Opinion
Civil Action No. 03-3771
February 27, 2004
MEMORANDUM AND ORDER
Plaintiff Malaysia International Shipping Corporation (MISC) has brought suit claiming that Defendant Sinochem International Co. Ltd. (Sinochem) made negligent misrepresentations to a Chinese Admiralty Court. Sinochem moves to dismiss MISC's Amended Complaint for lack of subject matter jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(1), and for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2) and (b)(5). Additionally, Defendant argues that dismissal of the Amended Complaint is warranted for forum non conveniens and Plaintiffs failure to observe the rules of comity. For the reasons stated below, we will grant said motion.
I. FACTUAL BACKGROUND
This matter involves the arrest of a Malaysian vessel in China by order of a Chinese Admiralty Court, pursuant to the petition of a Chinese corporation, which alleges that the Malaysian vessel owner fraudulently back-dated the bill of lading when it loaded the Chinese corporation's cargo. This matter's undisputed connection to the district of this Court is that the cargo was loaded by an American company, a non-party to this suit, at the Port of Philadelphia in 2003.
The undisputed facts are as follows. Defendant Sinochem, a Chinese company, contracted with Triorent Trading, Inc. (Triorient), an American company located in Connecticut, to purchase a substantial quantity of steel coils. The contract called for the coils to be shipped from the United States to China on or before April 30, 2003, and that, before Triorient could receive payment, inter alia, a corresponding valid bill of lading needed to be tendered to the bank where Defendant had opened a line of credit for the purchase of the steel coils. (Pl.'s Br. at 3.) The contract further expressly called for any disputes arising out of the contract to be arbitrated under Chinese law. (Contract, Def.'s Br. Ex. 3 at 3.)
Triorient sub-chartered the vessel on which the coils were shipped from Plaintiff MISC, a Malaysian company and the managing owner of the vessel (Pl.'s Br. at 2), and hired Novolog Bucks County, Inc. (Novolog), a stevedoring company located in Pennsylvania, to load the steel coils onto Plaintiff's vessel at the Port of Philadelphia. A bill of lading was issued, acknowledging receipt of the cargo, and the vessel set sail for China. (Pl.'s Br. at 3.) The bill of lading was dated April 30, 2003, and lists Triorient as the shipper and Pan Ocean Shipping Co., Ltd. (Pan Ocean) as the carrier. Defendant was identified as the party to notify, signifying that it is the end receiver; Plaintiff is not mentioned on the bill. The contract of carriage accompanying the bill of lading calls for the application of the Hague Rules, which implicates the Carriage of Goods at Sea Act (COGSA) under U.S. law. The bill of lading also incorporates a charter party, the terms of which Pan Ocean will not disclose; however, its counsel states in a letter that the charter party implicates U.S. law.
Black's defines charter party as a "contract by which a ship, or a principal part of it, is leased by the owner, especially to a merchant for the conveyance of goods on a predetermined voyage to one or more places; a special contract between the shipowner and charterer, especially for the carriage of goods at sea." Black's Law Dictionary (7th ed. 1 999).
Upon arrival at the Chinese port in June 2003, Plaintiff's vessel carrying Defendant's cargo was arrested by order of the Guangzhou Admiralty Court, pursuant to a petition filed by Defendant for preservation of a maritime claim. This claim was based on an allegation that Plaintiff had fraudulently backdated the bill of lading (i.e., dated the bill of lading April 30, 2003, when it actually did not load the shipment until May). According to Defendant, this alleged fraud infringed its rights and caused significant financial loss. (Civil Decision, Pl.'s Br. Ex. C and Def.'s Br. Ex. 2.) As required by the ruling, Plaintiff paid the ordered US $9,000,000 security bond to obtain release of its vessel and Defendant filed a complaint in Chinese Admiralty Court. (See Civil Decision; Def.'s Br. at 2.)
The matter involving Defendant's Complaint, filed on July 2, 2003, that Plaintiff fraudulently backdated the bill of lading, is currently proceeding before a judge in the Chinese Admiralty Court. Plaintiff has contested the jurisdiction of the Chinese court on grounds either that the charter party incorporated in the bill of lading calls for the application of U.S. law or that the commencement of the instant action before this Court, on June 23, 2003, obviates the need for the Chinese court to entertain the matter. (See Huang Ya Quan Affirmation and Statement of Appeal, Pl.'s Br. Ex. A.) Rejecting this jurisdictional objection, the Guangzhou court dismissed Plaintiff's application. Plaintiff has since appealed the ruling to the Guangdong Provincial High Court, China's court of appeal. The High Court's decision remains pending. (Huang Ya Quan Affirmation, PL's Br. Ex. A ¶ 9.)
