IN THE SUPREME COURT OF TEXAS
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No. 04-1129
In re Pirelli Tire, L.L.C.,
Relator
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On Petition for Writ of Mandamus
Argued November
29, 2005
Justice O’Neill announced the Court’s
disposition and delivered an opinion joined by Justice Hecht, Justice Brister, and
Justice Medina.
Justice Willett delivered a concurring
opinion joined as to Part I by Justice
Wainwright.
Justice Johnson delivered a dissenting
opinion joined by Chief Justice
Jefferson.
Justice Green did not participate in the
decision.
In this case,
we consider the limits of a trial court’s broad discretion when deciding whether
to dismiss on forum-non-conveniens grounds an action brought by a claimant who
is not a legal resident of the United States. We conclude that,
though by its terms the forum-non-conveniens statute
is permissive, the deference it affords trial courts is not without bounds. As
with other discretionary rulings, a trial court abuses its discretion if its
forum-non-conveniens ruling is arbitrary,
unreasonable, and without reference to guiding principles. In this case, absent
any significant connection between the incident and the Texas forum, and
considering the private and public interests involved, we hold that the trial
court clearly abused its discretion in denying the defendant’s motion to dismiss
based on forum non conveniens.
I. Background
Valentin Hernandez Aran and Juan Benitez Mendoza, both Mexican citizens, were
transporting a heavy load of seafood in a fourteen-year-old GMC pickup on a
Mexican highway when the truck rolled over, killing Aran. The accident report filed by the Mexican police
indicates that Aran was driving, but in light of
evidence indicating Aran did not know how to drive the
parties speculate that Mendoza, who was not present when the police arrived, may
have been driving the truck when it rolled over and subsequently fled the scene.
According to the report, the truck was speeding on a level two-lane road when
the right rear tire failed and the truck rolled over.
R. Garza Motors of Brownsville, Texas, purchased the truck two years
before the accident at an auction in Arkansas. Eleven days after the purchase,
Garza Motors in Cameron County sold the truck to a Mexican citizen, who
imported it into Mexico the same day. The truck was
used, maintained, and serviced in Mexico from the time it was sold by
Garza Motors until the date of the accident. The tire which allegedly failed was
manufactured by Pirelli Tire in Des
Moines, Iowa, in March
1994. Pirelli is incorporated in Delaware, and
its principal place of business is Georgia.
In March 2003, Aran’s wife, Maria Magdalena
Meza Aran, his son, Damian Hernandez Meza, and later
his mother, Felipa Aran
Limas (collectively “the Arans”), all citizens of
Mexico, sued Pirelli in Cameron County. They alleged that Pirelli negligently
designed and manufactured the tire, and also asserted strict liability claims. Less than a month later, Pirelli filed
its Original Answer, as well as a Motion to Dismiss on Grounds of Forum Non
Conveniens. In March 2004, Pirelli filed an expanded
Motion to Dismiss on Grounds of Forum Non Conveniens
and a Motion to Apply the Law of Mexico. The trial court denied Pirelli’s
motions, and the court of appeals denied mandamus relief. We granted oral
argument on Pirelli’s Petition for Writ of Mandamus to consider the parameters
of the trial court’s discretion in deciding the dismissal motion.
II. Timeliness of Pirelli’s Motion
As a threshold matter, the Arans contend the
trial court did not abuse its discretion in denying the motion to dismiss
because Pirelli’s motion was untimely under subsection (d) of the
forum-non-conveniens statute, section 71.051 of the
Texas Civil Practice and Remedies Code, enacted by Act of May 29, 1997,
75th Leg., R.S., ch. 424, § 1, 1997 Tex. Gen. Laws
1680, 1680. Under that provision, a request for a stay or dismissal on
forum-non-conveniens grounds must be filed within 180
days of the time for filing a motion to transfer venue. The Arans acknowledge that Pirelli filed a motion to dismiss
concurrently with its answer, but they maintain that motion was inadequate
because it consisted of only three paragraphs and contemplated that Pirelli
would later file a supplemental brief more fully explaining Pirelli’s
contentions. In contesting the timeliness of Pirelli’s motion, the Arans focus solely on the expanded motion to dismiss that
Pirelli filed in February 2004, well after the time allowed under section
71.051(d) had expired.
