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ALAN RICHARDS, et
al., Plaintiffs-Appellants, v. LLOYD’s OF LONDON, an unincorporated
association, et al., Defendants-Appellees. JOHN R. NORTON, III; DORIS S.
NORTON; DIANE B. ALLISON; CHARLES G. BENTZIN; F. M. BINKLEY; DELMAR A. BRADY;
SAMME JO BRADY; GEORGE MANING CLOSE; RUSSELL M. COLLINS; PETER DWARES; ROBERT
FLESVIG; DONALD P. GALLOP; CHARLES A. GERLACH, JR.; ROBERT W. GERWIG; RICHARD
C. HENRY; MICHAEL C. HIRSH; R. WILLIAM JOHNSTON; JAMES H. KAYIAN; JOANNE S.
KAYIAN-OLOONEY; SUZANNE KAYIAN; LOWELL CONRAD LUNDELL; JUDITH M. OTT; H.E.
RAINBOLT; DAVID L. ROSENBLATT; RAY MORSE SANDERSON; CLAIRE TILLMAN; WARREN G.
VANDER VOORT; PETER BECK; HAROLD FRANZ ILG; JOHN C. GRIFFIN; TED KOSLOFF;
FRANCIS J. MILON; GLEN R. MOGAN; MELANIE M. NORTON; JOSEPH F. WELLER,
Plaintiffs-Appellants, v. LLOYD’s OF LONDON, an unincorporated
association; CORPORATION OF LLOYD’s, aka Society of Lloyd’s,
aka The Society and Council of Lloyd’s, Defendants-Appellees. No. 95-55747, No.
95-56467 UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT 107 F.3d 1422; 1997
U.S. App. LEXIS 3889; Fed. Sec. L. Rep. (CCH) P99,425; 97 Cal. Daily Op.
Service 1691; 97 Daily Journal DAR 3209 November 5, 1996,
Argued and Submitted at Pasadena, California March 6, 1997, Filed SUBSEQUENT HISTORY: [*1] Rehearing Granted August 22, 1997, Reported at: 1997 U.S.
App. LEXIS 22778. Withdrawn by the Court February 3, 1998; Substituted Opinion
of February 3, 1998, Reported at: 1998 U.S. App. LEXIS 1414. PRIOR HISTORY: Appeals from the United States District
Court for the Southern District of California. D.C. No. CV-94-01211-IEG. D.C.
No. CV-95-00952-IEG. Irma E. Gonzalez, District Judge, Presiding. NOTE: The following
judgment has been withdrawn and replaced by that at 135 F.3d 1289 (9th Cir. Feb. 3d 1998) Appeals from the United States District Court for the
Southern District of California Irma E. Gonzalez, District Judge, Presiding JUDGES: Before: Alfred T. Goodwin, Charles
Wiggins and John T. Noonan, Circuit Judges. Opinion by Judge Noonan; Partial Concurrence and Partial
Dissent by Judge Goodwin COUNSEL: Stephen A. Kroft, McDermott, Will
& Emery, Los Angeles, California; Eugene I. Goldman, Robert E. Kohn,
McDermott, Will & Emery, Washington, D.C.; Arlington Ray Robbins, Michael
V. Pundeff, John H. Stephens, Robbins & Keehn, San Diego, California, for
the plaintiffs-appellants. Phillip K. Fife, Seal Beach, California, for
plaintiff-appellant E. Pomeroy Williams. Dean Hansell, LeBoeuf, Lamb, Greene & MacRae, Los
Angeles, California, Taylor R. Briggs, Sheila H. Marshall, Mary L.B. Betts,
Stephen H. Orel, LeBoeuf, Lamb, Greene & MacRae, New York, New York, for
defendants-appellees The Corporation of Lloyd’s, the Society of
Lloyd’s, and The Council of Lloyd’s. Richard H. Walker, Jacob H. Stillman, Eric Summergrad,
John W. Avery, Securities and Exchange Commission, Washington, D.C., as amicus
curiae. Eugene R. Anderson, Seth B. Schafler, Anderson Kill Olick
& Oshinsky, New York, New York; Amy R. Bach, San Francisco, California, for
amicus curiae United Policy holders. Richard A. Brown, Leonard D. Venger, Ronald B. Turvsky,
Donald R. Brown, Manatt, Phelps & Phillips, Los Angeles, California; Paul
