would then be acquired by Atkins and Donohue for nominal
consideration. (Id.) After the sale, the Group would pay off
the claims on its insurance policies with the funds initially
contributed by Armco and its affiliates. (Id.)
According to plaintiffs, Atkins, Donohue, Rossi, and Stinson
(collectively, the "Individual Defendants") secretly agreed prior
to the sale of the Group that Rossi and Stinson would become
joint owners of the Group with Atkins and Donohue after the
management buy-out. (Id. ¶ 3.) Defendant Wingfield Limited
("Wingfield"), a corporation existing under the laws of Jersey,
Channel Islands, and with its principal place of business in
Jersey, was the acquisition vehicle used by Donohue and Atkins to
purchase the North Atlantic Group from Armco. (Id. ¶ 18.)
Plaintiffs allege that Wingfield was secretly owned also by Rossi
and Stinson. (Id. ¶¶ 3, 18.)
The sale of the Group was completed on September 3, 1991 upon
the execution of a contract of sale (the "Sale Contract") in the
New York City offices of Armco's attorneys. (Id. ¶ 45.) The
Sale Contract consisted principally of Wingfield's purchase of CI
Services Holding Limited ("CISHL"), which held the assets of the
North Atlantic Group, from plaintiff AFSIL and another Armco
affiliate.*fn3 (Id. ¶¶ 12, 18.) CISHL, also a defendant in
this action, is incorporated and has its principal place of
business in Jersey. (Id. ¶ 19.) As part of the agreement
between parties, Armco affiliates contributed over $40 million to
CISHL. (Id. ¶ 45.) The Sale Contract also contained a forum
selection clause providing that all disputes arising out of the
transaction would be resolved by the courts of England.
(Agreement for the Sale and Purchase of the Whole of the Issued
Share Capital of CISHL ("Sale Contract"), set forth as Exhibit 4
to the Affidavit of Stephen Fishbein in Opposition to Certain
Defendants' Motion to Dismiss the Complaint ("Fishbein Aff.") at
Plaintiffs assert that the Sale Contract was not the product of
an arms-length negotiation but rather part of a wide-ranging
conspiracy to defraud Armco and its affiliates out of millions of
dollars. (Compl. ¶ 3.) Plaintiffs assert that, because their
representatives Rossi and Stinson were secret partners of the
purchasers, the terms of the Sale Contract were biased in favor
of the purchasers at the expense of plaintiffs. (Id.)
Specifically, plaintiffs allege that the Sale Contract resulted
in Armco's making an excessive contribution to the Group,
permitting the defendants to enrich themselves at plaintiffs'
In addition to the fraudulent inducement of the sale agreement,
plaintiffs allege that defendants engaged in further fraud after
the transfer of the Group to their control. According to
plaintiffs, the Individual Defendants, acting in concert with the
principal insurance subsidiary of the Group, now called North
Atlantic Insurance Company ("NAIC"), further increased the
available assets of the Group by fraudulently withdrawing funds
from two trust funds that NAIC had previously established in
favor of plaintiff Northwestern. (Id. ¶¶ 4, 46.) Defendant NAIC
is an insurance company existing under the laws of the United
Kingdom with its principal place of business in England. (Id. ¶
Plaintiffs allege that defendants completed their scheme by
diverting funds from the Group to themselves. (Id. ¶ 5.)
Defendants allegedly accomplished this by means of excessive
"acquisition fees," "dividends," "commissions," and "consulting
fees," paid either to the Individual Defendants themselves or to
corporate entities they controlled. (Id. ¶ 5.) Plaintiffs
allege that more than $16 million was fraudulently obtained by
defendants from the Group between 1991 and 1997. (Id.)
Other corporate entities allegedly controlled by the Individual
Defendants and used in furtherance of the alleged fraud are (i)
defendant International Trustee and Receivership Services, Inc.
("ITRS"), a corporation organized under the laws of the State of
Ohio with its last known principal place of business in Ohio, and
which was controlled by defendant Rossi in connection with the
alleged fraud, (Compl. ¶ 16); (ii) defendant International Run-Off
Services, Inc. ("International Run-Off"), a corporation existing
under the laws of the State of Ohio with its last known principal
place of business in Ohio, and which was controlled by defendant
Stinson in connection with the alleged fraud, (Id. ¶ 17); and
(iii) defendant NPV, a corporation existing under the laws of
Nevis, with its principal place of business in Singapore, (Id.
