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HSBC USA, INC. v. PROSEGUR PARAGUAY

September 30, 2004.

HSBC USA, INC., Plaintiff,
v.
PROSEGUR PARAGUAY, S.A., Defendant.



The opinion of the court was delivered by: LORETTA PRESKA, District Judge

OPINION AND ORDER

HSBC USA, Inc. ("HSBC" or "plaintiff") brings its Complaint against Prosegur Paraguay, S.A. ("Prosegur" or "defendant") for: (1) breach of contract; (2) negligence; (3) bailment; (4) breach of fiduciary duty; (5) conversion; and (6) fraud. Defendant now moves for dismissal on the grounds of forum non conveniens. For the reasons set forth below, defendant's motion to dismiss is denied.

BACKGROUND

  Plaintiff HSBC is a domestic corporation formed under the laws of the state of Maryland, with its principal place of business in New York. (Complaint ("Compl.") ¶ 1.) Defendant Prosegur is a foreign corporation, existing under the laws of the Republic of Paraguay, with its principal place of business in Asunción, Paraguay. (Compl. ¶ 2.) In late 1996, Prosegur's general manager traveled to HSBC's offices in New York, New York, for the purpose of soliciting HSBC to engage Prosegur for the armored transport of currency in Paraguay. (Compl. ¶ 3.) At this meeting, HSBC and Prosegur, through their respective agents, orally negotiated the terms and conditions upon which they would conduct business. (Compl. ¶ 4.) Specifically, Prosegur would safeguard and transport currency, via armored vehicle, from banks in Paraguay to the Silvio Pettirossi International Airport ("Airport") in Asunción, Paraguay. (Compl. ¶ 4.) From 1996 through June 2000, defendant transported currency for plaintiff on several occasions without incident. (Compl. ¶ 5.) On July 18, 2000, individuals attempted to rob an HSBC shipment from Prosegur at the Airport as the shipment sat on the tarmac awaiting loading, but the robbery was aborted at the last minute. (Compl. ¶ 7.) Prosegur never informed HSBC of that event. (Compl. ¶ 7.) On August 4, 2000, HSBC and Prosegur entered into a written agreement via facsimile transmissions between New York and Paraguay, pursuant to which Prosegur was to transport seven parcels of currency from various banks in and around the city of Asunción, Paraguay, to the Airport for shipment to New York. (Compl. ¶ 8.) On August 4, 2000, as the bags were being loaded into the aircraft, a group of armed men with assault rifles drove up to the plane and stole five of the seven bags of currency, containing in excess of $11,132,000. (Compl. ¶ 14.) Plaintiff commenced this action in the Supreme Court of the State of New York, County of New York, on February 11, 2003. Pursuant to sections 1441 and 1446 of title 28 of the United States Code, Prosegur removed the action to the United States District Court for the Southern District of New York on May 12, 2003. Defendant brought the present motion on December 5, 2003. For the foregoing reasons, defendant's motion to dismiss is denied.

  DISCUSSION

  I. The Standard

  The doctrine of forum non conveniens permits a court, in rare instances, to dismiss a claim even if the court is a permissible venue with proper jurisdiction over the claim. Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 100 (2d Cir. 2000). District courts have broad discretion when deciding whether to dismiss an action on such grounds. R. Maganlal & Co. v. M.G. Chem. Co., 942 F.2d 164, 167 (2d Cir. 1991). At the outset, my analysis is predicated on a strong presumption that the plaintiff's choice of forum should be honored. Piper Aircraft v. Reyno, 454 U.S. 235, 265-66 (1981); Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 504 (1947); Guidi v. Inter-Continental Hotels, 224 F.3d 142, 146-47 (2d Cir. 2000); Alcoa S.S. Co. v. M/V Nordic Regent, 654 F.2d 147, 162 n. 9 (2d Cir. 1998); PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 74 (2d Cir. 1998). When deciding a motion to dismiss on the basis of forum non conveniens, I engage in a two-part analysis. First, I determine if the defendant seeking dismissal has established that an adequate alternative forum is available. Realuyo v. Diaz, No. 98 Civ. 7684, 2000 WL 307407, at *7 (S.D.N.Y. Mar. 23, 2000) (citing Gulf Oil, 330 U.S. at 506-7). It is not enough that the defendant is subject to jurisdiction there. See R. Maganlal, 942 F.2d at 167 (citing Piper, 454 U.S. at 254 n. 22); Rasoulzadeh v. Associated Press, 574 F. Supp. 854, 861 (S.D.N.Y. 1983). In addition, the foreign forum cannot be one in which "the plaintiff[] [is] highly unlikely to obtain basic justice[.]" Rasoulzadeh, 574 F. Supp. at 861 (internal quotation omitted).

  Once the defendant demonstrates that an adequate forum exists, I weigh the private and public interests the Supreme Court set forth in Gulf Oil Corp. v. Gilbert. 330 U.S. at 508-9. To prevail, the defendant must demonstrate that the balance of all of these factors tilts strongly towards the foreign forum. Piper, 454 U.S. at 255; PT United, 138 F.3d at 74; R. Maganlal, 942 F.2d at 167. The private interest factors I consider in determining whether dismissal is warranted are: (1) relative ease of access to sources of proof; (2) availability of compulsory process to secure the attendance of unwilling witnesses; (3) cost of obtaining the attendance of witnesses; (4) possibility of viewing the premises, if relevant to the action; and (5) all other practical problems that make trial of a case easy, expeditious, and inexpensive. Gulf Oil, 330 U.S. at 508-9; PT United, 138 F.3d at 73. The public interest factors I weigh are: (1) court administrative difficulties;*fn1 (2) burdens on the jury pool; (3) the interest of forums in having local disputes decided at home; and (4) the appropriateness of trying a case in a forum familiar with the governing law of the case. Gilbert, 330 U.S. at 508-9; PT United, 138 F.3d at 74; R. Maganlal, 942 F.2d at 167.

  II. Application

  Plaintiff HSBC is a United States corporation, (Compl. ¶ 1), and is therefore entitled to significant deference in its choice to sue in its home forum. See Piper, 454 U.S. at 255; Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 70-71 (2d Cir. 2003). Although HSBC is engaged in business in foreign countries, the contract at issue had its genesis in New York only after Prosegur's agent traveled to New York to solicit a contract from HSBC. Consequently, the instant case is distinguishable from those holding that corporations soliciting international business cannot expect to bring their foreign opponents into a U.S. court when every reasonable consideration leads to the conclusion that the litigation should occur elsewhere. Cf. Carey v. Bayerische Hypo-Und Vereinsbank AG, 370 F.3d 234, 237, 238 (2d Cir. 2004) (internal citations omitted); Reid-Walan v. Hansen, 933 F.2d 1390, 1395 (8th Cir. 1991). Thus, Prosegur bears a heavy burden on this motion.

  Despite the fact that Prosegur has agreed to accept service of process and waive all procedural defenses it may have in Paraguay, (Massarioli Decl. ¶¶ 2-3),*fn2 I am not convinced that Paraguay is an adequate alternative forum.

  HSBC disputes the adequacy of Paraguay as a forum for two reasons: (1) it believes it has a legitimate fear for the safety of its agents and witnesses; and (2) it believes it will not receive basic justice in Paraguay. In a forum non conveniens analysis, "the ultimate inquiry is where trial will best serve the convenience of the parties and the ends of justice." Guidi, 224 F.3d at 147 (citing Koster v. Am. Lumbermens Mut. Cas. Co., 330 U.S. 518, 527 (1947)).

  Plaintiff has presented ample evidence that litigating in Paraguay could endanger the safety of plaintiff's agents and potential witnesses. (Pl. Opp. Brief p. 11.)*fn3 To wit, R. Matthew Bagdanovich, an HSBC investigator, was repeatedly followed and found listening devices that had been hidden in his hotel room. (Bagdanovich Decl. ¶ 14.)*fn4 He was later chased by a vehicle whose occupants had their weapons drawn and aimed at Mr. Bagdanovich. (Bagdanovich Decl. ¶ 14.) During the course of his investigation, Mr. Bagdanovich learned that five people connected with the robbery or the investigation have been murdered or have died under suspicious circumstances, including the lead prosecutor in the robbery investigation and the police chief in charge of the investigation. (Bagdanovich Decl. ¶ 10.) Additionally, union leaders of Paraguay's National Civil Aviation Office reportedly complained that their workers investigating the robbery were targets of an intimidation scheme run by an Air Force Major. (Bagdanovich Decl. ¶ 12.) Of considerable significance is the fact that Hanan Ofer, the HSBC representative who entered into the oral contract at issue and who also witnessed the robbery, fears that his safety would be in jeopardy if the action were litigated in Paraguay. (Ofer Decl. ¶ 4.)*fn5 In addition to the violence that has already been directed at individual witnesses, HSBC would likely be unable to obtain basic justice in Paraguay. HSBC claims that a former high-level Paraguayan government official was involved in planning the robbery and that the robbery was undertaken to fund the once-dominant political party in Paraguay. (Bagdanovich Decl. ¶ 7, 8.) The robbery was allegedly "coordinated and supported by a network of current and ex-governmental, military and police officials." (Bagdanovich Decl. ¶ 9.) These are more than generalized allegations of corruption. Cf. Blanco v. Banco Indus. de Venezuela, S.A., 997 F.2d 974, 982 (2d Cir. 1993); Mercier v. Sheraton Int'l, Inc., 981 F.2d 1345, 1351 (1st Cir. 1992). Moreover, "[i]n 2003, Paraguay was ranked the fourth most corrupt country in the world (behind Bangladesh, Nigeria, and Haiti)." (Bederman Decl. ¶ 12.)*fn6 A State Department report issued in February 2000 noted that denials of fair trials are common in Paraguay and the courts are often pressured by politicians and other persons whose interests are at stake. (Bederman Decl. ¶ 15.) Even the former Attorney-General of Paraguay has remarked that "there is a `mafia' that controls the judiciary." (Bederman Decl. ¶ 29.) Notably, Prosegur has done little to rebut HSBC's charges.*fn7

  The violence that has already been directed at investigators of the robbery that provoked this litigation, together with the uncontested allegations of governmental involvement in the robbery compel a finding that Prosegur has not carried its burden of showing that Paraguay is an adequate forum. Guidi, 224 F.3d at 147 (holding that the substantial safety risk and emotional burden plaintiffs would bear if required to travel to foreign forum supports keeping the case in their ...


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