H. Falon, Manatt, Phelps & Phillips, Washington, D.C., for amicus curiae
California Commissioner of Insurance. OPINION NOONAN, Circuit Judge: Alan Richards and 573 other individuals (collectively,
the plaintiffs or the Names) brought suit against the Corporation of
Lloyd’s (Lloyd’s) and against Lloyd’s of London, a
community of enterprises characterized by the plaintiffs as an Unincorporated
Association (the Unincorporated Association). The plaintiffs alleged securities
fraud under the Securities Act of 1933, 15 U.S.C. S 77 (the 1933 Act) and under
the Securities Exchange Act of 1934, 15 U.S.C. S 78 (the 1934 Act). The suit
also alleged related violations of the Racketeer Influenced and Corrupt
Organizations Act of 1970, 18 U.S.C. S 1961 et seq. (RICO). The plaintiffs
further alleged breach of state Blue Sky laws, breach of fiduciary duty, and
common law fraud. On motion of the defendants under Fed. R. Civ. P. 12(b)(3)
the district court dismissed the plaintiffs’ action. The primary question presented on appeal is whether forum
selection and choice of law provisions in the contracts signed by the Names
(the Choice Clauses) require the application of English law to the
plaintiffs’ claims and the confinement of these claims to the courts
of England. Holding that the Choice Clauses are void because they violate the
1933 Act and the 1934 Act, we reverse the district court’s dismissal
of the Names’ federal claims. We affirm the district court’s
dismissal of the claims under the Blue Sky laws and the common law claims. We
remand for consideration by the district court the amenability to suit of the
Unincorporated Association. Without passing on the truth of the allegations, we set
out the plaintiffs’ case as it is alleged by them. THE ALLEGATIONS The Unincorporated Association is engaged in the business
of writing insurance and reinsurance. Its principal place of business is
London, England. Its principal parts consist of the corporation
(Lloyd’s, the other defendant in this case); underwriting agents;
brokers; and syndicates of underwriters. The corporation, Lloyd’s, is
governed by the Council for Lloyd’s; the Council has
“virtually complete control” over all of the operations of Lloyd’s,
including the operations of the underwriting agents and the brokers, and
“virtually dictates the exact form of agreements and contents of
agreements that are to be used … and dictates not only the policies
but the practices of those who constitute the Lloyd’s
community.” The members of each syndicate underwriting insurance are
known as Names. They are divided into Working Names, a group of insiders who
devote essentially full time to the business of insurance at Lloyd’s,
and External Names, recruited from all over the world. The Working Names
control Lloyd’s. The External Names are “totally passive
investors ” and “are absolutely prohibited” from
being involved in the “underwriting process.” They make a
deposit, usually in the form of a letter of credit, equal to a percentage of
the premium income they expect to receive in a given year from the underwriting
syndicate of which they are members. They have several, not joint, liability on
the policies written by the syndicate. The liability of each Name is unlimited.
