United States: "Forum Non Conveniens": How To Avoid The Tide Of Lawsuits Brought By Foreign Nationals

British jurist Lord Alfred Denning famously remarked that, "[a]s a moth is drawn to the light, so is a litigant drawn to the United States."1 Because remedies and procedures available in U.S. courts are generally more attractive to plaintiffs than those available in other countries, foreign litigants frequently file suit in the U.S. with dreams of "striking it rich" with "jackpot verdicts." Thus, on many occasions, foreign nationals claiming to have been harmed by drugs or medical devices have chosen to bring suit against the manufacturers and/or their parent companies in the U.S., rather in their own country.

Suppose, for example, that "Alice," "Simon," "Maria," and "Patrick," are citizens and residents of foreign countries who all file suit in the U.S., claiming to have sustained injuries from a drug manufactured in the U.S. by "Acme," but that was prescribed and ingested in their own respective countries, where they all received subsequent medical treatment. Alice, a Canadian, would prefer to file suit in the U.S., because she cannot recover punitive damages under Canadian law. Simon, a United Kingdom (U.K.) resident, would prefer to file suit in the U.S. because of more favorable remedies and because he is having difficulty finding legal counsel in the U.K., where the prevailing party is entitled to attorney's fees.

Maria, a resident of Mexico, would prefer to file suit in the U.S., because there is no right to a jury trial in Mexico, the Mexican court process is slower, and the right to discovery is more limited. Finally, Patrick, a resident of New Zealand, would prefer to pursue his claims in the U.S., because he cannot even file a lawsuit for compensatory damages in his home country; instead, New Zealand has a statutory administrative no-fault compensation system, which allows compensation to the injured parties without finding fault or negligence and reduces the legal process to a matter of weeks.

The U.S. court has jurisdiction over all of these lawsuits, because Acme, a U.S. company, manufactured the drug in the U.S. and made other similar decisions in the U.S. Ironically, traditional maneuvering to obtain a "home field advantage" is completely thrown out the window, as none of the parties wants the case to be tried in his/her/its own countries. Would the U.S. court, even though it has jurisdiction, grant a request by Acme to dismiss the lawsuits and require these plaintiffs to pursue remedies in their own countries? Quite probably.

Apprehensive of serving as the "courtroom to the world for adjudication of essentially foreign disputes with only nominal connections to the United States,"2 American courts have frequently relied on the doctrine of forum non conveniens to weed out lawsuits that ought to be pursued in another country. Under this doctrine, a trial judge generally retains the discretion to dismiss a lawsuit in the event that: (a) an alternative forum is available and adequate; and (b) the alternative forum is more convenient, after considering both private and public interests. In Gulf Oil v. Corp. v. Gilbert,3 the Supreme Court identified the following public interest considerations:

Administrative difficulties follow for courts when 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.

Generally recognized private interests include "(1) the 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."4

Piper Aircraft Co. v. Reyno

The Supreme Court's decision in Piper Aircraft Co. v. Reyno5 in 1981 is the seminal case applying the forum non conveniens doctrine to a lawsuit brought by a foreign national. The plaintiffs in that case, representatives of estates of Scottish citizens who died in an airplane crash in Scotland, brought suit in the U.S. against the U.S. manufacturers of the aircraft and propeller. The district court concluded that the case should be dismissed for forum non conveniens. The Court of Appeals reversed, finding that a case should not be dismissed for forum non conveniens if the substantive law that would be applied in the alternative forum is less favorable. Because the plaintiffs could pursue strict liability through tort claims in the U.S., but not in Scotland, the Court of Appeals concluded that the plaintiffs were entitled to have their claims resolved in their chosen forum.

