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Lasala v. Lloyds TSB Bank

August 17, 2007

JOSEPH P. LASALA AND FRED S. ZEIDMAN, AS CO-TRUSTEES OF THE AREMISSOFT CORPORATION LIQUIDATING TRUST, PLAINTIFF,
v.
LLOYDS TSB BANK, PLC, DEFENDANT.



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

MEMORANDUM OPINION AND ORDER

In this diversity action, plaintiffs seek to hold defendant Lloyds TSB Bank, PLC ("Lloyds" or "the Bank") responsible for its alleged role in connection with a massive "pump and dump" scheme perpetrated by two corporate insiders of a software company, who fraudulently inflated the company's value and then sold their shares and funneled these funds through banks in Switzerland and elsewhere. In this motion defendant seeks to dismiss the complaint on three separate grounds: (1) forum non conveniens; (2) preemption of the claims by the Securities Litigation Uniform Standards Act, 15 U.S.C. §§ 77, 78 ("SLUSA"); and (3) failure to state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6). For the following reasons, I dismiss the complaint on the ground of forum non conveniens.

I. BACKGROUND

A. The Scheme Perpetrated by Kyprianou and Poyiadjis

Much of the following account is drawn from the complaint, whose well-pleaded factual allegations are taken as true on this motion. AremisSoft Corporation ("AremisSoft" or "the Company") was a software company, incorporated in Delaware in 1997, that purported to develop, market, implement, and support software applications for mid-sized corporations in the manufacturing, healthcare, hospitality and construction industries. Decl. Joseph P. LaSala in Opp'n to Def.'s Mot., dated Sept. 21, 2006 ("LaSala Decl."), at & 9. From about 1998 through July of 2001, Lycourgos Kyprianou and Roys Poyiadjis, two Cypriots who were officers of the Company ,*fn1 caused the Company to issue false public statements and regulatory filings representing to the public that it was experiencing rapid growth when in fact its growth nowhere neared the stated revenues. Compl. ¶¶ 18, 19. The two men caused AremisSoft to announce publicly that it had acquired other software companies of significant value, when, in reality, the companies were small and had been acquired for much less than the announced price. They fabricated records in support of these falsehoods. Id. The effect of these fraudulent misrepresentations was that the value and profitability of the Company were perceived to be much greater than they actually were, and consequently the price at which the Company's shares were traded on the open market was artificially high. Kyprianou and Poyiadjis sold their shares at these inflated prices to investors who were not privy to their knowledge concerning the true value of the Company. LaSala Decl. & 11. In order to give the impression that the stock sales were arm's length sales by other investors, Kyprianou and Poyiadjis devised a money laundering scheme, employing various entities to hold and sell their AremisSoft stock. Id. Kyprianou allegedly breached his fiduciary duties in other ways, by converting assets purportedly used to acquire software companies for his own personal benefit, and failing to account to AremisSoft for his insider trading profits. Id. When the truth about the Company was revealed, the value of the stock plummeted, and investors suffered great losses. By the time the fraud was uncovered in 2001, AremisSoft shareholders had sustained losses of approximately $500 million. Compl. & 30.

By May 2001 attention began to be focused on AremisSoft for reporting inflated income. On May 17, the New York Times reported that the true value of an AremisSoft contract with the Bulgarian government was not the $37.5 million claimed by the Company but rather less than $4 million. Id. & 20. By May 24, 2001, at least one class action lawsuit against AremisSoft and its directors had been filed. Id. & 21. On July 31, 2001, the day after AremisSoft was due to release its second quarter 2001 earnings, the Company announced that Kyprianou had resigned and that it was delaying the earnings release. On July 31, 2001, the Company was delisted from NASDAQ. Id. ¶¶ 23, 24.On or about October 4, 2001, the SEC sued Kyprianou and Poyiadijs in a civil injunction action, alleging that they had sold millions of shares of their AremisSoft stock in violation of U.S. securities laws. Id. &25. In an action before this Court, the SEC succeeded in freezing $175 million of Poyiadjis's proceeds lodged in bank accounts in the Isle of Man. In December 2001, an indictment was obtained against Poyiadjis in the Southern District of New York, and in June 2002, a superseding indictment was returned against Kyprianou, Poyiadjis, and M.C. Mathews, the top AremisSoft executive in India, on counts of securities fraud and money laundering, and conspiracy to commit both crimes. Id. ¶¶ 26, 28, 29. On March 15, 2002, AremisSoft filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. Id. & 27.