Between 1970 and 1993 Lloyd’s sought to increase
its underwriting capacity and to do so undertook “a major recruitment
program in the United States.” Representatives of Lloyd’s
came to the United States to carry out the recruitment by offering investment
contracts by which residents of the United States might become External Names
at Lloyd’s. Lloyd’s provided printed information on its
history and operations as part of the campaign. The United States mails were
used to provide this information and to send questionnaires, applications, and
agreements to potential Names resident in the United States. Brokerage firms in
the United States were paid commissions by Lloyd’s to recruit Names in
this country. Existing Names in the United States were also given financial
incentives to recruit additional Names here. The information furnished by
Lloyd’s did not meet the standards required of prospectuses by the
Securities Exchange Commission (the SEC). The investment contracts offered by
Lloyd’s were securities but were not registered under either federal
or state law. As a result of its efforts, Lloyd’s raised over
$600 million in letters of credit and deposits furnished by residents of the
United States who became External Names. Lloyd’s also enormously
expanded its underwriting capacity by securing the unlimited liability on
insurance contracts from Lloyd’s of 3,196 residents of the United
States recruited to become External Names at Lloyd’s. The plaintiffs
are a portion of those so recruited. Plaintiffs, the Names of this case, were defrauded by
Lloyd’s in at least one of two ways: (1) Lloyd’s put them on
syndicates reinsuring long tail asbestos and toxic waste claims which had
arisen prior to these Names becoming members of such syndicates; (2)
Lloyd’s put them on syndicates carrying an unusual concentration of
risks because of a reinsurance scheme (the LMX Spiral) that operated as a
species of scam. In neither case did Lloyd’s inform the plaintiffs of
the magnitude of their exposure although Lloyd’s was aware of the
magnitude. In each case Lloyd’s acted to benefit Working Members and
other insiders at Lloyd’s while pushing large liabilities foreseen by
Lloyd’s, but undisclosed by it, upon the unsuspecting and uninformed
External Names of whom the plaintiffs form a portion. In 1986, these plaintiffs each were required by
Lloyd’s to execute in the United States a contract with
Lloyd’s entitled “General Undertaking.” Paragraph
2.1 of this agreement reads as follows: “The rights and obligations of
the parties arising out of or relating to the Member’s membership of,
and/or underwriting of insurance business at, Lloyd’s and any other
matter referred to in this Undertaking, shall be governed by and construed in
accordance with the laws of England.” Paragraph 2.2 of this agreement
reads in relevant part as follows: “Each party irrevocably agrees that
the courts of England shall have exclusive jurisdiction to settle any dispute
and/or controversy of whatsoever nature arising out of or relating to the
Member’s membership of, and/or underwriting of insurance business at
Lloyd’s … .” These two provisions, the Choice
Clauses, had not been in General Undertakings prior to 1986 but that group of
plaintiffs who had become Names prior to 1986 and signed earlier General Undertakings
without the Choice Clauses were required by Lloyd’s to execute the
1986 form as a condition of remaining as Names. The group of plaintiffs who
became Names in 1986 and thereafter were required by Lloyd’s to
execute the 1986 form as a condition of becoming Names. To neither group of
plaintiffs did Lloyd’s disclose the information it possessed as to the
fraud or frauds being practised on them. The Choice Clauses were themselves
obtained by fraud. Such are the plaintiffs’ allegations. PROCEEDINGS On October 9, 1994 the plaintiffs filed in the Southern
District of California an amended complaint containing these allegations. The
Unincorporated Association did not answer, and the plaintiffs moved for a
default judgment against it. Invoking the Choice Clauses, Lloyd’s
moved to dismiss on the grounds of improper venue, also on grounds of forum non
conveniens and/or res judicata. Various declarations were submitted by both
sides as well as pleadings and judgments in other cases. In argument,
Lloyd’s relied on the Choice Clauses and forum non conveniens. On April 28, 1995 the district court entered its order
dismissing the complaint. “Forum-selection clauses, ” the
court reasoned, “are presumptively valid,” to be set aside
only if “unreasonable” under the circumstances. Such
circumstances, the court found, had not been shown here. Relying on Roby v.
Corporation of Lloyd’s, 996 F.2d 1353 (2d
Cir.), cert. denied, 510
U.S. 945 (1993), the court held that the remedies available in
England were sufficient to protect the American investors. Refining the Second
Circuit’s reasoning in Roby, the court noted that the SEC’s
inaction towards Lloyd’s “undercuts or dilutes the strength
of the policy argument that insufficient deterrence exists for
Lloyd’s” under the laws of England. The court found
insufficient evidence to support the allegation that the Choice Clauses themselves
were obtained by fraud. The plaintiffs moved for reconsideration. On August 4,
1995 the district court denied this motion, adding:“The Dismissal
Order dismissed plaintiffs’ complaint in its entirety and as to all
parties. Therefore the court dismisses as moot” plaintiffs’
motion for a default judgment against the Unincorporated Association. The plaintiffs appeal. ANALYSIS The validity of the Choice Clauses is first attacked by
the plaintiffs on the ground that these clauses were themselves procured by
fraud. On this point as it affects the jurisdiction of the district court, the
allegations of the plaintiffs are not to be taken as true, as would be the rule
in an ordinary motion to dismiss under Rule 12. To the contrary, we have held
that such clauses are good, “[a]bsent some evidence submitted by the
party opposing enforcement of the clause to establish fraud, undue influence,
overweening bargaining power, or such serious inconvenience in litigating in
the selected forum so as to deprive the party of a meaningful day in court
… .” Argueta v. Banco Mexicano, 87 F.3d 320, 324 (9th Cir.
