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Huang v. Advanced Battery Technologies

May 26, 2010


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge


This action arises out of an employment agreement for a Chief Technology Officer at a publicly held battery manufacturer in China. Plaintiff Sui-Yang Huang ("Plaintiff" or "Huang"), a United States citizen who resides primarily in China, brings this action against Defendant Advanced Battery Technologies, Inc. ("Defendant" or "ABAT"), a Delaware corporation with production facilities in China, for breach of the terms of his employment contract. Huang also claims to have suffered intentional infliction of emotional distress due to death threats that he received after bringing suit. ABAT moved to dismiss on forum non conveniens grounds and for failure to state a claim. Huang opposed the motion and filed a cross-motion for summary judgment. For the reasons that follow, ABAT's motion to dismiss is GRANTED on forum non conveniens grounds. As such, I need not reach Plaintiff's motion for summary judgment.


Huang is a United States citizen with residences in Pleasanton, California and Schenzhen, Guandong Province, China. He currently resides in China, where he has three homes, along with his partner and their child. Plaintiff has some twenty-five years of experience in chemical engineering, and over twenty-one years experience "in the Chinese battery industry." Am. Compl. ¶ 6. He claims to hold seven United States and twenty Chinese patents "related to the design and manufacture of batteries." Id. Huang is also a professor at South China University of Technology and a researcher for the Chinese Academy of Sciences. Defendant ABAT is a corporation that manufactures and distributes polymer lithium-ion batteries. ABAT is incorporated in Delaware and has a New York office. All but one of ABAT's executives, as well as its production facilities and "headquarters," are located in Harbin, China.

Huang was the founder and CEO of a company called Luke Battery Corporation ("LBC"),*fn1 and his father financed its formation and was its sole shareholder. On August 30, 2008, Huang, acting as an agent for his father, entered into an acquisition agreement with ABAT Chairman and CEO Zhiguo Fu ("Fu") to sell LBC to ABAT for one million dollars. In conjunction with the sale, the company was renamed Shenzhen Advanced Battery Technologies Co., or "SABAT." Contemporaneously, Huang entered into two other agreements with ABAT that pertained directly to him. In the first agreement, Huang licensed all of his patents to ABAT. Additionally, ABAT agreed to employ Plaintiff as the company's Chief Technology Officer for five years from September 1, 2008 to August 31, 2013 for a salary of $60,000 in U.S. dollars per year, as well as to provide him with 200,000 shares of ABAT stock. The second agreement*fn2 provided for an additional 100,000 shares of ABAT stock to be transferred to a designee of Huang's choice.

The nub of this dispute is over precisely when Huang was to receive the shares of stock. According to Defendant's translation, ABAT agreed to provide the 200,000 shares "during the time after the effective date of the contract, which Party A is responsible for completing no later than November 30, 2008," or according to one of Plaintiff's translations, "[a]fter this Contract has become effective -- and on November 30, 2008." McPherson Decl., Ex. A; Huang Decl., Ex. E.*fn3 The agreement to provide 100,000 shares to Huang's designee "shall be completed on September 30, 2008" or was "concluded on September 30, 2008," depending on Plaintiff's translation.*fn4 Am. Compl., Ex. C; Huang Decl., Ex. E. Plaintiff interpreted this to mean that his designee would receive all 100,000 shares on September 30, 2008, and he would receive all 200,000 shares on November 30, 2008. Defendant, on the other hand, claims the shares were intended to be distributed on a pro rata basis over the five years of Plaintiff's employment.

According to Huang, neither he nor his designee received the shares by what he believed were the deadlines. When Plaintiff confronted CEO Fu about this, Fu allegedly told Huang that "it would take until the end of the year to make the transfers." Am. Compl. ¶ 11. In early January 2009, Plaintiff received 40,000 of the 200,000 shares, while his designee received 20,000 of the 100,000 shares, consistent with Defendant's projected pro rata payments. Plaintiff claims that this was not the agreement, and Fu actually told Huang that he "changed his mind and would not follow the contracts" because he was "afraid Huang would quit once he received his shares." Am. Compl. ¶ 13.

On August 4, 2009, Fu allegedly informed Plaintiff by letter that due to a "job change," Huang would not longer be paid by ABAT, and instead would now be paid by SABAT at the greatly reduced salary of $17,000 per year. Id. ¶ 14. Huang continued to seek the remaining shares, did not receive them, was "threatened [by Fu].about bringing any litigation," and ultimately brought suit on September 30, 2009. Id. at ¶15. Plaintiff claims that the day after he filed suit, he received death threats via text message to his cell phone directed at him and his family. On October 25, 2009, Plaintiff was allegedly fired as ABAT's CTO by Fu, and directed to "work at an ABAT facility located over 1,800 miles from his home." Id. at ¶ 16. By contrast, Defendant claims that Plaintiff failed to perform his job duties, failed to report to work regularly, ignored direct orders from the CEO, did not respond to a request to check problems at a facility in October, was provided two formal notices to perform his job duties, and was ultimately terminated in November 2009.

Huang brings causes of action for breach of contract, intentional infliction of emotional distress, retaliation, breach of implied contractual covenant of good faith, and prima facie tort. Defendant moved to dismiss the action on forum non conveniens grounds, or alternatively to dismiss the tort and implied contract claims for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Defendant believes this action would be better suited for litigation in China, where ABAT's primary facilities are located, where the agreement was negotiated, and where Plaintiff was employed. Plaintiff opposed the motion and cross-moved for partial summary judgment on his breach of contract claim. Oral argument was held on March 22, 2010.


A.Legal Standard

"[T]he doctrine of forum non conveniens contemplates the dismissal of lawsuits brought by plaintiffs in their favored forum in favor of adjudication in a foreign court." Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 101 (2d Cir.2000). A district court has "broad discretion" to apply this principle. Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 153 (2d Cir. 2005). The Second Circuit has "outlined a three-step process to guide the exercise of that discretion." Id. That process requires the court to (1) determine the degree of deference accorded to the plaintiff's forum choice; (2) consider the adequacy of the alternative forum to adjudicate the dispute; and (3) balance the private and public interests implicated by the choice of forum. Id. at 153 (citing Iragorri v. United Tech. Corp., 274 F.3d 65, 73-74 (2d Cir. 2001)); see also Aracruz Trading Ltd. v. Japaul Oil and Mar. Servs., PLC, No. 08 Civ. 3511(JGK), 2009 WL 667298, at *2 (S.D.N.Y. Mar. 16, 2009).

B. Deference to Plaintiff's Forum Choice

Generally speaking, a plaintiff's choice of forum is entitled to significant deference. "Unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Iragorri, 274 F.3d at 70-71 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). The Second Circuit found that the deference accorded to a plaintiff's choice of forum should be weighed on a "sliding scale depending on several relevant considerations." Iragorri, 274 F.3d at 71. Chiefly, the court must look at whether the choice was made due to a "bona fide connection" with the forum or for forum shopping purposes. Id. at 72. A court should consider the "totality of circumstances" that support or undermine the deference accorded to this choice. Norex, 416 F.3d at 155. Factors that counsel against dismissal include "the convenience of the plaintiff's residence in relation to the chosen forum, the availability of witnesses or evidence to ...

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