Filed: Apr. 05, 2006
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2006 Decisions States Court of Appeals for the Third Circuit 4-5-2006 Tech Dev Co Ltd v. Onischenko Precedential or Non-Precedential: Non-Precedential Docket No. 05-4835 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006 Recommended Citation "Tech Dev Co Ltd v. Onischenko" (2006). 2006 Decisions. Paper 1311. http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1311 This decision is brought to you for free and open access by
Summary: Opinions of the United 2006 Decisions States Court of Appeals for the Third Circuit 4-5-2006 Tech Dev Co Ltd v. Onischenko Precedential or Non-Precedential: Non-Precedential Docket No. 05-4835 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006 Recommended Citation "Tech Dev Co Ltd v. Onischenko" (2006). 2006 Decisions. Paper 1311. http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1311 This decision is brought to you for free and open access by t..
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Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
4-5-2006
Tech Dev Co Ltd v. Onischenko
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-4835
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006
Recommended Citation
"Tech Dev Co Ltd v. Onischenko" (2006). 2006 Decisions. Paper 1311.
http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1311
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No 05-4835
THE TECHNOLOGY DEVELOPMENT
COMPANY, LTD.,
Appellant
v.
MICHAEL ONISCHENKO
On Appeal from the United States District Court
for the District of New Jersey
District Court No. 05-cv-04282
District Judge: Hon. Mary Little Cooper
Argued on March 6, 2006
BEFORE: ROTH and GREENBERG, Circuit Judges
and BUCKWALTER, District Judge
(Opinion Filed April 5, 2006)
OPINION
*The Honorable Ronald L. Buckwalter, Senior United States District Court Judge
for the Eastern District of Pennsylvania, sitting by designation.
James B. Manning, Esquire (ARGUED)
LeBoeuf, Lamb, Greene & MacRae
125 West 55 th Street
New York, NY 10019
Counsel for Appellant
Frederick L. Whitmer, Esquire (ARGUED)
Akiva M. Cohen, Esquire
Brown, Raysman, Millstein, Felder & Steiner LLP
900 Third Avenue
New York, NY 10022-4728
Counsel for Appellee
ROTH, Circuit Judge:
I. Background and Procedural History
This is an appeal from a District Court order dismissing The Technology
Development Company’s (TTDC) Complaint on the ground of forum non conveniens.
Because we believe the District Court’s analysis failed to address adequately all of the
necessary factors of the forum non conveniens test, we will vacate the order of dismissal
and remand for reconsideration based on the existing record.
TTDC is a Bermuda corporation that, for much of the time relevant to this appeal,
maintained its principal place of business in Moscow, Russia. Its exact business purpose
is unclear; it appears that TTDC was interested in developing new technologies in the
pharmaceutical industry. From 1999 until 2005, Michael Onischenko, a member of the
2
New York bar, represented TTDC and its owner and president, Thomas De Shazo. The
District Court found, and the parties appear to agree, that Onischenko is a resident of New
Jersey. De Shazo is a United States citizen with a residence in Idaho.
In 2002, TTDC began work to develop and commercialize a product for oral
delivery of insulin and gene cell therapies. As part of its effort to develop the technology,
TTDC employed Dr. Vladimir Sabetsky. The employment agreement provided that
TTDC would set up a holding company in which Dr. Sabetsky would be a 25% owner
and to which he would assign all patents. The agreement further provided that TTDC
would contribute the money necessary for Dr. Sabetsky to develop his idea.
In the spring of 2005, TTDC decided to leave Russia for the United States because
it believed it could strike a deal with a US pharmaceutical company on the basis of Dr.
Sabetsky’s work. De Shazo came to the United States before Onischenko and left
Onischenko in charge of TTDC’s Moscow operations. TTDC claims that around the time
it decided to move into the US market, Onischenko began to demand an equity position in
the holding company that would own the technologies. De Shazo was not interested and
asked for Onischenko’s resignation. Onischenko complied.
The separation was not amicable. TTDC claims that when Onischenko demanded
his equity position in the holding company, he threatened to derail the project unless
TTDC agreed. After TTDC declined Onischenko’s “offer,” Onischenko purportedly
began to make good on his threat by, among other things, trying to cut off TTDC’s ability
3
to obtain patents. Further, TTDC claims that Onischenko stole TTDC’s original books
and $240,000 in operating funds from the Moscow office. TTDC also avers that
Onischenko turned Dr. Sabetsky and TTDC consultants Geosta Bergvall and Dr. Stefan
Arver against it. Finally, TTDC claims that Onischenko has interfered or is interfering
with its negotiations with New Jersey drug companies.
