District Court Dismisses RICO Action Involving Non-U.S. Participants and a French Dispute on Forum Non Conveniens Grounds

The World in U.S. Courts: Fall 2015 - Personal Jurisdiction/Forum Non Conveniens | July.21.2015

Lfoundry Rousset SAS v. Atmel Corp, U.S. District Court for the Southern District of New York, July 21, 2015

Plaintiffs are a bankrupt French corporation and one of its former employees, a French national, that formerly operated a French semiconductor business owned by a U.S. corporation and its French parent, both of which are defendants. The complaint alleged violations of the U.S. RICO statute through a scheme by which the defendants sought to close the semiconductor business in a way that improperly avoided expenses associated with French labor law and a collective bargaining agreement. The complaint was purportedly brought as a class action on behalf of displaced French employees. The defendants moved to dismiss on multiple grounds, including that a New York forum was so inconvenient and inappropriate so as to trigger the doctrine of forum non conveniens.

The District Court observed that it had discretion to dismiss a case on forum non conveniens grounds after undertaking a three-part analysis:  (1) the amount of discretion to be accorded the plaintiffs' choice of forum, (2) whether the alternative forum proposed by the defendants is adequate to adjudicate the parties' dispute, and (3) whether a balancing of the private and public interests counsels dismissal.

As to the first factor, the Court concluded that the strong presumption in favor of a plaintiff's choice of forum was weakened principally by the facts that (i) the plaintiffs here (and almost all of the plaintiffs they seek to represent) are not American, (ii) the "core operative facts" occurred in France, and (iii) that a U.S. forum was largely chosen as a product of "forum shopping"—here, a desire to take advantage of the U.S. RICO statute.  

Second, the Court determined that a French court would provide an adequate remedy. In so ruling, it specifically rejected the plaintiffs' contention that French law provided an inadequate alternative because it supported neither class actions nor a RICO-style treble damages remedy.

Finally, the Court concluded that both private and public interests favored dismissal. As for the private interests, the Court noted the inconvenience of witness travel to the U.S. and the fact that certain key parties could not be compelled to travel from Europe to testify. The most prominent public interests were the U.S. interest in having local disputes settled locally and the greater interest that France would have in resolving this dispute. The Court also cited difficulties attendant to applying non-U.S. law.

Finding little basis to keep the case and many reasons not to, the Court dismissed the case on forum non conveniens grounds.

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