1996) (italics in original) (quoting Pelleport Investors, Inc. v. Budco Quality
Theatres, Inc., 741 F.2d 273, 280 (9th Cir. 1984)). The district court here
found that the plaintiff had not produced sufficient evidence of fraud in the
procurement of the Choice Clauses. We defer to this factual finding. For
purposes of defeating the Rule 12(b)(3) motion and for purposes of this appeal
(but not as the law of the case because the plaintiffs have not had the chance
to present their full case), the Choice Clauses must be deemed not obtained by
fraud. We express no view on whether the Names’
participation in Lloyd’s constitutes the purchase of a
“security” within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934. For purposes of this appeal, we assume
the truth of the Names’ allegation that Lloyd’s was engaged
in the offer and sale of securities. Determining whether the Names can prove
this allegation will require further development of the record in the district
court at trial or on summary judgment. We turn to the validity of these clauses under the
controlling statutes. Doing so, we take the plaintiffs’ allegations as
to their causes of action to be true. We look not at evidence — for
the plaintiffs do not have to prove their case at the pleading stage —
but at what the plaintiffs say their case is. The Statutes’ Bar. Section 14 of the 1933 Act
provides: Any condition, stipulation, or provision binding any
person acquiring any security to waive compliance with any provision of this
title or of the rules and regulations of the Commission [the SEC] shall be
void. 15 U.S.C. S 77n. The bar of Section 29a of the 1934 Act
is substantially the same. 15 U.S.C. S 78cc(a). The Choice Clauses operate to
effect such waivers. Accordingly, under the precise terms of these two
statutes, the Choice Clauses are void. The district court made an error of law in supposing that
the Choice Clauses were unenforceable only if unreasonable. Congress had
already determined that such clauses were void. It was not for a court to weigh
their reasonableness, not for a court to say whether they offended any policy
of the United States. The policy decision had been made by the legislature. Lloyd’s asks us to look at Scherk v.
Alberto-Culver Co., 417 U.S. 506 (1974) where the Supreme Court, 5-4, held that
in “an international commercial transaction” the
parties’ agreement to arbitrate before the International Chamber of
Commerce in Paris any controversy or claim that “shall arise out of
this agreement” should be upheld despite the plaintiffs’ reliance
on S 10b of the 1934 Act. Lloyd’s overlooks both the facts and the
reasoning of this precedent. As to the facts: the property being purchased was
that of three businesses organized under the laws of Germany and Liechtenstein.
Negotiations for the contract took place in the United States, England and
Germany and involved consultations with legal and trademark experts from these
countries and from Liechtenstein. The contract was signed in Austria. The
businesses being bought were engaged in activities, “largely if not
entirely, directed to European markets.” Id. at 515. As to the reasoning: the Supreme Court
stressed “the orderliness and predictability essential to any
international business transaction” and the dangers presented by a
“parochial refusal” to “enforce an international
arbitration agreement.” Id. at 516. The Supreme Court quoted with
approval from The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9 (1972):
“We cannot have trade and commerce in world markets and international
waters exclusively on our terms, governed by our laws, and resolved in our
courts. ” The Supreme Court said that for these reasons it held
“that the provisions of the Arbitration Act cannot be ignored in this
case.” Scherk, 417 U.S. at 513 . The Supreme Court relied on this act
of Congress, 9 U.S.C. S 1, which it found to represent a policy not easily
reconcilable with the Securities Exchange Act. Id. at 512 (referring to the
Court’s earlier statement in Wilko v. Swan, 346 U.S. 427 (1953)). With
two federal statutes in conflict, the considerations of international commerce
tipped the balance. An exception to “the clear provisions of the
Arbitration Act” would not be accepted. Scherk, 417 U.S at 517. The fragmentary contacts with the United
States of the contract in Scherk distinguish that contract from the contracts
here where, according to the allegations we must accept at this state of the
pleadings as true, the offerees were recruited in the United States, agents of
the offeror were paid in the United States, documents material to the contracts
were mailed in the United States and executed in the United States, and
residents of the United States invested large sums of money and remained liable
to the full extent of their assets for indefinite amounts of money. Factually
distinct from Scherk, the case is also distinct in terms of the statutes
involved. As is apparent from the Supreme Court’s reasoning, the Court
in Scherk had to decide which one of two federal statutes to apply. It chose to
apply the Arbitration Act. It did not weigh reasonableness or pit amorphous
policy against a command of Congress. Is there a significant difference between a
policy objection to enforcement of the antiwaiver bars and a statutory obstacle
to such enforcement? We believe there is. Where a statute exists, a policy has
been given form and focus and precise force. A statute represents a decision by
the elected representatives of the people as to what particular policy should
prevail, and how. A policy objection represents judicial reasoning in the area
where the federal statutes, if they are to the contrary, must rule. A statutory
obstacle represents a legislative determination that is of at least equal weight
with another statute. Consequently, what was decided when the Arbitration Act
stood in the way of the antiwaiver bars is not helpful when no statute stands
in the way of their enforcement. The Supreme Court in Mitsubishi Motors v.
