Opinion
No. 97 Civ. 2858 (BSJ).
February 3, 2005
Opinion
This case arises out of a seizure and confiscation of foreign property allegedly in violation of New York State law. The Plaintiffs, Raphael Bigio, Bahia Bigio, Ferial Salma Bigio and B. Bigio Co. (collectively, "the Bigios") seek damages from the Defendants, The Coca-Cola Company and The Coca-Cola Export Corporation (collectively, "Coca-Cola"), for their conduct in connection with the nationalization of the Bigios' property by the Egyptian government in the early 1960s. Specifically, Plaintiffs seek damages for conversion. Defendants move to dismiss the Complaint on the grounds of: (1) international comity; (2) forum non conveniens; (3) failure to state a claim; (4) failure to join two indispensable parties; (5) and that the claims are time barred.
BACKGROUND
The factual history of this action is set forth at length in a previous district court opinion, Bigio v. Coca-Cola Co., 1998 U.S. Dist. LEXIS 8295 (S.D.N.Y. June 5, 1998), dismissing Plaintiffs' complaint because Plaintiffs had not satisfied the prerequisites for jurisdiction under the Alien Tort Claims Act, and because the act of state doctrine barred the court's exercise of jurisdiction despite the parties' diversity of citizenship. The Court of Appeals subsequently affirmed that Plaintiffs had no claims under the Alien Tort Claims Act, but reversed the District Court's holding that the act of state doctrine barred the claims. Finding diversity jurisdiction, the Circuit Court remanded for consideration of whether the principle of international comity barred consideration of the case. Bigio v. Coca-Cola Co., 239 F.3d 440 (2d Cir. 2001). Familiarity with those opinions is assumed, and only a brief summary of the facts appears here.Plaintiffs Raphael Bigio, his sister Ferial Salma Bigio, and their mother Bahia Bigio are citizens and residents of Canada. Plaintiff B. Bigio Co. is a company owned by the Bigio family, organized in Egypt in the early 1930s. Defendants the Coca-Cola Company and the Coca-Cola Export Company are incorporated in the State of Delaware and headquartered in Atlanta, Georgia. The Coca-Cola Export Company is a wholly owned subsidiary of the Coca-Cola Company.
The property that is the subject of this action consists of land and factories located in Heliopolis, Egypt, a suburb of Cairo. The Bigios contend that the Egyptian government under President Gamal Abdel-Nasser sequestered and nationalized their property in 1962 because they were Jewish. The Bigios left Egypt in 1965 without having received compensation.
Once the Egyptian government seized Plaintiffs' property it transferred ownership to the Misr Insurance Company ("Misr"), a company wholly owned by the Egyptian government. Misr in turn leased the property to the El-Nasr Bottling Company ("ENBC"), another company wholly owned by the Egyptian government.
In 1977, after the death of President Nasser, the Egyptian government apparently issued an edict revoking the contracts of sale that had effected the transfer of the Bigios' property to Misr. In 1979, purportedly pursuant to this edict, the Egyptian Ministry of Finance issued Decision Number 335, which ordered Misr to return the Bigios' property, along with any rental burden and active occupants, or to forward to the Bigios the proceeds of any sale of the property that might have occurred. However, Misr did not return the property.
The Bigios brought suit in Egypt in 1980 against Misr, ENBC, and various government agencies. Plaintiffs do not claim that they have ever sued Coca-Cola in Egypt. Coca-Cola asserts that the 1980 claims were dismissed for failure to prosecute. The Plaintiffs do not dispute this. (Declaration of Ahmed Abou Ali, August 19, 1997, Chart A.)
Coca-Cola began doing business with the Bigio family in 1938. Coca-Cola leased land from the Bigios for its bottling plants and gradually bought bottle caps and other marketing elements from Bigio factories until the family was dispossessed in 1962. From 1967 to 1979 Coca-Cola was barred from doing business in Egypt because it did business in Israel. After the peace treaty between Egypt and Israel, Coca-Cola reentered the Egyptian market. (Defendants' Answers to Interrogatories at 20.) In 1993, Coca-Cola sought to invest in the privatization of ENBC, the Egyptian beverage company.
In 1993, ENBC consisted of a number of distribution and warehousing facilities throughout Egypt and thirteen bottling plants, one of which was located on the Bigios' former property. Two subsidiaries of Coca-Cola Export Company invested in ENBC and currently own 42% of the company. (Defendants' Renewed Motion at 8.)
