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In re Optimal U.S. Litigation


October 10, 2012


The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.



On August 10, 2012, this Court issued an Opinion and Order granting defendants' renewed motion to dismiss for forum non conveniens. On August 28, 2012, plaintiffs moved pursuant to Local Rule 6.3 and Rule 59(e) of the Federal Rules of Civil Procedure for reconsideration of the August 10 Opinion on the grounds that the Court "(1) incorrectly consider[ed] facts occurring after the complaint was filed to diminish the level of deference owed to Plaintiffs' choice of forum; and (2) [found] inconveniences where there were none and overlook[ed] pivotal considerations in its analysis of 'how great would be the inconvenience' for Plaintiffs to restart this case in Switzerland."*fn2 For the reasons stated below, the motion is denied.


Motions for reconsideration under Local Civil Rule 6.3 are committed to the sound discretion of the district court.*fn3 "'The standard for granting such a motion is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked'"*fn4 and that "might reasonably be expected to alter the conclusion reached by the court."*fn5

A motion for reconsideration may also be granted to "'correct a clear error or prevent manifest injustice.'"*fn6 A motion for reconsideration is not an opportunity to "advance new facts, issues or arguments not previously presented to the Court,"*fn7 nor is it a substitute for appeal.*fn8


A full discussion of the doctrine of forum non conveniens is contained in the August 10 Opinion.*fn9 Nonetheless, I briefly restate the standard here. Courts may decline to exercise jurisdiction under the doctrine of forum non conveniens when, weighing "relative advantages and obstacles to fair trial" in the alternative fora, and practical considerations of which forum will "make trial of a case [more] easy, expeditious and inexpensive . . . the balance is strongly in favor" of the defendant's request for dismissal in favor of a more convenient forum.*fn10 In deciding whether to dismiss on this ground, courts in this Circuit undertake a three-step analysis set forth in Iragorri v. United Technologies Corp.*fn11 First, courts determine the degree of deference due the plaintiff's choice of forum.*fn12

Second, courts examine whether there is an adequate alternative forum for the dispute.*fn13 Third, courts balance the competing private interests of the parties in the choice of forum, and the public interests of the alternative fora under consideration.*fn14 "The action should be dismissed only if the chosen forum is shown to be genuinely inconvenient and the selected forum significantly preferable."*fn15


When I first denied dismissal for forum non conveniens, I recognized that "the balance of factors was extremely close."*fn16 In reaching that decision, along with deference to plaintiffs' choice of forum I credited "the United States' interest in enforcing violations of federal securities law, and the due diligence efforts conducted in New York."*fn17 While reconsideration of the degree of deference due to plaintiffs' choice of forum was a factor in my ultimate decision to dismiss, it was by no means determinative.*fn18 In granting defendants' renewed motion for forum non conveniens dismissal, I emphasized that plaintiffs' federal securities law claims have been dismissed and the parties have undertaken extensive discovery efforts in Europe. This dispute now concerns claims governed by foreign law under relevant choice-of-law principles, brought by foreign plaintiffs suing mostly foreign defendants based on alleged misstatements made abroad.*fn19

I therefore concluded that "the balance of factors . . . now point strongly towards dismissal."*fn20 Plaintiffs have not pointed to any law or newly available facts that warrant reconsideration, nor have they demonstrated that failure to reconsider the August 10 Opinion will inflict a "manifest injustice" upon them.

A. The Court's Analysis of the Degree of Deference Accorded Plaintiffs' Choice of Forum Does Not Merit Reconsideration Plaintiffs argue that the Court made a "clear legal error" by "re- weighing the Iraggori [sic] convenience factors 'as discovery in this case has progressed,'" to "newly conclude[] 'that plaintiffs' choice of forum is entitled to some, but little deference.'"*fn21 In support of this argument, plaintiffs cite a recent Second Circuit summary order stating that the factors for determining what level of deference to accord a plaintiffs' choice of forum "must be analyzed in reference to . . . the time at which the complaint was filed."*fn22

Here, the Court did not reevaluate the degree of deference due based on "facts that arose or came to light long after the complaint was filed."*fn23 Rather, I concluded that " it has become clear that the focus of discovery is in Europe, which weighs against according plaintiffs' choice of forum deference" and "[g]iven that the focus of discovery has not been the United States, I am less inclined to infer that plaintiffs' choice of forum was motivated by genuine convenience rather than tactical considerations."*fn24 In other words, in applying the Iragorri rule that "we give greater deference to a plaintiff's forum choice to the extent that it was motivated by legitimate reasons,"*fn25 I reconsidered the inferences I had previously drawn about whether plaintiffs' motivation at the time the Complaint was filed was in fact a "bona fide connection to the United States and to the forum of choice."*fn26

The factual bases for these reconsidered inferences -- that most of the relevant documents and important witnesses were located in Europe -- existed and were known as of the filing of the Complaint.*fn27

It is implausible that the Second Circuit intended to preclude a district court from reevaluating the extent to which a plaintiff's forum choice was "motivated by legitimate reasons" if it came to light later in the litigation that plaintiffs had initially misrepresented their claims and intentions with respect to discovery for the purpose of litigating in a Unites States court.*fn28

B. Plaintiffs' Private Interest Arguments Regarding Difficulties of Transferring the Litigation to Switzerland Do Not Merit Reconsideration of the Dismissal Plaintiffs also argue that the Court incorrectly weighed the convenience to defendants of litigating in Switzerland against the inconvenience to plaintiffs of doing so. In support of reconsideration, plaintiffs raise new arguments that the witnesses over whom compulsory process will be gained are not crucial or, in the case of Echevarria, cannot be compelled to testify in Switzerland and reassert the need for testimony from U.S. residents not subject to compulsory process in Switzerland.*fn29 Plaintiffs also submit, for the first time, projections regarding procedural delays and the costs of translating documents into French.*fn30

Plaintiffs' assertions regarding the need to depose U.S. residents, which have not been borne out by the course of discovery thus far,*fn31 and the inability to obtain testimony from Echeverria in any forum do not merit reconsideration of the conclusion that "private interests in this dispute between foreign plaintiffs and mainly foreign defendants arising from statements made abroad and based on transactions not governed by U.S. securities law, weigh in favor of a foreign forum."*fn32 First of all, plaintiffs admit that there is a chance that the criminal case will not proceed against Echevarria, whom they acknowledge is central to their claims and, if it does, that plaintiffs will be able join that case.*fn33

Moreover, plaintiffs' arguments regarding compulsory process at best demonstrate that there will be difficulties securing witness testimony regardless of which forum the case is in.*fn34 That there will be inconveniences associated with litigating in Switzerland, just as there were in New York, does not outweigh the other considerations that strongly favor Switzerland as the more appropriate forum for this lawsuit.*fn35

Plaintiffs also argue that the Court failed to "analyz[e] the cost, time delays, and linguistic complications imposed upon Plaintiffs by changing both court and country mid-case."*fn36 To the contrary, I recognized that the delay occasioned and the extensive discovery that has already occurred "would normally weigh against dismissal," but concluded that as "much of that effort was required because of the action's minimal connection to New York," it should not be the basis for maintaining a lawsuit in an otherwise inconvenient forum.*fn37 While plaintiffs' projections regarding translation costs and delays, submitted for the first time on reconsideration, are of concern, plaintiffs do not argue that they are prohibitive, and, in fact, they may have the positive effect of inspiring the parties to reconsider

resolving this dispute out of court.*fn38 In the absence of evidence that "manifest injustice" will result from requiring plaintiffs to relocate to Switzerland, reconsideration is not warranted.*fn39

C. The Absence of a Public Interest in Adjudicating the Case in New York Was a Primary Consideration in Reweighing the Iragorri Factors Plaintiffs argue that, despite the fact that the connection with New York is significantly diminished, "the public interests do not strongly favor dismissal."*fn40 This position is plainly unsupported by the weight of authority, which I originally distinguished because of "an interest in federal securities fraud claims arising from New York based conduct."*fn41 The federal securities claims have since

been dismissed and "the role of the New York based conduct is now less substantial."*fn42 In the absence of countervailing New York interests, the public interests strongly favor dismissal.*fn43 Plaintiffs cite no law or facts to the contrary. In fact, plaintiffs do not take issue with this portion of my opinion in their motion to reconsider. Instead, they cite to a Second Circuit case in which the court found that the need to apply foreign law weighed "'somewhat . . . but not significantly' in favor of the foreign forum."*fn44 I did not hold to the contrary, but merely recognized that the need to apply foreign law was an additional factor that favored dismissal.*fn45

Thus, nothing in plaintiffs' motion merits reconsideration of the conclusion that the public interests strongly favor dismissal.


In sum, notwithstanding the costs of relocating to Switzerland mid-litigation, all other signs - that the transactions at issue were foreign, that all parties with the exception of one defendant are foreign, that Swiss law will most likely govern, and that the evidence and witnesses are concentrated in Europe - strongly support dismissal. For the foregoing reasons, plaintiffs' motion to reconsider is denied. The Clerk of the Court is directed to close this motion [Docket Entry # 172] and this case.


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