Petition — Humphreys (Cayman), Ltd. v. Lehman

Court, U.S.

r D

OCT 29 1983

IN THE

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Supreme Court of the United Grates STEVAS,

OcToBer TERM, 1983

No.

HuMPHREYsS (CAYMAN), LTD.

and

Houpay Inns, Inc.

Petitioners,

Vv.

Victoria A. LEHMAN, as ExECcuTRIx OF Tue Estate OF

RosBert WAYNE LEHMAN, DECEASED

Respondent.

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PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Joun S. RICHBOURG

Suite 2002, Clark Tower

5100 Poplar Avenue

Memphis, Tennessee 38118

(901) 761-3360

Counsel for Petitioner

QUESTIONS PRESENTED

1. Whether the Court of Appeals erred in holding the Trial

Court abused its discretion in dismissing the action on the

grounds of forum non conveniens when the lower court

considered all relevant public and private interest factors found

in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) and its balancing

of these factors are reasonable.

2. Whether the Court of Appeals erred in relying upon the

standards used to determine the constitutional limits of extra-

territorial service of process upon nonresidents (“minimum

contacts” tests) in reviewing a lower court’s dismissal on the

grounds of forum non conveniens.

3. Whether the Court of Appeals erred in ruling that lowa law

probably applied to plaintiffs warranty claims precluding

dismissal on the basis of forum non conveniens when the record

reflects the contract was entered into and performed in Grand

Cayman.

4. Whether the Court of Appeals erred in placing substantial

weight upon the unavailability of contingent fees in Grand

Cayman as justification for its overruling the lower court’s

dismissal on forum non conveniens ground.

5. Whether the Court of Appeals erred in giving no weight to

the inability of the petitioner to implead third parties in the

Court’s review of a forum non conveniens dismissal.

6. Whether the Court of Appeals erred in giving special or

substantial weight to the residence and citizenship of an

American plaintiff in overruling the Trial Court’s forum non

_ conveniens dismissal.

7. Whether the Court of Appeals erred by denying the

petitioners their right to due process guaranteed by the United

States Constitution in overruling the Trial Court’s forum non

conveniens dismissal.

INDEX

Page

DET ccc suhe sdwecSics vex sesacsscsusbvavesusucenssartin l

Te os voi sescvsies comveshenseneshs 2

ii cdvnte abpdancrincece scsessebuuntvoas 2

I Bate a, cccccevessearvanpavstagecevpecets 3

Reasons for Granting the Writ ..................00--ceeeceeeeees 6

1. The Decision Below Conflicts with the

Decisions of the Supreme Court ....................- 6

2. The Decision Below Conflicts with the

Decisions of Other Courts of Appeals as to the

Proper Application of Forum Non

Conveniens Criteria ...............----- iE oN 13

3. The Decision Below Raises Significant

Recurring Problems Concerning Procedures in

Forum Non Conveniens Inquiries ................... 18

eae. dia vccadhbeds coadseseverercesoocsunt 20

EE Seek Mic eLts coh ciy ih Gedas ueadencibsduensgsvcescodedeesey la

CITATIONS

CASES:

Gulf Oil Corp. vs. Gilbert, 330 U.S. 501 (1947) ....... 2, 6, 7, 8,

9, 10, 12, 16, 18

Koster vs. Lumberman’s Mutual Co., 330 U.S.

418 (1947) .......... eiatididsopenseunsa i giaentstem 6, 9, 10, 12

Piper Aircraft Co. vs. Reyno, 454 U.S. 235 (1981) ...... 6, 8, 9,

10, 11, 12, 13

International Shoe Co. vs. Washington, 326 U.S.

EN aa dsc dcos's behind’ chunls snagaddabantbethiasteeradunns 6

Hodson vs. A. H. Robbins Co., Inc., 528 F. Supp.

809 (E.D. Va. 1981)

CASES: Page

Pain vs. United Technologies Corp., 637 F.2d 775,

SERRA CED y sivduindent>vcnaceqad'gesee ... 13, 14, 16, 18

Fitzgerald vs. Texaco, Inc., 521 F.2d 488,

CAME oo sn ied Ueupadeurdededsered 13, 14, 16, 18

Dahi vs. United Technologies Corp., 632

PE ete LOE GE, TOE cess ccdteicccscdescenesgesinenees 15

Alcoa, Inc. vs. M/V Nordic Regent 656 F.2d 147

ES SINE oie cus sudacchaVecdctocdspoibepteststdster 16, 18

Schertenleib vs. Traum, 589 F.2d 1156

ng d ets s ipwa tenth snnedooannele 16

Mizokami Bros. vs. Boychem Corp., 556 F.2d 975

(9th Cir. 1978) cert. denied, 434 U.S.

PUP UITED Sa bax codhexccokprocsivecstebhepecdvacvasssaepnbues 17

Vanity Fair Mills vs. T. Eaton Co., 234 F.2d 633

(2d Cir.) cert. denied, 352 U.S. 871 (1956) ............... 17

MISCELLANEOUS:

Federal Practice and Procedure, Wright, Miller

BR CHINE, GSO hbcpec cc ccesvisseccivasigdecinchseunziie 7

a a we

aes 2) oes) A

es

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

No.

HuMPHREYS (CAYMAN), LTD.

and

Houpay Inns, INC.

Petitioners,

Vv.

Victoria A. LEHMAN, as ExeEcuTRIX Or THE EsTATE OF

ROBERT WAYNE LEHMAN, DECEASED

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

The petitioners, Humphreys (Cayman), Ltd. and Holiday Inns,

Inc., respectfully pray that a writ of certiorari issue to review the

judgment and opinion of the United States Court of Appeals for

the Eighth Circuit entered in this proceeding on July 19, 1983.

OPINION BELOW x

The opinion of the Court of Appeais, not yet reported, appears

in the Appendix hereto, as weil as the United States District

Court for the Northern District of lowa’s order on Humphrey’s

(Cayman), Ltd.'s resisted motion to dismiss filed March 4, 1982

2

and the District Court’s order on Victoria A. Lehman’s resisted

motion to reconsider, filed April 27, 1982.

JURISDICTION

The judgment of the Court of Appeals for the Eighth Circuit

was entered on July 19, 1983. This petition for certiorari was filed

within 90 days of that date plus permitted extensions. This

Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1).

QUESTIONS PRESENTED

1. Whether the Court of Appeals erred in holding the Trial

Court abused its discretion in dismissing the action on the

grounds of forum non conveniens when the lower court

considered all relevant public and private interest factors found

in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) and its balancing

of these factors are reasonable.

2. Whether the Court of Appeals erred in relying upon the

standards used to determine the constitutional limits of extra-

territorial service of process upon nonresidents (“minimum

contacts” tests) in reviewing a lower court’s dismissal on the

grounds of forum non conveniens.

3. Whether the Court of Appeals erred in ruling that lowa law

probably applied to plaintiff's warranty claims precluding

dismissal on the basis of forum non conveniens when the record

reflects the contract was entered into and performed in Grand

Cayman.

4. Whether the Court of Appeals erred in placing substantial

weight upon the unavailability of contingent fees in Grand

Cayman as justification for its overruling the lower court’s

dismissal on forum non conveniens ground.

5. Whether the Court of Appeals erred in giving no weight to

the inability of the petitioner to implead third parties in the

Court’s review of a forum non conveniens dismissal.

6. Whether the Court of Appeals erred in giving special or

substantial weight to the residence and citizenship of an

3

American plaintiff in overruling the Trial Court’s forum non

conveniens dismissal.

7. Whether the Court of Appeals erred by denying the

petitioners their right to due process guaranteed by the United

States Constitution in overruling the Trial Court’s forum non

conveniens dismissal.

STATEMENT OF THE CASE

This is a dispute between the executrix of the estate of Robert

Wayne Lehrran, on one side, and Holiday Inns, Inc. and

Humphreys (Caym»n), Ltd. which owns and operates a Holiday

Inn franchise from Holiday Inns, Inc. in Cayman Islands, Grand

Cayman, British West Indies.

In or around October of 1980, plaintiff's son, through a travel

agency located in Clinton, Iowa, made reservations for a double

occupancy at the Grand Caymanian Holiday Inn owned by

Humphreys (Cayman), Ltd. He tendered payment, however, for

only a single occupancy and it was not until the plaintiff's son

arrived and registered that Humphreys (Cayman), Ltd. learned

that the plaintiff's son would be accompanied by the decedent,

Robert Wayne Lehman. At that time, the decedent was given

accommodations at the Grand Caymanian. (A. p. 21a)

On November 21, 1980, while a guest at the Grand Caymanian,

Lehman rented from Bob Soto's Diving, Ltd., a shop which

leases a portion of the beach adjacent to the hotel, a Hobie Cat

sailboat for sailing on the Carribean Sea. While sailing that day,

Lehman was allegedly lost at sea. Plaintiff, in her complaint,

contends that her decedent’s death was caused by the defendants’

negligence and breach of implied warranties.

Humphreys (Cayman), Ltd. moved for a dismissal on the

grounds that there was insufficient process and that there were

insufficient contacts between it and the state of Iowa to justify the

Court’s exercise of jurisdiction over it. Both Holiday Inns and

Humphreys (Cayman), Ltd. further moved the Court to dismiss

on the basis of forum non conveniens.

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In an opinion entered on March 4, 1982, the Honorable

Edward J. McManus overuled the defendant's motion to dismiss

for insufficiency of process and lack of minimum contacts

between Humphreys (Cayman), Ltd. and the state of lowa but

granted both Humphreys (Cayman), Ltd.'s and Holiday Inns,

Inc.'s motions to dismiss on the grounds of forum non

conveniens.

On March 12, 1982, the plaintiff filed her motion to amend

findings and to alter or amend order and judgment which the

District Court treated as a motion to reconsider, (A. p. 17a) which

motion was denied by the Trial Judge on April 27, 1982.

In opposition to the plaintiff's motions, the defendants filed

the affidavits of Pau! Joseph Valentine Dougherty, attorney at

law, licensed to practice law in Grand Cayman, indicating that

the defendants are subject to the jurisdiction of the Cayman

Court and are subject to service of process in that court, that the

cause of action alleged by plaintiff in this action is cognizable

under Cayman law, that Cayman law provides for the recovery of

exemplary damages for more than simple negligence, that

Cayman law provides that an estate may recover for wrongful

death and that the decedent's dependents may recover their lost

support, that Cayman law allows for an action for indemnity and

contribution, that jury trials are available in civil matters and that

a wrongful death action would not necessarily be limited to four

or five thousand dollars as previously contended by the plaintiff.

Humphreys (Cayman) further filed the affidavit of John S.

Richbourg, reciting the identities of 17 witnesses including the

individuals and employees of Bob Soto's Diving, Ltd. who leased

the Hobie Cat to Lehman and who gave sailing instructions and

tested Lehman's ability to operate the Hobie Cat, as weil as

individuals who saw the decedent alive while operating the Hobie

Cat and search pilots and police officers who participated in the

search and discovery of the lost sailboat. In addition, two of the

witnesses offered by the defendants were employees of Humphreys

(Cayman), Ltd., who could testify regarding the relationship

between Holiday Inns, Inc. and Humphreys (Cayman), Ltd.

These two employees of Humphreys (Cayman), Ltd. had no

5

knowledge about the facts surrounding the disappearance of

Lehman. (R.35-39)

Plaintiff offered affidavits in support of her motions that

indicated she would call two witnesses to testify concerning the

weather conditions in Grand Cayman.

