The opinion of the court was delivered by: Michael B. Mukasey, United States District Judge
Assicurazioni Generali S.p.A. ("Generali"), a defendant in all
actions, moves to dismiss on the grounds of forum non conveniens and
contractual forum selection. Zurich Life Insurance Company and Zurich
Versicherungs-Gesellschaft (collectively "Zurich"), defendants only in
the Schenker action, also move to dismiss on the ground of forum non
conveniens. Both Generali and Zurich argue that the balance of
conveniences requires litigation in either: 1) the International
Commission on Holocaust Era Insurance Claims ("ICHEIC"), a private
commission set up by several European insurance companies, governmental
entities, and nongovernmental organizations to resolve unpaid
Holocaust-era insurance claims; or 2) the courts of the European
countries for which the relevant insurance policies were issued. Generali
additionally argues that applicable forum selection clauses mandate
litigation of plaintiffs' claims in Europe. For the reasons set forth
below, Generali's and Zurich's motions to dismiss are denied with respect
to all plaintiffs.
In considering a motion to dismiss on the ground of forum non
conveniens, a court must first determine the level of deference to be
given plaintiff's choice of forum. Iragorri v. United Techs. Corp.,
274 F.3d 65, 73 (2d Cir. 2001) (en banc). Once that level is determined,
the court must consider whether an adequate alternative forum exists.
Id. If so, the court must weigh the relative convenience of the forums by
examining the private and public interest factors set out by the Supreme
Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09 (1947), Koster
v. (Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518, 831-32 (1947), and Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 241 n. 6 (1981). "[T]he greater the
degree of deference to which the plaintiff's choice of forum is
entitled, the stronger a showing of inconvenience the defendant must make
to prevail in securing forum non conveniens dismissal." Iragorri, 274
F.3d at 74.
The level of deference to be afforded a plaintiff's choice of forum is
a question that has been the subject of much recent jurisprudence in the
Second Circuit. See DiRienzo v. Philip Servs. Corp., 294 F.3d 21 (2d
Cir. 2002) ("DiRienzo II"); Iragorri, 274 F.3d at 69; DiRienzo v. Philip
Servs. Corp., 232 F.3d 49 (2d Cir. 2000) ("DiRienzo I"); Wiwa v. Royal
Dutch Petroleum Co., 226 F.3d 88 (2d Cir. 2000); Guidi v.
Inter-Continental Hotels Corp., 224 F.3d 142 (2d Cir. 2000). In DiRienzo
I, Wiwa, and Guidi, the Circuit suggested that whenever a U.S. plaintiff
files suit in a
U.S. forum, that choice is to be considered the
plaintiff's "home forum," and therefore entitled to great weight —
even if that forum is a district other than the district in which the
plaintiff resides. See DiRienzo I, 232 F.3d at 60-63; Wiwa, 226 F.3d at
101-03; Guidi, 224 F.3d at 145-48. A divided panel in DiRienzo I held
this level of deference to be undiminished by the fact that the U.S.
plaintiffs may be acting in a representative capacity as part of a
shareholder class action, at least where the majority of the plaintiff
class were American residents. See DiRienzo I, 232 F.3d at 60-62. But
see DiRienzo I, 232 F.3d at 72-79 (Cabranes, J., dissenting).
In order to elucidate the principles established in those recent
opinions, the Second Circuit in Iragorri v. United Technologies Corp.,
274 F.3d 65 (2d Cir. 2002), sitting en banc, fashioned a "sliding scale"
approach to determine the appropriate deference to be given to a
plaintiff's choice of forum. Id. at 71. According to that scale, "the
greater the plaintiff's or the lawsuit's bona fide connection to the
United States and to the forum of choice and the more it appears that
considerations of convenience favor the conduct of the lawsuit in the
United States," the more deference will be accorded plaintiff's choice of
a U.S. forum, and "the more difficult it will be for the defendant to
gain dismissal for forum non conveniens." Id. at 72 (footnotes omitted).
