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What not to do when Asserting Forum Non Conveniens

Millennium Inorganic Chemicals, Ltd. v. National Union Fire Ins. Comp. of Pittsburgh, PA, No. CCB-09-1893 (D. Md. Feb. 3, 2010) available at
http://www.mdd.uscourts.gov/Opinions/Opinions/Millenium03feb10.pdf

Plaintiffs, Millennium Inorganic Chemicals, Ltd. ("Millennium") and Cristal Inorganic Chemicals, Ltd. ("Cristal") (collectively "Plaintiffs") sued their insurers, National Union Fire Insurance Co. of Pittsburgh, Pa. ("National Union"), ACE American Insurance Co. ("ACE") (collectively "Defendants"), and their insurance broker, Marsh USA Inc. ("Marsh") for declaratory relief, breach of contract, and bad faith for a wrongful denial of insurance coverage. Plaintiffs commenced this action as the result of an alleged loss of income sustained at their manufacturing plant in Western Australia. They claimed they suffered a loss of business income in excess of $10 million when a gas explosion in Western Australia disrupted the receipt of natural gas needed to run their factory.

Prior to the June 2008 gas explosion, Plaintiffs received gas under a long-term contract whereby Plaintiffs' supplier of gas issued a force majeure notice to Plaintiffs that their gas delivery to the factory would be terminated because the Plaintiffs' supplier was likewise issued a notice of force majeure notice from its supplier. This dispute arose from Defendants' refusal to provide coverage under the National Union and ACE policies for the Plaintiffs' business interruption losses.

Millennium is organized under the laws of Australia and has offices in Western Australia. National Union is a Pennsylvania company with its principal place of business in New York, ACE is a Pennsylvania company with its principal place of business in Pennsylvania, and Marsh is a Delaware company with its principal place of business in New York. All three Defendants regularly conduct business in Maryland. The policies issued by National Union and ACE were brokered by Marsh in New Jersey, list Cristal's address as being in Maryland, and were issued in Australia. Based upon this information, Defendants moved for dismissal under the doctrine of forum non conveniens.

In a forum non conveniens case, the defendant bears the burden of persuading the court that the plaintiff's choice of forum is sufficiently inconvenient to warrant dismissal. To meet its burden, the defendant must show that a particular other forum is more appropriate. Thus, this burden implies a preliminary duty to show that an alternative forum exists and that it is available as to all defendants. Furthermore, the defendant must indicate what court provides the alternative forum, rather than merely suggesting the country.

Here, Defendants failed to make the threshold showing that an alternative forum existed. Defendants merely alleged that because ACE and National Union insured Australian property, that they would be amenable to process in Australia. This showing was insufficient in several respects. First, it cannot simply be assumed that an Australian court would take jurisdiction in this case. Second, the defense failed to meet the Fourth Circuit's clear requirement that they indicate which court provides the alternative forum, not just which country. Third, Defendants offered no evidence that all Defendants were amenable to suit in Australia (i.e., Marsh).

Defendants' Motion to Dismiss for forum non conveniens also failed after balancing the public and private interest factors. Specifically, Defendants failed to identify any specific witnesses located in Australia who were essential to Defendants' case and the substance of their testimony. Defendants also failed to submit any affidavits explaining why and to what extent any witnesses would be inconvenienced or that documents will be inaccessible if the case continued in the District of Maryland. Finally, there was no suggestion that harassment motivated the forum selection here. For these reasons, the private factors did not weigh in favor of dismissal.

The public factors did not support dismissal as well. The factor alone that the United States District Court for the District of Maryland may have to interpret Australia law, if it retained jurisdiction, was insufficient to support dismissal. Additionally, Defendants failed to establish Australia's greater interest in the litigation. In short, the public factors did not weigh in favor of dismissal.

Because Defendants did not meet their burden of persuasion that the United States District Court for the District of Maryland was an inconvenient forum, that an alternative forum existed, and because the public and private interest factors weighed against Plaintiffs' choice of forum, Defendants' Motion to Dismiss for forum non conveniens was denied.


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