On September 30, 2024, the U.S. District Court for the Southern District of New York ruled that related lawsuits seeking to hold multiple global banks liable for financing mining activity that allegedly led to environmental destruction in Brazil must be heard in Brazil—not New York. The cases arose out of the mining operations of Vale S.A. in Brazil's "Iron Quadrangle," which has one of the largest concentrations of iron ore deposits in the world. The plaintiffs, Brazilian homeowners and municipalities, alleged that U.S. banks—Merrill Lynch, Pierce, Fenner & Smith Inc., Barclays Capital, Inc., Citibank Inc., Citigroup Global Markets, Inc., JP Morgan, and JP Morgan Securities LLC—were strictly liable for various environmental damage caused by Vale's mining activity they provided over $17 billion in financing to Vale despite their alleged awareness of the environmental risks.
Judge John P. Cronan granted the defendants' motion to dismiss the complaint on forum non conveniens grounds, concluding that these cases must be litigated, if at all, in Brazil. Applying a three-part analysis, the court first determined that the plaintiffs' chosen forum, the Southern District of New York, was entitled to minimal deference under the circumstances. Next, the court found that Brazil would be an adequate alternative forum, based in part on the defendants' stipulation that they would not contest the jurisdiction of Brazilian courts over the plaintiffs' claims. Finally, the court concluded that the relevant private interest factors—such as the location of witnesses and evidence—and public interest factors—such as court congestion, the interest of the community in having the controversy decided locally, and complex issues of conflicts of law and application of foreign law—weighed in favor of having the case be tried in Brazil. In arguing that New York was the proper forum, the plaintiffs attempted to rely on forum selection clauses found in various agreements between the defendants and Vale; however, the court noted that the plaintiffs had no relation to the agreements.
The cases are Antônio Pereira Association, et al. v. Merrill Lynch, Pierce, Fenner & Smith Inc., et al., Case No. 23-cv-08160-JPC and City of Ouro Preto v. Merrill Lynch, Pierce, Fenner & Smith Inc., et al., Case No. 23-cv-08139-JPC. The plaintiffs are represented by Milberg Coleman Bryson Phillips Grossman, PLLC. The banks are represented by Jones Day, Allen Overy Shearman Sterling US LLP, Davis Polk & Wardwell LLP, and Mayer Brown LLP. The order is available here.
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