We disagree that Pirelli’s motion to dismiss was untimely. It is
undisputed that Pirelli apprised the trial court of its
claim that Cameron
County was an inappropriate
forum within the time allowed under section 71.051(d). Pirelli’s original
dismissal motion contended Cameron
County had no connection with the
accident, Mexico was a more appropriate forum,
Mexican law provided the Arans an adequate remedy, and
the balance of public and private interests weighed in favor of dismissal.
Pirelli’s second motion merely expanded on those contentions and identified
specific events and circumstances supporting them. That Pirelli later
supplemented its initial argument is entirely consistent with section 71.051(d),
which allows a trial court to rule on a forum-non-conveniens motion only after a hearing with at least
twenty-one days’ notice to the parties. The statute further requires the court
to provide the parties “ample opportunity” to obtain discovery relevant to the
motion prior to the hearing. Thus, the statute contemplates that a motion may be
filed and then supplemented in light of discovery. Pirelli’s motion was not
untimely.
III. The Forum-Non-Conveniens
Statute
A. Trial Court Discretion
Section 71.051 of the Civil Practice and Remedies Code governs motions to
dismiss based on forum non conveniens. Subsection (a)
governs suits, like this one, brought by claimants who are not legal residents
of the United
States. It provides:
With
respect to a plaintiff who is not a legal resident of the United States, if a
court of this state, on written motion of a party, finds that in the interest of
justice a claim or action to which this section applies would be more properly
heard in a forum outside this state, the court may decline to exercise
jurisdiction under the doctrine of forum non conveniens and may stay or dismiss the claim or action in
whole or in part on any conditions that may be just.
Tex. Civ. Prac. & Rem.
Code §
71.051(a).
Pirelli contends a trial court’s discretion to dismiss on forum-non-conveniens grounds “in the interest of justice” is not
unfettered. Citing our decision in In re
Smith Barney, 975 S.W.2d 593, 598 (Tex.
1998), Pirelli argues dismissal is warranted when an action has no significant
connection with Texas. Pirelli further contends that the
factors listed in section 71.051(b) of the forum-non-conveniens statute, which apply to cases brought by
claimants who are legal residents of the United States,
should guide a court in determining whether a case will be dismissed under
subsection (a). Those factors are whether:
(1) an alternate forum exists in which the claim or action may be
tried;
(2) the alternate forum provides an adequate remedy;
(3) maintenance of the claim or action in the courts of this
state would work a substantial injustice to the moving party;
(4) the alternate forum, as a result of the submission of the
parties or otherwise, can exercise jurisdiction over all the defendants properly
joined to the plaintiff's claim;
(5) the
balance of the private interests of the parties and the public interest of the
state predominate in favor of the claim or action being brought in an alternate
forum; and
(6) the stay or dismissal would not result in unreasonable
duplication or proliferation of litigation.
Tex. Civ. Prac. & Rem.
Code § 71.051(b).
The Arans, on the other hand, contend section
71.051(a) confers virtually unlimited discretion on the trial court to decide
whether a motion to dismiss should be granted on forum-non-conveniens grounds because the trial court’s authority is
described in permissive terms. According to the Arans,
a reviewing court may reverse a decision denying a motion to dismiss under
section 71.051(a) only if the underlying suit has no connection with the forum
whatsoever. Because the truck involved in this case was in Texas for eleven days and
was sold here, the Arans contend, we have no choice
but to sustain the trial court’s decision. We disagree.
While application of the forum-non-conveniens
doctrine is now codified in Texas, the doctrine has deep roots in the
common law. As in section 71.051(a), the common-law doctrine permitted a court
possessing jurisdiction over a dispute to decline to exercise it when, “‘for the
convenience of the litigants and witnesses and in the interest of justice, the
action should be instituted in another forum.’” Exxon Corp. v. Choo, 881 S.W.2d 301, 302 n.2 (Tex. 1994) (quoting Sarieddine v. Moussa, 820 S.W.2d 837, 839-40 (Tex. App.—Dallas 1991,
writ denied)). The doctrine of forum non conveniens
has always afforded great deference to the plaintiff’s forum choice. Flaiz v. Moore, 359 S.W.2d 872, 874
(Tex. 1962) (citing Gulf Oil Corp. v.
Gilbert, 330 U.S. 501, 508 (1947)). But the
doctrine also recognizes that the plaintiff’s choice must sometimes yield in the
public interest, and in the interest of fundamental fairness. Id. Further,
forum-non-conveniens doctrine generally affords
substantially less deference to a nonresident’s forum choice. Piper Aircraft
Co. v. Reyno, 454 U.S. 235, 255-56 (1981); see Owens Corning v.
Carter, 997 S.W.2d 560, 570 (Tex. 1999). The doctrine comes into play when
there are sufficient contacts between the defendant and the forum state to
confer personal jurisdiction upon the trial court, but the case itself has no
significant connection to the forum. See Gulf Oil, 330 U.S. at 506. We
have recognized that “[i]t is fundamentally unfair to
burden the people of Texas with the cost of providing courts to hear cases that
have no significant connection with the State.” In re Smith
Barney, 975 S.W.2d at 598. Moreover, while forum-non-conveniens questions differ from due-process inquiries,
see Metro, Life Ins. Co. v. Robertson-Ceco
Corp., 84 F.3d 560, 575 (2d Cir. 1996), the doctrine touches on similar
issues of fundamental fairness, protecting defendants from being forced to
litigate in oppressive and vexatious circumstances. See
Flaiz, 359 S.W.2d at 874 (citing Gulf Oil,
330 U.S. at 508).
It is true, as the Arans contend, that trial courts possess broad discretion in
deciding whether to dismiss a case on forum-non-conveniens grounds. Id. But, as with other discretionary
decisions, a trial court’s forum-non-conveniens ruling
is subject to review for clear abuse of discretion. See In re Smith
Barney, 975 S.W.2d at 596. “A trial court abuses
its discretion if its decision ‘is arbitrary, unreasonable, and without
reference to guiding principles.’” Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997) (quoting Mercedes-Benz Credit
Corp. v. Rhyne, 925 S.W.2d
664, 666 (Tex.
1996)). And we have granted mandamus relief from orders issued under grants of
authority couched in permissive terms comparable to section 71.051(a) when trial
courts failed to adhere to guiding principles. For example, in In re Van Waters & Rogers, Inc., 145
S.W.3d 203, 206 (Tex. 2004), we granted mandamus relief from a trial court order
consolidating twenty cases for trial in a mass tort case. Under Rule 174 of the
Texas Rules of Civil Procedure, trial courts exercise broad discretion in
determining whether cases should be consolidated. When cases involve a common
question of law or fact, a court “may order a joint hearing or trial of any or
all the matters in issue,” “may order all the actions consolidated,” and “may
make such orders . . . as may tend to avoid unnecessary costs or delay.” Tex. R. Civ. P. 174(a). Despite Rule 174’s
permissive language, we concluded that mandamus relief was warranted in In re Van Waters because the trial court’s
consolidation order did not comport with the principles we have articulated that
must guide a court’s exercise of discretion under the rule. 145 S.W.2d at 210-11.
We identified the principles that guide application of the
forum-non-conveniens doctrine long ago, when we
embraced the analytical framework the United States Supreme Court articulated in
Gulf Oil. Flaiz, 359 S.W.2d at 874
(citing Gulf Oil, 330 U.S. at 508). While the Gulf
Oil test cannot be applied formulaically, the factors
to be considered are not difficult to name. An interest to be
considered, and the one likely to be most pressed, is the private interest of
the litigant. Important considerations are the relative ease of access to
sources of proof; availability of compulsory process for attendance of
unwilling, and the cost of obtaining attendance of willing, witnesses;
possibility of view of premises, if view would be appropriate to the action; and
all other practical problems that make trial of a case easy, expeditious and
inexpensive. There may also be questions as to the enforcibility of a judgment if one is obtained. The court
will weigh relative advantages and obstacles to fair trial. It is often said
that the plaintiff may not, by choice of an inconvenient forum, ‘vex,’ ‘harass,’
or ‘oppress’ the defendant by inflicting upon him expense or trouble not
necessary to his own right to pursue his remedy . . . .
Factors of
public interest also have place in applying the doctrine. Administrative
difficulties follow for courts when litigation is piled up in congested centers
instead of being handled at its origin. Jury duty is a burden that ought not to
be imposed upon the people of a community which has no relation to the
litigation. In cases which touch the affairs of many persons, there is reason
for holding the trial in their view and reach rather than in remote parts of the
country where they can learn of it by report only. There is a local interest in
having localized controversies decided at home. There is an
appropriateness, too, in having the trial of a diversity case in a forum
that is at home with the state law that must govern the case, rather than having
a court in some other forum untangle problems in conflict of laws, and in law
foreign to itself.
Gulf
Oil, 330 U.S. at 508.
There is obviously much overlap between the Gulf Oil factors and
those contained in section 71.051(b) of the Civil Practice and Remedies Code.
But that the Legislature chose to incorporate into section 71.051(b) some of the
specific concepts articulated in Gulf Oil does
not mean that the Gulf Oil considerations have no application and may be
entirely disregarded when deciding under section 71.051(a) whether “in the
interest of justice” another forum would be more appropriate. To the contrary,
the Gulf Oil test has guided courts for decades in determining whether a
case should be dismissed on forum-non-conveniens
grounds. And, because “‘[a]ll statutes are presumed to
be enacted by the [L]egislature with full knowledge of
the existing condition of the law and with reference to it,’” we presume that
the Legislature was aware of the test when it empowered courts to dismiss noncitizen suits in the interest of justice. Am.
Transitional Care Ctrs. of Texas, Inc. v.
Palacios, 46 S.W.3d 873, 878 (Tex. 2001)
(quoting McBride v. Clayton, 166 S.W.2d 125, 128 (Tex. 1943)).
B. The Gulf Oil Factors
1. Adequate Alternative Forum
The Gulf Oil factors presuppose that an adequate alternative forum
would have jurisdiction over the case. Gulf Oil, 330 U.S. at 507.
Pirelli maintains that Mexico
provides an adequate alternative forum because Pirelli has stipulated that it
will submit to personal jurisdiction in Mexico and will not assert any
statute-of-limitations defense based on time that has elapsed since the
Texas lawsuit
was filed. The Arans respond that Pirelli has failed
to establish that a Mexican forum is available, pointing to their expert’s
testimony that a law in the state of Tamaulipas, the
alternative forum for the Arans’ suit, “poses a
formidable obstacle” to an agreement renouncing prescriptive rights that have
not yet accrued. We note that the Arans nowhere state
that prescriptive rights have not yet accrued; if they have not, then
limitations would not appear to be an obstacle to the Mexican forum in the first
place. But in any event, the contingency that a Mexican court might not accept
Pirelli’s waiver does not overcome the important public and private interests
supporting dismissal that inhere in this case, particularly when the statute
authorizes the court to condition a dismissal order on the alternative forum’s
acceptance of jurisdiction. Tex. Civ.
Prac. & Rem. Code §
71.051(a). The federal courts commonly include such “return
jurisdiction” clauses in forum-non-conveniens
dismissal orders. See, e.g., Vasquez v. Bridgestone/Firestone,
Inc., 325 F.3d 665, 681 (5th Cir. 2003) (directing district court to modify
dismissal order to include return-jurisdiction clause).
The Arans also contend dismissal is
inappropriate here because, even if available, the Mexican forum is inadequate
in a number of respects. Although they acknowledge that Mexico provides
a cause of action akin to negligence, the Arans
contend a Mexican forum is inadequate because it does not afford a cause of
action for strict liability. The Arans contest the
Mexican forum’s adequacy on the additional grounds that its legal system does
not provide for a jury, no “American-style” discovery is available, and a
Mexican court could not compel the authentication of documents in the
United
States. The Arans
further contend Mexican law does not provide for survival damages and severely
restricts damages for death.
Presuming that the Arans’ portrayal of the
Mexican law is correct, we do not agree that a Mexican forum is thereby rendered
inadequate. That the substantive law of an alternative forum may be less
favorable to the plaintiff is entitled to little, if any, weight. Piper
Aircraft, 454 U.S. at 246-51. We agree with the
Fifth Circuit that “[a]n alternative forum is adequate if ‘the parties will not
be deprived of all remedies or treated unfairly, even though they may not enjoy
the same benefits as they might receive in an American court.’” Vasquez,
325 F.3d at 671 (quoting Gonzalez v. Chrysler Corp., 301 F.3d 377, 379-80
(5th Cir. 2002)). As the Fifth Circuit explained in Gonzalez:
[W]e start from basic principles of comity. Mexico, as a
sovereign nation, has made a deliberate choice in providing a specific remedy
for this tort cause of action. In making this policy choice, the Mexican
government has resolved a trade-off among the competing objectives and costs of
tort law, involving interests of victims, of consumers, of manufacturers, and of
various other economic and cultural values. In resolving this trade-off, the
Mexican people, through their duly-elected lawmakers, have decided to limit tort
damages . . . . It would be inappropriate — even patronizing — for us to
denounce this legitimate policy choice by holding that Mexico provides
an inadequate forum for Mexican tort victims.
301 F.3d at 381-82. Pirelli has demonstrated the availability
of an adequate alternative forum, and the factors that the Arans raise are immaterial to that assessment.
2. Private Interests
Pirelli argues that the private-interest factors identified in Gulf
Oil favor a Mexican forum for several reasons, and we agree. First, key
evidence and witnesses concerning damages are in Mexico. Benitez,
the only witness to the accident, together with the accident investigators and
all medical personnel are in Mexico. The witnesses most likely to
be familiar with the condition and maintenance of the truck and the tire, the
truck’s owner and its importer, are in Mexico. None of the Mexican witnesses
can be compelled to testify in Texas, and
several critical witnesses — Benitez, the truck’s owner, the importer of the
truck, and even one of the plaintiffs — have refused to be deposed here. While
compulsory process may be available under the Hague Convention, Pirelli
presented evidence that the process was time-consuming, uncertain as to result,
and unlikely to bear fruit in time for trial. The accident scene itself is in
Mexico. Moreover, evidence concerning
the tire’s design and manufacture is located not in Texas, but in Georgia or Iowa.
The Arans contend Pirelli has not demonstrated
that litigating in Cameron County would be vexatious or oppressive,
and has not shown that any burden on the corporation would substantially
outweigh their own convenience. But the Arans cannot
logically claim that it is more convenient for them to litigate in Texas than in Mexico. In fact, Felipa Aran Limas, Valentin’s mother, has refused to appear for a deposition in
Texas,
claiming she is unable to make the trip. It is undoubtedly true, as the Arans claim, that documentary evidence and expert reports
will have to be translated into Spanish if the case proceeds in
Mexico. But it is equally true that
all documents and testimony bearing on the accident and its cause, the condition
and maintenance of the truck and the tire, and damages, will have to be
translated into English if the case is tried in Texas. On balance, the private
interests that are implicated clearly favor the Mexican forum.
3. Public Interests
Factors regarding the public interest must also be considered in applying
the doctrine of forum non conveniens. Gulf Oil,
330 U.S. at 508. The public interests
involved here strongly favor Mexico. Mexico’s
interest in protecting its citizens and seeing that they are compensated for
their injuries is paramount. The safety of Mexican highways and products within
the country’s borders are also Mexican interests. On the other hand, it is
unfair to impose upon the citizens of Cameron County the cost and administrative burden of a complex
products-liability suit with no significant connection to Texas. As the Supreme
Court has stated, “[j]ury duty is a burden that ought
not to be imposed upon the people of a community which has no relation to the
litigation.” Gulf Oil, 330 U.S. at 508-09. The happenstance that
the truck was in Texas for eleven days before
it was sold and imported to Mexico is simply insufficient to provide
Texas with any
interest in this case.
In sum, the factors the Supreme Court articulated in Gulf Oil
clearly and overwhelmingly favor a Mexican forum for resolution of this dispute.
In light of the evidence presented, the trial court’s denial of Pirelli’s motion
was arbitrary, unreasonable, contrary to guiding rules and principles, and
constituted a clear abuse of discretion.
IV. Inadequate Remedy by Appeal
We have held that there is no adequate remedy by appeal when a trial
court refuses to enforce a forum-selection clause. In re
Prudential Ins. Co. of Am., 148 S.W.3d 124, 138 (Tex. 2004).
Erroneous denial of a forum-non-conveniens motion is
closely analogous, and for the same reasons cannot be adequately rectified on
appeal. We conclude that Pirelli has no adequate remedy by appeal, and
conditionally grant mandamus relief.
*
* *
For the foregoing reasons, we conditionally grant Pirelli’s petition for
writ of mandamus, and direct the trial court to dismiss the case in accordance
with our opinion. The writ will issue only if the trial court fails to
comply.
___________________________________
Harriet O’Neill
Justice
OPINION DELIVERED:
November 2, 2007