United States District Court, Southern District of New York
PAUL G. GARDEPHE, U.S.D.J.
In this diversity action, Plaintiff Semyon Kislin seeks $4 million in damages for alleged losses arising out of his sale of an interest in a Russian corporation to Defendant Simon Dikker. The Complaint alleges claims for breach of contract, conversion, and fraud. (Cmplt. (Dkt. No. 1) ¶¶ 21, 30-33, 37) On August 25, 2014, Dikker moved to dismiss on grounds of forum non conveniens. (Dkt. No. 40) On September 12, 2014, this Court referred the motion to Magistrate Judge James C. Francis, III for a report and recommendation. (Dkt. No. 51)
On September 25, 2014, Judge Francis issued a Report and Recommendation ("R & R") in which he recommended that the Court deny Dikker's motion. (Dkt. No. 52) Dikker filed timely written objections to the R & R on October 14, 2014, and Kislin responded to those objections on October 28, 2014. (Dkt. Nos. 54, 55) The Court has reviewed the R & R and Defendant's objections. For the reasons discussed below, the Court adopts the R & R in its entirety and denies Defendant's motion to dismiss.
Between 2002 and 2007, Kislin, Dikker, and a third individual not party to this lawsuit co-owned and operated TransRegionlnvest ("TRI"), a Russian joint-stock company, during which time Kislin owned 51% of outstanding shares and Dikker owned 24.5%. (Cmplt. (Dkt. No. 1) ¶¶ 7-8, 11; Kislin Deck (Dkt. No. 48) ¶¶ 10, 15) Kislin and Dikker allegedly agreed that Dikker would purchase Kislin's ownership interest in TRI for $20 million. (Cmplt. (Dkt. No. 1) ¶ 13; Kislin Decl. (Dkt. No. 48) 116) Dikker paid Kislin $16 million and allegedly gave assurances that he would pay the remaining $4 million. (Cmplt. (Dkt. No. 1) ¶ 16-17, 19; Kislin Decl. (Dkt. No. 48) ¶¶ 20-26) In 2009, Kislin and Dikker entered into a written agreement that the $4 million balance would be paid between December 2009 and May 2010. (Cmplt. (Dkt. No. 1) ¶ 30; Kislin Decl. (Dkt. No. 48) ¶ 24) In the fall of 2012, with the $4 million still unpaid, the parties agreed to extend the deadline for the outstanding payment to May 1, 2013. (Cmplt. (Dkt. No. 1) ¶ 32; Kislin Decl. (Dkt. No. 48) ¶ 26) Kislin maintains that Dikker never made the remaining $4 million payment. (Cmplt. (Dkt. No. 1) ¶¶ 22, 25, 28-29, 33-34, 44; Kislin Decl. (Dkt. No. 48) ¶ 27)
On January 13, 2014, Kislin filed this action against Dikker asserting claims for conversion, breach of contract, and fraud, and seeking recovery of the $4 million still owed. (Cmplt. (Dkt. No. 1) ¶¶ 20-22, 30-44) On August 25, 2014, Dikker moved to dismiss on grounds of forum non conveniens. (Dkt. No. 40) Dikker contends that the more convenient and appropriate forum for this action is Moscow, Russia. (Def. Br. (Dkt. No. 44) at 14-15)
In analyzing Dikker's claim of forum non conveniens. Judge Francis applied the three-step analysis set forth in Iragorri v. United Techs. Corp., 274 F.3d 65, 73-74 (2d Cir. 2001) (en banc). Under this analysis,
[a]t step one, a court determines the degree of deference properly accorded the plaintiffs choice of forum. At step two, it considers whether the alternative forum proposed by the defendants is adequate to adjudicate the parties' dispute. Finally, at step three, a court balances the private and public interests implicated in the choice of forum.
Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 153 (2d Cir. 2005) (internal citations omitted) (citing Iragorri, at 73-74). "[U]nless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed." Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508(1947).
In his September 25, 2014 R & R, Judge Francis found that Kislin has been a resident of New York since 1985 and a United States citizen since the 1970s, works primarily out of New York City, and does not have an office or residence in Moscow. (R & R (Dkt. No. 52) at 6-7) Judge Francis concluded that New York is Kislin's "home forum" and therefore "his choice of forum is entitled to great deference." (Id at 7 (citing Iragorri, at 71)) Judge Francis also observed that Dikker lives only one hour from this forum in New Jersey, and has "indicated] his amenability to suit in this forum." (Id., at 7-8, 17)
As to the adequacy of Defendant's alternative forum, Judge Francis found that Dikker had not offered evidence regarding the treatment of similar claims under Russian law and had not demonstrated that adequate relief is available to Kislin in Moscow. (Id., at 10-13) Indeed, Judge Francis noted that "[Dikker's] submissions fail to address this issue at all, " beyond a conclusory statement. (Id., at 11-12)
Even if Dikker had established that Moscow was an adequate alternative forum, Judge Francis concluded that Dikker had not demonstrated (1) the relevance of four witnesses in Russia or that it would be difficult to obtain their testimony in this action; (2) that the cost of transporting relevant documents and translating these documents from Russian to English would be substantial; or (3) that Russian law governs this case. (Id. at 14-19) He also noted that "the offices of both parties' attorneys are ... located in New York City." (Id. at 17) Finally, Judge Francis found that the public interest did not weigh in favor of transferring this case to Moscow, as Russia has no greater interest in the outcome of this litigation than New York and "it is far from clear that Russian law would govern this case." (Id. at 18-21) Judge Francis therefore recommended that the motion to dismiss be denied. (Id. at 21)
I. STANDARD OF REVIEW