United States District Court, S.D. New York
June 3, 2004.
CAROLYN REERS, in her capacity as Personal Representative of the Estates of SUSANNE AMORE, deceased, and SALVATORE MICHAEL AMORE, deceased, KATHRYN MEYERS-TONUCCI, Individually and in her capacity as Personal Representative of the Estate of JEANNE MEYERS AMORE, deceased, and GEORGE GUERTIN, in his capacity as Personal Representative of the Estates of EMILY JEANNE AMORE, deceased, and MICHAEL B. AMORE, deceased, Plaintiffs, -against- DEUTSCHE BAHN AG, a Republic of Germany Corporation, DEUTSCHE BAHN REISE & TOURISTIK AG, a Republic of Germany Corporation, DEUTSCHE BAHN AUTOZUG AG, a Republic of Germany Corporation, DEUTSCHE BAHN NACHTZUG AG, a Republic of Germany Corporation, MR. VOLKER, an Individual, ACCOR SA, a Republic of France Corporation, COMPAGNIE INTERNATIONALE DES WAGONS-LITS, a Republic of France Corporation, and ISD-DSG GmbH, a Republic of Germany Corporation, Defendants
The opinion of the court was delivered by: MIRIAM CEDARBAUM, Senior District Judge
Defendants Deutsche Bahn AG ("Deutsche Bahn"), Deutsche Bahn AutoZug
AG ("AutoZug"), Deutsche Bahn Reise & Touristik AG ("R&T"), Janz
Volker, Accor S.A. ("Accor"), and Compagnie Internationale des
Wagons-Lits ("CIWLT"), move to dismiss the complaint on various grounds,
including sovereign immunity, lack of personal jurisdiction, and
forum non conveniens. For the following
reasons, the motions are granted. BACKGROUND
This case arises from the death of five members of the Amore family in
a train accident in France. According to the allegations of the
complaint, which are accepted as true for the purposes of this motion,
the Amores embarked in Paris on an overnight train to Munich on November
6, 2002. The train was operated by the French national railway,
Société Nationale Chemins de Fer Francais ("SNCF"), but the
railcar to which the Amores were assigned, Railcar 120, was owned and
operated by AutoZug, a subsidiary of defendant Deutsche Bahn, the
nationally owned rail operator of Germany.
Shortly before two in the morning, the kitchenette of Railcar 120
caught fire. According to plaintiffs, defendant Volker, an employee of
defendant R&T and the attendant assigned to Railcar 120 that night,
started the fire and, failing to extinguish it, abandoned his post
without warning the sleeping passengers in Railcar 120. The complaint
further alleges that employees of Accor and CIWLT, who were working in
cars adjacent to Railcar 120, failed to timely warn and evacuate the
Amores after defendant Volker fled.
The fire quickly raged out of control, blocking the railcar's interior
exits and preventing twelve passengers, including the Amores, from
escaping. Although the fire was soon detected and the train stopped,
rescue workers were unable to enter Railcar 120 because Volker had locked the exterior doors of
the railcar from the inside. The passengers trapped inside their
individual compartments were unable to break the windows. By the time
firefighters arrived and gained access to Railcar 120, the twelve
passengers inside were dead.
Plaintiffs, one of whom is suing individually and all of whom are suing
as representatives of the estates of the Amore family, filed this
wrongful death and survival action against Volker and a number of
corporate defendants connected either directly or through their
subsidiaries to the operation of the train on which the Amores were
traveling in France. Plaintiffs assert claims of negligence, product
liability, and breach of implied warranty. Plaintiffs also seek punitive
On December 11, 2003, plaintiffs consented to the dismissal of two
corporate defendants, Accor North America and Stinnes Corporation.
Plaintiffs have agreed to dismiss Deutsche Bahn Nachzug, a defendant
named in the caption and discussed in the complaint, but whom plaintiffs
concede does not exist. Plaintiffs have also agreed to dismiss ISD-DSG
GmbH, which did not exist at the time of the accident and is in
liquidation. The remaining defendants now move to dismiss the complaint. DISCUSSION
The Deutsche Bahn defendants move to dismiss based on sovereign
immunity, lack of personal jurisdiction, forum non conveniens,
and the principle of abstention. The Accor defendants move to dismiss the
complaint for lack of personal jurisdiction, forum non
conveniens, and failure to state a claim.
I. Sovereign Immunity
Deutsche Bahn argues that this court has no subject matter jurisdiction
over the claims against it, because it is an agency or instrumentality of
a foreign sovereign and therefore immune from suit pursuant to the
Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1603-10. As
previously noted, Deutsche Bahn is the national rail operator of Germany,
wholly owned by the German government.
The FSIA provides foreign states with immunity from suits in American
courts, subject to certain exceptions. See Verlinden B.V. v. Central
Bank of Nigeria, 461 U.S. 480, 489 (1983). Section 1603 states that
immunity extends not only to political subdivisions, but also to agencies
and instrumentalities of a foreign state, defined as:
[A]ny entity . . . (1) which is a separate legal
person, corporate or otherwise, and (2) which is
an organ of a foreign state or political
subdivision thereof, or a majority of whose shares
or other ownership interest is owned by a foreign
state or political subdivision thereof, and (3) which is
neither a citizen of a State of the United States
. . . nor created under the laws of any third
28 U.S.C. § 1603(b). Once a defendant makes a prima facie showing
that it is an agency or instrumentality of a foreign state, the plaintiff
must demonstrate that a statutory exception to immunity applies.
See Cargill Int'l S.A. v. M/T Pavel Dybenko, 991 F.2d 1012
1016 (2d Cir. 1993).
Plaintiffs concede that Deutsche Bahn is an instrumentality of the
Republic of Germany. They argue, however, that two of the FSIA's
exceptions remove the cloak of immunity from Deutsche Bahn in this case.
The FSIA provides, in relevant part:
A foreign state shall not be immune from the
jurisdiction of courts of the United States
or of the States in any case
(1) in which the foreign state has waived its
immunity either explicitly or by
implication . . .; [or]
(2) in which the action is based upon a commercial
activity carried on in the United States by the
foreign state; or upon an act performed in the
United States in connection with a commercial
activity of the foreign state elsewhere; or upon
an act outside the territory of the United States
in connection with a commercial activity of the
foreign state elsewhere and that act causes a
direct effect in the United States. . . .
28 U.S.C. § 1605(a).
Plaintiffs argue that Deutsche Bahn waived its immunity pursuant to
§ 1605(a)(1) when Germany signed the Convention Concerning
International Carriage by Rail ("COTIF"), a treaty that regulates
litigation arising from railway transportation in signatory countries. Plaintiffs claim, and defendants concede, that
each signatory of COTIF, including Germany, has waived its sovereign
immunity with respect to damage claims arising from its railway
transportation activities in other signatory countries. Each signatory
nation has also agreed that personal injury actions arising from railway
accidents can be filed only in the country in which the injury occurred.