To help guide future analysis, the Court identified the following factors
as examples of factors that militate against forum non conveniens
the convenience of the plaintiff's residence in
relation to the chosen forum, the availability of
witnesses or evidence to the forum district, the
defendant's amenability to suit in the forum
district, the availability of appropriate legal
assistance, and other reasons relating to
convenience or expense.
Id. On the other hand, the Court stated that forum non conveniens
dismissal will be most appropriate where:
plaintiff's choice of a U.S. forum was motivated by
forum-shopping reasons — such as attempts to
win a tactical advantage resulting from local laws
that favor the plaintiff's case, the habitual
generosity of juries in the United States or in the
forum district, the plaintiff's popularity or the
defendant's unpopularity in the region, or the
inconvenience and expense to the defendant resulting
from litigation in that forum.
In the actions currently before the court, three distinct plaintiff
groups are present. See supra note 1. The first plaintiff group consists
of the plaintiffs in the Cornell and Schenker class actions, who filed
their class-action complaints in this court in the first instance. of the
named Cornell plaintiffs, two live in New York, one lives in Texas, and
one lives in California. (Cornell Second Am. Compl.) of the named
Schenker plaintiffs, two are residents of New Jersey, two are residents
of Florida, and one is a resident of California. (Schenker Corrected Am.
Compl.) Both the Cornell and Schenker class action complaints were
recently amended to exclude all claims against German Corporations in
accordance with the German Foundation settlement between the German and
American governments. See infra p. 11-12 & n. 6. Prior to those
amendments, 22 of the 39 named plaintiffs in the Cornell and Schenker
actions were residents of New York. (Cornell Am. Compl.; Winters Compl.)
There appears to be no reason to doubt the bona f ides of the Cornell
and Schenker plaintiffs' choice of a U.S. forum: every single named
plaintiff is a U.S. resident, and litigation abroad would likely raise
costs and necessitate the retention of
foreign counsel. Furthermore,
plaintiffs' choice of this particular U.S. forum was likely motivated by
their legitimate desire to litigate close to their residences. Twenty-two
of the original 39 named plaintiffs were from New York, with the other 17
plaintiffs scattered around the country; even for the current group of
named plaintiffs, New York is a convenient forum, with four of the nine
plaintiffs living in New York or New Jersey, and the other five plaintiffs
geographically scattered. Furthermore, "[o]utside of Israel, New York is
home to the largest number of Holocaust survivors and their heirs in the
world," N.Y. Holocaust Victims Insurance Act of 1998 ("HVIA") § 2,
N.Y. Ins. Law § 2701 notes (McKinney 2000), which suggests that
whomever the unnamed plaintiff class or classes ultimately include, a
substantial portion will consist of New York residents.
It does not appear that the Cornell and Schenker plaintiffs have
brought suit in this forum merely to inconvenience defendants. Although
the parties have not presented evidence as to where else Generali and
Winterthur might be subject to suit, plaintiffs, having chosen a U.S.
forum, have chosen a convenient one. Generali itself concedes as much,
stating in its motion before the MDL panel to consolidate the present
actions in this district: "New York is the most convenient forum to
litigate the issues in the United States, as it is the home of Generali's
United States Branch, Generali's counsel, and several of the firms
representing plaintiffs." (Swift Decl. Ex. E (Generali Mot. for Transfer
of 8/11/00 at 6)) The fact that defendants currently do extensive
business in New York and in this country belies any argument that
defendants would be litigating in an unduly hostile or unfamiliar
environment. Given plaintiffs' legitimate reasons for bringing suit in
this forum, and given defendants' representations to the MDL panel,
plaintiffs' choice of forum is entitled to strong deference under the
Circuit's sliding-scale approach in Iragorri. See DiRienzo II, 294 F.3d
at 28-29. Such deference is due notwithstanding the fact that plaintiffs
are acting in a representative capacity. Id.*fn2
The second plaintiff group present in this action consists of the
Brauns, Mandil, Weiss, David, Szekeres, Lightner, and Sladek plaintiffs
and the named and unnamed plaintiffs in the Haberfeld and Smetana class
actions — all of whom originally filed their lawsuits in their home
forums, but whose cases have since been transferred to this district
after Generali's successful motion before the MDL panel.*fn3 These
plaintiffs are not only U.S. residents who seek a U.S. forum, but they are
also U.S. residents who originally sought to litigate in their home
district within the United States.*fn4 According to Koster, a resident's
choice to sue in his or her home forum is generally entitled to great
deference. See Koster, 330 U.S. at 524; Iragorri, 274 F.3d at 71. Such
deference is not diminished because defendant has forced plaintiffs to
litigate in a different forum by effecting a transfer before the MDL
panel. See DiRienzo II, 294 F.3d at 28-29 (noting the importance of
defendants' motions before the MDL panel in the Iragorri analysis); In re
Cinar Corp. Sec. Litig., 186 F. Supp.2d 279, 296 (E.D.N.Y. 2002) (same).
