The Eighth Circuit Court of Appeals recently reversed a District Court’s dismissal on forum non conveniens grounds, finding that the motion to dismiss was untimely. The Court of Appeals held that the Defendants undermined their own inconvenience arguments by litigating in the forum for 18 months before filing their motion.
The doctrine of forum non conveniens arose out of due process concerns that defendants from across the country (or indeed the world) can be hauled into federal court in far-flung jurisdictions having no significant connection to the case. Courts are also concerned that attractive districts will face the undue financial burden of supporting litigation of claims of no significant interest to the district. Practitioners in the Eastern District of Missouri are no doubt well-versed on these concerns.
Defendants can obtain dismissal of a lawsuit filed in an inconvenient forum. But forum non conveniens is mentioned neither in Rule 12 nor anywhere else in the Federal Rules of Civil Procedure, and courts have often held that such motions can be filed at any time, even on the day of trial. If there is no set deadline for when the motion to dismiss must be filed, how can such a motion ever be untimely?
The Court of Appeals attempted to answer that question in Hersh v. CKE Restaurants, Holdings, Inc., No. 19-2794 (Apr. 28, 2021). It held that those seeking to dismiss on forum non conveniens grounds must show that it is actually inconvenient to litigate in the current forum and such a showing should be made at a reasonably early time, lest defendants inadvertently undermine the purported “inconvenience” of litigating in the forum.
The Court of Appeals found that the District Court abused its discretion in granting a motion to dismiss on forum non conveniens grounds. To dismiss on forum non conveniens grounds, the movant must establish that an adequate alternative forum exists. This is essentially any forum in which the defendant can be served. Then the court weights private-interest factors (e.g., location of the parties, attorneys, evidence, and witnesses) and public-interest factors (e.g., choice of law issues, court resources, and strains on the jury pool) to determine whether dismissal is appropriate. The overriding goal is to ensure that the forum is convenient.
The Hersh case involved a little boy who was playing in a restaurant playground in Amman, Jordan, and was tragically electrocuted by an exposed wire. The case was filed in the Eastern District of Missouri, the restaurant holding company’s home. Yet, the Plaintiffs, several of the Defendants, and most of the witnesses were located in Jordan. Plaintiffs’ attorneys were located in Michigan. Other potential defendants to implead were located in Jordan and not subject to personal jurisdiction in Missouri. Jordanian law would govern the wrongful death claims and the standard of care. Documents and testimony would have to be translated from Arabic. On these grounds, and others, the District Court granted defendants’ motion to dismiss for forum non conveniens. At first blush, the District Court’s ruling appeared completely reasonable. However, the Court of Appeals held that the District Court abused its discretion and reinstated the case in St. Louis.
According to the Court of Appeals, 18 months was just too long to wait to file a motion to dismiss based on forum non conveniens, because all of the factors supporting dismissal were available to the defendants much earlier on in the case. In fact, virtually all of the factors identified by the District Court were apparent or ascertainable from the face of the Complaint. The Court of Appeals did not decide whether timeliness is a public- or private-interest factor, or a separate independent consideration, and did not elaborate further on what constitutes a reasonable amount of time.
The Court of Appeals cited In re Air Crash Disaster near New Orleans, 821 F.2d 1147, 1165 (5th Cir. 1987), but did not explicitly adopt its straightforward and well-articulated rule: “a defendant must assert a motion to dismiss for forum non conveniens within a reasonable time after the facts or circumstances which serve as the basis for the motion have developed and become known or reasonably known to the defendant.” Had the Court adopted this guideline, it might better serve practitioners in evaluating the timeliness of their motions.
Although most cases will not have the forum non conveniens issues set out as dramatically as in Hersh, practitioners can take a few lessons from the Court of Appeals opinion.
First, if you have considered a motion to dismiss for lack of personal jurisdiction, or if the court has personal jurisdiction only because of a long-arm statute, then you should consider forum non conveniens.
Second, evaluate how discovery is progressing early on. If you find that every interview, deposition, accident site visit, or expert consultation involves an associate flying across the country, the current forum may be inconvenient. Go ahead and file your motion now.
