New York Appellate Court Decision Highlights Need for ALAC

A recent New York appellate court decision is an example of where American Laws for American Courts (ALAC) legislation would have been applicable and helpful by protecting U.S. and N.Y. constitutional principles of Due Process. The plaintiffs in this case were citizens of United Kingdom and France, who fell ill at a hotel in Dubai. The hotel’s parent company is a Maryland corporation doing business in New York. As a result, the plaintiffs sue in New York state court, which clearly has personal jurisdiction over the defendant and was a correct venue. The plaintiffs sued in New York because there were procedural and jurisdictional hurdles in the United Kingdom and France that might preclude them from suing there. They did not want to sue in Dubai, where the accident occurred, because not only is there no due process in Dubai; it is rife with nepotism and bias. There is also no real discovery (apparently you conduct discovery because you are a royal and can beat it out of your opponent or obtain it by bribery); and because of sharia, Islamic law as applied in the Dubai courts, there are very few causes of action.

The defendant hotel company argued that even though New York has jurisdiction/venue, it is an inconvenient forum and pursuant to the prudential judicial doctrine called appropriately enough forum non conveniens the case should be tried in Dubai.

The New York trial court accepted the inconvenient forum argument hook, line and sinker and dismissed the case, but the appellate court tried to fix the obvious problem of the ruling — that is, you should not be in NY because it is inconvenient to the defendant hotel company who would rather you sue it in Dubai where you will most assuredly lose. So, the appellate court agrees with the trial court that NY is inconvenient, and more or less agrees that Dubai would violate basic fundamental notions of due process, and further that the UK and French courts (where the plaintiffs reside respectively) probably don’t have jurisdiction either, but rules that if defendant hotel company waives the personal jurisdiction and other procedural limitations of the UK and French courts, the NY appellate court will dismiss the suit in New York and plaintiffs will be left with bringing suit in Dubai (which does not provide Due Process, and thus would violate ALAC if it were on the books in NY), or possibly in the UK or France. But, as the dissent points out, the courts of the UK and France were illusory because the plaintiffs could not sue there, no matter what the defendants waived. Typically, a party cannot waive the jurisdictional requirements to get into court … and that was the essential problem in the UK and French courts. That means, the NY appellate court left these plaintiffs with only one option: Dubai and sharia. . . .

Here’s what the dissent said about jurisdiction:

With regard to the UAE as an alternate forum, certain procedural and substantive features available here, such as loss of consortium claims, jury trials, contingency fees, discovery procedures, cross-examination, and the ability to subpoena witnesses and documents, are not available there. In addition, the plaintiffs cite to, and the Supreme Court relied upon, an analysis of the UAE court system issued by the United States Department of State, which suggests a real concern that the UAE courts are not independent. The Department of State’s analysis notes that, in practice, the UAE’s courts’ decisions “remain[ ] subject to review by the political leadership and suffer[ ] greatly from nepotism” (United Arab Emirates, at 5 [accessed September 19, 2013]). Moreover, Sheikh Ahmed bin Saeed Al Maktoum, a member of the Dubai royal family, is also an owner of the Westin Hotel in Dubai. This fact is disconcerting given the Department of State’s analysis that, due to nepotism in the UAE court system, “[t]here [is] no functional separation between the executive [monarchy] and judicial branches” (id.).

The defendant contends that the matter should be litigated in Dubai since the UAE has a “formidable” interest in this litigation because the injury occurred there and due to Dubai’s desire to maintain its stature in the tourism industry. However, such a conclusory contention does nothing to assuage the concerns identified by the Department of State.

In addition to the concern as to whether the plaintiffs could receive a fair trial before an independent judiciary in the UAE, the plaintiffs presented evidence showing that there are also procedural and substantive hardships associated with litigating in the UAE, such as the lack of mandatory discovery in the UAE. Further, it appears that a plaintiff cannot bring a claim in the UAE under both contract and tort theories of recovery.

ALAC would have clarified this judge-created confusion by laying down a basic statutory formula to deny the motion to dismiss on forum non conveniens grounds: that is, if the UAE courts deprived the litigants of due process, ALAC would not allow the court to grant the motion to dismiss due to the “inconvenience” of litigating in NY. ALAC essentially says, if you have the right to sue in NY and the “more convenient option” in some other country deprives you of fundamental constitutional liberties, like Due Process and Equal Protection under the law, well, you’ll just have to make do in American courts using American laws.

Furthermore, look what defendant hotel company’s attorneys said to the media:

Troy Froderman, Jason Nagi and Megan Tracy of Polsinelli Shughart represented Starwood Hotels and Resorts Worldwide. In an interview, Froderman said he was “pleased” with the majority ruling. He said he respected Austin’s opinion, but that “The precedent in this jurisdiction is we’re not going to pass judgment on a sovereign’s court system.”

Their attorney is utterly mistaken. “Void as Against Public Policy” — the basis of ALAC — is applied in every state and every federal court when questions of comity, choice of law, or forum non conveniens comes up. It is an absurdity to say that the plaintiffs, who have a constitutional and statutory right to sue in U.S. courts, have to litigate in a foreign jurisdiction that does not abide by the rule of law and due process. But, it is true that New York and many state courts are reluctant to “pass judgment” on foreign sovereigns and this is exactly why ALAC is necessary because it gives the judges, who should not be legislating public policy from the bench, the statutory cover of a legislative mandate that says we draw the line at our constitutional liberties — specifically, Due Process and Equal Protection.

See here for more information about ALAC.