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O'Donnell v. Club Mediterranee S.A.

March 21, 2008

GRACE-MARIE O'DONNELL, PLAINTIFF,
v.
CLUB MEDITERRANEE S.A., CLUB MED, INC., CLUB MED HOLDING, N.V., CLUB MED FINANCE B.V., CLUB MED SALES, INC., HOLIDAY VILLAGES : (PROVINCIALES TURKS AND CAICOS), LTD., AND CLUB MEDITERRANEE (BAHAMAS) LTD., DEFENDANTS.



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

NOT FOR ELECTRONIC OR PRINT PUBLICATION

OPINION AND ORDER

Plaintiff, Grace-Marie O'Donnell, brought this personal injury action against defendants, several entities belonging to the Club Med group, in New York State Supreme Court, Kings County, on October 13, 2004. On February 2, 2005, defendants removed the action to this court pursuant to 28 U.S.C. § 1332(a)(2), invoking this court's diversity jurisdiction. Plaintiff moved to remand this matter to state court and defendants moved to dismiss the action on the ground of forum non conveniens. For the reasons set forth below, both motions are denied.

BACKGROUND

A. The Parties

1. Plaintiff

Plaintiff, Grace-Marie O'Donnell, is a resident of Kings County, New York. Compl. at ¶ 1. She purchased a vacation package from defendant Club Med Sales, Inc. through Liberty Travel Agency in Oceanside, New York. The terms of the package included plaintiff's meeting with a Club Med Sales representative at JFK International Airport on October 13, 2001, and thereafter boarding a chartered flight to a resort villa in the Turks & Caicos Islands, which was owned and operated by another Club Med entity. See Ex. 8 to Pltf.'s Mot. for Remand (Dkt. No. 47-8).*fn1

According to the complaint, on October 15, 2001, plaintiff set out on a scuba diving expedition arranged by Club Med, specifically by defendant Hotel and Villages (Providenciales Turks & Caicos), on a dive boat named "Bat Ray." Compl. at ¶ 39. At some point during the excursion, plaintiff abandoned the dive and attempted to board the boat by climbing a side ladder, which provided access between the water and the boat. Id. According to the complaint, the ladder was slippery and the dive boat did not have a lookout on board to help plaintiff climb on board. Plaintiff slipped as she was trying to board the Bat Ray and suffered an ankle fracture, for which she was treated immediately by a physician in Turks & Caicos. Id.

Plaintiff then returned to New York on October 17, 2001. As a result of her injuries, she required surgical intervention on October 22, 2001, at Sisters of Charity Medical Center in Staten Island, New York, and on January 28, 2003, at Saint Vincent's Hospital, also in Staten Island. See Pltf.'s Aff. in Supp. of Mot. for Remand at ¶¶ 11-12 (Dkt. No. 47-1).

2. Defendants

The instant action lists seven (7) defendants, which are referred to herein collectively as "defendants" or "Club Med."

Defendant Club Méditerranée, S.A.,is a corporation organized in France as a "société anonyme" that is "in the business of owning, operating, and developing vacation resorts and hotels." See Decl. of Edouard Silverio and Attachment Thereto, submitted as Ex. A to Defs.' Opp. to Remand (Dkt. No. 48-1) (hereinafter "1st Silverio Decl."). In essence, Club Méditerranée, S.A. is the global parent of a network of corporations that own and operate vacation resorts and hotel businesses throughoutthe world; it is a publicly traded company with share capital of more than € 77.4 million and market capitalization of € 761 million, as of the end of 2005,see Club Méditerranée Annual Report 2005 submitted as Ex. 12 to Pltf.'s Aff. in Supp. of Mot. for Remand at 1, 12-13 (Dkt. No. 47-12) (hereinafter "Club Méditerranée 2005 Report"). It owns subsidiaries, directly and indirectly, in 40 countries, see id.; Club Méditerranée Group Consolidated Financial Statements, submitted as Ex. I to Defs.' Opp. to Remand, at 80-85 (Dkt. No. 48-9) (hereinafter "2005 Financial Statements").Although the operations of the Club Méditerranée subsidiariesspan the globe, the general counsel of the company has attested that the company has its main office in Paris, France, that the "overwhelming majority of corporate officers work in the Paris office," and that the majority of the company's corporate and business decisions are made in France. See 1st Silverio Decl. at ¶ 3. In addition, Club Méditerranée does not share any directors or officers with any of the other defendants, see id. at ¶¶ 7-13; it keeps separate office space, bank accounts, and books and records from each of the other defendants, and files separate tax returns. See id. at ¶¶ 14-16.Club Méditerranée, S.A. is not authorized to do business in, and does not own any real property or have any corporate offices in New York. See id. at ¶ 4.

Defendant Club Med, Inc. was a wholly owned subsidiary of Club Méditerranée, organized as a corporation in the CaymanIslands, with its head office located in the Cayman Islands. See Club Med, Inc., Certificate of Incorporation, submitted as Ex. C to Defs.' Opp. to Remand (Dkt. No. 48-3); 2005 Financial Statements at 109; Decl. of Eileen Kett, submitted as Ex. B. to Defs.' Opp. to Remand (Dkt. No. 48-2) at ¶ 6 (hereinafter "1st Kett Decl."). The company was dissolved in March of 2007. See Ex. C. to Defs.' Opp. to Remand.Before its dissolution, Club Med, Inc. was, like its parent Club Méditerranée, in the business of managing hotel and resort businesses, as well as travel agencies and tour operators for those businesses, see id. It was not authorized to do business in New York, nor did it own any real property or have any corporate offices in New York. See 1st Kett Decl. at ¶ 7.

Defendant Club Med Sales, Inc., is a wholly owned subsidiary of Club Méditerranée, S.A., incorporated in the State of Delaware with its headquarters in Coral Gables, Florida.According to the declaration of its general counsel, Eileen Kett (who is also one of Club Med Sales, Inc.'s vice-presidents), Club Med Sales is authorized to do business in at least 8 states, including New Jersey and New York, and it has employed airport representatives in other states. See 1st Kett Decl. at ¶ 4. However, Club Med Sales has corporate offices only in Arizona and Florida, and, according to Kett, the "overwhelming majority" of its employees are located in those two states. Id. at ¶ 3. In addition, Club Med Sales, Inc. did not, at the time of commencement of this action, have any corporate offices, telephone listings, or real property in New York, id. at ¶ 5, nor did it have more than eight employees in New York. Id. Club Med Sales is the entity from which plaintiff purchased the vacation package that is at issue in this case, see Ex. 8 to Pltf.'s Mot. for Remand. At times, Club Med Sales did business simply as "Club Med." See, e.g., Ex. 8 to Pltf.'s Mot. for Remand (statement of plaintiff's vacation purchase from Club Med Sales, Inc., bearing a "Club Med" logo).

Defendant Hotel Villages (Providenciales Turks & Caicos), Ltd., hereinafter referred to as "Providenciales," is a limited liability corporation organized under the laws of Turks & Caicos, in the British West Indies, see Ex. E to Defts.' Opp to Remand, and is a wholly owned indirect subsidiary of defendant Club Méditerranée, S.A. See 2005 Financial Statements at 109; see also Decl. of Eileen Kett submitted as Ex. A. to Defts.' Aff. of 3/3/08, at ¶ 4, (Dkt. No. 54-2) (hereinafter "2nd Kett Decl.") (stating that the sole shareholder of Providenciales since October 2001 has been Club Med Amerique du Nord, S.A., a limited liability company organized under the laws of France); Decl. of Eduardo Silverio submitted as Ex. C to Defts.' Aff. of 3/3/08, at ¶¶ 2-5, (Dkt. No. 54-5) (hereainfater "2nd Silverio Decl.") (stating that Club Méditerranée, S.A. is the sole shareholder of Club Med Amerique du Nord, S.A.).

Like the other named defendants except Club Med Sales, Inc., Providenciales, and its sole shareholder, Club Med Amerique de Nord, S.A., have, at all relevant times, (1) not been authorized to do business in New York State, see 1st Kett Decl. at ¶ 11; 2nd Silverio Decl. at ¶ 4, (2) not owned property in New York State, see 1st Kett Decl. at ¶ 10; 2nd Silverio Decl. at ¶ 4, and (3) not had any officers, directors, or employees working in New York State, see 2nd Kett Decl. at ¶ 4, 2nd Silverio Decl. at ¶¶ 3-4. Providenciales owns the Club Med resorts in Turks & Caicos where plaintiff was on vacation when she was injured, id. At times, it has conducted its affairs simply as "Club Med." See, e.g., Ex. 11 to Pltf.'s Mot. for Remand (boat leasing agreement in which Providenciales is referred to as "Club Med").

Defendant Club Méditerranée (Bahamas), Ltd., herein referred to as Club Med Bahamas, is a wholly owned indirect subsidiary of defendant Club Méditerranée, S.A., organized as a limited liability corporation under the laws of the Commonwealth of the Bahamas, with its principal registered office in the Bahamas. See Ex. F. to Defs.' Opp. to Remand; 2005 Financial Statements at 109; 1st Kett Decl. at ¶ 12. During all periods relevant to this litigation, the shareholders of Club Med Bahamas consisted of Club Med, Inc., as well as nominee shareholders Eoz Limited and Arion Limited, two limited liability companies incorporated under the laws of the Bahamas, not licensed to do business in New York, and owned entirely by citizens of the Commonwealth of the Bahamas. See 2nd Kett Decl. at ¶ 6 (stating membership of Club Med Bahamas); Aff. of Clement T. Maynard III submitted as Ex. B. to Defts.' Aff. of 3/3/08, at ¶¶ 3-6 (Dkt. No. 54-4) (Arion Limited and Eoz Limited are Bahamas limited liability companies not authorized to do business in New York, and with no property, officers, directors, or employees in New York). At times, Club Med Bahamas has conducted its affairs simply as "Club Med." See, e.g., Exhibit to Decl. of Joseph Lemaire, submitted as Ex. B to Defts.' Mot. to Dismiss (boat leasing agreement in which Bahamas referred to as "Club Med").

Finally, defendants Club Med Holding, N.V., and Club Med Finance, B.V., were, up to the moment of their dissolution in early 2001, incorporated in the Netherlands Antilles and the Netherlands, respectively, with their head offices and principal places of business outside of the United States. See 1st Kett Decl. at ¶¶ 8-9; see also Decl. of Francis Beleau submitted as Ex. D to Defts.' Aff. of 3/3/08, at ¶ 1 (Dkt. No.54-6) (hereinafter "Beleau Decl.") (Club Med Holding N.V. had registered office in Netherlands and principal place of business in Luxembourg). Club Med Holding, N.V., was dissolved in Luxembourg upon the acquisition of all of its shares by defendant Club Med, Inc., see Ex. D. to Defs.' Opp. to Remand (indicating that Club Med Holding N.V. was dissolved as of May 2001 upon the decision of its new owner, Club Med, Inc.). Club Med Finance, B.V. was dissolved in Luxembourg on June 29, 2001 by resolution of its sole shareholder, Club Med Asie, S.A. See Beleau Decl. at ¶ 2; see also Certificate of Dissolution submitted as Exhibit to Beleau Decl. In addition, the record indicates that Club Med Asie, S.A. is a limited liability company organized under the laws of, and with its principal place of business in, Luxembourg, see Beleau Decl. at ¶¶ 4-5, and that the only shareholders of Club Med Asie, S.A., have been, at all relevant times, Club Med Amerique du Nord, S.A. and Club Méditerranée, S.A. Id. at ¶ 6.

3. Other Relevant Facts

a. Other Club Med Entities

At least two other non-party entities of the Club Med conglomerate are relevant to this motion. The first is Club Med Management Services, Inc., an indirect wholly owned subsidiary of Club Méditerranée, S.A. See 2005 Financial Statements at 109. It is organized in the State of New York and it is directly owned by defendant Club Med Sales, Inc. See Ex. G to Defs.' Opp. to Remand; 1st Kett Decl. at ¶ 15. Club Med Management Services shares at least three directors and officers with its parent, Club Med Sales, including Vice-President Eileen Kett, as well as office space in Florida. See id. at ¶¶ 21-22. It also appears to file consolidated U.S. federal income tax returns with Club Med Sales. Id. at ¶ 19 (stating that Club Med Management Services files separate tax returns from all defendants except Club Med Sales, Inc., but only "separate state tax returns" from that defendant) (emphasis added).

The second entity is Club Med Boutique, Inc., which was, before its dissolution in early 2003, a New York corporation. See Ex. H to Defs.' Opp. to Remand (indicating dissolution of New York corporation). It had its principal executive office in New York, New York. See Ex. 14 to Pltf.'s Mot. for Remand.

b. Seminole Catamarans and the Lease Agreement

In addition to the defendants, the other relevant party is Seminole Catamarans, Ltd., ("Seminole"), the owner of the boat "Bat Ray" aboard which plaintiff was injured. Seminole is a company incorporated under the laws of Turks & Caicos, see Agreement Between Club Med (Bahamas) and Seminole Catamaran, Ltd., dated May 1, 1999, attached as Ex. 2 to Decl. of Joseph Lemaire (Dkt. No. 45-2) (hereinafter "Boat Rental Agreement"). It is undisputed that Seminole is an entity which is wholly separate in ownership from Club Med. In December of 1997, Seminole entered into an agreement with defendant Club Med Bahamas, by which Seminole agreed to purchase from Club Med Bahamas a number of boats, including the boat "Bat Ray." See Sale Agreement, submitted as Ex. 10 to Pltf.'s Mot. for Remand. As part of the sale agreement, Seminole agreed to leave the Bat Ray at the disposal of Club Med (Bahamas) under a renewable rental agreement for the following five years. Id.

Although it is not clear from the record whether the two parties immediately entered into such a rental agreement, it is clear that Club Med Bahamas and Seminole entered into a rental agreement valid from May 1999 through October 2002, under which Seminole leased the Bat Ray to Bahamas for use in scuba diving expeditions originating from the vacation resort located at Providenciales, Turks and Caicos. See Boat Rental Agreement. In addition, Seminole agreed to purchase general liability insurance, worth at least "$US 50 million per occurrence," to indemnify Club Med for personal and property damages incurred on the boat. Id. Finally, the agreement provides that, although Club Med has exclusive control of the boat throughout the life of the lease, Seminole shall provide the captain and crew of the boat and shall be responsible for making weekly maintenance and repairs. Id.

B. Procedural History

Plaintiff brought the instant action against Club Med on October 13, 2004, in the Supreme Court of the State of New York, Kings County, alleging, inter alia, negligence against the defendants and seeking damages for her injuries. On February 2, 2005, defendant Club Med Sales, Inc., filed a notice of removal of the action from the state court to this court. See Notice of Removal (Dkt. No. 1). The grounds for removal were stated as the diversity of the parties. See id. at ¶ 2. After completing some discovery, plaintiff moved to return this action to state court under 28 U.S.C. § 1447(c), alleging that there is no complete diversity between the ...


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