The Trial Court in considering defendant's motion to dismiss

on the grounds of forum non conveniens acknowledged that

there is a strong presumption in favor of the plaintiff's choice of

forum, especially where the plaintiff has chosen the home forum,

but realized that the resident plaintiff's forum choice is not

dispositive. The Trial Court then considered the Gilbert private

interest factors and public interest factors and concluded that

virtually all key witnesses reside in Grand Cayman and that there

would be no compulsary process for attendance of witnesses who

live in Grand Cayman who are not citizens of this country and

who are unwilling to voluntarily appear at trial. Most

importantly, the Trial Court concluded that defendants will be

unable to implead Bob Soto's Diving, Ltd. and felt that the more

expeditious and inexpensive course would be for all claims and

issues to be disposed of in one action.

The Trial Court further held that more significant local interest

was in Grand Cayman and that Grand Cayman law would

control in the action.

From the District Court's dismissal of the action the plaintiff

took her appeal to the United States Court of Appeais for the

Eighth Circuit. On July 19, 1983, the Eighth Circuit reversed the

trial judge and remanded the case for trial. In doing so the Court

of Appeals ruled that the Trial Court had abused its descretion in

dismissing the complaint holding that the plaintiff's choice of the

home forum should rarely be disturbed. The court found that the

district court did not weigh properly the location of the parties

witnesses and that the District Court gave undve weight to the

defendants desire to impiead a third party. The Court concluded

that Iowa law may well control the plaintiff's claim for breach of

warranties and that both lowa and the United States have a

significant interest in the litigation inasmuch as the defendants

6

are subject to the personal jurisdiction of Iowa under its

procedures for extra-territorial service of process on non-

residents. The Court of Appeals felt the District Court had not

realistically considered Lehman's ability to litigate her claims in

the foreign court. In particularly the Court ruled that the lack of

the contingency fee system in Grand Cayman impaired her ability

to litigate in Grand Cayman. Finally, the Court concluded that

the District Court failed to give proper weight to the factor of

Lehman's residence.

REASONS FOR GRANTING THE WRIT

1. THE DECISION BELOW CONFLICTS WITH THE

DECISIONS OF THE UNITED STATES SUPREME

COURT.

The United States Supreme Court has dealt with forum non

conveniens defenses in three cases that are worthy of note. They

are Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947); Koster v.

Lumberman's Mutual Co., 330 U.S. 518 (1947); and most

recently Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981).

The opinion below violates the Gilbert decision in applying the

“minimum contracts” test promulgated by the United States

Supreme Court in /niernational Shoe Co. v. Washington, 326

U.S. 310 (1945).

The Court of Appeals reasoned that the interest of the State of

lowa could be measured under the same standards used to

measure the interest of a state in exercising jurisdiction over

nonresident defendants. (A. p. 9a, 10a). This is error. The question

before any Court in ruling upon the constitutionality of the

extra-territorial service of process on nonresident defendants

involves a defendant's minimum contacts with the forum state. If

it does not offend traditional notions of fair play and substantial

justice to exercise jurisdiction over a defendant, a court is

justified in doing so. In dealing with forum non conveniens

defenses, on the other hand, the ulltimate question before the

Court is one of convenience. The two issues are separate and

distinct and have been confused by the lower Court. In fact, in a

forum non conveniens inquiry, jurisdiction of the court is

>

presumed. The only issue before the Court is whether to exercise

or decline its jurisdiction. The doctrine of forum non conveniens

does not come into play unless the court in which the action was

brought has both subject matter and personal jurisdiction and

venue is proper. See: Federal Practice and Procedure, Wright,

Miller and Cooper, § 3828 at p. 179.

The Gilbert Court very laboriously set forth the various

standards to be used as guides for a court to utilize in making

forum non conveniens determinations. On page 506 of the

decision, the Court held:

“The Neirbo case is only a declaration that if the

defendant, by filing the consent to be sued, waives its

privilege to be sued at its place of residence, it may be sued in

the federal courts at the place where it has consented to be

sued. But the general venue statute plus the Neirbo

interpretation do not add up to a declaration that the Court

must respect the choice of the plaintiff, no matter what the

type of suit or issues involved. The two taken together mean

only that the defendant may consent to be sued, and it is

proper for the federal court to take jurisdiction, not that the

plaintiff's choice cannot be questioned. The defendant’s

consent to be sued extends only to give the court jurisdiction

of the person; it assumes that the court, having the parties

before it, will apply all the applicable law, including, in

those cases where it is appropriate, its discretionary

judgment as to whether the suit should be entertained. In all

cases in which the doctrine of forum non conveniens comes

into play, it presupposes at least two forums in which the

defendant is amenable t. process; the doctrine furnishes

criteria for choice between them.”

From this holding by the Supreme Court it is clear that the fact a

federal court may assume personal jursdiction over a defendant

(whether that defendant consents to the jurisdiction or whether a

statute provides for jurisdiction) does not necessarily mean that it

is convenient to litigate the matter in that particular forum. A

court may be able to exercise personal jurisdiction over a

defendant but may, using its sound discretion, decline to exercise

such jurisdiction on the grounds of forum non conveniens. The

Gilbert Court realized that a trial judge may have personal

jurisdiction but still refuse to entertain the litigation because it is

inconvenient. The Court of Appeals has violated the holding in

Gilbert by using “minimum contacts” criteria in determining

Iowa's interest in the litigation.

After all, jurisdiction over a nonresident defendant is a

constitutional inquiry into the limits of the due process clause

while the forum non conveniens question is a discretionary

decision by a Trial Court to refuse jurisdiction over the subject

matter because of the inconvenience in litigating in that

particular forum. The two issues are entirely different breeds of

cat. It is entirely conceivable that a defendant may have the

necessary minimum contacts to submit that defendant to the

jurisdiction of a court and yet the forum itself may be obviously

inconvenient for both the parties and the court.

The court below relied heavily upon the residence of the

defendants in the United States and their solicitations of business

in Iowa. But this residence and solicitation of business only

indicate their willingness to be sued there, not the convenience of

being sued there. The Court of Appeals ruling, therefore, violates

the Gilbert decision in utilizing “long arm” rationale in making a

forum non conveniens determination.

The Supreme Court on numerous occasions has held that a

decision by a trial judge on the forum non conveniens issue is a

discretionary one. Gilbert, supra., Reyno, supra. As this court

phrased it in Reyno:

9

Here, as in the Reyno case, tl. ‘‘ourt of Appeals realized that

the standard of review was that of abuse of discretion.” While

dispensing “lip service” to that standard of review, the Eighth

Circuit has substituted its own judgment for that of the District

Court. The Trial Judge, while giving excrutiating attention to

detail, followed the standards set forth in the Gilbert and Reyno

cases, giving proper weight to all relevant factors and exercised

its discretion to refuse jurisdiction. In making its decision, the

Trial Court considered all the Gilbert criteria. It recognized that

there was a strong presumption in favor of the plaintiff's choice of

forum, especially where the plaintiff has chosen his home forum.

It also recognized that the plaintiff's choice of home forum was

not dispositive because the relative conveniences could disfavor

the plaintiff’s choice of forum and justify dismissal. The Court

then painstakingly examined each of the Gilbert private and

public interests factors and concluded that the defendant's

inability to compel attendance of witnesses and its inability to

implead Bob Soto’s Diving, Ltd. justified dismissal.

The Court further felt dismissal was justified from the public

interest factors because of the more significant local interest in

vtand Cayman and the fact that Cayman law would apply. In

overruling the Trial Court, the Court of Appeals substituted its

own discretion for that of the District Judge.

The Court of Appeals also differed with the lower court

regarding the access to proof by cavalierly ignoring the

defendant's affidavit setting forth the names and locations of

seventeen witnesses all of whom are located in Grand Cayman

other than two who live in Memphis and Miami and one with the

U.S. Coast Guard (R.35-39). Although the record clearly refuted

it, the Court of Appeals heid that many of the witnesses worked

for the Holiday Inn. Even though the piaintiff only asserted by

her affidavit that she would call two U.S. witnesses the Court of

Unitea States.

Of course, the Kester case addressed itself ta the use of

affidavits in forum non conveniens defensc. it held:

10

“This Court cannot say that the District Court abused its

discretion giving weight to the undenied sworn statements

of fact in defendant’s motion papers, espevially in view of

the failure of plaintiff's answering affidavit to advance any

reason of convenience to the plaintiff. We hold only that a

District Court, . .. may refuse to exercise its jurisdiction

when a defendant shows much harrasment and plaintiff's

response not only discloses so little counterveiling benefit to

himself in the choice of forum as it does here, but indicates

such disadvantage to support the inference of the forum he

chose would not ordinarily be thought a suitable one to

decide the controversy.” p. 531, 532.

The Petitioners cannot help but agree with the Court in Koster.

The Court of Appeals must take the record as it finds it and may

not alter the record to justify its decision. The affidavit of the

defendants in support of its motion to dismiss and the affidavit of

the plaintiff supports the Trial Court’s discretionary decision that

compulsory process for the attendance of unwilling witnesses was

not available to the plaintiff, despite the Court of Appeals finding

to the contrary.

The Court of Appeals aiso disagreed with the Trial Judge’s

reasoning that Cayman law would apply jn clear controversion of

this Court’s decision in both Gilbert and Reyno. It is known from

the ruling in Gilbert that “there is an appropriateness ... , in

having the trial of a diversity case in a forum that is at home with

the .. . law that must govern the case, rather than having a court

in some other forum untangle problems in conflict of laws and in

law foreign to itself.” (p. 509) We also know from Reyno that

“the public interest factors point towards dismissal where the

Court would be required to ‘untangle problems in conflict of

laws, and in law foreign to itself.’ ” (citation deleted) (p.

251). However, the Court of Appeais in substituting its discretion

for the Trial Judge criticized the lower court’s ruling concerning

the choice of law question and concluded that, although Cayman

law may apply toward the negligence count, Iowa law may, in all

probability, apply to the contract action, inasmuch as the

warranties were made by the defendants in Iowa. (A. p. 12a).

Even if the Court of Appeals is correct, the choice of law problem

still points towards dismissal because a trial involving two sets of

11

laws will, unnecessarily, confuse ajury. Reyno, p. 260. In making

its ruling regarding the choice of law, however, the Court of

Appeals, again, paid no heed to the record in the case. From the

order of the District Court it is revealed “through the affidavit of

Cayman’s executive vice-president, .. . that the reservation made

in October vy plaintiff's son was for a double room but that

Cayman received advanced payment sufficient only for a single

occupancy. Notwithstanding the failure to properly reserve a

double occupancy room, Cayman allowed plaintiff's son to

register for double occupancy when he arrived at the Grand

Caymanian. It was not until he arrived and registered, however,

that Cayman learned that plaintiff's son would be accompanied

by Lehman and that Lehman would be a guest of the Grand

Caymanian.” (A. p. 21a)

Of course, warranties are creatures of contract law. There can

be no breach of an express warranty unless the parties have

entered into a contract based upon or containing those express

warranties. The record is clear that while Lehman's son made a

reservation in lowa, Lehman, the decedent, had no contract fora

room until he appeared at the registration desk in Grand

Cayman. As a result, the contract was entered into in Grand

Cayman and not Iowa. (A. p. 21a).

