Ayco Farms, Inc. v. Guillermo Ochoa , 862 F.3d 945 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AYCO FARMS, INC., a Florida No. 15-55611
corporation,
Plaintiff-Appellant, D.C. No.
8:14-cv-01675-
v. JLS-AN
GUILLERMO RODRIGUEZ OCHOA, an
individual, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Josephine L. Staton, District Judge, Presiding
Argued and Submitted January 9, 2017
Pasadena, California
Filed July 10, 2017
Before: Richard C. Tallman and Michelle T. Friedland,
Circuit Judges, and David A. Faber, * District Judge.
Per Curiam Opinion
*
The Honorable David A. Faber, Senior United States District Judge
for the Southern District of West Virginia, sitting by designation.
2 AYCO FARMS V. OCHOA
SUMMARY **
Forum Non Conveniens
The panel affirmed the district court’s order dismissing
Ayco Farms, Inc.’s complaint under the doctrine of forum
non conveniens.
The panel held that in performing a forum non
conveniens analysis, the district court did not abuse its
discretion by comparing the proposed foreign forum
(Mexico) with the forum that the plaintiff actually chose
(California), rather than with the United States as a whole.
The panel held that the district court did not err in
affording less deference to Ayco’s choice to file a lawsuit in
California where Ayco had limited contacts with California.
The panel held that the district court properly found that
the private interest factors strongly favored trial in Mexico,
and the public interest factors supported the foreign forum.
The panel concluded that the district court did not err in
balancing the private and public interest factors, and in
concluding that they strongly favored dismissal.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
AYCO FARMS V. OCHOA 3
COUNSEL
Paul S. Marks (argued) and Yuriko M. Shikai, Neufeld
Marks, Los Angeles, California, for Plaintiff-Appellant.
Timothy D. Biche (argued), Diyari Vázquez, and Gerald E.
Hawxhurst, Crone Hawxhurst LLP, Los Angeles, California,
for Defendant-Appellee.
OPINION
PER CURIAM:
Ayco Farms, Inc. appeals the district court’s order
dismissing its complaint under the doctrine of forum non
conveniens. We have jurisdiction under 28 U.S.C. § 1291.
Because we conclude that the district court applied the
correct legal rule and that dismissal was appropriate, we
affirm.
Ayco markets and sells produce throughout the United
States. It is incorporated in Florida and maintains its
headquarters there. In 2012, Ayco partnered with two
individuals—Guillermo Rodriguez Ochoa, who is a citizen
of Mexico and the United States, and Jorge Manuel Del Toro
Chavez, who is a citizen of Mexico—to create a new
business: Ayco Farms Mexico (“AFM”). AFM would buy
or grow produce, which Ayco would then market and sell
worldwide on an exclusive basis.
Rodriguez and Del Toro are also officers of another
business, Operadora de Productos Frescos, SA de CV
(“OPF”), a Mexican company with its headquarters in
4 AYCO FARMS V. OCHOA
Mexico. OPF helps Mexican farmers import their produce
into the United States. OPF agreed to be AFM’s agent until
AFM was more established.
For nearly two years, Ayco marketed the partnership’s
celery, cauliflower, peppers, and broccoli to buyers in the
United States. In early 2014, however, the partners started
having disputes. OPF first sued Ayco in Mexico. It alleged
that AFM was never properly formed or established and that
Ayco never paid for certain expenses as it had promised.
Ayco then filed this case in U.S. District Court in the Central
District of California several months later. It alleged, among
other things, that it had a valid exclusivity agreement with
OPF and that Rodriguez and Del Toro breached this
agreement by diverting produce to distributors in the United
States and Canada.
Rodriguez and Del Toro moved to dismiss Ayco’s
California lawsuit under the doctrine of forum non
conveniens, arguing that the dispute should be litigated in
Mexico. After hearing oral arguments, the district court
granted the motion in a detailed written order. It concluded
that Ayco’s choice of forum was entitled to less deference
because Ayco had essentially no contacts with California;
that Mexico offered the litigants an adequate alternative
forum; and that dismissal was appropriate in light of the
private and public interest factors identified by the Supreme
Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947). The
district court imposed several conditions on the dismissal,
including that Rodriguez and Del Toro submit to service of
process in Mexico, waive statute-of-limitations defenses,
give Ayco access to evidence, and consent to satisfy any
judgment rendered against them. Ayco appealed the district
court’s order.
AYCO FARMS V. OCHOA 5
Federal district courts have discretion to dismiss an
action under the doctrine of forum non conveniens. See, e.g.,
Am. Dredging Co. v. Miller, 510 U.S. 443, 447–48, 455
(1994) (first citing Gulf Oil, 330 U.S. at 504; then citing
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981)).
Dismissal is appropriate only if the defendant establishes
“(1) the existence of an adequate alternative forum, and
(2) that the balance of private and public interest factors
favors dismissal.” Bos. Telecomms. Grp., Inc. v. Wood,
588 F.3d 1201, 1206 (9th Cir. 2009) (quoting Loya v.
Starwood Hotels & Resorts Worldwide, Inc., 583 F.3d 656,
664 (9th Cir. 2009)). 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.” Piper Aircraft, 454 U.S. at 257.
Ayco does not contest the district court’s holding that
Mexico is an adequate alternative forum. Ayco argues
instead (1) that the district court erred in its overall approach
when it compared Mexico and California because it should
have compared Mexico and the United States as a whole;
(2) that the district court afforded inadequate deference to
Ayco’s choice to litigate in California; and (3) that the
district court did not correctly balance the relevant private
and public interest factors. We disagree with Ayco on all
three points.
A
First, the district court did not err when it compared the
burdens and benefits of litigation in Mexico and California
and not the burdens and benefits of litigation in Mexico and
6 AYCO FARMS V. OCHOA
the United States as a whole. Although we have not
previously addressed the question squarely, we have
typically applied the doctrine of forum non conveniens by
comparing the burdens and benefits of litigation in a foreign
country against the burdens and benefits of litigation in a
particular state. For example, in Boston
Telecommunications, we reversed a forum non conveniens
dismissal after extensively weighing the relative
convenience of litigation in Slovakia and California.
588 F.3d at 1206–12. Among many other considerations, we
noted that one witness refused to testify in Slovakia but
agreed to travel to California, id. at 1208–09, that the
defendant allegedly made misrepresentations during a
meeting in California, id. at 1212, and that “California ha[d]
an ‘interest in preventing fraud from taking place within its
borders’ that [was] at least as strong as Slovakia’s interest,”
id. Similarly, in Ranza v. Nike, Inc., 793 F.3d 1059 (9th Cir.
2015), cert. denied, 136 S. Ct. 915 (2016), we affirmed
dismissal notwithstanding the defendant’s Oregon
headquarters because “the relevant documents and witnesses
[were] mostly located abroad.” Id. at 1078. Thus, “relative
to the Netherlands, Oregon [was] an inconvenient forum.”
Id.; see also, e.g., Carijano v. Occidental Petroleum Corp.,
643 F.3d 1216, 1225–34 (9th Cir. 2011) (comparing
California and Peru); Tuazon v. R.J. Reynolds Tobacco Co.,
433 F.3d 1163, 1178–82 (9th Cir. 2006) (comparing
Washington and the Philippines).
It would indeed be difficult for a district court to consider
all of the “practical problems that make trial of a case easy,
expeditious and inexpensive,” Gulf Oil, 330 U.S. at 508, if it
were required to consider the United States as a whole. The
relative conveniences of litigating in Florida versus Alaska,
for example, are unlikely to be the same, so it is not clear
how a convenience comparison between a foreign forum and
AYCO FARMS V. OCHOA 7
the United States as a whole could be carried out in most
cases.
Perhaps there could be a case in which the decisive
factors would weigh in favor of litigation in a foreign forum
regardless of what state the plaintiff chooses, or vice versa.
Cf., e.g., Villar v. Crowly Mar. Corp., 782 F.2d 1478, 1482–
83 (9th Cir. 1986) (affirming forum non conveniens
dismissal after the district court concluded that a forum in
the Philippines would be more convenient than one in the
United States because the plaintiffs were not U.S. citizens,
the law applied would be foreign, and the events at issue
occurred abroad). 1 But that question can be addressed if and
when a case presents it. Here, we hold that in performing a
forum non conveniens analysis, a district court does not
abuse its discretion by comparing the proposed foreign
forum with the forum that the plaintiff actually chose, rather
than with the United States as a whole.
B
Second, the district court did not err in affording less
deference to Ayco’s choice to file a lawsuit in California.
Although a plaintiff is generally entitled to deference in its
choice of forum, especially if the plaintiff is a U.S. citizen or
resident, that deference is “far from absolute.” Ranza,
793 F.3d at 1076 (quoting Lockman Found. v. Evangelical
All. Mission, 930 F.2d 764, 767 (9th Cir. 1991)). “We have
held that the mere ‘presence of American plaintiffs . . . is not
in and of itself sufficient to bar a district court from
dismissing a case on the ground of forum non conveniens.’”
1
See also Villar v. Crowley Mar. Corp., 990 F.2d 1489, 1498 (5th
Cir. 1993) (rejecting attempt to bring suit in Texas based on same events
and agreeing that “no forum in the United States [is] convenient”).
8 AYCO FARMS V. OCHOA
Bos. Telecomms., 588 F.3d at 1207 (quoting Cheng v. Boeing
Co., 708 F.2d 1406, 1411 (9th Cir. 1983)). A U.S. citizen
plaintiff is entitled to less deference in his choice of forum if
he does not reside in that forum. See, e.g., Gemini Capital
Grp., Inc. v. Yap Fishing Corp., 150 F.3d 1088, 1091–92
(9th Cir. 1998) (giving less deference to U.S. citizens’ choice
of Hawaii forum because they were not Hawaii residents).
Far from maintaining a residence in California, Ayco has
made what appears to be a late-stage attempt to establish
connections to California. Other than filing this lawsuit and
selling to customers in California, its only contact with
California is the California office it allegedly opened during
the same month as oral argument on Defendants’ motion to
dismiss. When faced with such “eleventh-hour efforts to
strengthen connections” with the chosen forum, we have
followed the reasoning of the en banc Second Circuit: “the
more it appears that the plaintiff’s choice of a U.S. forum
was motivated by forum-shopping reasons . . . the less
deference the plaintiff’s choice of forum commands.”
Vivendi SA v. T-Mobile USA Inc., 586 F.3d 689, 695 (9th
Cir. 2009) (quoting Iragorri v. United Techs. Corp.,
274 F.3d 65, 72 (2d Cir. 2001) (en banc)). The district court
was within its discretion to view Ayco’s choice of forum
with skepticism.
C
Of course, “less deference is not the same thing as no
deference.” Ravelo Monegro v. Rosa, 211 F.3d 509, 514
(9th Cir. 2000). For a U.S. citizen’s choice of forum to be
rejected, the private and public interest factors must
“strongly favor trial in a foreign country.” Lueck v.
Sundstrand Corp., 236 F.3d 1137, 1145 (9th Cir. 2001).
However, we reject Ayco’s third argument that the district
AYCO FARMS V. OCHOA 9
court erred when it concluded that the private and public
factors strongly favor trial in Mexico.
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.”
Id. (quoting Gulf Oil, 330 U.S. at 508). The public interest
factors are “(1) [the] local interest of [the] lawsuit; (2) the
court’s familiarity with governing law; (3) [the] burden on
local courts and juries; (4) [the amount of] congestion in the
court; and (5) the costs of resolving a dispute unrelated to
[the] forum.” Id. at 1147.
The district court here properly held that the private
interest factors strongly favor trial in Mexico. It correctly
noted that Rodriguez and Del Toro are citizens and residents
of Mexico; that the crux of the parties’ dispute concerns a
contract that was negotiated, signed, and allegedly violated
in Mexico; and that Ayco failed to identify any witnesses,
documents, or evidence located in California. The district
court also reasonably predicted that many witnesses—
produce growers, distributors, and Del Toro, for example—
could probably not be compelled to appear in California
court. Finally, the district court observed that related
litigation was already pending in Mexico when Ayco filed
its complaint in California. See id. at 1147 (relying on “the
existence of . . . related proceedings” in a foreign forum as a
10 AYCO FARMS V. OCHOA
factor favoring dismissal). Ayco has offered no plausible
challenge to any of these findings of fact.
The district court likewise properly held that the public
interest factors support the foreign forum. Again, the district
court correctly noted that the dispute overwhelmingly
concerns events in other states and countries, that Mexican
law will likely apply because the disputed agreement was
signed in Mexico and performance was expected in Mexico,
that California has an insufficient interest in the case to
justify the significant burden on a California jury, that the
court congestion factor is neutral, and that California’s
overall interest in the dispute is slight when compared to the
cost of resolving the dispute. Again, Ayco fails to identify
any error in these findings of fact.
The district court did not err when it balanced the private
and public interest factors or when it concluded that they
strongly favor dismissal.
For the reasons above, we AFFIRM.
Costs shall be taxed against Defendant-Appellee. See
Fed. R. App. P. 39(a)(2).