The diversity action before us on this appeal has wended its way through the federal court system for 11 years, having been before us twice, once in 1988 and again in 1991, and before the district court three times. It was commenced in 1985 by plaintiffs Scottish Air International, Inc. (a dissolved New York corporation) and Murray Vidockler against British Caledonian Group pic, a Scottish public limited company, and three British subjects who are among that company’s former directors.
Plaintiffs appeal from a judgment entered in the United States District Court for the Southern District of New York (Kram, J.) dismissing their action on forum non conveniens grounds. Plaintiffs also appeal from the district court’s order granting summary judgment to defendants with respect to plaintiffs’ claim that defendants are in contempt of a district court order embodying a settlement agreement between the parties and others. In deciding where a trial should be held the central notions of the doctrine of forum non conveniens are the convenience of the parties and their witnesses and that justice be served. In affirming the district court’s dismissal under that doctrine and bringing the long odyssey of this case to an end, we believe those notions have been furthered.
The facts underlying this litigation have already been detailed in
Scottish Air Int’l, Inc. v. British Caledonian Group, PLC,
BACKGROUND
A. Organizing An Airline
In 1961 a group of Scottish investors, including defendants Adam Thomson and Dennis H. Walter, organized Caledonian Airways (Prestwick) Ltd. (“Caledonian Air”) under the laws of Scotland. Their goal was to operate a worldwide charter airline service. The same group of Scottish investors formed a company called Airline Interests (Thomson) Ltd. (“Airline Interests”) as a holding company for the shares of Caledonian Air. At the same time, a group of American investors, which included plaintiff Murray Vidock-
A few years after getting this charter air service off the ground, Scottish Air’s role in managing the enterprise came into dispute. In 1965 trouble arose between Scottish Air’s shareholders and the principals of Caledonian Air and Airline Interests. Scottish Air brought a shareholder derivative suit in New York State Supreme Court (New York County) against Caledonian Air and several of its directors. Following the removal of the action to the United States District Court for the Southern District of New York, Scottish Air agreed to the dismissal of the action under the terms of a settlement agreement. The settlement — signed on January 28, 1966 by Vidockler as president of Scottish Air and by Thomson on behalf of Airline Interests, Caledonian Air, and its other directors — provided that Caledonian Air must appoint an individual nominated by Scottish Air to sit on Caledonian Air’s board of directors for as long as the former held shares in the latter.
See Scottish Air V,
Four years later, Airline Interests acquired British United Airways Ltd., a regular-service airline. In an October 9, 1970 letter to Caledonian Air shareholders, Thomson explained that the acquisition was to be accompanied by a corporate restructuring to avoid unfavorable tax consequences for the holders of Airline Interests shares. Under the reorganization, Caledonian Air shareholders — including Scottish Air — relinquished their Caledonian Air shares in exchange for shares in Airline Interests. Thus, Scottish Air continued to have a stake in the charter and regular-service airline businesses, but no longer directly controlled any of the shares in Caledonian Air; all of the stock it held was now Airline Interests stock. Vidockler held a seat on Caledonian Air’s board of directors until the 1970 reorganization. In addition, although the 1966 settlement agreement did not guarantee Vidockler or any Scottish Air designee a seat on the board of directors of the holding company, Vidockler also held a seat on the Airline Interests board until 1985.
In 1984 Airline Interests was renamed Caledonian Aviation Group pic (“Caledonian Aviation”). The board of Caledonian Aviation passed a resolution mandating retirement of its directors at age 65. Vidockler was informed that he would not be nominated for another term. Vidockler — then age 65 — refused to step down voluntarily. The shareholders of Caledonian Aviation ousted him in 1986. While this election was pending, Vidockler and Scottish Air instituted the instant lawsuit in the Southern District of New York, seeking a declaration that Caledo-nian Aviation was in contempt of Judge Bonsai’s May 25, 1966 order and that Scottish Air was entitled to a representative on Cale-donian Aviation’s board. Plaintiffs also sought damages for breach of the settlement agreement.