B. The Parties

Neither of the swindlers, whose acts of fraud and theft are undisputed, is a party to this case. Kyprianou is in Cyprus, and Poyiadjis is awaiting sentencing in this Court, having pleaded guilty to fraud. See United States v. Poyiadjis, et al., 01 Cr. 1177, 2002 WL 1941481 (S.D.N.Y. Aug. 21, 2002). Defendant Lloyds is a wholly owned subsidiary bank of Lloyds TSB Group, PLC, both of which have principal places of business in London, United Kingdom. Lloyds maintains extensive branches throughout the world, including in Geneva, Switzerland, and New York, NY. Compl.¶¶ 10, 11.

Plaintiffs are co-trustees of the AremisSoft Corporation Liquidating Trust (the "Trust"), a Delaware trust formed pursuant to three orders by District Judge Pisano of the District of New Jersey in connection with AremisSoft's voluntary bankruptcy: (1) a July 2002 order confirming the First Amended Joint Plan of Reorganization of AremisSoft ("Plan of Reorganization"); (2) an August 2002 order approving a Class Action Settlement, which had settled a consolidated class action brought by former shareholders against AremisSoft; and (3) an August 2002 order correcting the Order and Final Judgment previously entered in respect of AremisSoft's Chapter 11 bankruptcy petition. Id. & 2. The governing documents for the Trust are the Plan of Reorganization and the Liquidating Trust Agreement ("Trust Agreement").

This action seeks to pursue some of the claims assigned to the Trust. Under the Plan of Reorganization, the Trust was assigned claims arising out of the purchase of AremisSoft securities on the open market between April 22, 1999 and July 27, 2001 as well as corporate claims of AremisSoft. Id. & 5. The Trust beneficiaries include SoftBrands, Inc. as the reorganized debtor and the former AremisSoft shareholders, who number over 6000 persons. Id. ¶¶ 6, 30.

The Trust has litigated Trust Claims abroad. It commenced a chancery action in the Isle of Man against Kyprianou, Poyiadjis, and others. Id. & 31. Kyprianou defaulted in appearance in this proceeding, and consequently the Trust initiated separate proceedings against him and alleged co-conspirators in Cyprus in July of 2005. Id. & 35. Plaintiffs also initiated proceedings in the United Kingdom to freeze assets belonging to Kyprianou and his wife and to obtain relevant documents and information from third parties. Id. & 36. Plaintiffs maintain that it was through these last proceedings that they obtained documents giving rise to their claims in the instant action. Id. ¶¶ 37, 38.

C. The Allegations Against the Bank

This case, along with the related cases filed by the plaintiff Trustees against UBS, AG ("UBS") and the Bank of Cyprus Public Company Limited ("Bank of Cyprus"),*fn2 turns on the role of a bank in facilitating the fraud and/or the money laundering of one or both of the swindlers and their co-conspirators. In the captioned case against Lloyds, Kypriannou is the central villain. The gravamen of the complaint is that "Lloyds not only made it possible, and in many instances easy, for Kyprianou to launder the proceeds of his criminal and fraudulent conduct through Lloyds' accounts, but Lloyds misrepresented material information that it knew would be relied on by AremisSoft and its auditors in reporting the Company's financial condition and thereby perpetuated Kyprianou's fraud and crimes upon the Company." Id. & 60.

