Forum Convenience May Brush the Merits

Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp.

Sincohem Int. Co. Ltd., a Chinesse state-owned importer brought suit in a Chinese Admiralty Court, arguing that a Malaysian shipping company caused it to make payments on the basis a falsified a bill of lading. The Malaysian company was shipping U.S. goods, and brought charges in U.S. District Court against Sincohem for negligently misrepresenting their ship’s fitness and causing delay due to the ship’s subsequent arrest. That court found subject matter jurisdiction (admiralty) and believed that limited discovery might give the Malaysian company an opportunity to show personal jurisdiction. Before allowing such discovery, however, the court transferred it under the forum non conveniens doctrine. The Third Circuit overturned this decision.

A federal court can dismiss for forum non conveniens when another forum has jurisdiction and a trial in the former would “establish … oppressiveness and vexation to a defendant … out of all proportion to plaintiff’s convenience,”or for administrative and legal reasons. When the forum selected is the home forum the party moving to change bears a heavy burden. Courts cannot assume jurisdiction for the purposes of ruling on the merits, but there is no mandatory sequencing of judicial matters and a court may dismiss for lack of personal jurisdiction without first reaching the question of subject matter jurisdiction. Because forum non conveniens denies a merits evaluation, a court may dispose of a case under this doctrine without reaching subject-matter or personal jurisdiction. That being the case, such orders do not fall within the collateral order exception to the firm final judgment rule (a party may not appeal until the district court has rendered a final judgment). There will be some overlap between the merits and the forum non conveniens evaluation, but “threshold issues [may] involve a brush with ‘factual and legal issues of the underlying dispute.’” “Resolving a forum non conveniens motion does not entail any assumption by the court of substantive ‘law-declaring power,’” rendering it a threshold, nonmerits issue.

Gulf Oil v. Gilbert, which largely caused the confusion in this case stated that the doctrine “can never apply if there is absence of jurisdiction” and that “in all cases in which forum non conveniens comes into play, it presupposes at least two forums in which the defendant is amenable to process.” The Court disposes with the first statement by characterizing it as a tautological statement that once a court determines that there is no jurisdiction the case must be dismissed. The second one is read to mean only that a court’s statutory power to entertain a suit does not settle the question of whether it must do so. Since proceedings are already underway elsewhere, this is no occasion to consider whether a court conditioning forum non conveniens dismissal on waiver of jurisdictional objections. In sum, courts may take the less burdensome route