Lengthy legal proceedings ensued, following which plaintiffs’ original counsel withdrew from the case. In 1986 Caledonian Aviation once again changed its name, this time to British Caledonian Group pic (“British Caledonian”). Plaintiffs subsequently filed an amended complaint alleging that defendants had breached other agreements in addition to the 1966 settlement agreement. The amended complaint included new allegations: that the parties had agreed in 1966 that Scottish Air would be represented on the Airline Interests board as well as the board of Caledonian Air, the latter of which, of course, was provided in the settlement agreement; that the parties agreed in 1970, at the time of the corporate restructuring, that Scottish Air’s right to a seat on the board of Caledonian Air would thereafter
B. History of Prior Proceedings
On April 15, 1988 the district court (Edelstein, J.) ordered the dismissal of plaintiffs’ action under the doctrine of
forum non conveniens.
On appeal we remanded the case to the district court, reasoning that it had failed to consider plaintiffs’ contempt and breach-of-contract causes of action and instead had focused exclusively on plaintiffs’ claim for injunctive relief. See
Scottish Air I,
On remand, Judge Edelstein denied plaintiffs’ motions to amend their complaint and to join British Airways as a necessary party.
Scottish Air II,
When plaintiffs appealed, we once again were forced to remand because the district court had not given plaintiffs the notice required before granting summary judgment to defendants under Fed.R.Civ.P. 56(c).
See Scottish Air III,
In an order dated March 22, 1995 Judge Kram dismissed the remainder of the action on the basis of the
forum non conveniens
doctrine, for the reasons set forth in
Scottish Air IV,
ANALYSIS
I Contempt of the 1966 Order— Summary Judgment
We turn first to Judge Kram’s grant of summary judgment dismissing plaintiffs’ contempt of court cause of action. Plaintiffs assert that for denying Scottish Air the right to a representative on the board of directors of British Caledonian, defendants should be held in contempt of Judge Bonsai’s May 25, 1966 order, which incorporated the settlement agreement between Vidockler, Thomson, and others. In response, defendants correctly point out that the settlement agreement entitles Scottish Air to representation on the board of Caledonian Air, not British Caledonian. Plaintiffs argue, however, that
To be entitled to summary judgment, the moving party must demonstrate that there is no genuine issue of material fact for trial and that it is entitled to judgment as a matter of law.
See
Fed.R.Civ.P. 56(c);
Celotex Corp. v. Catrett,
In his May 25, 1966 order dismissing the shareholder derivative action, Judge Bonsai ordered the effectuation of the settlement between the parties in accordance with the terms of the January 28,1966 settlement agreement. The terms of the settlement were incorporated into the order, so that breaching the agreement would at the same time violate the order.
See Kokkonen v. Guardian Life Ins. Co. of Am.,
— U.S. -, -,
To support their assertion that material questions of fact precluding the grant of summary judgment for defendants exist, plaintiffs cite several portions of a January 19, 1994 affidavit of plaintiff Murray Vidockler. First, they maintain that “a key provision in this [1966] settlement from the perspective of [Scottish Air] was the recognition of [Scottish Air’s] right to have a director with executive responsibilities on the board of the joint venture airline” and that this right is set forth in the settlement agreement. Second, plaintiffs contend, the 1970 corporate reorganization involved the transfer of Caledonian Air’s management functions to Airline Interests (the entity that is now British Caledonian); all of Caledonian Air’s directors became directors of Airline Interests and all its shareholders became shareholders of Airline Interests. Third, plaintiffs insist that Thomson acknowledged in 1970 that Scottish Air’s right under the 1966 settlement agreement “continued, unaffected by the corporate reorganization, except that the corporate entity to which the right applied was [British Caledonian].”