The immense fraud was exposed, according to the complaint,
because the diversion of funds from the Group eventually led to
the insolvency of NAIC in 1997. (Id. ¶ 6.) Atkins had resigned
from the Group in 1995, and subsequent to the initiation of the
NAIC insolvency proceeding, the other Individual Defendants
transferred funds to NAIC which plaintiffs allege represent
monies fraudulently obtained by them from Armco and its
Plaintiffs commenced the present action to recover the funds
that they allege were taken under false pretenses by the
Individual Defendants and corporate entities they controlled.
(Id.) The Amended Complaint states claims arising under the
common law doctrines of fraud, conversion, and breach of
fiduciary duty, as well as under the Federal Racketeer Influenced
and Corrupt Organizations Act ("RICO"). Because defendant NAIC is
in provisional liquidation, this action was originally filed as
an adversary proceeding in the bankruptcy court. Upon the motion
of NAIC, however, the bankruptcy court dismissed the claims
against NAIC on the grounds that they were barred by the court's
previously issued injunction. Plaintiffs moved this Court to
withdraw the reference of the action to the bankruptcy court,
and, NAIC having been dismissed from the case, this Court granted
the motion on February 3, 1999. (See Order of the Court dated
February 3, 1999.)
While the appeal from the bankruptcy court's order dismissing
the claims against NAIC was pending, NAIC entered into a
settlement with plaintiffs. Defendant Atkins has also settled
with plaintiffs and agreed to come to New York to testify on
their behalf. A consent judgment between plaintiffs and Atkins
was entered by this Court on August 24, 1999. Cf. Armco Inc. v.
North Atlantic Ins. Co. Ltd., No. 98 Civ. 6084(AGS), 1999 WL
173579 (S.D.N.Y. Mar.29, 1999) (overruling certain defendants'
objection to the entry of the consent judgment).
The case is now before the Court upon the motion to dismiss on
various grounds made by Rossi, Stinson, Wingfield, ITRS,
International Run-off, and CISHL (the "Moving Defendants").
Moving Defendants seek dismissal of this action on three
grounds: (1) lack of personal jurisdiction, (2) improper venue,
and (3) forum non conveniens, each of which is separately
I. PERSONAL JURISDICTION
Moving Defendants move to dismiss this action pursuant to
Federal Rule of Procedure 12(b)(2) for lack of jurisdiction over
the person. On a motion to dismiss pursuant to Rule 12(b)(2), all
pleadings and affidavits must be construed in the light most
favorable to plaintiffs, and all doubts resolved in plaintiffs'
favor. See Herbstein v. Bruetman, 768 F. Supp. 79, 81 (S.D.N Y
1991) (citing CutCo Industries, Inc. v. Naughton, 806 F.2d 361,
365 (2d Cir. 1986)). In order to "withstand a 12(b)(2) motion to
dismiss, [plaintiffs] need only make out a prima facie case of
jurisdiction." Id. (citing Beacon Enterprises, Inc. v.
Menzies, 715 F.2d 757, 768 (2d Cir. 1983)).
Federal Rule of Civil Procedure 4(k)(1)(A) provides that
service of a summons is effective to establish jurisdiction over
the person of a defendant if that defendant "could be subjected
to the jurisdiction of a court of general jurisdiction in the
state in which the district court is located." The New York long
arm statute exerts jurisdiction over, inter alia, a
non-domiciliary who "commits a tortious act within the state. . .
." N.Y.C.P.L.R. § 302(a)(2) ("§ 302(a)(2)").
A. ROSSI AND STINSON
Defendants Rossi and Stinson are subject to the personal
jurisdiction of this Court because it is alleged that they
committed tortious acts within New York State and this district.
See § 302(a)(2). To satisfy New York's long-arm statute, the
complaint must "adequately fram[e] a cause of action in tort
arising from those acts." PI, Inc. v. Quality Products, Inc.,
907 F. Supp. 752, 760 (S.D.N.Y. 1995) (citing Evans v. Planned
Parenthood of Broome County, Inc., 43 A.D.2d 996, 352 N.Y.S.2d 257,
259 (3d Dep't 1974)).
