as amended october 11 1989. as amended october 20 1989.: October 2, 1989.
On Appeal from the United States District Court for the District of Delaware, D.C. Civil Action No. 88-00320.
A. Leon Higginbotham, Jr., Greenberg, and Hutchinson, Circuit Judges.
A. LEON HIGGINBOTHAM, JR., Circuit Judge.
Plaintiff Adolf Lony, a small West German business, appeals from the dismissal by the district court of its suit in United States District Court for the District of Delaware against E. I. Du Pont de Nemours & Co., a Delaware Corporation, on grounds of forum non conveniens. For reasons that follow, we find that the district court erred in failing to consider adequately and to determine the amount of deference due the choice of forum of a foreign plaintiff when suit is brought on the defendant's home ground and much of the evidence is located there. We also find that it clearly erred in the conclusion it drew from its weighing of the private interest factors and in its assessment of the applicability of local law in its weighing of the public interest factors. Because these errors constitute an abuse of discretion that alters the outcome of the forum non conveniens analysis, we will vacate the order of dismissal and remand this case for further proceedings.*fn1
II. FACTS AND PROCEDURAL BACKGROUND
Appellant Adolf Lony ("Lony") is a sole proprietorship with its principal place of business in the Federal Republic of Germany ("Germany"). Joint Appendix ("App.") at 909. It prints and processes cellophane and plastic films into wrappers for food and other products. App. at 910-11. Appellee E. I. Du Pont de Nemours & Co ("Du Pont") is a Delaware corporation with its principal place of business in Delaware. App. at 909-10. In addition, Du Pont's research laboratories and its Flexible Packaging Division headquarters are located in Delaware. App. at 481, 354-56. Du Pont is the largest private employer in the state. App. at 481.
In 1985, Lony purchased some Du Pont cellophane from Transparent Paper Ltd. ("Transparent"), a Swiss distributor of cellophane for Du Pont and other manufacturers. App. at 911, 9-10. At that time, Lony's largest client was Haribo GmbH. & Co. KG ("Haribo"), a West German candy producer with its principal place of business in Germany, which manufactures, among other products, the children's candy "Gummibaerchen" or Gummy Bears. App. at 911. Lony claims that it used the Du Pont cellophane it purchased through Transparent to make wrappers for Haribo candy. Id.; App. at 5.
Lony claims that in August of 1985, Haribo asked Lony whether the cellophane packaging provided by Lony for its candy contained diethylene glycol ("DEG"), and specified that the cellophane used for Haribo candy must be free of DEG. App. at 10, 13. The concern was apparently prompted by a widely publicized scandal at that time over the presence of DEG in some European foods and wines. App. at 910. Lony claims that it asked Transparent whether or not the Du Pont cellophane was free of DEG, and that Transparent forwarded the question to Du Pont and forwarded Du Pont's reply to Lony. App. at 10-11. In October 1985, William Percival, of the Regulatory Affairs Group of Du Pont's Polymer Products Department in Wilmington, wrote to Transparent:
In response to your question to W. Pierce, I am informing you that there is no diethylene glycol in any type of Du Pont Company Cellophane Film handled by your Company.
I trust this provides the assurance you were seeking.
App. at 557. Lony claims that Percival was aware that he was responding to a customer's inquiry because he stated in a postscript, "[thanks] for your explanation regarding the reason for your questions." Id.; Appellant's Brief ("Applt's Br.) at 4.
Lony alleges that in December 1985 and January 1986, following Du Pont's assurances, Lony shipped candy wrappers made with Du Pont cellophane to Haribo; in May 1986, Haribo tested the candy wrappers it had received from Lony, found they contained DEG, severed its business relationship with Lony, and drove Lony to the brink of bankruptcy. App. at 13-14. Lony asserts that Haribo returned the unused wrappers. App. at 309-10, 341-42. Subsequently, Lony and Haribo renewed their business relationship. App. at 896.
Lony also makes the following claims. As a result of Lony's experience, Du Pont tested several types of its cellophane for DEG at its research facilities in Wilmington in the fall and summer of 1986 but reported in a letter from Mr. Percival to Transparent that it had found none. App. at 588-89. While investigating the cause of its loss in 1987, Lony learned that the source of the DEG in the Du Pont cellophane might be polyethylene glycol ("PEG") used in the manufacturing process. Applt's Br. at 6. Of the 50 types of cellophane manufactured at Du Pont's plant in Tecumseh, Kansas, six used PEG 300 as a softener, including type K160DB23 that was shipped to Lony from Tecumseh in July 1985, but none of the six was among those tested by Du Pont in 1986 and reported as being free of DEG. App. at 108, 135-56, 813.
In June 1986, Du Pont sold its entire cellophane business to Flexel, Inc. ("Flexel"). App. at 597-601. Lony asserts that all of Du Pont's records relating to the cellophane business were transferred to Flexel and that Flexel now employs personnel who worked for Du Pont at the time period relevant to this litigation. App. at 85, 98, 597-601.
Lony brought this suit in Delaware on June 15, 1988, claiming tortious misrepresentation, common law fraud, statutory fraud, breach of warranty, and breach of fiduciary duty. In response to Du Pont's forum non conveniens motion, the district court stayed discovery in the case except that related to identifying witnesses, records and their location. App. at 78, 402. After briefing and oral argument on the motion, the court granted it on November 14, 1988, subject to a number of conditions (App. at 930-31): the West German courts must entertain at least one of Lony's claims; Du Pont must submit to jurisdiction in West Germany; it must facilitate trial proceedings in West Germany by making available at its own expense any documents, witnesses or other evidence in its custody or control that a West German court determines might be needed and by providing translations where appropriate; it must agree to pay any damages, costs and fees awarded by West German courts; finally, Du Pont must consent to Lony's reinstitution of the suit in the United States without prejudice should any of the other conditions fail. Id. Upon judgment entered, Lony appealed.