Defendants have amply demonstrated that there is no evidence to support the claim that their conduct was in contempt of Judge Bonsai’s order. Caledonian Air and Airline Interests (now called British Caledonian) were both in existence when the settlement agreement was signed, and both were parties to the agreement. The agreement simply gives Scottish Air the right to a seat on the board of “Caledonian,” which it clearly defines as “Caledonian Airways (Prestwick), Ltd.” Plaintiffs’ evidence shows that the parties were aware of the possibility of giving Scottish Air a seat on Airline Interests’ board as well — Vidockler cites an exchange of telexes in February 1966 in which he asked Thomson to confirm an understanding that “[Scottish Air] will have [a] director on [Airline Interests’] as well as Caledonian[’s] board” (emphasis added). The settlement agreement, however, gave Scottish Air a seat only on Caledonian Air’s board, not on Airline Interests’ board.
Hence, Vidockler’s statement that representation on the board of the “joint venture airline” was one of Scottish Air’s— his New York corporation’s — primary purposes in entering the 1966 agreement is not material to the issue of contempt. The settlement agreement that plaintiffs negotiated included no such provision, and the district court properly refused to amend the agreement by supplying it.
Cf. Hughes v. United States,
Vidockler’s declaration that management functions were transferred from Caledonian Air to its holding company Airline Interests during the 1970 corporate reorganization is also immaterial. The settlement agreement gave Scottish Air the right to a seat on Caledonian Air’s board, not on the board of any entity that would later assume responsibility for its operations. In addition, the parties to the 1966 agreement chose not to include a “successors and assigns” provision. Nothing in the record shows that the termination of Caledonian Air’s operations was designed to evade defendants’ obligations. Instead, Vidockler’s affidavit and other documents submitted to the district court themselves suggest that the 1970 reorganization was prompted by tax concerns.
Moreover, the assertion that Thomson made assurances in 1970 that Scottish Air’s right to a seat on Caledonian Air’s board would apply to Airline Interests is not pertinent. Such. an event occurring four years after Judge Bonsai’s May 25, 1966 order could not effectively modify it. Even had Vidockler’s ouster from British Caledonian’s board in 1984 constituted a violation of an agreement reached in 1970, there would be no basis for finding that defendants acted in contempt of the 1966 order. Under the terms of the settlement agreement, Scottish Air’s right to a seat on Caledonian Air’s board expired in 1970 when the former relinquished all its shares in the latter. Any subsequent promise by Thomson that Scottish Air would be represented on the board of a different entity is distinct from the 1966 order incorporating the settlement.
See United States v. American Cyanamid Co.,
II Forum Non Conveniens
A. In General
If plaintiffs’ claim of contempt were viable, the Southern District of New York might well have been a convenient forum for this litigation.
Cf. Scottish Air IV,
A decision to grant or deny a motion to dismiss a cause of action under the doctrine of
forum non conveniens
lies wholly within the broad discretion of the district court and may be overturned only when we believe that discretion has been clearly abused.
See Overseas Nat’l Airways, Inc. v. Cargolux Airlines Int’l, S.A.,
Under the
forum non conveniens
doctrine, a district court may dismiss a ease “when an alternative forum has jurisdiction to hear the case, and when trial in the chosen forum would ‘establish ... oppressiveness and vexation to a defendant ... out of all proportion to plaintiffs convenience,’ or when the ‘chosen forum [is] inappropriate because of considerations affecting the court’s own administrative and legal problems.’ ”
Piper Aircraft Co. v. Reyno,
Several private and public interest factors must be weighed in deciding
a forum non conveniens
motion. The factors, set forth by Justice Jackson in
Gulf Oil Corp. v. Gilbert,
A plaintiffs choice of forum should not lightly be disturbed.
See Piper Aircraft,
B. Private Interest Factors
In
Scottish Air II,
Judge Edelstein evaluated the private and public interest factors and found them weighted heavily in favor of dismissing the action.
See
Plaintiffs object to the district court’s finding that most of the potential witnesses are in Great Britain. They declare that several of these people reside in New York and are within the jurisdiction of the district court. But such assertion is unsupported. Apart from the 1966 settlement agreement — which, as explained above, was not breached — all of the alleged assurances and agreements took place in Great Britain, and the improper actions alleged in the amended complaint were taken by British Caledonian’s former directors, most of whom reside in Great Britain. Plaintiffs’ contention that the district court ignored several potential U.S. witnesses is, on this record, more wishful than real.
Plaintiffs also point out that any witnesses located outside the district court’s jurisdiction can be deposed if they will not appear voluntarily. Even if this is true, it still was not error for the trial court to find that obtaining testimony would be inconvenient for the parties.
See Scottish Air II,
In addition, most — if not all — relevant documents are located in Great Britain. Although plaintiffs apparently concede that this was true when Judge Edelstein so found, they maintain that they received numerous documents in the course of discovery in a separate action between Scottish Air and Leonard Bebchick, British Caledonian’s counsel, in the Eastern District of New York. As a result, they aver, no additional documents are needed from Great .Britain. This blithe assertion, however, is contradicted by the fact that plaintiffs have sought additional documents from Great Britain since the action in the Eastern District of New York was settled.
We also reject plaintiffs’ contention that the district court improperly relied on the unenforceability of an injunction giving Vidockler a seat on the British Caledonian board. The district judge explicitly recognized the plaintiffs’ argument that the claim for injunctive relief had become moot,
Scottish Air IV,
Similarly, despite plaintiffs’ argument that British Airways has undertaken to ensure the payment of any money judgment against British Caledonian, the district court’s reliance on the unenforceability of a damages award does not warrant reversal. Because British Airways has not agreed to stand behind the individual defendants, the possibility that the guarantee will reduce the potential inconvenience is speculative. In sum, it was not an abuse of discretion to conclude that the private interest factors weigh heavily in favor of dismissal.
C. Public Interest Factors
With respect to the public interest factors, the trial court emphasized that New York has little interest in this litigation. Great Britain, on the' other hand, “has a substantial interest in determining the legal rights to seats on the board of directors of a Scottish corporation.”
Scottish Air II,
When deciding
a forum non conveniens
motion, a court may properly rely on the difficulties attending the resolution of questions of foreign law.
See Schertenleib v. Traum,
In the first place, the instant suit involves at least some matters of internal corporate governance, such as the enforceability of an agreement entitling a shareholder to representation on a board of directors, regardless of the remedy sought by plaintiffs. Second, even leaving aside matters of internal governance, British law would likely apply to all the other issues in the suit. Although plaintiffs contend that the relevant agreements provided that New York law would apply, the only explicit choice-of-law provision appeared in the 1966 settlement agreement. As already explained, plaintiffs have no valid claim that Vidockler’s ouster from the British Caledonian board constituted a breach of the 1966 agreement. The choice-of-law clause is therefore irrelevant. Any contractual liability would necessarily be based on subsequent transactions, which in a New York court would almost certainly be governed by British law because Great Britain “has the most significant contacts with the matter in dispute.”
Auten v. Auten,
Third, it was also appropriate to take into account that Great Britain has a more substantial interest because the litigation involves the right to a seat on the board of directors of a Scottish corporation. Although courts must not decline to exercise jurisdiction solely to avoid deciding matters involving foreign corporations,
see Koster,
Plaintiffs also complain that the district court ignored various advantages of a New York forum, including the plaintiffs’ ability to retain American lawyers familiar with the case, the benefit of a sympathetic jury, and that Vidoekler would not wish to start again in a foreign court. Although litigating in Great Britain is obviously less advantageous for plaintiffs, and the disposition of the present ease has, for a variety of reasons, taken an extraordinarily long time, “some inconvenience or the unavailability of beneficial litigation procedures similar to those available in federal district courts does not render an alternative forum inadequate.”
Borden,
Finally, we reject plaintiffs’ contention that a district court is precluded from ruling on one substantive issue and subsequently dismissing the action.
Forum non conveniens
is a doctrine that necessarily requires great flexibility.
See Piper Aircraft,
We add parenthetically that the district court arguably should have made explicit that the dismissal is conditional, because plaintiffs represented to the district court that the statute of limitations governing contract questions had expired in Great Britain.
Cf. Calavo Growers of California v. Generali Belgium,
CONCLUSION
For the reasons stated, the judgment of the district court is affirmed.
