Reply Brief — Springwell Navigation Corp. v. Chase Manhattan Bank

2 Supreme Court, US.

(3) FILED

DEC 3 1 2003

No. 03-815

ERK

IN THE

Supreme Court of the United States

SPRINGWELL NAVIGATION CORPORATION,

Petitioner,

Vv.

THE CHASE MANHATTAN BANK,

Respondent.

On Petition for Writ of Certiorari

to the United States Court of Appeals for the Second Circuit

REPLY IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

ERIK S. JAFFE

Counsel of Record

ERIK S. JAFFE, P.C.

5101 34" Street, N.W.

Washington, D.C. 20008

(202) 237-8165

Counsel for Petitioner

TABLE OF CONTENTS

Pages

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REASONS FOR GRANTING THE WRIT..............:::cccecceeees 2

I. The Second Circuit Applied the Wrong

Standards of Deference, in Conflict with Other

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A. Treaty-Based Deference to Choice of a

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B. Plaintiff's Choice of Defendant’s Home

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II. The Second Circuit Eliminated Witness

Unwillingness to Appear as an Element of

Gilbert’s Compulsory-Process Factor, in

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III. The Second Circuit Erroneously Applied

Gilbert’s Foreign-Law Factor to a Case of

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IV. This Case Raises Important and Recurring

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TABLE OF AUTHORITIES

Pages

Cases

Argentine Republic v. Amerada Hess Shipping Corp.,

SG UD. SoG Cy avicesictsenscdnnsnctaninenn 4

Burt v. Isthmus Development Corp., 218 F.2d 353 (CAS),

Cort. amin, POO. Fis Ce scnsinvstisiciunatsbinmasaacinanaeaas 3

Donald G. Atteberry, DVM, P.A. v. Barclays Bank PLC

(In re Donald G. Atteberry, DVM, P.A.), 159 B.R. |

PER SRR. TOD ciisisssicciarirneandeiiicg uname 5

Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947)... eects 7

Meridian Seafood Prods., Inc. v. Fianzas Monterrey,

S.A., 149 F. Supp.2d 1234 (S.D. Cal. 2001) ..... 2... ccsseee a

Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) ........ ee 7

Reid-Walen v. Hansen, 933 F.2d 1390 (CA8 1991)............... 3

Treaties is

Treaty of Friendship, Commerce and Navigation,

Aug. 8, 1938, U.S.-Liberia, 54 Stat. 1739.00... ceseeeseees 4

For purposes of deciding whether to grant certiorari, the

most salient aspect of respondent’s Opposition is its silent

concession of the three discrete circuit splits identified by pe-

titioner Springwell. Those splits involve: (1) the degree of

deference given to the choice of forum by a citizen-equivalent

plaintiff; (2) the degree of deference given to a plaintiff's

choice of the defendant’s home forum; and (3) whether Gil-

bert’s compulsory-process factor requires some showing that

non-resident witnesses would be “unwilling” to attend trial in

the chosen forum. Each of those splits involves a significant

issue concerning the legal boundaries of the forum non con-

veniens analysis that deserves this Court’s attention. To-

gether, they present an especially efficient opportunity for this

Court to reestablish the inter-circuit uniformity of legal rules

in a long-neglected area of the law that is sorely in need of

this Court’s guidance.

STATEMENT OF THE CASE

As described in the Petition, this case involves facts and

wrongdoing in multiple locations, including New York, Lon-

don, Jersey, Moscow, and Greece. Pet. 3-5. Respondent’s

selectively distorted description of the case as involving noth-

ing more than the acts and omissions of a salesperson in Lon-

don is simply wishful fiction. Even the district court con-

ceded that at least two of the counts in Springwell’s complaint

involve direct misfeasance by Chase New York personnel,

Pet. App. B12, B14, and it is undisputed that Stuart Gager,

who was responsible for Springwell’s account during the

relevant period and whose actions and failures constitute

many of the alleged wrongs, ran the Hellenic Group from

New York. This case thus unquestionably has substantial

connections with both New York and London, and the facts

and allegations of the complaint relating to New York are

plain in the record.