The Trial Judge also concluded on the same page of his

decision:

“It appears that the parties agree that Bob Soto's

Driving{sic] Ltd. actually rented the Hobie Cat to Lehman.

It also appears that Bob Soto's and Cayman are parties to

some form of lease agreement in which Bob Soto’y is lessee

and Cayman, lessor. Bob Soto's is not a party to this action.

It is a corporation organized under the laws of the Cayman

Islands and it has no presence in or contacts with the United

States.” (A. p. 21a)

Of course, the plaintiff's contract theory of liability is based

upon certain alleged warranties made by Humphreys (Cayman)

concerning the availability of Hobie Cats for sailing in the

Carribean Sea. However, the record clearly reflects that Lehman

entered into a contract for the rental of the Hobie Cat with Bob

12

Soto’s and that the rental of said Hobie Cat was entered into in

Grand Cayman and not in Iowa. As a result, plaintiff suggests

that the law of Grand Cayman would apply to both the

negligence and the contract counts of the complaint because the

contract in question was entered into and to be performed in

Grand Cayman. Inasmuch as the Court of Appeals did not take

these facts from the record into consideration, the opinion of the

Trial Court is enhanced and, in all probability, the Trial Court is

correct in ruling that the law of Grand Cayman applies to the

action. This is a factor pointing toward the dismissal of the case

on the ground of forum non conveniens.

In the Court of Appeal’s opinion, great deference was afforded

to the plaintiff's supposed inability to litigate in Cayman because

of the unavailability of contingent fee arrangements in Grand

Cayman. This position taken by the Court of Appeals violates the

spirit, if not the letter, of this Court’s ruling in Reyno. This Court

concluded in Reyno that a possibility of less favorable law in the

alternate forum should not ordinarily be given conclusive or even

substantial weight in the forum non conveniens inquiry. Logic

would dictate that if little weight should be given to the less

favorable law in alternate forum, certainly less weight should be

given to the less favorable terms and conditions in plaintiff's

contract with her attorney in the alternate forum. How the

lawyer’s fees are paid has no place in a forum non conveniens

inquiry. Neither Gilbert nor Koster made any mention of legal

fees as a substantial factor in balancing the conveniences of a

forum. Moreover, the only case cited by the Court of Appeals

which mentions the contingent fee system, Hodson, v. A.H.

Robbins Co., Inc., 528 F. Supp. 809 (E.D. Va. 1981), whiie

stating that the absence of a contingent fee system in England is a

factor, concludes that this factor may be ignored unless plaintiffs

demonstrate their inability to afford the litigation in a

noncontingent fee system. In the Hodson case, the plaintiffs

submitted affidavits attesting to their lack of sufficient funds to

pursue their actions in England. But, on the contrary, ‘in this

action the Trial Court relied upon affidavits indicating that the

plaintiff is far from a pauper and has sufficient funds on hand to

retain counsel in Cayman.

13

According to Reyno, the Court must only ask itself: Is there an

alternate forum which gives plaintiff an adequate remedy. Based

upon the affidavits filed in the cause from an attorney licensed to

practice in Grand Cayman. (A. p. 30a), that question must be

answered affirmatively. Plaintiff's fee arrangement with his or

her lawyer should never come into play in determining the

availability of an alternate forum in a forum non conveniens

inquiry.

These conflicts between the decision below and decisions of the

United States Supreme Court justify the grant of certiorari to

review the judgment.

2. THE DECISION BELOW CONFLICTS WITH THE

DECISIONS OF OTHER COURTS OF APPEALS

AS TO THE PROPER APPLICATION OF FORUM

NON CONVENIENS CRITERIA.

The decision of the Eighth Circuit in this case conflicts with

various other circuits in its application of the forum non

conveniens doctrine.

For instance, in Pain v. United Technologies Corp., 637 F.2d

775 (D.C. Cir. 1980), various plaintiffs, one of whom was an

American, sued a defendant manufacturer for deaths occuring in

a helicopter crash. On page 784 of the decision the Court outlined

steps a district judge must take:

“Thus, district judges’ forum non conveniens inquiry should

proceed in four steps. 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 interest 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 insure that the

plaintiffs can reinstate their suit in the alternative forum

14

without undue inconvenience or prejudice.” (emphasis

theirs)

The petitioners argue that the trial judge below followed the

four steps set forth in Pain. After considering all the relevant

factors of private interest and after weighing the strong

presumption against disturbing plaintiff's initial forum choice, it

felt the question, albeit close, required dismissal. The trial court

then turned to the public interest factors and found that those

interests tipped the balance in favor of a trial in the foreign

forum. It is not within the province of the Court of Appeals to

overrule the discretionary decision of a district court when that

district court has properly weighed all the relevant factors

following the steps set forth in Pain. In doing so, the Court of

Appeals has created a conflict between itself and the District of

Columbia Circuit which rendered the Pain decision.

Another manner in which the Eighth Circuit has conflicted

with other circuits involves the issue of the petitioner's ability or

inability to implead a third party defendant. The Eighth Circuit

gave no weight whatsoever to the defendant's inability to implead

Bob Soto’s Diving. The Eighth Circuit strained the facts to find

that separate trials of plaintiff's claim against these defendants

and indemnity action against Bob Soto's Diving would not

require much duplication of proof or result in inconsistent

judgments. The fact is that if the petitioners can show that the

accident was caused not by negligence on their part but rather by

the negligent acts and omissions of Bob Soto's Diving, they

would be relieved of liability altogether. Both the Pain decision

and Fitzgerald vs. Texaco, Inc., 521 F.2d 448 (2d Cir. 1975),

cert. denied, 423 U.S. 1052 (1976), consider the inability to

implead other parties directly involved in the controversy a factor

which weighs against the retention of jurisdiction. The Eighth

Circuit gave no weight to the petitioner's inability to implead Bob

Soto’s Diving creating a conflict between itself and the Second

and Distnct of Columbia Circuits requiring this Court to grant

certiorari.

Likewise, the Pain decision gave substantial consideration to

the public interest factors set forth in Gilbert. It felt the greater

15

local public interest resided in Norway rather than the United

States because the accident took place there and Norway has a

substantial interest in applying its law to such cases in order to

prevent accidents occuring within its borders and over its

territorial water. In the same manner, Grand Cayman has a

substantial interest in protecting its citizens and visitors from

dangers associated with its surrounding waters. See also Dahi v.

United Technologies Corp., 632 F.2d 1027 (3d Cir. 1980).

The Dadi case and the Pain case also considered dismissal

appropriate because of the applicability of local law. The Eighth

Circuit considered the District Court's analysis of the choice of

law questions to be defective and concluded that lowa law may be

applicable to the warranty claim. While the petitioners disagree

with the Eighth Circuit, we find the Third Circuit's reasoning in

Dahi persuasive:

“We have reviewed the District Court’s conflict of law

analysis and we cannot say that the Court erred in

concluding that the factor of applicable substantive law

favored dismissal of the actions. We believe that Norweigan

substantive law will predominate the trial of this case and

that the mere presence of the count pleaded under

Connecticut law but which may have little chance of success

does not warrant a different conclusion. If we were to hold

otherwise, the plaintiff could avoid dismissai on forum non

conveniens grounds by the inclusion of the substantive

count based on American law regardless of the merits of

that claim.” p. 1032.

The Third Circuit, therefore, will not preclude a forum non

conveniens dismissal simply because the complaint contains a

count to which American law would apply when foreign law

predominates. On its holding below, the Eighth Circuit is in

conflict.

Perhaps the most apparent conflict created by the Court of

Appeal's opinion below concerns the weight that should be

alloted to the citizenship and the residence of the palintiff. The

Court below while stating that it does not place any “talismanic

significance” on the fact that Lehman was a U.S. citizen, did give

16

more deference to the plaintiff's and her husband's U.S.

citizenship and residence in Iowa. From a review of Alcoa

Steamship Co., Inc. vs. M/ V Nordic Regent, 656 F.2d 147 (2d

Cir. 1981), and other cases, it is clear that the Second, District of

Columbian, and Ninth Circuits disagree to a great extent. The

Alcoa court in an en banc decision observed:

“A trend of both the common law generally and admiralty

law in particular has been away from according a talismanic

significance to the citizenship or residence of the parties.”

The Court concluded that the Supreme Court's decision in

Gilbert contains all the criteria by which a forum non conveniens

motion is determined. That is to say that there is a presumption in

the law that the plaintiff's initial choice of forum is the correct

one, but this presumption is a rebuttable one and may be

overcome if the defendant can show that the forum is an

inconvenient one. Alcoa holds, however, that “.. . the American

citizenship of a plaintiff [does not] justify creating a special rule

of forum non conveniens.” p. 159.

The District of Columbia Circuit subscribes to the Alcoa

interpretation in Pain vs. United Technologies Corp., supra. On

page 796 of the decision it states:

“In the recent case of Alcoa Steamship Co., Inc. vs. M/V

Nordic Regent, the Second Circuit sitting en banc rejected

the notion that American citizens should be accorded

preferential access to courts in the United States. The effect

of the decision in Alcoa is to require an application of the

forum non conveniens doctrine strictly pursuant to the tests

set forth in Gilbert and Koster without regard to the

citizenship of the parties. Although this approach differs

somewhat from the approach previously followed by this

Court in Founding Church of Scientology vs. Verlag, we

find the Second Circuit’s en banc reasoning in Alcoa

persuasive.”

The District of Columbia Circuit agreed with Judge Fineberg in

Schertenieib vs. Traum, 589 F.2d 1156 (2d Cir. 1978) who

reasoned:

“If litigation is in a clearly inconvenient forum, why should

defendant and the Court be burdened with its continuing

there, if an alternative forum now exists so that plaintiff will

uot be without a remedy?”

Petitioners agree and argue that the Eighth Circuit has placed too

great a significance on the citizenship and residence of the

plaintiffs. See also, Mizokami Bros. vs. Baycham Corp, 556 F.2d

975 (9th Cir. 1977), cert. denied, 434 U.S. 1035 (1978) and Vanity

Fair Mills vs. T. Eaton Co., 234 F.2d 633 (2d Cir.) cert. denied,

352 U.S. 871 (1956).

Petitioners are aware that this Court dealt briefly with the

subject of American citizenship and residence in the Reyno

decision. However, the Court’s holding there needs clarification.

On page 255 of that decision, the Court stated:

“The District Court acknowledged that there is ordinarily a

strong presumption in favor of the plaintiff's choice of

forum, which may be overcome only when the private and

public interest factors clearly point towards trial in the

alternative forum. It held, however, that the presumption

applies with less force when the plaintiff or real parties in

interest are foreign. ... When the home forum has been

chosen, it is reasonable to assume that this choice is

convenient. When the plaintiff is foreign, however, this

assumption is much less reasonable. Because the central

purpose of any forum non conveniens inquiry is to ensure

that the trial is convenient, a foreign plaintiff's choice

deserves less deference.”

