Lfoundry Rousset SAS v. Atmel Corporation, No. 14-CV-1476, 2015 U.S. Dist. LEXIS 95165, (S.D.N.Y. July 21, 2015) [click for opinion]

Plaintiffs, a bankrupt French company and one of its French National former employees, filed their complaint in the Southern District of New York seeking damages for alleged fraud committed by Defendants relating to Defendants’ acquisition of the French Company and its subsequent bankruptcy.

Plaintiffs alleged that Defendants carried out a scheme to fraudulently convey the French company to a near-insolvent buyer in order to dispose of it without paying the employee assistance that French Law mandates must be paid when French companies file for bankruptcy. Plaintiffs sued Defendants as a putative class action on behalf of the former employees of the French company who, as a result of the bankruptcy, did not receive the employee assistance mandated by French law.

Defendants moved to dismiss Plaintiffs’ claims, arguing, among other things, that New York was an inappropriate forum in which to litigate this dispute under the doctrine of forum non conveniens. Defendants argued Plaintiffs had engaged in forum shopping by filing their case in New York in order to take advantage of the RICO statute and U.S. class action laws.  Defendants further argued that nearly all of the relevant witnesses were located in France, France provided an appropriate alternative forum, and the public and private interests at issue favored dismissal.

Agreeing with Defendants, the district court dismissed Plaintiffs’ complaint under the doctrine of forum non conveniens.The district court engaged in a three-part test.

First, the district court examined the degree of deference to be afforded to a plaintiff’s choice of forum. The court examined the availability of witnesses and evidence in the forum district and found that none of the witnesses were located in New York.Moreover, the court found that Plaintiffs had admitted in their interrogatory responses that they were bringing suit in New York in order to take advantage of laws unique to U.S. courts, namely the RICO statute and class action laws. In other words, Plaintiffs admitted to forum shopping.As a result, the district court concluded plaintiffs’ choice of forum would be given only limited deference.

Next, the district court determined that French courts provided an adequate forum for resolving the dispute because French courts permitted litigation on the subject matter of Plaintiffs’ complaint, and Defendants were amendable to service of process in France (though the district court conditioned its dismissal of the complaint on Defendants’ acquiescence in writing to service of process in France).

Finally, the district court balanced the public and private interests in adjudicating the dispute in New York, finding that there was no public interest in settling the dispute in New York. Furthermore, the district court found the private interests factors also supported dismissal, as nearly all relevant witnesses would be forced to travel to New York from France in order to prosecute or defend the case.

Michael Lehrman of the Chicago office contributed to this summary.