See Convention Concerning International Carriage by Rail (May
9, 1980), app. A, art. 52, § 1. Plaintiffs recognize that the United
States is not a signatory of this treaty, but argue that this explicit
waiver of immunity from suit in signatory countries is an implied waiver
of immunity from suit in the United States within the meaning of the
Plaintiffs' reading of § 1605(a)(1) is too broad. The Second
Circuit has stated that the FSIA's implied waiver provision should be
construed narrowly, see Transatlantic Shiffahrtskontor GmbH v.
Shanghai Foreign Trade Corp., 204 F.3d 384, 391 (2d Cir. 2000), and
that such waivers should not be found absent a showing of the sovereign
defendant's intention to waive immunity, see, e.g.,
Cargill, 991 F.2d at 1017. Here, Germany's ratification of
COTIF constitutes a very narrow waiver of sovereign immunity: signatory
nations have not consented to suit in any signatory nation, but only in
the courts of the country in which the injury giving rise to the suit
occurred. Plaintiffs provide no justification for finding that through such a
limited waiver, Germany and its instrumentalities have impliedly waived
sovereign immunity for lawsuits arising in nonsignatory jurisdictions and
in countries other than the country in which the injury giving rise to
the suits occurred.
Plaintiffs also contend that this suit falls under § 1605(a)(2),
the commercial activities exception to sovereign immunity. Because it is
undisputed that the Amores purchased their train tickets in Europe, and
that all of the wrongdoing alleged in the complaint occurred in Europe,
the only subcategory of the commercial activities exception potentially
applicable here is the third, which removes sovereign immunity when an
action is based upon "an act outside the territory of the United States
in connection with a commercial activity of the foreign state elsewhere
and that act causes a direct effect in the United States."
28 U.S.C. § 1605(a)(2).
The parties do not dispute that Deutsche Bahn's provision of rail
transportation in Europe is a commercial activity. The significant
question is whether the negligence, product defects, and breach of
warranty that allegedly contributed to the fire in Railcar 120
the acts upon which the complaint is predicated had direct
effects in the United States.
In Martin v. Republic of South Africa, 836 F.2d 91 (2d Cir.
1987), the Second Circuit held that personal injuries suffered by an American abroad as a result of the tortious conduct of a foreign
sovereign cannot provide a basis for finding an exception to immunity
under § 1605(a)(2), see id. at 95. In that case, appellant
alleged that he was injured in a car accident in South Africa and was
denied timely medical care because he was black. See id. at 92.
He returned home a quadriplegic, and argued that the pain, suffering, and
financial loss that he consequently suffered in the United States were
direct effects of South Africa's tortious conduct. But because appellant
suffered his injuries and became a quadriplegic in South Africa, the
court reasoned that "it cannot be said that the effects of South Africa's
acts occurred `in the United States.'" Id. at 94. The court
drew on the reasoning of the leading Second Circuit case to parse the
meaning of "direct effect in the United States," Texas Trading &
Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2d Cir.
1981). Texas Trading held that Nigeria's repudiation of
contracts with American corporations had a direct effect in the United
States because the plaintiffs' financial loss occurred here: the
contracts provided for payment in the United States from a New York bank,
and the plaintiffs were injured when Nigeria withheld that payment.
See id. at 312; see also Martin, 836 F.2d at 94. The
Texas Trading court also suggested that cases involving
personal injuries sustained by Americans abroad are both analytically
distinct from and easier to resolve than contract claims by corporations. The court noted
that personal injuries are "undoubtedly . . . `direct' effects,"
Texas Trading, 647 F.2d at 312, and that when an individual is
injured overseas, "it is easy to locate the `effect' outside the United
States" id. at 312 n.35.
Texas Trading also approved the reasoning of Harris v.
VAO Intourist, Moscow, 481 F. Supp. 1056 (E.D.N.Y. 1979), a wrongful
death action arising from the death of an American citizen in a fire in a
Moscow hotel. In rejecting the plaintiff's argument that the commercial
activities exception of the FSIA barred the defendants' claim of
sovereign immunity, Judge Weinstein wrote:
Obviously the negligent operation of a hotel in
Moscow causing the death of a United States
resident has effects in the United States; here it
leaves aggrieved relatives in this country. But
the precise issue is not whether the fire had any
effect here, but whether it had a "direct effect"
in the United States within the meaning of the
statutory language. Indirect injurious
consequences within this country of an
out-of-state act are not sufficient contacts to
satisfy the "direct effect" requirement of section
Id. at 1062. See also Close v. Am. Airlines,
587 F. Supp. 1062, 1064-65 (S.D.N.Y. 1984) (holding that an American citizen
could not recover for injuries caused abroad by a foreign airline).
Plaintiffs allege that Deutsche Bahn's conduct outside the United
States caused the losses suffered here by the Amores' surviving
relatives, as well as economic losses to Deutsche Bahn itself resulting
from a decline in its United States business following extensive
publicity about the accident. But the direct effects of the conduct alleged were the deaths of the Amores in
France, and the cases cited above demonstrate that those extraterritorial
effects do not provide an exception to Deutsche Bahn's sovereign
immunity. Therefore, the claims against Deutsche Bahn are dismissed for
lack of subject matter jurisdiction.
II. Personal Jurisdiction
Plaintiffs bear the burden of establishing that the court may exercise
personal jurisdiction over the remaining defendants CutCo Indus.,
Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986) When, as here, a
motion to dismiss for lack of personal jurisdiction is decided before
discovery and without an evidentiary hearing, a plaintiff need only make
a prima facie showing of personal jurisdiction. See DiStefano v.
Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001). All pleadings
and affidavits are construed in the light most favorable to the
plaintiffs, and all doubts are resolved in their favor. See id.
A federal court sitting in diversity must apply the law of the forum
state in determining whether it may exercise personal jurisdiction over
an out-of-state defendant. Savin v. Ranier, 898 F.2d 304, 306
(2d Cir. 1990). If the applicable statute of the forum state allows the
court to exercise personal jurisdiction, the court must then determine
whether the constitutional standards of due process are met. Id.
Because this lawsuit does not arise out of any activity by the
nonresident defendants within the state of New York, plaintiffs rely on
New York's "general jurisdiction" provision, N.Y. C.P.L.R. § 301.
Personal jurisdiction over a corporation exists pursuant to § 301 if
the corporation is "engaged in such a continuous and systematic course of
`doing business' [in New York] as to warrant a finding of its `presence
in this jurisdiction.'" Laufer v. Ostrow, 55 N.Y.2d 305, 309-10
(1982) (quoting McGowan v. Smith, 52 N.Y.2d 268, 272 (1981)).
Section 301 jurisdiction, which subjects a nondomiciliary corporation to
suits unrelated to its contacts with New York, is appropriate only if the
corporation does business in New York "not occasionally or casually, but
with a fair measure of permanence and continuity." Hoffritz for
Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985)
(quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267
As discussed in greater detail below, plaintiffs fail to make a prima
facie showing of personal jurisdiction over AutoZug and R&T. There
are also serious questions whether this court can exercise jurisdiction
over Accor and CIWLT.
