In mid-2018 Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland with common stock that trades on the New York based over-the-counter market) disclosed that it was under scrutiny by the U.K. Serious Fraud Office and DOJ. (See here for the prior post).
Soon thereafter, the company’s share price fell and sure as the sun rises in the east and dogs bark, attorneys representing shareholders filed securities fraud claims against the company and certain executives.
One such action was filed in the U.S. District Court in New Jersey alleging that Glencore and certain executives made false and /or misleading statements and/or failed to disclose facts relating to bribery schemes Glencore allegedly engaged in in the Democratic Republic of Congo, Venezuela and Nigeria.
The defendants filed a motion to dismiss for lack of personal jurisdiction, forum non conveniens, and for failure to state a claim. Recently, Judge Susan Wigenton granted the motion to dismiss on forum non conveniens grounds. (See 2020 WL 4382280).
Forum non conveniens is a legal doctrine in which a court may refuse to hear a case despite having jurisdiction if doing so would better serve the parties’ convenience and would be in the interest of justice. The following factors are relevant to the analysis: (1) the amount of deference to be afforded plaintiffs’ choice of forum; (2) the availability of an adequate alternative forum; (3) private interest factors; and (4) public interest factors.
In terms of deference, the court concluded that Plaintiff’s choice of forum is accorded less deference because Glencore did not have any offices or subsidiaries in the forum and the alleged conduct giving rise to Plaintiff’s claims allegedly occurred abroad in the DRC, Venezuela, and Nigeria. Moreover, the court noted that “there is no indication that New Jersey houses any evidence relevant to this matter.”
As to the availability of an adequate alternative forum, the court concluded that the defendants met their burden of showing that at least one adequate alternate forum (Switzerland) exists.
Finally, the court concluded that the private and public interest factors weigh in favor of dismissal on forum non conveniens grounds. Among other things, the court noted that “the relevant documentary evidence and other potential witnesses are likely located outside the U.S.” and that “the center of Defendants’ purported securities violations appears to have centered abroad in Switzerland where the alleged misstatements/omissions were drafted and approved.”