The question arises: Are there two presumptions or one

presumption? That is to say, is there a presumption that any

plaintiffs choice of forum is correct and an additional

presumption on top of the first one stating that the plaintiff's

choice of his home forum is even more correct? Petitioners think

not and submit that any deference to a plaintiff who chooses his

home forum is included in the original presumption in favor of

any plaintiff's choice of forum. There should not be any greater

deference given to a plaintiff who chooses his home forum than

18

any other plaintiff who exercises a choice of forum. The

presumption is not fully applicable where a foreign plaintiff

chooses a U.S. forum because that is not consistent with

convenience. On the other hand, the presumption is fully

applicable where the home forum is chosen because that is

consistent with convenience. The presumption includes those

class of plaintiffs who choose their home forum and achoice of a

home forum permits no greater deference beyond the original

presumption. The rule should be, then: A plaintiff's choice of

forum is presumed convenient, particularly where the plaintiff

chooses his home forum but noi necessarily if an alien or non-

resident chooses a U.S. forum. Once the presumption applies, the

Gilbert standards should be reviewed to determine the con-

venience of the forum and none of these refer to the citizenship or

residence of the plaintiff. The Eighth Circuit has applied the

presumption and then given plaintiff's citizenship and residence

even greater deference in conflict with Alcoa and Pain.

Petitioner’s suggest that the Supreme Court needs to issue a

writ of certiorari in this case to clarify its decision in Reyno and to

do away with the conflicts between the Eighth Circuit on the one

hand and the Second and District of Columbia Circuits on the

other.

3. THE DECISION BELOW RAISES SIGNIFICANT

RECURRING PROBLEMS CONCERNING PROCE—

DURES IN FORUM NON CONVENIENS INQUIRIES.

The Eighth Circuit’s opinion in this case reflects important

policy considerations growing out of forum non conveniens

inquiries. American Courts have grown to be quite popular when

compared to foreign forums. This is mainly due to products

liability legislation not available in other jurisdictions, con-

tingent fee systems, and prospects of a larger damage award from

an American jury. As a result of this popularity of American

forums, our judicial system has already become over-crowded

with litigation that could have been brought in other forums.

Time and time again, district judges will be called upon to rule on

forum non conveniens objections. The criteria and guidelines to

19

be used in this important procedural question will arise over and

over and will effect many litigants and courts in the future.

The Eighth Circuit’s treatment of the forum non conveniens

objection may have far reaching repercussions. It has held that

standards generally reserved to determine the constitutionality of

extra-territorial service of process may be used in measuring a

forum state’s interest in the litigation in ruling on forum non

conveniens objections. If this holding is correct it means that

many, many litigants who have minimum contacts with an

American state and who may be subject to the personal

jurisdiction of a U.S. court can be forced to litigate in that court

when the forum is patently inconvenient. The impact of this

decision will be felt worldwide.

The Eighth Circuit has also held, in effect that the nonexistence

of a contingent fee system in an alternate forum is a criterion in

determining the availability of an adequate alternate forum. The

United States probably stands alone in permitting contingency

fees. If the Court of Appeals is correct, American courts will be

inundated with litigants eager to commence lawsuits with lawyers

being paid contingently upon the outcome. In truth, acontingent

fee may cost a plaintiff more or less than other type fee

arrangements depending upon the outcome of the suit. It would

be speculation on any court’s part to conclude that the lack of a

contingency fee makes litigation more expensive. Actually,

palintiff may pay more under a contingent fee system than she

would otherwise. How the lawyers ar paid has no place in a forum

non conveniens inquiry.

Finally, it is of extreme importance that a trial court be abie to

control its own docket and to be able to use its sound discretion io

refuse to exercise jurisdiction in inconveniently placed liti-

gation. This Court needs to provide further instruction to lower

courts to outline the extent of the trial judge’s discretion and the

limits of the Appellate Court’s ability to interfere with that

discretion.

20

CONCLUSION

For these reasons, a writ of certiorari should issue to review the

judgment and opinion of the Fighth Circuit Court of Appeals.

Respectfully submitted,

JOHN S. RICHBOURG

SurtTE 2002, 5100 PopLarR AVENUE

MEMPHIS, TENNESSEE 38137

(901) 761-3360

Counsel for Petitioner

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 82-1645

Victoria A. LEHMAN, as Executor of the Estate of

ROBERT WAYNE LEHMAN, deceased,

Appellant,

Vv.

HuMPHREY CAYMAN, LTD. and

HouipDay INns, INC.,

Appellees.

Appeal from the United States District Court

for the Northern District of Iowa.

Submitted: February 14, 1983

Filed: July 19, 1983

Before Lay, Chief Judge, Bricut and Poss, Circuit Judges.

LAY, Chief Judge.

Victoria Lehman appeals from the district court’s dismissal of

her wrongful death action against the defendants. The district

court dismissed the action on the ground of forum non

conveniens, holding that it would be more convenient for the suit

to be brought in the Cayman Islands, British West Indies. We

reverse and remand to the district court with directions to

reinstate the suit.

Lehman’s action stems from the presumed death of her

husband, Robert Wayne Lehman, while he was a guest at the

Grand Caymanian Holiday Inn in the Cayman Islands. Victoria

Lehman is a citizen of the State of Iowa, as was Robert Lehman

before his death. Humphrey Cayman, Ltd., is a corporation

organized under the laws of the Cayman Islands, and maintains

2a

corporate offices in Tennessee. Humphrey Cayman owns and

operates the Grand Caymanian Holiday Inn, and is a franchisee

of Holiday Inns. Holiday Inns is a Tennessee corporation, and

maintains a registered agent in Iowa.

Robert Lehman and his son were guests of the Grand

Caymanian Holiday Inn for several days in November 1980. On

November 21, Robert Lehman rented a 16-foot “Hobie Cat”

sailboat from a sailboat rental shop, Bob Soto’s Diving Litd.,

located on the hotel premises. Robert and two other persons set

sail on the Caribbean Sea. Several hours later, observers

informed the manager of the sailboat rental shop that Robert

Lehman’s sailboat was not visibie from the shore. An air search

was launched. Searchers eventually discovered only the wreckage

of the sailboat; Lehman and his two companions are presumed

dead.

Victoria Lehman brought suit in the federal district court for

the Northern District of Iowa, alleging that the defendants

breached express and implied warranties that the hotel and its

facilities, including the rental shop and its sailboat, were safe for

their intended uses, and that the defendants were negligent in

failing to exercise the due care required of an innkeeper for the

protection of its guest. The defendants moved to dismiss, arguing

inter alia that the district court had no personal jurisdiction over

the defendants, and that if personal jurisdiction did exist the

action should be dismissed pursuant to the doctrine of forum non

conveniens.

The district court heid that it possessed personal jurisdiction

over the defendants, but it agreed with the defendants that the

Cayman Islands was the more convenient forum in which this

suit should be litigated. The district court held that, after it

considered the factors enunciated by the Supreme Court in Gulf

Oil Corp. v. Gilbert, 330 U.S. 501, 508-09 (1947), it was

“convinced that the interests of convenience require the dismissal

of this action.”

3a

Analysis.

The determination of whether an action should be dismissed

on the ground of forum non conveniens is committed to the

sound discretion of the district court, and will be overturned only

upon a showing of an abuse of that discretion. In Gilbert, the

Supreme Court held:

“Wisely, it has not been attempted to catalogue the

circumstances which will justify or require either grant or

denial of remedy. The doctrine leaves much to the discretion

of the court to which plaintiff resorts, and experience has

not shown a judicial tendency to renounce one’s own

jurisdiction so strong as to result in many abuses.”

330 U.S. at 508 (footnote omitted).

Although perhaps no list of factors is exhaustive, the Supreme

Court in Gilbert enunciated private and public concerns a trial

court must consider when it decides whether to dismiss a case on

the ground of forum non conveniencs:

“If the combination and weight of factors requisite to

given results are difficult to forecast or state, those to be

considered are not difficult to name. An interest to be

considered, and the one likely to be most pressed, is the

private interest of the litigant. Important considerations are

the relative ease of access to sources of proof; availability of

compulsory process for attendance of unwilling, and the

cost of obtaining attendance of willing, witnesses; possi-

bility of view of premises, if view would be appropriate to

the action; and all other practical problems that make trial

of a case easy, expeditious and inexpensive. There may also

be questions as to the enforcibility of a judgment if one is

obtained. The court will weigh relative advantages and

obstacles to fair trial. It is often said that the plaintiff may

not, by choice of an inconvenient forum, “vex,” “harrass,”

or “oppress” the cefeadant by inflicting upon him expense

or trouble not necessary to his own right to pursue his

remedy. But unless the balance is strongly in favor of the

defendant, the plaintiff's choice of forum should rarely be

disturbed.

Factors of public interest also have place in appiying the

doctrine. Administrative difficulties follow for courts when

4a

litigation is piled up in congested centers instead of being

handled at its origin. Jury duty is a burden that ought not to

be imposed upon the people of a community which has no

relation to the litigation. In cases which touch the affairs of

many persons, there is reason for holding the trial in their

view and reach rather than in remote parts of the country

where they can learn of it by report only. There is a local

interest in having localized controversies decided at home.

There is an appropriateness, too, in having the trial of a

diversity case in a forum that is at home with the state law

that must govern the case, rather than having a court in

some other forum untangle problems in conflict of laws, and

in law foreign to itself.”

330 U.S. at 508-09 (footnotes omitted).

The district court, relying upon Gilbert, found that relevant

private and public interest factors required dismissal of the

action. Of the various private factors listed in Gilbert, the trial

court discounted the relative ease of access to sources of proof

and the possibility of a view of the premises. However, the court

found dispositive (1) the fact that the defendants do not have

available compulsory process for attendance of witnesses who

- live in the Cayman Islands, and (2) the fact that the defendants

would not be able to implead Bob Soto's Diving Ltd., the sailboat

rental shop, in a federal forum in Iowa. The trial court also found

that the place of Lehman's death provided the Cayman Islands

with the more significant “local interest” and that the substantive

law of the Cayman Islands would control the case. Therefore, the

court heid that the interests of convenience required the dismissal

of the action.

We may disturb the district court's decision only if we find an

abuse of discretion; simply to disagree with the district court as if

the facts had been presented to this court in the first instance

cannot be the basis of our decision. Paper Operations

Consultants International, Lid. v. SS Hong Kong Amber, 513

F.2d 667, 670 (9th Cir. 1975).

Although the Supreme Court has ruled that the piaintiff’s

residence is not to be given dispositive weight in ruling on a

Sa

motion for dismissal under the doctrine of forum non

conveniens, it is nonetheless a significant concern to be

considered by the trial court. Piper Aircraft Co. v. Reyno, 454

U.S. 235, 255 (1981) (the presumption in favor of the plaintiff's

choice of forum applies with less force when the plaintiff or real

parties in interest are foreign).

In addition, earlier Supreme Court decisions have emphasized

the deference to be given a plaintiff's choice of forum. In Koster v.

(American) Lumbermens Mutual Casualty Co., 330 U.S. 518

(1947), the Court stated that “[i]n any balancing of conveniences,

a real showing of convenience by a plaintiff who has sued in his

home forum will normally outweigh the inconvenience the

defendant may have shown.” /d. at 524. In Gilbert, relied upon by

the district court, the Supreme Court admonished that “unless

the balance is strongly in favor of the defendant, the plaintiff's

choice of forum should rarely be disturbed,” 330 U.S. at 508, and

that jurisdiction is to be declined only in “exceptional

circumstances,” id. at 504.

Courts of Appeals have reinforced these considerations. In

Founding Church of Scientology v. Verlag, 536 F.2d 429 (D.C.

Cir. 1976), the court observed:

“{Cjourts should require positive evidence of unusually

extreme circumstances, and should be thoroughly con-

vinced that material injustice is manifest before exercising

any such discretion to deny a citizen access to the courts of

this country.”