A. The Remaining Deutsche Bahn Defendants
AutoZug and R&T are two German corporations whose principal business is long-distance passenger train travel in Europe. R&T
is a wholly owned subsidiary of an entity called DB Personenverkehr,
which is itself a wholly owned subsidiary of Deutsche Bahn. AutoZug is a
wholly owned subsidiary of R&T. Thus, each subsidiary exists several
rungs down the corporate ladder from Deutsche Bahn.
Plaintiffs have alleged no direct contacts between AutoZug and New
York, and only one such contact between R&T and New York.
Specifically, plaintiffs allege that R&T contracted directly with
U.S. airlines which have operations in New York to develop "rail and fly"
packages for U.S. customers. This allegation is insufficient because it
does not show that R&T conducted a continuous course of business in
New York, or even that R&T solicited or executed these contracts in
New York. The existence of contractual relationships with entities that
happen to have operations in New York does not establish § 301
jurisdiction, because it does not show extensive conduct directed toward
or occurring in New York. See Mantello v. Hall,
947 F. Supp. 92, 98 (S.D.N.Y. 1996).
Plaintiffs also rely on mere department and agency theories to argue
that jurisdiction over these defendants is proper. Each of these is
discussed in turn below. 1. AutoZug and R&T as "Mere Departments" of Deutsche Bahn
First, plaintiffs contend that these German subsidiaries are "mere
departments" of Deutsche Bahn, and accordingly share the jurisdictional
contacts of their parent. See Volkswaaenwerk Aktiengesellschaft v.
Beech Aircraft Corp., 751 F.2d 117, 120-22 (2d Cir. 1984). A
corporate entity that is present in New York will be considered a "mere
department" of a foreign parent, so as to expose the parent to personal
jurisdiction in New York, "only if the foreign parent's control is
pervasive enough that the corporate separation is more formal than real."
Palmieri v. Estefan, 793 F. Supp. 1182, 1187 (S.D.N.Y. 1992)
(quoting H. Heller & Co. v. Novacor Chemicals Ltd.,
726 F. Supp. 49, 54 (S.D.N.Y. 1988)). This theory, of course, requires an
initial finding that Deutsche Bahn itself is doing business in New York,
and plaintiffs offer a number of alternative theories to support such a
finding: that Deutsche Bahn itself has numerous direct contacts with New
York, that Deutsche Bahn is doing business through other mere departments
located in New York, or that Deutsche Bahn is doing business through
various New York-based agents.
There is a serious problem with plaintiffs' attempt to premise personal
jurisdiction over the German subsidiaries on Deutsche Bahn's contacts
with New York. Deutsche Bahn is immune from suit in the United States. By
alleging that these subsidiaries are mere departments of Deutsche Bahn, plaintiffs are
alleging that the subsidiaries are not separate corporate entities at
all, but rather alter egos of an immune entity. If, as plaintiffs insist,
the subsidiaries' independent corporate form is a mere facade, and
Deutsche Bahn exerts pervasive control over them, then the entities must
share Deutsche Bahn's immunity. Cf. U.S. Fid. & Guar. Co. v.
Braspetro Oil Servs. Co., No. 97 Civ. 6124 (JGK), 1999 WL 307666, at
*11 (S.D.N.Y. May 17, 1999), aff'd, 199 F.3d 94, 97 (2d Cir.
1999) (finding that the defendant, a corporate subsidiary of a subsidiary
of Petrobras, an instrumentality of Brazil, was also an alter ego of
Petrobras, and would have been entitled to sovereign immunity under the
FSIA except that a statutory exception to immunity applied). To permit
plaintiffs to sue AutoZug and R&T in New York would, according to
plaintiffs' own allegations, be tantamount to permitting plaintiffs to
sue Deutsche Bahn, a foreign sovereign.
Plaintiffs respond that the rule of Dole Food Co. v.
Patrickson, 538 U.S. 468 (2003), mandates a finding that these
subsidiaries are not immune under the FSIA. In Dole, the
Supreme Court held that indirect subsidiaries of a foreign state do not
qualify as agencies or instrumentalities under the FSIA, because they do
not satisfy the statutory requirement of majority ownership by a foreign
state or political subdivision. See id. at 474; see
also 28 U.S.C. § 1603 (b)(2). But according to plaintiffs' own allegations, AutoZug and R&T are not
subsidiaries indirectly owned by Germany, but "mere departments" of
Germany's agency or instrumentality, Deutsche Bahn. Dole did
not address such allegations. Essentially, plaintiffs ask this court to
ignore the corporate form for purposes of the jurisdictional analysis and
to defend it rigorously with respect to the FSIA analysis. Plaintiffs
cannot have it both ways. The mere department test, as discussed in
greater detail below, "requires an examination of economic realities, not
formal relationships." Mayatextil, S.A. v. Liztex U.S.A., Inc.,
No. 92 Civ. 4528 (SS), 1995 WL 131774, at *5 (S.D.N.Y. Mar. 23, 1995). If
AutoZug and R&T are mere departments of Deutsche Bahn, then this
court lacks subject matter jurisdiction over the claims against them. If
they are separate corporate entities, then plaintiffs cannot attribute
Deutsche Bahn's contacts to the subsidiaries for purposes of personal
2. DER/REG and Deutsche Bahn as the Agents of R&T and
Alternatively, plaintiffs contend that AutoZug and R&T are doing
business in New York through an agent. "[A] court of New York may assert
jurisdiction over a foreign corporation when it affiliates itself with a
New York representative entity and that New York representative renders
services on behalf of the foreign corporation that go beyond mere
solicitation and are sufficiently important to the foreign entity that the corporation itself would
perform equivalent services if no agent were available." Wiwa v.
Royal Dutch Petroleum Co., 226 F.3d 88
, 95 (2d Cir. 2000). So, for
example, in the leading New York case on agency jurisdiction,
Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533
(1967), the Court of Appeals held that New York courts could assert
jurisdiction over a British Corporation, Hilton Hotels (U.K.) Ltd., based
on the activities of the Hilton Reservation Service, an entity doing
business in New York. The New York entity responded to requests for rate
quotations from travel agents, confirmed reservations, performed
publicity and public relations work, and otherwise generated business for
the London corporation. See id. at 537. In short, the court
found that "the Service does all the business which Hilton (U.K.) could
do were it here by its own officials." Id. See also Wiwa, 226
F.3d at 95-96 (asserting personal jurisdiction over defendant foreign
holding companies based on the activities of their New York Investor
Relations Office, which was fully funded by the defendants, consulted
them on major decisions, and whose sole function was to act on their
behalf); Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116
120-21 (2d Cir. 1967) (premising jurisdiction over an Arizona tour
operator upon the activities of a New York travel agent that confirmed
reservations and performed other services on behalf of operator);
Miller v. Surf Props., Inc., 4 N.Y.2d 475, 481 (1958) (holding that a travel agency
that responded to telephone inquiries, mailed brochures, and accepted
deposits for many Florida hotels was not the agent of one of those
hotels for the purposes of personal jurisdiction).