Ultimately, however, Chase’s fictional narrowing of the

case to only that subset of conduct that occurred in London is

y

irrelevant to the questions presented by the Petition. The def-

erence question turns on Springwell’s treaty-based right to

citizen-equivalent freedom of access to U.S. courts and on

Chase’s residence in New York. The compulsory-process

question turns on the undisputed absence of any evidence or

finding that friendly Chase witnesses would be unwjJling or

unable to appear in New York. And the foreign-law question

turns on the conceded applicability of mixed New York and

English law to the various claims in the compiaint. Aside

from atmospherics, therefore, Chase’s distorted description of

the facts has nothing to do with the issues this Court is being

asked to decide or the appropriateness of granting certiorari.

The questions presented by Springwell’s petition each

raise clean issues of law that are ripe for this Court’s resolu-

tion and this case is an excellent vehicle for addressing those

issues. It is not the facts as found that are in contention, but

rather the legal relevance of those facts, the legal standards

against which those facts must be measured, and the legal re-

quirement for the consideration of additional facts that were

not found or even considered by the courts below. Had the

proper legal standards been applied to this case, the outcome

would necessarily have been different, and clarification of

those legal standards will have a beneficial impact well be-

yond the particular facts of this case.

REASONS FOR GRANTING THE WRIT

I. THE SECOND CIRCUIT APPLIED THE WRONG

STANDARDS OF DEFERENCE, IN CONFLICT WITH

OTHER CIRCUITS.

A. Treaty-Based Deference to Choice of a U.S. Forum.

The Second Circuit in this case disparaged the signifi-

cance of the U.S.-Liberian treaty for purposes of deference,

denying that the treaty provided court access equal to that of

U.S. citizens and dismissing the importance of “citizen”-

equivalent access in any event. Such erroneous holdings do

,™=

3

great damage to the value of the U.S.-Liberian and similarly

worded treaties and create a conflict with other circuits that

give substantial deference based on citizenship.

Respondent makes no attempt to defend the Second Cir-

cuit’s erroneous interpretation of the U.S.-Liberian treaty as

providing less than citizen-equivalent deference. Instead it

only claims that the district court gave_ petitioner the same

deference as a non-resident United States citizen. BIO ay Ea

But the deference given by the district court was trivial at

best, and well below the deference accorded by other courts

based on citizenship per se, aside from residence. Compare

Pet. App. B10, B17 (“plaintiffs’ choice of forum should not

be accorded particularly strong deference, even assuming the

Liberian treaty grants plaintiffs’ choice some extra modicum

of deference”; as non-residents, “plaintiffs deserve the mini-

mum deference due them as treaty beneficiaries”), with Burt

v. Isthmus Development Corp., 218 F.2d 353, 357 (CAS)

(“courts should require positive evidence of unusually ex-

treme circumstances * * * before exercising any such discre-

tion to deny a citizen access to the courts of this country”)

(emphasis added), cert. denied, 349 U.S. 922 (1955) and

Reid-Walen v. Hansen, 933 F.2d 1390, 1394 (CA8 1991)

(“the relevant distinction is whether or not the plaintiff who

has selected the federal forum is a United States citizen”’).

Furthermore, the Second Circuit denied even the inade-

quate deference given by the district court, holding that “the

Liberian treaty does not afford the plaintiffs’ choice of a

United States forum the same deference as that afforded the

choice of a U.S. citizen.” Pet. App. All. And even discuss-

ing the hypothetical maximum of citizenship-based deference,

the court denigrated the value of citizenship as irrelevant to

convenience and hence refused to assign a supposedly “artifi-

cial weight to citizenship.” Pet. App. Al2. Such cavalier

dismissal of the deference due citizens and citizen-equivalent

litigants is in plain conflict with the significant deference

triggered by citizenship itse!f in the Fifth and Eighth Circuits.

4

Respondent’s non sequitur response that citizenship does

not provide absolute immunity under forum non conveniens,

BIO 13, 17, does nothing to rebut the importance of the sub-

stantial deference owed to foreign litigants with treaty-based

“freedom of access to the courts and citizen-equivalent rights

to bring suit in the United States. A lack of absolute immu-

nity is fully consistent with the still substantial insulation

from dismissal that proper citizen-equivalent deference pro-

vides to citizen litigants.