Id. at 435, quoting Burt v. Isthmus Development Co., 218 F.2d

353, 357 (Sth Cir. 1955).

See also Pain v. United Technologies Corp., 637 F.2d 775 (D.C.

Cir. 1980), cert. denied, 454 U.S. 1128 (1981), in which the court

held:

“Thus, the plaintiff's choice of forum is more than just one

factor that the trial judge must consider when

equities between two alternative forums. Trial judges do not

have unchecked discretion to dismiss cases from a plaintiff's

6a

chosen forum simply because another forum, in the court's

view, may be superior to that chosen by the plaintiff.”

637 F.2d at 783 (footnote omitted).

See also Manu International, S.A. v. Avon Products, Inc., 641

F.2d 62, 65 (2d Cir. 1981) (“Emphasis on the district court's

discretion, however, must not overshadow the central principle

of the Gilbert doctrine that ‘unless the balance is strongly in favor

of the defendant, the plaintiff's choice of forum should rarely be

disturbed.’ ”); Hoffman v. Goberman, 420 F.2d 423, 426 (3d Cir.

1970).!

In our view the district court failed to properly weigh the

parties’ convenience in light of the above principles. The court

made no finding of exceptional circumstances or that the

defendants’ interests “strongly” favored dismissal. In fact, the

court indicated simply thai it was a “close” question.’

'Because the criteria for forum non conveniens dismissal in the state

courts in lowa are essentially the same as the federal criteria,

Silversmith v. Kenosha Auto Transport, 301 N.W. 2d 725, 727-28 (lowa

1981), we need not decide here whether state or federal law is the source

of the rule. See Gilbert, 330 U.S. at 509; Mizokami Brothers of Arizona,

Inc. v. Mobay Chemical Corp., 660 F.2d 712, 719 n.10 (8th Cir. 1981);

Reyno v. Piper Aircraft Co., 630 F.2d 149, 157 and n.17 (3d Cir. 1980),

rev'd on other grounds, 454 U.S. 235 (1981).

2We recognize ‘hat, notwithstanding the plaintiff's choice of forum, if

the balance of conveniences makes trial in the forum at issue

“unnecessarily burdensome” for the defendant or the court, dismissal

would be proper. Piper Aircraft Co. v. Reyno, 454 U.S. at 256 0.23.

7a

We turn now to the district court’s analysis.

A. Location of Key Witnesses.

The district court found that many of the key witnesses reside

in the Cayman Islands, and that the defendants have available to

them no compulsory process to compel the attendance of

unwilling witnesses at a trial in this country. The district court

also found that to the extent such witnesses would be willing to

appear, the cost to the defendants of transporting them to trial in

Iowa would be substantial.

In making this evaluation, the district court did not address the

fact that many of the witnesses work for the Holiday Inn and

compulsory process probably would not be necessary to produce

its own employees for an appearance at trial. Furthermore, the

geographical location of the witnesses should not be dispositive.

The time and expense of obtaining the presence or the testimony

of a foreign witness in a local forum are significanily lessened by

modes of communication and travel that are commonplace

today. Use of admissions can also eliminate the need for much of

the testimony. Furthermore, the district court did not consider

the possibility of taking the foreign witnesses’ testimony in the

Cayman Islands, or wherever else they may be located. See Fed.

R. Civ. P. 28(b) and 29. See also Calvano Growers of California

v. Generali Belgium, 632 F.2d 963, 969 (2d Cir. 1980) (Newman,

J., concurring), cert. denied, 449 U.S. 1084 (1981). Moreover,

Lehman's claim for relief is based upon two counts: (1) breach of

express and implied warranties and (2) negligence. Although the

accident took place in the Cayman Islands, most of the

contractual arrangements for the accommodations with the

travel agency and with Holiday Inn took place in lowa, and

therefore many witnesses with knowledge relevart to the

warranty count would be present in Iowa. In addition, Robert

Lehman was a long-time resident of Iowa; as such, witnesses

material to the plaintiff's claim also would be closer to the local

forum than to the Cayman Islands. At best we find that, in light

of the location of the defendants’ witnesses, Lehman's choice of

an Iowa forum is not suggestive of harrassment of the defendants

nor oppressive to their defense. This factor stand.ng alone does

not set forth exceptional circumstances of inconvenience for the

—_—

8a

defendants to defend in an lowa court. The location of the

defendants’ witnesses, when balanced with the plaintiff's

inconvenience to produce witnesses iu the Cayman Islands, is not

an exceptional circumstance which would justify the denial of the

plaintiff’s choice of a local forum.

B. The Defendants’ Ability to Implead.

The district court placed great emphasis upon the defendants’

inability to implead the sailboat rental shop if the action were

tried in Iowa. We think the court erred in doing so. The

defendants’ primary defense appears to be that it was not

negligent in its actions toward Robert Lehman, and that if any

party was negligent, it was the sailboat rental shop, Bob Soto's

Diving Ltd. (Soto). The defendants contend that if trial is held in

federal court in Iowa, they will be unable to implead Soto as a

third-party defendant in a claim for contribution or indemnity

since the court has no personal jurisdiction over Soto. The

district court concluded that the more expeditious and

inexpensive course of action would be for ail claims to be

resolved in a single action in the Cayman Islands. See Piper

Aircraft Co. v. Reyno, 454 U.S. at 259.

It is certainly more efficient, from the viewpoint of the

administration of justice, to have all disputes arising from an

incident settled in one place and in one lawsuit. The liberal

joinder of parties allowed by the Federal Rules of Civil

Procedure is designed to achieve such efficiency. However, as the

Second Circuit has held, “impleader practice is discretionary

with the courts and care must be taken to avoid prejudice to the

plaintiff or third-party defendant.” Olympic Corp. v. Societe

Generale, 462 F.2d 376, 379 (2d Cir. 1972). In the present case, as

in Olympic Corp., the difference between the plaintiff's claims

against the defendants and the latter’s claims against the third-

party defendant is such that it is not likely that separate trials of

the claims would require much duplication of proof or result in

inconsistent judgments. In addition to the negligence count,

Lehman is suing the defendants for the alleged breach of

9a

warranties contained in the defendants’ advertising materials

received by Robert Lehinan in the United States. Whatever claim

the defendants might have against Soto for indemnity or

contribution based on the defendants’ alleged breach of these

warranties certainly would not involve the same issues as

Lehman's warranty claim against the defendants, since the

warranties were made by the defendants, not by Soto. See

Olympic Corp., 462 F.2d at 379. Therefore, although trial of all

claims in the Cayman Islands may be more expeditious from a

viewpoint of judicial administration, this is so only to a slight

degree, and does not take into account the convenience of all

parties. Assuming judgment were rendered against the defend-

ants, they would be free to pursue their claim for contribution or

indemnity against Soto in an action in the Cayman Islands.

C. Interest of the Forum in the Dispute.

The district court held that the Cayman Islands have a more

significant local interest in the dispute than do lowa and the

United States. Robert Lehman was a guest of the Grand

Caymanian Holiday Inn at the time of his death. He rented a

sailboat from a Caymanian shop, and the accident took place in

the Cayman Islands.

However, we find the district court failed to weigh the fact that

lowa and the United States have an equally strong local interest

in the dispute. Robert Lehman was a resident of Iowa, the

defendants engaged in a systematic advertising effort to generate

business in lowa, the representations regarding the hotel and its

facilities were directed at Robert Lehman and his son in Iowa,

and the hotel reservations were made through a travel agency in

Iowa. We find that when the defendants have conducted business

in Iowa to this extent,’ and when an Iowa resident is killed or

3The district court, in holding that it possessed the power to exercise

personal jurisdiction of the defendants, found that “it is quite likely that

Lehman and his son would never have chosen the Grand Caymanian if

Cayman had not engaged in a systematic effort to generate business in

Iowa.” This may be contrasted with cases in which the litigation had

10a

injured during the course of his business with the defendants, the

State of Iowa and the United States have an interest in seeing that

the plaintiff is provided a convenient local forum, especially

when the only alternative forum available to the plaintiff is

outside the United States. In determining whether the defendants

would be subject to personal jurisdiction in an lowa forum, the

district court noted that “the forum state's interest in providing a

forum for its injured residents is neither insignificant or absent. ...

In addition to the interest of lowa, in a case such as this where

the only available United States venue lies in a single district, the

United States itself has an interest in seeing that plaintiff is

provided a forum in this country.” But this reasoning was either

ignored or given little weight when the trial court evaluated the

little or no connection with the forum, and the action was dismissed on

the ground of forum non conveniens. For example, in Gilbert, a

Virginia plaintiff sued a defendant incorporated in Pennsylvania. Suit

was brought in federal district court in New York. The suit stemmed

from a fire, allegedly caused by the defendant, at the plaintiff's

warehouse in Virginia. The suit was dismissed in favor of a Virginia

forum. 330 U.S. at 502-03.

In Paper Operations Consultants International, Lid. v. SS Hong

Kong Amber, 513 F.2d 667 (9th Cir. 1975), the plaintiff cargo owner, a

Bahamian corporation with its principal office in Florida, sued the

defendant ship owner, a Liberian corporation. Suit was brought in

federal district court in San Francisco. The suit arose from the

defendant's shipment of the plaintiff's cargo from Vancouver, British

Columbia to Singapore. The only connection San Francisco had with

the dispute was that the plaintiff's San Francisco counsel began pre-

litigation negotiations in San Francisco with the agency that issued the

bill of lading. The action was dismissed in favor of a Vancouver forum.

Id. at 669, 672.

Finally, in J.F. Pritchard & Co. v. Dow Chemical of Canada, Lid.,

462 F.2d 998 (8th Cir. 1972), tne plaintiff sued regarding a construction

contract between the plaintiff's Canadian subsidiary and the Canadian

defendant. Suit was brought in federal district court in Missouri. The

contract was executed by Canadian companies, was almost entirely

lla

convenience of the parties and the interest of the lowa forum in

entertaining the case.‘

D. Application of Substantive Law.

The district court held that according to Iowa’s choice of law

rule* the substantive law of the Cayman Islands would govern

a”

performabie in Canada, and the majority of work under the contract

was done in Canada. The contract called for the application of

Canadian law, and any judgment for the plaintiff would have to be

enforced in Canada. In addition, suit on the contract was already

pending in a Canadian court. /d. at 1000. In upholding the district

court’s dismissal, this court said: “Appellant made his bed in Canada;

now he must lie in it if he wishes to proceed.” /d. at 1002.

‘See Aigner v. Bell Helicopters, Inc., 86 F.R.D. 532, 543 (N.D. IIL.

1980) (“When . . . it is shown that there exists a significant relationship

between the forum at issue and the litigation, the plaintiff's choice of

forum must be accorded great weight and, for that reason, ‘should

rarely be disturbed.’ ”).

We note that the question whether a forum may exercise personal

jurisdiction over a defendant involves “traditional notions of fair play

and substantial justice,” World-Wide Volkswagen Corp. v. Woodson,

444 U.S. 286, 292 (1980), quoting International Shoe Co. v.

Washington, 326 U.S. 310, 316(1945), while a determination of a forum

non conveniens issue involves the relative convenience of the parties to

suit in one forum vis-a-vis other forums. In spite of this distinction it

would seem inconsistent for a court to hold that lowa and the United

States have an interest in a dispute for purposes of determining personal

jurisdiction, but not for purposes of determining the convenience of the

forum. Therefore, as we analyze the forum non conveniens issue in this

case, we rely to some extent on the district court’s findings regarding its

personal jurisdiction over the defendants.

