China as a Suitable Alternative Forum in a Forum Non Conveniens Motion

• Author: Courtney L. Gould
• Pages: 61-95

2010 CHINA AS ALTERNATIVE FORUM 61

CHINA AS A SUITABLE ALTERNATIVE FORUM IN A FORUM

NON CONVENIENS MOTION

Courtney L. Gould



Abstract

This article discusses the U.S. Federal standard regarding a

motion to dismiss for forum non conveniens as it is applied to the

alternative fora of the People’s Republic of China. The discussion

focuses on how a specific forum within the PRC should be analyzed

for suitability under this U.S. standard due to the somewhat unique

aspects of the PRC legal system. By analogy to Federal forum non

conveniens case law, this article provides suggestions for courts and

practitioners to apply the standard to the PRC judiciary. In doing

so however, the article intends to identify and distinguish which

aspects of the current U.S. conception of the PRC system are based

in reality, and which are based in rumor or stereotype.

I. INTRODUCTION

The confusion associated with litigation in a global world is no

longer reserved for first year Civil Procedure exam hypotheticals – it

is now part of the every day challenges of complex civil litigation.

Indeed, cross-border litigation and the prevalence of forum non

conveniens (FNC) motions continually push the boundaries of U.S.

courts’ knowledge of foreign legal systems. While the analysis of

the public and private interest in each FNC motion raises certain

case-specific and domestic legal issues, determining whether the

foreign jurisdiction provides a suitable alternative forum requires a

broad understanding of the jurisdiction and the particular challenges

it might present to the parties. For countries outside of familiar

Europe, and especially for countries with constantly developing legal

systems such as the People’s Republic of China (P.R.C. or China),

the analysis in cases thus far has been somewhat lacking. Further,

 J.D., UCLA School of Law, 2010; Semester Certificate, Tsi nghua University LL.M. Program, 2009;

B.S., Vanderbilt University, 2007. I would like to thank Prof. Randall Peerenboom for his gracious

help with this article, as well as Prof. Donald Cla rke, Prof. Robert Berring, the Tsinghua LL.M.

Program, the UCLA Pacific Basin Law Jou rnal and the China Law Association for their part in my

development within the China Law discipline. Thank you to Mr. Isaac Miller for your many draft edits

and support always. Finally, thanks and credit to Mr. Bruce Friedman for providing me his example

and guidance while working on the Danone v. Zong case, with this article as a result.

62 TSINGHUA CHINA LAW REVIEW Vol. 3:59

because the FNC test does not currently articulate exactly what

determines the suitability of a forum, it is unclear what type of

evidence is admissible and persuasive, and in what direction

commonly offered evidence weighs.

This article will identify and analyze the specific issues U.S.

courts face in applying the FNC test to cases where removal to a

Chinese court is requested. Part II outlines the requirements of the

FNC test and how it has been employed for cases involving various

foreign jurisdictions. Part III provides a brief primer on aspects of

the Chinese legal system pertinent to the FNC analysis, focusing on

those aspects that differ from the U.S. system. Lastly, Part IV

begins with an overview of past federal and state cases involving

FNC motions for dismissal to a Chinese forum and then discusses the

potential institutional, substantive, and procedural areas of concern

that arise during the FNC suitability analysis. Part IV also suggests

considerations for parties and courts engaging in the examination of

a Chinese forum.

II .FEDERAL FNC STANDARD AND THE “NOREMEDY ATALL”

EXCEPTION

Generally, a two-part test is applied in both federal and state

courts when considering a FNC motion.1 The first part, and the

focus of this article, is whether the alternative forum proposed by the

defendant is adequate to hear the case.2 The second part requires

the court to balance the private interests of the litigants and the

public interest in retaining the litigation in US.3 However, it is

worth noting that despite technical advances which make information

1 Some courts, such as in the Second Circuit, include a fi rst level of inquiry regarding the degree of

deference due to the plaintiff. See Iragorri v. United Techs. Corp., 274 F.3d 65, 71, 73-74 (2d Cir.

2001) (en banc). Essentially, this is an elaboration on the “lesser-deference” rule that a plaintiff

engaging in forum shopping as opposed to selecting the forum for convenience shou ld not have its

forum choice entitled to a presumption of substantial deference. See Piper Aircraft Co. v. Reyno, 454

U.S. 235, 255-56 (1981). However, other cou rts draw from the Piper Aircraft Co. test that the concern

of forum shopping should be considered within the assessment of the defendant’s burden, discussed

infra.

