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Kisano Trade & Invest Ltd. v. Lemster

United States Court of Appeals, Third Circuit

December 12, 2013

KISANO TRADE & INVEST LIMITED; TRASTECO LTD; VADIM SHULMAN, Appellants
v.
DEV LEMSTER; STEEL EQUIPMENT CORP; AKIVA SAPIR; SAPIR ENTITIES 1-100

Argued: October 8, 2013

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 11-cv-00852) District Judge: Honorable Joy Flowers Conti.

Bruce S. Marks, Esq. Thomas C. Sullivan, Esq. Maria Temkin, Esq. Marks & Sokolov Counsel for Appellants

Larry K. Elliott, Esq. David F. Russey, Esq. Julie W.Vanneman, Esq. Curt Vazquez, Esq. Cohen & Grigsby Counsel for Appellees

Before: FUENTES, GREENBERG and BARRY Circuit Judges.

OPINION

BARRY, Circuit Judge.

I. Introduction

In June of 2011, Kisano Trade & Invest Limited ("Kisano") and Trasteco Ltd. ("Trasteco"), two companies owned by Vadim Shulman, filed suit in the U.S. District Court for the Western District of Pennsylvania against Dev Lemster and his company, Steel Equipment Corp. The complaint alleged violations of the Racketeer Influenced Corrupt Organizations Act ("RICO"), intentional interference with contract, unjust enrichment, and breach of fiduciary duty. After discovering evidence of what Shulman believed to be fraud perpetrated by his business partner, Akiva Sapir, an amended complaint added Shulman as a plaintiff, Sapir and certain of his entities as defendants, and several claims of fraud.

Between then and now, we vacated the grant of a preliminary injunction, and the parties moved forward on Sapir's motions to dismiss the complaint for failure to state a claim and on forum non conveniens grounds, the latter motion offering Israel as an alternative forum. The motions were referred by the District Court to the Magistrate Judge to issue a Report and Recommendation (the "R&R"). The R&R recommended that the action be dismissed on forum non conveniens grounds, reasoning that Israel would be the more appropriate forum, and declined to reach the motion to dismiss for failure to state a claim, leaving that to be addressed, if appropriate, by the Israeli court. The District Court adopted the R&R, and granted the motion to dismiss for forum non conveniens "on the understanding that the case may be refiled in Israel and that the defendants waived certain statute of limitations defenses." (A00060.) Plaintiffs now appeal. We will affirm.

II. Jurisdiction and Standard of Review

The District Court had jurisdiction pursuant to 28 U.S.C. § 1331 and 18 U.S.C. § 1964(c), as the underlying claim asserts recovery under RICO. We have jurisdiction pursuant to 28 U.S.C. § 1291. "'[W]here 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.'" Lony v. E.I. Du Pont de Nemours & Co., 886 F.2d 628, 631–32 (3d Cir. 1989) ("Lony I") (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981)) (alteration in original). Thus, "we do not perform a de novo resolution of forum non conveniens issues, " and instead review the District Court's dismissal on grounds of forum non conveniens for an abuse of discretion. Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir. 1988).

III. Forum Non Conveniens

This case, at its core, involves plaintiffs' allegations of numerous claims of fraud—the Warren equipment "fraud, " the Trasteco "secret deal, " the Kisano "secret deal, " the Plama "secret deal, " the Veolia "secret deal, " and the New York real estate "fraud." The parties, at great length, have set forth those facts that plaintiffs believe, on the one hand, support those claims, and defendants believe, on the other, defeat them. At the end of the day, however, the sole issue before us for review is the dismissal on grounds of forum non conveniens. We, therefore, will refer only to those facts necessary to our analysis of that issue.

Although a plaintiff's choice of forum should rarely be disturbed, "[w]hen an alternative forum has jurisdiction to hear the case, and when trial in the plaintiff's chosen forum would 'establish . . . oppressiveness and vexation to a defendant . . . out of all proportion to plaintiff's convenience, ' or when the 'chosen forum [is] inappropriate because of considerations affecting the court's own administrative and legal problems, ' the court may, in the exercise of its sound discretion, dismiss the case." Windt v. Qwest Commc'ns Int'l, Inc., 529 F.3d 183, 189 (3d Cir. 2008) (quoting Koster v. (Am.) Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)) (second alteration in original). We have identified the following four factors to guide a district court's exercise of discretion: (1) the amount of deference to be afforded to plaintiffs' choice of forum; (2) the availability of an adequate alternative forum where defendants are amenable to process and plaintiffs' ...


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