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In re Factor VIII or IX Concentrate Blood Products Liability Litigation

June 4, 2008

IN RE FACTOR VIII OR IX CONCENTRATE BLOOD PRODUCTS LIABILITY LITIGATION
THIS DOCUMENT RELATES TO:
ELI ASHKENAZI, ET AL., PLAINTIFFS,
v.
BAYER CORPORATION, ET AL., DEFENDANTS.



MDL 986

MEMORANDUM OPINION

(Ruling on Israel Forum Non Conveniens Motion)

This is the third opinion in which we rule on a motion by the defendants in this multidistrict litigation to dismiss the claims of the plaintiffs on the ground of forum non conveniens. The claims under consideration are brought by residents of Israel. The history of the litigation is set forth in our first forum non conveniens decision, In re Factor VIII or IX Concentrate Blood Products Liability Litigation, 408 F. Supp. 2d 569, 570-73 (N.D. Ill. 2006) (granting United Kingdom forum non conveniens motion), aff'd In re Factor VIII or IX Concentrate Blood Products Litigation, 484 F.3d 951 (7th Cir. 2007). We will not repeat that history here. We refer to that decision as the Gullone case. The second decision involved residents of Argentina and will be referred to as the Abad case. We granted the motion to dismiss that case as well, In Re Factor VIII or IX Concentrate Blood Products Litigation, 531 F. Supp. 2d 957 (N.D. Ill. 2008), and the decision is presently on appeal.

We will refer to these Israeli claims as the Ashkenazi case, because that is the name of the first-named plaintiff in the low-numbered case with Israeli plaintiffs.

The Ashkenazi plaintiffs make the same basic allegations as all of the other foreign plaintiffs in the second generation cases. They are hemophiliacs who claim to have contracted HIV and/or the hepatitis C virus ("HCV") in Israel from using factor concentrates manufactured by one or more of the four defendant pharmaceutical companies. The contamination allegedly occurred as a result of the defendants' negligence. When the defendants were alerted to the problem, they took steps to eliminate the contamination in the products they distributed in the United States, but allegedly continued to distribute their contaminated products for use by hemophiliacs in foreign countries.

There are 135 Ashkenazi plaintiffs, most of whom are named in four complaints that were filed in this court. The remaining plaintiffs are named in a complaint filed in the Northern District of California and transferred to this district by the Judicial Panel on Multidistrict Litigation.

The defendants' motion to dismiss is based upon their contention that the litigation of these cases in either the Northern District of Illinois or the Northern District of California would be oppressively inconvenient for them. The law that governs their motion to dismiss is well settled and was discussed at some length in our Gullone and Abad opinions as well as the Seventh Circuit opinion in Gullone.

THE LAW OF FORUM NON CONVENIENS

As we stated in Abad, The steps involved in a forum non conveniens analysis are well-settled. The first step is a two-part inquiry as to whether the proposed alternative forum ... is available and adequate for the litigation of plaintiffs' claims. Kamel v. Hill-Rom Co., 108 F.3d 799, 802-03 (7th Cir. 1997) ("An alternative forum is available if all parties are amenable to process and are within the forum's jurisdiction. An alternative forum is adequate when the parties will not be deprived of all remedies or treated unfairly."). If the alternative forum is both available and adequate, "the district court must then balance the private and public interest factors that emerge in a given case." Id. (citations omitted). 531 F. Supp. 2d at 959-60.

AVAILABILITY

The defendants have stipulated, as a condition of dismissal, that they will accept service of process in Israel. In addition, their alleged fraudulent conduct occurred in Israel, and that conduct caused injury in Israel. For those reasons, the defendants' expert witness on Israeli law, retired judge Dr. Gabriel Kling, states that the Israeli courts would have jurisdiction over these claims. (Defs.' Mem. In Supp. Of Mot. To Dismiss, Ex. 1, Decl. of Judge Dr. Gabriel Kling (retired) ¶ 16.)

The plaintiffs argue in response that the Israeli courts would not have jurisdiction. They rely upon the declaration of their Israeli law expert, retired judge Dan Arbel, a former Director of the Israeli Courts System. Judge Arbel refers in his declaration to Israel's Regulation of Civil Procedure 500(7), which allows jurisdiction over a non-resident defendant if "the legal claim is based upon an act or an omission which has taken place within the borders of the State." He states that this Regulation "has been narrowly construed by the Israeli courts to exclude instances where foreign negligent conduct (e.g., actions by a foreign producer of a defective product) results in injury in Israel." (Decl. of Judge Dan Arbel (retired), ¶¶ 25-27.) Judge Arbel cites three cases in his declaration that stand for the proposition that Regulation 500(7) would not support jurisdiction where an act or omission committed in a foreign country caused damage in Israel. (Id. ¶¶ 28-30.)

