United States: Sixth Circuit Affirms FNC In Favor Of Germany

We've mentioned before how our Trusts & Estates professor described the German legal system as "the mind of God revealed to man." Professor Langbein was especially impressed with the German system of training judges, as well as the absence of party-hired experts (saxophones is what he called them, since they will play any tune). We were reminded of all this when we read Hefferan v. Ethicon Endo-Surgery Inc., 2016 U.S. App. LEXIS 12558; 2016 FED App. 0158P (6th Cir. July 8, 2016), a case in which the Sixth Circuit upheld the district court's forum non conveniens dismissal on the grounds that the case should have been filed in Germany. We discussed the lower court decision here, and the appellate decision is mostly consistent. Of course it could be only "mostly," because Judge Boggs authored the Sixth Circuit decision, and Boggs, like Posner, is so strong-willed and strong-minded that he will inevitably put his own spin on things. (Boggs was, for a time, a consistent short-lister when Supreme Court vacancies arose under Republican presidents. We once heard a Boggs clerk describe his boss as the "Brazil of Circuit judges," since Brazil was for such a long time mentioned as the next superpower.)

To remind you of the facts of Heffernan: an American living in Germany for several years underwent surgery in Germany and allegedly suffered injuries in Germany. He claimed that a surgical stapler, manufactured by a company in America, had malfunctioned. He sued in a U.S. federal court (initially in New Jersey, later transferred to Ohio), along with his German citizen wife, who sued for loss of consortium. The district court granted the defendant's motion to dismiss on the ground of forum non conveniens in favor of litigating in Germany.

The standard of review was abuse of discretion, so the plaintiffs were already running up hill. Here is a helpful outline of issues from Judge Boggs: "After the court determines the degree of deference owed the plaintiff's forum choice, the defendant carries the burden of establishing an adequate alternative forum and showing that the plaintiff's chosen forum is unnecessarily burdensome based on public and private interests." It turns out that no deference was owed the plaintiffs' forum choice because they chose a forum other than their home (they had no physical presence in the U.S. and it was clear they intended to remain in Germany) and there was no apparent convenience associated with litigating on this side of the Atlantic. Thus, the court concluded, the plaintiffs "have not shown that their decision to file suit in the United States was motivated by a legitimate reason such as convenience or the ability to obtain jurisdiction over the defendants rather than tactical advantage."

The next issue was whether Germany was an adequate alternative forum. The defendant was amenable to process in Germany (no surprise there), so that potential barrier was out of the way. It came down to the differences in the German legal system, all of which seemed to irk the plaintiffs mightily. In particular, the plaintiffs bemoaned the German court's employment of court-appointed experts, the lower average damages awards in Germany compared with the United States, and the absence of jury trials, party-directed pretrial discovery, and punitive damages. While Germany parts company with the U.S. in those aspects of its legal system, it is, of course, consistent with the many civil law systems around the world, where well-trained judges perform fact-finding. It would be bizarre, wrong, and beyond insulting for an American court to announce that such a civil law system deprives plaintiffs of justice. In fact, most of the civilized world regards our litigation system as lottery lunacy. The Sixth Circuit did the right thing here by agreeing with the district court that none of the differences in the German justice system made it an inadequate forum. (We have no idea whether Germany has a doctrine of FNC, but it would be interesting to see what sort of arguments would be made against a transfer of a case to the U.S. We are already writing the brief in our heads.) The plaintiffs also pointed out that German law would not permit the wife to recover for loss of consortium. But the Sixth Circuit pointed out that, even if litigated in a United States district court, the wife's claim would be governed by German substantive law. The Sixth Circuit's point was considerably sharper.

For us, that ends the most interesting part of the decision. What follows is the balancing of public and private interests. That always seems like such vague, dreary stuff that can be phrased or fashioned in virtually any way one wants. We are sure that Judge Boggs gets it right here, but it all seems perfectly obvious, inevitable, and repetitive.

Oh well, here goes. The allegedly defective product was purchased and used in Germany, making Germany the primary locus of the relationship. Whatever policy underlies the German policy of limiting spousal recovery for loss of consortium, its interest in the claim cannot be less than those of Ohio or New Jersey. The case does not present those "rare circumstances" where a forum's "clearly unsatisfactory" remedy renders it an inadequate alternative. Further, most of the important witnesses (e.g., plaintiffs and their doctors) were in Germany.

The plaintiffs argued that certain costs associated with the German legal system weighed against FNC dismissal. First, they asserted that upfront filing fees in Germany can be significant for personal-injury claims. But the Sixth Circuit observed that the plaintiffs "did not establish that these fees would be greater than the out-of-pocket costs they might incur if the case proceeded in the United States." Second, the plaintiffs referenced a bond required of claimants who file suit in Germany but who do not have a "habitual place of residence" in the European Union. But it was not clear that such a bond would even apply to the plaintiffs, both of whom are domiciled in Germany. Besides, the defendant helpfully agreed to waive the requirement. Third, and most interestingly, the plaintiffs decried the unavailability of contingency-fee arrangements in Germany which, according to the plaintiffs, would result in "tens of thousands of dollars" in additional costs for them. Judge Boggs agreed that "[c]ontingency payment of legal fees certainly opens a litigation system to otherwise priced-out plaintiffs." But the plaintiffs had not supported their assertion "with evidence of the fees that they would avoid if the case proceeded in the United States."

That last item has us a tiny bit worried that someday a particularly feisty foreign plaintiff will gin up an expert affidavit that will lay out the fee-avoidance and show that unavailability of contingency fees would sound the death knell for any hope of a remedy in that particular case. Would such "evidence" stave off FNC dismissal? We hope not, and maybe at this point we should be grateful for the mushiness of the public-private balancing test. The Sixth Circuit's analysis gave great weight to the plaintiffs' domicile and the place of occurrence: "Germany has a strong interest in deciding a controversy involving a product purchased and used within its borders, especially because the suit will involve the application of its law to determine the parties' rights and liabilities." It cannot be that the absence of contingency fee arrangements – which are as much a bane as a boon – could, by itself, dislodge that strong interest.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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