In February 1994, when Coca-Cola was seeking to buy ENBC, Raphael Bigio contacted Coca-Cola to discuss the Bigios' claims regarding the Heliopolis property. Correspondence and two meetings between the Bigios and the company followed. In July 1995, Coca-Cola advised Mr. Bigio that it would not compensate him. Coca-Cola asserts that its investigation prior to the acquisition led it to conclude that ENBC, which leased the land from Misr Insurance Company, had no liability to the Bigios.
The plaintiffs filed this lawsuit in the United States District Court for the Southern District of New York on April 21, 1997, seeking compensatory and punitive damages for the defendants' allegedly improper conduct in "converting plaintiffs' assets." Their complaint alleged that Coca-Cola engaged in wrongdoing by "acquiring the assets of ENBC, knowing that plaintiffs had been deprived of their rights to the property solely because of their religious faith."
Judge Martin, in his earlier district court opinion, held that the act of state doctrine applied. The act of state doctrine is an element of abstention doctrine, which refers to a district court's decision not to exercise jurisdiction it has. The Second Circuit examined the abstention issues and disagreed with Judge Martin's holding on the act of state doctrine. Instead, they remanded for this Court to determine whether another abstention doctrine, international comity, applied. Bigio v. Coca-Cola Co., 239 F.3d 440, 451-455 (2d Cir. 2000).
DISCUSSION
I. International Comity
International comity has been defined as "the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation." Hilton v. Guyot, 159 U.S. 113, 164 (1895).
Under the doctrine of international comity, a court declines to exercise jurisdiction it admittedly has and dismisses a complaint in favor of a foreign forum. See Finanz AG Zurich v. Banco Economico S.A., 192 F.3d 240, 245-46 (2d Cir. 1999). The decision whether to dismiss a case on international comity grounds lies within the discretion of the district court. See id. at 246; Jota v. Texaco, Inc., 157 F.3d 153, 160 (2d Cir. 1998).
International comity is an affirmative defense; the party asserting comity as grounds for dismissal bears the burden of proof. United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F.Supp. 2d 198, 212 (S.D.N.Y. 2002);Allstate Life Ins. Co. v. Linter Group, Ltd., 994 F.2d 996, 999 (2d Cir. 1993).
As the Second Circuit noted, central to an ultimate determination in this case is "the legal effect of the 1977 edict and subsequent instructions issued by the Egyptian government with respect to the Bigios' property." 239 F.3d at 454.
The Defendants meet their burden, demonstrating the need for comity by using the seven-step test laid out by the Ninth Circuit and endorsed by this Circuit. Timberlane Lumber Co. v. Bank of America Nat'l Trust and Savings Assoc., 749 F.2d 1378 (9th Cir. 1984); O.N.E. Shipping Ltd. v. Flota Mercante Grancolombiana, S.A., 830 F.2d 449, 451 (2d Cir. 1987).
The first element of the Timberlane test asks the Court to consider the degree of conflict with foreign law or policy. The degree of conflict here is high. To find the Defendants liable for trespass or conversion of the Bigios' property, this Court would have to determine that the Egyptian governments acts in sequestrating the land were wrongful in the first place, and a government-owned company's refusal to return the property was wrong subsequently. Misr, the state-owned company, presumably believes it has a valid basis under Egyptian law for refusing to abide by the 1977 edict that purported to repair the property to the Bigios. Any adjudication by this Court in Plaintiffs' favor would necessarily entail a determination that the Egyptian government or a state-owned subsidiary, or both, acted contrary to law. This would bring the Court into conflict with Egyptian law and policy, and tips strongly in favor of a comity finding.
The remaining Timberlane factors also suggest that deference to Egypt would be appropriate. They are: (2) the nationality of the parties, which is Canadian in the plaintiffs' individual cases, Egyptian in the case of the plaintiff corporation, and American for the defendant corporations; (3) the extent to which enforcement by either the U.S. or Egypt can be expected to achieve compliance, which tips strongly in favor of Egypt given that title to real property is at issue; (4) the relative significance of the effects on the U.S. as compared with those in Egypt, which also tips in favor of Egypt given that there are almost no effects in the United States save the possibility of a small effect on Coca-Cola's balance sheet; (5) and (6) the extent to which there is explicit purpose to harm or effect American commerce, and the foreseeability of such an effect, which is nil; and (7) the relative importance to the violations charged of conduct within the U.S. as compared with conduct in Egypt, which also tips in favor of Egypt. Although Coca-Cola's decisions about the Heliopolis property may have originated in the U.S., the conduct that is of crucial importance — the conduct of the Egyptian government — happened in Egypt.