Appropriate deference may not prevent dismissal in ex-

ceptional cases where two foreign parties are remitted to ei-

ther the plaintiff's or the defendant’s home forum abroad, but

it certainly stands as a barrier to dismissal of this unexcep-

tional suit against a New York defendant in a New York fo-

rum on claims that involve conduct spanning multiple juris-

dictions including New York. That only three of the ten Gil-

bert factors are even alleged to apply to this case at all amply

illustrates the tenuous and unexceptional nature of the balance

and the consequence of an incorrect determination of defer-

ence. Had the courts below applied even a semblance of the

' The holding in Argentine Republic v. Amerada Hess Shipping Corp., 488

U.S. 428, 443 (1989), that the U.S.-Liberian treaty’s court-access provi-

sion is subject to “local laws” such as the Foreign Sovereign Immunities

Act does nothing to support the decision below. The issue here is not

whether forum non conveniens applies at all — petitioners have never sug-

gested that it does not — but rather whether the discriminatory focus on a

treaty-beneficiary’s residence denies freedom of access by converting

forum non conveniens dismissals into the presumptive rule rather than the

rare exception. Unlike the FSIA, such a restriction on access based on

residence is precisely not the sort of general “local law” contemplated by

the treaty’s access provision. Where the treaty intends residence to be

controlling, it expressly says so. See, e.g., Treaty of Friendship, Com-

merce and Navigation, Aug. 8, 1938, U.S.-Liberia, 54 Stat. 1739, Art. I

(assuring equality of taxes for nationals of either party “within the territo-

ries of the other”); id. Art. XVIII (assuring certain equal rights and privi-

leges to nationals of either party “within the territories of the other”).

en ee 1

5

appropriate deference, it would have been apparent that this

case should remain in New York.

Even the cases cited by respondent illustrate the point that

the dismissal of a citizen plaintiff requires a far greater imbal-

ance in convenience than is alleged to exist in this case. For

example, in Forsythe v. Saudi Arabian Airlines Corp., 885

F.2d 285, 290-91 (CA5 1989), the defendant was a foreign

corporation that was an instrumentality of the Saudi Arabian

government, plaintiff was a U.S. citizen who was a pilot em- -

ployed and eventually fired by defendant in Saudi Arabia,

Saudi Arabian law exclusively governed the case, and defen-

dant sought to have the case transferred to its home forum of

Saudi Arabia where all documents and witnesses were lo-

cated. That overwhelming set of facts was sufficient to over-

come substantial deference to the U.S. citizen’s choice of fo-

rum but it is a far cry from this case where Chase was sued in

its own home forum on at least two counts that even the dis-

trict court conceded were based on conduct by Chase New

York personnel. See, e.g., Pet. App. B12, B14.”

Because the virtually non-existent deference applied by

the Second Circuit effectively vitiates the “freedom of access”

granted by the U.S.-Liberian treaty and conflicts with the def-

* The two district court cases cited by respondent likewise involved for-

eign defendants being dragged away from their home fora and seeking to

return to their home fora outside the United States. Meridian Seafood

Prods., Inc. v. Fianzas Monterrey, S.A., 149 F. Supp.2d 1234, 1236, 1238

(S.D. Cal. 2001) (Mexican defendant with no business, employees, or of-

fices in California, seeking transfer to home Mexican forum for case in-

volving exclusively Mexican business activity governed exclusively by

Mexican law); Donald G. Atteberry, DVM, P.A. v. Barclays Bank PLC (In

re Donald G. Atteberry, DVM, P.A.), 159 B.R. 1, 7-8 (D. Kan. 1993)

(English defendant with no apparent contacts with Kansas seeking transfer

to home English forum for case involving money wired to, deposited, and

held in England and governed exclusively by English law). Again, such

circumstances are overwhelmingly more inconvenient than Chase being

sued in its home forum, and hence understandably sufficient to overcome

even the significant deference accorded citizen-plaintiffs.

6

erence accorded by other circuits based on citizen-status per

se, this Court should grant certiorari.

B. Plaintiff's Choice of Defendant’s Home Forum.

Respondent makes no effort to reconcile the Second Cir-

cuit’s refusal to apply substantial deference to plaintiffs

choice of defendant’s home forum with the considerable def-

erence given such a choice by four other circuits. See Pet. 12-

13 (citing cases from the First, Third, Eighth, and Tenth Cir-

cuits). Indeed, respondent says absolutely nothing in defense

of the Second Circuit’s complete disregard of the choice of

defendant’s home forum as an element of deference. Instead,

respondent merely repeats the various reasons why London

would be an appropriate alternative, BIO 13, which simply

ignores the question. The very point of deference is that it

creates a substantial barrier to dismissal regardless of the

availability of other appropriate fora.

