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Fagan v. Deutsche Bundesbank

July 11, 2006


The opinion of the court was delivered by: Haight, Senior United States District Judge


In this action, there are three motions currently pending before the Court: (1) defendant Commerzbank AG*fn1 has moved for dismissal of the complaint on the ground of forum non conveniens; (2) defendant Deutsche Bundesbank ("Bundesbank") has moved for dismissal for lack of subject matter jurisdiction, insufficiency of process, insufficiency of service of process, and lack of personal jurisdiction; and (3) plaintiff Edward D. Fagan has moved for leave to amend his complaint. For the following reasons, the Court grants the motions by Commerzbank and Bundesbank, and denies the motion by Fagan.


The plaintiffs are four Florida residents and a Florida law firm. They filed the captioned action in this Court to recover damages for allegedly false and defamatory statements made about them in Germany by German bank spokesmen to German newspapers which were then, in the first instance, published in the German language in Germany.*fn2

Commerzbank is alleged to be "a German bank which has its principal offices in Frankfurt Germany." Complaint ¶ 7. Subject matter jurisdiction over plaintiffs' claims against Commerzbank is based upon diversity of citizenship under 28 U.S.C. § 1332. Bundesbank is alleged to be the "German National Bank," having its principal offices in Frankfurt, Germany, with another office in New York City. Id. ¶ 6. Subject matter jurisdiction over plaintiffs' claims against Bundesbank is alleged based upon 28 U.S.C. §§ 1330 and 1605 et seq. (providing commercial exceptions to the Foreign Sovereign Immunities Act). Id. ¶ 9. The complaint alleges that "[i]n or about mid-October 2005," Commerzbank and Bundesbank through "official representatives" caused libelous and slanderous statements about plaintiffs to be "published in and through various international wire services, newspapers and magazines," id. ¶ 22. The particular statements alleged in the complaint include two "Statement[s] of Commerzbank Spokesman" on October 17, 2005 and one statement attributed to Bundesbank on that same date, all of which were published on in the October 18 edition of the "German Newspaper Frankfurt Allgemeine Zeitung," id. ¶ 25. The complaint attaches as Exhibit 1 a copy of the pertinent newspaper article in the German language and a translation into English.

As mentioned, both defendants Bundesbank and Commerzbank have moved to dismiss. Instead of opposing the motions to dismiss, all the plaintiffs except Fagan have stipulated to the dismissal of their claims against the defendants. Therefore, Fagan is the sole remaining plaintiff in this action.

Fagan has, in an apparent attempt to counter Commerzbank's forum non conveniens argument and correct the pleading errors asserted by Bundesbank, now moved to amend his complaint.


I. The Forum Non Conveniens Motion

Commerzbank contends that the courts of Germany furnish an adequate alternative remedy for Fagan's claims, and that the relevant private and public interests identified in forum non conveniens jurisprudence all militate in favor of this Court dismissing the action in favor of the German courts as the more convenient forum.

In Flores v. Southern Peru Copper Corp., 253 F. Supp. 2d 510 (S.D.N.Y. 2002), aff'd on other grounds, 414 F.3d 233 (2d Cir. 2003), I had occasion to consider the present state of Supreme Court and Second Circuit jurisprudence in respect of the doctrine of forum non conveniens. Plaintiffs, Peruvian residents, claimed that environmental pollution from the defendant American company's Peru mining operations caused them injuries. Plaintiffs asserted subject matter jurisdiction under the Alien Tort Claims Act ("ATCA"), 28 U.S.C. § 1350. Defendant moved to dismiss the complaint on the ground that it did not state a claim under the ATCA and, in the alternative, on the ground of forum non conveniens.

I concluded that the complaint did not state a claim under the ATCA and accordingly dismissed the action for lack of federal subject matter jurisdiction. 253 F. Supp. 2d at 512-525. However, in order to place this Court's views fully before the Second Circuit on the inevitable appeal, I went on to analyze the applicability of forum non conveniens to the case, id. at 525- 544, and concluded that if I had not decided that the Court lacked subject matter jurisdiction, I would "dismiss the action on the grounds of forum non conveniens." Id. at 544.

On appeal, the Second Circuit affirmed the dismissal of the complaint on jurisdictional grounds and consequently did not reach forum non conveniens, but was kind enough to say that "[t]he District Court conducted a careful and thorough analysis of this issue, in which it considered all of the relevant factors." 414 F.3d at 266. Thus encouraged, I apply those factors to the case at bar.