Kyprianou would use nominee companies, primarily AremisSoft's subsidiaries AresmisSoft EE.ME.A. and LK Global, to hold and sell his AremisSoft stock. The complaint alleges that Lloyds played an integral role in this scheme. Kyprianou opened an account at Lloyds through Evangelos Embedoklis, his wife's cousin, who was at the time the Deputy General Manager and Chief of Private Banking of Lloyds. Id. ¶¶ 18, 49. Lloyds assigned Jane Moore-Piacentini, Manager at the Geneva branch of Lloyds, to be Kyprianou's account manager. Id. &49. Plaintiffs allege that at least one account was unquestionably opened for the benefit of Kyprianou and that several others were likely to have been opened for his benefit as well. Id. Kyprianou and Lloyds allegedly agreed that money transferred into the Lloyds-Kyprianou account would be transferred without reference to the remitter's name and directed to Moore-Piacentini. Id. It is alleged that Lloyds not only sanctioned but "itself suggested" the use of pseudonyms to conceal Kyprianou's ownership and control over the accounts. See LaSala Decl. & 43. Furthermore, money was allegedly transferred into that account with reference to "house account" numbers, numbers that are created by a bank for its internal use. Compl. ¶¶ 34, 50, 82. At the time the Lloyds-Kyprianou account was opened, Lloyds is alleged to have known that Kyprianou was Chairman of AremisSoft, a publicly traded United States Company, and that the purpose of the account was depositing the proceeds of the sale of his shares. Id. & 51.

Lloyds is also charged in the complaint with knowledge, actual or constructive, that Kyprianou held AremisSoft stock and received stock options, and that Kyprianou had in November 2000 gifted 1.6 million shares to two unnamed donees. Id. &53. In December 2000, shortly after those "gifts" were made, more than $36 million was transferred into the Lloyds-Kyprianou account in four tranches from two accounts at Bordier et Cie ("Bordier") and Dominick Company AG ("Dominick"), two private Swiss banks. Id. & 54. On January 3, 2001 and February 9, 2001, Lloyds received transfers of $7,500,00 and $781,536 from an account at Bordier in a different name. Id. & 55. These were proceeds of the sale of stock after exercise of AremisSoft options that Kyprianou had gifted through another alter ego entity. Id. All together, Kyprianou is alleged to have laundered more than $44 million in furtherance of this scheme. Id. ¶¶ 19, 58. It is alleged that Lloyds' failure to take measures to clarify the identity of the beneficial owner on the account and its permissive practices with respect to the Lloyds-Kyprianou account, such as receiving payments that did not reference the remitter's name or account number, made it possible for Kyprianou to launder his ill-gotten funds through Lloyds' accounts. Id. ¶¶ 50, 82.

Additionally, the complaint alleges that Lloyds created a false document that aided Kyprianou in his fraud. In response to an audit inquiry concerning the cash in AremisSoft's bank accounts from Pavlos Meletiou, a co-conspirator of Kyprianou who purported to act as AremisSoft EE.ME.A's auditor, Lloyds issued a letter (the "Confirmation Letter") in March 2001 stating that since December 29, 2000, Lloyds was holding $9.98 million "blocked in favour of AremisSoft (EE.ME.A) Ltd." Id. ¶ 61. The Confirmation Letter was signed by Moore-Piacentini and Sylvie Orsatti, the Assistant Manager at Lloyds. Id. Lloyds, however, allegedly did not hold $9.98 million blocked in favor of AremisSoft; neither AremisSoft EE.ME.A nor any other AremisSoft entity had an account at Lloyds, as the "supposedly blocked funds, if ever blocked at all, were in an account in the name of, or for the benefit of, Kyprianou." Id. ¶ 63. This letter, which was relied on by the Company's auditors in preparing their opinion on the finances of the Company and by the Company itself, caused AremisSoft to include false and misleading information in its publicly filed financial statements, delaying the discovery of the fraud. Id. ¶66.

Despite the media reports appearing in May of 2001 raising red flags about AremisSoft, Lloyds continued to do business with Kyprianou, permitting him to open an account in the name of AremisSoft EE.ME.A in June of 2001, even though that entity had no offices, personnel, or business operations in Switzerland. Id. ¶ 69. On June 8, 2001, Lloyds transferred over $10 million (the $9.9 million supposedly "blocked in favour of AremisSoft Ltd" plus interest) from the Kyprianou account to the newly opened Lloyds-EE.ME.A account. Id. ¶ 70. On June 29, 2001, after disclosure of fraud in the reporting of revenues generated by a healthcare contract in Bulgaria, Lloyds permitted transfer of $200,000 from this account to another account in Sofia, Bulgaria. Id. The complaint maintains that even after Kyprianou had been indicted for money laundering, Lloyds permitted at least three transfers to Kyprianou accounts at the bank. Id. & 80. Nearly all transfers referenced Moore-Piacentini. Id. ¶¶ 78, 80. Lloyds's conduct with regard to these accounts, it is maintained, frustrated the tracing of the proceeds of Kyprianou's fraud. LaSala Decl. & 4.