Plaintiffs argue that these German subsidiaries of Deutsche Bahn are
doing business in New York through what is actually two separate
entities: Destination Europe Resources ("DER") and Rail Europe Group
("REG"). REG is based in White Plains, New York. Plaintiffs note that REG
advertises itself as the official North American representative of sixty
European railways. REG owns DER, a travel wholesaler. Plaintiffs argue
that DER/REG functions as the New York agent of AutoZug and R&T
through activities it performs on behalf of their corporate ancestor,
Deutsche Bahn: Deutsche Bahn holds DER out as its general agent in the
United States on its website for international customers; Deutsche Bahn
encourages U.S. customers to purchase all their tickets through DER/REG;
and Deutsche Bahn generates significant revenue from ticket sales by
DER/REG. Although all of these allegations involve the parent
corporation, not the subsidiaries, plaintiffs contend that DER/REG's
activities are sufficiently significant to the business of the
subsidiaries, and that the agency theory of jurisdiction is sufficiently
broad, to support a finding of jurisdiction over the subsidiaries.
There are several problems with plaintiffs' argument. Plaintiffs make no allegations sufficient to justify the conflation
of two distinct entities DER and REG. Why plaintiffs choose to
combine DER and REG is clear from Deutsche Bahn's website, which was
included as an exhibit attached to plaintiffs' opposition papers: DER,
the entity that Deutsche Bahn holds out as its general agent in the
United States, is located in Rosemont, Illinois. The activities of an
Illinois-based organization cannot support a finding that AutoZug and
R&T are doing business through an agent in New York. And the
activities of REG alone do not support plaintiffs' argument. Plaintiffs
concede that REG serves sixty European railways, not Deutsche Bahn and
its subsidiaries exclusively. To find that a corporation is doing
business in New York through an agent, a plaintiff must show that the
agent is "primarily employed by the defendant and not engaged in similar
services for other clients." Wiwa, 228 F.3d at 95; see
also Jacobs v. Felix Bloch Erben Verlag fur Buhne Film und Funk KG,
160 F. Supp.2d 722, 737 (S.D.N.Y. 2001); Miller, 4 N.Y.2d at
481. Plaintiffs' allegations indicate only that REG is an independent
contractor. Deutsche Bahn's use of REG to sell train tickets in the
United States is insufficient to support a prima facie determination
that Deutsche Bahn or its subsidiaries are doing business in New York.
Furthermore, plaintiffs have not offered a single factual allegation
that shows that DER/REG performs any activity in New York on behalf of AutoZug and R&T, as opposed to Deutsche Bahn.
Plaintiffs also argue that Deutsche Bahn itself acts as its
subsidiaries' agent in New York. Again, the complaint contains no
allegations that Deutsche Bahn performs any activity in New York on
behalf of its subsidiaries. Plaintiffs rely far too heavily on language
in the case law that suggests that common ownership "gives rise to a
valid inference as to the broad scope" of an agency relationship.
Frummer, 19 N.Y.2d at 537. Taken to its logical extreme, their
position would make every parent the agent of each of its subsidiaries
for jurisdictional purposes, and vice versa. But plaintiffs must also
show that the agent rendered important services on behalf of its
principal. This they have failed to do.
Plaintiffs have not made a prima facie showing that this court has
personal jurisdiction over AutoZug and R&T.
Since there is no jurisdiction in New York over any of the Deutsche
Bahn defendants, it is not necessary to reach their argument that this
court should abstain from hearing this case in deference to the legal
proceedings ongoing in France.
B. Janz Volker
Defendant Volker also moves to dismiss for lack of personal
jurisdiction. Plaintiffs offer no allegations with respect to Volker's
contacts with the United States. Therefore, they have failed to make a prima facie showing of personal jurisdiction over
C. The Accor Defendants
Accor is a corporation organized under the laws of France. It maintains
a registered office in Evry, France. It possesses ownership interests in
numerous hotel and tourism-related corporations around the world.
CIWLT is a corporation organized under the laws of Belgium. It
maintains a registered office in Brussels. CIWLT provides travel-related
services throughout continental Europe, focusing on sleeping and dining
car services on European trains. Accor has a 99.48% ownership interest in
Plaintiffs offer two theories to support the exercise of jurisdiction
over Accor: first, that Accor itself maintains sufficient contacts with
New York to fulfill the "doing business" standard of § 301; and
second, that the jurisdictional contacts of Accor Leisure, a "mere
department" of Accor that is doing business in New York, are properly
attributable to the parent. Each of these theories is considered in turn. a) Accor's Activities in New York
In determining whether a corporation does business in New York with
sufficient regularity to make it amenable to personal jurisdiction under
§ 301, a court should consider whether the corporation maintains
offices, bank accounts, or other property in New York; whether employees
of the corporation are present in New York; and whether the corporation
solicits business in New York. See Hoffritz, 763 F.2d
at 58. "Solicitation of business alone will not justify a finding of
corporate presence in New York with respect to a foreign manufacturer or
purveyor of services, but when there are activities of substance in
addition to solicitation there is presence and, therefore, jurisdiction."
Laufer, 55 N.Y.2d at 310 (internal citation omitted); see
also Landoil Res. Corp. v. Alexander & Alexander Servs., Inc.,
918 F.2d 1039, 1043-44 (2d Cir. 1991).
The plaintiffs cite the following contacts as sufficient to support
general jurisdiction over Accor:
(1) Accor owns more than 15 businesses that are registered to conduct
business in New York, and its North American subsidiaries accounted for
22% of its revenue in 2002.
(2) Accor maintains a web of internet sites linking its various
subsidiary hotels. Through these websites, Accor solicits U.S. businesses
(including New York businesses) to join its affiliate program. By placing
a link to Accor's website on its website, a member of the affiliate program can receive compensation for every
booking that Accor obtains through customers directed to it by an
(3) Accor encourages U.S. customers (including New York residents) to
join one of its "loyalty programs," through which they can earn credit
toward discounts at Accor hotels.
(4) In 1999, Accor announced that it was acquiring Red Roof Inns and
Motel 6. As part of this acquisition, it received a commitment from
Morgan Stanley Real Estate Fund LP to tender its 68.3% stake in those
hotel chains. The Morgan Stanley Real Estate Fund is owned by Morgan
Stanley Group, Inc., a Delaware company whose principal office is located
in New York City.
(5) Accor hired a New York law firm, Proskauer Rose LLP, to perform the
legal work necessary to complete these acquisitions, and hired New
York-based J.P. Morgan & Company to provide financial advice.
(6) Accor formed a joint venture with a New York venture capital firm,
the Blackstone Group, to acquire 52 hotels from Vivendi.
