CHANG v. BAXTER HEALTHCARE CORP. (March 26, 2010)
A number of residents of Taiwan brought suit against manufacturers of clotting factors. They allege that the defendants improperly processed donated blood in California and continued to sell it in foreign countries after they knew it was contaminated. The plaintiffs are mainly hemophiliacs who were infected with HIV from the contaminated clotting factors. The plaintiffs also allege that the defendants fraudulently induced a settlement agreement and they allege a breach of the settlement agreement. The district court dismissed the claims, some on the merits as untimely and others pursuant to the doctrine of forum non conveniens. The plaintiffs appeal.
In their opinion, Judges Posner, Evans, and Tinder affirmed. The Court first addressed the dismissals on the merits. It approved the district court’s conclusion that the claims were untimely both because they were filed outside the statute of limitations period and because the California court would apply the Taiwanese 10 year statute of repose (the plaintiffs were infected in the 1980s). Although the plaintiffs assert that their claims arose in California, the Court disagreed. The rule in California is there is no tort without an injury -- and the injuries occurred in Taiwan. A California court would apply the statute of repose either under its own “borrowing” statute or under a more general "balancing of interests" approach to conflict of laws. The Court next addressed the breach of settlement agreement claim which the district court dismissed on forum non conveniens grounds. The Court found that the relevant clause in the settlement agreement was ambiguous and that extrinsic evidence would be necessary. Most of the people with relevant evidence live in Taiwan. In addition, Taiwan law makes it difficult to gather evidence in Taiwan for use in another country. The Court found nothing that would favor the case being tried in United States – dismissal was proper. Another claim that was dismissed on forum non-conveniens grounds is the individual claim by a woman who claims to have been infected by her boyfriend. Although all the same considerations favored the dismissal of this claim, the Court examined it more closely because of the possibility the claim would be time-barred if brought in Taiwan. Dismissal under forum non-conveniens is improper if the other forum is inadequate and will not provide a fair hearing. Here, however, the California court would apply the Taiwanese limitations period just as the Taiwanese court would. Since the statute of limitations would be the same and the convenience factors all favor Taiwan, the Court affirmed the dismissal.