The complaint states five counts. Counts I-IV allege aiding and abetting a breach of fiduciary duty, aiding and abetting fraud, fraud, and negligent misrepresentation. Count V is a tort claim arising under Swiss law for alleged violations of the Swiss Penal Code ("SPC") and the Federal Act on Prevention of Money Laundering in the Financial Sector ("Money Laundering Act"). The Money Laundering Act requires banks to verify the identity of the customer opening an account by examining proper documentation, requires banks to identify the beneficial owner of the assets in the account if the customer is not the owner, and requires additional investigation and reporting measures where a customer engages in unusual transactions or there is reason to suspect that assets in the account are proceeds of criminal conduct. Compl.&107. Article 305ter of the SPC prohibits financial intermediaries from accepting, holding on deposit, investing, or transferring assets or failing to determine the identity of the beneficial owner of the assets without the necessary diligence required by circumstances, see id. & 105; and Article 305bis of the SPC prohibits anyone from taking action to frustrate the discovery, tracing, or recovery of funds he or she knows or must assume are the proceeds of criminal conduct, see id. & 106. Plaintiffs contend that civil damages are available under Article 41 of the Swiss Code of Obligations ("CO") for violations of Articles 305ter and 305bis of the SPC as well as for violations of the Money Laundering Act, and they contend that Article 55 of the CO, which sets forth circumstances under which a principal is liable for damages caused by its employees, is also applicable. Id. & 109.

D. Judge Pisano's Decision

After defendant's motion had been filed but before it was fully briefed, District Judge Pisano dismissed a similar case brought by the same plaintiffs in the District of New Jersey against two private Swiss banks. See LaSala & Zeidman v. Bordier et Cie & Dominick, 452 F. Supp. 2d 575 (D. N.J. 2006). The complaint in that case had, like the complaint at bar, asserted tort and Swiss law claims. Judge Pisano dismissed all the claims on the ground that the entire action was preempted by SLUSA. Id. at 579-91.

In that case, defendants had filed a separate motion to dismiss on the basis of forum non conveniens and lack of personal jurisdiction, but "contend[ed] that dismissal under SLUSA . . . is a subject matter jurisdiction inquiry pursuant to Rules 12(b)(1) and 12(h)(3)." 452 F. Supp. 2d at 577 n.1.While Judge Pisano noted that the case had been brought on the basis of diversity jurisdiction, he said, "The Court need not resolve whether this motion is properly brought pursuant to Rule 12(b)(1) and/or Rule 12(h)(3)," because the parties agreed that SLUSA would be addressed before other pending motions and the outcome of his SLUSA analysis rendered the other pending motions moot. Id.

SLUSA preemption is certainly a question of subject matter jurisdiction when the case comes to federal court via removal from a state court. See Spielman v. Merrill Lynch et al., 332 F.3d 116, 122-25 (2d Cir. 2003); Aruaujo v. John Hancock Life Ins. Co., 206 F. Supp. 2d 377, 380 (E.D.N.Y. 2002). For claims that fall within SLUSA, the statute preempts actions removed from state courts "by essentially converting a state law claim into a federal claim," Spielman, 332 F.3d at 123, and then mandating its dismissal. As Judge Lynch of this Court has pointed out, however, the statute contains separate provisions concerning "preemption as a jurisdictional mechanism requiring removal" and "preemption as a defense to state-law claims."Winne v. Equitable Life Assurance Soc. of U.S, 315 F. Supp. 2d 404, 409 (S.D.N.Y. 2003). Preemption therefore appears in SLUSA in the form of both a jurisdictional provision and a failure to state a claim provision. Normally, as Judge Newman pointed out in a concurring opinion in Spielman, the two are "the opposite sides of the same coin." Spielman, 332 F.3d at 132. See also Winne, 315 F. Supp. 2d at 409. The case at bar was not removed from a state court to this Court. Plaintiffs initially filed their complaint in this Court on the basis of diversity of citizenship. In consequence, SLUSA is a preemption defense and, as such, one of a number of preliminary grounds for dismissal, among which a judge has discretion to choose when deciding whether to dismiss a case. See Sinochem Int' l Co. Ltd. v. Malaysia Int' l Shipping Corp., 127 S.Ct. 1184, 1186 (2007) (a federal court "has leeway to choose among threshold grounds for denying audience to a case on the merits") (citation and internal quotation marks omitted). In the exercise of that discretion, I consider first the forum non conveniens ground for dismissal.

