District Court Dismisses Does Not Give Weight to Forum Selection Clause But Nonetheless Dismisses Case on Forum Non Conveniens Grounds

The World in U.S. Courts: Winter 2015 - Forum Non Conveniens/International Comity

Lavera Skin Care North America, Inc. v. Laverana Gmbh & Co. KG, U.S. District Court for the Western District of Washington, December 19, 2014

A German limited partnership in the business of manufacturing natural cosmetics was sued by its exclusive North American distributor under breach of contract theories, and to allow the distributor to continue to use the domain name, “lavera.com.” The manufacturer moved to dismiss the claim on forum non conveniens grounds.

The U.S. District Court in Washington State stated that a “strong presumption” exists in favor of a plaintiff’s choice of forum, and that it would be disturbed only where private and public interest factors “strongly favor” that the dispute be resolved in a forum outside the U.S. As a preliminary matter, the Court rejected the manufacturer’s argument that recent U.S. Supreme Court decisions enforcing forum-selection clauses required that the agreement, which provided that “the place of jurisdiction shall be Hanover” [Germany], be read to mean that the dispute be heard only in a German Court. The Court concluded that the absence of the word “exclusive,” or anything like it, rendered to choice of forum “permissive,” and therefore the reference to a German forum did not impose a mandatory forum.

The Court nonetheless concluded that dismissal should occur based on the traditional forum non conveniens analysis. First, the Court concluded that Germany provided an adequate alternative forum (the parties at the very least had so agreed in their contract), and that it was an appropriate one since German law applied to the contract in question and that German law permitted suit to be brought for relief that was comparable to what a U.S. Court might award. Second, the Court determined that factors of the “private interest” of the parties favored litigation in Germany. Among the factors cited by the Court were: Litigation in Germany would be significantly more convenient for the manufacturer and its witnesses, who do not speak English, while the distributor’s principal was a German citizen and spoke German fluently; the key witnesses as to liability live in Germany; the location of evidence slightly favors a German forum; U.S. Courts might not be able to compel the attendance or participation of German witnesses; and that a judgment in favor of the distributor might not be honored in Germany.

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