5See Zeman v. Canton State Bank, 211 N.W.2d 346, 348-49 (lowa

1973) (“most significant relationship”); see also Restatement (Second)

of Conflict of Laws §§ 6, 145 (1971).

|

—_

12a

this dispute. This finding, if correct,* would weigh in favor of trial

in the Cayman Islands. See Gilbert, 330 U.S. at 509 (“appropriate-

ness... in having the trial of a... case in a forum that is at home

with the... . law that must govern the case”). However, we find the

district court’s analysis failed to take into consideration the fact

that Lehman’s warranty claims have their roots in lowa and may

necessarily involve lowa law. It is true that the negligence claim is

based upon the events in the Cayman Islands and Cayman Island

law likely would govern that count. However, the fact that a

federal court may be required to apply foreign law is not

dispositive on the forum non conveniens issue. Federal courts are

quite capable of applying foreign law when required to do so, and

a district court’s application of foreign law is a factual matter

reviewable on appeal. Manu International, S.A. v. Avon

*We are not certain that the substantive law of the Cayman Islands

would govern this dispute entirely. In conflict-of-laws questions, lowa

has adopted the “most significant relationship” approach of the

Restatement (Second) of Conflict of Laws. Conradi v. Boone, 316 F.

Supp. 918, 920(S.D. lowa 1970); Cole v. State Automobile & Casualty

Underwriters, 296 N.W.2d 779, 781 (lowa 1980); Zeman v. Canton

State Banki, 211 N.W.2d at 348-49. Under this approach (we note

without deciding the issue) it is probable that the substantive law of the

Cayman Islands would govern the negligence count. See Restatement

(Second) of Conflict of Laws §§ 145, 146 (1971). However, it is not clear

that the law of the Cayman Islands would govern Lehman's breach of

express warranty action. Cf id., § 188 (contacts to consider in

determining most significant relationship include the place of

contracting, the place of negotiation of the contract, the place of

performance, the location of the subject matter of the contract, and the

domicile, residence, nationality, place of incorporation and place of

business of the parties). We note, again without deciding the question,

that it is arguable that the substantive law of lowa should govern

Lehman’s express warranty claim. The express warranty was made by

the defendants in Iowa, and it was received and accepted in lowa when

reservations were made in lowa for accommodations in the defendants’

hotel. See generally Cole v. State Automobile & Casualty Underwriters,

296 N.W.2d at 781; Joseph L. Wilmotte & Co. v. Rosenman Brothers,

258 N.W.2d 317, 325-26 (Iowa 1977).

l3a

Products, Inc., 641 F.2d at 67-68 (“[W]e must guard against an

excessive reluctance to undertake the task of deciding foreign

law, achore federal courts must often perform”); Olympic Corp.

v. Societe Generale, 462 F.2d at 379; Hoffman v. Goberman, 420

F.2d at 427; Burt v. Isthmus Development Co., 218 F.2d at 357.

E. Plaintiff's Ability to Litigate in a Foreign Forum.

We find the district court failed to consider fully the practical

results of its decision to dispatch Lehman to the Cayman Islands

to litigate her dispute. Attorneys in the Cayman Islands

apparently do not accept cases on a contingent fee basis, and

Lehman states that she is financially unable to pay the retainer fee

that a Cayman Island attorney would require. Lehman also

argues that it would be unlikely that she would be able to obtain a

jury trial in the Cayman Islands, and furthermore, since she is a

foreigner, a court there would require her to post acost bond of at

least $1,000. Lehman also argues that recoveries in the Cayman

Islands for wrongful death generally do not exceed $5,000; the

defendants dispute the latter statement.

As the district court noted, a plaintiff's showing of less

favorable substantive law in the alternative forum is not to be

given conclusive or even substantial weight in a forum non

conveniens determination. Piper Aircraft Co. v. Reyno, 454 U.S.

at 247. However, this is not an issue concerned wholly with a less

favorable substantive law. The court must be alert to the realities

of the plaintiff's position, financial and otherwise, and his or her

ability as a practical matter to bring suit in the alternative forum.

See Manu International, S.A. v. Avon Products, Inc., 641 F.2d at

67; Thomson v. Palmieri, 355 F.2d 64, 66 (2d Cir. 1966); Hodson

v. A. H. Robins Co., 528 F. Supp. 809, 818 (E.D. Va. 1981).

F. Residence of the Parties.

The defendants argue that Alcoa Steamship Co. v. M/V

Nordic Regent, 654 F.2d 147 (2d Cir. 1980), represents the

modern trend that the American citizenship of the plaintiff

should not bar a forum non conveniens dismissal when the only

alternative forum is in a foreign jurisdiction. See id. at 154-56. We

l4a

do not place any “talismanic significance” on the fact that

Lehman is a United States citizen. However, significant contacts

between the defendants and Robert Lehman took place in the

United States, and as we noted, Iowa and the United States have

a significant interest in this dispute. These facts arise largely as a

result of Lehman’s (and her husband’s) residence in Iowa.’

In a case decided after the Alcoa Steamship decision, the

Second Circuit observed:

“It is almost a perversion of the forum non conveniens

‘doctrine to remit a plaintiff, in the name of expediency, toa

forum in which, realistically, it will be unable to bring suit

when the defendant would not be genuinely prejudiced by

having to defend at home in the piaintiff’s chosen forum.”

Manu International, S.A. v. Avon Products, Inc., 641 F.2d at 67.

In Founding Church of Scientology v. Verlag, 536 F.2d 429

(D.C. Cir. 1976), the court of appea!s, in reversing the district

court’s forum non conveniens dismissal, found significant the

fact that the defendant was a resident of the United States. “In

incorporating in this country and locating here,” the court said,

“they have in effect signified their willingness to be sued in

American courts.” /d. at 435. In this case, the defendant Holiday

Inn is a Tennessee corporation. Although the defendant

Humphrey Cayman is a Caymanian corporation, it maintains

corporate offices in Tennessee. Thus, in this case, as in Veriag, the

fact that the defendants are located in this country is one

indication that it would be less burdensome for the defendants to

defend suit in this country than it would be for Lehman to litigate

in a foreign country.

"In Piper Aircraft Co. v. Reyno, 454 U.S. at 255-56, it was held that a

foreign plaintiff's choice of forum is given less weight than the choice of

a resident or citizen, because it is much less reasonable to assume that a

foreign plaintiff's choice of a United States forum is based on

convenience than it is tc assume that a United States plaintiff's choice of

a United States forum is based on convenience. See also Note, Forum

Non Conveniens and American Plaintiffs in the Federal Courts, 47

U.Chi.L.Rev. 373, 382-83 (1980).

lSa

The court in Verlag noted: “The doctrine that a United States

citizen does not have an absolute right to use United States courts

usually is expressed in the context of a citizen doing business

abroad, expecting still to use United States courts.” 536 F.2d at

435 (quoting Thomson v. Palmieri, 355 F.2d at 65). Such was the

case in Alcoa Steamship Co. v. M/ V Nordic Regent, in which the

plaintiff was a New York corporation, and owned a pier in

Trinidad. The suit arose when the Nordic Regent collided with

the pier. In holdjng that Trinidad’s limitation of damages law did

not militate against the district court’s decision that Trinidad was

the more convenient forum, the Second Circuit said:

“{Ijt is not at all unfair for appellant to recover the lesser

amount. Its pier was in Trinidad. It was not likely to go

traveling. As long as it did not, Trinidad’s damage

limitation law governed. it would be far more unfair to

impose an additional recovery against appellee when

appellant, fully familiar with the law of the place where it

maintained a permanent business, could have insured its

additional risk in a prudent fashion. There is no reason to

suppose that it has not done so.”

654 F.2d at 159.

In this case, Robert Lehman was not doing business aboard ona

daily basis, but instead was pursuing a personal vacation of a few

days’ duration in a vacation spot located just outside the United

States. In arranging his vacation he dealt with an American

corporation and relied on the defendants’ representations

received by him in Iowa. The defendants, on the other hand,

actively solicited business in the United States, were incorporated

or at least maintained ccrporate officers here, and fairly could be

expected to anticipate and take into account the cost of defending

a lawsuit brought in a United States forum. Thus, even though

“considerations of fairness are more properly part of the

jurisdictional analysis than of a forum non conveniens determi-

nation, the above-discussed factors indicate the relative conven-

iences of the parties and their respective abilities to bring or

defend against a lawsuit brought in the United States or the

Cayman Islands.

l6a

Conclusion.

We find that the district court did not weigh properly the

location of the parties’ witnesses relating both to liability and

damages. We find as well that the district court gave undue

weight to the defendants’ desire to implead a third-party

defendant. In addition, the court failed to consider that lowa law

may well control Lehman's claim for breach of warranties, and

that both Iowa and the United States have a significant interest in

the litigation. The district court also failed to consider

realistically Lehman's practical ability to litigate her claims

properly in a foreign court, and failed to give proper weight to the

significant factor of Lehman's residence, and the significant local

contracts that arose as a result of that residence.

In light of the Supreme Court’s direction that a dismissal on

the ground of forum non conveniens should occur only rarely

and in extraordinary circumstances,’ and only when the balance

of conveniences weighs strongly in favor of dismissal, we hold

that the district court abused its discretion in dismissing

Lehman’s action. Accordingly, the district court’s decision is

reversed.

A true copy.

Attest:

Clerk, U.S. Court of Appeals, Eighth Circuit.

* Piper Aircraft Co. v. Reyno, 454 U.S. at 255; Gilbert, 330 U.S. at

504, 508, 509; Koster v. (American) Lumbermens Mutual Casualty Co.,

330 U.S. at 524.

17a

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF IOWA

CEDAR RAPIDS DIVISION

No. C 81-131

Victoria A. LEHMAN, as Executor of the Estate of

ROBERT WAYNE LEHMAN, Deceased,

Plaintiff,

vs.

HUMPHREY CAYMAN, LTD. and

Ho.ipDay INNS, INC.,

Defendants

ORDER

This matter is before the court on plaintiff's resisted motion to

reconsider,' filed March 12, 1982. Denied.

On March 4, 1982, this court ordered the dismissal of this

action for forum non conveniens. Judgment was entered

accordingly on that same day. Plaintiff now seeks to have the

court reconsider that decision. Plaintiff makes essentially three

‘Plaintiff's motion is characterized as one “To Amend Findings And

To Alter Or Amend Order And Judgment; and it is brought pursuant to

FRCP 52(b) and 5%e). Defendants argue that rule 52(b) is not meant to

be used as a vehicle for rehearing a matter on the merits. Whi’: the court

is inclined to agree with that proposition, see Evans, Inc. v. Tiffany &

Co., 416 F.Supp. 224(N.D. Ill. 1976). it is unnecessary to do so because

specific authority to reconsider the court's earlier ruling exists under

FRCP 5%e) and 60(b). See generaily 11 C. Wright & A. Miller, Federal

Practice & Procedure $§ 2817 and 2857 (1973).

