Opinion
01 Civ. 3226 (BSJ)
July 17, 2002
ORDER AND OPINION
On April 17, 2001, Plaintiff New Hampshire Insurance Company ("New Hampshire") commenced this action against Defendants Sphere Drake Insurance Ltd. ("Sphere Drake"), GE Reinsurance Corp. ("GE Reinsurance"), Royal Sun Alliance Insurance PLC ("RSA") and Great Lakes Reinsurance (UK) PLC ("Great Lakes") (collectively "Defendants"), alleging breach of contract and seeking both damages and a declaratory judgment that Defendants are liable on the contract. Specifically, Plaintiff alleges that Defendants breached reinsurance contracts memorialized in a reinsurance slip signed by Defendants and AIG Europe (UK) Ltd. ("AIG (UK)"), a sister subsidiary of Plaintiff and Plaintiff's purported agent. Currently before the court are the following motions: (1) RSA's motion to dismiss for lack of personal jurisdiction and pursuant to the doctrine of forum non converiiens; (2) GE Reinsurance and Great Lakes' motion to dismiss on the grounds of forum non conveniens, insufficiency of service of process, and for failure to join an indispensable party; and (3) Sphere Drake's motion to dismiss on the grounds of forum non conveniens and failure to join an indispensable party. After full consideration of Defendants' motions, the court finds that although Plaintiff has met its burden of demonstrating pe:rsonal jurisdiction over all Defendants, this case is properly dismissed under the doctrine of forum non conveniens.
GE Reinsurance alone raises insufficiency of service as a ground for dismissal.
Because the court dismisses this case on forum non conveniens grounds, the court does not address GE Reinsurance, Great Lakes and Sphere Drake's argument that this action should be dismissed for failure to join an indispensable party.
PARTIES
Plaintiff New Hampshire is a Pennsylvania corporation with its principal place of business at 70 Pine Street, New York, New York. (Pl.'s Compl. ¶ 2).Defendant Sphere Drake is an English company with its principal place of business in Brighton, England. (Pl.'s Compl. ¶ 3; Noakes Decl. ¶ 3).
Defendant RSA is an English corporation with its principal place of business in London, England. (Pl.'s Compl. ¶ 5).
Defendant Great Lakes is an English corporation with its principal place of business in London, England. (Pl's Comp. ¶ 6; Ruperti Decl. ¶¶ 3-4).
Defendant GE Reinsurance is an Illinois corporation with its principal place of business in Lincolnshire, Illinois. (Pl's Compl. ¶ 4; Kehrwald Decl. ¶¶ 3-4).
BACKGROUND
On or about October 14, 1998, Plaintiff issued a policy of insurance ("Underlying Policy") in connection with an offering of $100,000, 000 face amount of 61/4% notes ("Notes") by Destination Film Funding Corp., a wholly owned subsidiary of Destination Film Distribution Co., Inc. (Pl.'s Compl. ¶ 12) Plaintiff subscribed to a 60% share of the limit; the remaining 40% was subscribed to by AXA Reinsurance UK plc ("AXA"). (Id. ¶ 13) Although Plaintiff's sister subsidiary AIG (UK) was the signatory on the Underlying Policy, the Policy explicitly states that AIG (UK) was acting as agent for New Hampshire. (Id. at Ex. A).
According to Plaintiff's Complaint, Defendants each agreed to reinsure Plaintiff for a portion of the risk associated with the Underlying Policy. (Id. ¶ 16) These reinsurance contracts were negotiated, drafted and executed in London by AIG (UK), English broker Wihis Faber Dumas ("Willis Faber") and Defendants. These agreements were then memorialized in a reinsurance slip signed by Defendants and AIG (UK). (Id. at Ex. B) Although AIG (UK) negotiated and signed the reinsurance agreements, Plaintiff asserts that AIG (UK) was at all times acting as Plaintiff's agent, such that the true reinsured is Plaintiff.
All Defendants acted through their London offices except for GE Reinsurance, which acted through its Belgium office.