The Complaint filed in this Court stems from the same incident and runs parallel to the matter before the Chinese Admiralty Court; both matters turn on whether Plaintiff fraudulently back-dated the bill of lading. Denying these allegations of fraud, Plaintiff in the instant matter claims damages resulting from Defendant's alleged "negligent misrepresentation [to the Chinese Admiralty Court] of [Plaintiffs] vessel's fitness and suitability to load its cargo," which resulted in substantial financial losses due to the Chinese court's arrest of the vessel. (See Am. Compl. ¶¶ 30, 34.)
Defendant has filed the instant Motion to Dismiss for lack of subject matter and personal jurisdiction. If we find that we have jurisdiction over this matter, Defendant further contends that we should decline to entertain this claim on grounds of forum non conveniens and Plaintiff's failure to observe the rules of international comity by engaging in forum-shopping.
We find that we do have subject matter jurisdiction, as this is a matter or admiralty or maritime jurisdiction. We further find that, while Plaintiff cannot establish personal jurisdiction over Defendant through Pennsylvania's long-arm statute, limited jurisdictional discovery could establish personal jurisdiction through the federal long-arm statute. However, the taking of such discovery will not be necessary because we find that the Chinese Admiralty Court is the best venue and authority to address this matter and we thus grant the Motion to Dismiss for forum non convemens.
II. ANALYSIS
A. Subject Matter Jurisdiction
Defendant objects to this Court having subject matter jurisdiction over this case and argues the absence of such jurisdiction on three bases: (1) maritime jurisdiction; (2) diversity; and (3) federal question through the Carriage of Goods by Sea (COGSA) or Harter Acts. Because we conclude that this matter falls within federal maritime jurisdiction, we find that we do have subject matter jurisdiction, and deny Defendant's motion as to this argument.
Plaintiff asserts that this case is one of admiralty or maritime jurisdiction, giving us original subject matter jurisdiction, pursuant to 28 U.S.C. § 1333. We agree. For a plaintiff to establish jurisdiction under § 1333, it must satisfy a two-prong test, establishing both a location and a connection to maritime activity.
With respect to location, Plaintiff must show either that "the tort occurred on navigable water or [that the] injury suffered on land was caused by a vessel on navigable water." Grubart, Inc. v. Great Lakes Dredge Dock Co., 513 U.S. 527, 534, 115 S.Ct. 1043, 130 L.Ed.2d 1024 (1995); Neely v. Club Med Mgmt. Servs., Inc., 63 F.3d 166, 179 (3d Cir. 1995).
Plaintiff easily establishes this first prong of the test, as the Third Circuit's finding in Neely so instructs. There, the plaintiff filed suit in the Eastern District of Pennsylvania, claiming violations of maritime law, after being injured by the propellers of a scuba diving vessel that was anchored in the coastal waters of St. Lucia.Neely, 63 F.3d at 170. Concluding that the district court had subject matter jurisdiction, the Third Circuit found that "the locality test is readily satisfied, for plaintiffs injuries occurred in navigable waters and were caused there by a vessel." Id. at 179.
Contrary to some district court holdings in the Second and Fourth Circuits, which Defendant cites in an effort to narrow the scope of the locality test, Neely demonstrates that the Third Circuit does not invoke an additional element requiring that the "navigable water" be under the jurisdiction of the United States. Thus, the fact that the vessel was seized in China is of no consequence. As the seizure occurred on navigable water, at a port in China, Plaintiffs Complaint satisfies the locality prong.
To state the obvious, St. Lucia is not part of the United States, but rather its own commonwealth, having received its independence from Great Britain in 1979. See http://www.stlucia.go v.lc/saint_lucia/saintluciaconstitution/the_saint_lucia_ constitution.htm
Further, to establish the requisite connection to maritime activity, Plaintiff must show both that the general features of the alleged negligence "had 'a potentially disruptive impact on maritime commerce,'" and that " 'the general character' of the 'activity giving rise to the incident' shows a 'substantial relationship to traditional maritime activity.'" Grubart, 513 U.S. at 534 (quoting Sisson v. Ruby, 497 U.S. 358, 364 n. 2, 365, 364, and n. 2, 110 S.Ct. 2892, 111 L.Ed.2d 292 (1990)). This matter satisfies both of these elements.
While neither party characterizes the general features of this matter, we note that throughout their briefs, Plaintiff focuses on the loading of the cargo in Philadelphia and the alleged fraudulent bill of lading as the critical incident, while Defendant emphasizes the arrest of the vessel in the Chinese port. For these purposes, we need not establish which incident is the relevant activity because the general features of both activities have a sufficient connection with maritime activity. We look to the Supreme Court for guidance in describing the general character of these incidents.
In Sisson, which involved damages to a marina on Lake Michigan, as well as vessels docked nearby, resulting from a fire that ignited on a pleasure yacht docked there, the Supreme Court characterized the incident for jurisdictional purposes as "a fire on a vessel docked at a marina on navigable waters." 497 U.S. at 363. Following this lead, we characterize this incident either as the improper loading of cargo on a vessel docked at a port on navigable waters or the arrest of a vessel docked in navigable waters. Both scenarios have a potentially disruptive impact on maritime commerce.
The possible effects on maritime commerce of untimely, or otherwise improper, loading of cargo are obvious and far-reaching. Similarly, it is clear that the seizure of a vessel has the potential to disrupt commercial activity, as such an arrest hinders the ability of the vessel to carry out further commercial transactions. See Neely, 63 F.3d at 179 (finding a potential disruptive impact on maritime commerce in part because the incident "could lead to delays in commercial shipping").
Furthermore, both the arrest of a vessel and the improper loading of a vessel at a dock on navigable waters have clear and substantial relationships to maritime activity. Based on its desire to protect maritime commerce, which is the fundamental purpose underlying maritime jurisdiction, the Supreme Court has stated that all "activities traditionally undertaken by vessels, commercial or noncommercial," have a substantial relationship to maritime activity. Id. at 367 (citing Foremost Ins. Co. v. Richardson, 457 U.S. 668, 674, 102 S.Ct. 2654, 73 L.Ed.2d 300 (1982)). As such, the Court inSisson found that docking a ship was an important maritime activity because, at a marina, vessels often remained for long periods of time and received fuel supplies. Accordingly, the storage and maintenance of a ship at a marina had a substantial relationship to maritime activity. Id. Similarly, loading a ship, which is done while the ship is docked at a marina and which involves actions very similar to obtaining supplies, is substantially related to maritime activity.
Furthermore, if activities undertaken by vessels have a substantial relationship to maritime activity, it logically follows that actions carried out to or against vessels would also have a substantial relationship to maritime activity. As such, the very serious act of arresting a vessel at a port sufficiently relates to maritime activity to establish subject matter jurisdiction.
Because this matter occurred on navigable water and has a sufficient connection to maritime activity, we find that it falls within the scope of admiralty or maritime jurisdiction. As such, we appropriately have subject matter jurisdiction over this claim.
As we find that this admiralty matter falls within this Court's subject matter jurisdiction, we need not address Defendant's objections with respect to diversity or federal question subject matter jurisdiction.
B. Personal Jurisdiction
Defendant next argues that we should dismiss this Amended Complaint, pursuant to Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction. In furtherance of this argument, Defendant contends that this Court lacks specific jurisdiction because Defendant has no place of business in Pennsylvania and has not availed itself of the privileges of Pennsylvania commerce.
As Defendant has contested personal jurisdiction, the burden lies with Plaintiff to demonstrate "with reasonable particularity" the sufficiency of the non-resident Defendant's activities in Pennsylvania.Provident Nat'l Bank v. Cal. Fed. Savings Loan Assoc., 819 F.2d 434, 437 (3d Cir. 1987). We find that Plaintiff has not identified sufficient minimum contacts to establish personal jurisdiction, either specific or general, based on the Pennsylvania long-arm statute. However, we do find that, with limited jurisdictional discovery, Plaintiff might be able to establish jurisdiction pursuant to the federal long-arm statute, under Fed.R.Civ.P. 4(k)(2).
The analysis that follows pertains solely to specific jurisdiction. Plaintiff does not contest Defendant's argument that it does not have the continuous and systematic contacts to establish general jurisdiction, and we think that Defendant's clear showing of an absence of general jurisdiction obviates the need for any such discussion.
1. Pennsylvania Long-Arm Statute, Pursuant to Fed.R.Civ.P. 4(e)
Under Fed.R.Civ.P. 4(e), a federal district court has personal jurisdiction over a non-resident defendant if a state court would have that power. Dollar Sav. Bank v. First Sec. Bank of Utah, 746 F.2d 208 (3d Cir. 1984). Accordingly, we look to the Pennsylvania long-arm statute, 42 Pa. Cons. Stat. Ann. §§ 5301 et seq. (Purdon 1981 Supp. 1989), to determine whether facts or circumstances exist to require Defendant to answer in this forum. Section 5322(b) of the long-arm statute authorizes both general and specific jurisdiction to the "fullest extent allowed under the Constitution of the United States." Thus, because Pennsylvania's "reach is coextensive with the limits placed on states by the federal constitution," Vetrotex Certaineed Corp. v. Consolidated Fiber Glass Products Co., 75 F.3d 147, 150 (3d Cir. 1996), we apply the familiar two-part test summarized below.
The interpretation of the United States Constitution by Pennsylvania courts does not, however, bind federal courts. Instead, we must look to federal constitutional doctrine in assessing Defendant's susceptibility to personal jurisdiction in Pennsylvania. The Fourteenth Amendment due process clause limits the power of the state to assert personal jurisdiction over a nonresident defendant. Pennover v. Neff, 95 U.S. 714, 733, 24 L.Ed. 565 (1877). The basic factors for ascertaining whether the exercise of personal jurisdiction over a nonresident defendant is proper were set forth in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). That case held that due process is satisfied when a nonresident defendant has such minimum contacts with the forum state "that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Id. at 316, 66 S.Ct. 154 (internal citation omitted).
The Third Circuit Court of Appeals has cogently summarized the applicable two-part inquiry:
First, the defendant must have made constitutionally sufficient 'minimum contacts' with the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985). The determination of whether minimum contacts exist requires an examination of the 'relationship among the forum, the defendant and the litigation.' Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2580, 53 L.Ed.2d 683 (1977), in order to determine whether the defendant has 'purposefully directed' its activities towards residents of the forum. Burger King, 471 U.S. at 472, 105 S.Ct. at 2182 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790 (1984)). There must be 'some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.' Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958). Second, if 'minimum contacts' are shown, jurisdiction may be exercised where the court determines, in its discretion, that to do so would comport with 'traditional notions of fair play and substantial justice.' International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).Vetrotex, 75 F.3d at 150-151. "Specific jurisdiction" is invoked when the cause of action arises from, or is related to, the defendant's contacts with the forum, such that the defendant "should reasonably anticipate being haled into court there." Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414 n. 8, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).
We find that Plaintiff has failed to establish sufficient minimum contacts. As the primary contact to Pennsylvania, Plaintiff argues that Defendant availed itself of the benefits of this jurisdiction when it applied for an order from this Court allowing it to take discovery for the purposes of foreign litigation in a related matter. (See Pl's Br. at 15.) However, we agree with Defendant that this independent action does not give rise to personal jurisdiction, as the prior order involved a separate matter not being litigated in this country, much less this jurisdiction, and a different party.
While it seems to have arisen from the same subject matter as the instant claim, this matter, 2:03-mc-00087-FVA, involved a foreign action by Defendant against an entity not a party to this case, for which Defendant needed records from two Pennsylvania companies, neither of which are parties to the instant suit.
While Plaintiff correctly quoted Third Circuit precedent that parties seeking affirmative relief in a particular court typically subject themselves to that jurisdiction for litigating matters arising from the same subject matter, Bel-Ray Co., Inc. v. Chemrite (Pty) Ltd., 181 F.3d 435, 443 (3d Cir. 1999), Bel-Ray and the other cases cited both in Bel-Ray and by Plaintiff are clearly distinguishable because they involve proceedings between the same parties all within the same suit.
For example, the Bel-Ray court denied the defendants' personal jurisdiction defense because, prior to asserting that defense, the defendants had moved for, and litigated, summary judgment on a counterclaim. Those actions, made within the same case and involving the same party against whose claims they attempted to assert the personal jurisdiction defense, effectively constituted a waiver of that defense.Id. at 443-44.
In so finding, the Bel-Ray court relied on earlier Third Circuit case law that "held that a defendant who participates in the adjudication of the plaintiffs application for a preliminary injunction without securing a determination of his challenge to the court's personal jurisdiction over him submits himself to the jurisdiction of the court. . . ." Id. (discussing Wyrough Loser, Inc. v. Pelmor Labs., Inc., 376 F.2d 543, 547 (3d Cir. 1967)). Again, just as in Bel-Ray, Wvrough involved proceedings within the same case arising from the same subject matter involving the same parties.
Similarly, the Supreme Court in Adam v. Saenger, which Plaintiff also cites, found that a procedure allowing judgment against the plaintiff, against whom the defendant had filed a cross-claim, does not violate the due process clause because "the plaintiff, having, by his voluntary act [of filing a claim,] in demanding justice from the defendant, submitted himself to the jurisdiction of the court, there is nothing arbitrary or unreasonable in treating him as being there for all purposes for which justice to the defendant requires his presence." 303 U.S. 59, 67-68, 58 S.Ct. 454, 82 L.Ed. 649 (1938).
Unlike the aforementioned cases, not only did the prior matter involving Defendant before this Court not involve Plaintiff or this negligence claim, but it did not even involve a claim seeking relief from another party. See Wyrough, 376 F.2d at 547 (reasoning that because the hearing would resolve factual conflicts and could grant some relief, the party's participation in that proceeding waived the personal jurisdiction defense as to the specific litigation in that case). Rather, Defendant merely filed an application to take discovery from two companies based in Pennsylvania, who are not parties to this suit, in furtherance of foreign litigation against another non-party to this suit. In fact, Defendant filed the application for the Order permitting discovery on May 15, 2003, almost one month prior to Plaintiff's vessel even arriving in China.
The application and corresponding order for discovery involving partiesnot part of the instant suit in furtherance of a matternot being litigated in this country simply does not rise to the level of establishing a contact with Pennsylvania such that Sinochem would expect to be haled into court here on a completely different claim.
Finally, to find Defendant's prior discovery application and this Court's order relevant to a determination of personal jurisdiction in this case would be inconsistent with other findings in this circuit.See, e.g., Paul Yanuzzi Builders, LLC v. Music Mountain Assocs., LLC, No. 02-cv-7438, 2003 WL 925368, at *2 (E.D. Pa. Feb. 28, 2003) (finding that the defendants did not submit to personal jurisdiction by requesting discovery prior to raising the defense). We find that Defendant did not establish a minimum contact with Pennsylvania for purposes of this case by seeking an order to take discovery in a separate matter.
As such, the sole remaining alleged minimum contact to this jurisdiction is the fact that the cargo at issue was loaded onto the vessel in Philadelphia. (See Pl.'s Br. at 16-17 (identifying Defendant's minimum contacts alleged to be substantial enough not to violate the Due Process Clause)). However, this contact alone does not survive a due process analysis, such that Defendant would reasonably expect to be haled into court here. As such, Plaintiff has not demonstrated that this Court has specific jurisdiction over Defendant through Pennsylvania's long-arm statute.
Additionally, Plaintiff argues that Defendant's purchase of the cargo from Pennsylvania was a further minimum contact. However, Plaintiff's own pleadings indicate that Defendant contracted with Triorient Trading, Inc., a Connecticut corporation, to purchase the steel coils. (See Pl.'s Br. at 18.)
2. Federal Long-Arm Statute, Pursuant to Fed.R.Civ.P. 4(k)(2)
We do find, however, that provided limited discovery, Plaintiff might be able to identify sufficient national contacts to establish personal jurisdiction over Defendant through the federal long-arm statute. However, because we grant Defendant's Motion to Dismiss on other grounds, we will not order such discovery.
Under Rule 4(k)(2), a plaintiff may establish that a court has personal jurisdiction over a defendant if it can show that: (1) the claim arises under federal law; (2) the defendant does not have general jurisdiction in any state; and (3) jurisdiction would survive a due process analysis.
The rule states
If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state. Fed.R.Civ.P. 4(k)(2).
While the Third Circuit has not ruled on whether Rule 4(k)(2) applies to matters of maritime jurisdiction, in a case of first impression for this Circuit, the District of the Virgin Islands relied on "its own reading of the rule, and the similar reasoning used in the currently unanimous body of case law on point," to hold Rule 4(k)(2) applicable to cases of admiralty and maritime law. Western Equities, Ltd. v. Hanseatic, Ltd., 956 F. Supp. 1232, 1235 (D. V.I. 1997) (citing the only other opinions at the time to address this issue, all but one of which found that Rule 4(k)(2) encompasses maritime cases). The sole opinion to find to the contrary was reversed by the Fifth Circuit, which held that federal law does include maritime cases, as applied to Rule 4(k)(2). World Tanker Carriers Corp. v. My Ya Mawlaya, 99 F.3d 717, 722-723 (5th Cir. 1996) (discussing the federal nature of maritime law and citing numerous cases that have stated that admiralty cases are federal law). Since Western Equities, no case in our Circuit has held otherwise. Thus, we follow our sister court and find that the federal long-arm statute does apply to admiralty cases.
With respect to the second element of the test, Defendant's own arguments, coupled with the absence of argument regarding personal jurisdiction from Plaintiff, make clear that it does not have general jurisdiction in Pennsylvania. See Def.'s Br. at 14-16 (arguing absence of personal jurisdiction). However, it is unclear whether any other state may have general jurisdiction over Defendant. Despite Defendant's averment that it "is incorporated and has its principal place of business in China" (Dacheng Decl. ¶ 8), it is uncertain whether Defendant has "continuous and systematic contacts" with any forum in the United States, from which general jurisdiction would arise. General Elec. Co. v. Deutz Ag, 270 F.3d 144, 150 (3d Cir. 2001) (citing Helicopteros, 466 U.S. at414-16); Def.'s Br. at 14. We would allow minimal jurisdictional discovery to make this determination.
Similarly, it is uncertain whether Defendant has sufficient minimum contacts with the United States to survive a due process analysis. The "widely adopted" test applied by the court in Western Equities to determine whether the defendant had enough minimum contacts considered three factors with respect to the defendant:
(1) transacting business in the United States; or
(2) doing an act in the United States; or
(3) having an effect in the United States by an act done elsewhere.Western Equities, 956 F. Supp. at 1237.
Defendant avers that its personnel work in China, that it has no place of business in the United States, and that it neither advertises nor solicits business in the United States. (Dacheng Decl. ¶¶ 8-9.) However, Plaintiff claims that Defendant does have "enterprises in the United States which may be related for purposes of jurisdiction" (Pl.'s Br. at 20), and we are required to interpret all factual disputes in a light most favorable to the plaintiff. Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003).
Moreover, Defendant has undoubtedly transacted business in the United States, as its contract with the Connecticut-based Triorient demonstrates, and, according to the contract, the cargo that Defendant purchased was to be shipped from an American port. (See Contract, Def.'s Br. Ex.3.)
However, the Supreme Court has made clear that a contract alone cannot establish sufficient minimum contacts in the home forum of the other party. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); BP Chemicals, Ltd. v. Formosa Chemical Fibre Corp., 229 F.3d 254, 260 (3d Cir. 2000);see also Sunbelt Corp. v. Noble, Denton Assoc., Inc., 5 F.3d 28, 32 (3d Cir. 1993) ("a nonresident's contracting with a forum resident, without more, is insufficient to establish the 'minimum contacts' required for the exercise of personal jurisdiction over the nonresident.").
The Court further informs us that, with respect to establishing specific jurisdiction, "[i]t is . . . prior negotiations and contemplated future consequences [of the contract], along with the terms of the contract and the parties' actual course of dealing that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum." Burger King, 471 U.S. at 479; BP Chemicals, 229 F.3d at 260.
Given the uncertainty with respect to possible Sinochem enterprises that do business in the United States or any Sinochem business that has an effect on the United States, as well the instruction provided us by the Supreme Court in Burger King regarding the significant aspects of Defendant's contract for determining jurisdiction, we would be inclined to allow limited discovery to determine whether Plaintiff can establish personal jurisdiction, either through the identification of other enterprises that Plaintiff claims could be related, or through additional information with respect to the parties' dealings. So long as Plaintiff alleges facts "that suggest 'with reasonable particularity' the possible existence of the requisite 'contacts between [the party] and the forum state, the plaintiff's right to conduct jurisdictional discovery should be sustained." Id. at 456 (quoting Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992)).
Plaintiff's allegations with respect to other Defendant enterprises in the country, as well as the undisputed facts averred with respect to the how the contract was carried out, render Plaintiff's claim far from frivolous. Thus, we would refrain from ruling on whether the federal long-arm statute, Rule 4(k)(2), permits personal jurisdiction over Defendant until after the parties had taken limited jurisdictional discovery. However, as the ensuing analysis shows, this discovery will not be necessary because we will dismiss this matter for forum non conveniens.
C. Forum Non Conveniens
Defendant next argues that, even if we were to find the requisite subject matter and personal jurisdiction, we still should decline jurisdiction in this matter for forum non conveniens, as the witnesses to this matter, many of whom are based in Asia, reside outside this jurisdiction. (Def.'s Br. at 17.) Preliminarily, we note that we are required to indicate how much deference to pay to this foreign plaintiff's choice of forum. Consistent with our sister court's prior findings, "we will not lightly disturb plaintiff's choice of forum and will hold defendant to establishing a strong preponderance in favor of dismissal." Lacey v. Cessna Aircraft Co., 932 F.2d 170, 179 (3d Cir. 1991) (Lacey II) (quoting Lacey v. Cessna Aircraft Co., 736 F. Supp. 662, 664 (W.D. Pa. 1990), rev'd on other grounds byLacey II).
To warrant a dismissal on these grounds, Defendant bears the burden of establishing two elements: an adequate alternative forum and that both public interest and private factors weigh heavily towards dismissing the case. Id. at 180.
A defendant typically can satisfy the first element by showing that it is "amenable to process" in another jurisdiction. Id. (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n. 22, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981)) (citation omitted in original). As reflected in the absence of any argument to the contrary from Plaintiff, the existence of the parallel proceeding commenced by Defendant in Chinese Admiralty Court easily establishes the existence of an adequate alternative forum.
We next consider the private interest factors, which include:
relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make a trial of a case easy, expeditious and inexpensive.Id. at 180 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 91 L.Ed. 1055 (1947)).
The main witnesses with respect to the loading of the ship would be personnel from the stevedoring company that loaded the cargo onto the ship and the crew members of the vessel that sailed it to China, as well as "surveyors retained on behalf of the various vessel interests and shipper, [and] the local agent." (See Pl.'s Br. at 23 (identifying some of the witnesses.)) Additionally, Defendant's representatives who made the alleged misrepresentations to the Chinese Admiralty Court would also have to be available. The only such persons clearly associated with the United States are the Novolog employees who loaded the cargo on the ship. The members of the crew are Filipino and Defendant's representatives are Chinese. While Plaintiff argues that neither the surveyors nor the local agent are located in China, Plaintiff fails to identify their connection to the United States.
Def.'s Br. Ex. 5. While it appears as though Exhibit 5 may not include the entire list of crew members — it is p. 2 of a facsimile and the names through the bottom of the sheet suggest that there could be a continuation — we accept it as the full list, as Plaintiff does not contest it and Lu Min avers to it. (See Lu Min Decl. ¶ 13.)
Furthermore, while we acknowledge Plaintiff's averments that the Chinese system of discovery and documentation may not be as broad or as facilitative as the American system, we have no reason to doubt the competence and justness of the system the Chinese courts do have in place. (See Lu Min Reply Decl. ¶ 6.) Additionally, because irrespective of our ruling here, Plaintiff still must litigate this matter in the Chinese court, the costs inherent in translation and interpretation would only increase if we maintained jurisdiction. The existence of the Chinese litigation, which would require travel to China anyway, further negates Plaintiff's argument with respect to the travel costs of American witnesses.
While we recognize that the declaration of Plaintiff's witness describes China's discovery procedure more negatively than that of Defendant's witness (Compare Huang Ya Quan Unsworn Decl. ¶ 15 with Lu Min Reply Decl. ¶ 6), and we are required to interpret factual disputes in favor of Plaintiff, the non-moving party, we do not find their statements to be inconsistent.
Additionally, we must consider public interest factors in determining forum non conveniens, which include:
the administrative difficulties flowing from court congestion; the 'local interest in having localized controversies decided at home'; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in application of foreign laws; and the unfairness of burdening citizens in an unrelated forum with jury duty.Id. (quoting Piper, 454 U.S. at 241 n. 6)).
The sole applicable public interest issue here involves choice of law, and we find that such an analysis would render this matter one of Chinese law. A choice of law analysis requires, as a threshold issue, that we establish whether this matter implicates significant U.S. interests. In other words, we must find one of five factors:
1) injury to an American seaman or a seaman with America dependents,
2) injury in American territory,
3) American defendants,
4) an American flagged ship, or
5) a contractual choice of law clause specifying American law.Neely, 63 F.3d at 182. The undisputed relevant facts reflect an absence of the first four factors.
Upon meeting this threshold, we would have to determine whether it would reasonable, under the circumstances, to apply American law.Id. For purposes of our analysis, we need not make this finding, as it would not affect our determination regarding forum non conveniens.
The sole possible factor implicating U.S. interests involves the choice of law clause, in the charter party, which the bill of lading incorporates. (See Conditions of Carriage for Bill of Lading, Pl.'s Br. Ex. A.) However, the letter identifying U.S. law as the law of choice in the charter party does not state whether the charter party calls for U.S. law to apply specifically to this type of negligence matter, and the context of the letter suggests that Pan Ocean's concession regarding American law resulted from an inquiry from Plaintiff with respect not to this suit or any allegations of negligence by Defendant, but rather with respect to Plaintiffs attempts under Chinese law to secure release of its vessel. (See Pl.'s Br. Ex. A, Clyde Co. letter (stating both that the carrier was "prepared to indicate that the [charter party] provides for New York arbitration with US law to apply," but that their "understanding of PRC law [was] that such a provision . . .[was] unlikely indeed to induce the Chinese court to order the release of the vessel without security.")).
Furthermore, while we recognize that the bill of lading, especially as it incorporates the charter party, calls for the application of U.S. law, we disagree with Plaintiffs argument that it has any relevance to this negligence matter. (See Pl.'s Br. at 29.) The allegations of fraud underlying the negligence claim involve the issuance of the bill of lading, not the actual conditions of carriage, such as the handling of the cargo, to which the choice of law provision in the bill of lading would apply. Stated another way, Plaintiff does not allege a violation with respect to the nature of the carrier's duties to be carried out pursuant to the bill of lading and carriage contract, such as the manner of loading, conditions in transit, or protection of the cargo.
Rather, its dispute involves solely the date on which the cargo was loaded and whether Plaintiff fraudulently backdated the bill of lading, thus validating the contract for the sale of the steel coils and allowing the buyer to withdraw monies from Defendant's line of credit. This matter does not implicate the choice of law clause in the bill of lading; rather, the choice of law clause more applicable to this matter is that of the purchase contract of the steel coils, which calls for the use of Chinese law.
The Third Circuit has stated that one of the two main purposes for conducting a choice of law analysis with respect to admiralty law "is to assure that American maritime law is not applied to incidents that lack any significant American connection." Neely, 63 F.3d at 181. We find that this matter "lack[s] any significant American connection." While the loading of the cargo, the date of which we concede is critical to the matter, occurred in the United States, Plaintiff's claim does not allege any wrongdoing with respect to the manner in which the American company loaded the cargo, the environment at the U.S. port where the cargo was loaded, or the general handling of the cargo. Indeed, no American company is a defendant, much less a party to this matter.
Moreover, the loading of the cargo could have happened anywhere in the world and it would not have changed the circumstances of this litigation; the fact that it occurred at a U.S. port by an American stevedoring company was a function of the purchase contract with a non-party to this matter, not alleged in this suit to have engaged in any wrongdoing. The actual injury, the arrest of the vessel, occurred in Chinese territory, pursuant to an order by a Chinese court, at the request of a Chinese corporation. The interests of the United States are not implicated here.
As such, we find that, despite the deference we pay to Plaintiffs choice of forum, we find that Defendant has established a strong preponderance of dismissal, as this matter is best litigated in the Chinese Admiralty Court. The existence of a parallel proceeding in the Chinese Admiralty Court negates any argument of convenience with respect to litigating the matter here, as, irrespective of our ruling, Plaintiff will have to litigate this matter in China. Moreover, with the exception of the American employees of the stevedoring company who loaded the vessel, most, if not all, of the witnesses are based in Asia. Finally, the Chinese Admiralty Court arrested the Malaysian vessel at a Chinese port, pursuant to Chinese law, at the request of a Chinese corporation; no American companies or interests are at stake. We have no reason to second-guess the authority of Chinese law or the competence of its courts; this matter is appropriately addressed there. We grant Defendant's Motion to Dismiss and close this case on grounds of forum non conveniens.
Aside from legal argument, we are confident that the Chinese Admiralty Court can competently and justly handle this matter. Plaintiff does not contest that the Chinese Admiralty Court is a well-established court, which handles more than 2000 cases per year, the majority of which involve non-Chinese parties, or that the presiding judge on this matter has nineteen years of judicial experience. (Lu Min Decl. ¶¶ 19, 21.) Additionally, while there seems to be some disagreement as to the extent of Chinese discovery and evidentiary practice relative to that in the United States, the Chinese system appears to have competent and orderly practice and procedure capable of justly addressing matters involving foreign entities. (Compare Huang Ya Quan Affirm. ¶¶ 14-15, 17 with Lu Min Decl. ¶¶ 6-8 (debating China's discovery practice and its evidentiary procedure regarding witness testimony.)) Moreover, neither party should face any prejudice regarding discovery available in the United States because, as Defendant has utilized in a related matter before the Chinese court, our system permits the use of the American discovery process for the purpose of foreign litigation.
Because we dismiss this case for forum non conveniens, we need not reach Defendant's arguments regarding the rules of international comity and forum-shopping.
III. CONCLUSION
Defendant filed the instant Motion to Dismiss, pursuant to Fed.R.Civ.P. 12, on grounds of lack of subject matter jurisdiction, personal jurisdiction, forum non conveniens, and forum-shopping. We find that while we do have subject matter jurisdiction, and may have personal jurisdiction, because the Chinese Admiralty Court is competent and in the best position to try this matter between Asian parties, we grant the motion on grounds of forum non conveniens. As such, we need not reach the issue of forum-shopping. An appropriate order follows.
ORDER
AND NOW, this 27th day of February, 2004, after full consideration of Defendant's Motion to Dismiss, filed January 5, 2004, Plaintiff's response thereto, filed February 4, 2004, and Defendant's reply, filed February 17, 2004, it is hereby ORDERED that said motion is GRANTED and this case is DISMISSED without prejudice to Plaintiff's right to proceed on this matter in the appropriate Chinese Admiralty Court. This case is closed.