Plaintiffs' complaint asserts causes of action for common law
fraud, breach of fiduciary duty, and RICO violations that arise
from numerous and specific acts committed by Rossi and Stinson
within New York. Plaintiffs allege that the agreement whereby
Rossi and Stinson would become secret partners of Atkins and
Donohue with respect to the purchase of the North Atlantic Group
was entered into in New York. (Compl. ¶ 34). Plaintiffs further
allege that defendants Rossi and Stinson visited New York on at
least three separate occasions, for a total of 17 days, when
"negotiating" with Atkins and Donohue the sale of the North
Atlantic Group. (Compl. ¶ 44.)*fn4 The contract closing, which
was a key act in furtherance of the alleged conspiracy, occurred
on September 3, 1991 in a conference room at a New York law firm.
(Id. ¶ 45.) Rossi testified that he signed hundreds of
documents that day. (Rossi Dep. at 110.) All Individual
Defendants were present at the closing.
Wingfield is also subject to the jurisdiction of this Court
based on plaintiffs' allegations of tortious acts committed by
Wingfield in New York. Donohue and Atkins, as representatives of
Wingfield, met in New York with Rossi and Stinson to conclude the
purchase of the North Atlantic Group by Wingfield. Plaintiffs
allege that Wingfield, by means of its representatives, deceived
plaintiffs by failing to disclose that it was owned also by Rossi
and Stinson. (Compl. ¶ 38.) Wingfield then entered into the Sale
Contract with the Armco companies under false pretenses. Because
Wingfield is alleged to be a key participant in the tortious acts
committed in New York in the furtherance of the scheme to defraud
plaintiffs, it is subject to jurisdiction under § 302(a)(2).
CISHL is also subject to this Court's jurisdiction because it
was allegedly a participant in the fraud that occurred in New
York and the scheme to defraud plaintiffs. During the course of
the execution of the Sale Contract, which involved the transfer
of CISHL from the Armco companies to Wingfield, CISHL took
concrete actions, such as executing powers of attorney
authorizing Rossi and Stinson to act on its behalf. (Rossi Dep.
at 8-9; Stinson Dep. at 130-31.) Further, at the time of the
closing of the sale transaction, Atkins and Donohue were
appointed directors of CISHL and signed documents
on behalf of the company while present in New York. (Exhibit 14
to Fishbein Aff.; Rossi Dep. 138-40.) Under the circumstances of
this case, these contacts are sufficient to subject CISHL to this
D. INTERNATIONAL RUN-OFF AND ITRS
This Court has personal jurisdiction over defendants
International Run-off and ITRS under § 302(a)(2) because these
defendants were allegedly co-conspirators with the other
defendants in the scheme to defraud plaintiffs. Plaintiffs allege
that these two defendants participated in the conspiracy by,
inter alia, receiving fraudulent consultant fees, acquisition
fees, dividends, and commissions. (Compl. ¶ 51, 52.)*fn5 This
diversion of funds was integrally related to previous fraudulent
acts, such as the inducement of the fraudulent Sale Contract,
because prior fraudulent acts provided the North Atlantic Group
with excess funds that could be siphoned off by International
Run-off and ITRS, and used for the benefit of their shareholders,
Rossi and Stinson. As members of the conspiracy who were both
aware of and benefited from fraudulent acts committed by their
co-conspirators in New York, International Run-off and ITRS are
responsible for the jurisdictional contacts of their
co-conspirators. See Chrysler Capital Corp. v. Century Power
Corp., 778 F. Supp. 1260, 1266 (S.D.N.Y. 1991); Madanes v.
Madanes, 981 F. Supp. 241, 261 (S.D.N.Y. 1997).*fn6
The Court finds that plaintiff has made a prima facie case that
defendants are subject to its personal jurisdiction, and the
motion to dismiss for lack of jurisdiction over the person is
II. IMPROPER VENUE
Moving Defendants assert that the forum selection clause in the
Sale Contract (the "Forum Selection Clause" or "Clause")
prohibits plaintiffs from maintaining this action in New York.
