Forum Non Conveniens Blocking Statutes

Forum Non Conveniens Blocking Statutes

What happens to litigation that obviously should be pursued in a foreign country but is prevented from doing so by a forum non conveniens blocking statute? That’s the question presented in a recent Florida state court case of Scotts Co. v. Hacienda Loma Linda.

Here are the basic facts: Scotts sells a product to Hacienda that allegedly destroys thousands of Hacienda’s orchids in Panama. Hacienda sues Scotts in Miami and Scotts successfully dismisses the case on forum non. Panama has a “forum non conveniens blocking statute” that precludes Panamanian courts from asserting jurisdiction over any case that has been brought in Panama as a result of a foreign judgment of forum non conveniens. Hacienda files a complaint in Panama and invokes this blocking statute. The Panamanian court relies on this statute and concludes that it lacks jurisdiction. Hacienda seeks to reinstate the action in Florida arguing that the Panamanian court is not an adequate alternative forum. The Florida court denies the motion. Here is the Florida state appellate court’s reasoning:

In an effort to enhance their own citizens’ chances of avoiding a forum non conveniens dismissal in the U.S., a number of countries enacted laws or rendered judicial decisions intended to preclude their own courts from hearing the refiled cases. The plain intention of these measures was to assure that the foreign country would not be an “available adequate forum” for purposes of the U.S. court’s forum non conveniens analysis, with the hoped-for result that a plaintiff from that country would be able to keep its claims in the U.S. court…. For a Florida court, the dilemma is readily apparent. On the one hand, Kinney holds that Florida simply cannot become a courthouse for the entire world, our taxpayers should not pay for the resolution of law-suits that are utterly unconnected to this state’s inter-ests, and a set of rational tests should be applied to a lawsuit filed here to determine whether Florida is the proper forum. On the other hand, our well-established principles of comity suggest that … we should generally recognize the decisions of a foreign court. We reconcile these competing objectives by returning to the principles upon which Gulf Oil and Kinney were based, and by recognizing that our courts cannot be compelled by other countries’ courts and lawmakers to resolve cases that should be determined in those countries. In the present case … the case plainly belongs in Panama. Scotts’ products were applied to Hacienda’s orchids there; the orchids were allegedly damaged there; and the alleged damages were suffered there by a company incorporated and based there. Florida “has no interest in adjudicating the dispute of a Panama corporation whose property was injured in Panama by events taking place there.” … Analogous to the principle of “prevention of performance” in our law of contracts, a plaintiff in a lawsuit dismissed here for forum non conveniens may not render an alternative foreign forum “unavailable” and thereby obtain reinstatement here by (a) itself inducing the foreign court to dismiss the foreign action or (b) relying on foreign laws or decisions plainly calculated to preclude dismissal in Florida under Kinney.Expressed another way, if our courts determine that a foreign forum is available and adequate, it is the obligation of the plaintiff to assent to jurisdiction there and to support that court’s exercise of jurisdiction over the matter and the parties. Further, that plaintiff may not assume that a foreign country’s preemption or blocking laws will be recognized here. If the foreign country chooses to turn away its own citizen’s lawsuit for damages suffered in that very country, and if the other Kinney factors warrant dismissal here, it is difficult to understand why Florida’s courts should devote resources to the matter. For these reasons, we reverse the order of reinstate-ment, and we remand the case to the circuit court for dismissal.

The Florida court is clearly playing hard ball with Panama’s efforts to keep the litigation in the United States. But I’m not sure it will succeed. In addition, the main purpose of such blocking statutes is to defeat forum non motions in the first place, not to get the litigation reinstated once it has been dismissed in the U.S. on forum non and then dismissed again in Panama. It is a giant red flag proclaiming “we are not an adequate available forum!” In the face of that red flag, I doubt most state courts would dismiss based on forum non conveniens in the first instance.

I also am not sure that I agree that Hacienda did anything wrong by pointing out to the Panamanian court that there was a jurisdictional defect to pursuing the action in Panama. It sounds as though the Florida court wants a plaintiff to hide the fact that the Panamanian court lacks jurisdiction under Panamanian law. It would be one thing if the blocking statute turned on personal jurisdiction that could be waived by Hacienda. But I read these forum non conveniens blocking statutes as denying subject matter jurisdiction over the claim. Does the Florida court really expect a lawyer in good faith to ignore such a fatal jurisdictional flaw?

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Response..The court is not saying that it expects the lawyer to hide the fact that there is no subject matter jurisdiction.  Rather it is saying that as a matter of public policy we are not going to allow a foreign country to game our forum non-conveniens laws and impose costs on our society.  The purpose of jurisdictional eligibility in the foreign country was never intended to apply to such cynical gamesmanship.  If Panama wants to harm the interest of its own citizens then so be it.