On appeal, the Supreme Court reversed and reinstated the district court's dismissal of the lawsuit. In doing so, the Court set a very low bar for considering whether a remedy is available and adequate in a foreign country. The Court found that a forum is available merely if the defendant may be served with process within that jurisdiction.6 The Court suggested that an alternative forum is inadequate only in "rare circumstances . . . where the remedy offered by other forum is clearly unsatisfactory," such as where the alternative forum would not permit litigation of the subject matter.7 The Court noted that, were the Court of Appeals' high standard accepted, "American courts, which are already extremely attractive to foreign plaintiffs, would become even more attractive," and "[t]he flow of litigation into the United States would increase and further congest already crowded courts."8

The Supreme Court found that the district court acted within its discretion in determining that it would be more convenient to litigate the case in Scotland, taking into consideration the private and public interests. The Court noted that the "the private interests point in both directions"— although important witnesses and evidence were located in Scotland, important evidence about the aircraft's design, manufacture and testing were located in the U.S.9 The Court agreed with the district court, however, that the defendants faced challenges because certain key witnesses would not be subject to U.S. compulsory process and because the defendants would not be able to implead potential third-party defendants in the U.S., thus increasing the risk of piecemeal litigation10. Turning to the public considerations, the Supreme Court recognized that "Scotland has a very strong interest in this litigation," given that the accident took place in Scotland and all of the decedents were Scottish citizens.11 Although the plaintiffs argued that the U.S. had a strong interest in deterring its companies from manufacturing defective products, the Court concluded that "[t]he American interest in this accident is simply not sufficient to justify the enormous commitment of judicial time and resources that would inevitably be required if the case were to be tried here."12

Sufficiency of Alternative Forums

On numerous occasions after Piper Aircraft, American courts have dismissed pharmaceutical products and medical device lawsuits filed by foreign nationals. Courts have very rarely, if at all, determined that the foreign plaintiff's own country did not provide an available and adequate forum. Courts typically have found a foreign forum to be available based on the defendant's stipulation that it would accept service of process and be subject to jurisdiction in that country. Given the low bar set in Piper Aircraft, courts have rarely found that a foreign court did not offer an adequate remedy. As noted by one court, "American courts should be wary of branding other nations' judicial forums as deficient in the substance or procedures that their laws contain," because "[s]uch denunciations . . . run counter to principles of international comity and could retard efforts to reform foreign tribunals."13

For instance, even though punitive damages are not available as a remedy in Canada and many other countries, courts have repeatedly determined that the unavailability of certain claims and remedies, "[e]ven where the award would be drastically reduced in an alternate forum," does not render the foreign forum inadequate.14 In fact, courts have found that countries, such as New Zealand, that have enacted an administrative no-fault accident compensation scheme, afford an appropriate remedy, even though they do not permit litigation.15

Many courts have also refused to deem a foreign forum inadequate merely because discovery procedures are less generous than in the U.S.,16 or because there is no right to a trial by jury in the foreign forum.17 Courts have generally not afforded much credence to any practical challenges faced by plaintiffs in pursuing remedies in a foreign forum. For instance, in In re Vioxx Litig.,18 the New Jersey court rejected the plaintiffs' argument that the U.K. offered an inadequate forum due to the "English system" of attorney's fees recovery and other financial challenges of bringing mass tort litigation in that country. Courts have even found that a forum is adequate in countries with systems "well below international standards for law or human rights."19

Balancing Private and Public Interests

Upon recognizing that a foreign forum is both available and adequate, courts on many occasions have determined that the balancing of public and private interests weighs in favor of requiring foreign plaintiffs to pursue drug or medical device products liability claims in their own countries. In most of these cases, the consideration of private interest factors has been a relatively close call. Resolution of the case in the foreign forum is often more convenient if much of the discovery must take place in that country. This is particularly true if important sources of evidence, such as healthcare providers and pharmacies, are located in the foreign country, and therefore, are immune from a U.S. court's subpoena. If a defendant wishes to pursue an indemnity action against a foreign third party, this would also weigh in favor of a dismissal so that litigation is not pursued piecemeal.20

Foreign plaintiffs often argue that it is more convenient to litigate in the U.S. because important documents and witnesses concerning the product at issue are located in the U.S. Although courts have been sympathetic to this argument, many courts have noted that this is less of a concern because the evidence is generally within the defendant's control. Therefore, it would be expected that this evidence could be readily obtained by the plaintiff in a foreign court proceeding. Moreover, "[i]n ongoing multidistrict litigation actions in which a U.S. pharmaceutical company has already produced voluminous amounts of documentary evidence, courts may accord the company's location less weight in the private interest analysis."21