On or about March 28, 2001, Plaintiff received a notice from the Trustee of the Notes that there was a shortfall in Destination Film Funding's ability to make the April 15, 2001 interest payment on the Notes. As a result, Plaintiff alleges that it became obligated to pay the Trustee $2,897,487.50, due on or before April 16, 2001. Plaintiff alleges that it timely paid the required sum. (Id. ¶¶ 24-26) Plaintiff further alleges that it notified Defendants of the amount due from each of them under the reinsurance contracts. (Id. ¶ 27) On April 17, 2001, Defendants still having failed to pay the monies allegedly owed, Plaintiff filed the instant action to enforce the reinsurance contracts allegedly issued by Defendants to Plaintiff.
In the weeks following Plaintiff's instigation of the instant action, Defendants each filed related proceedings in the High Court of Justice, Queen's Bench Division, Commercial Court, in England against New Hampshire and AIG (UK). In these proceedings, which are currently going forward on a consolidated basis, Defendants seek a declaration that Defendants have no liability under the reinsurance contract. (Graham Decl. 5 Ex. 1; Noakes Decl. ¶ 10 Ex. B; Reston Decl. ¶¶ 21-22 Ex. A) According to Defendants, they are not liable under the reinsurance contracts because (1) AIG (UK), the purported reinsured, was not a party to the underlying insurance contract and thus was never exposed to the risk purportedly reinsured; (2) there was a breach of the warranty or condition of the Reinsurance Contract that Steve Stabler maintain a contract of employment as Chief Executive Officer of Destination Film Distribution Co., Inc. for a defined period of time; and (3) the reinsured failed to retain 20% of the risk as is required by the reinsurance contract. (Graham Decl. Ex. 1; Noakes Decl. Ex. B; Reston Decl. Ex. A; Pl.'s Compl. Ex. B, pp. 3-4) Although New Hampshire moved to dismiss or stay the English proceedings, that motion was denied by the English court. (RSA's Letter to the Court dated Nov. 8, 2001; New Hampshire's Letter to the Court dated Nov. 6, 2001)
GE Reinsurance and Great Lakes were the first to commence proceedings against New Hampshire and AIG (UK) on or about April 27, 2001. Then, on May 31, 2001, Sphere Drake commenced nearly identical proceedings. Finally, on June 1, 2001, RSA instigated proceedings against New Hampshire and AIG (UK).
The crux of this issue involves whether AIG (UK) was in fact acting as Plaintiff's agent on the reinsurance transaction. That is, while Plaintiff argues that AIG (UK) was at all times acting as its agent, such that Plaintiff is the actual reinsured, Defendants assert that AIG (UK) was acting on its own behalf in entering into the reinsurance contracts with Defendants.
PERSONAL JURISDICTION
As an initial matter, the court considers whether it has jurisdiction over each of the Defendants. See Allstate Life Ins. Co. v. Linter Group, Ltd., 782 F. Supp. 215, 219 (S.D.N.Y. 1992) (when forum non conveniens motions and motions to dismiss for lack of personal jurisdiction are before a court, the court must first consider the jurisdictional objections). of the four Defendants, only GE Reinsurance and RSA assert a jurisdictional challenge. These Defendants argue that although Plaintiff alleges jurisdiction is proper under section 1213 of the New York Insurance Law, (Pl.'s Compl. ¶ 8), section 1213 does not apply because defendants did not engage in any of the "predicate acts" enumerated in the statute. Since GE Reinsurance and RSA raise their jurisdictional challenges before discovery has occurred, and because no evidentiary hearing has been held on this issue, Plaintiff need only make a prima facie showing of personal jurisdiction to defeat defendants' motions to dismiss on this ground. See Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). Because the court finds that Plaintiff has made a prima facie showing that GE Reinsurance and RSA engaged in acts sufficient to confer jurisdiction under section 1213, defendants' motions to dismiss on this ground are denied.
Although GE Reinsurance phrases their challenge as one targeted toward the sufficiency of service of process, the essence of GE Reinsurance's argument is the same as RSA's; namely, that New York Insurance Law § 1213 does not apply to this case.
