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Aep Industries, Inc. v. Uteco North America, Inc.

United States District Court, W.D. Kentucky, Bowling Green Division

March 23, 2015

AEP INDUSTRIES, INC., Plaintiff,
v.
UTECO NORTH AMERICA, INC., SUMMIT RIGGING, INC., and RPM TRANSPORT, INC., Defendants,
v.
COUGAR ESCORTE ROUTIERE, INC. Third-Party Defendant.

MEMORANDUM OPINION AND ORDER

GREG N. STIVERS, District Judge.

Defendant RPM Transport, Inc. ("RPM") filed Motions to Dismiss for Forum Non Conveniens or, in the Alternative, to Stay Litigation. (DN 25, 26). Third-Party Defendant Cougar Escorte Routiere, Inc. ("Cougar") filed a similar motion to dismiss the third-party claims. (DN 33). All motions are ripe for adjudication. All three motions (DN 25, 26, 33) are DENIED, both with respect to dismissal for forum non conveniens and abstention or stay under the Colorado River doctrine.

I. SUMMARY OF FACTS AND CLAIMS

This Court has diversity jurisdiction under 28 U.S.C. ยง 1332. Plaintiff AEP Industries, Inc. ("AEP"), a Delaware corporation with a principal place of business in New Jersey, brings negligence and breach of contract claims against UTECO North America, Inc. ("UTECO"), Summit Rigging, Inc. ("Summit"), and RPM Transport, Inc. ("RPM"). UTECO and Summit are Georgia citizens, while RPM is a Canadian citizen. Additionally, UTECO asserts a third-party claim against Cougar, a Canadian citizen.

AEP owns a factory in Bowling Green, Kentucky. In 2012, it purchased a film printing press to aid its manufacture of packaging material. It contracted with UTECO for the sale, delivery, and installation of this equipment for its Kentucky facility. UTECO then subcontracted with Summit to deliver the equipment from Montreal, Quebec. Summit subcontracted RPM, a transportation provider, who hired Cougar to provide highway escort services as RPM transported the unusually-sized load to Kentucky.

While in transit to Kentucky, the large load struck a highway overpass in Ottawa, Ontario, causing substantial damage to the printing press. AEP alleges that this resulted in a significant interruption of its business activities. AEP received separate compensation for its losses from two different insurers. On June 2, 2014, the insurer of the equipment filed a subrogation claim in AEP's name against the current defendants and others in the Ontario Superior Court of Justice. That lawsuit is still pending.

AEP filed the present lawsuit on September 24, 2014, seeking to recoup its $500, 000 deductible under the business interruption insurance policy the other insurer provided. RPM then moved to dismiss the primary and cross claims based upon the doctrine of forum non conveniens. (DN 25, 26). Cougar also moved to dismiss the Third-Party Complaint. (DN 33).

II. DISCUSSION

RPM seeks relief under two legal doctrines that allow a federal court to abstain or temper the exercise of its jurisdiction. First, the doctrine of forum non conveniens allows courts to "resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute." Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507 (1947). "[T]he central purpose of any forum non conveniens inquiry is to ensure that the trial is convenient[.]" Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 (1981). Second, and alternatively, RPM asks the Court to restrain its exercise of jurisdiction under the doctrine announced in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). The Colorado River doctrine allows courts to abstain or postpone exercise of jurisdiction in favor of ongoing proceedings elsewhere to conserve judicial resources.

A. Forum Non Conveniens

To determine whether dismissal based upon forum non conveniens is appropriate, the Court must apply a two-step analysis. First, the defendant must establish that an appropriate alternative forum is available. Second, the balance of public and private interest factors must demonstrate an unnecessary hardship on the defendants. Zions First Natl Bank v. Moto Diesel Mexicana, S.A. de C.V., 629 F.3d 520, 523 (6th Cir. 2010). If these factors indicate that "oppression and vexation to a defendant [is] out of all proportion to plaintiff's convenience[, ]'" dismissal is appropriate. Zions First Natl Bank, 629 F.3d at 525 (citing Koster v. Am. Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947)). Notably, a U.S. plaintiff's choice of forum is given heightened deference. Duha v. Agrium, Inc., 448 F.3d 867, 874 (6th Cir. 2006).

Private factors are unique to the parties and dispute. These include the "relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive." Gulf Oil Corp., 330 U.S. at 508. Private factors must weigh heavily in the defendant's favor to warrant dismissal. Id. at 508.

Public interests are those particular to the forum. If the dispute's "origin" is outside the forum, these factors generally weigh against the exercise of jurisdiction. In particular, juries from jurisdictions without a connection to the dispute should not be burdened. Id. at 509. Conversely, the citizens of a jurisdiction, through their participation in a jury pool, have an interest in deciding local controversies. Id. Finally, the ...


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