SME Racks, Inc. v Sistemas Mecanicos Para Electrinica, S.A. 03-12572 / 11th U.S. Circuit Court

Two Florida corporations doing business in the name and style of SME Racks, Inc. and  Valtec Information Systems, Inc. together with private Florida citizen Rafael Castro commenced an action against Sistemas Mecanicos Para  Electrinica, S.A, a Spanish firm.  The action was commenced in the United States for damages in respect of defective goods purchased via an international sale of goods contract negotiated in the United States but executed in Spain.  The actual contract contained a choice of law forum in the event any dispute arose between the contracting parties and the choice of law forum was actually Spain.  The US District court dismissed the action on the grounds that the United States was not the convenient forum for the case to be heard.  The plaintiffs filed an appeal against this decision with the 11th US Circuit Court on August 24th, 2004.

On appeal it was held that a District Court’s finding based upon the doctrine of forum non conveniens can only be reversed in circumstances where it is clear that the discretion to invoke the doctrine was clearly abused. In order to determine whether or not the there was an abuse of discretion it was necessary to examine the factors which had to be weighed in ascertaining whether or not a foreign forum was the most convenient forum.  Relying on its own previous ruling in Leon v Millon Air, Inc., 251 F.3d 1305, 1311 (11th Cir. 2001) the appellate court ruled that hese factors are private and public interests concerns.  Citing the US Supreme Court’s finding in Gulf Oil Corporation v Gilbert, 330 U.S. 501 (1947) the 11th Circuit Court found that the lower court will fail to exercise its discretion fairly when it does not take full account of all of the relevant factors falling under the private and public interests heads.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

The 11th Circuit Court went on to explain that the private interests concern is the interest of the plaintiffs and those interests are more important than public interests.  It is only when the private interests are at an “equipoise” then the court is required to look at the public interest matters.  Private matters are concerned with the location of the witnesses, the ease with which they could be brought to court, the location of the evidence and all other similar matters.  On the facts of the case there was no appreciable difference between the witnesses and the evidence in both the United States and Spain.  As a result the District Court looked to the public interest concerns and found that since the applicable law was Spanish, the balance of convenience dictated that the trial should be heard in Spain.

The 11th Circuit Court did not agree with this finding holding instead that it has long since been a standard attitude throughout the US courts that domestic plaintiffs should not be ousted from domestic courts.  While the lower court applied the necessary tests they failed in that they did not apply them meaningfully.  In other words the lower court abused its discretion by failing to give proper deference to the plaintiff’s choice of forum and placed far too much emphasis on the fact that an equally adequate foreign forum.  The 11th Circuit Court expressed the opinion that the discretion to oust domestic plaintiffs from the court:

“Requires positive evidence of unusually extreme circumstances, and should be thoroughly convinced that material injustice is manifest before exercising any such discretion as may exist to deny a United States citizen access to the courts of this country.”[1]

In general the court will give consideration to the plaintiff’s choice of forum when weighing the private interests of the litigants in the application of the forum non conveniens doctrine.  This the 11th Circuit court ruled was the rationale behind the US Supreme Court’s ruling in Piper Aircraft Co. 454 U.S. at 255.  This in essence is the rule of law established in the case of SME Racks, Inc. v Sistemas Mecanicos Para  Electrinica, S.A. 03-12572 / 11th U.S. Circuit Court.  In the circumstances of this case the lower court’s ruling of forum non conveniens was reversed as it exercised its discretion unfairly.  The greatest policy consideration is the protection of the plaintiff’s freedom of choice provided it does not unfairly disadvantage the defendant in civil lawsuits.