JANE MAGNUS-STINSON, Chief District Judge.
This matter is before the Court on Defendants Dow Chemical Company ("
When a defendant moves to dismiss a complaint under Rule 12(b)(2), "[t]he plaintiff bears the burden of showing that personal jurisdiction over the defendant exists." Claus v. Mize, 317 F.3d 725, 727 (7th Cir. 2003). When, as here, the Court "rules on a defendant's motion to dismiss based on the submission of written materials, without the benefit of an evidentiary hearing . . . the plaintiff `need only make out a prima facie case of personal jurisdiction.'" Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (quoting Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)). Any factual disputes are resolved in the plaintiff's favor. Id.
"A federal district court's personal jurisdiction over a defendant is established in a diversity-jurisdiction case . . . only so long as the defendant is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located." N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014). Indiana Trial Rule 4.4(A) serves as Indiana's longarm provision and expands personal jurisdiction to the full extent permitted by the Due Process Clause. See LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 965-66 (Ind. 2006). "Thus, the statutory question merges with the constitutional one—if [Indiana] constitutionally may exercise personal jurisdiction over a defendant, its long-arm statute will enable it to do so." N. Grain, 743 F.3d at 492.
"The federal constitutional limits of a court's personal jurisdiction in a diversity case are found in the Fourteenth Amendment's due-process clause." Id. "[F]ederal constitutional law draws a sharp and vital distinction between two types of personal jurisdiction: specific or caselinked jurisdiction, and general or all-purpose jurisdiction." Abelesz v. OTP Bank, 692 F.3d 638, 654 (7th Cir.2012). "If the defendant's contacts are so extensive that it is subject to general personal jurisdiction, then it can be sued in the forum state for any cause of action arising in any place." uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir. 2010). "More limited contacts may subject the defendant only to specific personal jurisdiction, in which case the plaintiff must show that its claims against the defendant arise out of the defendant's constitutionally sufficient contacts with the state." Id. Zevoli only asserts that the Court has specific, not general, jurisdiction over Dow Chemical. [
The following allegations are taken from Zevoli's Complaint, and are accepted as true for purposes of deciding the pending jurisdictional motion, consistent with the applicable standard of review. [
Zevoli is a South African private company with its principal offices in South Africa. [
This dispute relates to contamination to real property in South Africa known as the Canelands Site. [
In 2007, Dow South Africa sold the Canelands Site to Chemical Specialties (Proprietary) Limited ("
On June 22, 2007, ChemSpec and Dow South Africa executed a lease agreement (the "
In 2009, ChemSpec sold the Canelands Site to Zevoli. [
In early 2015, ChemSpec entered business rescue proceedings.
Shortly after ChemSpec entered business rescue proceedings, Dow South Africa notified Zevoli that it had reported contamination of the Canelands Site to South Africa's Department of Environmental Affairs ("
The reports revealed that the contamination at the Canelands Site was not decreasing as a result of the remediation activities conducted pursuant to the 2007 PSA; rather, the contamination was spreading and worsening. [
The 2005 report made known many other types of contamination around the Canelands Site in addition to the buried arsenic in the sump at the Peskor Plan that Dow South Africa actually disclosed in 2007. [
The 2007 J&W report was issued in February 2007, shortly before the execution of the 2007 PSA, and revealed worsening arsenic contamination and highly contaminated water flowing in and out of the basement sump in the main building. [
In 2016, "Defendants demolished the water treatment plant constructed in 2012, a manufacturing plant and associated labs, a steam generation room, and a process control area." [
Zevoli has lodged several allegations against the Defendants for the acts of their subsidiary, Dow South Africa. [
Zevoli alleges that "[a] director of Zevoli was also told by an attorney for [Dow South Africa] that Dow [Chemical] has total control and responsibility over the actions of [Dow South Africa]." [
Dow Chemical carries a $45,000,000 umbrella policy on the Canelands Site in its own name. [
Defendants argue that Dow Chemical's only connection to Indiana is the fact that Dow Agro is its wholly-owned subsidiary, which is insufficient to establish personal jurisdiction over it. Defendants claims that Zevoli's mere allegation that "the parent corporation exercised control over its wholly-owned subsidiary, and that the wholly-owned subsidiary in turn would have carried out the parent's directions in the forum state[]" is insufficient to establish jurisdiction over it. [
Zevoli first concedes that Indiana does not maintain general jurisdiction over Dow Chemical. [Filing No. 27 at 22.] With respect to specific jurisdiction, Zevoli argues that the actual decisions relating to the Canelands Site, including remediation efforts and its sale, were made in the United States. It also states that "[w]hile all the evidence is not yet available, the pleadings and allegations. . . support an inference that Dow [Chemical] acted through [Dow Agro], its wholly-owned Indiana subsidiary, in exercising control over [Dow Agro]'s direct subsidiary, [Dow South Africa]." [
Defendants respond that there are no factual allegations to support Zevoli's "inference" that Dow Chemical acted through Dow Agro to exercise control over Dow South Africa. [Filing No. 28 at 4.] Therefore, Zevoli cannot make out a prima facie case for specific jurisdiction.
The Court agrees. For the Court to exercise specific jurisdiction, the defendant must have purposefully availed itself of the privilege of conducting activities within the forum so that the defendant may reasonably anticipate being hailed into court there. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75 (1985) (citations omitted). To exercise jurisdiction consistent with due process, "the defendant's suit-related conduct must create a substantial connection with the forum State." Advanced Tactical Ordnance Sys, LLC v. Real Action Paintball, Inc., 751 F.3d 796, 801 (7th Cir. 2014) (quotation marks and citation omitted).
Zevoli requests an "inference" that Dow Chemical, in Michigan, directed Dow Agro, in Indiana, to take or omit certain actions relating to Dow South Africa at the Canelands Site. But nothing in the Complaint suggests that Dow Chemical somehow used Indiana to harm Zevoli in South Africa. The Complaint bundles Dow Chemical and Dow Agro into the "US Dow Entities" and makes no mention of any specific activity performed by Dow Chemical in Indiana that could establish specific jurisdiction. [
Moreover, nothing in the Complaint suggests that Dow Chemical exerted an unusually high degree of control over Dow Agro or that Dow Agro's corporate existence is a mere formality and that Dow Agro is simply Dow Chemical's agent. See Purdue Research Found., 338 F.3d at 788 n.17. And the fact that Dow Chemical owns "a majority of [Dow Agro] stock is insufficient to establish personal jurisdiction." GCIU-Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). Thus, Zevoli has failed to establish a prima facie case to allow this Court to exercise specific jurisdiction over Dow Chemical. Accordingly, Defendants' Motion to Dismiss Dow Chemical for lack of personal jurisdiction pursuant to Rule 12(b)(2) is
In the alternative to dismissal for lack of personal jurisdiction, Zevoli requests that the Court allow it limited jurisdictional discovery. The Court first notes Defendants' assertion that Zevoli informed the Magistrate Judge at the November 7, 2017 initial pretrial conference that it would not need discovery relating to Defendants' motion to dismiss Dow Chemical for lack of personal jurisdiction. [Filing No. 28 at 5-6.] Defendants raise this for the first time in their reply brief, which is understandable given their prior understanding of Zevoli's intentions with respect to jurisdictional discovery. Zevoli does not contest this assertion with a surreply or any evidence, however, and therefore the Court accepts as true Defendants' uncontested assertion that Zevoli waived the opportunity to seek jurisdictional discovery in this matter.
Nonetheless, even if Zevoli had not waived the opportunity to seek jurisdictional discovery, it has failed to make an adequate showing for which such relief could be granted. It is "well established that a plaintiff does not enjoy an automatic right to discovery pertaining to personal jurisdiction in every case." Andersen v. Sportmart, Inc., 179 F.R.D. 236, 241 (N.D. Ind. 1998). "At a minimum, the plaintiff must establish a colorable or prima facie showing of personal jurisdiction before discovery should be permitted." Cent. States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000). In other words, a "plaintiff must make a threshold or prima facie showing with some competent evidence demonstrating that personal jurisdiction might exist over a defendant in order to be entitled to jurisdictional discovery." Andersen, 179 F.R.D. at 241 (citations omitted) (emphasis in original). "This standard is quite low, but a plaintiff's discovery request will nevertheless be denied if it is only based upon `bare,' `attenuated,' or `unsupported' assertions of personal jurisdiction[.]" Id. (citing Ellis v. Fortune Seas, Ltd., 175 F.R.D. 308, 312 (S.D. Ind. 1997) (collecting cases)).
As stated more fully above, Zevoli's Complaint fails to meet even this threshold with respect to the alleged contacts that Dow Chemical maintains in Indiana, and therefore Zevoli's request for jurisdictional discovery is
Because the Court does not have personal jurisdiction over Dow Chemical, the Court will only address Dow Agro, which has moved for dismissal pursuant to the common law remedy of forum non conveniens. The Court "has discretion to dismiss a case on the ground of forum non conveniens when an alternative forum has jurisdiction to hear the case, and trial in the chosen forum would establish oppressiveness and vexation to a defendant out of all proportion to plaintiff's convenience[.]" Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 429 (2007) (internal citations omitted). The Court may also dismiss the case if "the chosen forum [is] inappropriate because of considerations affecting the court's own administrative or legal problems." Id. The doctrine of forum non conveniens is an exceptional doctrine that must be used sparingly. Deb v. SIRVA, Inc., 832 F.3d 800, 805 (7th Cir. 2016) (citation omitted). A defendant bears a heavy burden in opposing the plaintiff's chosen forum, which is given preferential treatment. Id. at 806. When a plaintiff's chosen forum is not its home forum, "the presumption in the plaintiff's favor applies with less force, for the assumption that the chosen forum is appropriate is in such cases less reasonable." Id. (internal quotation marks and citation omitted).
Determining whether dismissal for forum non conveniens is appropriate first requires the Court to inquire as to the availability and adequacy of the alternative forum. Kamel v. Hill-Rom Co., 108 F.3d 799, 802 (7th Cir. 1997). If an adequate and available forum exists, the Court then proceeds to balance the public and private interest factors set forth in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). Id. at 803.
Dow Agro claims that South Africa is an adequate forum and, in support, attaches the declaration of David Nat Unterhalter, who is Senior Counsel practicing at the Johannesburg Bar, South Africa. [
Zevoli does not specifically contest the characterization of South African law as outlined by Mr. Unterhalter. Instead, Zevoli argues generally that "the available forms of relief in South Africa are much more limited." [
"An `alternative forum is adequate when the parties will not be deprived of all remedies or treated unfairly.'" Fischer v. Mayar Allambasutak, 777 F.3d 847, 867 (7th Cir. 2015) cert. denied, ___ U.S. ___, 135 S.Ct. 2817 (2015) (quoting Kamel, 108 F.3d at 803). A dismissal based on forum non conveniens, however, should not be rejected simply because it would lead to a change of law that does not favor the plaintiff. In re Factor VIII or IX Concentrate Blood Prods. Litig., 484 F.3d 951, 956 (7th Cir. 2007) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 247 (1981)). "Only if `the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all' should the unfavorable change be given substantial — or even dispositive — weight." Id. (quoting Piper Aircraft, 454 U.S. at 254).
None of the arguments raised by Zevoli establish that it will be "deprived of all remedies or treated unfairly." Kamel, 108 F.3d at 803. Nor is there anything to suggest that the remedy offered by the South African courts is "so clearly inadequate or unsatisfactory that it is no remedy at all." Piper Aircraft, 454 U.S. at 254. Thus, South Africa is an adequate forum to hear the claims of this case.
Zevoli claims that Dow Agro is neither amenable to service in South Africa nor has a presence in the country, aside from a parent-subsidiary relationship with Dow South Africa, which is insufficient to establish jurisdiction over Dow Agro. [
Zevoli argues that this case is comparable to the facts set forth in Deb v. SIRVA, Inc., 832 F.3d 800 (7th Cir. 2016). In Deb, the plaintiff argued that Allied Van Lines and SIRVA (the "
Dow Agro responds that Zevoli is able to "obtain complete relief by proceeding against [Dow South Africa], which is undoubtedly amenable to service of process in South Africa, and there is no reason to believe that [Dow South Africa] would be unable to satisfy a judgment against it." [Filing No. 28 at 11.] In support, Dow Agro merely points to the allegation in the Complaint relating to "an insurance policy with a limit in the tens of millions of dollars." [
Dow Agro's first assertion presumes that the damages will be covered by the insurance policy and/or the attachment of its property in South Africa, but offers no support to suggest that either of those assets would provide adequate coverage for damages that have yet to be determined. Despite having contracted with J&W to assess the damage as well as the remediation efforts necessary to clean up the Canelands Site, Dow Agro sets forth no evidence relating to the damages caused by the environmental hazards on the property. Accordingly, such a bald assertion is disregarded by the Court. See Puffer v. Allstate Ins. Co., 675 F.3d 709, 718 (7th Cir. 2012) (arguments that are underdeveloped, conclusory, or unsupported by law may be deemed waived).
In support of its second argument, Dow Agro relies solely on Estate of Thomson ex rel. Estate of Rakestraw v. Toyota, et al., 545 F.3d 357 (6th Cir. 2008). In Estate of Thomson, the Sixth Circuit found that South Africa was an available forum to the plaintiffs because they could pursue claims against Oklahoma-based defendant Thrifty's South African subsidiary, which would be amenable to service there. Id. at 365. The court determined that Thrifty's non-amenability to service did not preclude dismissal, and found that the plaintiff's ability to sue Thrifty's associated entities rendered South Africa an "adequate forum." Id. In dismissing Thrifty for forum non conveniens, the court held:
Id.
The Court first notes that Estate of Thomson is not controlling authority in this circuit. Moreover, the fact that a corporate affiliate is amenable to service in a foreign jurisdiction is irrelevant to establishing whether the corporation itself is amenable to service in that jurisdiction. See Miller v. Toyota Motor Corp., 593 F.Supp.2d 1254, 1258-59 (M.D. Fla. 2009) (noting that the Estate of Thomson court's conclusion "conflates the concepts of `adequacy' and `availability'"). In the Seventh Circuit, a forum is "available if all parties are amenable to process and are within the forum's jurisdiction." Kamel, 108 F.3d at 803 (emphasis added). That is not the case here. Dow Agro has not consented to South Africa's jurisdiction in this case; nor has it provided any evidence that, aside from its affiliation with Dow South Africa, it has a physical presence in South Africa and would be amenable to service there.
Because Dow Agro has not yet consented to jurisdiction in a South African court, the Court will require Dow Agro to file a report stating that it consents to the jurisdiction of the South African court before dismissal occurs, in order to establish that South Africa is, indeed, an available forum. Stroitelstvo Bulgaria Ltd. v. Bulgarian-American Enterprise Fund, 598 F.Supp.2d 875, 882 (N.D. Ill. 2009) ("A party's express consent to a forum's jurisdiction obviates any concern about availability"); Lie v. Boeing Co., 2004 WL 1462451, *2 (N.D. Ill. 2004) (conditioning dismissal based on forum non conveniens on, among other things, defendant agreeing to submit to the jurisdiction of the foreign court). The Court will also require Dow Agro to state in the report that it will accept service of process and waive any statute of limitations defense to Zevoli's claims that did not exist prior to initiation of the instant lawsuit (unless such a defense relies on Zevoli's failure to bring suit timely after the date on which the Court enters this dismissal) for a suit brought in South Africa. See Bentel & Co., LLC v. Schraubenwerk Zerbst GmbH, 2017 WL 3278324, *14-15 (N.D. Ill. 2017) (requiring defendant to file a statement agreeing to personal jurisdiction in foreign country, accepting service or process, and waiving any statute of limitations defense to plaintiff's claims).
Given Dow Agro's insistence on placing the full blame of the allegations made in the Complaint on its wholly-owned subsidiary, the Court finds that requiring Dow Agro to submit a report stating that it consents to the South African court's jurisdiction, will accept service of process, and will waive any statute of limitations defenses is both necessary and appropriate in order for the Court to ensure that South Africa is an available forum.
"If an adequate alternative forum exists, the district court should consider whether a forum non conveniens dismissal would serve the private interests of the parties and the public interests of the alternative forums." Stroitelstvo Bulgaria Ltd, 589 F.3d at 425 (citation omitted). Relevant private interest factors include: (1) relative ease of access to sources of proof; (2) availability of compulsory process for unwilling witnesses and the costs of obtaining attendance of willing witnesses; (3) possibility of viewing the premises, if appropriate; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. In re Bridgestone/Firestone, Inc., 420 F.3d 702, 703 (7th Cir. 2005) (quoting Gulf Oil Corp., 330 U.S. at 508). The private factors in this case favor dismissal.
The majority, if not nearly all of the proof, likely lies in South Africa. The allegations in the Complaint relate to environmental contamination to real property in South Africa. Zevoli also alleges that certain buildings were constructed at the site to remediate the pollution and claims that they were destroyed without Zevoli's consent. The contracts underlying this dispute were executed and performed in South Africa. Finally, and most importantly, all contamination took place on South African soil, and any further testing that needs to be done to determine the extent of that contamination will necessarily be facilitated there. Accordingly, this factor weighs heavily in favor of dismissal.
To the extent that a party in the United States wishes to obtain evidence from a witness present in South Africa, no procedure exists under "South African law to compel the witness to travel to the United States for trial, or to be examined by the parties' lawyers in South Africa." [
Most of the witnesses that were privy to the contract or participated in the alleged environmental contamination are located in South Africa, as all three companies that purchased or leased the Canelands Site during the relevant period are South African companies. J&W, the environmental consulting firm that has tested the Canelands Site on multiple occasions, is located in South Africa. Notably, ChemSpec is in business rescue proceedings in South Africa. The Complaint centers a great deal on the relationship between ChemSpec and Dow South Africa, and the extent to which ChemSpec knew about the environmental contamination at the time it sold the Canelands Site to Zevoli. Given the uncertainty of ChemSpec's future, and the importance of ChemSpec's relationship with both Dow South Africa and Zevoli, if necessary, compulsory process would be much more convenient in South Africa. It would be quite burdensome for the parties to seek an order from a High Court in South Africa to conduct the examination; even more so given that the examination would not be conducted by the parties' counsel.
Indeed, the only allegations relating to United States witnesses involve corporate direction from Dow Agro to Dow South Africa. Assuming that Dow Agro submits to the jurisdiction of South Africa, such compulsory process shall not be an issue for obtaining testimony from Dow Agro personnel.
Finally, given that most of the witnesses are located in South Africa, aside from those few named in the Complaint who are United States citizens, the cost of obtaining their attendance in this Court would be much higher than doing so in South Africa.
Accordingly, this factor weighs heavily in favor of dismissal.
This factor, for obvious reasons, weighs heavily in favor of dismissal.
Zevoli notes that any enforcement against Dow Agro would be difficult to collect, particularly in light of the alleged undercapitalization of Dow South Africa. [
Given the nature of the Court's conditional dismissal, this problem is no longer a concern and plays no further role in the Court's analysis.
After weighing the private interest factors, the Court concludes that relevant factors strongly favor dismissal in this case.
The Court must next examine the public interest factors in determining whether dismissal is appropriate. Applicable public interest factors include: (1) administrative difficulties stemming from court congestion; (2) the local interest in having localized disputes decided at home; (3) the interest in having the trial of a diversity case in a forum that is at home with the law that governs the action; (4) the avoidance of unnecessary problems in conflicts of laws or in the application of foreign law; and (5) the unfairness of burdening citizens in an unrelated forum with jury duty. In re Bridgestone/Firestone, Inc., 420 F.3d at 704 (quoting Kamel, 108 F.3d at 803).
The parties dispute whether South African courts offer a speedier trial than this Court. [Compare
Given the congestion of both court systems, the Court finds that this factor is neutral.
This case involves real property contamination in South Africa as a result of contracts executed and performed in South Africa. Zevoli's own allegations contain reference to South African environmental regulations and the contamination of South African environmental resources. Moreover, the Complaint alleges that the South African DEA has been notified of the contamination on the property. See In re Air Crash Near Athens, Greece on August 14, 5005, 479 F.Supp.2d 792, 804 (N.D. Ill. 2007) (noting that Cyprus government had already instituted its own investigation into the allegations set forth in the complaint). Thus, it is clear that South Africa has a strong interest in the environmental contamination at the Canelands Site.
The United States has little to no localized interest in resolving these disputes — the only allegations relating to United States citizens involve alleged overreach by Dow Agro as to the actions of its subsidiary, Dow South Africa. Moreover, given the United States' lack of interest in this dispute, it would be unfair to burden the citizens of Indiana with jury duty.
Finally, should this case remain with this Court, potential choice of law issues may arise. Although the contract between ChemSpec and Dow South Africa contains provisions allowing either party to choose South Africa as a forum, such election is not mandatory on either party and is therefore not dispositive on this issue. Neither party, however, provides any meaningful analysis of what other choice of law might apply. Nonetheless, the doctrine of forum non conveniens "is designed in part to help courts avoid conducting complex exercises in comparative law." Piper Aircraft Co., 454 U.S. at 251. Thus, "the public interest factors point towards dismissal where the court would be required to `untangle problems in conflict of laws, and in law foreign to itself.'" Id. (quoting Gulf Oil Corp., 330 U.S. at 509). Provided the substantial weight of all the other factors favoring dismissal, the Court need not reach a definitive conclusion on choice of law at this stage, though it too would likely favor dismissal. See In re Air Crash Near Athens, Greece on August 14, 5005, 479 F. Supp. 2d at 805 (citation omitted) (declining to "undertake a lengthy choice of law analysis" where weight of the other factors clearly favored dismissal).
Thus, as with the private interest factors, the public interest factors strongly favor South Africa as the proper forum for this suit.
For the foregoing reasons, Defendants' Motion to Dismiss Dow Chemical for lack of personal jurisdiction pursuant to Rule 12(b)(2) is