2 See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947) superseded by statute the Jones Act, 46

U.S.C. App. c 688(a) as recognized in Am. Dredging Co. v. Miller, 51 0 U.S. 443 (1994).

3 Id. For a detailed analysis of this part of the FNC test, please see generally Emily J. Derr,

Striking a Better Public-Private Balance in Forum Non Conveniens, 93 CORNELL L. REV. 819 (2008).

Courts consider as private interest factors the ease of access to evidence, availability of compulsory

process and cost to compel attendance of witnesses, possibility of view of premises and if view would

be appropriate to the action, as well as any other practical problems that make trial of a case easy,

expeditious and expensive; public factors include the administrative difficulties of court congestion,

local interest in having local controversies d ecided at home, avoidance of unnecessary problems in

conflict of laws or application of foreign law, and the unfairness of burdening citizens in an unrelated

forum with jury duty. See Michael Greenberg, The Forum Non Conveniens Motion and the Death of

the Moth: A Defense Perspective in the Post-Sinochem Era, 72 ALB.L.REV. 321, 344 (2009).

2010 CHINA AS ALTERNATIVE FORUM 63

on foreign law and legal systems readily available to U.S. judges, a

lack of confidence in their knowledge about foreign jurisdictions

continues to cause judges to allow transfer of cases involving foreign

elements to the foreign jurisdiction on the grounds that the difficulty

of discovering and applying foreign law is overly burdensome to the

court.4

A. Procedural and Substantive Adequacy

To determine whether an alternative forum is adequate, both

procedural and substantive adequacy is considered. A court must

be assured that the defendant(s), including any and all defendants

other than those “not essential” to the case, will be subject to service

of process in the proposed alternative forum.5 As a condition of

dismissal to the foreign jurisdiction, U.S. courts often request

defendants stipulate to personal jurisdiction, accept service of

process, and waive any statute of limitations defense.6 Defendants

are also often requested to make available all witnesses and

documents in the foreign forum proceedings as well as satisfy any

final judgment entered by the foreign court.7

The substantive prong of the suitability analysis considers

whether the foreign forum deprives the plaintiff of the opportunity

for a remedy. The Court in Piper Aircraft Co. v. Reyno clearly

states that a difference in the law between the plaintiff’s preferred

U.S. forum and defendant’s preferred forum is not enough alone to

render a forum inadequate. 8 Rather, an alternative forum is

adequate as long as the parties will not be deprived of all remedies or

treated unfairly, even though they may not enjoy the same benefits as

they might receive in a U.S. court.9

4 See Derr, supra note 3, at 828-29.

5 See Murray v. British Broadcasting Corp ., 81 F.3d 287, 293 n.2 (2d Cir, 1996)

6 See Greenberg, supra note 3, at 350 nn.149-52.

7 See id. at 350. This article will assume stipulation, particularly as most defendants do so easily in

order to facilitate a favorable resu lt to their FNC motion, see, e.g.,Mercier v. Sheraton Int’l Inc., 981

F.2d 1345, 1353 (1st Cir.1992). But, circuits split on whether conditions are possibly even a

mandatory element for FNC dismissal, compare Leetsch v. Freedman, 260 F.3d 1100, 1104 (9th Cir.

2001) (noting conditions are permissible to assure adequacy but not required) with Vasquez v.

Bridgestone/Firestone, Inc., 325 F.3d 665, 675, Prod. Liab. Rep. (CCH) P 16594 (5th Cir. 2003)

(holding conditions as a mandatory elem ent of a FNC dismissal).

8 See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 25 4-55 (1981).

9 See id. The Ninth Circuit held that the assessment of the adequacy of a rem edy should examine

the remedy, and not the cause of action. Lueck v. Sundstrand Corp., 236 F.3d 1137, 1141-42 (9th Cir.

1993). This means th at if, for example, products liability is not a cause of ac tion in the P.R.C., but a

remedy for an injury from a product may be provided through perhap s some other tort or contract basis,

the remedy is adequate. Such a position has not been expressly followed by other circuits.