Soler Chrysler-Plymouth, 413 U.S. 614 , 637 n.15 (1985) has already declared in
dicta in an antitrust case what it thinks of contract clauses operating in an
international transaction, as the Choice Clauses do here, contrary to the
statutes of the United States: “We merely note that in the event the
choiceof-forum and choice-of-law clauses operated in tandem as a prospective
waiver of a party’s right to pursue statutory remedies for antitrust
violations, we would have little hesitation in condemning the agreement as against
public policy. ” There is no question that the Choice Clauses operate
in tandem as a prospective waiver of the plaintiffs’ remedies under
the 1933 and 1934 Acts. If the Supreme Court would condemn such clauses where
they work against a public policy embodied in statutes even though the statutes
themselves do not void the clauses, a fortiori the Supreme Court would condemn
similar clauses when they run in the teeth of two precise statutory provisions
making them void. There is an additional reason why application
of the Choice Clauses is barred by precedent that explicitly refers to the
statutory bars of the 1933 and 1934 Acts: In securities cases upholding
arbitration clauses by virtue of the Arbitration Act, the Supreme Court has
observed that arbitration changes procedure but that the arbitrators will apply
the substantive securities law of the United States where that law is
applicable. Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S.
477, 481 (1989); Shearson/American Express v. McMahon, 482 U.S. 220, 232
(1986). In Scherk because of the slight contacts with the United States the
proper law to be applied was uncertain and so could be fixed by agreement. See
Scherk, 417 U.S. at 516 . The strong implication is that where there is
substantial contact with the United States even the Arbitration Act could not
authorize the waiver of the substantive protections of the 1933 and 1934 Acts.
What the Supreme Court has in mind by “substantive”
provisions of these Acts is illustrated by “the provision in section
12(2) of the 1933 Act placing on the seller the burden of proving lack of
scienter when a buyer alleges fraud.” Rodriguez de Quijas, 490 U.S. at
481 . By this test, the Choice Clauses require the waiver of substantive
provisions of the 1933 and 1934 Acts and are consequently void. Lloyd’s urges not as controlling but
persuasive precedent the decision of other circuits in cases pursued by certain
Names against Lloyd’s. The first of these, Riley v. Kingsley
Underwriting Agencies, Ltd., 969 F.2d 953 (10th
Cir. 1992), cert. denied, 506 U.S. 1021 (1992) is a federal securities case
against Lloyd’s where the court did not discuss the statutory bars and
where the issue was clouded by the presence of a clause requiring arbitration.
It is not an apt precedent here. We recognize that our holding creates a
conflict with the interpretation of the Lloyd’s Choice Clauses in
other cases. E.g., Allen v. Lloyd’s of London, 94 F.3d 923 (4th Cir.
1996); Bonny v. Society of Lloyd’s, 3 F.3d 156 (7th Cir.