Third, nothing in the Court of Appeals’ opinion precludes a motion to dismiss where new information turns up in discovery. However, act quickly once new information arises.
Finally, evaluate the alternative forum. In most cases, as in Hersh, the movant is precluded from challenging jurisdiction in the new forum.
Here, the District Court’s opinion seemed quite persuasive. If not for the passage of 18 months, the Court of Appeals likely would have upheld the dismissal. However, for the Court of Appeals, by litigating in the forum for 18 months, defendants apparently proved that the forum was not inconvenient, after all.
Does an Arbitration Clause Have to Provide for Equivalent Rights and Remedies to Both Sides, in Order to Be Enforceable?April 30, 2021 | John Brooks
The Missouri Court of Appeals for the Southern District recently reversed a Circuit Court decision that denied a corporate defendant’s motion to compel arbitration, in Keeling v. Preferred Poultry Supply, LLC. Plaintiff Brandon Keeling sued Preferred Poultry Supply, alleging breach of contract, fraudulent misrepresentation, and negligent misrepresentation. Preferred Poultry and Keeling entered into a written contract in May of 2016. Preferred Poultry agreed to construct six broiler chicken buildings on Keeling’s poultry farm in Newton, Missouri in exchange for a payment of $2,048,321.00.
Following construction of the buildings, Keeling sued Preferred Poultry. Keeling alleged that he discovered defects related to the construction and repairs would cost in excess of $745,516.00. Keeling also alleged Preferred Poultry made false and misleading representations to Keeling. In response, Preferred Poultry filed a combined dispositive motion: a motion to dismiss, or in the alternative, motion to order arbitration. Preferred Poultry attached the contract between Keeling and Preferred Poultry to its motion and highlighted the arbitration clause of the contract, titled “BINDING ARBITRATION”:
All claims, disputes and matters in question arising out of or relating to this Contract or any claimed breach of this Contract shall be decided by binding arbitration in accordance with the Uniform Arbitration Act in force in Arkansas . . . . This agreement to arbitrate shall be specifically enforceable under the Federal Arbitration Act since this Contract involves interstate commerce. . . . The location of the arbitration proceedings shall be in Fayetteville, Arkansas. . . . Any award of arbitration may be entered in the Circuit Court for Washington County, Arkansas and will have the force of a judgment from that court.
The contract provided that Arkansas law would govern disputes between Keeling and Preferred Poultry. The trial court denied Preferred Poultry’s motion to compel arbitration. Preferred Poultry appealed that denial. Missouri law allows the right to an immediate appeal of an order denying a stay of proceedings relating to a matter that may be arbitrable. If Preferred Poultry had not appealed, the case would have continued in Newton County Circuit Court through the completion of a trial.
On appeal, Keeling first challenged Preferred Poultry’s appeal as premature. Typically, a party may only appeal a final judgment which disposes of all issues in a case. But Missouri law (§ 435.440.1(1), RSMo.), federal law (9 U.S.C.A. § 16(a)(1)(C)), and Arkansas law (Ark. Code Ann. § 16-108-228(a)(1)) all specifically allow an appeal from an order denying an application to compel arbitration. The appellate Court applied Missouri law and deemed the appeal timely.
Keeling also argued that his tort claims for negligent misrepresentation and fraudulent misrepresentation should not be arbitrated because under Arkansas law, tort claims are not subject to arbitration. The appellate Court disagreed. The Court cited Riley v. Lucas Lofts Investors, LLC, 412 S.W. 3d 285, 290 (Mo. App. E.D. 2013), as well as Arkansas case law, and concluded that Keeling’s claims all related to the contract with Preferred Poultry.
Even though Keeling characterized his some of his claims as tort claims, the Court determined that he could not avoid the arbitration provision. The Court noted that Keeling’s tort claims both sought damages, as opposed to rescission of the contract. Under Missouri law, when damages are sought for claims of poor workmanship, those claims are typically subject to arbitration.