184

arguments in support of her motion. First, she says that she will

be unduly prejudiced if forced to litigate her claim in the courts of

the Cayman Islands. Specifically, she asserts that a jury trial is

unavailable under the law of the Cayman Islands, that attorneys

in that jurisdiction do not work for a contingent fee and would

require a retainer of approximately $5,000.00, that the courts

there would require her, as a foreigner, to post a cost bond of at

least $1,200.00, and that wrongful death recoveries there

generally do not exceed $4,000.00 to $5,000.00. Second, plaintiff

maintains that special weight should be accorded the fact that she

is a resident and citizen of lowa. Third, she asserts that the court’s

decision is without precedent.

The court is unpersuaded that its decision was incorrect. Even

assuming that plaintiff will not be able to have her claim decided

by a jury and that her recovery will not exceed $5,000.00,

assumptions that are questionable,’ the court is disinclined to

change its mind. Piper Aircraft Co. v. Reyno, i02 S.Ct. 252

(1981) (mere showing of less favorable substantive law in foreign

forum not dispositive); Abouchalache v. Hilton International

Co., 464 F.Supp. 94, 98 (S.D.N.Y. 1978), aff'd mem., 628 F.2d

1344 (2nd Cir. 1980) (“A district court has discretion to dismiss

an action under the doctrine of foreign non conveniens . . . even

though the law applicable in the alternative forum may be less

favorable to plaintiff's chance and amount of recovery.”) With

regard to the financial consequences of being forced to litigate in

the Cayman Islands, the court is not convinced that plaintiff

cannot afford the expense of doing so. By her own filing, it

2In an a*fidavit attached to defendants’ resistance, Paul Joseph

Valentine Dougherty, an attorney licensed to practice in the Cayman

Islands, attests that a jury trial is available upon request and a showing

that “the matter is one that can be properly” tried by a jury. He also

attests that the recovery for wrongful death, if any, would turn on the

facts of plaintiff's case and that it would not necessarily be limited to

$4,000.00 to $5,000.00. In this regard, the court also notes that

exemplary damages are available under the law of the Cayman Islands,

according to Mr. Dougherty’s earlier affidavit.

19a

appears that she has available to her from her husband’s estate

approximately $14, 750.00. As for her argument that the fact of

her United States citizenship and residence deserves “special

weight,” such a proposition is not supported in the law. The court

gave the consideration to this factor required by the Supreme

Court in Reyno and was convinced that the balance of

conveniences favored dismissal. The court is still so convinced.

Lastly, plaintiff's assertion that the court’s decision was without

precedent is unfounded. E.g. Alcoa Steamship Co., Inc. v. M/V

Nordic Regent, 654 F.2d 147 (2nd Cir. 1981); Mizakami Brothers

of Arizona, Inc. v. Baychem Corp., 556 F.2d 795 (9th Cir. 1977);

Abouchalache v. Hilton International Co., 464 F.Supp. 94

(S.D.N.Y. 1978).

It is therefore

ORDERED

DENIED.

April 27, 1982.

/s/Edward J. McManus, Chief Judge

UNITED STATES DISTRICT COURT

. § o>

end

20a

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF IOWA

CEDAR RAPIDS DIVISION

No. C 81-131

Victoria A. LEHMAN, as Executor of the Estate of

ROBERT WAYNE LEHMAN, Deceased,

Plaintiff,

vs.

HUMPHREY CAYMAN, LTD. and

Ho.uipDay INNS, INC..

Defendants

This matter is before the court on defendant Humphrey

Cayman, Ltd.'s (Cayman's), resisted motion to dismiss,’ filed

December 18, 1981. Granted

In this diversity action, plaintiff, as executor of the estate of

Robert Lehman (Lehman), seeks damages for Lehman's death.

Plaintiff is an lowa citizen. Defendant Holiday Inns, Inc.

(Holiday Inn), is a Tennessee corporation. Defendant Cayman is

a corporation formed pursuant to the laws of the Cayman

Islands, a British Crown Colony located in the West Indies, and it

maintains corporate offices in Tennessee. Jurisdiction of the

subject matter of this action exists under 28 USC § 1332(a).?

‘Defendant Holiday Inns, Inc., joins in Cayman's motion to the

extent it is based on the doctrine of forum non conveniens.

Plaintiff's complaint does not adequately allege jurisdictional

facts—it contains no allegation of the principal places of business of

Cayman or Holiday Inn—but this defect is curable by amendment. 28

USC § 1653. Because of the court's disposition of defendants’ motion,

however, such amendment is unnecessary.

2la

As indicated, this action arises out of the death of Lehman. The

facts, as gleaned from the complaint, Cayman’s motion and

supporting affidavits, and plaintiff's resistance to Cayman's

motion and her supporting affidavit, are as follows. Sometime in

October or November of 1980, plaintiff's son, through a travel

agency located in Clinton, lowa, made and paid for reservations

for himself and Lehman for a double room at the Grand

Caymanian Holiday Inn (Grand Caymanian),’ located on Grand

Cayman Island, British West Indies, and owned and operated by

Cayman.‘ The reservations covered the period of November |4 to

November 22, 1980. On November 21, 1980, while a guest of the

Grand Caymanian, Lehman rented from a shop located on the

premises of the Grand Caymanian a Hobie Cat sailboat for

sailing on the Caribbean Sea.’ While sailing on the Caribbean

Sea that day, Lehman was lost at sea. He is now presumed dead.

Plaintiff alleges that Lehman's death was proximately caused by

3Through the affidavit of Cayman's Executive Vice-President,

Cayman asserts that the reservation made in October by palintiff’s son

was for a double room, but that Cayman received advance payment

sufficient only for single occupancy. Notwithstanding the failure to

properly reserve a double occupancy room, Cayman allowed plaintiff's

son to register for double occupancy when he arrived at the Grand

Caymanian. It was not until he arrived and registered, however, that

Cayman learned that plaintiff's son would be accompanied by Lehman

and that Lehman would be a guest at the Grand Caymanian.

“According to the affidavit of Cayman's Executive Vice-President,

Cayman operates the Grand Caymanian under a franchise agreement

with Holiday Inn. Plaintiff alleges that this agreement gave Holiday Inn

a right of control over Cayman in the operation of the Grand

Caymanian and that Holiday Inn exercised that right at all times

relevant to this action.

5It appears that the parties agree that Bob Soto's Driving Ltd. actually

rented the Hobie Cat to Lehman. It also appears that Bob Soto's and

Cayman are parties to some form of lease agreement in which Bob

Soto's is lessee and Cayman lessor. Bob Soto's is not a party to this

action; it is a corporation organized under the laws of the Cayman

Islands and it has no presence in or contacts with the United States.

22a

defendants’ negligence and breach of express and implied

warranties.

Cayman now moves for dismissal, basing its motion on three

separate grounds. First, it challenges the sufficiency of process.

Second, it maintains that there exists insufficient contacts

between it and the State of lowa to support this court’s exercise of

in personam jurisdiction. Last, it seeks dismissal on the basis of

forum non conveniens.* These matters will be taken in turn.

In a diversity case such as this, the determination of the

sufficiency of process requires an analysis of the Federal Rules of

Civil Procedure and of pertinent state court rules and state

statutes. See generally 4C. Wright & A. Miller, Federal Practice

& Procedure § 1062 (1969). In this case, plaintiff, following the

teaching of FRCP 4e), made several attempts to effect service of

process pursuant to Iowa statute or rule of court. Initially,

plaintiff attempted to utilize one of lowa’s long-arm statutes,

Iowa Stat. § 617.3. Apparently in response to Cayman's motion

challenging her compliance with that statute, plaintiff attempted

to re-serve Cayman by personally serving its Vice-President.

Cayman, in its first amended motion to dismiss, challenged this

second service asserting that it was not provided with a summons

as required by FRCP 4d). Plaintiff’s third attempt at service

followed. Cayman, in its second amended motion to dismiss, now

challenges that third service of process.

Cayman asserts that plaintiff's third attempted service of

process is without effect because plaintiff failed to obtain a court

order under Iowa Rules of Civil Procedure 56.1(n) and 56.2.

Rules 56.1 and 56.2 have been construed by this court and by the

United States District Court for the Southern District of lowa as

providing an alternate method of service to that set out in lowa’s

long-arm statutes. Roadway Express, Inc. v. Piekenbrock, No. C

80-1007 (N.D. Ia. Aug. 15, 1980); Mahaska Bottling Co. v.

Southdown Sugars, Inc., 79 FRD 704 (S.D. Ia. 1978). Rule 56.2

provides in part:

*See n.1, supra.

23a

ALTERNATE METHOD OF SERVICE

“Every corporation . . . that shall have the necessary

minimum contact with the state of lowa shall be subject to

the jurisdiction of the courts of this state, and the courts of

this state shall hold such corporation. .. amenable to suit in

Iowa in every case not contrary to the provisions of the

constitution of the United States.

Service may be made on any such corporation .. . (a) as

provided in rule 56.1 within or without the state, or (b) if

such service cannot be so made, in any manner consistent

with due process of law prescribed by order of the court in

which the action is brought.”

Rule 56.1(f) and (n) provide, respectively:

PERSONAL SERVICE

“Original notices are “served” by delivering a copy to the

proper person. Personal service may be made as follows:

(f) Upon ...a.... foreign corporation, by serving any

present or acting or last known officer thereof, or any

general or managing agent, or any agent or person now

authorized by appointment or by law to receive service of

original notice...

(n) if service cannot be made by any of the methods

provided by this rule, any defendant may be served as

provided by court order, consistent with due process of

law.”

Cayman suggests that plaintiff could only effect service on it

under Rules 56.1 and 56.2 by first obtaining a court order

prescribing the method of service. The court’s reading of the

above quoted portions of those rules convinces it otherwise,

however. Here, plaintiff utilized IRCP 56. 1(f) to serve Cayman.

Therefore, rules 56.1(n) and 56.2(b) do not come into play.

Accordingly, it may not be said that plaintiff's third service of

process was defective.

Cayman also seeks dismissal on the ground that there exists

insufficient contacts between it and Iowa to support this court’s

ee |

ee.

24a

exercise of in personam jurisdiction. Initially, it must be noted

that the court, in ruling on this portion of Cayman’s motion,

must assume that the facts contained in plaintiff's complaint

supporting jurisdiction are true. Hutson v. Fehr Bros., Inc., 584

F2d 833, 835 (ith Cir.), cert. denied sub nom., Fehr Bros., Inc. v.

Aeciaierie Weissenfels, 439 U.S. 983 (1978). Furthermore, any

conflicts in the affidavits that were submitted on this issue must

also be resolved in plaintiff's favor. Wessel Co. v. Yaffee &

Beitman Management Corp., 457 F.Supp.! 939 (N.D. Ill. 1978);

see Atlantic Lines, Lid. v. M/V Domburgh, 473 F.Supp. 700

(S.D. Fla. 1979).

It is well understood that the due process clause of the

fourteenth amendment requires that a person must have some

minimum contact with a given forum before that forum can hale

him into its courts. In /nternational Shoe v. Washington, 326

U.S. 310 (1945), the leading modern case in this area, it was held

that defendant’s contacts with the forum state must be such that

the maintenance of litigation does not offend “traditional notions

of fair play and substantial justice.” In the later case of Hansen v.