The substantial deference due the selection of a defen-

dant’s home forum was squarely raised and expressly rejected

below and the Second Circuit’s denial of deference is in direct

conflict with substantial deference given to such a selection in

other circuits. Respondent does not deny the conflict, does

not defend the Second Circuit’s treatment of this deference

issue, and offers not a single reason why this Court should not

grant certiorari to resolve the issue.

Il. THE SECOND CIRCUIT ELIMINATED WITNESS

UNWILLINGNESS TO APPEAR AS AN ELEMENT OF

GILBERT’S COMPULSORY-PROCESS FACTOR, IN

CONFLICT WITH OTHER CIRCUITS.

As with the deference conflicts, respondent makes no at-

tempt to deny the conflict created by the Second Circuit’s re-

fusal to require some evidence of “unwillingness” to appear

on the part of non-resident witnesses as an element of Gil-

bert’s compulsory-process factor. Pet. 16 (citing cases from

First, Fifth, and Ninth Circuits). Instead, respondent simply

asserts that this Court’s discussion of witnesses in Piper Air-

7

craft Co. v. Reyno, 454 U.S. 235, 258-59 (1981), contains no

such requirement. BIO 14-15. Nothing in Piper even re-

motely contradicts the element of unwillingness established

by Gilbert as part of the compulsory-process factor.

In Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947),

this Court established a clear dichotomy in the private interest

factors relating to witnesses. Where non-resident witnesses

are “willing” to attend trial in the chosen forum, the only wit-

ness consideration in the Gilbert balance is the “cost of ob-

taining [their] attendance,” 330 U.S. at 508 — a consideration

the district court found irrelevant here given the presence of

numerous witnesses in both competing fora. Pet. App. B16.

The availability of compulsory process only comes into play

for the “attendance of unwilling” witnesses, 330 U.S. at 508,

and has no legal significance in the absence of some evidence

of such unwillingness.

This Court’s observation in Piper that defendants are not

required to particularize the testimony of each prospective

witness in no way contradicts the willing/unwilling witness

dichotomy established by Gilbert. Rather, Piper contains the

perfectly consistent requirement that defendants “must pro-

vide enough information to enable the District Court to bal-

ance the parties’ interests * * * [such as] affidavits describing

the evidentiary problems they would face if the trial were held

in the United States.” 454 U.S. at 258-59 (emphasis added).

In Piper this Court found that the defendants had indeed

provided “affidavits describing the evidentiary problems they

would face,” and those affidavits made it self-evident that the

witnesses in question — hostile third parties to whom defen-

dants intended to shift the blame for the air crash at issue —

would be unwilling to appear voluntarily in the United States.

Id. at 259 & n. 27 (foreign witnesses to include, inter alia,

“the relatives of the decedents; the owners and employees of

McDonald; the persons responsible for the training and li-

censing of the pilot; the persons responsible for servicing and

maintaining the aircraft”; noting “problems posed by the in-

‘ ;

ability to implead potential third-party defendants” for claims

“that the accident was caused not by a design defect, but

rather by the negligence of the pilot, the plane’s owners, or

the charter company”). The “unwillingness” of those hostile

witnesses to appear voluntarily and hence the need for

compulsory process was self-evident and amply supported by

the record and the findings in Piper.

In the present case, by contrast, there was neither any evi-

dence nor any finding of “evidentiary problems” given that

the supposedly non-resident witnesses identified by Chase

were never even claimed to be unwilling or unable to appear

in the United States.? Indeed, such witnesses were all self-

evidently friendly to Chase and hostile to Springwell, the pre-

cise opposite of the case in Piper. The mere fact that they

supposedly resided in England rather than the U.S. is not it-

self any “problem,” particularly in light of the district court’s

express finding that the costs of having witnesses travel to

either forum was not a problem and hence not a factor favor-

ing dismissal. Pet. App. B16. Absent evidence and findings

that witnesses were unwilling or unable to appear in New

York, the courts below lacked the “information” required to

count this factor against a New York forum and thus erred as

a matter of law in weighing it strongly in favor of dismissal.’