Plaintiffs respond that the Forum Selection Clause does not apply
to the present action. If the district court concludes that a
valid forum selection clause exists, it "must enforce the
forum-selection provision absent a clear showing [by the party
opposing enforcement] that enforcement would be `unjust' or that
the clause is `invalid for such reasons as fraud or
overreaching.'" Evolution Online Sys., Inc. v. Koninklijke PTT
Nederland N.V., 145 F.3d 505, 510 (2d Cir. 1998) (citations
omitted). However, on this motion, the "party seeking to avoid
enforcement of [a forum selection clause is] entitled to have the
facts viewed in the light most favorable to it, and no disputed
fact should be resolved against that party until it has had an
opportunity to be heard." New Moon Shipping Co.,
Ltd., v. Man B&W Diesel Ag, 121 F.3d 24, 29 (2d Cir. 1997).
Plaintiffs contend that the Forum Selection Clause (i) is not
applicable to the instant litigation because the claims asserted
in the complaint do not fall within the Clause's scope; (ii) is
unenforceable because it was induced by fraud; and (iii) is
unenforceable in the context of this litigation because only one
Moving Defendant and two plaintiffs were parties to the Sale
Contract containing the Clause. Applying the relevant standards,
and viewing the facts in the light most favorable to plaintiffs,
the Court concludes that plaintiffs have made a prima facie
showing that the Forum Selection Clause does not apply to this
A. THE SCOPE OF THE FORUM SELECTION CLAUSE DOES NOT ENCOMPASS
THIS ACTION, WHICH INVOLVES ALLEGATIONS OF A PRE-CONTRACT
SCHEME TO DEFRAUD PLAINTIFFS.
The Court finds that the allegations of a wide-ranging
conspiracy to defraud plaintiffs are not claims that fall under
the scope of the Forum Selection Clause contained in the Sale
Contract. "The applicability of a forum selection clause is
governed by `objective consideration of the language' of the
clause." Anselmo v. Univision Station Group, Inc., No. 92 Civ.
1471(RLC), 1993 WL 17173, at *1 (S.D.N.Y. Jan.15, 1993)
(citations omitted). The Forum Selection Clause in the Sale
Contract provides that
the parties irrevocably submit themselves to the
exclusive jurisdiction of the English Courts to
settle any dispute which may arise out of or in
connection with this Agreement.
(Sale Contract ¶ 18(a), at 34.) Because this action did not
"arise out of or in connection with" the Sale Agreement, the
Forum Selection Clause is inapplicable.
This action is not one that "arose out of" the Sale Contract.
Plaintiffs are not suing for breach of the Sale Contract,
alleging any lack of performance required by the Sale Contract,
or disputing either party's rights or obligations under the Sale
Contract. Rather, plaintiffs allege in the complaint a series of
fraudulent activities that included the negotiation and execution
of the subject Sale Contract. This action arose out of the
alleged wide ranging fraud, including numerous acts committed
before the execution of the Sale Contract.
The Court also concludes that this action did not arise "in
connection" with the Sale Contract, but rather should be viewed
independently of that contract. The Court reaches this
conclusion, to a significant extent, because plaintiffs allege
the existence of a large scale scheme to defraud that included
numerous pre-contract activities by defendants, and properly
assert a cause of action arising out of that fraud. The
conclusion of the court in Anselmo supports this view. See
Anselmo, 1993 WL 17173. The Anselmo court was required to
interpret a forum selection clause with language covering claims
"relating to" the underlying agreement. Id. That court found
the "relating to" language to be "broad enough to encompass
claims not explicitly grounded in the Agreement. . . . [and
enforceable if the] claims [asserted in the complaint] grow out
of the contractual relationship, or if `the gist' of those claims
is a breach of that relationship." Id. The court concluded,
however, that "plaintiff's tort claim . . . d[id] not `relate to'
the Agreement because the tort grew out of events which preceded
the Agreement." Anselmo, 1993 WL 17173, at *2.
Here, plaintiffs assert tort claims that also allegedly grew
out of events and acts by defendants preceding the execution of
the contract. Plaintiffs allege that the Individual Defendants,
together with their corporate entities, were engaged in a broad
scheme to defraud plaintiffs out of vast sums of money. Part of
the alleged scheme involved, for example, the creation
of Wingfield as a vehicle for defendants' fraudulent activities,
and the misrepresentation to plaintiffs that Wingfield was owned
solely by Atkins and Donohue, when it was in fact allegedly also
owned by plaintiffs' representatives Rossi and Stinson. (Compl. ¶
68.) These allegations predate the signing and negotiation of the
sale agreement, and do not arise from its terms.
The "gist" of plaintiffs' claims is not the breach of a
contractual relationship, but the series of acts by defendants
resulting in the fraud. Cf. Anselmo, 1993 WL 17173, at *2. In
addition to the fact that plaintiffs base their fraud claims on
numerous pre-contract activities by defendants, plaintiffs' cause
of action for breach of fiduciary duty is also not based on the
terms or relationships embodied in the Sale Contract. Plaintiffs
allege that Rossi and Stinson, by acting as plaintiffs' principal
representatives during the negotiation of the Sale Contract, had
an affirmative duty to disclose their interest in Wingfield, and
are therefore liable to plaintiffs for their breach of this duty.
(Compl. ¶¶ 74-79.) This cause of action does not arise out of the
Sale Contract itself, but rather out of the course of Rossi's and
Stinson's representation of plaintiffs' interests during the
negotiation of the contract. The relationship upon which this
claim is based is between Armco, Rossi and Stinson — not between
the parties to the Sale Contract.
Further support for the Court's conclusion that the Forum
Selection Clause is inapplicable to this case is derived from the
fact that an English court involved in related Armco litigation
has made expressly the same finding. The English court, in
Donohue v. Armco, Inc., et al., 1999 Folio No. 211, Commercial
Court, Queen's Bench Division (July 16, 1999) (Hon. Mr. Justice
Aikens) (hereinafter referred to as the "English Decision"), was
presented with the issue as to whether it should grant a petition
to enjoin the present litigation (referred to by the court as the
"NY Proceedings") on the basis of the Forum Selection Clause
contained in the Sale Contract. The English court refused to
issue an injunction, concluding, inter alia, that
the claims raised in the N.Y. Proceedings based on a
pre-existing conspiracy to defraud Armco are not
claims that "arise out of" [the Sale Agreement]. . .
. They "arise out of" the agreement to conspire
against Armco and to defraud it.
(English Decision ¶ 42, at 21.)
WMW Machinery, Inc. v. Werkzeug-maschinenhandel GmbH IM
Aufbau, 960 F. Supp. 734 (S.D.N.Y. 1997) illustrates the
contrasts between the current action and one where the tort
claims did in fact arise out of a contractual relationship. The
WMW Machinery court was faced with the question as to whether
the plaintiff's tort claims should be subject to a forum
selection clause that was contained in a contract between the
parties. The contract gave the plaintiff exclusive rights to
distribute machinery in North America, and the plaintiff had
purchased large quantities of machine tools under the contract.
See id. at 738. When the defendant held up shipment of
plaintiff's goods, plaintiff sued for, inter alia, the tort of
wrongful conversion. The defendants contended that because the
plaintiff's "wrongful conversion claim relate[d] to goods and
alleged obligations which were the subject of the [Agreement] . .
. that claim `ar[ose] out of or in connection' with the Agreement
and must, therefore, be resolved by an appropriate German court
[as specified by the forum selection clause]." Id. at 747. The
WMW Machinery court agreed and enforced the clause. See id.
The contrast between WMW Machinery and the current case is
evident. In WMW Machinery, although the complaint asserted a
tort claim, it did not alter the fact that the plaintiff was
seeking redress for having been denied benefits guaranteed to it
by the exclusive distribution agreement containing the forum
selection clause. Here, by contrast, plaintiffs' claims do not
derive from entitlements or benefits granted in the Sale Contract
— quite the opposite. Further, the origin of the current dispute
was not a contractual relationship as it was in WMW Machinery,
but rather a pre-existing comprehensive scheme by the defendants
to defraud plaintiffs, of which the signing of the Sale Contract
was merely one important aspect.
The Court notes that similar reasoning has been used in the
context of a choice of law clause. In Telemedia Partners
Worldwide Ltd. v. Hamelin Ltd., 1996 WL 41818, at *7-8 (S.D.N Y
Feb.2, 1996), the court held that a limited choice of law clause
did not apply to a RICO claim "based on allegations of mail and
wire fraud antedating the existence of the agreement and which
goes beyond issues merely of construction and enforcement of the
Agreement." Id. The same reasoning applies here, where the
alleged fraud is much broader than the sale contract at issue,
and allegedly predates it.