(7) Accor owns two bank accounts in New York.
(8) Accor stock can be purchased in New York on the over-the-counter
exchange. The Bank of New York trades Accor's American Depository
Receipts, and Merrill Lynch trades Accor's ordinary shares. Between 11%
and 16.7% of Accor's equity shares have been held by U.S. institutional
or individual investors at various times.
(9) Accor conducted thirty "roadshows" in Europe and the United States
in 2002 to promote its equity offerings to potential investors,
"presumably" with the assistance of one of its New York-based market
(10) Accor authorized a subsidiary, Accor Economy Lodging Inc., which
is registered to do business in New York, to file a Form D with the
Securities and Exchange Commission ("SEC") regarding a stock issuance.
(11) Accor retained the services of three New York-based investment
banks to manage a $680 million bond offering in 2001.
(12) Accor maintains strategic partnerships with U.S. companies, such
as Delta Airlines. New York residents who are members of Delta's SkyMiles
program can earn credit toward discounts on goods and services through
stays in Accor hotels.
(13) Accor has two partnerships with New York-based American Express
Company, which involve jointly branded charge cards and a "points"
(14) American Express has also owned as much as one percent of Accor
stock, making it at one time Accor's fifth largest shareholder.
(15) Accor's worldwide internet reservation system generates revenue
from New York residents who make reservations for stays at Accor hotels,
as well as from non-New York residents who reserve rooms at New York hotels owned by subsidiaries of Accor.
(16) Accor owns 50% of Carlson WagonLit Travel, a travel agency with
offices in New York.
These are isolated and scattershot contacts, not the substantial,
continuous, and permanent contacts required to support § 301
jurisdiction. Most of them also suffer from other serious deficiencies.
Plaintiffs attempt to blur the line between Accor's contacts with the
United States and its contacts with the State of New York. Because this
is a diversity suit, it is defendant's contacts with the forum state, not
with the United States as a whole, that are relevant to the personal
jurisdiction inquiry. Conduct directed toward the United States (or, in
the case of some of these purported activities, toward the world
generally), cannot subject a defendant to personal jurisdiction in a
particular state. Accordingly, while New York residents can benefit from
Accor's affiliate program, loyalty programs, internet reservation system,
and partnership with Delta Airlines, those benefits do not result from
Accor's having reached into New York to solicit business here, but from
the fact that access to these programs is available to anyone in the
United States who seeks them out. See, e.g., Drucker Cornell v.
Assicurazioni Generali S.P.A., Nos. 97 Civ. 2262 (MBM), 98 Civ. 9186
(MBM), 2000 WL 284222, at *2 (S.D.N.Y. Mar. 16, 2000) (finding that the exercise of personal jurisdiction on the basis of a website
available worldwide, without an allegation that the website was
purposefully directed toward New York, would offend due process).
Plaintiffs cannot cure this deficiency by tacking on a reference to New
York residents, as they do in several of the allegations summarized
above, because it is clear that the thrust of Accor's activity is not
directed toward New York.
Other allegations similarly lack a New York focus. Plaintiffs do not
allege that any of Accor's thirty roadshows were conducted in New York,
or that any of the owners of Accor securities are New York residents or
entities. Plaintiffs do not allege that Accor Lodging filed forms with
the SEC on Accor's behalf in New York. And plaintiffs do not allege that
Accor retained the services of New York investment banks or law firms for
bond offerings or corporate acquisitions in New York. See
PaineWebber Inc. v. Westgate Group, Inc., 748 F. Supp. 115, 120
(S.D.N.Y. 1990) (finding a corporation's retention of New York law firm
to provide services outside of New York to be insufficient to confer
Plaintiffs' allegations that focus more directly on New York suffer
from problems as well. The mere fact that Accor owns or partially owns
businesses that are registered to do business in New York does not
subject Accor to general jurisdiction in New York. See Ontel Prods.,
Inc. v. Project Strategies Corp., 899 F. Supp. 1144, 1148 (S.D.N.Y. 1995) ("In New York, the individual who
owns a corporation is generally not subject to personal jurisdiction as a
result of the corporation's activities unless (1) the corporate veil can
be `pierced' or (2) the corporation acted as an agent for the owner.").
Neither is jurisdiction proper merely because Accor operates websites
through which New York residents can make hotel reservations or purchase
other services. See Rodriguez v. Circus Circus Casinos, Inc.,
No. 00 Civ. 6559 (GEL), 2001 WL 21244, at *2 (S.D.N.Y. Jan. 9, 2001)
(finding no general jurisdiction over foreign corporation based on
website accessible to New York residents); Drucker Cornell,
2000 WL 284222, at *2.
Several of plaintiffs' allegations depend on Accor's having done
business with entities that are based in New York. None of these
allegations, however, indicates whether Accor solicited its partners'
participation in New York or whether any of the business was conducted in
New York. "The mere existence of a business relationship with entities
within the forum state is insufficient to establish `presence.'"
Mantello, 947 F. Supp. at 98 (quoting Insurance Co. of
Pennsylvania v. Centaur Insurance Co., 590 F. Supp. 1187, 1189
(S.D.N.Y. 1984)). Accordingly, Accor's acquisition of hotels from a
subsidiary of the Morgan Stanley Group, its joint venture with the
Blackstone Group, and its partnerships with Delta Airlines and American
Express do not support an exercise of personal jurisdiction absent allegations of
purposeful conduct in New York.
Although Accor's ownership of two bank accounts located in New York is
one factor relevant to the jurisdictional inquiry, bank accounts standing
alone cannot create jurisdiction unless they are used for "substantially
all" of Accor's business. See United Rope Distribs. v. Kimberly
Line, 785 F. Supp. 446, 450 (S.D.N.Y. 1992). Plaintiffs do not make
such a claim. Similarly, the fact that Accor's stock may be purchased in
New York, and that Accor retains New York-based market makers to assist
in its sales of stock, is another important factor but is insufficient to
confer general jurisdiction. See In re Ski Train Fire in Kaprun,
Austria on Nov. 11, 2000, 230 F. Supp.2d 376, 383 (S.D.N.Y. 2002).
There is a serious question whether plaintiffs have demonstrated that
Accor solicits substantial amounts of business in New York. It is also
not clear whether the other contacts which actually involve conduct in
New York, such as the maintenance of bank accounts and the sale of
securities, constitute additional "activities of substance" sufficient to
justify jurisdiction. Laufer, 55 N.Y.2d at 310.
b) Accor Leisure as Accor's "Mere Department"
Alternatively, plaintiffs contend that personal jurisdiction over Accor is proper because Accor's "mere department," Accor
Leisure, is present and doing business in New York. The Second Circuit
has outlined four factors to aid in determining whether one entity is the
mere department of another: (1) common ownership; (2) financial
dependency of the subsidiary on the parent; (3) the degree to which the
parent interferes in the selection of the subsidiary's executive
personnel and fails to observe corporate formalities; and (4) the extent
of the parent's control over the subsidiary's marketing and operational
policies. Beech Aircraft, 751 F.2d at 120-22; Aboud v.
