District Court Finds Personal Jurisdiction over Foreign Insurer and Rejects Dismissal Based on Forum Non Conveniens

The World in U.S. Courts: Summer and Fall 2016 - Personal Jurisdiction/Forum Non Conveniens/ Foreign Sovereign Immunity Act (FSIA) | June.29.2016

Hill v. Assurance-Foreningen Skuld, U.S. District Court for the District of Guam, April 4, 2016

Plaintiff Hill, personal representative of the estate of David Hill, sued defendants Assurance-Foreningen Skuld and Skuld Mutual Protection and Indemnity Association Ltd., both Norwegian companies.  Hill’s husband had been killed when a boat insured by the defendants sank off the coast of Guam.  The defendants moved to dismiss the case for lack of personal jurisdiction and forum non conveniens

The Court began by examining whether it had personal jurisdiction over the defendants. The Court noted that Guam’s long-arm statute provides personal jurisdiction on any basis consistent with the U.S. Constitution, and that Plaintiff did not allege general personal jurisdiction over the defendants. Thus the sole issue was whether the defendants’ contacts with Guam were of such a quality and nature that they could reasonably expect to defend themselves in an action in Guam.  The Court used a three-factor test to determine whether it could exercise specific personal jurisdiction over the defendants, asking whether defendants purposefully availed themselves of the privilege of conducting business in Guam, whether Plaintiff’s claim arose out of defendants’ contact with Guam, and whether the exercise of personal jurisdiction would comport with fair play and substantial justice.

On the first factor, Hill argued that the defendants contracted to provide insurance to the owner of the boat, which was based in Guam, and that defendants filed several letters of undertaking in the U.S. District Court in Guam after the ship sunk.  The Court found this conduct sufficient to constitute “purposeful availment” because insurers should reasonably expect to defend coverage claims in their insured’s locality. Additionally, the Court found that the defendants’ letters of undertaking were further evidence of purposeful availment, as the letters arose from essentially the same facts as Plaintiff’s claim. The Court further found that the defendants’ contract with ship’s owner was the but-for cause of the litigation, and therefore that the Plaintiff’s claim “arose out of” the defendants’ contact with Guam.

The Court then considered whether jurisdiction over the defendants would comport with fair play and substantial justice.  Relying on the Ninth Circuit’s seven-factor test, the Court examined the extent of the defendants’ purposeful interjection into Guam, the burden on defendants of defending in Guam, the extent of any conflict with Norway, Guam’s interest in litigating the dispute, the most efficient judicial resolution of the dispute, Guam’s importance to the plaintiff’s interest in convenient and effective relief, and the existence of an alternate forum.  The Court found that defendants’ insuring the ship’s owner showed purposeful injection into Guam, that litigating in Guam would not pose an unfair burden on defendants given their familiarity with Guam’s legal system, that Guam had an interest in litigating the dispute, and that Guam was important to Plaintiff’s interest in relief. Thus, these four factors favored Plaintiff. On the other hand, the Court found there was a potential for conflict with Norway, that resolution in Norway would be slightly more efficient, and that Norway was a potential alternate forum. Thus, these three factors favored defendants. On balance, the Court concluded that the seven-factor test showed jurisdiction over defendants would comport with fair play and substantial justice. As a result, the Court held that personal jurisdiction over defendants was proper.

The defendants also argued the suit should be dismissed on forum non conveniens grounds. The Court noted that a domestic plaintiff’s choice of forum is entitled to considerable deference. Thus, courts dismiss for forum non conveniens only when an adequate alternate forum exists, and the balance of public and private interest factors favor dismissal.  Here, the Court concluded that Norway was an adequate alternate forum after defendants demonstrated they were amenable to process in Norway and satisfactory remedies were available in Norway. The Court then considered six private interest factors, including the relative ease and access to proof, location of witnesses and evidence, enforceability of a Norwegian judgment by U.S. courts, and any other practical problems.  Because the bulk of the defendants business was located in Norway, and there were no barriers to enforceability of the judgment, the Court concluded that that all the private interest factors favored defendants. The Court then turned to the public interest factors, including Guam’s interest in the litigation and the interest in avoiding application of Norwegian law by U.S. courts. While the Court noted trying the case in Guam would require the application of Norwegian law (in accordance with a contract provision), it nevertheless concluded the public interest factors generally favored Hill based on Guam’s connection to the underlying facts of Plaintiff’s claim. Because the private and public interests conflicted, the Court held that defendant had not managed to overcome the considerable deference due to Plaintiff’s choice of forum. As a result, the Court denied defendants’ motion to dismiss for forum non conveniens.

RETURN TO Summer and Fall 2016 Edition

RETURN TO The World in U.S. Courts Home Page

U.S. Laws Discussed

Editorial Board