B. THE FORUM SELECTION CLAUSE DOES NOT DEFEAT VENUE IN THIS
DISTRICT BECAUSE PLAINTIFFS ALLEGE THAT THEIR AGREEMENT TO
THE CLAUSE WAS INDUCED BY FRAUD.
Even if the Forum Selection Clause did apply to this dispute,
it would not bar the present action from proceeding because
plaintiffs have properly alleged that they were fraudulently
induced to agree to the Clause. A forum selection clause is not
enforceable if "the inclusion of that clause in the contract was
the product of fraud. . . ." Scherk v. Alberto-Culver Co.,
417 U.S. 506, 519 n. 14, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974). A
forum selection clause will not be enforced unless it was the
product of an "arms length negotiation" and the clause was "a
`vital part of the agreement' so as to make it believable that
the parties conducted their negotiations with the clause in
mind." Full-Bright Indus. Co., Ltd. v. Lerner Stores, Inc., No.
90 Civ. 5054(CSH), 1991 WL 84541, at *2 (S.D.N.Y. May 14, 1991)
(citing Lexington Investment Co. v. Southwest Stainless, Inc.,
697 F. Supp. 139, 143 (S.D.N.Y. 1988) (citing M/S Bremen v.
Zapata Off-Shore Co., 407 U.S. 1, 12-14, 92 S.Ct. 1907, 32
L.Ed.2d 513 (1972))).
Plaintiffs, by alleging facts supporting the conclusion that
the Forum Selection Clause was not an arms length transaction
have made a "prima facie showing . . . [that] would support the
court's exercise of jurisdiction." New Moon Shipping, 121 F.3d
at 29. Plaintiffs have set forth facts in the complaint that
suggest that similar transactions of this type normally contain
non-exclusive forum selection clauses. (Compl. ¶ 42.) Plaintiffs
also assert that an initial draft of the agreement provided for
New York law to govern, and contained no forum selection clause,
until Rossi directed Armco's lawyers to switch forms to one that
made use of exclusive U.K. forum and choice of law clauses.*fn8
Because plaintiffs allege that Rossi, who was charged with
protecting plaintiffs' interests in the contract negotiations,
was secretly working with the other defendants in this action to
defraud plaintiffs, it is not unreasonable to infer that Rossi
may have included the Forum Selection Clause in order to further
the alleged fraud. Similarly, if, as defendants suggest,
Wingfield's attorneys first suggested the inclusion of the Forum
Selection Clause, it is not unreasonable to assume that Rossi and
Stinson agreed to the Clause's inclusion in order to further
their alleged fraud.
The Court therefore finds that the allegations that the Forum
Selection Clause was the product of fraud provides an alternative
basis for its conclusion that the Clause does not prevent this
suit from proceeding in New York.*fn9 The motion to dismiss
premised on the Forum Selection Clause is DENIED.*fn10
III. FORUM NON CONVENIENS
Moving Defendants move to dismiss the claims against them based
on the doctrine of forum non conveniens, contending that England
is the more appropriate forum for the resolution of this dispute.
(Defendants' Memorandum of Law in Support of Motion to Dismiss at
29.) A district court has broad discretion in deciding whether to
dismiss an action on forum non conveniens grounds. See R.
Maganlal & Co. v. M.G. Chemical Co., Inc. 942 F.2d 164, 167 (2d
Cir. 1991) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235,
257, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)).
There is a strong presumption in favor of a U.S. plaintiff's
choice of a U.S. forum.*fn11 To prevail on a motion to dismiss
based on forum non conveniens, a defendant must demonstrate (i)
that an adequate alternative forum exists and (ii) that
considering the relevant private and public interest factors,
"the balance of convenience tilts strongly in favor of trial in
the alternative forum" because a trial would lead to
"oppressiveness and vexation to defendant . . . out of all
proportion to plaintiff's convenience." ESI, Inc. v. Coastal
Power Production Co., 995 F. Supp. 419, 425 (S.D.N.Y. 1998)
(citing Piper Aircraft, 454 U.S. at 241, 102 S.Ct. 252); Piper
Aircraft, 454 U.S. at 241, 102 S.Ct. 252 (citing Koster v.