On September 1, 2005, TTDC filed a Complaint and request for a preliminary
injunction against Onischenko in federal court in the District of New Jersey. The
Complaint alleged breach of contract, breach of fiduciary duty, tortious interference with
contract and prospective economic advantage, and wrongful conversion. Onischenko
moved to dismiss on forum non conveniens grounds. On September 30, 2005, the District
Court heard oral argument on the motion and issued an oral decision granting it. TTDC
filed a timely notice of appeal.
II. Jurisdiction and Standard of Review
The District Court exercised diversity jurisdiction under 28 U.S.C. § 1332. We
have appellate jurisdiction pursuant to 28 U.S.C. § 1291.
We review a decision to dismiss on forum non conveniens grounds for abuse of
discretion. Lony v. E.I. Du Pont de Nemours & Co., 886 F.2d 628, 631-32 (3d Cir. 1989)
(Lony I). “[W]here the court has considered all relevant public and private interest
factors, and where its balancing of these factors is reasonable, its decision deserves
substantial deference.” Piper Aircraft Co. v. Reyno,
454 U.S. 235, 257 (1981). Despite
4
this standard, “dismissal for forum non conveniens is the exception rather than the rule.”
Lacey v. Cessna Aircraft Co., 862 F.2d 38, 46 (3d Cir. 1988) (Lacey I) (quoting In re Air
Crash Disaster Near New Orleans, Louisiana on July 9, 1982,
821 F.2d 1147, 1164 n.26
(5th Cir. 1987)). A district court abuses its discretion “when it fails to consider
adequately and to determine the amount of deference due the foreign plaintiff’s choice of
forum or when it clearly errs in weighing the factors to be considered.” Lony
I, 886 F.2d
at 632 (citations omitted). Finally, the defendant bears the burden of persuasion as to the
elements of the forum non conveniens analysis. Lony
I, 886 F.2d at 632 (citing Lacey
I,
862 F.2d at 43).
III. Analysis
In Lacey I, we set forth the general standard for dismissal in forum non conveniens
cases: “A district court may . . . dismiss a case ‘when an alternative forum has
jurisdiction to hear the case, and when trial in the chosen forum would ‘establish . . .
oppressiveness and vexation to a defendant . . . out of all proportion to the plaintiff’s
convenience . . . .’’” 862 F.2d at 43 (quoting Piper
Aircraft, 454 U.S. at 241 (quoting
Koster v. Am. Lumbermens Mut. Cas. Co.,
330 U.S. 518, 524 (1947))). In ruling on a
motion to dismiss based on forum non conveniens, a district court must address four
issues: (1) the availability of an alternative forum; (2) the amount of deference to be
accorded to the plaintiff’s choice of forum; (3) the private interest factors; and (4) the
public interest factors. Lony
I, 886 F.2d at 633. In addition to considering these four
5
factors, Piper Aircraft “requires that the district court consider the availability of an
adequate alternative forum and the amount of deference to be accorded the plaintiff’s
choice of forum before it weighs the private and public interest factors. . . .” Lacey I, 862
F.2d at 45.
A. The Availability of an Alternative Forum
The Supreme Court has noted that this requirement is usually satisfied where the
defendant is “‘amenable to process’ in the other jurisdiction.” Piper Aircraft, 454 U.S. at
254 n.22 (citing Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 506-07 (1947)). Where,
however, the alternative jurisdiction cannot provide a satisfactory remedy, dismissal on
forum non conveniens grounds is improper.
Id. at 254.
Inadequacy of the alternative forum is rarely a barrier to forum non conveniens
dismissal. Id. at 254 n.22. Nonetheless, we believe the District Court should have done
more than simply conclude that Russia provides an adequate forum without any
discussion whatsoever of the remedies available in Russia or any citation to cases
supporting the view that the Russian courts are adequate to handle disputes of this nature.
Lacey
I, 862 F.2d at 44 (reversing forum non conveniens dismissal where the district court
did not adequately address, inter alia, the adequacy of British Columbia as an alternative
forum); Lony
I, 886 F.2d at 633 (expressing skepticism about a district court’s decision to
look to the plaintiff to show the inadequacy of the alternative forum but declining to find
reversible error where the defendant put forward “some evidence” on adequacy and
6
plaintiff did not specifically challenge the adequacy finding on appeal).
The District Court did no more than make a conclusory statement that “well
established” case law demonstrated the adequacy of the Russian courts for commercial
and tort law cases.1 It may well be that a proper analysis will reveal that Russia is an
adequate alternative forum, but where a plaintiff protests the alternative jurisdiction’s
adequacy both before the District Court and on appeal, the attack is not patently specious,
and the defendant offers minimal evidence in support of adequacy, dismissal without a
reasonably detailed discussion is an abuse of discretion.
B. Amount of Deference Due Plaintiff’s Choice of Forum
Ordinarily, a court is required to give a plaintiff’s choice of forum significant
deference. Piper Aircraft, 454 U.S. at 255. Where, however, the plaintiff is foreign, the
amount of deference is potentially less because a court cannot assume that the forum was
chosen based on convenience factors.
Id. at 255-56. We have stressed that Piper Aircraft
is “‘not an invitation to accord a foreign plaintiff’s selection of an American forum no
1
Before the District Court, Onischenko relied on Miller v. Boston Scientific Corp.,
380 F. Supp. 2d 443, 449-450 (D.N.J. 2005), in support of his contention that TTDC was
required to dispute the adequacy of the Russian courts, and, having failed to do so, TTDC
cannot now seek to establish reversible error. Assuming that Miller states the proper
standard (and we take no position on that issue), Onishenko’s argument is still
troublesome because TTDC did challenge Onischenko’s failure to “establish that Russian
courts have jurisdiction . . ., will provide satisfactory remedies, or that they even
recognize TTDC’s claims . . . .” We leave to the District Court in the first instance the
task of resolving whether, in light of TTDC’s challenge to the adequacy of the Russian
court system, Onischenko had to do more than merely state that he was amenable to suit
in Russia and cite a single case to the effect that Russian courts are not corrupt.
7
deference since dismissal for forum non conveniens is the exception rather than the
rule.’” Lacey I, 862 F.2d at 45-46 (quoting In re Air
Crash, 821 F.2d at 1164 n.26)
(emphasis in Lacey I). Accordingly, “[w]here a foreign plaintiff has made a strong
showing of convenience, . . . the district court must indicate how far that showing goes
toward putting the foreign plaintiff on the same footing as a domestic plaintiff.” Lony
I,
886 F.2d at 634; Iragorri v. United Techs. Corp.,
274 F.3d 65, 71-72 (2d Cir. 2001)
(noting that the more it appears that a foreign plaintiff’s choice of forum was dictated by
reasons the law deems legitimate, the more deference it should receive); Norex Petroleum
Ltd. v. Access Indus. Inc.,
416 F.3d 146, 154 (2d Cir. 2005) (same).
We believe the District Court committed an abuse of discretion by failing to set
forth how much deference it owed TTDC’s choice of forum. After stating that it was
required to determine how much deference to give TTDC’s choice of forum in its opening
recitation of the forum non conveniens standard, the only portion of its oral decision
arguably addressing the issue was its language, a number of transcript pages later, that
“[t]he plaintiff has no contact with New Jersey. The plaintiff is a Bermuda limited
liability company with its principal place of business in Moscow and the location of
residence of its principal, Mr. De Shazo, most recently Idaho.” Given that these
statements were made in the section of the decision in which the District Court was
discussing the private and public interest factors, it is not clear whether the District Court
was even thinking about deference issues at all.
8
Onischenko asks this Court to conclude that those two sentences indicate that the
District Court decided not to afford TTDC any more deference than a typical foreign
plaintiff is afforded under Piper Aircraft. Onischenko attempts to draw support for this
argument from Lacey v. Cessna Aircraft Co., 932 F.2d 170, 179 (3d Cir. 1991) (Lacey II),
in which we noted that a district court does not have to “mark on a continuum” the exact
amount of deference it is affording a foreign plaintiff’s forum selection. Lacey II upheld
a forum non conveniens dismissal where the district court addressed the issue of
deference, noted that it was impossible to quantify, and further provided that it was
requiring that the defendants establish a strong preponderance in favor of dismissal.
Id.
On the basis of the district court’s treatment, we were able to say that the district court
demonstrated that it accorded the plaintiff’s forum selection “not insignificant weight . . .
.”
Id.
Onischenko also directs our attention to the portion of Lacey II in which we
discussed a district court’s statement that “[b]ecause plaintiff is a foreign national with no
connection to the forum, his choice is not entitled to the same degree of deference
accorded a resident or citizen who chooses his home forum.”
Id. at n.6 (alteration in
Lacey II). He asserts that our endorsement of this language stands for the proposition
that a district court’s statement that a foreign plaintiff has no connection to the forum is
equivalent to a statement that the plaintiff has not made the required showing of
convenience to overcome the negative presumption that attaches to a foreign plaintiff’s
9
forum choice.
Contrary to Onischenko’s claims, Lacey II does not support the District Court’s
approach in this case. Initially, the District Court in Lacey II went much further in
addressing the deference issue than does the District Court here. Indeed, it takes a
generous reading of the decision here even to conclude that the deference issue was
addressed at all. Moreover, Lacey II states that a foreign plaintiff with no connection to
the chosen forum is entitled to less deference than a domestic plaintiff who chooses his
home forum. 932 F.2d at 170 n.6. However, simply because a foreign plaintiff without a
connection to the forum is not entitled to the same deference as a domestic plaintiff who
chooses his home jurisdiction, it does not follow automatically that such a plaintiff
receives only the lowest level of deference. The best reading of Lony I and Lacey II is
that where, as here, there is some evidence of convenience (even if it is not in the form of
the foreign plaintiff’s direct contacts to the forum), the proper approach is to “decide just
how much less deference is due this plaintiff’s choice of forum . . . ” than a domestic
plaintiff’s choice of
forum. 886 F.2d at 634; Norex
Petroleum, 416 F.3d at 155-56
(vacating a dismissal based on forum non conveniens where the district court failed to
determine how much deference it was according a foreign plaintiff’s forum choice despite
the plaintiff’s demonstration of convenience-based decision making).
In this case, TTDC sued Onischenko in Onischenko’s home jurisdiction largely
because it was the only place TTDC felt confident it could obtain jurisdiction. Moreover,
10
with TTDC moving its business operations from Russia to the United States, New Jersey
appears to be more convenient for TTDC and its United States resident principal. See
Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 103 (2d Cir. 2000) (holding that a
district court erred in failing to take plaintiff’s status as a United States citizen into
account because “[t]he benefit for a U.S. resident plaintiff of suing in a U.S. forum is not
limited to suits in the very district where the plaintiff resides . . . .”).
Our view of the importance of the deference determination is underscored by the
unusual scenario presented in this case. Most forum non conveniens cases involve a
defendant, sued far from home, arguing against being forced to litigate in a remote forum.
Lony v. E.I. Du Pont de Nemours & Co., 935 F.2d 604, 608 (3d Cir. 1991) (Lony II).
Here, by contrast, Onischenko was sued in his own forum and is arguing that it would be
more convenient for him to defend himself thousands of miles away. In Lony I, we
implied that a foreign plaintiff’s decision to sue a defendant in the defendant’s home
forum was itself a factor suggesting that the foreign plaintiff’s decision was based on
convenience rather than some ulterior
motive. 886 F.2d at 634; Norex
Petroleum, 416
F.3d at 155-56. Even granting that much of the conduct involved in this litigation
occurred while the parties were in Russia, the fact that TTDC chose to sue Onischenko in
the only place it thought it could obtain jurisdiction is evidence that its choice of forum
was based on convenience factors. This, plus that the fact TTDC was wrapping up its
Russian business and beginning the transition to the United States, shows that the District
11
Court’s treatment of this issue was too superficial. Therefore, dismissing without a more
detailed inquiry into the proper level of deference to be accorded to TTDC’s forum
selection constituted an abuse of discretion.
C. Private and Public Interest Factors
We are concerned that the District Court may not have applied the proper standard
to weighing the private and public interest factors. As stated above, Onischenko bears the
burden of establishing that litigation in New Jersey would be oppressive and vexatious to
him. Piper Aircraft, 454 U.S. at 241. In Lony I, we took exception to a district court’s
suggestion that dismissal was appropriate where the balance of private factors was at
equipoise or tipped toward
dismissal. 886 F.2d at 635. Here, it is unclear whether the
District Court concluded that litigation in New Jersey was vexatious and oppressive to
Onischenko out of all proportion to TTDC’s convenience, or whether, all things being
equal, Russia was a better forum. The former is a basis for dismissal; the latter is not.
The District Court concluded its private interest analysis by stating that “I think I have
given a sufficient recitation to show that there are no private factors and certainly no
interest of this forum factors that favor retaining jurisdiction in this forum.” The problem
is that dismissal is not appropriate just because the private and public factors do not favor
retaining jurisdiction. See Lony
I, 886 F.2d at 635.
On remand, we hope the District Court should carefully consider and address the
private and public interest factors. We make no forecast whether or not a proper analysis
12
will lead to the conclusion that the private and public interest factors weigh strongly
against litigation in New Jersey.
IV. Conclusion
The District Court abused its discretion by failing to address properly the Supreme
Court’s and this Court’s forum non conveniens jurisprudence. In view of TTDC’s
opposition to the alternate forum, the District Court did not sufficiently discuss or
determine its adequacy. Nor did the District Court address the issue of the proper level of
deference to be afforded TTDC’s forum selection. We are also concerned that the
District Court may not have applied the proper standard in weighing the private and
public interest factors. Therefore, we will vacate the order of dismissal and remand this
case for reconsideration based on the record as it currently stands.
13