II. DISCUSSION

A. Forum Non Conveniens

The doctrine of forum non conveniens permits a court to dismiss an action "even if the court is a permissible venue with proper jurisdiction over the claim." Carey v. Bayerische Hypo-Und Verinsbank AG, 370 F.3d 234, 237 (2d Cir. 2004) (citation omitted). A district court should dismiss a complaint where, on balance, the resolution of the matter in an adequate alternative forum would be more convenient for the parties and courts and more just. See R. Maganlal & Co. v. M.G. Chem. Co., 942 F.2d 164, 167 (2d Cir. 1991) ("The central purpose of a forum non conveniens inquiry is to determine where trial will be most convenient and will serve the ends of justice."). "The first step in a forum non conveniens analysis is for the court to establish the existence of an adequate alternative forum. Second, the court must determine the level of deference to accord the plaintiff's choice of forum. Third, the court must weigh the public and private interests in order to determine which forum will be most convenient and will best serve the ends of justice." USHA (India), Ltd. v. Honeywell Int' l, Inc., 421 F.3d 129, 134 (2d Cir. 2005) (emphasis in original) (internal quotation marks omitted).

A decision to dismiss "lies wholly within the broad discretion of the district court and may be overturned only when we believe that discretion has been clearly abused." Honeywell International, 421 F.3d at 134 (emphasis in original) (internal quotation marks omitted). "In the last analysis, it always must be borne in mind that there is no algorithm that assigns precise weights to the factors that inform forum non conveniens determinations. The doctrine instead is intensely practical and fact-bound. The most that may be said is that courts reach informed judgments after considering all of the pertinent circumstances." First Union Nat' l Bank v. Paribas, 135 F. Supp. 2d 443, 448 (S.D.N.Y. 2001), aff' d sub nom., First Union Nat'l Bank v. Arab African Int' l Bank, 48 Fed. Appx. 801 (2d Cir. 2002) (unpublished opinion).

1. Adequacy of the Alternative Forum

An alternative forum is adequate "if the defendants are amenable to service of process there, and if it permits litigation of the subject matter of the dispute." Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 75 (2d Cir. 2003). The test does not mean that the same degree of relief must be available in the alternative forum. See Fitzgerald v. Texaco, Inc., 521 F.2d 448 (2d Cir. 1975) (district court "has discretion to dismiss an action under the doctrine of forum non conveniens, . . . even though the law applicable in the alternative forum may be less favorable to the plaintiff's chance of recovery"). "Absent . . . a fundamental obstacle to a plaintiff's recovery . . . American courts are not prone to characterizing a sovereign nation's courts as 'clearly unsatisfactory.' International comity plays a part in this context as well." Sussman v. Bank of Israel, 801 F. Supp. 1068, 1076 (S.D.N.Y. 1992), aff' d, 990 F.2d 71 (2d Cir. 1993).

