permits more dismissals, than its federal counterpart. In
this appeal, however, we have decided that federal law on forum non conveniens
instead should apply. We have reached this decision after concluding that the
Sibaja case controls the issue at hand. Furthermore, we have reached this decision
based on our analysis showing that several federal interests, other than restricting
access to the federal docket, are at stake in the forum non conveniens context.
Such interests include the federal goal of ensuring that United States citizens
generally have access to the courts of this country for resolution of their disputes;
the federal government’s interest in foreign relations; and the federal concern over
maintaining a national, unified set of venue rules among the several circuits. These
federal interests trump outcome-determinative state law on forum non conveniens.
Our analysis thus had led us to the conclusion that the district court erred in
applying Florida law on forum non conveniens to this diversity suit, and so we
REVERSE the judgment of dismissal and REMAND for further proceedings
consistent with this opinion.
34
Patricia Esfeld v. Costa Crociere
Court: Court of Appeals for the Eleventh Circuit
Date filed: 2002-04-30
Citations: 289 F.3d 1300
Copy Citations