conveniens. Rogers's Mot. to Dismiss at 22. In response to defendants' arguments, plaintiff points to the numerous U.S.-based individuals involved in Hollywood Funding Nos. 3, 4, and 5 and "It Had To Be You." This court has previously noted that "the need to resort to videotaped depositions, obtained through letters rogatory, should not mandate dismissal." In re Corel Corp. Inc. Sec. Litig., 147 F. Supp.2d 363, 366 (E.D.Pa. 2001). Similarly, the potential need to videotape the four British defendants does not mandate dismissal in this case either.
At least on the face of the pleadings, it appears that the allegedly fraudulent transactions spanned three countries and involved many individuals. The complexity of this lawsuit's underlying facts means that it will be costly and complicated wherever it is brought. The court must thus address the relative costs of bringing suit in the various countries involved. Defendants have failed to demonstrate why bringing suit in the United States is so much more expensive or oppressive than litigating in England. Furthermore, any judgment acquired in either nation will potentially require enforcement in the United States, England, and Canada, as the defendants have assets in all three countries. Finally, there are no additional practical considerations that compel disregarding plaintiff's choice of forum. The evidence, when evaluated with the deference owed to a plaintiff's choice of forum, leads me to find that defendants have not demonstrated that the private interest factors weigh heavily in favor of dismissal.
3. Public Interest Factors
In Piper, the Supreme Court stated that the relevant public interest factors in a forum non conveniens inquiry include: (i) administrative difficulties flowing from court congestion; (ii) "local interest in having localized controversies decided at home;" (iii) avoidance of unnecessary problems in conflict of laws, or the application of foreign law; and (iv) the "unfairness of burdening citizens in unrelated forum with jury duty." 454 U.S. at 241 n. 6 (citation omitted).
Defendants argue that these public interest factors weigh in favor of dismissal. In support of their argument, they make the following statements. First, that there is no need to congest this forum's docket with an action whose factual predicate overlaps with that of the pending British litigation. Second, that the United States has negligible interest in the outcome of this litigation. Third, that the parties' common law disputes might be governed by British law. Fourth, that jurors from this district should not be burdened with the duty of hearing this matter.*fn12 See Rogers's Mot. to Dismiss at 25.
Defendants' arguments regarding the public interest factors are unpersuasive. While court congestion is a reality of the modern judicial system, this case does not represent the straw that might otherwise break the proverbial camel's back. The court is equipped to hear this case and doing so will not prejudice the interests of those parties who do not have the option of choosing from the variety of fora available to plaintiff. The overlap between this case and the ongoing British litigation does not diminish this court's capacity, nor does it erode the deference that a court owes to a plaintiff's choice of forum.
With regard to local interest, this forum has more than a negligible interest in the outcome of this case. RICO's availability within this forum testifies to its commitment to providing legal redress for victims of racketeering conspiracies. If the defendants did indeed use the U.S. mails and phone lines to perpetuate an elaborate fraud in Pennsylvania, Massachusetts, and California, whereby a Delaware corporation lost millions of dollars, then it stands to reason that the United States would have an interest in regulating such conduct and in indemnifying its citizens for their losses. Cf. Lacey I, 862 F.2d at 47 (recognizing, in federal diversity action, "Pennsylvania's interest in regulating the manufacture of products within its borders").
Both parties agree that there is a possibility that British law will govern Lexington's common-law claims against defendant. This possibility weighs heavily in favor of dismissal. It is counter-balanced, however, by the fact that more than half of the complaint involves RICO claims that are governed by federal law. So long as these RICO claims are legally viable, the possibility that British law will need to be applied by this court cannot outweigh the presumption against dismissal for forum non conveniens.
Finally, the risk that residents will be called to serve on a jury for this case does not weigh heavily in favor of dismissal. If defendants, by and through their actions in Gladwyne, conspired to effectuate the alleged Ponzi scheme, then a local jury has an interest in sanctioning such behavior insofar as it offends the laws of this forum. Cf. Corel, 147 F. Supp.2d at 367 n. 2.
Because I find that neither the private nor the public interest factors discussed above weigh heavily in favor of dismissal, defendants motion to dismiss based on the doctrine of forum non conveniens is denied.