When his deposition was taken by the defendants, Judge Arbel admitted that these three case citations are irrelevant to a situation where, as here, the defendant agrees to accept service in Israel. Regulation 500(7) refers only to service outside Israel. The defendants in the cases he cited were resisting extraterritorial service. (Arbel Dep. at 33.) In addition to citing an inapplicable regulation, Judge Arbel made no mention of the fact that, according to plaintiffs, an important part of the defendant's conduct occurred in Israel, in that they committed fraud upon the government of Israel and Israeli healthcare providers by failing to disclose that the products they were delivering to Israel were contaminated. (Ashkenazi Compl. ¶ 4.)

As a fallback position, the plaintiffs argue that even if the Israeli courts would have jurisdiction, they might in their discretion refuse to exercise it. This proposition is based upon Judge Arbel's opinion that if Israeli judges concluded that the plaintiffs were refiling their cases unwillingly in Israel, and that they actually preferred the American forum, "it is very probable that the Israeli courts will feel some commitment to their citizens and will decide not to let them pay the price of an allegedly wrong decision of the American judiciary." (Arbel Decl. ¶ 33.) In his deposition, Judge Arbel admitted that he knew of no instance where an Israeli judge had made such a ruling. (Arbel Dep. at 93-94.) He appears to believe that his opinion is buttressed by the fact that the Israeli courts "did not have jurisdiction in the first place" and that there was an "absence of any jurisdiction according to Regulation 500 of the Civil Procedure Regulations." (Arbel Decl. ¶ 33.) But he is wrong about Regulation 500, as he admitted in his deposition.

Judge Arbel's notion that an Israeli court would decline to exercise jurisdiction in retaliation for a forum non conveniens dismissal in the United States is pure speculation. The Abad plaintiffs made a similar suggestion in regard to the Argentinian courts, and we rejected it because we presumed "that the Argentine courts would act in good faith." 531 F. Supp. 2d at 970. We indulge the same presumption as to the Israeli courts and decline to give any weight to Judge Arbel's speculation.

We conclude that the Israeli courts are an available forum for the litigation of the Ashkenazi cases.

ADEQUACY

As noted above, "[a]n alternative forum is adequate when the parties will not be deprived of all remedies or treated unfairly." Kamel, 108 F.3d at 803 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981)). It appears from the declarations and depositions of the parties' experts that the remedies in Israel are substantially similar to those in the United States, and there is no evidence that the plaintiffs would be treated unfairly in the Israeli courts. The major procedural difference is that there are no jury trials in Israel, but this does not affect the adequacy of the forum. In fact, plaintiffs concede that the Israeli forum is adequate: "Plaintiffs do not challenge Defendants' contention that the Israeli courts are an adequate alternate forum." (Pls.' Mem. in Opp'n to Defs.' Mot. to Dismiss at 6 n.1.)

We turn, then, to a consideration of the private and public interest factors that are relevant to the question of convenience. When a plaintiff sues in his home forum, "it is reasonable to assume that this choice is convenient." Kamel, 108 F.3d at 803.

Conversely, if the plaintiff is suing far from home, it is less reasonable to assume that the forum is a convenient one and therefore the presumption in the plaintiff's favor applies with less force....

Gullone, 484 F.3d at 956 (quotation marks omitted). The Seventh Circuit went on to explain:

We do not understand this as any kind of bias against foreign plaintiffs. That would be inconsistent with many treaties the United States has signed as well as with the general principle that our courts are open to all who seek legitimately to use them. It is instead a practical observation about convenience. A citizen of Texas who decided to sue in the federal court in Alaska might face an equally skeptical court, which might conclude that convenience requires a change in venue under the federal statutory counterpart to forum non conveniens, 28 U.S.C. § 1404(a).

Id. The Ashkenazi plaintiffs turn these observations of the Court on their head and interpret them to mean that the treaty obligations of the United States require that in weighing the various public and private interest factors, the plaintiffs' choice of forum must be given "maximum deference." (Pls.' Mem. at 7-8.) We reject plaintiffs' argument and will be guided by the ruling of the Seventh Circuit.

PRIVATE INTEREST FACTORS

The defendants argue that the courts chosen by the plaintiffs, the Northern District of Illinois and the Northern District of California, are seriously inconvenient for them for a number of reasons. We will examine the parties' ...


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