This deference is not diminished by the class-action status of the
Smetana and Haberfeld actions. See DiRienzo II, 294 F.3d at 28-29.
The third and last plaintiff group present in this action consists
solely of plaintiff Tabaksman, a British citizen living in Britain who
filed suit in New York State Supreme Court. His case was subsequently
removed to this district. Tabaksman's asserted justification for bringing
his suit in New York is that his claim is "substantially the same as
those asserted in the putative class action also pending in this Court."
(Tabaksman Mem. at 1) He claims that "[i]f the Court denies the motions
to dismiss the other Generali cases, there will be no additional burden
to Generali in defending against Tabaksman's claim in this Court." (Id.
at 4) However, the fact that other related actions are pending in a given
district court in the United States is not a factor in the forum non
conveniens analysis used to determine the appropriate level of deference
in Iragorri. Tabaksman does not live in the United States, he is not a
U.S. citizen, and if he testifies as a witness, it will be inconvenient
for him to travel here from Britain. In short, he has no bona fide
connection to the forum. His decision to file his own individual lawsuit
in this district is therefore entitled to little deference.
The court thus accords great deference to all plaintiffs' choices of
forum, except for plaintiff Tabaksman. As for those plaintiffs entitled
to strong deference, defendants must make a strong showing of
inconvenience in order to prevail. See Iragorri, 274 F.3d at 74-75.
A. Forum Non Conveniens Dismissal in Favor of ICHEIC
Both Generali and Zurich first argue that this court should dismiss
plaintiffs' claims on the g round of forum non conveniens in favor of the
International Commission on Holocaust Era Insurance Claims ("ICHEIC").
Because ICHEIC is not an adequate alternative forum for the litigation of
plaintiffs' claims, defendants' forum non conveniens motions are denied
with respect to ICHEIC.
ICHEIC is a privately funded, non-profit entity that was created
pursuant to an August 25, 1998 Memorandum of Understanding ("MOU") among
six European insurance companies — Alianz Lebensversicherungs-AG of
Germany; AXA of France; Basler Lebens-Versicherungs-Gesellschaft,*fn5
Winterthur, and Zurich of Switzerland; and Generali of Italy —
with certain nongovernmental Jewish organizations, the State of
Israel, and certain U.S. state insurance regulators. (Weiss Mem. Ex. Q;
Velie Decl. Ex. A; Velie Rep. Decl. of 1/8/02 Ex. F) ICHEIC's mission is
to resolve unpaid Holocaust-era insurance claims through a formal claims
and valuation procedure that serves as an alternative to litigation in
the U.S. courts. (Weiss Mem. Ex. Q at 2, 7-8; Velie Decl. Ex. B) The
commission is chaired by former U.S. Secretary of State Lawrence
Eagleburger. (Velie Rep. Decl. of 1/8/02 Ex. F at 1) ICHEIC's funding has
thus far come from its six founding insurance companies, which pledged a
collective $90 million to ICHEIC; as of now, $30 million of that money
has been delivered. (Weiss Mem. Ex. Q at 14) On November 16, 2000,
Generali contributed an additional $100 million to ICHEIC as part of a
"global settlement with ICHEIC and the Jewish and Israeli
representatives." (Id.; Velie Decl. Ex. V; Carnicelli Decl. of 1/9/02
It is anticipated that the ICHEIC claims and valuation process will
ultimately be used to process not only claims against its current member
companies, but also claims against various German insurers in connection
with the July 17, 2000 executive agreement between the United States and
the Federal Republic of Germany creating the Foundation for Remembrance,
Responsibility and the Future ("the German Foundation"). (Velie Rep.