Rapid Rentals, No. 97 Civ. 1742 (MGC), 1998 WL 132790, at *1 (Mar.
24, 1998). The first factor, common ownership, is "essential to the
assertion of jurisdiction over a foreign related corporation," while the
other three factors are "important." Beech Aircraft, 751 F.2d
at 120. "The overall weighing of the various factors thus necessitates a
balancing process, and not every factor need weigh entirely in the
plaintiffs' favor." Aboud, 1998 WL 132790, at *1 (quoting
Mayatextil, 1995 WL 131774, at *5) (citations omitted).
However, the analysis requires more than an identity of ownership. A
parent cannot assume the jurisdictional status of its subsidiary unless
factors beyond common ownership suggest that their separate corporate
identities are a mere facade. See, e.g., Palmieri, 793 F. Supp.
at 1188-89 (citing cases applying the four factors). According to plaintiffs, all of Accor's subsidiaries are mere
departments of Accor, and the following allegations demonstrate that
Accor Leisure, in particular, is a mere department of Accor. Accor owns
90% or more of Accor Leisure. Accor sets the financial guidelines for all
of its subsidiaries. Specifically, Accor implements cost reduction plans,
controls bond offerings, manages financial risks, develops operating
budgets, approves capital expenditures, and handles insurance coverage.
Accor also interferes with personnel assignments by appointing the heads
of its subsidiaries. Accor directs that all of its subsidiaries use a
uniform logo that incorporates the Accor name. Accor has also centralized
employee recruitment for all of its subsidiaries and developed training
programs. Accor has centralized its corporate sales departments,
developed a groupwide employee incentive program, and formulated a
worldwide environmental policy and hotel risk prevention committee. Accor
also controls collective bargaining for all of its European hotels.
Finally, Accor's technology links the reservation systems of all of its
It is a close question whether these allegations constitute a prima
facie showing of jurisdiction over Accor in New York. Aside from common
ownership, plaintiffs make only one factual allegation specifically about
Accor Leisure: that the parent selected the executive in charge of Accor
Leisure. The rest of plaintiffs' allegations refer generally to all of Accor's
subsidiaries, to the activities of other of Accor's North American
subsidiaries, or to subsidiaries in other parts of the world.
Even if plaintiffs could show that their generalized allegations about
Accor's dealings with its subsidiaries apply with equal weight to Accor
Leisure, it is not clear that those allegations demonstrate the pervasive
control required to justify jurisdictional veil piercing. Most courts
have held that the financial dependency prong of the Beech
Aircraft test requires not merely that the parent have some control
over the finances of the subsidiary, but that the subsidiary would not be
able to function without the financial support of the parent. See
Meteoro Amusement Corp. v. Six Flags, 267 F. Supp.2d 263, 271
(N.D.N.Y. 2003); Dorfman v. Marriott Int'l Hotels, Inc., No.
99. Civ. 10496 (CSH), 2002 WL 14363, at *8 n.12 (S.D.N.Y. Jan. 3, 2002)
(noting that when assessing financial dependency, courts typically
consider "whether the two companies' accounts have been intermingled, the
parent has paid the subsidiary's expenses, the parent has loaned money to
the subsidiary without interest, or the parent has guaranteed the
subsidiary's obligations"). While plaintiffs have alleged facts
indicating that Accor has some measure of control over the broad
financial policies of its subsidiaries, they have not clearly alleged
dependency. Similarly, control over personnel decisions requires more than the
parent's appointment of a few of the subsidiary's officers or directors.
See Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d
Cir. 1998) (affirming district court's determination that the fact that
one of Nissan Japan's four managing directors was also the chairman of
Nissan U.S.A. was insufficient to show that the latter was a mere
department of the former). Management personnel of two related
corporations usually must be "substantially the same" or demonstrate
"mirror image symmetry" for this factor to contribute to a finding that a
subsidiary is a mere department of a parent. See, e.g., Self Intern.
(HK) Ltd. v. La Salle National Bank, No. 01 CV 4291 (RCC), 2002 WL
500372, at *3 (S.D.N.Y. Mar. 29, 2002) (citing cases). Plaintiffs only
allege that Accor named the head of Accor Leisure, which is not an
extraordinary act within the context of the parent-subsidiary
With respect to marketing policies, the fact that subsidiaries share a
logo, or that the parent decides to present several corporations on a
website in a unified fashion, is insufficient to show lack of formal
separation between two entities. See J.L.B. Equities, Inc. v. Ocwen
Fin. Corp., 131 F. Supp.2d 544, 550 (S.D.N.Y. 2001) (finding a
failure to distinguish between parent and subsidiary on website
insufficient to indicate lack of formal separation: "[a]n advertising
strategy deciding not to present to its consumers the existence of a
parent-subsidiary relationship is not equivalent to a showing that the
parent corporation exercises any control over its subsidiary's
operational or marketing activities"). Finally, it is not clear whether
plaintiffs' allegations with respect to Accor's employment,
environmental, risk prevention, and other policymaking show anything more
than the ordinary control that parent corporations exert over their
subsidiaries. It is true that a parent's imposition of operational
policies upon its subsidiaries can, in some instances, provide evidence
of pervasive control. See, e.g., Dorfman, 2002 WL
14363, at *9. However, plaintiffs have not alleged that Accor interferes
in the day-to-day operations of Accor Leisure, or that it has exerted
control over the standard operating procedures of its subsidiaries. The
policies plaintiffs describe are not central or essential to the way in
which Accor's subsidiaries conduct their business. "[U]nder New York law
a parent of a multinational corporate enterprise may make broad policy
decisions for its subsidiaries. Such control is inherent in the
parent-subsidiary relationship and does not justify labeling a subsidiary
a `mere department' of the parent." Saraceno v. S.C. Johnson &
Son, Inc., 83 F.R.D. 65, 71 (S.D.N.Y. 1979).
Plaintiffs have proffered evidence that Accor exercises the kind of
control over its subsidiaries typical in any parent-subsidiary relationship. Whether they have alleged the kind of extraordinary
control that would justify a finding that Accor Leisure is a mere
department of Accor is questionable.
2. Compagnie Internationale des Wagons-Lits
Jurisdiction over CIWLT depends on a determination that this court has
personal jurisdiction over its parent, Accor, and then on a determination
that CIWLT is a mere department of Accor and should share the
jurisdictional contacts of its parent.
As discussed above, a serious question exists as to whether plaintiffs
have made a prima facie showing of personal jurisdiction over Accor.
Accordingly, it is not clear that this court has personal jurisdiction
over CIWLT. Although discovery limited to the jurisdictional question
would ordinarily be in order in this situation, defendants' motion to
dismiss can be granted on the alternative ground that New York is an
inconvenient forum for this litigation, as discussed below.