Finally, the Court reviewed the arbitration clause in the contract to determine whether it was enforceable. Keeling argued that the arbitration agreement was invalid because the arbitration clause allowed Preferred Poultry to pursue all available rights under any state law, including filing a lien upon Keeling’s property. Keeling, however, was limited to arbitration as a remedy. Keeling argued this clause created a non-mutual obligation.
The appellate Court rejected this argument. The appellate Court noted that the Federal Arbitration Act does not require mutual obligations to arbitrate. Furthermore, the Court reviewed both Arkansas law and Missouri law, and noted that both states allow non-identical obligations in contracts as a whole, as long as the contract contains sufficient consideration. The appellate Court cited Eaton v. CMH Homes, Inc., 461 S.W.3d 426, 431 (Mo. banc 2015), where the Missouri Supreme Court found that the trial court erred in denying the defendant’s motion to compel arbitration. The appellate Court noted that the arbitration clause in Eaton similarly allowed only the contractor the option to pursue other remedies beyond arbitration, including foreclosure. In Eaton, as here, there was sufficient consideration on both sides: the contractor in Eaton (and Preferred Poultry) agreed to provide a building, and the buyer (and Keeling) agreed to pay a set amount for the building.
Accordingly, the appellate Court reversed and remanded the case to the trial court, with directions to refer the case to arbitration, because the parties’ arbitration agreement was valid and enforceable.
The key takeaway from the Court’s decision is that arbitration clauses are enforceable under Missouri law, even where they are more favorable to one party, provided there is consideration on both sides. Arbitration is often less expensive than a trial because the rules of evidence are more informal and there is no jury panel. A party in arbitration can spend less time preparing for trial and navigating written discovery. The appellate Court’s decision here emphasizes that when both parties agree to arbitration as the forum for resolving their disputes, that contractual agreement will ordinarily be enforced. Keeling and Preferred Poultry agreed to arbitration, and Preferred Poultry was able to successfully enforce arbitration.
Open and obvious: "both the condition and the risk are apparent to and would be recognized by a reasonable man . . . exercising ordinary perception, intelligence, and judgment."
The Missouri Court of Appeals for the Western District reversed and remanded Michael Lee v. Missouri Department of Transportation, a wrongful death lawsuit, back to the Circuit Court of Boone County, Missouri. Michael Lee appealed a dismissal by the trial court of his Third Amended Petition, alleging wrongful death claims for the death of his daughter against the Missouri Highway and Transportation Commission (MHTC).
The claims arose from a tragic accident involving Mr. Lee’s daughter and his grandchild who were ultimately unable to escape a flooded area on a road where they were driving one early morning. Mr. Lee’s granddaughter was following another vehicle just before the tragic incident, she stopped, just as the other vehicle did, to examine the flooded portion of the road, before unsuccessfully attempting to drive through the flooded area.
Mr. Lee alleged that the portion of the roadway at issue was known to MHTC as a flood hazard, that MHTC failed to provide adequate barriers or guardrails to keep vehicles from being swept off the roadway, and failed to provide adequate warnings that the road would flood.
The Court dismissed Plaintiff’s Petition, after MHTC filed a combined dispositive motion, seeking alternative forms of relief (Motion for Judgment on the Pleadings; Motion to Dismiss; Motion to Strike), arguing that that the flooded roadway was an open and obvious condition and that Mr. Lee’s daughter had a duty to exercise reasonable care for her own safety. The trial court ruled that dismissal was proper due to Plaintiff’s own pleadings and the reasonable inferences therefrom indicating that Mr. Lee’s daughter “saw the danger, examined the danger and decided to proceed anyway.”
On appeal, Mr. Lee first asserted the trial court failed to consider the facts pleaded and the reasonable inferences from the Petition in the light most favorable to Mr. Lee, as the non-moving party. The appellate Court focused on whether the Petition adequately set forth the elements to support a claim of imposing liability on a possessor of land (MHTC) for injuries sustained by an invitee (Mr. Lee’s daughter) due to conditions on that land, i.e.:
(a) MHTC knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and
(b) MHTC should expect that they will not discover or realize the danger or will fail to protect themselves against it, and
(c) Invitee (Mr. Lee’s daughter) fails to exercise reasonable care to protect them against the danger.
The ultimate question for the Court thus became whether Mr. Lee’s daughter should have realized the danger posed by the flooded condition of the roadway. The trial court ultimately concluded the cause of action fell under a case called Harris v. Niehaus, 857 S.W.2d at 224, which involved another tragic accident in which a mother lost her three children to drowning after her vehicle, parked on a sloped roadway, rolled down the street and into a lake that was plainly visible (aka open and obvious) to the mother.
The appellate Court in Lee, however, found the case to be distinguishable from Harris, concluding that evidence that needed to be considered could be presented at trial and a juror could infer whether it was reasonable or safe to cross the roadway. In other words, the Court ruled in favor of Mr. Lee on Point 1, finding that what is reasonable is for a jury to decide.
Mr. Lee’s second point on appeal focused on the trial court failing to properly construe and apply the meaning of section 343A of the Second Restatement of Torts. Specifically, he argued the Petition properly alleged that MHTC should have anticipated the harm despite any knowledge or obviousness that may have existed on the part of his daughter.
As explained by the Court, even if the flooded roadway was open and obvious, if the jury determined that MHTC should have anticipated the harm, then it would still be liable. The Court found that the Petition adequately alleged that MHTC was aware of certain issues of flooding with the roadway, as well as ingress and egress of local residents on that roadway. Agreeing with the Plaintiff, the Court found reasonable minds could differ on the facts surrounding roadway flooding, and it was up to the jury to determine whether the possessor of land should have anticipated harm to an invitee despite the open and obvious hazard.
So what does this all mean?
As defense lawyers, we are generally pleased to see successful trial court outcomes in cases of this type. Frankly, however, the Court of Appeals ruling in this case did not come as much of a surprise.
When considering a motion to dismiss in Missouri, the trial court reviews the Petition and the facts stated within its four corners in a light most favorable to the non-moving party (typically the Plaintiff), also giving all reasonable inferences in favor of the non-moving party. However, in this case, the trial court appeared to give the inferences to the defendant, ultimately finding that the open and obvious doctrine supported dismissal at the pleading stage. While we are aware of cases that were ultimately resolved in favor of the defendant based on the open and obvious doctrine, including the appellate case the trial court relied on to support dismissal, such cases typically have a greater developed factual record that has been before the Court and/or the jury.
The procedural posture of this case was somewhat unusual. The Plaintiff, Michael Lee, appears to have had two separate cases – one for his grandchild and the present case for his daughter. The case brought for the death of Michael Lee’s grandchild was dismissed (affirmed on appeal) for various reasons. Curiously, however, in this case, MHTC did not raise the open and obvious issue as an affirmative defense to prior amended Petitions, which made the same allegations. It was only when Mr. Lee amended to fix another problem with his prior Petitions that MHTC raised this argument along with other defenses. In addition, there appears to have been discovery, depositions, and more motions, but none of that was part of this appellate record, because the defendant sought to have the case disposed of via a Motion to Dismiss, rather than a Motion for Summary Judgment (which focuses on undisputed facts elicited in discovery, rather than the legal sufficiency of Plaintiff’s Petition).
In any event, Michael Lee v. Mo. Dept. of Transp. is back before the trial court, and it remains to be seen what will happen next. Unless the case is settled, a jury may well get to decide what is “open and obvious” and reasonable.
About Missouri Law Blog
The BSCR Missouri Law Blog examines significant developments, trends and changes in Missouri law on a broad range of topics of interest to Missouri practitioners and attorneys and businesses with disputes subject to Missouri law. Learn more about the editor, David Eisenberg.
The Missouri Law Blog is made available by Baker Sterchi Cowden & Rice LLC for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. Your use of this blog site alone creates no attorney client relationship between you and the firm.
Do not include confidential information in comments or other feedback or messages related to the Missouri Law Blog, as these are neither confidential nor secure methods of communicating with attorneys. The Missouri Law Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.