Section 1213 of the New York Insurance Law, which effectively serves as an extension of the New York long-arm provisions, states that its intended purpose is "to subject certain insurers to the jurisdiction of the courts of this state in suits by or on behalf of insurecis or beneficiaries under certain insurance contracts." N.Y. Ins. Law § 1213(a). The statute accomplishes its purpose by, inter alia, declaring that certain activities on the part of foreign unauthorized insurers constitute appointment of the New York Superintendent of Insurance as its attorney for service of process. N.Y. Ins. Law § 1213(b)(1); see also Cavahere v. New Jersey Ins. Underwriting Ass'n, 653 N.Y.S.2d 692, 693 (App.Div. (2d Dep't) 1997) ("[Section 1213] creates a very broad implied agency of service with the superintendent of insurance which, although going to the very perimeters of due process, provides a method for New York courts to obtain personal jurisdiction over a defendant.")
Pursuant to this section, the Superintendent will be so appointed when "[a]ny of the following acts in this state, effected by mail or otherwise, by an unauthorized foreign or alien insurer [takes place]: (A) the issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business therein, (B) the solicitation of applications for such contracts, (C) the collection of premiums . . . for such contracts, or (D) any other transaction of business . . ." N.Y. Ins. Law § 1213(b)(1). Section 1213 applies to reinsurers and reinsurance contracts as well as to insurers and insurance contracts. British Int'l Ins. Co., Ltd. v. Sequros La Republica, S.A., 212 F.3d 138, 140-41 (2d Cir. 2000); John Hancock Property and Casualty Ins. Co. v. Universale Reinsurance Co., 147 F.R.D. 40, 50-51 (S.D.N.Y. 1993).
The court finds that Plaintiff has met its burden at this early stage of the litigation of demonstrating that jurisdiction exists pursuant to section 1213. Plaintiff argues that GE Reinsurance and RSA committed the necessary predicate acts by "issuing or delivering" an insurance contract, "by mail or otherwise," to Plaintiff. In support of its position, Plaintiff alleges that it is a Pennsylvania corporation that is authorized to do business and maintains its principal place of business in New York. (Pl.'s Compl. ¶ 2) Plaintiff further alleges that Defendants agreed to reinsure Plaintiff's risk on the Underlying Policy and entered into reinsurance contracts with Plaintiff memorializing these agreements, albeit through Plaintiff's London agent, AIG (UK). Although whether AIG (UK) was acting as Plaintiff's agent in negotiating and signing the reinsurance agreements is hotly contested in this litigation, Plaintiff asserts that it is "widely known" in the London insurance market that AIG (UK) is not a risk-bearing entity that writes insurance for its own account, but rather it regularly functions as New Hampshire's agent in issuing or procuring insurance. (Aff. of Thomas Ripp ¶ 19) Moreover, Plaintiff points to the Underlying Policy, which explicitly states that AIG (UK) is acting as agent for New Hampshire. (Pl's Compl. Ex. A; Ripp Aff. ¶ 8) Indeed, Plaintiff notes that this Underlying Policy was stamped or initialed by representatives from both RSA and GE Reinsurance, thereby evidencing defendants' knowledge that New Hampshire was the insurer seeking reinsurance protection. (Ripp Aff. ¶ 9) Finally, Plaintiff asserts that Defendants knowledge of New Hampshire's role as the underlying insurer and reinsured is further evidenced by the fact that Defendants received additional documentation showing that AIG (UK) was acting as New Hampshire's agent on the reinsurance transaction. (Ripp Aff. ¶¶ 13-18)
The fact that the very purpose of reinsurance is for the underlying insurer (i.e., the reinsured) to cede portions of its risk to the reinsurers further supports the Plaintiff's position that AIG (UK) was acting as its agent; AIG (UK) has no insurance risk for Defendants to reinsure.
Based upon the above, the court finds that Plaintiff has made the necessary prima facie showing that GE Reinsurance and RSA, through its dealings with AIG (UK), issued reinsurance policies to New Hampshire — a New York corporation authorized to do business and with its principal place of business in New York — such that these defendants are subject to jurisdiction pursuant to section 1213. See Farm Family Mutual Ins. Co. v. Nass, 503 N.Y.S.2d 820, 821 (App.Div. (2d Dept.) 1986) (section 1213 authorizes service of process upon the Superintendent of Insurance where "any insurer unauthorized to do business in this State issues or delivers contracts of insurance to residents of this State or corporations authorized to do business herein"); Weiss v. La Suisse, 69 F. Supp.2d 449, 457 ("New York specifically provides for service of process on insurers who are not authorized to do business in the State but who provide insurance to New Yorkers); see also Am. Centennial Ins. Co. v. Asepuradora Interacciones, S.A., 2000 WL 1425078, *5 (S.D.N.Y. 2000) (section 1213, which imposes certain jurisdictional obligations upon authorized foreign or alien insurers doing business in New York, was enacted to protect New York residents and those authorized to do business in New York). Accordingly, GE Reinsurance and RSA's motions to dismiss for lack of personal jurisdiction and improper service are denied.
Because the court finds that jurisdiction exists pursuant to section 1213, the court need not address RSA's argument that jurisdiction does not lie under New York long-arm sections 301 and 302. Similarly, Plaintiff's argument that Defendants consented to jurisdiction need not be addressed at this point, although this argument is addressed in connection with the court's forum non conveniens analysis. See supra.
FORUM NON CONVENIENS
All four Defendants move to dismiss the Complaint pursuant to the doctrine of forum non conveniens. "In dismissing a case on the ground of forum non conveniens, a district court enjoys wide discretion to which substantial deference is given." DiRienzo v. Philip Services Corp., No. 99-7825, 2000 WL 33725106, *4 (2d Cir. April 1, 2002). The determination of whether dismissal on the grounds of forum non conveniens is appropriate is a three-step process: First, the court must determine what deference is owed plaintiff's choice of forum. Second, the court must determine whether an adequate alternative forum exists. Third, in the event that an adequate alternative forum does exist, the court must balance the public and private interest factors articulated in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947) (hereinafter "Gilbert"). See Id.Prior to conducting this three-step inquiry, however, the court first addresses Plaintiff's argument that Defendants' motions should be denied because they are bound by the forum selection clause contained in the Underlying Policy. This clause states as follows:
Each of the Insurers irrevocably (i) agree (sic) that any legal action, suit or proceeding against either or both of them brought by the Trustee or any beneficiary of the Insurance Policy with respect to the enforcement of a Claim under the Insurance Policy may be instituted in any court in The City of New York in the United States of America, (ii) waives, to the fullest extent it may do so, any objection which it may no (sic) have or hereafter has to the laying of venue of any such legal action, suit or proceeding, and (iii) submits to the exclusive jurisdiction of such courts in any such legal action, suit or proceeding.
(Pl.'s Compl. Ex. A) According to Plaintiff, this forum selection clause was incorporated into the reinsurance contracts and requires Defendants to litigate the instant dispute in New York. The court disagrees. The plain language of the clause makes it clear that it does not encompass either the reinsurance Defendants or the instant dispute, but rather is limited to certain proceedings brought by the Trustee or the Noteholders against New Hampshire and AXA. The term "Insurers" is defined under the "Definitions" section of the Underlying Policy by reference to the attached "Schedule of Insurers," which identifies the "Insurers" as New Hampshire and AXA. (Id.) The clause prohibits these two "Insurers" from contesting jurisdiction or venue in any legal action brought in New York City against either or both of them "by the Trustee or any beneficiary of the Insurance Policy with respect to the enforcement of a Claim under the Insurance Policy." Thus, the forum selection clause is limited on its face and does not serve to bind Defendants in the instant dispute.
Having established that the forum selection clause contained within the Underlying Policy does not conclusively establish that this court is the appropriate forum for this dispute, the court now addresses Defendants' arguments that this case should be dismissed on forum non conveniens grounds.