In partially reversing the District Court, the Second Circuit noted, "This lawsuit's connection to Egypt is . . . undeniably strong. By contrast, the only connection between this lawsuit and the United States . . . is the identity of the defendants as United States corporations." 239 F.3d at 454. The Circuit also instructed this Court to consider whether an adequate forum for the claim exists in Egypt and whether the defendants are subject to suit there. Notably, these questions overlap with the doctrine of forum non conveniens, which will be addressed below.
A. Adequacy of the Forum
An adequate forum for the claim exists in Egypt. Long after they had left Egypt, the Plaintiffs commenced litigation there — in 1980 and again in 1993. They now allege that continuing anti-Semitism in Egypt makes it too dangerous for them to pursue their action there, but the support they provide for that claim is insufficient.
The Plaintiffs cite an Egyptian newspaper article about this litigation as proof that "the publicity in Egypt obviously makes it life-threatening for the plaintiffs or their counsel to travel to that country or to engage in a public trial in that country." (Mot'n in Opp'n at 2.) The article, provided in full translation by Defendants, is certainly anti-Semitic in tone. However, nothing in its contents suggests that the Plaintiffs' safety would be jeopardized by litigating in Egypt. Likewise, the news articles cited by Plaintiffs regarding an anti-Semitic Egyptian television show do not demonstrate that Jews litigating in Egyptian courts are in physical danger, nor that the government has endorsed these racist attitudes.
In fact, the article Plaintiffs cite as proof of danger refers to thousands of other pending lawsuits like theirs. Although the Bigios claim that their numerous attempts to litigate their claims in Egypt comprise a "record of futility," they do not cite any cause for that futility beyond their own inaction. (Opp'n Memo at 13.)
B. Jurisdiction over defendant
The other key ingredient to the availability of a foreign forum is the ability to reach the defendant in that forum. In this case the Defendants have stipulated to jurisdiction in Egypt.
The Second Circuit found that this Court can decide the controversy, but remanded for consideration of whether it should. 239 F.3d at 454. This Court finds that after weighing the factors of an international comity analysis, the case is dismissed.
In the alternative, it is abundantly clear that a forum analysis strongly indicates that the case would be more properly prosecuted in Egypt. Both parties have briefed the forum non conveniens issue, and the Court will address it now.
Judge Martin dismissed the case without reaching the forum non conveniens claim. The Defendants preserved it on appeal but did not brief it fully. The issue thus has not been analyzed by either the district court or the circuit court.
II. Forum Non Conveniens
The decision to dismiss a case on forum non conveniens grounds "lies wholly within the broad discretion of the district court."Scottish Air Int'l, Inc. v. British Caledonian Group, PLC, 81 F.3d 1224, 1232 (2d Cir. 1996).
There is ordinarily a strong presumption in favor of the plaintiff's choice of forum. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981). A foreign plaintiff seeking to litigate in American court is generally given less deference, because the presumption of convenience is diminished. Id. Still, "some weight must still be given to a foreign plaintiff's choice of forum." Murray v. British Broadcasting Corp., 81 F.3d 287, 290 (2d Cir. 1996). The Plaintiffs are neither citizens nor residents of the United States.
In a forum non conveniens analysis, the court must first determine whether an adequate alternative forum exists. Carey v. Bayerische Hypo-Und Vereinsbank AG, 370 F.3d 234, 237 (2d Cir. 2004). If one does, the court then evaluates relevant private and public interest factors to determine if the balance of convenience tilts strongly in favor of dismissal. Id.; see also Piper Aircraft, 454 U.S. at 254; Gulf Oil Corp. v. Gilbert, 339 U.S. 501, 508-09, (1947).
A. Egypt as an Adequate Alternative Forum
An alternative forum generally is adequate if "(1) the defendants are subject to service of process there; and (2) the forum permits litigation of the subject matter of the dispute."Bank of Credit and Commerce Int'l (Overseas) Ltd. v. State Bank of Pakistan, 273 F.3d 241, 246 (2d Cir. 2001) (internal citation omitted). Here, Defendants have agreed to accept service in Egypt for this action, (Def. Mem. at 1), and there is no dispute that Egypt permits the litigation of the instant claims.