In drug and medical device product liability actions, public interest considerations typically tip the scales in favor of dismissal on forum non conveniens. This is based largely on the fact that such products are usually marketed and sold subject to unique and comprehensive statutory and regulatory schemes in other countries. As noted by the Sixth Circuit, "[w]hen a regulated industry, such as pharmaceuticals . . . is involved, the country where the injury occurs has a particularly strong interest in product liability litigation."22 A federal district court in Louisiana recently stressed the importance of deferring to a foreign sovereign government in such instances:

As one court noted, "[t]he forum whose market consumes" a regulated product has a "distinctive interest in explicating the controlling standards of behavior" related to that product. Doe v. Hyland Therapeutics Div., 807 F. Supp. 1117, 1129 (S.D.N.Y. 1992). Indeed, trying the plaintiffs' claims in the United States would risk disrupting the judgments of foreign regulatory bodies by imposing an American jury's view of the appropriate standards of safety and labeling on companies marketing and selling drugs in the plaintiffs' respective home forums. See Vasquez, 325 F.3d at 674 ("If accepted, plaintiffs' argument would curtail the rights of foreign governments to regulate their internal economics and threaten to engulf American courts with foreign claims.")23

A Pennsylvania federal court similarly found as follows:

Questions as to the safety of drugs marketed in a foreign country are properly the concern of that country; the courts of the United States are ill-equipped to set a standard of product safety for drugs sold in other countries. . . . The United States should not impose its own view of the safety, warning, and duty of care required of drugs sold in the United States upon a foreign country when those same drugs are sold in that country. . . . [I]t is manifestly unfair to the defendant, as well as an inappropriate usurpation of a foreign court's proper authority to decide a matter of local interest, for a court in this country to set a higher standard of care than is required by the government of the country in which the product is sold and used.24

Otherwise, there is a danger that a U.S. court would impose on the defendant a higher standard of care than is required in the country where the product was sold.25 Moreover, U.S. courts are reluctant to apply unique and unfamiliar foreign law and to burden U.S. courts and juries.26

A decision by a New York federal district court in In re: Fosamax Products Liab. Litig.,27 offers an insightful example of how courts have typically balanced public and private considerations in drug and medical device products liability actions. The British plaintiff in that case sought to pursue a products liability claim in a U.S. MDL against several pharmaceutical companies. The plaintiff's claims involved drugs that were prescribed, marketed, sold, and ingested in the U.K., where she also received medical treatment. The court found that the plaintiff's choice of forum deserved "little deference" given that she has "no apparent connection to the United States" other than her legal counsel.28 After finding that the U.K. was an adequate alternative forum, the court turned to the private and public considerations.

The court found that private factors weighed in favor of the case being litigated in the U.K.29 The court noted that the "overwhelming majority of evidence regarding injury, causation, and damages is located there," and that the plaintiff's physicians were not subject to U.S. compulsory process.30 Although many of the defendants' materials were located in the U.S., the court noted that these materials would already be available to the foreign plaintiff through the U.S. MDL discovery process.31

The court also found that public interest factors warranted dismissal. The court noted that "[p]harmaceutical products liability cases involving an allegedly unsafe drug that was sold in a foreign country subject to its regulatory scheme, and then later ingested by plaintiff in that foreign country, are especially susceptible to forum non conveniens dismissal due to the foreign country's strong interest in the matter."32 The court stated that "the foreign nation has an interest in protecting its citizens from alleged injuries caused by events occurring within its borders," as well as "the foremost interest in defining the standard of conduct which pharmaceutical companies must follow in distributing products under its regulatory scheme."33 Quoting Doe v. Hyland Therapeutics Div.,34 the court stated:

The forum whose market consumes the product must make its own determination as to the levels of safety and care required. That forum has a distinctive interest in explicating the controlling standards of behavior, and in enforcing its regulatory scheme. The standards of conduct implemented, and the level of damages assessed, will reflect the unique balance struck between the benefit each market derives from the product's use and the risks associated with that use; between the community's particular need for the product and its desire to protect its citizens from what it deems unreasonable risk. The forum's assessment will affect not merely the quality of the product, but also the price, quantity, and availability to its public. Such an assessment must remain the prerogative of the forum in which the product is used.35

Although the court acknowledged that the U.S. had an interest in the defendants' conduct given that they were U.S. companies, the court found that "[t]he presence of other similar actions further reduces the United States' interest in this particular matter as they 'ensure [] that appropriate standards of care are applied,' and if the defendants are found liable, then they and others will be deterred from engaging in similarly inappropriate conduct in the future."36