D. Principles of International Comity
Similar to the doctrine of forum non conveniens, principles of international comity allow a district court to exercise its discretion and dismiss a case over which it has subject matter jurisdiction in deference to the laws and interests of another nation. See Societe Nationale Industrielle Aerospatiale v. United States Dist. Ct. for the So. Dist. of Iowa, 482 U.S. 522, 543 n. 27 (1987); Paraschos v. YBM Magnex Int'l, Inc., No. 98-6444, 2000 WL 325945, at *5 (E.D.Pa. 2000). In Hilton v. Guyot, 159 U.S. 113, 164 (1895), the Supreme Court defined international comity as: "the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard to both the international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws." These principles permit a court to engage in "a spirit of international cooperation." Paraschos, 2000 WL 325945 at *5 (citation omitted). They do not, however, extend judicial deference to those cases whose dismissal would be contrary to domestic public policy. Id. Nor do they compel dismissal when the suits in question are neither duplicative nor parallel. Id.
Even the existence of a "parallel" case, however, need not compel dismissal.*fn13 "[A] district court should exercise jurisdiction over an action even where identical subject matter is concurrently before a foreign court." Id. at *6 (citing Ingersoll Mill. Mach. Co. v. Granger, 833 F.2d 680, 685 (7th Cir. 1987)). Dismissal for reasons of international comity is appropriate only in "extraordinary circumstances." Id. Such circumstances include: (i) duplicative litigation, (ii) inconvenience of the domestic forum, (iii) the governing law, (iv) the order in which jurisdiction was obtained, (iv) the relative progress of each proceeding, and (v) the "contrived nature" of the domestic claim." Id. (citations omitted).
Addressing the circumstances that inform a court's decision to dismiss based on principles of international comity, I make the following conclusions: First, this lawsuit is not a duplicate of the creditors' British suit against Lexington. The defendants are not parties to both suits and it is possible, according to plaintiff, that the English court will never reach Lexington's fraud defense to the creditors' claims. In addition, the British court is not determining whether defendants' alleged fraud injured plaintiff. Rather, the question before the British court appears to be whether defendants' fraud obviates plaintiff's obligation to indemnify Flashpoint's creditors. Second, I have already addressed the relative inconvenience of bringing suit here and abroad and found that the comparative drawbacks of bringing suit in either forum do not weigh heavily in defendants' favor. Third, my earlier conclusions regarding the issue of which forum's law governs plaintiff's claims apply here as well: The specter of a conflict of law problem is not "extraordinary" and does not does require dismissal. Fourth, defendants are correct that the present suit could have been brought when Flashpoint's creditors filed suit against Lexington. Although the British litigation preceded this suit, plaintiffs "should be permitted to bring their claims in the forum of their choice." Id. Finally, the availability of treble damages under RICO, together with the fact that plaintiff is a U.S. company, allay any doubts that plaintiff is merely casting about for a pretext on which to bring suit outside of Britain.
Earlier, defendants also raised the argument that a failure to dismiss would be disrespectful to the British courts. Supra, at n. 12. I suspect that the British courts are less thin-skinned than defendants maintain. This lawsuit has no bearing on the creditors' rights at issue in the British litigation. Nor does it purport to evaluate the fitness of any British court's decision. Should English law govern plaintiff's common-law claims, adjudication will be done with the utmost deference to England's jurists and its case law. Contrary to defendants' warning, I believe the sovereignty of that forum will not be impinged upon by American adjudication of this lawsuit. For these reasons and those expressed above, defendants' motions to dismiss based on principles of international comity are denied.
E. Rule 12(b)(6): Failure to State a Claim for Which Relief Can Be
Rule 12(b)(6) permits dismissal of a case when the plaintiff has failed to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). When considering a Rule 12(b)(6) motion, the Court must accept as true all of the allegations set forth in the complaint and must draw all reasonable inferences in favor of the plaintiff. See Ford v. Schering-Plough Corp., 145 F.3d 601, 604 (3d Cir. 1998). Dismissal of plaintiff's claim is appropriate only if plaintiff "can prove no set of facts in support of his claim which would entitle him to relief." Id. (quotations omitted). The court need not, however, accept conclusory allegations or legal conclusions. Morse v. Lower Merion School District, 132 F.3d 902, 906 (3d Cir. 1997).
