What not to do when Asserting Forum Non Conveniens
(February 2010) By Kevin M. Cox, Associate
For more information, contact Paul Farquharson.
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.