In scores of other products liability cases involving pharmaceutical products or medical devices, courts across the country have dismissed claims brought by foreign nationals, finding that public interest and private considerations demonstrated that an alternative foreign forum was more suitable and convenient.37 These cases offer defendants valuable precedent in procuring the dismissal of such claims. Most courts have agreed to dismiss such claims based on certain conditions, such as: (a) the defendant accepting service of process in the subsequent foreign suit; (b) the defendant not contesting that it is subject to jurisdiction in the foreign forum; and (c) tolling the applicable foreign statute of limitation during the time in which the matter was pending in the U.S.38

Footnotes

1 Smith Kline & French Lab. Ltd. v. Bloch, 1 W.L.R. 730 (1983).

2 Corporocion Tim, S.A. v. Schumacher, 418 F. Supp. 2d 529, 533 (S.D.N.Y. 2006).

3 330 U.S. 501, 508-09 (1947).

4 American Dredging Co. v. Miller, 510 U.S. 443, 448 (1994).

5 454 U.S. 235 (1981).

6 Id. at 255 n. 22.

7 Id.

8 Id. at 252.

9 Id. at 257.

10 Id. at 258-59.

11 Id. at 260.

12 Id. at 261.

13 Corporocion Tim, 418 F. Supp.2d at 533; see also Jhirad v. Ferrandina, 536 F.2d 478, 484-85 (2d Cir. 1976) ("It is not the business of our courts to assume the responsibility for supervising the integrity of the judicial system of another sovereign nation").

14 In re Vioxx Litig., 928 A.2d 935, 942 (N.J. Super. Ct. 2007); see also Ledingham v. Parke-Davis Div. of Warner-Lambert Co., 628 F. Supp. 1447 (E.D.N.Y. 1986); Ray v. Johnson & Johnson, 2011 U.S. Dist. LEXIS 143336, at *4 (N.D. Ohio Dec. 13, 2011); In re: Vioxx Products Liab. Litig., 2009 U.S. Dist. LEXIS 55973, at *20 (E.D. La. Feb. 11, 2009); In re: Rezulin Products Liab. Litig., 214 F. Supp.2d 396, 398 (S.D.N.Y. 2002).

15 See, e.g., Lueck v. Sundstrand Corp., 236 F.3d 1137, 1144-45 (9th Cir. 2000); Tang v. Synutra Int'l, Inc., 656 F.3d 242, 250-51 (4th Cir. 2011); In re: Silicone Gel Breast Implant Products Liability Litig., 887 F. Supp. 1469 (N.D. Ala. 1995); Stonnell v. Int'l Harvester Co., 132 Ill. App.3d 1043, 478 N.E.2d 518, 520 (1985).

16 See, e.g., Mercier v. Sheraton Int'l, Inc., 981 F.2d 1345, 1352-53 (1st Cir. 1992); In re Union Carbide Corp. Gas Plant Disaster at Bhopal, 809 F.2d 195, 205 (2d Cir. 1987); In re Vioxx Litig., 928 A.2d at 941.

17 Id.; Lockman Foundation v. Evangelical Alliance Museum, 930 F.2d 764, 768 (9th Cir. 1991); Union Carbide, 809 F.2d at 199.

18 928 A.2d 935, 943 (N.J. Super. Ct. 2007).

19 Douglas W. Dunham & Eric F. Gladbach, Forum Non Conveniens and Foreign Plaintiffs in the 1990s, 24 Brooklyn J. Int'l Law 665, 677 (1999).

20 See Piper Aircraft, 454 U.S. at 259; Doe v. Hyland Therapeutics Div., 807 F. Supp. 1117, 1126 (S.D.N.Y. 1992); Miller v. Boston Scientific Corp., 380 F. Supp.2d 443 (D.N.J. 2005); Ledingham, 628 F. Supp. at 1451.

21 Drug Product Liability, ch. 21 § 21.05[4][c] (2013).

22 Dowling v. Richardson-Merrell, Inc., 727 F.2d 608, 616 (6th Cir. 1984).

23 In re: Vioxx, 2009 U.S. Dist. LEXIS 55973, at *26-27.

24 Harrison v. Wyeth Lab. Div. of Am. Home Prod. Corp., 510 F. Supp. 1, 7-10 (E.D. Pa. 1980). See also Hyland, 807 F. Supp. at 1129-30 ("We are ill-equipped to enunciate the optimal standards of safety or care for products sold in distant markets, and thus choose to refrain from imposing our determination of what constitutes appropriate behavior to circumstances with which we are not familiar," and "[w]hile imposing our presumably more stringent standards to deter tortious conduct within our borders could afford a higher degree of protection to the world community, such an approach would also ignore the unique significance of the foreign forum's interest in implementing its own risk-benefit analysis, informed by its knowledge of its community's competing needs, values, and concerns.").

25 See Ledingham, 628 F. Supp. at 1452 ("[I]t would be manifestly unfair to the defendants, who claim to have complied with Canadian regulations, if this Court were to set a higher standard of care than is required by the Canadian government").

26 See Jones v. Searle Lab., 444 N.E.2d 157, 161 (Ill. 1982) ("The need to apply foreign law has frequently been deemed an important factor favoring dismissal of the suit") (citations omitted); Ray, 2011 U.S. Dist. LEXIS 143336 at *8 (finding that "the application of foreign law, namely the law of Canada, is a factor in favor, although not dispositive, of dismissal"); In re: Vioxx, 2009 U.S. Dist. LEXIS, at *30 n. 4 (finding that "the likelihood of having to apply foreign laws to a plaintiff's claims is a factor that weighs heavily in favor of dismissal"); Ledingham, 628 F. Supp. at 1452 ("This Court's unfamiliarity with Canadian law supports dismissal of the action on the basis of forum non conveniens").

27 2008 U.S. Dist. LEXIS 110831 (S.D.N.Y. Oct. 21, 2009).

28 Id. at *8.

29 Id. at *18-22.

30 Id. at *18, 21.

31 Id. at *20.

32 Id. at *12-13.

33 Id. at *13.

34 807 F. Supp. 1117, 1129 (S.D.N.Y. 1992).

35 Fosamax, 2008 U.S. Dist. LEXIS 110831, at *13-14.

36 Id. at *16 (quoting In re Rezulin, 214 F. Supp. 2d at 399).

37 See, e.g, Adams v. Merck & Co., 353 Fed. Appx. 960 (5th Cir. Nov. 30, 2009) (U.K. plaintiffs); de Melo v. Lederle Lab., 801 F.2d 1058 (8th Cir. 1986) (Brazilian plaintiff); Dowling v. Richardson-Merrell, Inc., 727 F.2d 608 (6th Cir. 1984) (U.K. plaintiffs); Ray, supra (Canadian plaintiff); In re: Vioxx Products Liab. Litig., 2009 U.S. Dist. LEXIS 55973 (E.D. La. Feb. 11, 2009) (plaintiffs from numerous foreign countries); In re: Vioxx Prod. Liab. Litig., 448 F. Supp. 2d 741 (E.D. La. 2006) (Italian and French plaintiffs); Miller, supra (Israeli plaintiffs); Silicone Gel Breast Implant, supra (Canadian, Australian, New Zealand, and U.K. plaintiffs); Hyland, supra (Irish plaintiffs); Ledingham, supra (Canadian plaintiff); Harrison, supra (U.K. plaintiffs); Stangvik v. Shiley Inc., 819 P.2d 14 (Cal. 1991) (Swedish and Norwegian plaintiffs); Jones, supra (U.K. plaintiffs); McCracken v. Eli Lilly & Co., 494 N.E.2d 1289 (Ind. Ct. App. 1986) (U.K. plaintiffs); In re Vioxx Litig., 928 A.2d 935 (N.J. App. Div. 2007) (U.K. plaintiffs); In re: N.Y. Bextra & Celebrex Prod. Liab. Litig., 2009 N.Y. Misc. LEXIS 3863 (N.Y. S.Ct. Feb. 11, 2009) (European plaintiffs).

38 See, e.g. Doe, 807 F. Supp. at 1133; Harrison v. Wyeth Lab. Div. of Am. Home Prod. Corp., 510 F. Supp. 1, 9 (E.D. Pa. 1980); Silicone Gel Breast Implant, 887 F. Supp. at 1478-79.

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    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions