Bass, Berry & Sims attorney Chris Lazarini provided insight on a case involving a question of appropriate jurisdiction since nine of ten parties involved in the lawsuit resided outside of the United States. The court dismissed the case on grounds of forum non conveniens – finding that even though jurisdiction may exist, in the interests of substantial justice, the litigation should take place in another forum.
Chris provided the analysis for Securities Online Litigation Alert (SOLA). The full text of the analysis is below and used with permission from the publication.
Vezozzo Filho vs. Borges, No. 651935/2018 (N.Y. Sup. Ct., NY Cty., 4/23/19)
Forum non conveniens allows a court to dismiss an action where, even though jurisdiction may exist, the court determines that, in the interests of substantial justice, the litigation should take place in another forum.
Plaintiffs are Brazilian hotel magnates who operate multiple luxury hotels in South America. Plaintiffs incorporated several offshore entities to hold assets outside Brazil. Defendants are individual investment advisors and their affiliated advisory firms. The individuals are residents of Brazil and the firms are Brazilian entities, except for one U.S.-based firm with its principal place of business in New York. In 1999, Plaintiffs engaged Defendants to manage some overseas assets. In 2017, Defendants reportedly told Plaintiffs they were managing $14 million in liquid assets, including some held in accounts in the United States. In their 2018 complaint alleging fraud, conversion, and other claims, Plaintiffs allege Borges confessed to masterminding a scheme to steal the assets and the assets were gone. Defendants moved to dismiss on grounds of forum non conveniens.
Granting the motion, the Court examines multiple factors, none of which are controlling, and finds the tenuous connection to New York is far outweighed by the dispute’s connection to Brazil. First, the Court notes the parties’ residences weigh strongly for dismissal because nine of the ten parties, including all individual parties, are located outside the United States. Second, the Court finds the critical events were not specifically alleged to have occurred in New York, but were allegedly directed by Borges from “parts unknown.” Third, the Court finds many key witnesses live in Brazil and, while acknowledging New York financial institutions may possess discoverable evidence, the Court finds that evidence can be obtained in Brazil.
Regarding the forums involved, the Court finds that the Brazilian courts are a convenient, alternative forum for resolution of the dispute and may have an interest in policing the conduct, since it involves Brazilian individuals and entities and its tax system. Litigating the dispute in New York would cause financial and other burdens on Defendants and the court system, because key witness testimony and documents must be translated from Portuguese to English adding time and expense to the litigation.