1993), cert. denied, 510 U.S. 1113 (1994); and Roby v. Corporation of Lloyd’s,
996 F.2d 1353
(2d Cir.), cert. denied, 510 U.S. 945 (1993). Although we do not lightly
deviate from the conclusions of our fellow circuits, we are convinced that
those cases improperly disregard the statutory antiwaiver provisions of the
Securities Acts. A comprehensive review of these cases has recently come to the
same critical conclusion. Note, No Way Out: An Argument Against Permitting
Parties to Opt Out of U.S. Securities Law In International Transactions, 97
Colum. L. Rev., 57, 74-78 (1997). These other circuit courts examined whether
the Choice Clauses are enforceable by applying an analysis announced in The
Bremen v. Zapata Off-Shore Co., 407
U.S. 1 (1972). The Bremen held that choice-of-forum clauses should be
enforced against a party unless it could show that enforcement would be
unreasonable or unjust, or that the clause was invalid due to fraud or
overreaching. Id. at 15. These other circuit courts interpreted The Bremen and
Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991), as
setting forth a “reasonableness” test to evaluate choice-of-forum
clauses. Allen, 94 F.3d at 928; Bonny, 3 F.3d at 160; Roby, 996 F.2d at 1363.
One factor making a clause “unreasonable,” and hence
unenforceable, is if enforcement of the clause would contravene a strong public
policy of the forum state. Allen, 94 F.3d at 928; Bonny, 3 F.3d at 160; Roby,
996 F.2d at 1363. In The Bremen, the Supreme Court stated that“[a]
contractual choice-of-forum clause should be held unenforceable if enforcement
would contravene a strong public policy of the forum in which suit is brought,
whether declared by statute or by judicial decision.” Bremen, 407 U.S.
at 15 . Applying this test, these other circuits have determined
that the American securities laws do not prevent application of the Choice
Clauses. Deciding that the remedies available under English law are adequate to
effectuate the anti-fraud purposes of the American securities laws, these
circuit courts concluded that the Choice Clauses were reasonable and should be
enforced. For instance, as posed by the Seventh Circuit in Bonny,
“the fundamental question” became whether the remedies
available in England subverted “the public policy ” of the
Acts. Bonny, 3 F.3d at 161. The court found that the plaintiffs could sue Lloyd’s
in England for fraud and for breach of contract; that they could sue
Member’s Agents for breach of fiduciary duty; that upon application of
[an English ] Secretary of State they might obtain an injunction and remedial
orders; and that, upon a finding of criminal liability under the[English]
Financial Services Act, they “could potentially receive some
compensation for their injuries. More importantly, such criminal penalties
serve as an important deterrent against exploitation of United States investors.”
Id. In our view, however, the reasonableness of the Choice Clauses is not
determinative of their enforceability. The Securities Acts’ antiwaiver
provisions themselves render the Choice Clauses void, making it unnecessary to
examine whether enforcement of the clauses would be reasonable under the test
set forth in The Bremen and Carnival. Notably, The Bremen did not involve the
applicability of a statutory anti-waiver provision like that contained in the
Securities Acts. The Supreme Court was reviewing a judgment of the Fifth
Circuit holding that this choice-offorum clause contained in an international
admiralty contract was unenforceable because it was contrary to public policy. Reading The Bremen closely dispells the notion that
choice-of-forum clauses are generally disfavored. The Bre men, 407 U.S. at 10 . Instead, those clauses are presumed valid,
though the “reasonableness” test allows the presumption to be
rebutted. Id. However, The Bremen did not apply the
“reasonableness” analysis in the face of a statute purporting
to decide the question of a choice-of-forum clause’s enforceability.
The Bremen announced a reasonableness test to evaluate choice-of-forum clauses
when Congress has not directly spoken to the issue. The
“unreasonableness” test does not apply here where Congress
specifically enacted antiwaiver provisions in the Securities Acts. Further support of this conclusion is found
in the Supreme Court’s Carnival decision, specifically in its discussion
of the effect of the Limitation of Vessel Owner’s Liability Act, 46
U.S.C.App. S 183c. The Carnival Court does not apply The Bremen’s
“reasonableness” analysis to determine whether this statute
renders unenforceable a choice-of-forum clause contained in a contract between
a cruise ship and a passenger. The Court discusses The Bremen analysis
separately, concluding that the forum-selection clause is not unreasonable
under The Bremen factors. When analyzing section 183c, however, the Court
simply rules that the forum-selection clause did not violate the statute.
