United States District Court, S.D. New York
September 30, 2004.
HSBC USA, INC., Plaintiff,
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
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
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
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.
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 chosen forum).
Nevertheless, I now consider the private and public interest
factors established in Gulf Oil Corp. v. Gilbert.
A. Private Interest Factors
The parties' relative ease of access to sources of proof
neither favors nor disfavors dismissal. Both HSBC and Prosegur
claim to have relevant documents in New York and Paraguay,
respectively. Not surprisingly, most of HSBC's documents are
written in English, and most of Prosegur's documents are written in Spanish. (See Servidio Decl. ¶
6.)*fn8 The costs of translating and shipping such documents
will befall either HSBC or Prosegur. Courts generally refuse to
dismiss cases where the cost burden would simply shift from one
party to the other. See, e.g., TeeVee Toons, Inc. v. Gerhard
Schubert GMBH, No. 00 Civ. 5189, 2002 WL 498627, at *8 (S.D.N.Y.
Mar. 29, 2002). Thus, I find that ease of access to documentary
sources of proof is a neutral factor that benefits neither
plaintiff's nor defendant's argument.
Given the relatively even disbursement of witnesses in both New
York and Paraguay, the cost of witnesses traveling is not a
factor favoring either plaintiff or defendant. Just as this Court
lacks the authority to compel Paraguayan citizens unwilling to
serve as witnesses for Prosegur to testify in New York, several
of HSBC's witnesses have indicated that they will not return to
Paraguay to testify, and Prosegur has not demonstrated that
Paraguay has any more power than this Court to compel foreign
citizens to testify against their will. Moreover, "[t]he party
seeking the transfer must clearly specify the key witnesses to be
called and must make a general statement of what their testimony
will cover" to avoid a judicial determination of which forum is
most convenient based merely on which party can present a longer list of possible witnesses. Jenkins v. Wilson
Freight Forwarding Co., 104 F. Supp. 422, 424 (S.D.N.Y. 1952).
Prosegur has provided a witness list containing only names and
either job titles or roles in the robbery. (Servidio Decl. ¶ 3.)
Defendant has not established that these witnesses can provide
testimony relevant to the claims in this case. As such, I find
that Prosegur has not demonstrated that the location of several
witnesses in Paraguay strongly favors dismissal.
Prosegur contends that "proceeding with the case in New York
will preclude Prosegur from bringing appropriate third-party
actions against others in Paraguay with respect to the armed
robbery." (Pros. Motion to Dismiss p. 11.)*fn9 This argument
has failed before in this Circuit. See TeeVee Toons, 2002 WL
498627, at *9. Nothing prevents Prosegur from initiating an
action in Paraguay in reliance on a judicial determination in New
York. See Nat'l Union Fire Ins. Co. of Pittsburgh v. BP Amoco,
P.L.C., No. 03 Civ. 0200, 2003 WL 21180421, at *8 (S.D.N.Y. May
20, 2003) (noting that courts have accorded little weight to the
efficiency that might be gained by having all related litigation
in a single forum) (citing Overseas Programming Cos. v.
Cinematographische Commerz-Anstalt, 684 F.2d 232, 235 (2d Cir.
1982); MasterCard Int'l Inc. v. Argencard Sociedad Anomina, No.
01 Civ. 3027, 2002 WL 432379, at *8 (S.D.N.Y. Mar. 20, 2002).
Accordingly, I find that the private interest factors militate
against dismissing the action. I turn now to the public interest
B. Public Interest Factors
The first two factors are the congestion of the court and the
burden on the jury pool. Prosegur has not cited any
administrative difficulties in this court or burdens on the jury
pool that make this case different and distinct from other cases
in which courts have refused to dismiss on grounds of forum non
conveniens. See, e.g., Guidi, 224 F.3d 142; Rasoulzadeh,
574 F. Supp. 854; Ingram Micro, Inc. v. Airoute Cargo Express,
Inc., No. 99 Civ. 12480, 2001 WL 282696 (S.D.N.Y. Mar. 22,
The next factor is the local interest in deciding localized
disputes at home. An American corporation's home forum is deemed
to be any United States court. Guidi, 224 F.3d at 146. Local
juries have a particularly strong interest in resolving HSBC's
action for fraud; such an allegation is typically afforded great
weight by district courts. See, e.g., Herbstein v. Bruetman,
743 F. Supp. 184, 189 (S.D.N.Y. 1990). In addition, the contract
that was allegedly breached was formed in New York. As such, "New
York has a clear interest in seeing the dispute adjudicated
here." Realuyo, 2000 WL 307407, at *25.
The final factor is the appropriateness of trying a case in a forum familiar with the governing law of the case. Even
if Prosegur is correct and Paraguay law "may very possibly" apply
to some of the claims, this is not a sufficient reason to
dismiss. See Boosey & Hawkes Music Publishers, Ltd. v. Walt
Disney Co., 145 F.3d 481, 492 (2d Cir. 1998).
Accordingly, I find that the public interest factors do not
favor dismissing the action.
Because defendant Prosegur has not demonstrated that Paraguay
is an adequate alternative forum and because all of the Gulf Oil
Corp. v. Gilbert factors weigh against dismissal, defendant's
motion to dismiss is denied.
Counsel shall appear for a scheduling conference on Monday,
October 18, 2004, at 9:00 a.m.