Opinion
Civil No. 04-00364 (ACK/BMK).
May 17, 2005
ORDER GRANTING WATKINS' MOTION TO DISMISS AND STAYING CASE AS TO AON AND ACORDIA
BACKGROUND
I. Factual History
Plaintiff Paradise Cruise Ltd. ("Plaintiff") is a Hawaii corporation, whose business consists of providing educational and entertaining passenger cruises within the Hawaiian Islands. (Compl. at ¶ 4). Plaintiff owns and operates the 13-year old cruise vessel, the Star of Honolulu. (Compl. at ¶ 9). Plaintiff's operations include daytime and dinner excursions and, prior to September 11, 2001, a daily excursion to Pearl Harbor. (Compl. at ¶¶ 9, 11). Plaintiff alleges that it "purchased an insurance policy ["the Policy"] from or through Defendants, which covers inter alia, trade disruption for the cruise and passenger vessel industry, and was in effect for the 12 month period commencing May 2001." (Compl. at ¶ 13). Plaintiff further alleges that it purchased the Policy based, in part, on the representation of the broker that the Trade Disruption Insurance terms of the Policy covered broad losses, including the perils described in the Complaint. (Compl. at ¶ 13).
Plaintiff alleges that the "attacks of September 11, 2001, constituted one or more of the perils covered by the policy" and that the September 11th attacks "caused a disruption to the trade of Plaintiff, as defined in the Policy." (Compl. at ¶¶ 15, 16). Plaintiff alleges that "[t]he disruption to trade resulted from the closing of Pearl Harbor to commercial vessels, the closing of the Honolulu Airport for several days, and the effect of the peril on the tourism to Hawaii." (Compl. at ¶ 17). Plaintiff alleges that it made a timely claim to its insurer, Watkins, which is located in London, and Watkins refused to compensate Plaintiff according to the terms of the insurance Policy. (Compl. at ¶¶ 18-19).
On June 10, 2004, Plaintiff filed its action against its insurer and Plaintiff's own agents, Acordia Northwest, Inc. ("Acordia") and Aon Risk Services, Inc. of Ohio. ("Aon"). Plaintiff alleges that Acordia and Aon are insurance agents and/or brokers that brokered the subject Policy. (Compl. at ¶ 8). Plaintiff's Complaint alleges that Defendant Michael Else and Company, Ltd. ("Michael Else") is an underwriting agent for Great Lakes Reinsurance (UK) PLC, dba Transmarine ("Transmarine"), the insurance company for Plaintiff under certificate Number 0232/01/03. (Compl. at ¶ 5). The Complaint also states that Lloyd's is the underwriter for Plaintiff's Policy. (Compl. at ¶ 7).
On December 3, 2004, Watkins filed its Answer to Plaintiff's Complaint. Defendant Watkins Syndicate ("Watkins") alleges that Plaintiff was mistaken, at the time of filing its claim, and, in fact, none of the entities as described by Plaintiff are or ever were insurers for Plaintiff under the subject Policy. (Watkins' Answer at 4). Rather, Watkins, a syndicate at Lloyd's, London, is the one and only subscribing insurer under the Policy. (Watkins' Answer at 4). Upon being informed of these facts, Plaintiff filed a notice of dismissal of its Complaint against Michael Else and Transmarine on December 20, 2004.
In its Answer, Watkins admitted that it is a "British entity, having its principal place of business in a country other than the State of Hawaii." (Compl. at ¶ 1; Watkins' Answer at ¶ 1). Watkins explained that Lloyd's, London is a place, and not an entity or insurer for the Policy, and that Watkins "is the subscribing insurer under the alleged policy of insurance issued to the Plaintiff." (Watkins' Answer at ¶ 7). Watkins alleges that "Plaintiff has failed to respond to various inquiries in asserting its claim to its insurer and has thus far failed to comply with its policy obligations and provide a properly documented claim." (Watkins' Answer at ¶ 19). Watkins further claims that "[u]ntil the relevant claim documentation is presented the Defendant is unable to respond to the claim" and that "there is not yet a controversy ripe for judicial determination." (Watkins' Answer at ¶ 19).
Watkins alleges that although the Honolulu Airport was closed from September 13-15 following the September 11th attacks, Plaintiff "seeks $2.4 to $3.8 million for loss revenue for the entire 90-day limit of the policy, based on cancellations of wedding and charter business, reduced airline traffic, lay offs of nonessential employees, new restrictions in entering Pearl Harbor, and additional costs and expenses for security and restructuring cruises." (Watkins' Mot. to Dismiss at 3). Watkins further alleges that "[Plaintiff] denies such losses were caused by general market conditions, such as a fall in business due to the `dot.com' failures or the Asia market crises, or the overall decline in its business over the years, none of which would be covered under the policy." (Watkins' Mot. to Dismiss at 3).
II. Procedural History
On June 10, 2004, Plaintiff filed its Complaint.
On August 13, 2004, Defendant Acordia filed an Answer.
On August 16, 2004, Defendant Aon filed an Answer and a Cross-Claim against Defendants Michael Else, Great Lakes Reinsurance, Lloyd's of London, Lloyd's Underwriters, and Acordia.
On September 7, 2004, Acordia filed an Answer to Cross-Complaint by Tomlinson, Inc. and a Cross-Complaint against Defendants Michael Else, Great Lakes Reinsurance, Lloyd's of London, Lloyd's Underwriters, and Acordia.
On September 9, 2004, Aon filed an Answer to Acordia's Cross-Complaint.
On December 3, 2004, Watkins (erroneously named as Lloyd's of London; Lloyd's Underwriters) filed an Answer to Plaintiff's Complaint.
On December 20, 2004, Plaintiff filed a Notice of Dismissal Without Prejudice of Complaint Against Michael Else and Company, Ltd. and Great Lakes Reinsurance (UK) PLC, dba Transmarine.
On March 21, 2005, Watkins filed a Motion to Dismiss and for Order Referring Matter to Arbitration.
On March 22, 2005, Aon filed a Statement of No Position to Watkins Motion to Dismiss.
The Court notes that Defendant Acordia failed, contrary to LR 7.4, to file a statement of its position regarding Watkins' Motion to Dismiss and for Order Referring Matter to Arbitration.
On April 14, 2005, Plaintiff filed an Opposition to Watkins Motion to Dismiss.
On April 21, 2005, Watkins filed a Reply in Support of its Motion to Dismiss or for Order Referring Matter to Arbitration.
On May 2, 2005, a Hearing on Watkins' Motion was held.
STANDARD
"Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is appropriate." Schwarzenegger v. Fred martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). When the Court rules without conducting an evidentiary hearing, "the plaintiff need only make a prima facie showing of jurisdictional facts" through the submitted materials in order to avoid dismissal. Id.; Data Disc., Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). In such cases, the Court only inquires into whether the plaintiff's "pleadings and affidavits make a prima facie showing of personal jurisdiction." Id. (quoting Caruth v. International Psychoanalytical Ass'n, 59 F. 3d 126, 128 (9th Cir. 1995)).
The plaintiff "must eventually establish jurisdiction by a preponderance of the evidence either at a pretrial evidentiary hearing or at trial." Hi-Pac, Ltd. v. Avoset Corp., 980 F. Supp. 1134, 1137 (D. Haw. 1997).
"In determining whether [the plaintiff] has met this burden, uncontroverted allegations in [the] complaint must be taken as true, and `conflicts between the facts contained in the parties' affidavits must be resolved in [the plaintiff's] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists.'" American Tel. Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (quotingWNS Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989));accord Pure, Ltd. v. Shasta Bev., Inc., 691 F. Supp. 1274, 1277 (D. Haw. 1988).
DISCUSSION
I. Personal Jurisdiction
Plaintiff purchased a trade disruption insurance policy underwritten by Watkins. The policy contains a forum selection, choice of law, and arbitration clause. Section 14.1 of the policy states: The construction of these Terms and Conditions and the respective rights and obligations of the Underwriters and the Assured shall be governed by and construed in accordance with English Law. (Ex. B attached to the Decl. of Alison Clare Maxwell). Section 15(a) of the policy, titled "ARBITRATION," states: Any dispute or difference between an Assured and the Underwriters shall, unless the Underwriters decide in their absolute discretion that any such dispute or difference shall be decided by the English High Court of Justice, be referred to arbitration in London by an Arbitrator to be appointed by agreement between the parties concerned. (Ex. B attached to the Decl. of Alison Clare Maxwell). Thus, the policy makes clear that any dispute between the parties shall be governed by English law and shall be resolved in London, whether by arbitration or the English High Court of Justice.
To subject a nonresident defendant to suit, both the long-arm statute of the state in which the Court sits and constitutional due process requirements must be satisfied. The Hawaii Supreme Court interprets Haw. Rev. Stat. § 634-35 as allowing jurisdiction "to the full extent permissible by the Due Process Clause of the Fourteenth Amendment." Cowan v. First Ins. Co., 608 P.2d 394, 399 (Haw. 1980); accord Robinson Corp. v. Auto-Owners Ins. Co., 304 F. Supp. 2d 1232, 1236 n. 7 (D. Haw. 2003) (citation omitted). Because Hawaii's long-arm statute reaches to the full extent permitted by the Constitution, the Court need only determine whether due process permits the exercise of personal jurisdiction. See, e.g., Schwarzenegger, 374 F.3d at 800-01.
Because there is no applicable federal statute and the Court sits in diversity, Hawaii's long-arm statute, Haw. Rev. Stat. § 634-35, controls. See, e.g., Loral Terracom v. Valley Nat'l Bank, 49 F.3d 555, 559 (9th Cir. 1995).
"The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985); accord Omeluk v. Langsten Slip Batbyggeri A/S, 52 F.3d 267, 269-70 (9th Cir. 1995). Due process is satisfied if the Court has "either general jurisdiction or specific jurisdiction" over the defendant. Doe v. American Natl. Red Cross, 112 F.3d 1048, 1050 (9th Cir. 1997); Robinson Corp. v. Auto-Owners Ins. Co., 304 F. Supp. 2d 1232, 1236 (D. Haw. 2003) (citation omitted).
General jurisdiction exists only when the defendant's "activities in the state are `substantial' or `continuous and systematic.'" Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990) (quoting Data Disc., 557 F.2d at 1287). The parties do not contend that Watkins has engaged in any activity in Hawaii that would confer general jurisdiction on the Court. Therefore, the Court must determine whether it has specific jurisdiction. Specific jurisdiction requires that the defendant have "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); accord Burger King, 471 U.S. at 475.
To determine whether specific jurisdiction exists, the Court employs "a three-part test to evaluate the nature and quality of [the defendant's] contacts" with the forum state. Sher, 911 F.2d at 1361. Specifically:
(1) The non-resident defendant must purposefully direct [its] activities or consummate some transaction with the forum or resident thereof; or perform some act by which [it] purposefully avails [itself] of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.Schwarzenegger, 374 F.3d at 801-02 (citing Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)). "If any of the three requirements is not satisfied, jurisdiction in the forum would deprive the defendant of due process of law." Omeluk, 52 F.3d at 270.
The plaintiff bears the burden of satisfying the first two requirements of the test. Schwarzenegger, 374 F.3d at 801-02 (citation omitted). If the plaintiff fails to satisfy either of these requirements, personal jurisdiction is not established in the forum state. Id. If the plaintiff succeeds in satisfying both the first and second requirement, "the burden then shifts to the defendant to `present a compelling case' that the exercise of jurisdiction would not be reasonable." Id. (quoting Burger King, 471 U.S. at 476-78). The Court may exercise jurisdiction "with a lesser showing of minimum contacts than would otherwise be required if considerations of reasonableness dictate."Haisten v. Grass Valley Med. Reimb. Fund, Ltd., 784 F.2d 1392, 1397 (9th Cir. 1986).
A. Purposeful Availment
Under the first prong of the three-part specific jurisdiction test, Plaintiff must establish that Watkins either purposefully availed itself of the privilege of conducting activities in Hawaii, or purposefully directed its activities toward Hawaii. Schwarzenegger, 374 F.3d at 802. "The contacts made by defendant therefore must, by [its] own actions, create a `substantial connection' to the forum state." Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'antisemitisme, 379 F.3d 1120, 1129 (9th Cir. 2004) (internal citation omitted). "Only contacts occurring prior to the event causing the litigation may be considered." Farmers Ins. Ex. v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 913 (9th Cir. 1990).
Here, Watkins argues that it does not have sufficient contacts with Hawaii to justify maintaining this action against it in this forum because Watkins is a British entity with its principal place of business in London, England; it does not sell insurance in Hawaii; it has no offices or employees in Hawaii; it is not registered to do business in Hawaii; the subject policy was purchased by Plaintiff's agents in London; and the policy requires claims to be sent to London and disputes to be resolved there. (Watkins' Mot. to Dismiss at 9-10). Plaintiff argues that even if these statements are true, they do not defeat personal jurisdiction over Watkins. (Pl.'s Opp. at 11). Plaintiff argues that jurisdiction is proper because Watkins agreed to insure Plaintiff, which is located in Hawaii; the subject policy was sent to Plaintiff in Hawaii; the policy is written to expressly cover unique business operations in Hawaii (such as a tour in and around Pearl Harbor); and Watkins accepted payments for the policy, which were issued out of Hawaii. (Pl.'s Opp. at 11-12).
Plaintiff relies on McGee v. International Life Insurance Co., 355 U.S. 220 (1975). In McGee, the United States Supreme Court held that a Texas insurance company had sufficient minimum contacts with California to satisfy due process concerns, where a life insurance policy was delivered in California, premiums were paid from California, and the insured was a resident of California at the time of his death. Id. at 223. McGee is not dispositive of the matter at hand because the insurance company in McGee mailed a reinsurance certificate to the insured in California, offering to insure him in accordance with the terms of an earlier policy. Conversely, in the matter at hand, Plaintiff sought insurance in London and Watkins did not mail or solicit business in Hawaii.
"[T]he mere existence of a contract with a party in the forum state does not constitute sufficient minimum contacts for jurisdiction." Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990) (citing Burger King, 471 U.S. at 478). Rather, the Court must consider the parties' "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing" to determine whether Watkins' contacts are "substantial" and not merely "random, fortuitous, or attenuated." Id. (citing Burger King, 471 U.S. at 479-80) (internal quotations omitted)).
In Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 1392 (9th Cir. 1986), an attorney for a California hospital went to the Cayman Islands to arrange for the formation of a Medical Reimbursement Fund to provide the hospital's doctors, who were California residents, with self-funding indemnity insurance. Although no part of the transaction for insurance took place in the forum state, the Ninth Circuit held that "activity by the defendant need not physically take place in the forum state so as to constitute sufficient contact under the due process test." Id. at 1397.
The Court finds Haisten distinguishable from the matter at hand. In Haisten, the Ninth Circuit explained, "This case is unique in that we are presented with a defendant who has made a tremendous effort to construct a transaction in such a way as to avoid the appearance of contacts with California, and thus avoid the reach of the California courts. Nonetheless, its only purpose was to provide insurance for California doctors treating California patients and to avoid requirements imposed by California law." Id. at 1396 (emphasis added). The fund at issue in Haisten was created on behalf of California physicians to indemnify themselves against liability solely under California's laws and was funded solely by California physicians thus the Ninth Circuit concluded that the effect in the forum was not only foreseeable it was bargained for. Id. Here, conversely, Watkins does not exist solely for the benefit of Hawaiian businesses and was not created in an attempt to avoid the Hawaiian courts. Rather, it is a broker of international insurance policies that contracted to limit its amenability to suit to its principal place of business. As Plaintiff's counsel represented at the hearing, Plaintiff sought a type of insurance that was not available in the United States and accordingly entered the international market. Plaintiff thereafter purchased the subject policy with the fully disclosed choice of law and choice of forum clauses.
The Court finds the terms of the subject policy and the manner in which the policy was obtained to be particularly significant to the purposeful availment analysis. Here, Watkins did not solicit business in Hawaii. Rather, Plaintiff's agents procured the policy from Watkins in London. Although the policy is written to expressly cover Plaintiff's business operations in Hawaii, the policy expressly provides that English law will govern "the construction of [the] Terms and Conditions [of the Policy] and the respective rights and obligations of the Underwriters and the Assured" and requires any claims to be sent to London and disputes to be resolved there.
The fact that the subject policy was sent to Plaintiff in Hawaii and that Watkins accepted payments for the policy issued out of Hawaii are simply insufficient to establish that Watkins sought to purposefully avail itself of the benefits and protections of conducting business in Hawaii. See e.g., Sher, 911 F.2d at 1362 (finding that the fact that the defendant accepted payment from a bank in the forum state and made calls and sent letters to the forum state did not constitute deliberate creation of a substantial connection with the forum and did not alone establish purposeful availment).
Moreover, the purposeful availment requirement "is but a test for determining the more fundamental issue of whether a `defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there.'" Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 1392 (9th Cir. 1986) (quoting World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 297 (1980)). The Court finds that Watkins' conduct was not such that it should have reasonably anticipated being haled into court in Hawaii. The terms of the subject policy clearly establish that the parties contracted to conduct any business related to the policy in London. While it is true that "[i]nsurance by its nature involves the assertion of claims, and resort to litigation is often necessary," here the parties expressly contracted that any such litigation was to occur in London. Farmers Ins. Exch. v. Portage La Prairie Mutual Ins. Co., 907 F.2d 911, 913 (9th Cir. 1990) (citation omitted). The Court finds that Plaintiff has not made a prima facie showing that Watkins' contacts with Hawaii satisfy the purposeful availment prong of the specific personal jurisdiction analysis such that it should have reasonably anticipated being haled into court here.
B. Arising out of Forum-Related Activities
The second prong of the jurisdictional analysis is "met if `but for' the contacts between the defendant and the forum state, the cause of action would not have arisen." Loral Terracom, 49 F.3d at 561. Plaintiff's claims against Watkins arise out of Watkins' alleged breach of the terms of the subject Policy by failing to compensate Plaintiff for its allegedly insured loss occurring in Hawaii. Although the Policy alone was insufficient to satisfy the purposeful availment prong of the jurisdictional analysis, the Court finds that Plaintiff's causes of action would not have arisen but for the Policy's coverage of losses occurring in Hawaii. Thus, this prong is satisfied. C. Reasonableness
Even if the Court found that the purposeful availment prong of the jurisdictional analysis was satisfied, the Court finds that the exercise of jurisdiction over Watkins would not be proper because it would be unreasonable. See e.g., Miracle, 87 F. Supp. 2d at 1068 (holding that the exercise of personal jurisdiction must be reasonable); Omeluk, 52 F.3d at 270;Insurance Co. of N. America v. Marina Salina Cruz, 649 F.2d 1266, 1270 (9th Cir. 1981). The reasonableness determination requires the Court to consider the following factors:
(1) The extent of the defendants' purposeful interjection into the forum state's affairs;
(2) the burden on the defendant of defending in the forum;
(3) the extent of conflict with the sovereignty of the defendants' state;
(4) the forum state's interest in adjudicating the dispute;
(5) the most efficient judicial resolution of the controversy;
(6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and
(7) the existence of an alternative forum.
Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1488-89 (9th Cir. 1993) (citation omitted). The Court balances all seven factors, recognizing that none of the factors is dispositive in itself. Id.
1
The Court first considers the extent of Watkins' purposeful interjection into the forum state. "The smaller the element of purposeful interjection, the less is jurisdiction to be anticipated and the less reasonable is its exercise." Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1488 (9th Cir. 1993) (citation omitted). As discussed above, Watkins is a British entity with its principal place of business in London, England; it does not sell insurance in Hawaii; it has no offices or employees in Hawaii; it is not registered to do business in Hawaii; the subject policy was purchased by Plaintiff's agents in London; and the policy requires claims to be sent to London and disputes to be resolved there. Because the Court found that Watkins contacts with Hawaii were insufficient to establish purposeful availment, the Court finds that this factor weighs in favor of Watkins. See Sinatra v. National Enquirer, Inc., 854 F.2d 1191, 1199 (9th Cir. 1988) (finding that the factor of purposeful interjection is analogous to the purposeful availment analysis).2
The Court next considers the burden on Watkins of defending a lawsuit in Hawaii. "The unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders."Asahi Metal Indus. Co., Ltd. v. California Superior Court, 480 U.S. 102, 114 (1987) (citation omitted). The burden on Watkins of defending suit in Hawaii is considerable. Watkins is not registered to do business in Hawaii and has no offices or employees in Hawaii. Moreover, Plaintiff sent its claim and supporting documents to London and thus the documentation regarding the claim is located in London. Moreover, the witnesses who processed Plaintiff's claim are located in London and additional witnesses regarding the extent of the policy's coverage are also located in London. Although it is likely that Plaintiff will have witnesses located in Hawaii, "in personal jurisdiction cases, the burden on the defendant is the primary concern." Pacific Atlantic Trading Co. v. M/V Main Exp., 758 F.2d 1325, 1330 (9th Cir. 1985) (citation omitted) (explaining that because the burden on the defendant is the primary concern, the possible burden on the plaintiff does not dilute the strength of this factor); Amoco Egypt Oil Co. v. Leonis Navigation Co., 1 F.3d 848, 852 (9th Cir. 1993) (stating that even if plaintiff's burden would be similar to defendant's, the burden on the defendant is not a forum non conveniens question, but a function of due process requirements). This factor favors Watkins.
3
The next factor is the extent to which the exercise of jurisdiction would conflict with the sovereignty of the defendant's state. The United States Supreme Court has held that "[g]reat care and reserve should be exercised when extending our notions of personal jurisdiction into the international field."Asahi Metal, 480 U.S. at 115 (citation omitted). Accordingly, "litigation against an alien defendant creates a higher jurisdictional barrier than litigation against a citizen from a sister state because important sovereignty concerns exist."Core-Vent Corp., 11 F.3d at 1488-89 (9th Cir. 1993) (citingSinatra, 854 F.2d at 1199); Rano v. Sipa Press, Inc., 987 F.2d 580, 588 (9th Cir. 1993) (citations omitted). This principle is especially relevant here since the subject policy was purchased and issued in London, and the policy explicitly provides that related disputes shall be governed by English law in an English forum. This factor weighs heavily in favor of Watkins.
4
The Court next considers Hawaii's interest in adjudicating the suit. While Hawaii maintains a strong interest in providing an effective means of redress for its residents when their insurers refuse to pay claims, Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 1392 (9th Cir. 1986), the Court also considers the adverse effect the assumption of jurisdiction might have on commerce when the forum activities of the defendant are not substantial. See Pacific Atlantic Trading Co. v. M/V Main Exp., 758 F.2d 1325, 1330 (9th Cir. 1985) (citations omitted). It is not insignificant, that the cost and availability of insurance on the international market may be impacted by insurers' inability to contractually limit the forums in which they can be sued. When these interests are balanced, this factor weighs evenly in favor of both Plaintiff and Watkins.
5
The next factor concerns the efficiency of the forum. "Unlike the burden on the defendant, this factor involves a comparison of alternative forums." Amoco Egypt Oil Co. v. Leonis Navigation Co., 1 F.3d 848, 852 (9th Cir. 1993). In evaluating this factor, courts consider where the evidence and potential witnesses are likely to be located. Here, as discussed above, Plaintiff sent its claim and supporting documents to London and thus the witnesses who processed Plaintiff's claim are located in London and additional witnesses regarding the extent of coverage are also located in London. However, Plaintiff is also likely to have witnesses located in Hawaii. The location of the evidence and witnesses does not weigh heavily in either party's favor.
However, the Court finds the subject policy's choice of law provision especially relevant to efficiency considerations. See Pacific Atlantic Trading Co., 758 F.2d at 1331; Amoco Egypt Oil Co., 1 F.3d at 852. The policy states that "[t]he construction of these Terms and Conditions and the respective rights and obligations of the Underwriters and the Assured hereunder shall be governed by and construed in accordance with English Law." (Ex. C attached to the Decl. of Alison Clare Maxwell). An English forum would necessarily be more efficient than this forum, in light of the parties' agreement to the application of English law to their disputes. This factor weighs in Watkins' favor.
6
The Court next considers the importance of the forum to Plaintiff's interest in convenient and effective relief. Litigating abroad presents an obvious inconvenience to Plaintiff. This factor therefore weighs in favor of Plaintiff. However, the United States Court of Appeals for the Ninth Circuit has "said previously that this factor is not of paramount importance."Harris Rutsky Co. Ins. Servs., Inc. v. Bell Clements Ltd., 328 F.3d 1122, 1133 (9th Cir. 2003) (citations omitted);Core-Vent Corp., 11 F.3d at 1490 (stating that "[n]either the Supreme Court nor [the Ninth Circuit] has given much weight to inconvenience to the Plaintiff"). "[N]o doctorate in astrophysics is required to deduce that trying a case where one lives is almost always a plaintiff's preference." Roth v. Garcia Marquez, 942 F.2d 617, 624 (9th Cir. 1991).
7
Finally, the Court must determine whether an adequate alternative forum exists. Plaintiff bears the burden of proving the unavailability of an alternate forum. Core-Vent Corp., 11 F.3d at 1490 (citing Pacific Atlantic Trading Co., 758 F.2d at 1331). Although Plaintiff may be compelled to submit to arbitration in London and may not be able to try its case before a jury, Plaintiff has not shown that its claims cannot be effectively remedied there. Id. (stating that "[a] mere preference on the part of the plaintiff for its home forum does not affect the balancing. . . ."). Moreover, Plaintiff can obtain full relief from the remaining defendants in its action in Hawaii. This factor weighs in Watkins' favor.
8
The Court concludes, based on these factors, that the exercise of jurisdiction over Watkins would not comport with fair play and substantial justice and would thus be unreasonable. The Court recognizes that Hawaii maintains an interest in providing a forum to residents who have legitimate claims to pursue. However, where as here plaintiff directed its agents to purchase insurance on the international market, plaintiff agreed to choice of law and choice of forum provisions to obtain the subject policy, and the defendant insurer's purposeful interjection into the forum is limited, that interest must give way. Requiring Watkins to submit to the jurisdiction of the Court would impose substantial burdens on it and would interfere with the sovereignty of a foreign nation. As explained above, "litigation against an alien defendant creates a higher jurisdictional barrier than litigation against a citizen from a sister state because important sovereignty concerns exist." Core-Vent Corp., 11 F.3d at 1488-89 (9th Cir. 1993). The Court concludes that this higher threshold has not been met here.
II. Aon and Acordia
At the hearing, Plaintiff stated that should the Court dismiss Plaintiff's claims against Watkins or refer them to arbitration, Plaintiff would like the litigation against Aon and Acordia to proceed. Neither Aon nor Acordia stated their position on a stay at the hearing nor in a filing with the Court. Plaintiff conceded that if it were permitted to continue litigating its claims against Aon and Acordia, various issues, including damages, could not be resolved until Plaintiff's claims against Watkins are resolved. Indeed, if Plaintiff prevails against Watkins in London, Plaintiff's case against Aon and Acordia may be entirely moot. The United States Court of Appeals for the Ninth Circuit has held that "a trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case. This rule applies whether the separate proceedings are judicial, administrative, or arbitral in character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court." Mediterranean Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1465 (9th Cir. 1983) (citations omitted). Accordingly, the Court exercises its discretion to stay Plaintiff's suit against Aon and Acordia pending resolution of Plaintiff's claims against Watkins in London.
Aon filed a Statement of No Position as to Watkins' Motion to Dismiss, and Acordia did not file a statement of its position.
CONCLUSION
The Court finds that it lacks personal jurisdiction over Watkins because Plaintiff has not made a prima facie showing that Watkins' contacts with Hawaii are such that it should have reasonably anticipated being haled into court here. The Court further finds that the exercise of jurisdiction over Watkins would not comport with fair play and substantial justice and would thus be unreasonable. The Court accordingly GRANTS Watkins' Motion to Dismiss. Because Plaintiff's claims against Aon and Acordia remain, the Court exercises its discretion to stay the action pending resolution of Plaintiff's claims against Watkins in London.
IT IS SO ORDERED.
ORDER GRANTING WATKINS' MOTION TO DISMISS AND STAYING CASE AS TO AON AND ACORDIA, PARADISE CRUISE LIMITED V. MICHAEL ELSE AND COMPANY LTD.; GREAT LAKES REINSURANCE (UK) PLC, d.b.a. TRANSMARINE; LLOYD'S OF LONDON; LLOYD'S UNDERWRITERS; ACORDIA NORTHWEST, INC.; AON RISK SERVICES, INC. OF OHIO, Civil No. 04-00364 (ACK/BMK).