Defendant may properly be sued in Switzerland, see Decl. Ursula Cassani in Supp. Def.'s Mot. Dismiss, dated Jul. 21, 2006 ("Cassani Decl."), ¶¶ 42-45, and thus only the second part of the test is at issue. The parties agree that if this case were tried in Switzerland, and Swiss law were applied, Swiss law affords plaintiffs "no causes of action analogous to Counts I through IV of the complaint." Pl.'s Mem. in Opp'n, at 9 (citing Cassani Decl. ¶¶ 99-110; Decl. Mark Pieth in Supp. Pl.'s Mem. in Opp'n, dated Sept. 21, 2006 ("Pieth Decl."), ¶¶ 69-73). Plaintiffs contend that since "Switzerland does not recognize the majority of the AremisSoft Trust's claims," it is an inadequate alternative forum. Id. The Second Circuit, however, has made it abundantly clear that "[t]he availability of an adequate alternate forum does not depend on the existence of the identical cause of action in the other forum," PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 74 (2d Cir. 1998). Cf. Zweig v. Nat' l Mortgage Bank of Greece, No. 91 Civ. 5482, 1993 WL 227663, at *9 (S.D.N.Y. June 21, 1993) (plaintiffs' contention that only one legal remedy remains in Greece due to tolling of Greek statute of limitations is incorrect and thus plaintiffs have "a number of options that remain viable" and there is no "fundamental obstacle" to plaintiffs' recovery). Courts in this district have in some cases found overseas fora inadequate where plaintiffs have sued under particular U.S. statutory regimes, see Greenlight Capital, Inc. v. Greenlight (Switzerland) S.A., No. 04 Civ. 3136, 2005 WL 13682, at *5 (S.D.N.Y. Jan. 3, 2005) (inadequacy of alternative forum stemmed from the fact that "[t]rademark rights are largely territorial, as they exist in each country solely according to that country's statutory scheme") (citation and some internal quotation marks omitted)). However, the present plaintiffs' causes of action that will fail in Switzerland are not based on U.S. statutory law but rather on common law tort. The mere fact that Switzerland's tort law does not provide the same causes of action as ours does not render it inadequate. In addition, where portions of Swiss law are designed to prevent banks from facilitating money laundering, it cannot be said that the forum fails to permit "litigation of the subject matter of the dispute." Consequently, the courts of Switzerland constitute an adequate alternative forum.

2. Deference Due to Plaintiffs' Choice of Forum

The adequacy of the alternative forum having been determined, the next question is the amount of deference to be given plaintiffs' choice of forum. In cases with foreign defendants, the home forum for the plaintiff is any federal district in the United States, not the particular district in which the plaintiff lives. Guidi v. Inter-Continental Hotels Corp., 224 F.3d 142, 146 (2d Cir. 2000); Jacobs v. Felix Bloch Erben Verlag fur Bhune Film und Funk KG, 160 F. Supp. 2d 722, 743 (S.D.N.Y. 2001). Thus in this case I must consider the deference that should be given plaintiffs' choice to sue in the United States (not New York specifically) as opposed to Switzerland.

In the Second Circuit, the "degree of deference to be given to a plaintiff's choice of forum moves on a sliding scale depending on several relevant considerations." Iragorri v. United Techs. Corp., 274 F.3d 65, 71 (2d Cir. 2001) (en banc). Considerations include "the plaintiff's or the lawsuit's bona fide connection to the United States and to the forum of choice," which encompasses "convenience of the plaintiff's residence in relation to the chosen forum, the availability of witnesses or evidence to the forum district." Id. at 72. Plaintiffs argue that they fall at a very high point on this sliding scale. They maintain that they have a significant connection to the United States, as this is where AremisSoft was incorporated, where the bankruptcy Trust was established, and where the beneficiaries of the Trust are located. See Pl.'s Mem. in Opp'n, at 6-8. They also argue that their choice of forum was motivated by factors of convenience rather than forum shopping. See id. at 7. I agree that plaintiffs have significant ties to the United States and legitimate reasons for preferring to prosecute this action in the United States, such as convenience and expense and their interest in having an American judge decide issues that they maintain arise under American law.