Lumbermens Mut. Casualty Co., 330 U.S. 518, 524, 67 S.Ct. 828,
91 L.Ed. 1067 (1947)). Although trial in England would be an
adequate alternative forum, the court concludes that the relevant
private and public factors indicate that litigating this case in
the United States is completely appropriate. Permitting this
trial to proceed in New York would be neither oppressive nor
vexatious to defendants.
The public and private factors a court must consider in
evaluating a forum non conveniens motion were set forth by the
Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67
S.Ct. 839, 91 L.Ed. 1055 (1947). Among the private factors to be
considered are: (i) ease of access to proof, (ii) availability of
compulsory process for attendance of unwilling witnesses, and the
cost of obtaining those witnesses, (iii) all other factors that
make a trial of a case easy, expeditious, and inexpensive. See
R. Maganlal, 942 F.2d at 168 (citing Gulf Oil, 330 U.S. at
508, 67 S.Ct. 839). First, it will be noted that not a single
Moving Defendant is a resident of England, nor is any plaintiff.
The two Individual Moving Defendants, Rossi and Stinson, are
residents of Ohio, two corporate Moving Defendants are Ohio
corporations, and two other corporate Moving
Defendants are Jersey corporations controlled by Rossi and
Stinson. Two of the major English defendants, NAIC and Atkins,
have settled with plaintiffs, and a third, Donohue, is not
actively participating in the litigation and, in any event,
resides in Singapore. Additionally, all but one of the plaintiffs
are U.S. corporations,*fn12 and assert that the majority of
their relevant documents are located in the United States.
Defendants assert that many of their witnesses are located in
England. Even if this were true, "the unavailability of witnesses
[is] not a sufficiently weighty concern to require forum non
conveniens dismissal because any testimony [that the defendant]
needs from witnesses whose attendance cannot be compelled can be
obtained, for example, through the use of letters rogatory."
United States ex rel. Thistlehwaithe v. Dowty Woodville Polymer,
Ltd., 976 F. Supp. 207, 213 (S.D.N.Y. 1997) (denying defendant's
motion to dismiss for forum non conveniens). Moving Defendants do
not assert that letters rogatory are unavailable with respect to
their witnesses currently residing in England.
Further, plaintiffs allege that the secret fraudulent scheme
perpetrated by defendants was planned, to a significant extent,
at meetings that took place in New York. Witnesses testifying as
to these meetings would likely be found in New York.
Additionally, the Sale Contract was executed in New York, and
non-party witnesses with respect to the negotiation and execution
of that contract will likely be found in New York.
Among the public factors to be considered by a Court in
evaluating a forum non conveniens motion are (i) court
congestion, (ii) interest of forums in deciding local disputes,
(iii) interest in issues of foreign law being decided by foreign
tribunals. See Gulf Oil, 330 U.S. at 508-509, 67 S.Ct. 839; PT
United 138 F.3d at 74; R. Maganlal, 942 F.2d at 168. It is
beyond doubt that "[t]he United States has an interest in
ensuring that fraud does not occur within its borders. . . ."
Bank of Crete, S.A. v. Koskotas, 1991 WL 280714, at *4
(S.D.N.Y. Dec.20, 1991). Further, the statements of the English
courts themselves suggest that the U.S. interest in this action
is greater than the English interest. The English court involved
in related Armco litigation concluded the following:
In my view England is not the natural "centre of
gravity" for these claims, which have worldwide
connections. There are a large number of strands that
lead to this conclusion. First the alleged conspiracy
is said to have originated in meetings in the U.S.
and culminated in a secret written agreement of the
group of four in New York in April 1991. Further, the
alleged breaches of fiduciary duty by Mr. Donohue to
the Armco companies (incorporated and operating in
the USA) are said to have taken place in the USA, or
at least not in England. Secondly, only one of the
alleged conspirators, Mr. Atkins, resides in England.
. . . Wingfield and CIHSL are Jersey companies, but
with no obvious connections with England. Fourthly,
four of the Armco compan[ies] . . . are incorporated
in American states. . . . Further, none of the Armco
companies carries on business in England. . . .
Sixthly, the key witness on the Armco side . . .
Atkins, although a resident of England, has agreed to
give evidence in New York . . . Seventhly, the RICO
statute claims can only be brought in the USA.
(English Decision ¶ 63(3), at 32-33.) The English court went on
to state that: