JURISDICTION: FORUM NON CONVENIENS

1. Piper Aircraft Co. (Defendant) v. Reyno (Plaintiff) (SCOTTISH LAW IS

APPLICABLE)
Citation. 54 U.S. 235, 102 S. Ct. 252, 70 L. Ed. 2d 419 (1981)
Brief Fact Summary. Plaintiffs (Reyno) sued Defendants(Piper Aircraft Co.), in
state court arising from injuries sustained in a plane crash in Scotland. The cases
were removed to federal court and transferred to the District Court of
Pennsylvania. Defendants moved to dismiss under the doctrine of forum non
conveniens, arguing that the better forum was located in Scotland.
Synopsis of Rule of Law. The doctrine of forum non conveniens allows a court to
dismiss a case that was brought in the wrong forum. When all or most of the
significant events, witnesses and evidence are centered in one location, then a
court must dismiss a case brought in another location under the doctrine of forum
non conveniens unless the alternate forum provides the plaintiff with absolutely
no remedy. Whether the law of the forum chosen by the plaintiff is more
favorable to the plaintiff should not be given weight.

Facts.
There was a plane crash in Scotland, where five citizens of Scotland were killed.
The aircraft was manufactured in Pennsylvania by Piper Aircraft Company
(Defendant) and the propellers were made in Ohio by Hartzell Propeller, Inc.
(Defendant). The plane was registered in Great Britain and owned and operated
by people from the United Kingdom. The wreckage was in England. An
investigation conducted by The British Department of Trade concluded that there
was no evidence of defective equipment and that the crash was probably due to
pilot error. Reyno, Plaintiff, a legal secretary for the attorney of the decedents’
survivors, was appointed administratrix of the decedents’ estate by a California
probate court. Plaintiff commenced separate wrongful death actions against the
Piper and Hartzell in California Superior Court, claiming negligence and strict
liability. They also filed suit in the United Kingdom against the owner and operator.
Plaintiff admits that she filed suit in the United States because of its laws
regarding liability and capacity to sue. Defendant filed motion to remove to the
District Court in California which was granted. Piper moved to transfer to the
District Court in Pennsylvania. Hartzell moved to dismiss for lack of personal
jurisdiction or, in the alternative, to transfer. The District Court quashed service
and transferred the case to Pennsylvania. Plaintiff then served Hartzell with
process in the District Court in Pennsylvania. Defendants moved to dismiss for
forum non conveniens.
The District Court of Pennsylvania granted the motions based on the analysis
articulated in [Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055
(1947)], namely that: 1) An alternative forum existed in Scotland; 2) The plaintiff
only filed in the U.S. for the favorable law; 3) There were overwhelming
connections with Scotland; 4) Witnesses and evidence were beyond the reach of
compulsory process.; 5) All of Defendants’ witnesses are in Great Britain; 6)
There should be only one trial to preserve judicial expense and avoid the risk of
inconsistent verdicts; 7) Scottish law would apply to Hartzell, and Pennsylvania
law would apply to Piper, which would be excessively confusing for a jury; 8) The
jurors have little connection to the controversy; 9) Scotland has a substantial
interest in the outcome of litigation.
The Circuit Court reversed and remanded District Court’s decision.
It held that the District Court abused its discretion when using the Gilbert analysis.
In addition, the court based its argument on several additional factors: (1)
dismissal is never appropriate where the law of the alternative forum is less
favorable to Plaintiffs; (2) Plaintiffs’ choice of forum deserves substantial weight
even though they are non-residents; (3) Defendants did not prove that all their
witnesses were in Great Britain; (4) Defendants’ inability to implead other
defendants would be burdensome but not unfair; (5) viewing the wreckage and
Scottish topography was not that significant; (6) application of foreign law does
not require dismissal; (7) Pennsylvania and Ohio would be the governing law
anyway, because these states have the greatest policy interests; and finally (8) a
dismissal for forum non conveniens should not result in a change in the applicable
law, just a change in the location of the trial.
The Supreme Court read this holding to mandate that dismissal is automatically
barred if it would lead to a change in the applicable law unfavorable to the
plaintiff.

Issue. Should a case be dismissed on the grounds of forum non conveniens when
all the witnesses and evidence are in another country, the other country’s jurors
would be more connected to the problem, it is inconvenient to the parties to try
the case in the jurisdiction where it was brought, and the other country’s law will
be applied?

Held. Yes. Reversed. (Scottish law is applicable)

The possibility of a change of law should not be given substantial weight in a
forum non conveniens analysis. Plaintiffs can choose among many forums, and
generally choose the most favorable one. If they do not choose the most
favorable but the action can be dismissed anyway, it would not be proper. In
addition, courts would have to interpret the law of foreign districts, which would
pose a lot of problems and inconsistencies. This is why there is a doctrine of
forum non conveniens, to get rid of this kind of confusion.
Upholding the Court of Appeals’ judgment would also increase the flow of
litigation, and the courts would be overwhelmed.
Choice of law should only be considered in this scenario when the remedy in the
alternative forum is totally inadequate or when the alternative forum lacks
subject matter jurisdiction. The facts of the case do not show either scenario.
Giving the plaintiff’s interests less weight is justified when the plaintiffs are
foreign. Under this circumstance, the choice of forum is not necessarily
convenient. The connections with Scotland were not necessarily “overwhelming”,
but the District Court correctly found that there would be fewer evidentiary
problems. If Defendants had to prove exactly what persons it would be difficult to
identify and bring as witnesses, Defendants required expenditures would defeat
the purpose of their motion.
Even if Scottish law would not apply, the other public interest factors would be
sufficient to support dismissal. There is a local interest. The American interest is
not sufficient.

Discussion. Choosing a particular forum because the law is more favorable to the
plaintiff cannot be given any substantial weight under a forum non conveniens
analysis. Although the general rule is that a court should not dismiss a case on
grounds of forum non conveniens unless there is an alternate forum in which the
plaintiff can pursue a remedy, this rule only requires that the plaintiff be able to
file a proper lawsuit in that alternate forum.

2. GULF OIL CORP. V. GILBERT (VIRGINIA LAW IS APPLICABLE)

330 U.S. 501 (1947)
Argued December 18, 19, 1946

Decided March 10, 1947

CERTIORARI TO THE CIRCUIT COURT OF APPEALS
A federal district court has power to dismiss an action at law pursuant to the
doctrine of forum non conveniens -- at least where its jurisdiction is based on
diversity of citizenship and the state courts have such power.
Important considerations in the application of the doctrine of forum non
conveniens, from the standpoint of litigants, are relative ease of access to
sources of proof, availability of compulsory process for attendance of unwilling
witnesses, cost of obtaining attendance of willing witnesses, possibility of view
of the premises if that be appropriate, and all other practical problems that make
trial of a case easy, expeditious, and inexpensive.
Gilbert- Plaintiff-New York (file)-Virginia (res)
Gulf- Respondent-Pennyslvania (corp)-New York and Virginia (biz)

FACTS:
The case arose when a fire gutted a warehouse owned and operated by the
plaintiff (Gilbert). The allegations provide that the defendant carelessly handled a
delivery of gasoline to his warehouse tanks and pumps as to cause an explosion
and fire which consumed the whole warehouse together with the merchandise of
his customers.
The plaintiff asks for a judgment amounting to $365,529.77 in damages. The
breakdown of which are the following: (1)$41,889.10 damage to his warehouse
which was totally consumed; (2) $3,602.40 destroyed merchandise and fixtures to
his damage; (3) $20,030 injury to his business and profits; (4) $300,000 worth of
burned property of customers in his custody through the warehousing agreement;
(5) costs, disbursements, and interests from the date of the fire.
The plaintiff brought the case in Southern District of New York despite living in
Lynchburg, Virginia and where the warehouse is located. On the one hand, the
defendant is a corporation organized under the laws of Pennsylvania and is
qualified to do business both in New York and Virginia.
It has officials designated to each state as agents to receive service of process.
When the defendant was sued, it invoked the doctrine of forum non conveniens.
It claimed that the Virginia is the appropriate place for trial because it is where
the plaintiff lives, where the defendant does his business, where all the events of
the litigation took place, where most of the witnesses reside, and where both the
state and federal courts are available to the plaintiff and are able to obtain
jurisdiction of the defendant. No Federal question is involved and was brought to
the United States District Court solely on the issue of diversity of citizenship of the
parties. The district court dismissed the case citing the Erie Railroad Co. vs
Tompkins and considered that the law of New York is forum non conveniens
applied and should be left to Virginia Courts. However, the Circuit Court of
Appeals disagreed as to the applicability of New York law, took a restrictive view
of the application of the entire doctrine in federal courts. It reversed the district
court. Hence, certiorari was filed.
ISSUE:
Whether the United States District Court has inherent power to dismiss a suit
pursuant to the doctrine of forum non conveniens.
RULING: (VIRGINIA LAW)
Yes. The district court has the power to dismiss a suit pursuant to the doctrine of
forum non conveniens. As shown by several jurisprudence, the US courts are
allowed to decline jurisdiction on cases rightfully under its jurisdiction on
exceptional circumstances, one of which is the application of forum non
conveniens.
The doctrine provides that a court may relinquish its jurisdiction to hear a case
when such choice in venue to file the case causes inconvenience or burden to one
of the parties or when the choice in venue clearly is a form of harassment to the
adverse party.
Also, the interests of fair play, inconvenience on the part of the adverse party,
public interest, and the character or nature of the parties are to be balanced. If
the court sees a strong balance in favor of the adverse party, it may apply the
doctrine.
In the case at bar, several factors were considered in order to apply the doctrine.
First, the plaintiff is not a resident of New York and the tortious event happened
in Lynchburg, Virginia.
In fact, the court was candidly told by the plaintiff that the venue was chosen by
the insurance company for purposes of subrogation.
Second, all the witnesses, the customers of the plaintiff and those that were part
of negligent act live in Lynchburg, Virginia. Only the lawyer for the plaintiff is said
to be residing in New York.
Third, a trial in Virginia would simplify the proceedings. If the proceeding is
conducted in Virginia, issues on conflicts of laws may be avoided. Hence, given
these circumstances, the district court did not abuse its discretion in applying the
doctrine of forum non conveniens.

3. LUECK v. SUNDSTRAND CORPORATION (ARIZONA VS. NEW ZEALAND)

Klaus LUECK et al., Plaintiffs-Appellants, v. SUNDSTRAND CORPORATION;
  Honeywell Corporation; Hydraulic Units, Inc., dba Dowty Aerospace;
  Messier-Dowty International;   Dehavilland, Inc., Defendants-Appellees.
Lueck et al.- Plaintiffs- New Zealand (res)-New Zealand (plane crash)
Sunstrand- Defendant- Canadian and American
Facts:
 Plaintiffs appeal the district court's dismissal of their suit on the basis of forum
non conveniens.
Plaintiffs, citizens of New Zealand, are victims of an airplane crash in New Zealand,
on a New Zealand carrier.
Plaintiffs allege that the radio altimeter of the Ground Proximity Warning System
(“GPWS”) malfunctioned during flight and was a causal factor of the accident.
Defendants, the Canadian manufacturer of the aircraft and the American
manufacturers of the GPWS and the radio altimeter, argued that New Zealand
was an adequate alternative forum and that the public and private factors
weighed in favor of dismissal.
The district court agreed with Defendants.

Issue: WON The US Courts have jurisdiction over the case.

Held: (NEW ZEALAND LAW IS APPLICABLE)

No, US Courts have no jurisdiction.
PRINCIPLES
· A district court has discretion to decline to exercise jurisdiction in a case where
litigation in a foreign forum would be more convenient for the parties.
In dismissing an action on forum non conveniens grounds the court must examine:
  (1) whether an adequate alternative forum exists, and
(2) whether the balance of private and public interest factors favors dismissal.
We have also held that a district court must make a choice of law determination in
considering whether to dismiss the action.
· A forum non conveniens determination is committed to the sound discretion of
the district court. The district court's decision “may be reversed only when
there has been a clear abuse of discretion; where 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.”
A. Adequate Alternative Forum
In this case, Plaintiffs' attorney has candidly admitted that the impetus for the
lawsuit is money:   United States law offers Plaintiffs a greater potential remedy
for their losses than New Zealand law. A jury trial in the United States on these
facts could yield significantly higher awards to Plaintiffs than the compensation
they will receive from the ACC.
A New Zealand remedy is unquestionably available here. Although New Zealand
law does not permit Plaintiffs to maintain this exact suit, New Zealand, through its
no-fault accident compensation scheme, has provided and continues to provide a
remedy for Plaintiffs' losses. Plaintiffs have not shown that this type of
administrative remedy is so inadequate that it is tantamount to no remedy at all.
The forum non conveniens analysis does not look to the precise source of the
plaintiff's remedy, so we will not require the alternative forum to offer a judicial
remedy. Several other courts have found New Zealand's accident compensation
system to provide an adequate alternative remedy.
B. The Balance of Public and Private Factors

1. The Private Interest Factors

Courts consider the following private interest factors:

(1) the residence of the parties and the witnesses;

(2) the forum's convenience to the litigants;

(3) access to physical evidence and other sources of proof;

(4) whether unwilling witnesses can be compelled to testify;

(5) the cost of bringing witnesses to trial;

(6) the enforceability of the judgment;   and

(7) “all other practical problems that make trial of a case easy, expeditious and
inexpensive.”

Plaintiffs and Defendants each find a different forum to be more convenient

because each party focuses on different evidence and witnesses. Plaintiffs focus
on the evidence relating to the testing of the radio altimeter and GPWS, which
occurred in the United States, so they argue Arizona is a more convenient forum.
Defendants, on the other hand, focus on the evidence relating to the crash itself
and Plaintiffs' ongoing medical care, so they contend that New Zealand is a more
convenient forum.
We have said previously that a court's focus should not rest on the number of
witnesses or quantity of evidence in each locale. Rather, a court should evaluate
“the materiality and importance of the anticipated [evidence and] witnesses'
testimony and then determine their accessibility and convenience to the forum.”
Although crucial documents and witnesses exist in both fora, the private interest
factors are not in equipoise. The documents and witnesses in the United States
are all under the control of Plaintiffs and Defendants, so they can be brought to
court, no matter the forum. The documents and witnesses in New Zealand,
however, are not so easily summoned to the United States. Though some of the
New Zealand evidence is under Plaintiffs' control, including Plaintiffs' medical and
employment records, many of the New Zealand documents and witnesses are
under the control of the New Zealand government or Ansett. The district court
does not have the power to order the production or appearance of such evidence
and witnesses.
It is clear that evidence important to this dispute exists in both the United States
and New Zealand. However, because the district court cannot compel production
of much of the New Zealand evidence, whereas the parties control, and therefore
can bring, all the United States evidence to New Zealand, the private interest
factors weigh in favor of dismissal.
Furthermore, as noted above, Plaintiffs are maintaining a suit against Ansett, the
carrier, in New Zealand. Ansett, though not a party to this suit, controls
documents and witnesses that are relevant to this dispute. Although Plaintiffs
characterize the instant suit as focusing on the GPWS rather than the accident,
the fact is that both this and the Ansett lawsuits revolve around the causes of the
accident. Therefore, a significant number of the same witnesses will be needed
in both proceedings and much the same evidence will have to be presented to
both courts. Currently, the main difference is that Defendants are not parties to
the Ansett suit. If they are brought into that suit, all the evidence under their
control would have to be produced in New Zealand. Defendants, who have
brought this motion, are willing to cooperate in the production of evidence.
2. The Public Interest Factors
Courts consider the following public interest factors:
(1) local interest of lawsuit;

(2) the court's familiarity with governing law;

(3) burden on local courts and juries;

(4) congestion in the court;   and

(5) the costs of resolving a dispute unrelated to this forum.

The public interest factors weigh against maintenance of this action in Arizona.
None of the remaining plaintiffs are citizens or residents of the United States.
One of the defendants is a citizen of the chosen forum:   Honeywell, which
manufactured the radio altimeter in issue. The citizens of Arizona certainly have
an interest in the manufacturing of defective products by corporations located in
their forum. However, this interest is slight compared to the time and resources
the district court in Arizona would expend if it were to retain jurisdiction over this
dispute. Furthermore, the interest in New Zealand regarding this suit is extremely
high. The crash involved a New Zealand airline carrying New Zealand passengers.
The accident and its aftermath, including the accident investigation, the
post-investigation activity, and the various legal proceedings including an ongoing
criminal probe, have all received significant attention by the local media.
Because the local interest in this lawsuit is comparatively low, the citizens of
Arizona should not be forced to bear the burden of this dispute.
C. Choice of Law Analysis
This court has held that “[b]efore dismissing a case for forum non conveniens, a
district court must first make a choice of law determination.”
However, the choice of law analysis is only determinative when the case involves
a United States statute requiring venue in the United States, such as the Jones Act
or the Federal Employers' Liability Act. See Creative Tech., 61 F.3d at 700. The
Jones Act, 46 U.S.C.App. § 688(a), and the Federal Employers' Liability Act, 45
U.S.C. § 56, “contain special provisions mandating venue in the United States
district courts.” Creative Tech., 61 F.3d at 700. The purpose of a choice of law
inquiry in a forum non conveniens analysis is to determine if one of these statutes
would apply.
Where no such law is implicated, the choice of law determination is given much
less deference on a forum non conveniens inquiry. Because “there is no arguably
applicable law that would end the forum non conveniens inquiry [in this case] no
potentially dispositive choice of law determination need have been made.”

4. Monegro v Rosa

Synopsis:

Plaintiffs brought suit in the United States District Court for the Northern District
of California against the San Francisco Baseball Associates (“the Giants”), the
Giants' Latin America scout, Luis Rosa, and the Giants' Minor League Coordinator,
Jack Hiatt, for violations of federal and state law including sexual harassment,
sexual battery, wrongful termination, fraud and conversion. The district court
dismissed plaintiffs' action on the ground of forum non conveniens, concluding
that the Dominican Republic was the better forum for the suit.

We have jurisdiction under 28 U.S.C. § 1291, and we reverse.

Facts:

The thirteen plaintiffs in this care are aspiring professional baseball players who
live in the Dominican Republic. When they were between sixteen and twenty
years old, they were recruited by Luis Rosa, the Giants' former Latin America
scout. At Rosa's instigation, each player signed a seven-year minor league
contract with the Giants. Although the contracts initially provided that all the
plaintiffs would play baseball for the San Pedro Giants in the Dominican Republic,
the contracts could be assigned, and the players transferred, to minor or major
league teams in the United States. Underscoring this potential for transfer, many
of the contracts contained addenda stating salaries in Bellingham, Washington,
Scottsdale, Arizona, and Shreveport, Louisiana.

Playing for the San Francisco Giants or some other United States team was the
plaintiffs' common goal. All thirteen plaintiffs claim that Rosa expressly
conditioned their continued employment and/or reassignment to United States
teams upon their submitting to his sexual advances (TO ROSA), and that Rosa
appropriated part of their earnings or signing bonuses for his own use. They also
allege that the Giants' management knew or had reason to know of Rosa's
misconduct. In April 1998, plaintiffs initiated this suit against the Giants, Rosa and
Hiatt.

In June 1997, plaintiffs had brought substantially similar allegations to the

attention of authorities in the Dominican Republic. As a result of their
complaints, a combined criminal and civil suit against the Giants and Rosa is now
pending in the Dominican Republic. Noting the pendency of this “parallel”
proceeding, the defendants moved in June 1998 to dismiss plaintiffs' complaint
on the alternative grounds of forum non conveniens and abstention. The district
court granted the defendants' motion on the ground of forum non conveniens.

Issue: Whether or not the case should be dismissed by virtue of forum non
conveniens.

Held: (U.S. Federal Law is applicable)

No. U.S. has jurisdiction over the case.

There are two types of cases in which forum non conveniens dismissals have been
deemed appropriate in federal court.
In the first type, now rarely encountered, a foreign or domestic plaintiff chooses
a forum with little or no relation to either the defendant or the action in order to
disadvantage the defendant.
In the second type, now more commonly encountered, a foreign plaintiff chooses
the home forum of an American defendant in an action that has little or no
relation to the United States in order to take advantage of more favorable
American procedural or substantive rules.

In deciding whether or not a case should be transferred to a more convenient

forum, private and public interests are given consideration.

The private interest factors are:

(1) the residence of the parties and the witnesses;
(2) the forum’s convenience to the litigants;
(3) access to physical evidence and other sources of proof;
(4) whether unwilling witnesses can be compelled to testify;
(5) the cost of bringing witnesses to trial;
(6) the enforceability of the judgment; and
(7) “all other practical problems that make trial of a case easy, expeditious and
inexpensive.”

Public interest factors included court congestion, the unfairness of burdening

citizens in an unrelated forum with jury duty, the interest in having localized
controversies decided at home, the interest in trying the case in a forum familiar
with the applicable law, and the interest in avoiding unnecessary conflicts of laws.

[The doctrine of forum non conveniens survives in federal court only when the
alternative forum is in a foreign country.]

In this case, the SC that case cannot be dismissed based on forum non conveniens
because:
 First, plaintiffs' chosen forum is more than merely the American defendants'
home forum. It is also a forum with a substantial relation to the action.
Plaintiffs alleged that the Giants, through their agent, Rosa, solicited and entered
into contracts with the plaintiffs. Based on these contracts, plaintiffs formed the
legitimate expectation that if they demonstrated sufficient skill they would be
able to play professional baseball in the United States, possibly in San Francisco
for the Giants themselves.

Second, there are no possible co-defendants or third-party defendants who could

not be made to appear in the American forum. Indeed, quite the opposite
problem exits in this case:   If this suit were dismissed in favor of a suit in the
Dominican Republic, it is not clear that defendant Rosa would appear, or could be
compelled to appear, in that forum. Although “the relative ability of the forums to
compel the attendance of significant unwilling witnesses at trial” is an important
private interest factor, see 17 James Wm. Moore et al., Moore's Federal Practice §
111.74[3][c][iii] (3d ed.1997), the district court did not accord this factor any weight
because Rosa “agreed” to participate in legal proceedings in the Dominican
Republic. The plaintiffs expressed concern that Rosa's “agreement” was feigned
(insincere). Indeed, in their Rule 60(b) motion in the district court for
reconsideration of the dismissal, plaintiffs produced affidavits from two people
who recount that Rosa told them he did not plan to return to the Dominican
Republic where he faces possible imprisonment. Despite this concern, the district
court did not make its forum non conveniens dismissal contingent upon Rosa's
participation in the proceeding in the Dominican Republic, either by so ordering in
its original dismissal or by amending its dismissal order in response to plaintiffs'
Rule 60(b) motion.

Third, there is no showing that access to proof-even aside from Rosa's

testimony-would be easier in the Dominican Republic. The Giants asserted in their
motion to dismiss in the district court that “the costs of bringing witnesses to
California would be significantly greater than litigating the matter in the
Dominican Republic,” and that “United States citizens have much easier access to
the Dominican Republic than Dominican Republic citizens have to enter the
United States.” But there is no evidence to support these assertions. Indeed,
the only evidence before the district court was a declaration tending to show the
opposite, stating that visas would be readily available to plaintiffs.

5. Erie Railroad v. Tompkins (New York vs. Pennsylvania)

Citation. 304 U.S. 64

Brief Fact Summary. Defendant Harry Tompkins, was injured by a freight car of
Plaintiff Erie Railroad while in Hughestown, Pennsylvania. Defendant brought suit in
federal district court in New York, asking the judge to apply “general law” regarding
negligence, rather than Pennsylvania law, which required a greater degree of
negligence (gross negligence must be proven).
Synopsis of Rule of Law. Except in matters governed by the United States
Constitution or Act of Congress, the law that is to be applied in any case is the law of
the state.

Facts. In July of 1934 Defendant visited his mother-in-law’s house in Pennsylvania. He

walked part of the distance along the railroad tracks of the Plaintiff. A train passed,
and an open door on a refrigerator car struck him and knocked him partially under
the train. His right arm was severed. Defendant then brought suit against the railroad
in the Federal District Court for the Southern District of New York. Under
Pennsylvania law the railroad would have been liable only for “wanton” negligence.
However, rather than apply Pennsylvania law, the District Judge, at Defendant’s
urging, applied the “general law” that the railroad was liable even if it was guilty only
of “ordinary negligence. The jury returned a verdict for Defendant. Plaintiff appealed,
but the Second Circuit upheld Defendant’s verdict. The railroad then sought
certiorari from the Supreme Court of the United States. (trespassing)

Issue. Whether a Federal court sitting in diversity jurisdiction, should apply the
substantive law of the state the activities leading to the suit arose in, or the law of
the Federal court in the forum state.

Held. (Pennsylvania Law is applicable and must be applied by the U.S. courts)

The Supreme Court reversed the decision of the court of appeals, holding that
except in matters governed by the United States Constitution or Act of Congress,
the law that is to be applied in any case is the law of the state (Pennsylvanian
law). There is no Federal common law.

Dissent. The dissenting opinions of Justices Butler and McReynolds are omitted
by the casebook. Concurrence. Justice Reed concurred. Justice Reed agreed with
the majority to the extent that he thought where Congress has not spoken, then a
Federal court should apply the law of the state in which the activities arose.
However, he disagreed that there could be no such thing as “federal common
law,” finding instead that Congress has the power to declare what rules of
substantive law the federal courts shall use.

Discussion. The primary rationale for the Supreme Court’s decision here was the
prevention of forum shopping, whereby, under the old policy of allowing a federal
court to ignore the state’s substantive law and instead apply “general law” made
it so that the substantive law that was applied in each case varied according to
enforcement was sought in the state or federal court. Moreover, in asserting that
there is no such thing as federal common law, the court is probably referring to
judicial common law. Common law, Congress implicitly retained the right to pass
rules governing the federal courts, e.g. the Federal Rules of Civil Procedure, etc.

6.
G.R. No. 120077 October 13, 2000
THE MANILA HOTEL CORP. AND MANILA HOTEL INTL. LTD., petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ARBITER CEFERINA J. DIOSANA
AND MARCELO G. SANTOS, respondents.
PARDO, J.:
FACTS:
The case before the Court is a petition for certiorari1 to annul the following orders
of the National Labor Relations Commission (hereinafter referred to as "NLRC")
for having been issued without or with excess jurisdiction and with grave abuse of
discretion.
In May 1988, Marcelo Santos was an overseas worker in Oman. In June 1988, he
was recruited by Palace Hotel in Beijing, China. Due to higher pay and benefits,
Santos agreed to the hotel’s job offer and so he started working there in
November 1988. The employment contract between him and Palace Hotel was
however without the intervention of the Philippine Overseas Employment
Administration (POEA). In August 1989, Palace Hotel notified Santos that he will
be laid off due to business reverses. In September 1989, he was officially
terminated.
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel
was impleaded but no summons were served upon it. MHC is a government
owned and controlled corporation. It owns 50% of MHIL, a foreign corporation
(Hong Kong). MHIL manages the affair of the Palace Hotel. The labor arbiter who
handled the case ruled in favor of Santos. The National Labor Relations
Commission (NLRC) affirmed the labor arbiter.
ISSUE: Whether or not the NLRC has jurisdiction over the case.
HELD: No. The NLRC is a very inconvenient forum for the following reasons:
 1. The only link that the Philippines has in this case is the fact that Santos is a
Filipino;
2. However, the Palace Hotel and MHIL are foreign corporations – MHC cannot
be held liable because it merely owns 50% of MHIL, it has no direct business in the
affairs of the Palace Hotel. The veil of corporate fiction can’t be pierced because it
was not shown that MHC is directly managing the affairs of MHIL. Hence, they are
separate entities.
3. Santos’ contract with the Palace Hotel was not entered into in the
Philippines;
4. Santos’ contract was entered into without the intervention of the POEA (had
POEA intervened, NLRC still does not have jurisdiction because it will be the POEA
which will hear the case);
5. MHIL and the Palace Hotel are not doing business in the Philippines; their
agents/officers are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts
pertaining to the case. It is not competent to determine the facts because the
acts complained of happened outside our jurisdiction. It cannot determine which
law is applicable. And in case a judgment is rendered, it cannot be enforced
against the Palace Hotel (in the first place, it was not served any summons).
The Supreme Court emphasized that under the rule of forum non conveniens, a
Philippine court or agency may assume jurisdiction over the case if it chooses to
do so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent decision as to
the law and the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.
None of the above conditions are apparent in the case at bar.

7. K.K. SHELL SEKIYU OSAKA HATSUBAISHO and FU HING OIL CO.,

LTD., petitioners,

vs.THE HONORABLE COURT OF APPEALS, ATLANTIC VENUS CO., S.A., and THE
VESSEL M/V "ESTELLA", respondents. [G.R. Nos. 90306-07 July 30, 1990]
FACTS
· Kumagai Kaiun Kaisha, Ltd. (hereinafter referred to as Kumagai), a corporation
formed and existing under the laws of Japan, filed a complaint for the collection
of a sum of money with preliminary attachment against Atlantic Venus Co., S.A.
(hereinafter referred to as "Atlantic"), a corporation registered in Panama, the
 vessel MV Estella and Crestamonte Shipping Corporation (hereinafter referred to
as "Crestamonte"), a Philippine corporation. Atlantic is the owner of the MV
Estella.

The complaint, docketed as Civil Case No. 8738930 of the Regional Trial Court,
Branch XIV, Manila alleged that Crestamonte, as bareboat charterer and operator
of the MV Estella, appointed N.S. Shipping Corporation (hereinafter referred to as
"NSS"), a Japanese corporation, as its general agent in Japan. The appointment
was formalized in an Agency Agreement. NSS in turn appointed Kumagai as its
local agent in Osaka, Japan. Kumagai supplied the MV Estella with supplies and
services but despite repeated demands Crestamonte failed to pay the amounts
due.

NSS and Keihin Narasaki Corporation (hereinafter referred to a Keihin filed

complaints-in-intervention.

Petitioner Fu Hing Oil Co., Ltd. (hereinafter referred to as Fu Hing"), a corporation

organized in Hong Kong and not doing business in the Philippines, filed a motion
for leave to intervene with an attached complaint-in-intervention, alleging that Fu
Hing supplied marine diesel oil/fuel to the MV Estella and incurred barge expenses
for the total sum of One Hundred Fifty-two Thousand Four Hundred Twelve
Dollars and Fifty-Six Cents (US$152,412.56) but such has remained unpaid despite
demand and that the claim constitutes a maritime lien. The issuance of a writ of
attachment was also prayed for.

Petitioner K.K. Shell Sekiyu Osaka Hatsubaisho (hereinafter referred to as K.K.

Shell"), a corporation organized in Japan and not doing business in the Philippines,
likewise filed a motion to intervene with an attached complaint-in-intervention,
alleging that upon request of NSS, Crestamonte's general agent in Japan, K.K.
Shell provided and supplied marine diesel oil/fuel to the W Estella at the ports of
Tokyo and Mutsure in Japan and that despite previous demands Crestamonte has
failed to pay the amounts of Sixteen Thousand Nine Hundred Ninety-Six Dollars
and Ninety- Six Cents (US$16,996.96) and One Million Yen (Y1,000,000.00) and
that K.K. Shell's claim constitutes a maritime lien on the MV Estella. The
complaint-in-intervention sought the issuance of a writ of preliminary attachment.

· The trial court allowed the intervention of Fu Hing and K.K. Shell on June 19,1987
and August 11, 1987, respectively. Writs of preliminary attachment were issued on
August 25, 1987 upon posting of the appropriate bonds. Upon the posting of
counterbonds, the writs of attachment were discharged on September 3, 1987.
· In the meantime, Atlantic and the AWU Estella filed a petition in the Court of
Appeals against the trial court judge, Kumagai, NSS and Keihin, docketed as
CA-G.R. SP No. 12999, which sought the annulment of the orders of the trial court
dated April 30, 1987 and August 11, 1987.
· In a decision dated June 14, 1989, the Court of Appeals annulled the orders of
the trial court and directed it to cease and desist from proceeding with the case.
According to the Court of Appeals, Fu Hing and K.K. Shell were not suppliers but
sub-agents of NSS, hence they were bound by the Agency Agreement between
Crestamonte and NSS, particularly, the choice of forum clause, which provides:
12.0-That this Agreement shall be governed by the Laws of Japan.
Any matters, disputes, and/or differences arising between the
parties hereto concerned regarding this Agreement shall be subject
exclusively to the jurisdiction of the District Courts of Japan.
Thus, concluded the Court of Appeals, the trial court should have
disallowed their motions to intervene.
ISSUE: Is the finding of CA correct?
HELD: No, the Court finds reversible error on the part of the Court of Appeals in so
far; as it disallowed petitioners' intervention in the case before the trial court and
ordered the latter to cease and desist from proceeding with the case.
· A reading of the Agency Agreement fails to support the conclusion that K.K.
Shell is a sub-agent of NSS and is, therefore, bound by the agreement. No express
reference to the contracting of sub-agents or the applicability of the terms of the
agreement, particularly the choice-of-forum clause, to sub-agents is made in the
text of the agreement.

In view of the inconclusiveness of the Agency Agreement and the pleadings filed
in the trial court, additional evidence, if there be any, would still have to be
presented to establish the allegation that K.K. Shell is a sub-agent of NSS.

In the same vein, as the choice-of-forum clause in the agreement (paragraph 12.0)
has not been conclusively shown to be binding upon K.K. Shell, additional
evidence would also still have to be presented to establish this defense, K.K. Shell
cannot therefore, as of yet, be barred from instituting an action in the Philippines.

· Private respondents have anticipated the possibility that the courts will not find
that K.K. Shell is expressly bound by the Agency Agreement, and thus they fall
back on the argument that even if this were so, the doctrine of forum non
conveniens would be a valid ground to cause the dismissal of K.K. Shell's
complaint-in-intervention.
K.K. Shell counters this argument by invoking its right as maritime lienholder. It
cites Presidential Decree No. 1521, the Ship Mortgage Decree of 1978, which
provides:
SEC. 21. Maritime Lien for Necessaries; person entitled to such
lien-Any person furnishing repairs, supplies, to wage, use of dry
dock or marine railway, or other necessaries, to any vessel, whether
foreign or domestic, upon the order of the owner of such vessel, or
of a person authorized by the owner, shall have a maritime lien on
the vessel, which may be enforced by suit in rem, and it shall be
necessary to allege or prove that credit was given to the vessel.
Private respondents on the other hand argue that even if P.D. No. 1521 is
applicable, K.K. Shell cannot rely on the maritime lien because the fuel was
provided not exclusively for the benefit of the MV Estella, but for the
benefit of Crestamonte in general. Under the law it must be established
that the credit was extended to the vessel itself. Now, this is a defense
that calls precisely for a factual determination by the trial court of who
benefitted from the delivery of the fuel. Hence, again, the necessity for the
reception of evidence before the trial court.
In other words, considering the dearth of evidence due to the fact that the
private respondents have yet to file their answer in the proceedings below
and trial on the merits is still to be conducted, whether or not petitioners
are indeed maritime lienholders and as such may enforce the lien against
the MV Estella are matters that still have to be established.
Neither are we ready to rule on the private respondents' invocation of the
doctrine of forum non conveniens, as the exact nature of the relationship of
the parties is still to be established. We leave this matter to the sound
discretion of the trial court judge who is in the best position, after some
vital facts are established, to determine whether special circumstances
require that his court desist from assuming jurisdiction over the suit.
It was clearly reversible error on the. part of the Court of Appeals to annul
the trial court's orders, insofar as K.K. Shell is concerned, and order the
trial court to cease and desist from proceeding with Civil Case No.
87-38930.
There are still numerous material facts to be established in order to arrive
at a conclusion as to the true nature of the relationship between
Crestamonte and K.K. Shell and between NSS and K.K. Shell. The best
recourse would have been to allow the trial court to proceed with Civil
Case No. 87-38930 and consider whatever defenses may be raised by
private respondents after they have filed their answer and evidence to
support their conflicting claims has been presented. The Court of Appeals,
however, substituted its judgment for that of the trial court and decided
the merits of the case, even in the absence of evidence, on the pretext of
reviewing an interlocutory order.
8. COMMUNICATION MATERIALS VS. CA

FACTS:

Petitioners COMMUNICATION MATERIALS AND DESIGN, INC., (CMDI) and ASPAC

MULTI-TRADE INC., (ASPAC) are both domestic corporations.

Private Respondents ITEC, INC. and/or ITEC, INTERNATIONAL, INC. (ITEC) are
corporations duly organized and existing under the laws of the State of Alabama,
USA. There is no dispute that ITEC is a foreign corporation not licensed to do
business in the Philippines.

ITEC entered into a contract with ASPAC referred to as “Representative

Agreement”. Pursuant to the contract, ITEC engaged ASPAC as its “exclusive
representative” in the Philippines for the sale of ITEC’s products, in consideration
of which, ASPAC was paid a stipulated commission. Through a “License
Agreement” entered into by the same parties later on, ASPAC was able to
incorporate and use the name “ITEC” in its own name. Thus , ASPAC Multi-Trade,
Inc. became legally and publicly known as ASPAC-ITEC (Philippines).

One year into the second term of the parties’ Representative Agreement, ITEC
decided to terminate the same, because petitioner ASPAC allegedly violated its
contractual commitment as stipulated in their agreements. ITEC charges the
petitioners and another Philippine Corporation, DIGITAL BASE
COMMUNICATIONS, INC. (DIGITAL), the President of which is likewise petitioner
Aguirre, of using knowledge and information of ITEC’s products specifications to
develop their own line of equipment and product support, which are similar, if not
identical to ITEC’s own, and offering them to ITEC’s former customer.

The complaint was filed with the RTC-Makati by ITEC, INC. Defendants filed a MTD
the complaint on the following grounds: (1) That plaintiff has no legal capacity to
sue as it is a foreign corporation doing business in the Philippines without the
required BOI authority and SEC license, and (2) that plaintiff is simply engaged in
forum shopping which justifies the application against it of the principle of “forum
non conveniens”. The MTD was denied.
Petitioners elevated the case to the respondent CA on a Petition for Certiorari and
Prohibition under Rule 65 of the Revised ROC. It was dismissed as well. MR denied,
hence this Petition for Review on Certiorari under Rule 45.

ISSUE:

1. Did the Philippine court acquire jurisdiction over the person of the petitioner
corp, despite allegations of lack of capacity to sue because of non-registration?
2. Can the Philippine court give due course to the suit or dismiss it, on the principle
of forum non convenience?

HELD: petition dismissed.

1. YES;
We are persuaded to conclude that ITEC had been “engaged in” or “doing
business” in the Philippines for some time now. This is the inevitable result after a
scrutiny of the different contracts and agreements entered into by ITEC with its
various business contacts in the country. Its arrangements, with these entities
indicate convincingly that ITEC is actively engaging in business in the country.

A foreign corporation doing business in the Philippines may sue in Philippine

Courts although not authorized to do business here against a Philippine citizen or
entity who had contracted with and benefited by said corporation. To put it in
another way, a party is estopped to challenge the personality of a corporation
after having acknowledged the same by entering into a contract with it. And the
doctrine of estoppel to deny corporate existence applies to a foreign as well as to
domestic corporations. One who has dealt with a corporation of foreign origin as
a corporate entity is estopped to deny its corporate existence and capacity.

In Antam Consolidated Inc. vs. CA et al. we expressed our chagrin over this
commonly used scheme of defaulting local companies which are being sued by
unlicensed foreign companies not engaged in business in the Philippines to invoke
the lack of capacity to sue of such foreign companies. Obviously, the same ploy is
resorted to by ASPAC to prevent the injunctive action filed by ITEC to enjoin
petitioner from using knowledge possibly acquired in violation of fiduciary
arrangements between the parties.
2. YES;

Petitioner’s insistence on the dismissal of this action due to the application, or

non application, of the private international law rule of forum non conveniens
defies well-settled rules of fair play. According to petitioner, the Philippine Court
has no venue to apply its discretion whether to give cognizance or not to the
present action, because it has not acquired jurisdiction over the person of the
plaintiff in the case, the latter allegedly having no personality to sue before
Philippine Courts. This argument is misplaced because the court has already
acquired jurisdiction over the plaintiff in the suit, by virtue of his filing the original
complaint. And as we have already observed, petitioner is not at liberty to
question plaintiff’s standing to sue, having already acceded to the same by virtue
of its entry into the Representative Agreement referred to earlier.

Thus, having acquired jurisdiction, it is now for the Philippine Court, based on the
facts of the case, whether to give due course to the suit or dismiss it, on the
principle of forum non convenience. Hence, the Philippine Court may refuse to
assume jurisdiction in spite of its having acquired jurisdiction. Conversely, the
court may assume jurisdiction over the case if it chooses to do so; provided, that
the following requisites are met:

1) That the Philippine Court is one to which the parties may conveniently resort to;
2) That the Philippine Court is in a position to make an intelligent decision as to
the law and the facts; and,
3) That the Philippine Court has or is likely to have power to enforce its decision.
The aforesaid requirements having been met, and in view of the court’s
disposition to give due course to the questioned action, the matter of the present
forum not being the “most convenient” as a ground for the suit’s dismissal,
deserves scant consideration.

9. TO BE ADDED

10. MACSHANNON v. ROCKWARE GLASS LTD.

1987 A.C. 795 at 819
 In 1978, in MacShannon v Rockware Glass Ltd, the House of Lords in the
word of Lord Salmon stated: "the real test of [whether to grant a stay]
depends upon what the court in its discretion considers that justice
demands".
This test is preferable to the test of whether the plaintiff has behaved
'vexatiously' or 'oppressively' on a so-called liberal interpretation of those
words. With respect, it is extremely difficult to interpret them liberally
without emasculating them and completely destroying their true meaning.
Almost unanimously the House of Lords agreed that the concept had to be
changed. However, English judges tended not to use the new words
of forum non conveniens preferring for a more open-minded interpretation
of the concept of oppression, vexation and abuse.

FACTS
McShannon is a Scottish man. He was injured in an industrial accident at a factory
in Scotland owned by the defendants who were a company with head office in
England. London based solicitors acting on behalf of the plaintiff and his trade
union advised the bringing of proceedings in London on the grounds that the
procedure might be quicker and the damages larger. The evidence indicated that
medical testimony was equally available in Scotland and that the differences in
costs between the two systems were minimal. An application was made to stay
the proceedings in London

ISSUE: WON London has jurisdiction over the case.

DOCTRINE
It was in this case that the English courts really came to adopt and formulate the
doctrine of forum non conveniens. It was decided in this case that to obtain a stay
in proceedings a defendant would have to show that there was another
jurisdictional forum to which it was amendable and in which justice could be
done between the parties at substantially less convenience and expense.
Additionally, the decision stated that any stay should not deprive the plaintiff of a
legitimate personal or juridical advantage. This case moved away from the
previous test that litigation should be classified as vexatious or oppressive before
a stay could be granted.

11. Sumitomo Bank Ltd v Kartika Ratna Thahir and others and another matter
[1992] SGHC 301
Suit No: OS 308/1976
 FACTS:
· The plaintiffs (`Pertamina`), an Indonesian state enterprise, were created by Law
No 8 of 1971 of the Republic of Indonesia. Their principal business was and is the
exploration, processing and marketing of oil and natural gas and related projects.
Being a dominant economic force in Indonesia at all material times, they also
undertook major economic development projects at the direction of the
government of the Republic of Indonesia and one such project was the
construction of the infrastructure facilities for a massive steel works known as
Krakatau Steel at Cilegon, West Java.

Those steel works were owned and eventually operated by a company known as
PT Krakatau Steel (`PTKS`) created on 31 August 1970 by Law No 8 of 1970. For the
purposes of these proceedings, the contractors which constructed the
infrastructure and provided the materials and services under several contracts
signed in 1973 and 1974 in respect of the steel works and the infrastructure for the
industrial site at Cilegon, West Java, Indonesia were Klockner Industrie Analagen
GMBH (`Klockner`) and Siemens AG (`Siemens`). Another was Pertamina`s
involvement in and their payments for the purchases of equipment in relation to
two projects in the Batam Island.

· General Haji Achmad Thahir (`General Thahir`) was employed by Pertamina and
their statutory
predecessors. During the period directly and more immediately material to
these proceedings he held the office as the general assistant to the then
president director of Pertamina, General Ibnu Sutowo (`General Sutowo`). He
was appointed to that office with effect from 14 October 1968 until 23 July
1976 when he died, having succumbed to a heart attack. At all material times
his salary totalled only about US$9,000 per year. By para 3 of the reamended
statement of claim it is asserted that from at least June 1972 until his death,
General Thahir `was authorized to contract` on behalf of Pertamina and/or by
virtue of his position in Pertamina also on behalf of PTKS `and to deal with all
ancillary matters including the negotiation and implementation of financial
arrangements` in connection with principally the Krakatau steel project.

Pertamina further assert that it was within his power and authority to arrange
for creditors (including
Klockner and Siemens) of the plaintiffs and PTKS to be paid. The last assertion
of fact in para 3 of the
reamended statement of claim is that General Thahir, by virtue of his
relationship with General Sutowo, was in a position of influence with General
Sutowo, particularly in relation to matters involving the construction works
and the supply of goods and materials.
· 19 ACU deposits
It turned out that on 23 July 1976, when General Thahir died, there stood as
having been deposited with the Singapore branch of the Sumitomo Bank, 17
separate and discrete ACU deposits denominated in Deutschmarks, all in the
name of `Mr HA Thahir and/or Mrs KR Thahir`; their aggregate was
 DM53,972,374.12 and as from 23 July 1976 their maturity dates ranged
between a few days and just over four months. In addition, there were two
other separate and discrete ACU deposits, one on time deposit to mature on
18 August 1976 and the other on demand, which were denominated in US
dollars in the sums of US$593,249.31 and US$608,959.42 respectively. These
two ACU deposits totalled US$1,202,208.73.

The expression `Mrs KR Thahir` in all the 19 ACU deposits refers to the first
defendant, Kartika Ratna Thahir (hereinafter called `Mrs Kartika Thahir`) who
by her defence alleges that she is the lawful widow of General Thahir, having
lived with him as man and wife since 1969. Secondly, it is common ground (a)
that the moneys in all 19 ACU deposits were, at all material times, in separate
designated joint deposit accounts of both General Thahir and Mrs Kartika
Thahir; (b) that the relationship between Sumitomo Bank, Singapore branch
of the one part and General Thahir and Mrs Kartika Thahir of the other part is
governed by the law of Singapore under which their relationship is contractual
in nature and they are respectively debtors/creditors with the attendant
obligations and rights; and (c) that barring disputes, of the nature and type as
we have seen in these proceedings, Mrs Kartika Thahir on the death of General
Thahir would have become solely entitled to all the moneys in the 19 ACU
deposits.

· Three days after the death of General Thahir, Mr Mustapha Thahir and another
brother, both sons of General Thahir by an earlier marriage, called at the Djakarta
representative office of Sumitomo Bank. They claimed that all the ACU deposits in
question belonged to the estate of the deceased.
· On the same day the solicitors of Sumitomo Bank received a letter dated 28 July
1976 from Messrs Drew & Napier, the solicitors of Mrs Kartika Thahir. The letter
pointed out the legal rights of Mrs Kartika Thahir and the clear and undoubted
obligation on the part of the bank to pay Mrs Kartika Thahir.
· Faced with these competing claims, Sumitomo Bank sought interpleader reliefs
and commenced these originating summons on 30 July 1976 under O 17 r 1(1)(a) of
the Rules of the Supreme Court 1970 (`the RSC`). Mrs Kartika Thahir was named as
the first defendant and Messrs Abubakar Thahir, Ibrahim Thahir and Faruk Thahir
were named collectively as the second defendants.
PRINCIPLES:
· Courts of equity will apply their own rules to determining whether there is an
equity. In the present case, it would be a matter for Singapore law whether there
is an equity or not.
· It is observed that many English cases would have English law as the lex causae.
One cannot ignore the realistic possibility of proceedings commenced abroad, or
stays of action, in the case of a foreign lex causae. In the case of the latter, there
is the forum non conveniens doctrine. One of the factors determining an
appropriate forum abroad so as to justify a stay is the applicable law.
12. KARTRIKA RHATNA THAHIR V PT PERTAMBANGAN

Conflict of Laws – Choice of law – Restitution – Claim for bribes received by agent
– Basis of claim in equity and not contract – Giving and receipt of bribe as
constructive fraud – Obligation to restore bribes governed by law of country
where enrichment occurred

FACTS

Under the direction of the Government of the Republic of Indonesia, the

respondent ("Pertamina"), an Indonesian state enterprise, undertook to develop
a huge industrial complex for steel-making and related industries. In relation to
this development, Pertamina contracted with two German contractors (Siemens
and Klockner) for the provision of power generation equipment as well as for the
building and equipping of the water supply system. General Thahir ("Gen Thahir")
was, at this time, employed by Pertamina as general assistant to the president
director of Pertamina. At the date of his death, there stood as having been
deposited in the Singapore branch of Sumitomo Bank ("the bank"), 17 separate
and discrete Asian Currency Unit ("ACU") deposits denominated in Deutsch marks,
in the names of "Mr H A Thahir and/or Mrs K R Thahir", amounting in aggregate to
DM53,972,374.12. In addition, there were two other separate and discrete ACU
deposits denominated in US dollars in the sum of US$593,249.31 and
US$608,959.42 in their joint names. Mrs K R Thahir is Mrs Kartika Ratna Thahir,
the appellant in this appeal.

After Gen Thahir's death, there were two competing claims. Sons from his earlier
marriage claimed the ACU deposits belonged to the deceased's estate and
requested the bank freeze these deposits. The appellant however demanded
payment of certain sums and the balance of the deposits be transferred to her
sole name. The bank sought interpleader relief. Subsequently, Pertamina came
into the picture, claiming to be entitled to the ACU deposits on the ground that
they were wrongfully acquired by Gen Thahir by way of bribes (from Siemens and
Klockner). By order made on 12 March 1980, Pertamina was ordered to be the
plaintiffs, the appellant the first defendant, and the two sons representing the
deceased's estate, the second defendant.

At the trial below, Lai Kew Chai J held that the 17 ACU deposits denominated in
Deutsch marks were bribes which Siemens and Klockner paid to Gen Thahir but
that Pertamina had failed to discharge its legal and evidential burden of proof as
regards the two ACU deposits in US dollars. As such, the bank was to hold these
two deposits pending the outcome of the trial between the appellant and the
representative of Gen Thahir's estate as to who was entitled to that sum. The
learned judge also found that Pertamina's claims at law and in equity were
governed by the law of Singapore. The learned judge found that Gen Thahir held
the bribes as constructive trustee for Pertamina and as the appellant was hand in
glove with Gen Thahir in his dishonest schemes and/or was privy to the receipt of
the bribes, she also became a constructive trustee.

The appellant appealed against this decision. Following the appeal, Pertamina
filed a respondent's notice, which was in the nature of a cross-appeal against the
learned judge's decision on the two ACU deposits denominated in US dollars. The
issues on appeal were (a) whether Pertamina must have a proprietary claim to the
ACU deposits to succeed on the amended first issue; (b) whether the 17 ACU
deposits denominated in Deutsch marks were bribes which Siemens and Klockner
paid to Gen Thahir, and if so, whether the appellant was privy to the receipt of
those bribes; (c) whether, as a matter of conflict of laws, Pertamina's claim was
governed by Singapore law or Indonesia law or both; and (d) whether, under the
relevant law, Pertamina had a proprietary claim to the ACU deposits.

Held:

Allowing the motion but dismissing the appeal:

(1) The motion to strike out Pertamina's notice was allowed because the notice
suffered from a fundamental defect which was not curable. The notice was in the
nature of a cross-appeal, which if successful, would affect the estate of Gen
Thahir in the two deposits denominated in US dollars. However, the
representatives of the estate, a proper party to the cross-appeal, were not a party
in the present appeal. Therefore, the cross-appeal could not proceed and be
maintained.

(2) To succeed in interpleader proceedings, Pertamina had to be entitled to the

money in the deposits. This "entitlement" must be founded on some title or
proprietary interest in the deposits. A personal claim against Gen Thahir and/or
the appellant will not confer on Pertamina any entitlement that can enable them
to succeed in interpleader proceedings.
(3) The learned trial judge's findings that Pertamina did in fact pay Siemens and
Klockner the amounts alleged and that the ACU deposits denominated in Deutsch
marks were proceeds of bribes and/or secret commissions paid to Gen Thahir by
Siemens and Klockner in return for payments made to them by Pertamina, were
unassailable. The findings of fact were arrived at after a detailed examination of
the evidence before the court. The findings were reinforced by the appellant's
failure to explain the sources of the deposits and her admissions to General
Moerdani.

(4) The learned trial judge had ample evidence to draw an inference that the
appellant was "hand in glove with Gen Thahir in his dishonest schemes to receive
the bribes and that she participated in and/or was privy to the receipt by Gen
Thahir of the bribes."

(5) The basis of Pertamina's claim lay in the fact that equity regarded the giving
of a bribe as a constructive fraud on the part of the giver, and as the bribed agent
was necessarily a party to the bribery, it followed that the receiving of the bribe
was equally a constructive fraud on the part of the bribed agent. The principal's
remedies had no contractual origin or connection, but arose in equity. Therefore,
the proper governing law was the law of the country where the enrichment
occured, in this case, Singapore law.

(6) Where a servant or agent had realised a secret profit, commission or bribe in
the course of his employment, the term "fiduciary relation" was used in a wide
and loose sense and included a case where the servant gained from his
employment a position of authority which enabled him to obtain the sum which
he received. Having regard to the far-reaching extent of Gen Thahir's duties and
responsibilities, the trial judge's conclusion that he was a fiduciary was inevitable.

(7) Pertamina had a claim at common law against Gen Thahir for money had and
received. As the appellant had participated in the receipt of the bribes and
knowingly assisted the transfer of moneys that represented the bribes, Pertamina
also had a claim against her for money had and received. Nonetheless, the claim
for money had and received was a personal claim, not a proprietary claim.

(8) Pertamina's claim in equity was irresistible and was clearly a proprietary
claim. As soon as a bribe was accepted by a fiduciary in breach of his duty, he held
that bribe on a constructive trust for the person to whom the duty was owed.
Therefore, Gen Thahir held the 17 ACU deposits on a constructive trust for
Pertamina. The appellant, by reason of her complicity and involvement in the
transfer of the deposits to the joint account also became a constructive trustee,
and when she became the sole owner of the deposits she continued to hold them
on a constructive trust for Pertamina.

(9) The appellant's arguments that Pertamina must prove that Gen Thahir had
received the moneys "secretly without the knowledge or consent of the principal
(ie Pertamina)" were wholly untenable. Pertamina bore and discharged its burden
of proving that the 17 ACU deposits represented bribes paid to Gen Thahir by the
German contractors and the appellant's involvement and complicity in the receipt
of the bribes. If the appellant maintained that these were commissions paid to
Gen Thahir with the knowledge or consent of Pertamina, the burden of proving
this must lie with her.

13. THE RAINBOW JOY CASE

FACTS:

Filipino Engineer Paquiot Buton entered into an employment contract (standard

Philippine Overseas Employment Administration contract form) in Manila to work
on board the vessel Rainbow Joy, a general cargo ship registered in Hong Kong
and owned by Rainbow Joy Shipping, Inc., a Panamanian company. The POEA
contract provides that the terms and conditions shall be subject to Philippine
labor laws, that any conflict or dispute shall be resolved through arbitration in
the Philippines, among others.

As a common practice in the industry, a second contract was signed by Buton and
the Shipping company in Hong Kong (Hong Kong contract) to comply with Hong
Kong labor laws.

While the Rainbow Joy was in Myanmar, the Chief Engineer requested Buton to
help in the repair of a ladder. While the repair was done, the right eye of Buton
was hit by a sharp metal, which damaged his right eye.
He was advised by the attending physician in Myanmar to seek medical attention
in the Philippines considering the better medical facilities in the Philippines. The
Philippine hospital advised Buton to undergo corneal transplant, which Buton was
not able to do so because he was not able to inform his wife.

Because of his failure to undergo the transplant, his medical condition worsened.

Thereafter, he sought compensation claims in the NLRC in the Philippines and in

Singapore.

The shipping company sought the dismissal of the Singapore action on the ground
of forum non conveniens.

ISSUE/S:

Whether or not the Singaporean court has jurisdiction.

RULING:

No. The Singaporean court has no jurisdiction.

In deciding whether to acquire jurisdiction or not, the court must consider the
following factors, namely, availability of witnesses, residence of the parties, and
applicable laws.

In the case at bar, the medical condition of Buton can be better explained by his
doctors in the Philippines. These witnesses are available in the Philippines.

Buton is a resident in the Philippines and the representative of the shipping

company is also a Philippine registered company.
 The employment contract clearly provides that in case of any conflict or dispute, it
should be the Philippines laws that apply.

On the above grounds, the Philippines is a better forum to settle the controversy.
Hence, the Singaporean court has not jurisdiction.

JURISDICTION: Over the RES

1.
GULF OIL CORP. V. GILBERT,
330 U.S. 501 (1947)
Argued December 18, 19, 1946

Decided March 10, 1947

CERTIORARI TO THE CIRCUIT COURT OF APPEALS
1. A federal district court has power to dismiss an action at law pursuant to the
doctrine of forum non conveniens -- at least where its jurisdiction is based on
diversity of citizenship and the state courts have such power.
2. . Important considerations in the application of the doctrine of forum non
conveniens, from the standpoint of litigants, are relative ease of access to sources
of proof, availability of compulsory process for attendance of unwilling witnesses,
cost of obtaining attendance of willing witnesses, possibility of view of the
premises if that be appropriate, and all other practical problems that make trial of
a case easy, expeditious, and inexpensive.

FACTS:
The case arose when a fire gutted a warehouse owned and operated by the
plaintiff. The allegations provide that the defendant carelessly handled a delivery
of gasoline to his warehouse tanks and pumps as to cause an explosion and fire
which consumed the whole warehouse together with the merchandise of his
customers.
The plaintiff asks for a judgment amounting to $365,529.77 in damages. The
breakdown of which are the following: (1)$41,889.10 damage to his warehouse
which was totally consumed; (2) $3,602.40 destroyed
merchandise and fixtures to his damage; (3) $20,030 injury to his business and
profits; (4) $300,000 worth of burned property of customers in his custody
through the warehousing agreement; (5) costs, disbursements, and interests
from the date of the fire.
The plaintiff brought the case in Southern District of New York despite living in
Lynchburg, Viriginia and where the warehouse is located. On the one hand, the
defendant is a corporation organized under the laws of Pennsylvania and is
qualified to do business both in New York and Virginia.
It has officials designated to each state as agents to receive service of process.
When the defendant was sued, it invoked the doctrine of forum non conveniens.
It claimed that the Virginia is the appropriate place for trial because it is where the
plaintiff lives, where the defendant does his business, where all the events of the
litigation took place, where most of the witnesses reside, and where both the
state and federal courts are available to the plaintiff and are able to obtain
jurisdiction of the defendant. No Federal question is involved and was brought to
the United States District Court solely on the issue of diversity of citizenship of the
parties. The district court dismissed the case citing the Erie Railroad Co. vs
Tompkins and considered the that the law of New York is forum non conveniens
applied and should be left to Virginia Courts. However, the Circuit Court of
Appeals disagreed as to the applicability of New York law, took a restrictive view
of the application of the entire doctrine in federal courts. It reversed the district
court. Hence, certiorari was filed.
ISSUE:
Whether the United States District Court has inherent power to dismiss a suit
pursuant to the doctrine of forum non conveniens.
RULING:
Yes. The district court has the power to dismiss a suit pursuant to the doctrine of
forum non conveniens. As shown by several jurisprudence, the US courts are
allowed to decline jurisdiction on cases rightfully under its jurisdiction on
exceptional circumstances, one of which is the application of forum non
conveniens.
The doctrine provides that a court may relinquish its jurisdiction to hear a case
when such choice in venue to file the case causes inconvenience or burden to one
of the parties or when the choice in venue clearly is a form of harassment to the
adverse party.
Also, the interests of fair play, inconvenience on the part of the adverse party,
public interest, and the character or nature of the parties are to be balanced. If
the court sees a strong balance in favor of the adverse party, it may apply the
doctrine.
In the case at bar, several factors were considered in order to apply the doctrine.
First, the plaintiff is not a resident of New York and the tortious event happened
in Lynchburg, Virginia.
In fact, the court was candidly told by the plaintiff that the venue was chosen by
the insurance company for purposes of subrogation.
Second, all the witnesses, the customers of the plaintiff and those that were part
of negligent act live in Lynchburg, Virginia. Only the lawyer for the plaintiff is said
to be residing in New York. Third, a trial in Virginia would simplify the proceedings.
If the proceeding is conducted in Virginia, issues on conflicts of laws may be
avoided. Hence, given these circumstances, the district court did not abuse its
discretion in applying the doctrine of forum non conveniens.

2. Travelers Health Assn. v. Virginia,

339 U.S. 643 (1950)
In a proceeding under § 6 of the Virginia "Blue Sky Law," the State Corporation
Commission ordered an Association, located in Nebraska and engaged in the mail
order health insurance business, and its treasurer (appellants here) to cease and
desist from further offerings or sales of certificates of insurance to Virginia
residents until the Association had complied with the Act by furnishing
information as to its financial condition, consenting to suit against it by service of
process on the Secretary of the Commonwealth, and obtaining a permit. Notice of
the proceeding was served on appellants by registered mail, as authorized by § 6
when other forms of service are unavailable. They appeared specially, challenged
the jurisdiction of the State, and moved to quash the service of summons. On
recommendations from Virginia members, the Association for many years had
been issuing insurance certificates to residents of Virginia, and it had
approximately 800 members there. It had caused claims for losses to be
investigated, and the Virginia courts were open to it for the enforcement of
obligations of certificate holders.
Held:
1. The State has power to issue a cease and desist order to enforce at least the
requirement that the Association consent to suit against it by service of process
on the Secretary of the Commonwealth.
2. The contacts and ties of appellants with Virginia residents, together with that
State's interest in faithful observance of the certificate obligations, justify
subjecting appellants to cease and desist proceedings/
3. Virginia's subjection of the Association to the jurisdiction of the State
Commission in a § 6 proceeding is consistent with fair play and substantial justice,
and is not offensive to the Due Process Clause of the Fourteenth Amendment.
4. The power of the State to subject the Association to the jurisdiction of the
State Commission and to authorize a cease and desist order under § 6 is not
vitiated by the fact that business activities carried on outside of the State are
affected.
5. Service of process on appellants by registered mail did not violate the
requirements of due process.
RATIO:
Measured by the principles of the Osborn, Hoopeston, and International
Shoe cases, the contacts and ties of appellants with Virginia residents, together
with that state's interest in faithful observance of the certificate obligations,
justify subjecting appellants to cease and desist proceedings under § 6. The
Association did not engage in mere isolated or short-lived transactions. Its
insurance certificates, systematically and widely delivered in Virginia following
solicitation based on recommendations of Virginians, create continuing
obligations between the Association and each of the many certificate holders in
the state. Appellants have caused claims for losses to be investigated, and the
Virginia courts were available to them in seeking to enforce obligations created by
the group of certificates. See International Shoe Co. v. Washington, supra, at 326
U. S. 320.
Moreover, if Virginia is without power to require this Association to accept service
of process on the Secretary of the Commonwealth, the only forum for injured
certificate holders might be Nebraska. Health benefit
Page 339 U. S. 649
claims are seldom so large that Virginia policyholders could afford the expense
and trouble of a Nebraska law suit. In addition, suits on alleged losses can be
more conveniently tried in Virginia, where witnesses would most likely live and
where claims for losses would presumably be investigated. Such factors have
been given great weight in applying the doctrine of forum non conveniens. See
Gulf Oil Corp. v. Gilbert, 330 U. S. 501, 330 U. S. 508. And prior decisions of this
Court have referred to the unwisdom, unfairness, and injustice of permitting
policyholders to seek redress only in some distant state where the insurer is
incorporated. [Footnote 3] The Due Process Clause does not forbid a state to
protect its citizens from such injustice.
There is, of course, one method by which claimants could recover from appellants
in Virginia courts without the aid of substituted service of process: certificate
holders in Virginia could all be garnished to the extent of their obligations to the
Association. See Huron Holding Corporation v. Lincoln Mine Operating Co., 312 U.
S. 183, 312 U. S. 193. While such an indirect procedure would undeniably be more
troublesome to claimants than the plan adopted by the state in its "Blue Sky
Law," it would clearly be even more harassing to the Association and its Virginia
members. Metaphysical concepts of "implied consent" and "presence" in a state
should not be solidified into a constitutional barrier against Virginia's simple,
direct, and fair plan for service of process on the Secretary of the Commonwealth.
We hold that Virginia's subjection of this Association to the jurisdiction of that
state's Corporation Commission in a § 6 proceeding is consistent with "fair play
and substantial justice," and is not offensive to the Due Process Clause.

3. WORLDWIDE VOLKSWAGEN CORP v WOODSON

Brief Fact Summary. Plaintiffs purchased a car in New York and were subsequently
involved in a car accident in Oklahoma. Plaintiffs sued the distributor and retailer
of the car (Defendants) in Oklahoma state court for injuries suffered in the car
accident. Defendants moved to dismiss arguing Oklahoma did not have personal
jurisdiction.

Synopsis of Rule of Law. A non-resident defendant must purposely avail himself of

the forum state’s privileges and protections for that state to have personal
jurisdiction over him unless the case pertains to a product connected with
defendant’s business that was brought into the forum state by the plaintiff.
Foreseeability that the product might eventually enter the state is irrelevant if
there is no purposeful availment of that state’s privileges and protections.

Facts. The Robinsons, Plaintiffs, bought a car in New York from Seaway,
Defendant. Plaintiffs drove the car to Oklahoma where they were in a car accident
and injured. Plaintiffs sued Seaway, Audi (the manufacturer), Volkswagen of
America (the importer) and World-Wide Volkswagen (Worldwide; the regional
distributor) as Defendants in a strict liability action in Oklahoma state court
claiming the gas tank and fuel system were defective. There was no evidence that
the retailers and distributors had ever made any transactions in Oklahoma. The
trial court held that it had jurisdiction over Defendants in Oklahoma and denied
World-Wide’s motion for reconsideration. World-Wide sought a writ of prohibition
from the Supreme Court of Oklahoma. The writ was denied on the grounds that
jurisdiction was authorized by the Oklahoma long arm statute. World-Wide
appealed.
Issue. Can a state exercise in personam jurisdiction on the distributor and retailer
of a product when the distributor and retailer do not utilize the privileges of
conducting activities within that state, and do not distribute their product with
the expectation that it will be purchased by consumers within the state?
Held. No. Reversed.
The two goals of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154,
90 L.Ed. 95 (1945), are to avoid unfair inconveniences for the defendant and to
maintain the system of co-equal sovereignty among the states.

Although the rule in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199,
2 L.Ed.2d 223 (1957), demonstrates that contact with the forum for an out-of-state
defendant is not always inconvenient, jurisdictional boundaries are still relevant.
Contacts with the forum state are still required. The defendant must purposely
avail himself of the laws of the forum state in order for to satisfy the minimum
contacts test.

The foreseeability inquiry asks not whether the manufacturer or distributor can
foresee his product ending up in a particular state, but whether he can foresee
being hailed into court there.

This case is distinguishable from Gray v. American Radiator & Standard Sanitary
Co., 22 Ill.2d 432, 176 N.E.2d 761 (Ill. 1961). In Gray, the company delivered its
product to another state with the expectation that consumers in that forum state
would purchase it. This case involved a unilateral activity completely out of the
control of Defendants.

Dissent. Justice Brennan: The analysis should be focused on fairness and

reasonableness. The constitutional consideration is not what the best forum is but
whether the defendant is linked to that forum and the burden is not unreasonable.
The focus is on the relation among the parties, the transaction, and the forum
state.

Discussion. The majority opinion shows that a state does not necessarily have
personal jurisdiction over a corporate defendant simply because its product was
brought into the forum state. There defendant must still have voluntarily
connected himself or herself with the forum state via the notion that it purposely
availed itself of the forum state’s laws.
4. HERBERT SCHMIDT, represented by his mother and guardian,
MATIE SCHMIDT
vs. DRISCOLL HOTEL INC.

FACTS:

Driscoll Hotel, doing business under the name of The Hook – Em – Cow Bar
and Café located in Minnesota, illegally sold liquor to John Sorrenson. Having
been intoxicated, John Sorrenson drove a vehicle with Herbert Schmidt as a
passenger.

While the car was traversing in Wisconsin, it turned over and injured
Herbert.

Herbert’s mother, Matie, filed an action for damages against the Hotel in
Minnesota. The hotel, on the other hand, sought to dismiss the case on the
ground that court has not acquired jurisdiction over the subject matter.

The action for damages was based on the Civil Damage act, which provides
that ‘No penalty by way of collecting damages arose under the Civil Damage Act,
unless the injury was inflicted in the state. No civil action to collect penalty arose
unless the illegal sale in the state was followed by an injury in the state.’

ISSUE/S:

Whether or not the Minnesota court has jurisdiction over the case.

RULING:

No. The Minnesota court has no jurisdiction over the case.

The law is clear no penalty by way of collecting damages arose under the
law unless the injury was inflicted in the state and unless the illegal sale in the
state was followed by an injury in the state.

In the present case, the injury took place in Wisconsin, when the car was
over turned while being driven by Sorrenson. Since Wisconsin does not have the
same law as Minnesota, no cause of action arises from the complaint.

Thus, the Minnesota court has not jurisdiction over the case.