However, in the Second Circuit, deference is diminished when "plaintiff is a corporation doing business abroad and can expect to litigate in foreign courts." Guidi v. Inter-Continental Hotels Corp., 224 F.3d 142, 147 (2d Cir. 2000). See Morrison Law Firm v. Clarion Co., Ltd., 158 F.R.D. 285, 287 (S.D.N.Y. 1994) ("The private interest of plaintiffs in suing in its [sic] home location is diluted because it chose to do business with Japanese firms and to seek their custom, making it logical that they be required to litigate there, a result which should not expose plaintiff to surprise."); CCS Int' l, Ltd. v. ECI Telesystems, Ltd., No. 97 Civ. 4646, 1998 WL 512951, at *7 (S.D.N.Y. Aug. 18, 1998) (while "it remains defendants' burden to overcome the forum choice made by these American-citizen plaintiffs," for plaintiffs "who are involved in a decidedly international dispute such as this, their American citizenship and residence do not constitute the powerful, near-decisive factors for which they contend") (citation and internal quotation marks omitted). A plaintiff's choice of forum is also "given reduced emphasis where . . . the operative facts upon which the litigation is brought bear little materialconnection to the chosen forum." Nieves v. Am. Airlines, 700 F. Supp. 769, 772 (S.D.N.Y. 1988). See also Zweig, 1993 WL 227663, at *4 (notwithstanding plaintiff's American citizenship and residency, dismissal in favor of Greece is warranted because operative facts on which the litigation was based bore little connection to New York).

Plaintiffs are not a corporation doing business abroad, but they are suing on behalf of a trust whose governing document specifically authorizes litigation abroad. Plaintiffs have already litigated in several foreign countries. See Compl. ¶¶ 31-36. Plaintiffs therefore more closely resemble a corporation with substantial resources than ordinary citizens of comparatively modest means. See Carey, 370 F.3d at 238 (in the case of an "individual of modest means," this "individual's choice of the home forum may receive greater deference than the similar choice made by a large organization which can easily handle the difficulties of engaging in litigation abroad"). Moreover, the operative facts of this litigation unquestionably took place in Switzerland. See infra Part II.A.3.b. I therefore conclude that while plaintiffs' choice of forum is entitled to some deference, it does not operate at full strength.

Additionally, I note that "[a] citizen's forum choice should not be given dispositive weight. . . . [D]ismissal should not be automatically barred when a plaintiff has filed suit in his home forum. As always, if the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court, dismissal is proper." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 n. 23 (1981) (citations omitted). See also Wiwa v. Royal Dutch Petroleum Co.,226 F.3d 88, 102 (2d Cir. 2000) (There is no "rigid rule of decision protecting U.S. citizen or resident plaintiffs from dismissal for forum non conveniens"; rather, a court "must take into account the hardship dismissal would cause to a resident plaintiff"); Paribas, 135 F. Supp. 2d at 447 ("[T]he weaker the connection between a plaintiff's U.S. activities, even those of a U.S. plaintiff, and the events at issue in the lawsuit, the more likely it is that defendants attacking the plaintiff's choice of a U.S. forum will be able to marshal a successful challenge to that choice.").

Courts in this Circuit have numerous times dismissed suits by an American citizen or entity in favor of a foreign jurisdiction. See, e.g., Alcoa Steamship Co., Inc. v. M/V Nordic Regent, 654 F.2d 147 (2d Cir. 1978) (en banc) (in suit by American corporation, Trinidad held to be more appropriate forum); Farmanfarmaian v. Gulf Oil Corp., 588 F.2d 880 (2d Cir. 1978) (dismissing suit by Iranian national on the basis of forum non conveniens despite treaty that mandated court access equivalent to American citizen); Telephone Sys. Int' l, Inc. v. Network Telecom PLC, 303 F. Supp. 2d 377, 384-85 (S.D.N.Y. 2003) (dismissing in favor of United Kingdom despite presumption in favor of American corporation's choice of United States forum because "[t]hat presumption in favor of a plaintiff's convenience is not absolute and may be outweighed"); Realuyo v. Villa Abrille, No. 01 Civ. 10158, 2003 WL 21537754, at *4 (S.D.N.Y. Jul. 8, 2003) (finding, in concluding that the Philippines would be more appropriate jurisdiction, that "[a]lthough [American plaintiff's] forum choice warrants great deference, it is in this case outweighed by every other consideration"); Paribas, 135 F. Supp. 2d at 447; Panama Processes S.A. v. Cities Serv. Co., 500 F. Supp. 787, 792 (S.D.N.Y. 1980) (American citizenship has "no particular effect" where other factors favor dismissal), aff' d, 650 F.2d 208 (2d Cir. 1981).

In this case, because plaintiffs are not an entity that stands to experience hardship of the kind that would be suffered by an individual plaintiff of modest means, I conclude that the deference due to plaintiffs is not so significant as ...


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