A recent federal decision provided significant guidance on a frequently disputed issue in transnational litigation: applying the forum non conveniens doctrine. On July 1, 2020, the U.S. Court of Appeals for the Eleventh Circuit reversed a district court ruling that a Mexican court was a more convenient forum for a lawsuit brought by two U.S. and 37 non-U.S. plaintiffs. See Otto Candies LLC v. Citigroup Inc., 963 F.3d 1331, 1335 (11th Cir. 2020). The Eleventh Circuit reversed and remanded the case because the district court mistakenly gave only “reduced” deference to the domestic plaintiffs’ choice to sue in the United States, and the U.S. defendant failed to support its claims that most of the relevant documents and witnesses were located in Mexico. Id. The case, in which Quinn Emanuel represents the plaintiffs, has important implications both for plaintiffs seeking to bring cross-border disputes in the United States, and for defendants seeking to dismiss those lawsuits.
Overview
Forum non conveniens allows U.S. courts to dismiss cases in favor of having them proceed in another country’s courts. Among other considerations, U.S. courts must (1) give proper deference to plaintiffs’ choice to bring their lawsuit in the United States; (2) analyze the parties’ access to documents and witnesses (“private interest factors”); and (3) evaluate the U.S. and non-U.S. interests in the lawsuit (“public interest factors”). Id. at 1338. U.S. courts may also try mitigate the practical difficulties of forum non conveniens dismissals by making them subject to certain dismissal conditions, such as defendants’ agreement to provide documents relevant to plaintiffs’ claims. Id. at 1352. Forum non conveniens is a fact-intensive inquiry and district court decisions are subject to review under the abuse-of-discretion standard, making appellate court reversals rare.
The plaintiffs in the Otto Candies case are former creditors of Oceanografía, a now-bankrupt Mexican company that provided drilling services to Pemex, Mexico’s state-owned oil and gas company. Plaintiffs allege that Citigroup established credit facilities within its Mexican subsidiary to provide cash advances to Oceanografía, but did not adequately monitor the facilities and granted approximately $750 million in advances to Oceanografía knowing they were based on forged Pemex signatures. When the fraud was exposed in February 2014, Oceanografía declared bankruptcy and plaintiffs lost over $1.1 billion.
Deference to Forum Choice
The Eleventh Circuit held that the U.S. District Court for the Southern District of Florida committed legal error by failing to give greater deference to the choice of the...