Decl. of 1/8/02 Ex. F at 8-9) In that agreement, the German government
and representatives of German industry agreed to fund the German
Foundation in the amount of DM 10 billion (roughly $5 billion) in
exchange for "legal closure" with respect to all Holocaust-related
claims, including insurance claims, against German companies in the
United States legal system.*fn6 (Velie Decl. Exs. G, U; Velie Rep.
Decl. Ex. F at 8-9) The agreement calls for the German Foundation to
allocate up to DM 650 million (roughly $325 million) to ICHEIC for the
resolution of unpaid insurance claims against German companies, and
states that all insurance payments are to be made in accordance with
ICHEIC's claims and valuation procedures. (Id.) The German Foundation has
not yet delivered the promised funding because the Foundation and ICHEIC
are currently at loggerheads over various administrative matters. (Weiss
Mem. Ex. Q; Swift Decl. Exs. B, C).
ICHEIC, defendants point out, offers several advantages to plaintiffs
that make it preferable to litigation in the U.S. courts. First, ICHEIC
uses a currency formula that values all relevant currencies at the
exchange rate in effect at the end of 1938, before hyperinflation
destroyed many European currencies. (Velie Decl. ¶ 5, Ex. B) In
addition, ICHEIC's procedural rules incorporate relaxed standards of
proof, which make it easier for plaintiffs to introduce evidence relating
to insurance policies that were issued many years ago. (Velie Decl.
¶ 4, Ex. Z) Furthermore, the member insurance companies of ICHEIC have
waived many of their legal defenses to plaintiffs' claims, eliminating
many of the obstacles that plaintiffs would face in ordinary litigation.
(Velie Rep. Decl. of 1/8/02 Ex. P at 2; Generali Mem. of 5/25/01 at 3,
27) Finally, ICHEIC features a global advertising and outreach program
and toll-free telephone numbers with assistance available in numerous
languages. (Velie Decl. ¶ 4, Ex. S; Velie Rep. Decl. of 1/8/02 Exs.
S, U) The independence of ICHEIC is ensured through an independent
auditing process and a right to appeal the Commission's ruling to an
independent arbitrator or panel of arbitrators. (Velie Decl. ¶ 6,
2. ICHEIC is Not an Adequate Alternative Forum
In order to establish that an alternative forum is adequate, defendants
ordinarily must demonstrate only that the they are amenable to service of
process in that forum. See Piper Aircraft, 454 U.S. at 255 n. 22; Aguidna
v. Texaco, Inc., No. 01-7756L, 01-7758C, 2002 WL 1880105, at *5 (2d Cir.
Aug. 16, 2002); Blanco v. Banco Indus. de Venezuela, S.A., 997 F.2d 974,
981 (2d Cir. 1993). In this case, it is not disputed that Generali and
Zurich are subject to service of process in ICHEIC; in fact, ICHEIC was
expressly created in order to provide a forum in which insurance claims
could be brought against its member insurance companies. Nonetheless,
"[i]n rare circumstances . . . where the remedy offered by the other
forum is clearly unsatisfactory, the other forum may not be an adequate
alternative." Piper Aircraft, 454 U.S. at 255 n. 22, quoted in Aguinda,
2002 WL 1880105, at *5. This case involves such "rare circumstances."
Defendants have moved to dismiss in favor of a private, nongovernmental
forum that they both created and control, the continued viability of
which is uncertain. Because of these shortcomings, ICHEIC cannot be
considered an adequate alternative forum.
In a more traditional forum non conveniens motion, the court would be
asked to dismiss in favor of another nation's courts and would have to
determine whether that nation's courts provide an adequate alternative
forum. In such cases, American courts have understandably been quite
reluctant to declare another forum inadequate. See, e.g., PT United Can
Co. Ltd. v. Crown Cork & Seal Co., 138 F.3d 65, 73 (2d Cir. 1998).