As discussed above, Plaintiffs claim that their lives would be at risk if they litigated the case in Egypt, but do not provide support enough to convince the Court that this is more than legal theatrics. While this Circuit has recognized that the emotional burden of litigating abroad should be taken into account in a forum non conveniens analysis, the leading case on this factor emphasizes the court's interest in honoring a plaintiff's desire to litigate at home. Guidi v. Inter-Continental Hotels Corp., 224 F.3d 142, 146 (2d Cir. 2000) (". . . a plaintiff's choice of forum is entitled to greater deference when the plaintiff has chosen the home forum.")
Not only are the Bigios not suing at home, the forum that they claim is emotionally untenable is one in which they have litigated multiple claims since their dispossession. Absent the presumption of convenience created when a plaintiff sues at home, and given the Bigios' willingness to litigate in Egypt over the past decades, the Court finds nothing inadequate about the Egyptian courts as a forum for their claim.
B. Private Interest Factors
The relevant private interest factors include: (a) ease of access to evidence; (b) the availability of compulsory process for the attendance of unwilling witnesses; (c) the cost of willing witnesses' attendance; (d) if relevant, the possibility of a view of premises; and (e) all other factors that might make the trial quicker or less expensive. Gulf Oil, 330 U.S. at 508.
Here, the private interests tip in favor of litigating this action in Egypt. The essence of the instant action is what rights, if any, the Bigios have to real property located in Egypt. As two earlier courts have noted, evaluating Plaintiffs' cause of action against Coca-Cola requires first understanding what actions the Egyptian government took regarding the Plaintiffs' property in the early 1960's and late 1970's.Bigio, 1998 U.S. Dist. LEXIS 8295, *10-11; Bigio, 239 F.3d 440, 453. Although Plaintiffs assert that materials relevant to Coca-Cola's decision to invest in Egypt are located in the United States, the company's liability, if any, cannot be determined without first addressing the status of Plaintiffs' underlying Egyptian claim.
The relevant evidence — the documents, the non-party witnesses, and the property itself — are in Egypt. The documents are presumably in Arabic; many of the witnesses may not speak English. Moreover, Egyptian law as it existed in 1962 and 1977 will be crucial to the case, and an Egyptian court is far better equipped to interpret that law than this Court.
It is worth noting that almost nothing relevant occurred in the United States, and nothing at all in the Southern District of New York. Coca-Cola Export's parent company is headquartered in Atlanta. Coca-Cola executives received and responded to Mr. Raphael Bigio's claims there in 1994. That is the extent of this action's connection to the United States; no connection to this District is alleged.
C. Public Interest Factors
The relevant public interest factors to be weighed in a forum non conveniens inquiry are (a) administrative difficulties associated with court congestion; (b) the unfairness of imposing jury duty on a community with no relation to the litigation; (c) the local interest in having localized controversies decided at home; and (d) avoiding difficult problems in conflict of laws and the application of foreign law. Gulf Oil, 330 U.S. at 508-09. Here, the public interest factors overwhelmingly favor Egypt as the more appropriate forum.
Trying this case would require the diversion of resources from other cases having more connection to this district. To allow foreign nationals to bring such suits in this District (or elsewhere in the federal courts) would place a burden on the courts — a burden that would not be justified in light of the de minimis connection between Plaintiffs' loss of property that occurred outside of the United States and this district. It is undisputed that "this Court sits in one of the busiest districts in the country is undeniable, making this one of the congested centers of litigation referred to in [Gulf Oil]. The need to guard our docket from disputes with little connection to this forum is clear . . ." Doe v. Hyland Therapeutics Div., 807 F.Supp. 1117, 1128 (S.D.N.Y. 1992).
In addition, "jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation." Gulf Oil, 330 U.S. at 501-02.
Lastly, Egypt's interest in deciding this controversy is significant. Not only is Egypt the country with the most significant factual relationship to this litigation, but its strong interest in deciding the subject matter of this controversy is undeniable. As discussed above, the Bigios are not the only family who may have lost property under Nasser's government on account of their religion or ethnicity. Not only are Egyptian courts better prepared to untangle the legal knot of this case, they have a strong interest in maintaining whatever precedent may already have developed on the matter. The intrusion of a United States court could raise precisely the international comity issues that concerned the Second Circuit.
CONCLUSION
Given that the doctrines of international comity and forum non conveniens demand that the case be dismissed, the Court declines to consider other claims made by defendants: failure to state a claim, failure to join indispensable parties, and that the claims are time-barred.
The Clerk of the Court is directed to close the case.
SO ORDERED: