Opinion
03 Civ. 0200 (GEL)
May 12, 2003
Michael J. Carcich, Nicoletti Hornig Campise Sweeney Paige, New York, NY, for Plaintiffs
Edward M. Joyce, Heller Ehrman White McAuliffe LLP, New York, NY, for Defendants
OPINION AND ORDER
This action arises out of an insurance contract between plaintiff insurers and defendants, a multi-national group of companies affiliated or partnered with BP Amoco P.L.C. (collectively, "defendants" or "BP Amoco"). Plaintiffs National Union Fire Insurance Company ("National Union") and Associated Electric Gas Insurance Services, Ltd. ("AEGIS"), seek a declaratory judgment that certain insurance claims submitted by defendants are void because defendants misrepresented their eligibility for coverage, and that even if the claims are not void, they are not covered by the insurance policy. Defendants now move to dismiss the suit on grounds of forum non conveniens, arguing that London is the appropriate forum for this action. For the reasons discussed below, the motion will be denied.
Plaintiffs have named as defendants 127 companies located around the world, most of which are BP Amoco subsidiaries. Only fifty of these — those BP Amoco subsidiaries that are located in the United States — have appeared in this action at this time, and so these fifty are the only defendants who are parties to the instant motion. (Ltr. of Heather Zona, 3/19/03, at 1.) Thus, as used In this opinion, the term "defendants" refers to these fifty defendants.
BACKGROUND
BP Amoco is a group of companies engaged in oil and gas exploration at various locations around the world, of which BP Amoco P.L.C., based in the United Kingdom, is the ultimate parent company. (Defs. Mem. at 3.) Since 1998, BP Amoco has maintained an insurance policy known as the "Open Cover," which provides all of the BP Amoco subsidiaries with coverage for losses suffered at various on- and offshore projects. (Id.) The policy does not automatically cover all of BP Amoco's projects, but allows BP Amoco to "declare" selected projects for insurance coverage within a specified period of time after the project's initiation. (Siebenaler Aff. ¶ 4.)
BP Amoco hired Aon Risk Services ("Aon"), an insurance broker with offices in London and the United States, to identify insurers willing to participate in the Open Cover and to coordinate project declaration and claims processing. (Defs. Mem. at 3-4.) Aon's search for insurers was international in scope, and the insurers who eventually agreed to underwrite the Open Cover included Lloyd's of London, Swiss Re in Zurich, Switzerland, and AXA and QBE in Paris, France. (Defs. Mem. at 4.) Each insurer agreed to indemnify a percentage of any losses arising from projects covered by the Open Cover, and each signed a separate contract with BP Amoco. Except with respect to each insurer's percentage of participation, the contracts were identical in all respects. (Seibenaler Aff. ¶ 7 Ex. A.) National Union, an insurer based in New York, and AEGIS, an insurer based in New Jersey, both agreed to participate in the Open Cover, and both negotiated their contracts with Aon's offices in Houston and Chicago. (Costa Aff. ¶ 4; Keefe Aff. ¶ 4.) The contracts were executed at the insurers' places of business. (Costa Aff. ¶ 7; Keefe Aff ¶ 7.)
BP Amoco elected to have twenty-six projects, located in the North Sea, Asia, and the Gulf of Mexico, covered under the Open Cover. (Siebenaler Aff. ¶ 9.) BP Amoco suffered approximately $175 million in losses at eleven of the projects, and submitted claims for the losses to Aon's Chicago and London offices. (Id. ¶ 11.) Aon's Chicago office forwarded the claims to National Union and AEGIS, and its London office forwarded the claims to the European insurers. (Id.) Nine of the European insurers declined coverage for several of the projects (id.), while National Union and AEGIS accepted the claims (Oddy Aff. ¶¶ 4-5).
On September 21, 2001, BP Amoco P.L.C. filed suit on behalf of itself and its subsidiaries against the European insurers who had denied coverage under the Open Cover. (Id. ¶¶ 21-22.) In bringing the lawsuit in Commercial Court in London, BP Amoco relied on the Open Cover's provision that "[a]t the principal Insured(s) [sic] discretion this insurance shall be subject to English law and practice or USA law and practice," and on its provision that the insurers would agree to "Service of Suit in the United States or United Kingdom at the Insured's discretion." (Id. Ex. E at 6, 49.) In the lawsuit, which is currently pending, BP Amoco seeks a judgment declaring that the "contracts of insurance [that are] the subject of the 26 declarations . . . made under the Open Cover are valid and subsisting contracts of insurance and that the Defendants are obliged to indemnify the Claimant and its co-insureds in respect of claims thereunder." (Id. Ex. B ¶ (1).) The European insurers argue that the Open Cover is void in its entirety because of "material non-disclosure and/or misrepresentation," and that therefore the individual declarations are void. (Id. ¶ 14(1).) On February 27, 2003, after a trial of preliminary issues, the court issued a decision resolving the meaning of the contract with respect to the method and timing of declarations, and concluding that certain of the projects had been validly declared to the insurers. (Id. Ex. D at 6-7.) The issues that remain to be decided include the validity of the Open Cover as a whole, whether certain declarations are void for misrepresentations, and whether certain of the losses were eligible for coverage. (Id. ¶¶ 12-13.)
In 2002, National Union and AEGIS became aware of "certain misrepresentations of fact made by BP Amoco's Chicago office and/or Aon Chicago in connection with the declaration of projects . . . accepted by National Union and AEGIS under the policy." (Pls. Mem. at 6.) On December 9, 2002, both insurers notified BP Amoco that they were denying coverage with respect to certain of the projects., (Id. at 7.) On December 10, they filed this lawsuit against BP Amoco P.L.C. and its domestic and foreign subsidiaries and affiliated companies in the Supreme Court of New York, seeking a declaratory judgment that all declarations accepted by National Union and AEGIS on the basis of BP Amoco's misrepresentations are void, and that in the alternative, a number of the claims made under the Open Cover are not eligible for coverage. (See, e.g., Compl. ¶¶ 147, 158.) Defendants removed the action to this Court on the basis of diversity jurisdiction. See 28 U.S.C. § 1332 (2000).
Plaintiffs moved to remand the suit to state court, arguing that the parties were not completely diverse. This Court denied the motion on March 27, 2003. See National Union Fire Ins. Co. of Pittsburgh, PA v. BP Amoco P.L.C. et al., No 03 Civ. 200 (GEL), 2003 WL 1618534 (S.D.N.Y. Mar. 27, 2003).
After being notified that National Union and AEGIS were denying coverage, BP Amoco initiated a lawsuit against them in Commercial Court in London on December 12, 2002, claiming that National Union and AEGIS are obligated to provide coverage because the declarations made pursuant to the Open Cover formed valid insurance contracts. (Oddy Aff. ¶ 7 Ex. C.) BP Amoco is "presently in the process of effecting service on AEGIS and AIG," and once service is complete, it will attempt to consolidate the suit with its lawsuit against the European insurers. (Id. ¶ 7.)
Defendants now move to dismiss this action on grounds of forum non conveniens, arguing that the London litigation, as well as the fact that the projects at issue, and most of the insurers who participated in the Open Cover, are not located in the United States, makes the United Kingdom a more convenient forum for this action. Plaintiffs cross-move to strike various portions of the affidavits submitted in support of defendants' motion.
DISCUSSION I. Defendants' Motion To Dismiss
Under the doctrine of forum non conveniens, a district court has broad discretion to dismiss an action, over which jurisdiction is otherwise proper, based on the convenience of the parties and the interests of justice. See Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 527 (1947); R. Maganlal Co. v. M.G. Chem. Co., Inc., 942 F.2d 164, 167 (2d Cir. 1991) ("A district court has broad discretion in deciding whether to dismiss an action on the grounds of forum non conveniens.");Guidi v. Inter-Continental Hotels Corp., 224 F.3d 142, 145 (2d Cir. 2000) ("We have recognized that our review of a forum non conveniens dismissal is limited to whether a district court abused its broad discretion to dismiss on such grounds."). In determining whether to grant a motion for forum non conveniens, district courts must first determine the degree of deference to be accorded the plaintiffs' choice of forum, since "the plaintiff's choice of forum should rarely be disturbed." Iragorri v. United Techs. Corp., 274 F.3d 65, 71 (2d Cir. 2001). The greater the deference due to plaintiff's choice of forum, "the more difficult it will be for the defendant to gain dismissal for forum non conveniens" by establishing that the balance of conveniences favors defendant's choice of forum. Id. at 72. In any case, "[t]o prevail on a motion to dismiss based on forum non conveniens, a defendant must demonstrate that an adequate alternative forum exists and that, considering the relevant private and public interest factors set forth in [Gulf Oil Co. v. Gilbert, 330 U.S. 501, 508-09 (1947)], the balance of convenience tilts strongly in favor of trial in the foreign forum." Maganlal, 942 F.2d at 166.
A. Plaintiffs' Choice of Forum
Where, as here, the plaintiffs have chosen to sue in the United States, their choice of forum is ordinarily entitled to great deference.Koster, 330 U.S. at 524. In addition, "[t]he more it appears that a domestic or foreign plaintiff's choice of forum has been dictated by reasons that the law recognizes as valid, the greater the deference that will be given to the plaintiff's forum choice." Iragorri, 274 F.3d at 71-72. Defendants argue that plaintiffs' choice of New York is not entitled to deference, however, because it is the result of forum shopping, as evidenced by the fact that plaintiffs "waited fifteen months to tell BP . . . of their intention to deny coverage and file this action," and "did not attempt to intervene in the London action, even though they could have done so under English law." (Defs. Mem. at 1-2.) Plaintiffs contend that they filed suit shortly after they discovered the alleged misrepresentations, and that they chose to sue in New York because National Union executed its contract there, and because both plaintiffs' offices are located in the area. (Pls. Mem. at 9.) Defendants have not proffered any evidence of bad faith or forum shopping on plaintiffs' part; the fact that plaintiffs unquestionably chose a time and place of filing that was to their liking and elected to file in the United States rather than to join the litigation in the United Kingdom does not demonstrate any improper motivation. In the absence of any evidence to the contrary, plaintiffs' choice of their home forum appears to have been motivated by genuine considerations of convenience and connection to the events giving rise to the suit. Their choice is therefore entitled to a high degree of deference. Iragorri 274 F.3d at 71-73.
B. Adequate Alternative Forum
In order to prevail on a motion to dismiss for forum non conveniens, defendants must demonstrate that an adequate alternative forum exists. A forum is considered adequate for the purposes of forum non conveniens if the defendant is subject to the jurisdiction of that forum, and the foreign forum provides a remedy for the alleged wrong. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n. 22 (1981). Plaintiffs contend that not all of the defendants would be subject to service in the United Kingdom (Pls. Mem. at 10; Thomas Aff. ¶¶ 12-13), but defendants represent in their reply brief that they are in the process of ensuring that all defendants, including those who have not yet appeared in this action, will agree to service of process in London (Defs. Reply at 4; Zona Supp. Aff. Ex A-2). Such consent is sufficient to render the forum adequate to protect plaintiffs' interests. Jauss v. Lehman Bros., Inc., No. 94 Civ. 2921 (LMM), 1995 WL 4023, at *3 (S.D.N.Y. Jan. 5, 1995).
Defendants note that service of process also appears to be a problem in this forum, since at this point plaintiffs have successfully served only the domestic defendants, and a number of the foreign defendants will contend that they are not subject to personal jurisdiction in New York. (Defs. Mem. at 8.) Given the number of nations in which the defendants are located and do business, jurisdictional issues are likely to arise wherever the case is litigated, absent the defendants' consent to service.
Although BP Amoco has not yet been able to obtain the consent of all of the foreign defendants, if the motion were otherwise meritorious, the Court could condition the dismissal of this action on such agreement. See, e.g., Moscovits v. Magyar Cukor Rt., No. 00 Civ. 31 (VM), 2001 WL 767004, at *8 (S.D.N.Y. July 9, 2001), aff'd, 34 Fed. App. 24 (2d Cir. 2002).
Plaintiffs argue that London is an inadequate forum because no adequate remedy exists there for their claims. (Pls. Mem. at 11.) Specifically, plaintiffs contend that if they are forced to bring suit in London, the potential consolidation of their suit with BP Amoco's ongoing suit against the European insurers will deprive plaintiffs of their opportunity to litigate the issues that have already been decided in the London suit, and that may be determinative of their claims. (Id.) It is not clear that the existence of a pending lawsuit, and the possibility that a court may already have made adverse findings in the course of that lawsuit, renders a potential forum inadequate for purposes of forum non conveniens analysis. Mastercard Int'l Inc. v. Argencard Sociedad Anomina, No. 01 Civ. 3027 (JGK), 2002 WL 432379 (S.D.N.Y. Mar. 20, 2002) (finding Argentina an adequate alternative forum despite existence of previously filed pending parallel action there). At any rate, plaintiffs' assertion is somewhat surprising in light of their contention that the issues involved in the London litigation are entirely different than the ones at stake in this lawsuit (Pls. Mem. at 18); to the extent that the issues in the two lawsuits do not overlap, plaintiffs would have as fair an opportunity to litigate their claims in London as in New York. Moreover, the argument is purely speculative, since whether the actions are consolidated will depend on the discretion of the English court, and plaintiffs have presented no evidence suggesting that that court would be unable or unwilling to ensure that plaintiffs have a fair opportunity to fully litigate all of the dispositive issues in their case. See Piper Aircraft, 454 U.S. at 254 (holding that remedies afforded by a foreign court must appear "so inadequate as to afford no remedy at all" to render the foreign forum inadequate). Accordingly, the Court concludes London would be an adequate alternative forum for resolving plaintiffs' claims.
C. The Gilbert Convenience Factors
1. Private Interest Factors
In order to determine whether an action should be dismissed on the basis of forum non conveniens, this Court must first balance the convenience of the parties and witnesses, based on certain "private" factors. The applicable private factors are:
(1) the relative ease of access to sources of proof; (2) the availability of compulsory process for attendance of unwilling witnesses; (3) the cost of obtaining attendance of willing witnesses; (4) [i]ssues concerning the enforceability of a judgment; and (5) all other practical problems that make trial of a case easy, expeditious, and inexpensive — or the opposite.Murray v. British Broadcasting Corp., 81 F.3d 287, 292 (2d Cir. 1996);see also Gilbert, 330 U.S. at 508. Of course, the convenience of the parties is a somewhat elusive concept where, as here, the litigation is truly multi-national. BP Amoco negotiated the Open Cover in the United States and England on behalf of its international subsidiaries; plaintiffs are American corporations that executed the contracts pursuant to the Open Cover in the United States; the projects for which BP Amoco seeks coverage are located around the globe, and plaintiffs' claims implicate alleged misrepresentations made by BP Amoco concerning those projects, as well as the factual circumstances that led to specific losses at some of the sites. Precisely because the parties, the events at issue, and the evidence are dispersed all over the world, defendants have failed to show that the convenience of the parties dictates that this lawsuit must be tried in London, rather than New York.
The sources of proof necessary to resolve this dispute are scattered around the world. The evidence will include testimony as to defendants' conduct and alleged misrepresentations, which took place both here or overseas; the records of the projects themselves, which are located mainly in the North Sea, Asia, and the Gulf of Mexico, but are being compiled in London (Defs. Mem. at 14); and the testimony of various witnesses as to the meaning of the Open Cover itself, which was negotiated primarily in the United States (Siebenaler Aff. ¶ 6). Nonetheless, defendants argue that the fact that their lawyers in the United Kingdom are beginning to compile evidence relating to the individual projects weights the balance of conveniences in favor of the United Kingdom as the forum for this suit. (Defs. Mem. at 9.) Defendants have not yet collected all of the evidence in London (id.), however, and plaintiffs' documentary evidence relating to the contract negotiations, as well as many of their witnesses, are located in the United States (Pls. Mem. at 13). Moreover, the effort spent in gathering documents into a single place in connection with the London litigation makes it easier, not more difficult, to transport evidentiary material to New York than it was when the documents were in their original locations, and it is manifestly not the case that the live witnesses are now located in London. Defendants have not established that the various sources of proof are now concentrated in the United Kingdom, cf. SMT Shipmanagement Transport Ltd, v. Maritima Ordaz C.A., No. 00 Civ. 5789 (GEL), 2001 WL 930837, at *7 (S.D.N.Y. Aug. 15, 2001) (dismissing on forum non conveniens grounds where all evidence was located in Venezuela), nor have they argued that it would be "oppressive or vexatious" to transport documents from London to New York, DiRienzo v. Phillip Services Corp., 294 F.3d 21, 30 (2d Cir. 2002) (internal quotation marks omitted). In the absence of a clear concentration of the evidence in the United Kingdom, the fact that sources of proof are located in both forums, as well as in other parts of the world, is insufficient to establish that it would be significantly more convenient to submit this evidence to a court in London than one in New York. This factor thus does not weigh in favor of either party. In re Assicurazioni Generali S.p.A. Holocaust Ins. Litigation, 228 F. Supp.2d 348, 350 (S.D.N.Y. 2002).
BP Amoco next argues that this Court cannot compel witnesses located in Asia and Europe to testify in New York. (Defs. Mem. at 14.) Given the availability of letters rogatory as a means to obtain deposition testimony from witnesses located outside of the forum nation, however, in order to establish that this factor weighs in favor of dismissal, defendants must show that live testimony is particularly necessary in this case, and that some witnesses will be unwilling to travel to New York. DiRienzo, 294 F.3d at 30. Defendants have not asserted that this action requires the live testimony of foreign witnesses, and it appears that resolution of the main issues in dispute will predominantly involve examination of the records of the projects and the documents that defendants submitted in support of their insurance claims. Cf. Beekmans v. J.P. Morgan Co., 945 F. Supp. 90, 94 (S.D.N.Y. 1996) (stating that impossibility of live testimony was a "compelling" factor favoring dismissal, in a defamation case in which witnesses were to testify as to what was said and as to damage to reputation). Defendants also have not asserted that letters rogatory and depositions would not be an acceptable means of obtaining testimony. (Defs. Mem. at 14.) Therefore, this factor does not weigh in favor of dismissal.
The cost of obtaining the attendance of willing witnesses also does not favor dismissal. The potential witnesses in this case are located in the United States, the United Kingdom, Asia, and Europe. (Defs. Mem. at 14; Pls. Mem. at 14.) Since the witnesses are located all over the world, traveling to New York does not represent a greater aggregate expense than traveling to London. Cf. Jauss, 1995 WL 4023, at *3 (holding that Germany would be a more convenient forum where almost all witnesses were located in Germany).
Defendants do not dispute that any judgment obtained in New York would be enforceable as easily as one obtained in London. Since BP Amoco is composed of many corporations with offices and assets located around the world, any logistical problems or opportunities involved in enforcing a judgment would be similar in either case.
Finally, defendants argue that the parties' convenience necessitates adjudicating this action in London because the ongoing litigation against the European insurers, and BP Amoco's recently filed action against National Union and AEGIS, involve the same or similar issues. Thus, defendants argue, "[s]imultaneous lawsuits will create a substantial risk of inconsistent determinations as to the meaning, scope and application of the Open Cover . . . [and] would result in a duplication of attorney and court resources." (Defs. Mem. at 13.) As a practical matter, the real power of defendants' argument lies in the enhanced efficiency that arguably could be achieved by unifying all of these interrelated actions in a single forum.
Still, while the existence of related litigation involving some or all of the parties can weigh in favor of dismissal, "the pendency of foreign proceedings does not guarantee dismissal." Anglo Amer. Ins. Group, P.L.C. v. CalFed, Inc., 940 F. Supp. 554, 565 (S.D.N.Y. 1996). Thus, where the other factors do not warrant dismissal, the existence of foreign litigation is not sufficient on its own to justify a forum non conveniens dismissal. See DiRienzo, 294 F.3d at 29 (stating that because each forum non conveniens decision turns on its facts, "a single factor is rarely dispositive"). As is often the case, consolidation of related litigation would make things much easier for the party common to all the cases, but may not be in the interests of the distinct opposing parties which have taken different positions and have different legal interests.
Here, the pendency of the London litigation against the European insurers does not ultimately weigh powerfully in favor of dismissal, because, at least at this point, the issues involved in the two lawsuits appear to be distinct, and the possibility of inconsistent judgments accordingly slight. See U.S. Fidelity and Guaranty Co. v. Braspetro Oil Servs. Co., No. 97 Civ. 6124 (JGK), 1999 WL 307666, at *18 n. 10 (S.D.N.Y. May 17, 1999) (denying motion to dismiss for forum non conveniens where pendency of related foreign action would not create unfairness in domestic litigation). In the London action, BP Amoco seeks a declaration that the Open Cover is a valid contract, while the insurers assert that the Open Cover as a whole is void because of misrepresentations made by BP Amoco. (Oddy Aff. Ex. B ¶¶ (1), 14(1).) After a trial of preliminary issues, the court determined that certain of the projects were eligible for coverage under the Open Cover, and that BP Amoco had validly declared the projects according to the terms of the Open Cover. (Id. ¶ 11.) In contrast, National Union and AEGIS do not challenge the validity of the Open Cover itself or the contractual adequacy of the declarations, but allege that defendants made misrepresentations in connection with the declarations, and, in the alternative, that certain claims are not eligible for coverage under the Open Cover.
The issues involved in the two cases may converge at later stages of the lawsuits, however. Because plaintiffs here claim that all of BP Amoco's declarations contained misrepresentations, and the declarations were made to all of the participating insurers at once, the same alleged misrepresentations presumably were made to the European insurers as well. Indeed, defendants state that, in a subsequent stage of the London action, the court may have to determine whether "contracts of insurance otherwise validly declared . . . have been avoided by the [insurers] . . . for alleged misrepresentations" (id. ¶ 12), a determination that presumably will involve the same facts that gave rise to National Union's and AEGIS's claims for misrepresentation. In addition, in both this lawsuit and the London action, if the declarations are found to be valid, the court will have to adjudicate whether specific claims are eligible for coverage. (Id. ¶ 13.) Thus, while at this point the two lawsuits do not involve overlapping issues, there is a possibility of inconsistent judgments with respect to the alleged misrepresentations and the coverage of individual claims, should both lawsuits progress to that point.
Any potential divergence of decisions on these issues, however, will not produce conflicting obligations, because National Union and AEGIS are not yet parties to the London action, as BP Amoco did not sue them along with the European insurers. After this institution of this lawsuit, BP Amoco filed suit against National Union and AEGIS in the London court, intending eventually to consolidate the suit with the pending one against the European insurers. The new London suit has not progressed beyond its initial stages, however; defendants concede that National Union and AEGIS have not yet been served in the action (Oddy Aff. ¶ 7) and that therefore BP Amoco has not yet even filed a detailed statement of its claims. (Id. Ex. C at 2 ("If an Acknowledgment of Service is filed Particulars of Claim will follow.").) Cf. Turner Entertainment Co. v. Degeto Film GmbH, 25 F.3d 1512, 1518 (11th Cir. 1994) (staying case where parallel German litigation had progressed to the point where the court had issued a decision on the merits). Even after National Union and AEGIS appear in the London suit, the parties will have to litigate, and the London court decide, whether the new action should be consolidated with the existing suit. Thus, it is hardly an exaggeration to say that the London action against National Union and AEGIS has not even begun.
Indeed, plaintiffs have presented evidence that BP Amoco will have to seek permission from the English court to serve them, because neither is domiciled in the United Kingdom. (Thomas Aff. ¶¶ 4-7.) In order to obtain permission, BP Amoco will have to establish that the United Kingdom is the proper forum for the action. (Id.) Plaintiffs have also presented evidence that the Claim Form is not valid, since it states that it is "not for service out of the jurisdiction," and that BP Amoco has not served it within the required amount of time. (Id. ¶ 3; Oddy Aff. Ex. C at 1.) Thus, even assuming that BP Amoco will overcome these procedural obstacles and eventually obtain permission to serve National Union and AEGIS, it is not clear that the litigation against plaintiffs will proceed imminently or expeditiously.
Because National Union and AEGIS are not yet parties to the London suit against the European insurers, even if that lawsuit and this suit eventually produce inconsistent judgments, none of the parties to either litigation would be subjected to conflicting obligations. The insurers' individual contracts under the Open Cover obligate them each to pay a predetermined percentage of any losses, and specifically protect the insurers from joint liability (Oddy Aff. Ex. E at 11). Therefore, this Court's finding that a particular claim is valid and covered would simply obligate plaintiffs to pay their contractual percentage of the loss (Compl. ¶ 137), without impacting BP Amoco's rights with respect to the European insurers, or those insurers' obligations to BP Amoco
The doctrine of collateral estoppel will not affect the litigants in any way that would necessitate hearing both actions in the same forum. Because National Union and AEGIS are not parties to the London action, any determinations made in favor of BP Amoco by the London court could not be given preclusive effect in this Court. Films by Jove, Inc. v. Berov, No. 98 Civ. 7674 (DGT), 2003 WL 1907792, at *30 (E.D.N.Y. April 16, 2003) (noting that the Due Process Clause prohibits application of collateral estoppel based on determination made in a foreign action, when the party before the American court was not a party to the foreign action). On the other hand, to the extent that any issues in the two actions are identical, plaintiffs could assert collateral estoppel offensively in this action against BP Amoco as to those issues decided against BP Amoco in London. Kramer v. Showa Denko K.K., 929 F. Supp. 733, 749-50 (S.D.N.Y. 1996) (noting that court has discretion to allow offensive collateral estoppel against a party that had the opportunity to litigate the issue elsewhere). This would not leave BP Amoco in a worse position than if it successfully had this suit dismissed and proceeded to litigate against all of the insurers in London, however, since in that situation any adverse ruling by the London court would bind BP Amoco with respect to both the European insurers and National Union and AEGIS. Although BP Amoco will be forced to relitigate here issues on which it has prevailed in London, but risks being precluded on issues lost in London, this inconvenience does not rise to the level of unfairness necessary to warrant dismissal of this action. Braspetro Oil Servs., 1999 WL 307666, at * 18 n. 10 (stating, where foreign action involved overlapping issues but not all plaintiffs were parties to the foreign action, "[n]o unfairness would result from requiring Brasoil to proceed in two forums since the Japanese Banks are not parties in the Brazilian litigations in any event"). Since the collateral estoppel that could arise from maintaining two separate, but overlapping, suits, will not deprive either side of the right to litigate their claims, it does not necessitate dismissal.
In the event that BP Amoco successfully consolidates its London suit against National Union and AEGIS with its pending suit against the European insurers, the action will presumably become parallel to the action before this Court, as the portion of the London suit related to National Union and AEGIS's liability under the Open Cover will involve the same issues as this lawsuit. The existence of a parallel lawsuit pending in a foreign forum is not in itself sufficient to merit forum non conveniens dismissal, however. Concurrent parallel proceedings are "tolerable," because whichever suit reaches a conclusion first will simply have preclusive effect in the other suit. China Trade Devel. Corp. v. M/V Choong Yong, 837 F.2d 33, 36 (2d Cir. 1987). Thus, in order to obtain a dismissal based on the pendency of a parallel lawsuit, defendants must establish that maintaining the two suits simultaneously in two forums renders the domestic forum so oppressive and inconvenient that it merits overriding plaintiffs' choice of forum. Overseas Programming Cos., Ltd, v. Cinematographische Commerz-Anstalt, 684 F.2d 232 (2d Cir. 1982) (reversing forum non conveniens dismissal where parallel or related suits between the parties were ongoing in three foreign forums, because the defendant had not established that the balance of conveniences otherwise weighed in favor of dismissal). Here, BP Amoco has not established that the potential for parallel lawsuits alone would render New York oppressively inconvenient, since it has not argued that any potential preclusive effect arising from whichever court reaches a verdict first would in any way infringe its rights or deprive it of an opportunity to litigate its case.
This parallel action also implicates issues of comity and deference to the foreign court, as well as forum non conveniens dismissal. While district courts in the Second Circuit may accord deference to previously filed pending parallel foreign actions by either staying or dismissing the actions before them, such abstention occurs only in "rare circumstances," Braspetro Oil Servs. Co., 199 WL 307666, at * 18 n. 10, and is not warranted here, because National Union and AEGIS filed this suit before BP Amoco sued them in London, and because this lawsuit will be relatively far along by the time that National Union and AEGIS are consolidated into the suit against the European insurers. Ronar, Inc. v. Wallace, 649 F. Supp. 310, 318 (S.D.N.Y. 1986) ("When . . . the foreign action is pending rather than decided, . . . priority generally goes to the first suit filed.").
It unquestionably would be more efficient, from BP Amoco's perspective, to dismiss this suit in favor of the London actions, thereby allowing BP Amoco to litigate all of the issues arising out of the Open Cover in one forum. Because of the high degree of deference accorded the plaintiffs' choice of forum, however, the operative issue is not whether considerations of efficiency and economy make a foreign forum more convenient for defendants, but whether there are factors that render litigating in this forum vexatious or oppressive. See, e.g., Gilbane Bldg. Co. v. Nemours Foundation, 568 F. Supp. 1085, 1090 (D. Del. 1983) (finding that existence of parallel lawsuit did not render Delaware an inconvenient forum). Courts have therefore accorded little weight to the efficiency that might be gained by ensuring that all related litigation takes place in a single forum, because to do otherwise would be to deprive plaintiffs of their right to select the forum in which they want to litigate. See, e.g., Overseas Programming. 682 F.2d at 235; Mastercard Int'l Inc., 2002 WL 432379, at *8 (holding that deference to pending parallel foreign lawsuit was insufficient to outweigh plaintiff's choice of forum). BP Amoco is an international group of companies that maintains drilling operations all over the world, and it is certainly financially and logistically capable of pursuing litigation simultaneously in two forums. Since BP Amoco has not established that the other private interest factors render New York an inconvenient forum, the London litigation alone cannot mandate that this action be dismissed.
2. Public Interest Factors
The Gilbert "public" factors consider issues of judicial economy and the efficient resolution of disputes in determining whether the case should be dismissed for forum non conveniens. Specifically, the "public factors that a court must consider are
(1) the administrative difficulties flowing from court congestion; (2) the local interest in having controversies decided at home; (3) the interest in having a trial in a forum that is familiar with the law governing the action; (4) the avoidance of unnecessary problems in conflict of laws or in the application of foreign law; and (5) the unfairness of burdening citizens in an unrelated forum with jury duty.Murray, 81 F.3d at 293; Gilbert, 330 U.S. at 508-09. Defendants have not established that the public factors weigh in favor of dismissal.
With respect to the first factor, there is no reason to assume that the Commercial Court in London is any less congested than the Southern District of New York, and defendants do not so argue. Thus, this factor is neutral. Byrne v. British Broadcasting Corp., 132 F. Supp.2d 229, 238 (S.D.N.Y. 2001) ("The parties have not demonstrated that the courts of the United Kingdom are any more or less congested than is the Southern District of New York.").
The United States has more of an interest in deciding this controversy than does the United Kingdom, because the contracts at issue were negotiated here. See Diatronics, Inc. v. Elbit Computers, Ltd., 649 F. Supp. 122, 128 (S.D.N.Y. 1986) (relying on place of contract negotiation in holding that foreign forum was more convenient). BP Amoco developed and negotiated the Open Cover primarily in the United States. (Siebenaler Aff. ¶¶ 5-6.) While defendants point out that the Open Cover as a whole encompassed many contracts with individual insurers, and that most of these contracts were negotiated and executed outside of the United States by foreign insurers, (Defs. Mem. at 4), the specific contracts at issue here are those between the defendants and National Union and AEGIS, which were negotiated with Aon's Chicago and Houston offices and executed in the United States. (Shaak Aff. ¶¶ 4-7; Keefe Aff. ¶¶ 3-7.) The fact that plaintiffs' contracts may have been identical to those signed by the European insurers does not shift the nexus of the contract dispute to Europe (Defs. Mem. at 4), since each insurer's contract was executed independently of all the others, and creates rights and obligations between the insureds and the insurer that are not affected by any of the other individual contracts.
Contrary to defendants' argument (Defs. Mem. at 3, 15), because the doctrine of forum non conveniens is used to choose between foreign and United States fora, rather than between different United States judicial districts, Levin v. Miss. River Corp., 289 F. Supp. 353, 362 (S.D.N.Y. 1968), the appropriate inquiry here is whether the United States as a whole, not just New York, has an interest in adjudicating the dispute.See DiRienzo, 294 F.3d at 31-32 (discussing American interest in the events giving rise to the controversy, and surveying similar cases).
While the losses that gave rise to this lawsuit are dispersed all over the world, the conduct most directly at issue, defendants' alleged misrepresentations, took place in the United States. Because the information regarding declarations and claims was transmitted to plaintiffs by Aon's and BP Amoco's Chicago offices, plaintiffs allege that these two offices were responsible for the misrepresentations. (Pls. Mem. at 5-6.) While defendants argue that conduct relating to the losses that gave rise to insurance claims took place primarily in Europe and Asia, and that claims adjusters in Houston and London possess important evidence (Defs. Reply at 9), these facts do not establish that the United Kingdom has a particular interest in the litigation, and defendants have not alleged that the majority of the relevant conduct occurred in the United Kingdom. Therefore, while the United States has an interest in adjudicating the contract rights of its corporate citizens under a contract negotiated in the United States, the United Kingdom's interest in these particular contracts, and in the conduct at issue, is attenuated at best.
The next two factors, the interest in having a trial in a forum that is familiar with the law governing the action, and avoiding unnecessary problems in the application of foreign law, involve consideration of which country's law will apply to this action. Defendants contend that English law will apply, relying on the Open Cover's provision that BP Amoco may choose whether American or English law will govern. (Defs. Mem. at 7.) In its action against the European insurers, BP Amoco selected English law, and now appears to argue that that election controls this action as well. (Defs. Mem. at 7, 12.) Under New York law, the Court must enforce the contract's choice of law clause unless there is no reasonable basis for the parties' choice, or doing so would violate the public policy of any jurisdiction with an interest in the dispute. Radioactive, J.V. v. Manson, 153 F. Supp.2d 462, 469-70 (S.D.N.Y. 2001). Because plaintiffs have not alleged that the choice of law clause is invalid under New York law (Pls. Mem. at 23), the Court will assume for the purposes of this motion that it would honor the choice of law clause and apply English law to this dispute if BP Amoco so elects.
BP Amoco's argument is somewhat ambiguous. Defendants do not state that they are currently selecting English law in this action; rather, the argument appears to be that this Court "should" use English law because the London court is already using English law to interpret the Open Cover. (Defs. Mem. at 7.) The Court assumes for the sake of the argument that the contract purports to give BP Amoco an option of which law to apply, and that BP Amoco will choose English law, but it is not clear that BP Amoco has in fact exercised that option in this litigation, and the Court expresses no view on the validity of the choice-of-law clause, or on whether BP Amoco could elect instead for American law to apply in connection with the contracts with United States insurers.
Plaintiffs do argue that the clause might be invalid under English law (Pls. Mem. at 23-24; Thomas Aff. ¶ 19), but have not cited any authority indicating that a federal court sitting in diversity should not apply the choice of law rules of the forum state when determining whether to enforce a choice of law clause in a contract. See Radioactive, 153 F. Supp.2d at 469 ("Federal courts sitting in diversity in New York must apply New York's choice-of-law rules when determining the law that governs the contract.").
It is possible, of course, that New York law would apply to this action, since in determining whether to enforce the choice of law clause, the Court would have to consider whether the United Kingdom has sufficient contacts with the specific contracts at issue here, and with the misrepresentations at issue. Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 556 (2d Cir. 2000).
While the possibility that this Court will have to apply English law in interpreting the contracts weighs in favor of an English forum, the fact that foreign law applies is not in itself sufficient to render London the more convenient forum. Manu Intl'l, S.A. v. Avon Products, Inc., 641 F.2d 62, 67-68 (2d Cir. 1981) ("Proof of foreign law may be a burden in this case, but it is not alone enough to push the balance of convenience strongly in favor of the defendant. The other forum non conveniens factors must do that, but our foregoing analysis of them shows that in fact they do just the opposite."). Because federal courts must often apply foreign law, and the means of pleading and proving foreign law are provided in the Federal Rules of Civil Procedure, interpreting the contracts according to English law, and instructing a jury on that law if this case should go to trial, are not burdens heavy enough to weight the balance of convenience strongly in favor of dismissing the action. See Leutwyler v. Office of Her Majesty Queen Rania al-Abdullah, 184 F. Supp.2d 277, 302 (S.D.N.Y. 2001).
Finally, there is no unfairness in burdening New York citizens with jury duty in a trial in this action, since, as discussed above, one of the contracts was executed in New York, and the United States has an interest in protecting the contractual rights of its citizens. DiRienzo, 294 F.3d at 31.
3. The Balance of Conveniences
Defendants have not established that the balance of conveniences tilts so strongly in favor of the English forum as to overcome the high degree of deference accorded to plaintiffs' forum choice of New York. Since the witnesses and evidence involved in this lawsuit, as well as the events that gave rise to it, are not centralized in one place, but are dispersed all over the world, most of the private factors do not weight the balance in favor of one forum over the other. While the fact that defendants have begun compiling evidence in the United Kingdom for purposes of their lawsuit against the European insurers may make the United Kingdom more convenient for defendants, they have not shown that litigating in two forums at once would be oppressive or vexatious. In addition, the possibility that the issues involved in the two lawsuits will converge, and that National Union and AEGIS will become parties to the London suit, does not create an inconvenience so extreme as to outweigh the other factors and necessitate dismissal. The public factors do not strongly favor the United Kingdom; while the fact that English law may apply weighs in favor of the United Kingdom, the United States has a stronger local interest in the dispute. Since defendants have not fulfilled their burden of establishing that the United Kingdom is by far the more convenient forum than New York, the case cannot be dismissed on grounds of forum non conveniens.
II. Plaintiffs' Motion To Strike Portions of Affidavits
Plaintiffs move to strike various portions of the affidavits of William Siebenaler, Colin Wannell, Heather Zona, and Terrence Mehigan, submitted in support of defendants' motion to dismiss, as noncompliant with Fed.R.Civ.P. 56(e) because they are not based on personal knowledge, are speculative, or contain inadmissible hearsay. (Pls. Mot. to Strike at 1-9.) Because the evidence submitted in these affidavits was, for the most part, cumulative or of limited relevance to the issues at stake here, it has not "altered the Court's judgment or prejudiced the plaintiffs." Braspetro Oil Services Co., 1999 WL 307666, at *19. Therefore, the motion to strike is denied as moot. Id.