A. Deference Owed Plaintiff's Choice of Forum
As noted above, the "first level of inquiry" in a forum non conveniens analysis is to determine what deference is owed plaintiff's choice of forum. DiRienzo, 2000 WL 33725106 at *4 (citing Iraqorri v. United Tech. Corp., 274 F.3d 65, 73 (2d Cir. 2001)). "Ordinarily a strong favorable presumption is applied to [plaintiff's] choice. . . . [A] court should begin with the assumption that a plaintiff's choice of forum will stand unless the defendant can demonstrate that reasons exist to afford it less deference." Id. (citations omitted). The "degree of deference to be given to a plaintiff's choice of forum moves on a sliding scale depending on several relevant considerations. Iragorri, 274 F.3d at 71. How this "sliding scale" approach works can be described as follows:
"The more it appears that a domestic or foreign plaintiff's choice of forum has been dictated by reasons that the law recognizes as valid, the greater the deference that will be given to the plaintiff's forum choice. Stated differently, the greater the plaintiff's or the lawsuit's bona fide connections to the United States and to the forum of choice and the more it appears that considerations of convenience favor the conduct of the lawsuit in the United States, the more difficult it will be for the defendant to gain dismissal for forum non conveniens."
Id. at 71-72; see also Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 101 (2d Cir. 2000) (the deference accorded plaintiff's choice of forum increases as plaintiff's ties to the forum increase).
Here, Plaintiff is a Pennsylvania corporation with its principal place of business in New York and thus has sued in its home forum. Although a plaintiff's choice of forum is generally entitled to "great deference" when, as in this case, plaintiff has sued in its home forum, Tragorri, 274 F.3d at 71, this deference is lessened when one considers the fact that the instant dispute arises from reinsurance agreements that were negotiated, drafted and executed on the London reinsurance market by Plaintiff's London agent and Enqlish broker. More specifically, the reinsurance contracts at issue in this litigation were not negotiated and signed by New Hampshire in New York, but rather by AIG (UK) in England. (Ripp Aff. ¶ 7) This is not an unusual procedure for New Hampshire; according to Plaintiff, AIG (UK) regularly acts as its agent in England in procuring and issuing insurance. (Id. at ¶¶ 7, 19) In addition to using AIG (UK) as its agent in negotiating and executing the reinsurance contracts, Plaintiff also enlisted the services of English broker Wihis Faber. Indeed, it appears that all of Defendants' contact in this transaction was with these two London entities and occurred in either London or, in some instances, Belgium. Finally, the reinsurance contracts at the center of Plaintiff's claims incorporate standard London market terms and likely will be interpreted in accordance with English law.
Thus, although Plaintiff technically has brought suit in its home forum, the fact that the instant dispute arises from reinsurance agreements negotiated, drafted and executed on the London reinsurance market by Plaintiff's London agent and English broker must be taken into account when determining the appropriate level of deference. That is, this is not a case where the plaintiff is an "ordinary American citizen" for whom litigating abroad can be said to present an extreme and unanticipated inconvenience. Instead, New Hampshire is a corporation that elected to do business in London, and thus could have expected to litigate in English courts. See Guidi v. Inter-Contimental Hotels Corp., 224 F.3d 142, 147 (2d Cir. 2000). As the court explained in First Union National Bank v. Paribas, 135 F. Supp.2d 443, 454 (S.D.N.Y. 2001):
[the presumption in favor of a United States plaintiff's choice of a United States forum] is a proxy for the convenience usually to be had by a U.S. plaintiff in litigating at home. Here, it would be wrong to overlook the fact that this plaintiff is not in any practical sense seeking to litigate at home. These lawsuits have arisen out of the activities of its permanent branch in London. All or substantially all of its employees knowledgeable about the disputes reside there . . . the fact that plaintiff's convenience interest are not served significantly by litigating here do diminish somewhat the deference to be accorded to their selection of this forum.
B. Adequate Alternative Forum
It is undisputed that an adequate alternative forum exists in this case. An alternative forum is generally adequate if "(1) the defendants are subject to service of process there; and (2) the forum permits litigation of the subject matter of the dispute." Bank of Credit and Commerce Int'l (Overseas) Ltd. v. State Bank of Pakistan, 273 F.3d 241, 246 (2d Cir. 2001) (quoting Alfadda v. Fen, 159 F.3d 41, 45 (2d Cir. 1998)) (internal quotations and citation omitted). Not only does the English court meet the criteria articulated above, but also litigation is currently underway in England invoLving the same issues and identical parties as in this action. See supra.
C. Public and Private Interest Factors
Having established that an adequate alternative forum exists in this case, the court next considers the public and private interest factors articulated Gilbert. In considering these factors, the court is mindful that "[t]he burden of demonstrating that a plaintiff's chosen forum is not convement is on the defendant seeking dismissal." DiRienzo, 2000 WL 33725106 at *6. Moreover, "[b]ecause much of the doctrine's strength derives from its flexibility and each case turns on its own facts, a single factor is rarely dispositive." Id. Unless the balance of these factors strongly favors Defendants, Plaintiff's choice of forum "should rarely be disturbed." Id. at *7 (quoting Gilbert, 330 U.S. at 508).
2. Private Interest Factors
The relevant private interest factors include: (a) ease of access to evidence; (b) the availability of compulsory process for the attendance of unwilling witnesses; (c) the cost of willing witnesses' attendance; (d) if relevant, the possibility of a view of premises; and (e) all other factors that might make the trial quicker or less expensive. See DiRienzo, 2000 WL 33725106 at *6 (citing Gilbert, 330 U.S. at 508). The first three factors are relevant to the instant analysis.
a. Ease of Access to Evidence and the Cost of Obtaining Willing Witnesses' Attendance. The vast majority of the relevant documents and witnesses relating to Plaintiff's breach of contract claims are located in Europe — mostly England, with some in Belgium. Significantly, Plaintiff fails to identify documents or witnesses related to its claims that are located in the United States. Instead, Plaintiff argues that evidence exists in the United States that pertains to defenses allegedly to be raised by Defendants. Only one of these purported defenses, however, appears to have been raised in the parallel proceedings in England, despite the fact that in those proceedings Defendants seek a declaratory judgment that they are not liable under the reinsurance agreements. In asserting this defense, referred to among the parties as the "Stabler issue," Defendants argue that Steve Stabler's failure to maintain a contract of employment as Chief Executive Officer of Destination Film Distribution Co., Inc. for the required duration constitutes a breach of warranty or breach of condition under the reinsurance contract, thereby releasing Defendants from their obligations. According to Defendants, litigation of the "Stabler issue" is based on construction of the reinsurance agreements, requires application of English law and does not involve evidence located in the United States.
Consistent with their position in the English proceedings, Defendants' papers suggest that they do not intend to assert the other alleged defenses in the instant action.
Specifically, Defendants assert that because it cannot be disputed that Stabler resigned as CEO of Destination Film Distribution Co. on November 8, 1999, the only issue to be litigated is the legal effect of this breach of the condition set forth in the reinsurance contract. Litigating this discrete issue involves little if any evidence from the United States.
The other defenses asserted in the English proceedings (and thus likely to be asserted in the instant action) are (1) AIG (UK), the purported reinsured, was not a party to the underlying insurance contract and thus was never exposed to the risk purportedly reinsured; and (2) the reinsured (regardless of whether it is found to be AIG (UK) or New Hampshire) failed to retain 20% of the risk as is required by the reinsurance contract. The first of these two defenses will center on whether AIG (UK) was acting as New Hampshire's agent on the reinsurance transaction. As the negotiation, drafting and execution of the reinsurance contract took place almost entirely in England among English entities, the majority of evidence relevant to this defense will be found in England. See Calavo Growers v. Generali Belgium, 632 F.2d 963, 967 (2d Cir. 1980). The second of these defenses requires interpretation of a provision in the reinsurance contract and thus it, too, will require evidence located in England. At the same time, however, should it be determined that New Hampshire is the actual reinsured (as opposed to AIG (UK)), evidence relating to whether New Hampshire violated this provision of the reinsurance contract may be located in New York. (Ripp Aff. ¶ 39, fn.10)
Having considered the claims and defenses likely to be raised in this action, the court finds that the majority of relevant evidence is located in England, such that these factors favor Defendants. The weight to be accorded these factors, however, is lessened when one considers the fact that (1) Defendants are corporate entities, presumably with significant resources; and (2) Defendants have not demonstrated that copying and transporting documents or producing willing witnesses necessarily would be "oppressive" or "vexatious" in terms of cost or time. DiRienzo, 2000 WL 33725106, *6-7.
Additional evidence related to the claims and defenses in this action will be found in Belgium, and some evidence relating to potential defenses may be scattered about the United States.
b. Availability of Compulsory Process. Defendants have identified several non-party witnesses relating to key issues in this litigation that are beyond the subpoena power of this court. Included among these witnesses are representatives from English broker Willis Faber, former employees of Defendants who were involved in the negotiation and drafting of the reinsurance agreements, and representatives from AIG (UK). See Calavo Growers, 632 F.2d at 967 (fact that Defendant's London agent and Belgian broker are not subject to the court's compulsory process cuts in favor of dismissal where representatives of both may be key witnesses). Although the availability of international procedures such as letters rogatory somewhat mitigates this problem, there are limits to the effectiveness of these procedures. First Union National Bank, 135 F. Supp.2d at 450 (noting drawbacks of Hague Convention procedures for obtaining testimony of unwilling English witnesses). Moreover, there exists a strong preference among United States' courts for live trial testimony. Id. Accordingly, the court finds that this factor favors Defendants.
Although AIG (UK) is not included as a Plaintiff in this action, AIG (UK), through Thomas Ripp, a Vice President — Claims of American International Underwriters, has represented to the court that AIG (UK) will "to the best of its ability, make available to the court and the parties in this case any documents within its possession, custody, or control and any witnesses within its control . . ." (Ripp Aff. ¶ 42)
1. Public Interest Factors
The relevant public interest factors to be weighed in a forum non conveniens inquiry are (a) administrative difficulties associated with court congestion; (b) the unfairness of imposing jury duty on a community with no relation to the litigation; (c) the local interest in having localized controversies decided at home; and (d) avoiding difficult problems in conflict of laws and the application of foreign law. DiRienzo, 2000 WL 33725106 at *7 (quoting Gilbert, 330 U.S. at 508-09).
a. Administrative Difficulties. The court finds that this factor favors Defendants. Undler the circumstances of this case, there is administrative advantage in dismissing this action in favor of litigation currently pending in England involving the same issues and the identical parties. While the court recognizes that the existence of related litigation is not one of the factors explicitly enumerated in Gilbert, see DiRenzo, 2000 WL 33725106, the existence of such litigation is relevant where, as in this case, the parties to the American and foreign actions are identical and there exists a likelihood of significant duplication of legal efforts on behalf of all the parties. See Guidi, 224 F.3d at 148 (citing C-Cure Chem. Co. v. Secure Adhesives Corp., 571 F. Supp. 808, 822 (W.D.N.Y. 1983), overruled on other grounds, Goya Foods, Inc. v. Tropicana Products, Inc., 846 F.2d 848 (2d Cir. 1988), and Ocean Shelf Trading, Inc. v. Flota Mercante Grancolombiana S.A., 638 F. Supp. 249, 253 (S.D.N.Y. 1986)). Although the pendency of the English proceedings causes this factor to favor Defendants, the weight accorded this factor is lessened when one considers that Plaintiff filed the instant action prior to Defendants' instigating the English proceedings.
The court in England has considered and denied Plaintiff's motion to dismiss or stay the English proceedings. (RSA's Letter to the Court dated Nov. 8, 2001; New Hampshire's Letter to the Court dated Nov. 6, 2001)
b. Jury Duty Imposed on Community and the Local Interest. The court finds that this factor, too, favors Defendants. While this is not a case in which the Southern District of New York has no discernable relation to the controversy, this court can identify only one: The Southern District of New York is the principal place of business of Plaintiff. Although New York therefore may be said to have an interest in ensuring that one of its resident corporations collects monies allegedly owed under the reinsurance contracts, the court finds that the connections between the instant controversy and England (in particular, London) are far more numerous and significant. As indicated previously, in this action New Hampshire alleges breach of reinsurance contracts that were negotiated, drafted and executed almost entirely in England and on the London reinsurance market. The transaction involved AIG (UK) (allegedly as New Hampshire's agent in London), Wihis Faber (New Hampshire's London broker), the London offices of three English Corporations and the Belgium office of an Illinois Corporation. Finally, the reinsurance slip memorializing the parties' agreements incorporates standard London market terms and most likely will be interpreted in accordance with English law.
The local interest London has in adjudicating a dispute based on a reinsurance contract negotiated and executed by largely English corporations and/or representatives in London on the London reinsurance market and governed by English law is greater than any interest New York may have in this dispute. Accordingly, this factor favors Defendants.
c. Avoiding Conflict of Laws Problems and the Application of Foreign Law. As indicated above, given England's numerous contacts with this action, the court finds that it likely would apply English law to the reinsurance contracts at issue in this litigation. Whereas this court would have to apply foreign law, however, an English court would apply English law. (Reston Decl. ¶¶ 4-18; Hunter Decl. ¶¶ 23-29) Accordingly, the interest in avoiding the application of foreign law favors the English forum. See, e.g., Calavo Growers, 632 F.2d at 967 (dismissing on forum non conveniens grounds where Belgian law likely governed and where the suit possibly involved an inquiry into the customs of the insurance industry in Belgium and Europe at large).
Indeed, the English court presiding over the parallel proceedings in this case already has determined that English law applies to the reinsurance contracts. (RSA Letter dated Nov. 8, 2001).
Plaintiff's speculation that New York law may apply to certain defenses that may or may not be raised, see infra, does not tip this factor in Plaintiff's favor. (Hunter Decl. ¶¶ 23-29).
d. Other Public Policy Considerations. In support of its position, Plaintiff argues that New York's strong public policy in favor of providing a New York forum for New York residents suing alien and foreign insurers on insurance claims, as expressed in New York Insurance Law § 1213, cuts in favor of denying Defendants' motions to dismiss. The court disagrees.
The public policy behind section 1213 is set forth in section 1213(a):
"The purpose of this section is to subject certain insurers to the jurisdiction of the courts of this state in suits by or on behalf of insureds or beneficiaries under certain insurance contracts. The legislature declares that it is a subject of concern that many residents of this state hold policies of insurance issued or delivered in this state by insurers while not authorized to do business in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights under such policies."
N.Y. Ins. Law § 1213(a). Here, Plaintiff is a corporation that made the decision to use its London agent and English broker to negotiate reinsurance contracts with primarily English entities on the London reinsurance market. As such, Plaintiff has failed to demonstrate that having to litigate this dispute in England — hardly a "distant forum" in Plaintiff's eyes — would be either unanticipated or overly burdensome. Certainly, there is no indication that litigating abroad presents an "insuperable obstacle" to Plaintiff. In short, the court finds that the public policy concerns articulated in section 1213 are not present here, such that this factor does not favor (or disfavor) Plaintiff.
The exception of course being GE Reinsurance, which acted through its Belgium office.
Indeed, although Plaintiff made a prima facie showing of personal jurisdiction over RSA and GE Reinsurance under section 1213(b)(1)(A), supra, the court notes that a finding of personal jurisdiction under the circumstances of this case stretches "to the very perimeters of due process." Cavahere v. New Jersey Ins. Underwriting Ass'n, 653 N.Y.S.2d 692, 693 (App.Div. (2d Dep't) 1997).
3. Balancing the Factors
Having considered the relevant public and private interests enumerated in Gilbert, the court finds that the balance of factors strongly favors defendants in this case.
C. Conclusion
Having conducted the requisite analyses — including an assessment of the appropriate deference due Plaintiff's choice of forum, the existence of an adequate alternative forum and the public and private interest factors articulated in Gilbert — the court finds that this case is properly dismissed pursuant to the doctrine of forum non conveniens. As discussed in detail above, this is a case in which a United States corporation used its London agent and an English broker to conduct a transaction with primarily English entities on the London reinsurance market. This transaction resulted in reinsurance agreements that almost certainly will be interpreted in accordance with English law. Moreover, litigation currently is pending in England between identical parties regarding the same issues involved in this litigation. Based upon these and other considerations articulated in detail above, the court finds (1) the strong presumption in favor of Plaintiff's choice to litigate in its home forum is mitigated under the circumstances of this case, and (2) the convenience to Plaintiff of litigating this matter in the United States is substantially overborne by the burden such litigation would impose on Defendants.
Accordingly, Defendants' motions to dismiss on forum non conveniens grounds are granted. The Clerk of Court is directed to close this case.