III. Forum Non Conveniens
The Accor defendants contend that New York is a manifestly inconvenient
forum for this litigation. "The `central purpose' of forum non
conveniens analysis is to determine whether a trial will be most
convenient and will serve the interest of justice." Virgin Atlantic
Airways Ltd. v. British Airways PLC, 872 F. Supp. 52, 61 (S.D.N.Y. 1994). The analysis proceeds according to the test
set forth in the leading Supreme Court case on forum non conveniens.
Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947). Starting with the
proposition that the "plaintiff's choice of forum should rarely be
disturbed," id. at 508, the defendant must show that an
adequate alternative forum exists, see Piper Aircraft Co. v.
Reyno, 454 U.S. 235, 254 (1982). Only if defendant meets that
threshold requirement should the court proceed to the private and public
interest factors set forth in Gilbert. See id.;
see also Carey v. Baverische Hypound Vereinsbank AG,
F.3d , No. 03-7819, 2004 WL 1194391, at *2 (2d Cir. June 1, 2004).
A. France as an Adequate Alternative Forum
Generally, the alternative forum a defendant proposes is adequate as
long as the defendant is amenable to process there and the forum permits
litigation of the subject matter of the suit. See id. at 254
n.22. It is undisputed that all the corporate defendants are amenable to
suit in France. Accor is a French corporation, and CIWLT concedes that it
is subject to jurisdiction in France based on regularly conducted
business activities. Deutsche Bahn has a treaty obligation to submit to
jurisdiction in France.
Plaintiffs contend that France is not an adequate forum because the remedy French courts would provide to them is
unsatisfactory. Plaintiffs offer the declaration of Alain Behr, a French
attorney, who states that the maximum compensation that would be
available to each estate in a French court would be approximately
$100,000. Plaintiffs argue that such a remedy is clearly inadequate,
given the terrible circumstances of the Amores' deaths and the
seriousness of the misconduct alleged.
Plaintiffs are correct that "in rare circumstances . . . where the
remedy offered by the other forum is clearly unsatisfactory, the other
forum may not be an adequate alternative." Id. But
Piper is clear that an "unsatisfactory remedy," in this
context, means no remedy at all. The Piper Court was concerned
about situations in which the alternative forum does not recognize a
plaintiff's cause of action, refuses to permit litigation of the subject
matter of the suit, or is otherwise seriously flawed. See id.
at 254 & n.22. Accordingly, the Piper Court found that
Scotland was an adequate forum in a case involving a plane crash in that
country: "Although the relatives of the decedents may not be able to rely
on a strict liability theory, and although their potential damages
award may be smaller, there is no danger that they will be deprived
of any remedy or treated unfairly." Id. at 255 (emphasis
added). See also Alcoa S.S. Co. v. M/V Nordic Regent,
654 F.2d 147, 159 (2d Cir. 1978) (en bane) ("It is abundantly clear
. . . that the prospect of a lesser recovery does not justify refusing to dismiss
on the ground of forum non conveniens."); Varnelo v.
Eastwind Transport Ltd., No. 02 Civ. 2084 (KMW), 2003 WL 230741, at
*17 (S.D.N.Y. Feb. 3, 2003).
Because defendants are subject to the jurisdiction of the French courts
and those courts will hear plaintiffs' claims, defendants have shown that
France is an adequate alternative forum.
B. Public Interest Factors
The Gilbert public interest factors include (1) the
administrative difficulties arising from congested courts; (2) the
imposition of jury duty on members of a community unconnected to the
litigation; (3) a forum's interest in adjudicating local controversies;
and (4) the potential difficulties arising from the application of
foreign law. See Gilbert, 330 U.S. at 508-09.
The second and third factors weigh heavily in favor of France. It is
important to remember that the Amores booked their tickets in France, on
a train owned and operated by SNCF, the state-owned railway of France.
The complaint alleges tortious conduct on the part of Accor and CIWLT
that occurred wholly in France. The complaint alleges wrongdoing by
corporations that provide rail services in France and other parts of
Europe jointly with SNCF. France has an extremely strong interest in
ensuring that its own trains operate safely and that its partners and
affiliates properly maintain and equip their trains and train their
employees. France's active interest in these matters is evident both from
the criminal investigation into the accident that is pending in Nancy,
France, and from France's participation in COTIF, which provides for the
uniform regulation of train litigation in signatory countries. Unlike
Wiwa, this is not a case in which the interests of the American
and alternative forum are in equipoise. See Wiwa,
226 F.3d 88, 97. Nor have plaintiffs alleged that the United States has a
specific interest in the litigation of this suit in an American court,
such as the enforcement of U.S. laws, see, e.g. DiRienzo v. Philip
Services Corp., 294 F.3d 21, 32-33 (2d Cir. 2002), or the
adjudication of an accident involving a large number of American
citizens, see, e.g., Ski Train Fire at Kaprun, 230 F. Supp.2d
at 391 (noting that the accident in question occurred during a vacation
marketed to members of the U.S. military and their families). The United
States' general interest in protecting its citizens from harm while they
travel abroad is tenuous in comparison to France's concrete, immediate
interest in safe train travel within its borders.
Furthermore, to ask residents of the Southern District of New York to
hear what would clearly be a lengthy and complex trial, involving
Connecticut residents harmed by activities that occurred entirely in Europe, would be a significant burden.
The first and fourth factors add little weight to the analysis. As
plaintiffs point out, the Second Circuit has concluded that the first
factor has little or no applicability in this district because of the
recent filling of judicial vacancies. See Guidi v. Inter-Continental
Hotels Corp., 224 F.3d 142, 147 n.5 (2d Cir. 2000). Likewise, while
it is likely that French law applies to this dispute, defendants have not
indicated any particular conflicts or difficulties likely to arise from
the application of foreign law. Cf. Manu Int'l, S.A. v. Avon Prods.,
Inc., 641 F.2d 62, 68 (2d Cir. 1981) ("[W]e must guard against an
excessive reluctance to undertake the task of deciding foreign law, a
chore federal courts must often perform.").
Because France's interest in this lawsuit is so strong, and because the
imposition of jury duty on residents of the Southern District would be a
significant burden, the Gilbert public interest factors weigh
heavily in favor of France as the appropriate site for this litigation.
C. Private Interest Factors
Gilbert's private interest factors include "the relative ease
of access to sources of proof; availability of compulsory process for
attendance of unwilling, and the cost of obtaining attendance of willing,
witnesses; possibility of view of premises, if view would be appropriate to the action; and all other
practical problems that make trial of a case easy, expeditious and
inexpensive." Gilbert, 330 U.S. at 508. Within the last factor,
courts frequently consider the financial hardship that each party would
experience as a result of litigation in a distant forum. See,
e.g., Wiwa, 226 F.3d at 107.
Weighing heavily in favor of litigation in France is the fact that
plaintiffs are unable to proceed against the Deutsche Bahn defendants in
this court, and Accor and CIWLT will be unable to implead these parties.
