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Manu International, S.A. v. Avon Products Inc.

decided: January 20, 1981.

MANU INTERNATIONAL, S.A., PLAINTIFF-APPELLANT,
v.
AVON PRODUCTS, INC., DEFENDANT-APPELLEE .



Appeal from a judgment of the United States District Court for the Southern District of New York, Leonard B. Sand, Judge, entered on June 26, 1980, granting defendant-appellee's motion to dismiss the complaint of plaintiff-appellant on grounds of forum non conveniens . Reversed .

Before Lumbard, Mansfield and Van Graafeiland, Circuit Judges.

Author: Mansfield; Van Graafeiland

On July 18, 1979, Manu International, S.A. ("Manu"), a Belgian corporation, brought suit in the District Court for the Southern District of New York against Avon Products, Inc. ("Avon"), a New York corporation with its principal offices in New York, seeking damages for alleged fraud in obtaining disclosure from Manu, a middleman, of its Taiwanese source of handbags supplied to Avon and then by-passing Manu to deal directly with the source. On May 28, 1980, the district court, Leonard B. Sand, J., granted Avon's renewed motion to dismiss the action on grounds of forum non conveniens on condition that Avon consent to jurisdiction in Taiwan. Manu appeals this dismissal. We reverse on the ground that the district court exceeded the limits of its discretion in the matter.

Beginning in 1975 Manu entered into a business relationship with Avon Overseas Limited ("AOL"), a London-based wholly-owned subsidiary of Avon which is responsible for handling Avon's European markets. Manu supplied Avon with a product called the "Beauty Showcase," a high quality fabric handbag which Manu had manufactured for AOL in Taiwan. Manu claims that it designed the bag. Avon alleges that the bag was designed by an AOL employee. In any event, the bags were manufactured for Manu by independent producers in Taiwan, using what Manu claims were "confidential systems, techniques and methods of production" based on know-how developed over 30 years and disclosed only to Manu's exclusive representative in Taiwan, an individual named Lawrence Chu.

The relationship between Manu and Avon soon took a turn for the worse. In July of 1977, Avon established its Far East Buying Office ("FEBO") as a division of Arlington Limited ("Arlington"), a Bermuda corporation which is also a wholly-owned subsidiary of Avon. The purpose of the FEBO was to handle all products being made or which might be made in the Far East for Avon subsidiaries throughout the world. One obvious consequence of the establishment by Avon of its own buying office in the Far East was that European middlemen like Manu became less important. Shortly after the formation of the FEBO and its location in Hong Kong, C. H. Dams of AOL in London wrote Manu advising it that no items manufactured in the Far East would be purchased from importers or agents in Europe and that if Manu wished to maintain its business connection with Avon, Manu's manufacturing locations or their sales agencies in the Far East would have to contact the manager of the FEBO, an individual named John Kitchener.

During the summer of 1977, Nicholas Bova, an Avon Vice President based in New York, visited Taiwan and while there met with Chu, Manu's Taiwan "manager." Later Chu and Kitchener communicated with each other and Avon concedes that Chu is currently an agent in Taiwan for one of Avon's foreign subsidiaries. The parties disagree over the circumstances surrounding Bova's meeting with Chu, the latter's subsequent contact with Kitchener, and the explanation for Chu's shift from Manu to Avon. Avon contends that Manu, in the hope of maintaining some influence with the new FEBO, asked for the meeting between Bova and Chu. Manu claims that, after resisting some Avon efforts to discover the identity of Manu's representative in Taiwan, it finally consented to disclose that information in response to a representation by Dams that an Avon vice president (who turned out to be Bova) was to be in Taiwan and wanted to inspect Manu's operation there to determine if it had the capacity to handle production of the Beauty Showcase for American markets. This fraudulent representation, Manu claims, was a cover-up for Bova's real purpose, which was to find out the sources of Manu's production in Taiwan and lure them into direct dealing with the FEBO.

Amid all the controversy certain facts seem to be established. Bova, who is based in New York, did meet with Chu in Taiwan. Together they visited manufacturing sources able to produce the Beauty Showcase, one of which may have been the actual Manu production source. Chu is now working for Kitchener and the FEBO. AOL no longer purchases any products from Manu. According to Manu, this state of affairs has not resulted from legitimate business practices but instead from Avon's use of fraud to by-pass it.

The complaint purports to allege four separate claims. The first is that Avon tortiously interfered with a contract said to exist between Chu and Manu covering Chu's services. The second is that Avon fraudulently obtained Chu's identity, which allowed it to appropriate his services and sources. The third is that the sources and methods of manufacture of the Beauty Showcase were confidential trade secrets and were misappropriated by Avon. The fourth claim alleges that the foregoing acts were the product of a conspiracy among Avon, AOL and Arlington. In granting Avon's motion to dismiss on grounds of forum non conveniens Judge Sand concluded that Taiwan is the "focal point" of the litigation, that the issues must be decided according to Taiwanese law, and that there is "little "local interest' in having this controversy decided before this forum," i. e., the Southern District of New York.

Discussion

Whether an action may be dismissed for forum non conveniens when jurisdiction is otherwise properly invoked is governed by the factors outlined in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S. Ct. 839, 843, 91 L. Ed. 1055 (1947). As we have often noted in this Circuit, these factors break down into those relating to the "private interests" involved and to the "public interest," which must also be considered. Alcoa Steamship Co. v. M/V Nordic Regent, 636 F.2d 860 at 864, (2d Cir. 1980) (en banc ) ("Alcoa III "), cert denied, 449 U.S. 890, 101 S. Ct. 248, 66 L. Ed. 2d 116 (1980). The private interests concern the "practical problems that make trial of a case easy, expeditious and inexpensive" (ease of access to proof, availability of compulsory process, cost of obtaining willing witnesses' attendance), the likelihood of obtaining an enforceable judgment and the "relative advantages and obstacles to a fair trial." 330 U.S. at 508, 67 S. Ct. at 843. The public interest factors involved include the problems of court congestion, jury duty, local interest in the controversy and the advantages of having a court familiar with the law which is being applied. Id. at 508-09, 67 S. Ct. at 843. If a district court properly analyzes these factors, its forum non conveniens dismissal will not be reversed unless an abuse of discretion is found.

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." Id. at 508, 67 S. Ct. at 843. Additionally, there has been much recent sentiment in this Circuit for evaluating the forum non conveniens factors in light of the increased speed and ease of travel and communication which makes, especially when a key issue is the location of witnesses, no forum "as inconvenient (today) as it was in 1947." Fitzgerald v. Texaco, Inc., 521 F.2d 448, 457 (2d Cir. 1975) (Oakes, J., dissenting); see also id. at 454 (Mansfield, J., concurring). Judge Newman's recent concurrence in Calavo Growers of Cal. v. Generali Belgium, 632 F.2d 963 (2d Cir. 1980), reflects a concern for both of these considerations. He states that the "controlling principles" of forum non conveniens are

"First, the plaintiff's choice of forum is to be respected unless the balance of both public and private interests strongly justifies a transfer.

"Second, the assessment of whether the balance of public and private interests strongly overcomes the plaintiff's choice of forum must be made in light of the realities of modern transportation and communications. A forum is not necessarily inconvenient because of its distance from pertinent parties or places if it is readily accessible in a few hours of air travel. It will often be quicker and less expensive to transfer a witness or a document than to transfer a lawsuit. Jet travel and satellite communications have significantly altered the meaning of "non conveniens.'

"There is an understandable temptation in a busy district like the Southern District of New York to transfer cases that can as appropriately or even slightly more appropriately be tried elsewhere. That temptation must be resisted. The plaintiff's choice of forum should normally be respected. The circumstances of this case approach the limits ...


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