In any event, however, respondent’s misreading of Piper

does nothing to reconcile the conflict with three other circuits

that recognize the requirement of “unwillingness” well after

this Court’s Piper decision. Given that the compulsory-

> As it turns out, several of the witnesses alleged to reside in London in

fact do not reside there and are no more subject to English compulsory

process than to American compulsory process. Springwell Br. 39-40;

Springwell Reply 18.

* Indeed, the refusal to require some showing that Chase’s witnesses

would be unwilling to appear in New York was especially perverse given

the simultaneous rejection of the need for compulsory process over New

York witnesses because Springwell had not “demonstrated” that such wit-

nesses “would be unavailable at a trial in London.” Pet. App. B16.

9

process factor is the only private interest even claimed to fa-

vor dismissal, BIO 10; Pet. App. B14-16, and was conceded

to not “rise to the level of vexation or oppressiveness,” Pet.

App. B16, if the courts below erred as a matter of law by even

considering that factor absent some indication of witness un-

willingness to appear in New York, then dismissal would be

plain error. This case thus presents an ideal vehicle for con-

sidering the proper legal scope of the compulsory-process fac-

tor within the overall Gilbert balance and for resolving the

conflict created by the Second Circuit.

Il. THE SECOND CIRCUIT ERRONEOUSLY APPLIED

GILBERT’S FOREIGN-LAW FACTOR TO A CASE OF

MIXED LAW OF COMMON HERITAGE.

As amply explained in the Petition, where both competing

fora will have to apply some foreign law and the mixed law at

issue shares a familiar and common heritage, the foreign-law

‘factor should not play a significant role in the Gilbert balance.

Various other courts have recognized the limited significance

of that factor, Pet. 17-18, yet the courts below counted it

“strongly” in favor of dismissal. Pet. App. A18.

Chase’s only response is to suggest that the scope of the

foreign-law factor is merely a factual issue that should not be

revisited. BIO 15-16. But the question presented goes not to

the facts or even the choice of law determinations made by

the courts below. Rather, assuming that both English and

New York law would apply to different parts of this case, as

expressly found by the district court, Pet. App. B14 (New

York law would apply to “negligent supervision claims as

they relate to CMB New York and plaintiffs’ conversion

claims, which allege misfeasance on the part of CMB New

York directly”), petitioner contends that such a finding of

mixed law should have little or no /egal significance in the

Gilbert balance. The question presented thus asks for an up

or down answer to a straight-forward question. At issue are

10

the legal constraints on the scope of this Gilbert factor, not

the factual elements of that factor.

Once again, this case is an apt vehicle for addressing the

limits of the foreign-law factor given that it was one of only

two public-interest factors at issue. Error regarding the for-

eign-law factor thus would undermine an already thin balance

of interests and tip the scales to a different result.

IV. THiS CASE RAISES IMPORTANT AND RECURRING

NATIONAL ISSUES.

The importance and frequency of international disputes

between U.S. and foreign companies involved in business ac-

tivities spanning multiple fora are unchallenged by respon-

dent. Similarly unchallenged is the significance of having

predictably accessible venues for resolving disputes that arise

from such business. The forum non conveniens questions

presented by the Petition will affect disputes well beyond this

individual case and thus require both a correct and consistent

resolution that only this Court can provide. Multiple circuit

conflicts and the virtual erasure of bilateral treaty rights con-

cerning freedom of access to the courts will only complicate

and hinder the efficient conduct of international business and

undermine the credibility of the federal courts as effective

arbiters of disputes with U.S. companies. Indeed, in an era

where U.S. financiai institutions are making a habit out of

abusing the trust of their clients and customers around the

world, restricting access to U.S. courts for complaints alleg-

ing such abuse and fraud would seem especially inappropri-

ate. This case is an ideal vehicle for addressing significant

questions in an area of law that has not received substantial

attention from this Court since Piper, and that has suffered

accordingly from inconsistency and confusion.

CONCLUSION

For the foregoing reasons, the petition for a writ of certio-

rari should be granted.

Dated: December 31, 2003

Respectfully submitted,

ERIK S. JAFFE

Counsel of record

ERIK S. JAFFE, P.C.

5101 34" Street, N.W.

Washington, D.C. 20008

(202) 237-8165

Counsel for Petitioner