("[C]onsiderations of comity preclude a court from adversely judging the
quality of a foreign justice system absent a showing of inadequate
procedural safeguards, so such a finding is rare." (citation omitted));
Blanco, 997 F.2d at 981 ("[W]e have repeatedly emphasized that `[i]t is
not the business of our courts to assume the responsibility for
supervising the integrity of the judicial system of another sovereign
nation.'" (quoting Chesley v. Union Carbide Corp., 927 F.2d 60, 66 (2d
Cir. 1991) (citation omitted) (internal quotation marks omitted))).
Such deference to the legal processes of foreign nations extends even
to nonjudicial forums that are part of the administrative apparatus of
sovereign states. For example, two Courts in this Circuit have dismissed
actions in favor of nonjudicial liquidation proceedings in foreign
countries on the basis of comity. See Finanz AG Zurich v. Banco Economico
S.A., 192 F.3d 240 (2d Cir. 1999); Allstate Life Ins. Co. v. Linter
Group, Ltd., 994 F.2d 996 (2d Cir. 1993). In addition, at least two U.S.
Courts, in dismissing an action on the ground of forum non conveniens,
have determined that New Zealand's administrative accident compensation
system constitutes an adequate alternative forum. See Lueck v. Sundstrand
Corp., 236 F.3d 1137, 1143-45 (9th Cir. 2001); In re Silicone Gel Brest
Implants Products Liability Litig., 887 F. Supp. 1469, 1475-76 (N.D.
Ala. 1995) Similarly, another Court has ruled, in deciding a forum non
conveniens motion, that Saudi Arabia's quasi-judicial Legal Medical
Commission constituted an adequate alternative forum for plaintiffs'
medical negligence claims. See Jeha v. Arabian Am. Oil Co.,
751 F. Supp. 122, 125-26 (S.D. Tex. 1990). Apparently,
medical malpractice claims in Saudi Arabia are "regularly handled" by that
commission, and the commission is chaired by a judge appointed by the
Minister of Justice. Id. at 125.
However, ICHEIC — an ad-hoc, nonjudicial, private international
claims tribunal — is not entitled to the same deference as the
courts or an administrative arm of a foreign sovereign nation. No comity
concerns are implicated by a rigorous analysis of ICHEIC's adequacy; in
fact, greater scrutiny of ICHEIC is warranted because the commission, as
a nongovernmental entity, comes with fewer indicia of reliability than
the courts of a sovereign nation. That several United States state
insurance commissioners and the State of Israel are founding members of
ICHEIC, and that the insurance departments of several states have
endorsed ICHEIC (Generali Rep. Mem. of 1/9/02 at 10-11), does not make
ICHEIC a "governmental" forum. To the contrary, ICHEIC — in its own
publications — describes itself as a private, non-profit entity
organized as an Association . . . under the Swiss Civil Code (Velie Rep.
Decl. of 1/8/02 Ex. F at 1) (emphasis added)). A private, nonprofit
association is not entitled to the deference that is accorded a public
adjudicative or administrative organ of a sovereign state.
Because of it private status, it is not clear that a nongovernmental
forum such as ICHEIC can ever constitute an adequate alternative forum
for the purposes of forum non conveniens. When a plaintiff brings a claim
before a governmental body, that plaintiff has chosen to litigate his or
her claim in a public forum rather than before a private arbitrator or
private international commission. I am skeptical that the doctrine of
forum non conveniens can be used to undo that decision. The doctrine of
forum non conveniens is appropriately used as a tool to force plaintiffs
to litigate in a more convenient public forum, but it cannot be used to
throw a plaintiff out of court and into a private dispute-resolution
mechanism. Although a defendant may properly move to compel arbitration
based on a contract, or to dismiss in favor of an international
commission pursuant to a statute or executive agreement,*fn7 it is a
radical departure from usual forum non conveniens analysis to suggest
that a defendant could move to compel plaintiffs' appearance before ...