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Media Alerts - Ayco Farms, Inc. v. Ochoa
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October 3, 2017
  Ayco Farms, Inc. v. Ochoa
Headline:
Ninth Circuit panels holds (1) that in performing a forum non conveniens analysis, a district court does not abuse its discretion by comparing the proposed foreign forum with the particular State forum that the plaintiff actually chose, rather than with the United States as a whole, and (2) a U.S. citizen plaintiff is entitled to less deference in his choice of forum if he does not reside in that forum.

Areas of Law:
Civil Procedure; Forum Non Conveniens

Issues Presented:
(1) Whether, when balancing private and public interests under the doctrine of forum non conveniens, the court should weigh the burdens and benefits of litigating in a foreign country against the burdens and benefits of litigating in a particular state, or in the United States as a whole. (2) Whether a district court acts within its discretion when it affords less deference to a U.S. plaintiff's choice of forum when the plaintiff is not a citizen of the forum State.

Brief Summary:
Plaintiff Ayco Farms, a Florida corporation with its headquarters in Florida partnered with two Mexican nationals to create a new business entity that would buy and grow produce which Ayco would market and sell on an exclusive basis. Ayco filed suit in the Central District of California alleging breach of the exclusivity agreement. The district court granted defendants' motion to dismiss on forum non conveniens grounds. Affirming the district court's ruling, the Ninth Circuit panel held that the district court did not abuse its discretion in comparing the burdens and benefits of litigation in Mexico and California rather than the burdens and benefits of litigation in Mexico and the United States as a whole. The panel also held that the district court did not err in affording a Florida plaintiff's choice to file its lawsuit in California less deferance, ruling that "a U.S. citizen plaintiff is entitled to less deference in his choice of forum if he does not reside in that forum."

Significance:
(1) In balancing private and public interests under the doctrine of forum non conveniens, the court should weigh the burdens and benefits of litigating in a foreign country against the burdens and benefits of litigating in a particular state, not in the United States as a whole. (2) A district court acts within its discretion when it affords less deference to a U.S. plaintiff's choice of forum when the plaintiff is not a citizen of the forum State.

Extended Summary:
Ayco Farms, Inc. ("Ayco"), a business incorporated and headquartered in Florida, markets and sells produce throughout the United States. In 2012, Ayco partnered with two individuals to establish Ayco Farms Mexico ("AFM"), a business that would purchase and grow produce, and give Ayco Farms the exclusive right to market and sell their produce worldwide. The two individuals - Guillermo Rodriguez Ochoa and Manuel Del Toro Chavez - are citizens of Mexico and officers of Operadora de Productos Frescos, SA de CV ("OPF"), a company headquartered in Mexico that helps Mexican farmers import produce to the United States. Ochoa and Chavez agreed to assign OPF as AFM's agent until AFM became more established.

In 2014, two years after the partnership was established, OPF sued Ayco in Mexico for failure to properly establish AFM and honor its promises. Ayco then filed suit in the U.S. District Court for the Central District of California, alleging breach of an agreement to give Ayco exclusive rights to its products.

Ochoa and Chavez moved to dismiss under forum non conveniens doctrine. Ayco subsequently opened a California office. The district court granted Chavez's and Ochoa's motion to dismiss with several conditions, concluding that (1) Mexico was an adequate alternative forum; (2) the private and public interest factors identified in Gulf Oil Corp. v. Gilbert favored dismissal; and (3) less deference to Ayco's choice of forum was warranted due to Ayco's lack of contact with California.

On appeal, the Ninth Circuit panel held that the doctrine of forum non conveniens is generally applied by comparing the benefits and burdens of litigation in a foreign country against those of a particular state rather than the U.S. as a whole. The panel reasoned that, due to the vast differences among states, it would be difficult and impracticable for a district court to consider all Gulf Oil factors for the United States as a whole. While recognizing that there may be cases in which a simple application of the Gulf Oil factors could favor or oppose litigation in a foreign country, the panel concluded that district courts may use discretion in addressing the issue on a case-by-case basisThe panel ruled that the district court did not abuse its discretion here "by comparing the proposed foreign forum with the forum that the plaintiff actually chose, rather than with the United States as a whole.".

The panel also determined that, despite a plaintiff's general entitlement to deference in its choice of forum, especially an American plaintiff, this deference is not absolute and a mere showing of American citizenship is not in itself sufficient to bar a district court from granting a forum non conveniens dismissal. Moreover, the panel followed the Second Circuit en banc reasoning where "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." Vivendi SA v. T-Mobile USA Inc., 586 F.3d 698, 695 (9th Cir. 2009) (quoting Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001) (en banc)). The panel held that the district court acted within its discretion when it viewed Ayco's choice of forum with skepticism, affording it less deference because it was evident that Ayco's contacts with California were limited and that Ayco was attempting to establish connections with the state by opening an office within its jurisdiction during the month in which both parties presented oral arguments on respondents' motion to dismiss.

Moreover, the panel rejected Ayco's argument that the district court erred in concluding that the Gulf Oil factors favored a trial in Mexico, ruling that Ayco failed to provide evidence of any private factors or public interests favoring trial in California.

To read the full opinion, please visit: http://cdn.ca9.uscourts.gov/da...017/07/10/15-55611.pdf

Panel: Richard C. Tallman and Michelle T. Friedland, Circuit Judges; and David A. Faber, District Judge

Argument Date: January 9, 2017

Date of Issued Opinion: July 10, 2017

Docket Number: 15-55611

Decided: Affirmed

Case Alert Author: Christine Mardikian

Counsel: Paul S. Marks (argued) and Yuriko M. Shikai, Neufeld Marks, Los Angeles, California, for Plaintiff-Appellant. Timothy D. Biche (argued), Diyari Vásquez, and Gerald E. Hawxhurst, Crone Hawxhurst LLP, Los Angeles, California, for Defendant-Appellee.

Author of Opinion: Per Curiam Opinion
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Circuit: Ninth
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Case Alert Supervisor: Professor Glenn S. Koppel

    Posted By: Glenn Koppel @ 10/03/2017 04:58 PM     9th Circuit  

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