Denkia, 357 U.S. 235 (1958), it was stated that “it is essential in

each case that there be some act by which the defendant

purposefully avails itself of the privilege of conducting activities

within the forum state, thus invoking the benefits and protection

of its law.” 357 U.S. at 253. Stated differently, the exercise of

personal jurisdiction over a non-resident defendant may occur

only when the defendant, through his contact with the forum,

“should reasonably anticipate being haled into court there. World-

Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

It is axiomatic that each case in which jurisdiction is challenged

turns on its own facts. E.G. Perkins v. Benquet Consolidated

Mining Co., 342 U.S. 437 (1952). To aid the district courts, the

Eighth Circuit has set out a five-factor test for analyzing the

question whether the exercise of personal jurisdiction meets

constitutional muster. Caesar’s World, Inc. v. Spencer Foods,

Inc., 498 F.2d 1176 (8th Cir. 1974). The five factors, the first three

of which are of primary importance, are (a) the quantity of

defendant's contacts with the forum state; (2) the nature and

25a

quality of those contacts; (3) the source and connection of the

cause of action with those contacts; (4) the interest of the forum

state; and (5) convenience. 498 F.2d at 1180.

The application of the Caesar's World test convinces the court

that it may constitutionally exercise jurisdiction over Cayman.

According to plaintiff, Cayman and, on Cayman's behalf,

Holiday Inn are engaged in a systematic and pervasive

advertising program in Iowa. This advertising is accomplished

via Holiday Inn directories, which are provided to all Holiday

Inn hotels in Iowa, and brochures and other materials provided

to Iowa travel agencies. Pursuant to an arrangement with

Holiday Inn, reservations for the Grand Caymanian can be made

by mail or telephone through any Holiday Inn hotel in the United

States. Also, reservations may be made through lowa travel

agencies. Indeed, in this case the reservations utilized by Lehman

was made through an Iowa travel agency and that agency

received a commission on the basis of that reservation. The court,

on the basis of these assertions none of which is refuted by

Cayman, is of the view that the quantity and quality of Cayman's

contacts with lowa weigh in favor of the exercise of jurisdiction.

Furthermore, the court considers Cayman's contacts with lowa

to be closely connected with this cause of action; it is quite likely

that Lehman and his son would never have chosen the Grand

Caymanien if Cayman had not engaged in a systematic effort to

generate business in lowa. See Pemberton v. OvaTech, Inc., No.

81-1024 (8th Cir. Jan. 13, 1982). In this regard, the following

comment by the United States District Court for the Southern

District of New York, made in a case very similar to this, is

noteworthy:

“The fact that physical contacts are minimized through the

use of independent contractors and distributors does not

alter the basic existence of a defendant’s involvement in, and

its pecuniary benefit from, a full exploitation of the

market.”

Ladd v. KLM Royal Dutch Airlines, 456 F.Supp. 422, 425

(S.D.N.Y. 1978).

26a

While the court considers the application of the first three

Caesar's World factors to be dispositive, it notes that the fourth

factor, which involves the interest of the state of Iowa, is also

pertinent. As noted in Pemberton, the forum state’s interest in

providing a forum for its injured residents is neither insignificant

nor absent. No. 18-1024, at p. 14. In addition to the interest of

Iowa, in a case such as this where the only available United States

venue lies in a single district, the United States itself has an

interest in seeing that plaintiff is provided a forum in this country.

Aigner v. Beil Helicopters, Inc., 836 FRD 532 (N.D. Ill. 1980).’

Cayman and Holiday Inn also seek a dismissal for forum non

conveniens. That this court has the inherent power to refuse

jurisdiction over a case where the interests of justice require that

the suit be brought in a foreign country is well accepted. Gulf Oil

Corp. v. Gilbert, 330 U.S. 501 (1947); Reyno v. Piper Aircraft

Co., 479 F.Supp. 727, 730 (M.D. Pa. 1979), rev'd, 630 F.2d 149

(3rd Cir. 1980), rev'd, 102 S.Ct. 252 (1981). Moreover, the

determination to refuse jurisdiction is committed to this court’s

sound discretion. Gilbert, 330 U.S. at 511-12. When an

alternative foreign forum has jurisdiction to hear the case, and

when trial in the chosen forum would establish “oppressiveness

and vexation” to a defendant out of all proportion to plaintiff's

convenience, or when the chosen forum is inappropriate because

of considerations affecting the court’s own administrative and

legal problems, the court may, in its discretion, dismiss the case.

Piper Aircraft, 102 S.Ct. at 258 and 266 n.23.

The analysis of this question begins with the understanding

that there is a strong presumption in favor of the plaintiff's choice

of forum, especially where the plaintiff has chosen the home

forum. /d., at 265-66. As the Court in Piper Aircraft noted,

“{w]here the home forum has been chosen, it is reasonable to

7The last factor identified in Caesar's World, the convenience factor,

is not dispositive of defendant's motion challenging minimum contacts.

It receives considerable attention, however, in the ensuing consider-

ation of the claim of forum non conveniens.

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assume that this choice is convenient.” /d., at 266. The resident

plaintiff's forum choice is not dispositive, however, for the

balance of conveniences may disfavor plaintiff's forum and

justify dismissal. To guide the trial court’s exercise of discretion

in this regard, the Supreme Court has provided a list of “private

interest factors” affecting the convenience of the litigants and a

list of “public interest factors” affecting the convenience of the

forum. Gilbert, 330 U.S. at 508-09. The private interest factors

are: (1) relative ease of access to sources of proof; (2) availability

of compulsory process for attendance of unwilling, and the cost

of obtaining attendance of willing, witnesses; (3) possibility of

view of premises, if view would be appropriate to the action; and

(4) all other practical problems that make trial of a case easy,

expeditious, and inexpensive. /d., at 508. The public interest

factors are: (1) administrative difficulties flowing from court

congestion; (2) the local interest in having localized controversies

decided at home; (3) the interest in having the trial of a diversity

case in a forum that is at home with the law that must govern the

action; (4) the avoidance of unnecessary problems in conflicts of

law, or in the application of foreign law; and (5) the unfairness of

burdening citizens in an unrelated forum with jury duty. /d., at

509.

The court has considered the parties’ arguments and has

decided that this question, while close, must be resolved in favor

of defendants. Therefore, this action will be dismissed for forum

non conveniens.

With regard to the private interest factors, the court notes that

virtually all key witnesses reside at Grand Cayman. These

witnesses include the person who owns the shop from which the

Hobie Cat was rented by Lehman; employees of the sailboat

rental shop, including its manager; the person who was in charge

of smaillboat rental and who was responsible for giving sailing

instructions and for checking out people who wanted to rent

sailboats with regurd to their sailing ability, who instructed

Lehman in how to sail the Hobie Cat, and who was one of the last

people to see Lehman alive; another person who saw Lehman

shortly before his disappearance; the search pilot and various

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other persons who were involved in the search for Lehman,

including several police officers; and an employee of Cayman

who has knowledge of the relationship between Holiday Inn and

Cayman and between Cayman and the sailboat rental shop.In

addition to these witnesses, defendants indicate that they would

also call as witnesses the Brownsville, Texas, U.S. Coast Guard

Commander of the cutter that found the Hobie Cat and two

Cayman employees, one of whom lives in Memphis, Tennessee,

and one who lives in Miami, Florida.

Plaintiff represents that she is aware of two witnesses with

knowledge of the weather conditions on the day of Lehman’s

disappearance, and that these persons reside in lowa and Kansas.

Also, she indicates that both she and her son pian to testify.

Lastly, she asserts that there are lowa resident competent to

testify as to the sailing characteristics of a Hobie Cat

The court considers the first and third private interest factors,

the relative ease of access to sources of proof and the possibility

of viewing the premises, respectively, not to play a significart

part in the analysis of the propriety of dismissal on convenience

grounds. This is not the kind of case, for example, in which it is

necessary to offer into evidence the wreckage of an airplane or

helicopter or voluminous business records. See Piper Aircraft,

102 S.Ct. at 259; Pain v. United Technologies Corp., 637 F.2d

775, 786-87 (D.C. Cir. 1980). Similarly, the court does not feel

that a view of the area in which Lehman was sailing would be

necessary.

The consideration of the second private interest factor and of a

factor covered by the fourth private interest category, however,

clearly leads the court to the conclusion that dismissal is proper

and warranted. First, defendants have available to them no

compulsory process for attendance of witnesses who live at

Grand Cayman, who are not citizens of this country, and who are

unwilling to voluntarily appear at a trial of this action before this

court. Pain, 637 F.2d at 786-90; see FRCP 45; 28 USC § 1783.

And to the extent that such persons would agree to appear, the

cost to defendants of their appearance would be substantial. On

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the other hand, if trial is held at Grand Cayman, the only

witnesses plaintiff would have to reimburse would be her son and

herself. This court is sensitive to plaintiff’s claim of economic

hardship, see Phoenix Canada Oil Co., Lid. v. Texaco, Inc., 78

FRD 445, 453 (D. Del. 1978), but the court believes that it would

be relatively more severe to require defendants to bear the

expense of a trial in lowa.

Second, and perhaps most important, if trial is held in this

district and not at Grand Cayman, defendants will be unable to

implead Bob Soto’s Diving Ltd. Piper Aricraft, 102 S.Ct. at

267-68; Pain, 637 F.2d at 790-91. Defendants’ primary defense to

this action appears to be that the responsible party, if any, is Bob

Soto’s Diving Ltd. While it is true, as plaintiff argues, that

defendants could proceed against Bob Soto’s in a separate

indemnity action, the court feels that the more “expeditious and

inexpensive” course would, be for all claims and issues to be

disposed of in one action. Piper Aircraft, 102 S.Ct. at 267-68.

The analysis of the public interest factors also points towards

dismissal. First, the forum with the more significant “local

interest” is Grand Cayman, the locality of Lehman's death. /d.,

102 S.Ct. at 208; Pain, 637 F.2d at 792-93. Second, under Iowa’s

conflict of laws rules, Zeman v. Canton State Bank, 211 NW2d

346 (Iowa 1973) (“most significant relationship” test), it is more

than likely that the substantive law of Grand Cayman controls

this action. If that is the case, it is desirable that the trial of this

dispute take place at Grand Cayman and not here. Piper Aircraft,

102 S.Ct. at 268 N.29; Pain, 637 F.2d at 793-95.*

The court is convinced that the interests of convenience require

the dismissal of this action. Other than the possibility of

increased expense, the court is aware of no prejudice to plaintiff

from being required to proceed at Grand Cayman. In this regard,

the court notes that defendants have submitted the affidavit of

*The court recognizes that the first and fifth public interest factors

weigh in plaintiff's favor. The court does not view this contribution as

substantial, however.

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Paul Joseph Valentine Dougherty, an Attorney-at-Law licensed

to practice in the Cayman Islands, British West Indies. There,

Dougherty indicates that defendants are subject to jurisdiction of

the Cayman Court and are admissible to service of process in that

court, that the cause of action alleged by plaintiff in this action is

cognizabie under Cayman law, that Cayman law provides for the

recovery of exemplary damages for more than simple negligence,

that Cayman law provides that an estate may recover for death

and that the decedent’s dependents may recover their lost

support, and, lastly, that Cayman law, allows an action for

indemnity and contribution. Based upon these assertions, and

also on defendants’ agreement to submit to the jurisdiction of the

Cayman court and to waive any statute of limitation defense if

suit is commenced withim one year after the dismissal of this

action, id., the court is convinced that dismissal of this action is

required.

It is therefore

ORDERED

GRANTED.

March 4, 1982

/s/Edward J. McManus, Chief Judge

UNITED STATES DISTRICT COURT