A. Deference Due Plaintiff's Choice of Forum

When presented with a motion to dismiss for forum non conveniens, it is necessary for the court to determine the level of deference due the plaintiff's choice of forum. See Flores, 253 F. Supp. 2d at 527 (citing Iragorri v. United Tech. Corp., 274 F.3d 65, 73 (2d Cir. 2001)).Supreme Court precedent instructs that a plaintiff's choice of his own home forum should be given great deference, while a foreign resident's choice of a U.S. forum should be given less consideration; this is consistent with the broader principle "under which the degree of deference to be given to a plaintiff's choice of forum moves on a sliding scale depending on several relevant considerations." Id. at 527 (quoting Iragorri, 274 F.3d at 71). Foremost amongst those considerations, according to the Iragorri court, is whether a plaintiff chose a particular forum for genuine convenience or for tactical advantage. Id. The Second Circuit stated it this way:

[T]he 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 difficult it will be for the defendant to gain dismissal for forum non conveniens."

Id. (quoting Iragorri, 274 F.3d at 71-72).

In the case at bar, Fagan is a Florida resident, not a resident of this District. Further, as will be discussed more fully below, this action has no real connections to this District, and litigation here would be inconvenient for multiple reasons. Given these facts, Fagan's choice of this District as the forum for this litigation is entitled to minimal deference.

B. Adequate Alternative Forum

The Court begins the forum non conveniens analysis in earnest by determining whether an adequate alternative forum exists. Flores, 253 F. Supp. 2d at 526. A forum is considered adequate for the purposes of forum non conveniens if the defendant is subject to the jurisdiction of that forum, and the foreign forum provides a remedy for the alleged wrong. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n.22 (1981).

In the case at bar, it is apparent from the declaration of Tobias Kraetzschmar, an attorney admitted to practice in Germany who practices with a Munich firm and also holds a J.D. degree from Emory University in Atlanta, that the courts of Germany furnish an adequate alternative forum for the litigation of Fagan's claims: Commerzbank is subject to jurisdiction in Germany, and Germany provides remedies for libel. See Declaration of Tobias Kraetzschmar, dated Feb. 8, 2006 ("Kraetzschmar Decl. "), at 6-7, B(VI) & 7, (B)(2); see also Flores, 253 F. Supp. 2d at 531- 541 and cases cited. In addition, numerous courts*fn3 have found Germany to be an adequate alternative forum, including a court of this District in the context of a similar defamation suit. See Opert v. Schmid, 535 F. Supp. 591 (S.D.N.Y. 1982).

Fagan's arguments to the contrary are unpersuasive. In his papers submitted in support of his motion to amend, Fagan first argues that German courts will not have jurisdiction over all defendants, because Fagan proposes to amend his complaint to add Terrence Sweeney, Esq., the general counsel of Commerzbank's U.S. offices, as well as other defendants "whom it should be assumed" would not be domiciliaries of Germany. In the first place, Fagan will not be permitted to amend his complaint to add Sweeney as a defendant, as the proposed amended complaint alleges no individual involvement by Sweeney.*fn4 Further, the Court will not deny an otherwise warranted motion to dismiss pursuant to forum non conveniens simply because Fagan asserts the existence of certain phantom defendants who may possibly affect the forum non conveniens analysis. Moreover, although the Court can only speculate as to the roles of any remaining unidentified defendants, it seems likely that an additional defendant would be someone having a role in the allegedly defamatory statements, and thus would very likely be properly subjected to German jurisdiction, under either the European Convention or German law. See Kraetzschmar Decl. at 2-6, B(1).

Fagan next argues that Germany is not an adequate alternative forum because German courts utilize a different fee structure*fn5 for legal proceedings and different processes for obtaining and using evidence. Regarding the fee structure argument, however, the Second Circuit has made it plain that a plaintiff's "claim of financial hardship may not be considered in determining the availability of an alternative forum but must be deferred to the balancing of interests relative to the forum's convenience." Flores, 253 F. Supp. 2d at 531-32 (quoting Murray v. British Broadcasting Corp., 81 F.3d 287, 292-93 (2d Cir. 1996)) (emphasis in original); see also NCA Holding, 1999 WL 39539, at *2 ("The unavailability of contingency fee arrangements in Germany is only one factor to be weighed in determining the balance of convenience after the court determines that an alternative forum is available.") (quotation marks and citation omitted; emphasis in original). Additionally, the fact that German courts may utilize different procedures regarding evidence does not mean that forum non conveniens is inappropriate: "That the German legal system is different than that of the ...

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