"The inability to implead other parties directly involved in the
controversy is a factor which weighs against the retention of
jurisdiction in the Southern District of New York." Fitzgerald v.
Texaco, Inc., 521 F.2d 448, 453 (2d Cir. 1975); see also
Piper, 454 U.S. at 267-68. To require the Accor defendants to
litigate here seems an especially perverse result given that, according
to the allegations of the complaint, the unavailable parties are the ones
more directly responsible for the accident. Accor and CIWLT are being
sued because their employees, working in cars adjacent to Railcar 120,
failed to timely warn and evacuate the Amores after defendant Volker
fled. It would be unfair, and a significant burden, to require Accor and
CIWLT to litigate here without the opportunity to implead equally or more
culpable parties. Accor and CIWLT will also have difficulty impleading
SNCF, which would have a strong defense of sovereign immunity in this forum. See Abrams
v. Société Nationale des Chemins de Fer Francais,
332 F.3d 173, 179-80 (2d Cir. 2003). By contrast, all of these parties are
subject to the jurisdiction of the French courts.
It is also worth noting that bifurcating the suit, permitting
plaintiffs to litigate against some of the defendants in New York, and
requiring them to seek relief against others in Europe, would be as
inconvenient for plaintiffs as for defendants. Litigation in France would
therefore be more convenient for all parties.
The location of the evidence in this case also weighs in favor of
France as the appropriate forum. Plaintiffs' arguments with respect to
the location of evidence and witnesses depend heavily on their contention
that the French court conducting a criminal investigation into the
accident will soon rule on the culpability of the defendants, and
defendants will be collaterally estopped from contesting liability in
this action. Accordingly, plaintiffs argue that this court should
undertake the forum non conveniens analysis as though this were
a damages-only case, excluding from consideration access to evidence and
witnesses that are relevant only to liability. But plaintiffs have
presented no records from the French proceedings or affidavits from
parties involved that demonstrate that Accor and CIWLT are involved in
the French investigation or that the investigation is as wide-ranging in its examination of wrongdoing
as the complaint. For these reasons, the res judicata effect of
any French ruling is not certain, and it would be inappropriate to
foreclose consideration of issues of convenience related to liability.
Looking at the full range of proof likely to be introduced in this
case, what is most striking is that not a single fact witness or piece of
documentary evidence relevant to the complaint's allegations of tortious
conduct is located in the United States. Instead, all of the documents,
witnesses, and physical evidence that defendants will require to defend
this action are located in France, Belgium, or Germany. The breadth of
plaintiffs' complaint, which sounds in negligence, product liability, and
breach of warranty, and seeks punitive as well as compensatory damages,
ensures that the factual evidence presented in this case will be
extensive. Plaintiffs respond by pointing out that their damages evidence
is located in the United States, which should cancel out any weight to be
accorded to the location of defendants' evidence. But plaintiffs allude
to this evidence in conclusory terms, and do not explain what it consists
of or how it approaches in magnitude the evidence that defendants promise
to present.*fn1 To the extent that it consists of expert testimony, it is entitled to little weight in the forum non
conveniens analysis. See Brown v. Dow Corning Corp., No.
93 Civ. 5510 (AGS), 1996 WL 257614, at *2 (S.D.N.Y. May 15, 1996).
Plaintiffs also argue that defendants are large corporations that can
afford the expense of transferring all of their evidence to a foreign
tribunal. While courts do appear to be less sympathetic to defendants'
claims that litigation in a distant forum will be prohibitively expensive
when those defendants are corporations with "vast resources,"
Wiwa, 226 F.3d 88 at 107, defendants' financial resources
cannot be a determinative factor in the forum non conveniens
analysis. "If central emphasis were placed on any one factor, the
forum non conveniens doctrine would lose much of the very
flexibility that makes it so valuable." Piper, 454 U.S. at
249-50. The fact that defendants are corporations does not automatically
mean that they should bear the significant costs of transporting every
document, every piece of physical evidence (which would likely include
the train car in question), and every witness relevant to the factual
issues in dispute in this case. See Capital Currency Exchange, N.V.
v. Nat'l Westminster Bank PLC, 155 F.3d 603, 611 (2d Cir. 1998)
(affirming district court's dismissal on forum non conveniens
grounds where most of the witnesses resided in England and most of the documentary evidence was created and stored in England).
A related factor weighing in favor of litigation in France is
defendants' inability to compel critical third-party witnesses to testify
in New York and to compel the production of documents from third parties.
For example, the individual most directly responsible for plaintiffs'
injuries, Volker, cannot be compelled to appear here. Plaintiffs argue
that defendants have recourse under the Hague Convention on the Taking of
Evidence Abroad in Civil or Commercial Matters, 28 U.S.C. § 1781
note, to compel depositions and document production in foreign countries.
However, the evidence defendants would be required to seek through the
assistance of foreign courts would be both extensive and critical, coming
from the other alleged wrongdoers as well as from the French government's
investigation into the accident. The process of obtaining this evidence
would be costly and time-consuming. The massive inefficiency and
inconvenience that this would create for defendants and plaintiffs is all
the more striking given the existence of an alternative forum where many
of these problems would not arise.
Against these factors must be weighed the inconvenience to plaintiffs
of litigation in France. Plaintiffs argue that because France does not
permit contingent fee arrangements, they cannot afford to litigate their
case in France. However, the availability of contingent fee arrangements
is only one factor to be considered when analyzing the hardships to a plaintiff of
conducting litigation in a foreign forum. See Murray v. British
Broadcasting Corp., 81 F.3d 287, 292 (2d Cir. 1996). Plaintiffs have
offered no affidavits or other support for the proposition that they are
financially unable to conduct the lawsuit in France. See, e.g., Ski
Train Fire at Kaprun, 230 F. Supp.2d at 389 (noting that the
plaintiffs had filed affidavits demonstrating the financial hardship they
would experience if forced to litigate abroad). The mere fact that they
are individual, not corporate, litigants does not mean that litigation
elsewhere is necessarily a hardship sufficiently arduous to outweigh the
other factors in the Gilbert analysis.
The Gilbert analysis reveals that this litigation has only a
tenuous connection to the United States, let alone to New York.
Plaintiffs are American citizens, as were the individuals whose deaths
gave rise to this suit. France has a significant interest in ensuring the
safety of its railways. Defendants would be burdened by their inability
to implead other culpable parties as well as by the cost and difficulty
of obtaining necessary evidence and transporting it to this district.
These problems, as well as the fact that litigation here would be
inefficient because of this court's lack of jurisdiction over the
Deutsche Bahn defendants, indicates that this action should be dismissed
on forum non conveniens grounds in favor of litigation in
France. Accordingly, it is unnecessary to reach the Accor defendants' argument
that the complaint fails to state a claim against them.
For the foregoing reasons, defendants' motions to dismiss are granted.