Defendants make two arguments for why plaintiff's claim should be dismissed under Rule 12(b)(6). First, they argue that Counts I, II, and IV, which allege fraud, fail to meet Rule 9(b)'s heightened pleading standard for fraud claims. Second, Rogers argues that plaintiff's legal fees are not an injury for which relief can be granted under RICO and that Counts I-III, which invoke this federal statute, should therefore be dismissed. I will address both these arguments.
1. Rule 9(b)
Rule 9(b) provides a heightened pleading requirement for fraud claims. This rule provides that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b). The purposes of this rule are to provide notice of the precise misconduct with which defendants are charged and to "safeguard defendants against spurious charges of immoral and fraudulent behavior." Seville Indus. Mach. v. Southmost Mach.Corp., 742 F.2d 786, 791 (3d Cir. 1984). Although heightened, the pleading standards for fraud are not insurmountable. "As long as the allegations of fraud reflect precision and some measure of substantiation, the complaint is adequate." In re Meridian Sec. Litig., 772 F. Supp. 223, 226 (E.D.Pa. 1991) (citing Seville, 742 F.2d at 791). The Third Circuit has cautioned against over-zealous enforcement of this rule. See Seville, 742 F.2d at 791; In re Craftmatic Sec. Litig., 890 F.2d 628, 645 (3d Cir. 1989).
Lexington's 24-page complaint adequately particularizes the alleged fraudulent conduct. Having read the complaint, there can be no reasonable doubt in defendants' minds as to what acts, taken in regard to which transactions, are the basis of plaintiff's complaints for fraud. The detail with which plaintiff describes the predicate acts is in such depth that it would be a burden for this court to repeat them all. Defendants' 12(b)(1) motion with regard to Rule 9(b) is denied.
2. Failure to State an Injury for Which Relief Can Be Granted
Defendants argue that plaintiff cannot state a claim for which relief can be granted because its injury, in the form of legal fees, is too remote from the alleged predicate acts necessary for a successful RICO claim. Defendants do not, however, present this court with any controlling case law that either precludes an alleged RICO victim from recovering legal fees related to a predicate act or establishes when an injury is too remote. Although plaintiff has found the decision of Seaboard Surety Co. v. Parmacrete Construction Corp., 221 F.2d 366, 371 (3d Cir. 1955), which permits a victim of fraud to recover legal fees incurred defending itself against a third-party lawsuit when the alleged fraud caused that lawsuit, it has not presented the court with any controlling case that involves a RICO claim for legal fees. The controlling law in this circuit is thus unclear as to what type of injury a plaintiff must allege in order to state a RICO claim for which relief can be granted. Considering the case-at-hand in the light most favorable to plaintiff, I will deny defendants' 12(b)(6) motion.
F. Request for a Stay
Both defendants have requested a stay in this matter if the court declines to grant their motions to dismiss. In addition to the power to dismiss, federal courts have the power to stay an action based on the pendency of related proceedings in a foreign jurisdiction. Nat'l Union Fire Ins. Co. of Pittsburgh v. Kozeny, 115 F. Supp.2d 1243, (D. Col. 2000) (citing Landis v. Am. Water Works & Elec. Co., 299 U.S. 248, 254 (1936)). This power, however, is checked by the courts' "strict duty to exercise the jurisdiction that is conferred upon them by Congress." Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). The Third Circuit has not addressed what standard governs determinations of whether to award a stay in the event of related litigation pending in an alternative forum. In National Union, the Colorado district court performed a helpful survey of those federal cases that address this issue. After its review, the court found that the relevant factors for determining whether a stay was warranted were virtually identical to those concerning dismissal based on principles of international comity. See Nat'l Union, 115 F. Supp.2d at 1247. Although I agree with the Colorado district court's legal analysis, I reach a different conclusion. While resolution of the British litigation will clarify whether plaintiff has a claim for additional damages, it will not address plaintiff's alleged loss of millions of dollars in legal fees. Nor will it determine whether defendants committed wire and mail fraud within this forum or whether those frauds unlawfully injured plaintiff. Rather, the parallel litigation will determine the rights of those creditors now suing Lexington. For this reason I see no reason to delay what looks to be an expensive and protracted litigation. Defendants 12(b)(6) motions are therefore denied.
For the reasons articulated above, defendants' Motions to Dismiss, or, Alternatively, Stay the Instant Proceedings are denied.
AND NOW, this 8th day of May, 2003, the defendants' Motions to Dismiss, or, Alternatively, Stay the Instant Proceedings (Docket ##6, 11) are DENIED.