Ayco Farms, Inc., v. Guillermo Rodriguez Ochoa, No. 15-55611 (9th Cir. July, 10, 2017) [click for opinion]
Ayco Farms, Inc. ("Ayco"), an American produce distributor incorporated and headquartered in Florida, partnered with two residents of Mexico—Guillermo Rodriguez Ochoa and Jorge Manuel Del Toro—to distribute Ayco's produce internationally. Together, the parties created a new company, Ayco Farms Mexico ("AFM"), for the purpose of distributing Ayco's produce worldwide. Rodriguez and Del Toro are also officers of another Mexican company, Operadora de Productos Fresos ("OPF"), which helps Mexican farmers sell their produce in the United States. The parties agreed that OPF would serve as AFM's agent until AFM built up its business.
Ayco marketed the partnership's produce to buyers in the United States for approximately two years. However, in 2014, contract disputes arose. OPF sued Ayco in Mexico, alleging that Ayco violated various provisions of the partnership agreement. Several months later, Ayco filed suit in federal court in California, alleging that Del Toro and Rodriguez had breached the parties' exclusivity agreement.
Rodriguez and Del Toro moved to dismiss the California lawsuit under the doctrine of forum non conveniens, arguing that Mexico was the proper forum for litigation. The district court granted Rodriguez and Del Toro's motion, noting that Ayco had "essentially no contacts with California." Ayco appealed, arguing that the court should have compared the burdens and benefits of litigation in Mexico and the United States as a whole, rather than the burdens and benefits of litigation in Mexico and California specifically.
The Ninth Circuit disagreed, noting: "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." The court further reasoned that the logistical considerations which make trial easy, expeditious, and inexpensive vary greatly from state to state. "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 the United States as a whole could be carried out in most cases," the court explained. The court acknowledged that convenience factors could weigh in favor of litigation in a foreign forum, regardless of which forum state a plaintiff chooses, but noted that question was not presented in this case.
The court further held that the district court did not err in affording less deference to Plaintiff's choice of forum when Plaintiff established contacts with the forum state in the "eleventh hour," noting, "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."
Finally, the Ninth Circuit upheld the district court's determination that the Gulf Oil private and public interest factors strongly supported dismissing the California litigation and trying the case in Mexico, where the contract was executed and allegedly breached, both defendants resided, and related litigation was already pending.