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Taub v. Marchesi Di Barolo S.P.A.

December 10, 2009

DAVID S. TAUB AND MARC TAUB, PLAINTIFFS,
v.
MARCHESI DI BAROLO S.P.A., DEFENDANT.



The opinion of the court was delivered by: Spatt, District Judge.

MEMORANDUM OF DECISION AND ORDER

On February 12, 2009, David Taub and Marc Taub ("the Plaintiffs"), officers of Palm Bay International, Inc. ("Palm Bay"), filed this lawsuit against Marchesi Di Barolo, S.p.A. ("Marchesi"), alleging damages arising from Marchesi's termination of the parties' Agency Agreement. Eight days earlier, Marchesi commenced a separate action in an Italian court against Palm Bay. Presently before the Court is Marchesi's motion to dismiss the complaint based on forum non conveniens and in deference to the Italian litigation. In the alternative, Marchesi seeks to consolidate this action with a related case, Palm Bay International v. Marchesi Di Barolo, S.p.A., 09-CV-601 (ADS) (AKT) ("the Palm Bay Suit"), pending before the Court.

I. BACKGROUND

The Plaintiffs are officers ofPalm Bay, a wine importer with corporate offices in both Florida and Long Island. Marchesi is an Italian company that produces, bottles, and distributes Italian wines. In 1994, Palm Bay entered into a written agreement ("the Importation Agreement") with Marchesi for the exclusive right to import Marchesi's wine in the United States. Marchesi also entered into an Agency Agreement with the Plaintiffs whereby the Plaintiffs would act as the exclusive sales agents of Marchesi wine.

In January of 2008, Palm Bay received numerous complaints from customers concerning defective wine supplied by Marchesi. According to Palm Bay, the wine had a "noxious smell and taste" and, in some cases, customers reported that the bottles exploded or shattered. Palm Bay recalled the offending wine, allegedly incurring costs of $1.7 million and then sought reimbursement from Marchesi. Marchesi alleges that it attempted to "cure" the defective product and resolve the dispute in good faith. Nevertheless, after the parties were unable to reach a resolution, Palm Bay deducted $650,000 from an invoice it owed to Marchesi in order to offset losses incurred as a result of the recall. Marchesi responded by terminating the Importation Agreement and the Agency Agreement.

On February 4, 2009 Marchesi brought suit in an Italian court seeking a declaration that:

(1) Terrenostre SCA ("Terrenostre"), a third party that bottled the wine, is liable for the defective wine; (2) Palm Bay's claim of $1.7 million is baseless; (3) Marchesi does not owe Palm Bay any amount in damages; and (4) in the event that the court finds for Palm Bay, Terrenostre must indemnify Marchesi. In the present action before this Court, the Plaintiffs seek: (1) a declaratory judgment that Marchesi improperly terminated the Agency Agreement; (2) $1.5 million in damages arising from Marchesi's alleged breach of the Agency Agreement; and (3) a permanent injunction preventing Marchesi from terminating the Agency Agreement. In the Palm Bay Suit, which is also pending before this Court, Palm Bay seeks damages of $1.7 million stemming from the defective wine and $10 million in damages arising from Marchesi's termination of the Importation Agreement.

Marchesi now seeks dismissal of the complaint based on forum non conveniens and in deference to the pending Italian litigation. In the alternative, Marchesi requests that the Court consolidate this action with the Palm Bay Suit.

II. DISCUSSION

A. Standard - Forum Non Conveniens

The Second Circuit has outlined a three step analysis to evaluate a motion to dismiss based upon forum non conveniens. First, a court must determine the degree of deference owed to a plaintiff's choice of forum. Iragorri v. United Tech. Corp., 274 F.3d 65, 70-72 (2d Cir. 2001). Second, a court must ask whether there is an adequate alternative forum. Iragorri, 274 F.3d at 73. Finally, if an adequate alternative forum exists, a court must balance the private and public interests at stake to determine if the defendant has overcome the deference owed to the plaintiff's choice of forum. Id. at 73-75.

"In considering these factors, the court is necessarily engaged in a comparison between the hardships defendant would suffer through the retention of jurisdiction and the hardships the plaintiff would suffer as the result of dismissal and the obligation to bring suit in another country." Id. at 74. Ultimately, the decision to dismiss a case based on forum non conveniens is "committed to the district court's discretion." Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 99 (2d Cir. 2000).

1. The Deference Owed to the Plaintiff's Choice of Forum

There is a strong presumption that a plaintiff has a right to choose his forum. See Gulf Oil Corp v. Gilbert, 330 U.S. 501, 509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). This presumption is particularly strong when a plaintiff has chosen to commence a lawsuit in his home forum. Iragorri, 274 F.3d at 71 (citing Koster v. ( Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518, 524, 67 S.Ct. 828, 91 L.Ed. 1067 (1947), and Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255-56, 256 n. 23, 102 S.Ct. 252 (1981)). Accordingly, "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Gilbert, 330 U.S. at 508.

The Second Circuit has instructed courts to use a sliding scale to determine the appropriate level of deference owed to the plaintiff's choice of forum. Under this sliding scale, "the 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." Iragorri, 274 F.3d at 72.

Here, the Plaintiffs are New York residents and have chosen to litigate this dispute in their home forum. As such, the Plaintiffs' choice of forum is ...


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