Lony alleges that critical evidence necessary to proving its claims is located in the United States, primarily in Wilmington and in Tecumseh, Kansas. Applt's Br. at 9-19. It identified witnesses and documents regarding the following: Du Pont's decision to use PEG in the manufacture of cellophane; its purchasing of PEG; its use of PEG in the manufacturing process; the way in which the use of PEG in the manufacturing process resulted in DEG in the cellophane; the knowledge on the part of people at the Tecumseh plant and at Du Pont's Regulatory Affairs Group in Wilmington that the use of PEG in manufacturing cellophane would result in DEG in the finished product; and the ability of Du Pont to identify its cellophane. Id. It further claims that some of the witnesses and documents are now outside of Du Pont's control. The employees and documents of the Tecumseh plant are now in the control of Flexel, and other former Du Pont workers are now retired. Id. Those witnesses and documents would not be readily available for trial if the case were heard in West Germany.
Du Pont, for its part, has denied that PEG in the manufacturing process causes DEG to be present in cellophane. App. at 28. It claims that critical evidence necessary to its defense and to the proof of damages is located in Europe. For the most part, it does not specifically identify, but rather asserts the presence of, documents and witnesses regarding the following: the causal link between the presence of any DEG in Du Pont cellophane and Haribo's termination of its business relationship with Lony; tests done in Europe allegedly establishing the presence of DEG in the cellophane; the life history of the cellophane after it entered Lony's control which might explain the presence, or an increased level, of DEG in the wrappers; the claim that it was Du Pont cellophane that was used in the wrappers; and the amount of Lony's damages. Appellee's Brief ("Applee's Br.") at 8-10. Du Pont asserts that those witnesses and documents would not be readily available if the case were heard in the United States.
Our scope of review in this matter is limited. The motion to grant or deny a forum non conveniens motion lies within the sound discretion of the district court. "[Where] the court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonable, its decision deserves substantial deference." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981).*fn2 Therefore, "our review is limited to consideration of whether the district court abused its discretion, and we do not perform a de novo resolution of forum non conveniens issues." Lacey v. Cessna Aircraft Co. 862 F.2d 38, 43 (3d Cir. 1988).
We have previously stated that a district court abuses its discretion in a forum non conveniens analysis when it fails to consider adequately and to determine the amount of deference due the foreign plaintiff's choice of forum (Id. at 45-46) or when it clearly errs in weighing the factors to be considered. Id. at 43 (citing Reyno v. Piper Aircraft Co., 630 F.2d 140, 160 (3d Cir. 1980).
We have recently restated the grounds for dismissing a case for forum non conveniens in Lacey, 862 F.2d at 38, which came out shortly before the ruling in this case and was first brought to the attention of the district court in the motion for rehearing. In Lacey, as in the instant case, the plaintiff was not a United States citizen or resident and the defendant was a Pennsylvania manufacturer of the product that allegedly was responsible for the damage.*fn3 The standard is stated as follows:
A district court may, in the exercise of its sound discretion, dismiss a case "when an alternative forum has jurisdiction to hear the case, and when trial in the chosen forum would 'establish . . . oppressiveness and vexation to a defendant . . . out of all proportion to the plaintiff's convenience,' . . . Piper, 454 U.S. at 241, . . . (quoting Koster [v. American Lumbermens Mutual Casualty Co.], 330 U.S.  at 524 [(1947)]). In deciding whether to dismiss a case for forum non conveniens, "the ultimate inquiry is where trial will best serve the convenience of the parties and the ends of justice." Koster, 330 U.S. at 527 . . . .
Lacey, 862 F.2d at 42-43. The opinion also emphasizes that the defendant bears the burden of persuasion as to all elements of the forum non conveniens analysis. Id. at 43.
Determinations of forum non conveniens, unlike issues of jurisdiction, are not solely questions of law. Pain v. United Technologies Corp., 205 U.S. App. D.C. 229, 637 F.2d 775, 781 (D.C.Cir. 1981). "[Rather] they represent exercises of structured discretion by trial judges appraising the practical inconveniences posed to the litigants and to the court should a particular action be litigated in one forum rather than another." Id. (footnote omitted); see also In re Air Crash Disaster near New Orleans, 821 F.2d 1147, 1165 (5th Cir. 1987). We described the task as follows:
A district court entertaining a forum non conveniens motion must first decide whether an adequate alternative forum exists to hear the case. Furthermore, the court should also consider that a foreign plaintiff's choice of an American forum is entitled to less deference than an American citizen's choice of his home forum. If there is an adequate alternative forum, the district court must consider and balance several private and public interest factors that are relevant to the forum non conveniens determination.
Lacey, 862 F.2d at 43 (citations omitted) (footnote omitted).
The appellant Lony claims that in dismissing the suit on grounds of forum non conveniens the district court abused its discretion in several respects. Lony contends the court accorded no deference to Lony's choice of forum, placed the burden of persuasion on the plaintiff rather than on the defendant where it belonged, and clearly erred in weighing the private and public interest ...