Carnival, 499 U.S. at 596 . Congress was not ignorant of the potential
international character of securities transactions. Congress specifically
modified the 1933 Act to cover transactions in foreign commerce. S. Rep. No.
47, 73d Cong., 1st Sess. (1933) (accompanying S. 875.) A court should not apply
the reasonableness test or say whether the clauses offended any policy of the
United States when Congress has expressly made that determination. We do not
believe that we should turn the clock back to 1929 or introduce caveat emptor
as the rule governing the solicitation in the United States of investments in
securities by residents of the United States. See Jennifer M. Eck, “Turning
Back The Clock: A Judicial Return to Caveat Emptor For U.S. Investors In
Foreign Markets”, 19 N.C. J. Int’l L. & Com. Reg. 313
(1994). The dissent makes several remarkable rhetorical points: (1) Our
decision means that Americans betting on chicken fights in Zamboanga could sue
for breach of American securities law. (2) Our decision subjects
Lloyd’s “to the varying requirements of the different
countries in which the Names might reside.” (3) It is “unlikely”
that, without the Choice Clauses, Lloyd’s would engage in underwriting
risks at reasonable premiums. More dispassionate conclusions would be that
Americans can sue over a foreign gaming venture only if its securities are
peddled in the United States; subjecting sales of Lloyd’s securities
to our securities laws says nothing at all as to the legal fate of
Lloyd’s in the rest of the world; and Lloyd’s will go on
writing insurance as long as the business is profitable, Lloyd’s will
merely be more circumspect in raising capital in the United States. The
fundamental issue dividing the majority and minority does not depend upon
rhetorical flourishes but on whether the courts or Congress determines our
national policy after Congress has spoken. Even undertaking the analysis that the other
circuits undertook, we cannot agree with their evaluation of the remedies
available. In this not easy task we are aided by the SEC, which has entered
this case on appeal as a friend of the court. We do not defer to its position
as one arrived at by agency rulemaking (which has not occurred), but we do draw
on the SEC’s expertise when it points to the deficiencies in the
remedies provided the plaintiffs by English law. Three major deficiencies
exist: (1) There is no remedy in England for failure to register securities as
required by Section 12(1) of the 1933 Act. (2) There is no remedy in England
against Lloyd’s for negligent misrepresentation as provided by Section
12(2); the Lloyd’s Act, 1982, expressly immunizes Lloyd’s
from any claim “for negligence or other tort, breach of duty or
otherwise … unless the act or omission complained of … was
done or omitted to be done in bad faith.” (3) In the United States
there is liability for controlling persons under Section 15 of the 1933 Act and
Section 20(a) of the 1934 Act; there is no such liability in England. We need
not go further to list the various procedural and financial requirements noted
by the plaintiffs which would act as hurdles to obtaining relief in England.
Major gaps exist in the English substantive law of securities fraud. The
available English remedies are not adequate substitutes for the firm shields
and finely honed swords provided by American securities law. The dissent believes a “plain,
speedy and adequate remedy” exists if the plaintiffs had sued other
defendants, some of whom the dissent acknowledges to be insolvent. Such
hypothetical and derisory possibilities are not alternative remedies at all so
far as concerns the defendants the plaintiffs did choose to sue. The dissent
goes on to disparage suit in a federal court as a suit in California, a
“plaintiff-friendly environment.” The dissent takes no
equivalent glance at the environment likely to surround American investors
seeking redress in London against Lloyd’s of London, a business
corporation so powerful that it has obtained from the British legislature
substantial immunities. A plain, speedy, and adequate remedy for the wrongs alleged
by the plaintiffs is not shown to exist in Britain. The RICO Claims. The plaintiffs’
Tenth Claim for Relief, for alleged violations of RICO, rests in part on
allegations of “multiple acts of fraud in the sale of
securities” in violation of the 1933 and 1934 Acts and in part on
allegations of mail fraud in violation of 18 U.S.C. SS 1341 and 1343. The
allegations of securities fraud tie the RICO allegations to the federal
securities claims but the bar on the waiver of rights under the Securities Acts
is not a bar of waiver of rights under RICO, so our analysis of the Securities
Act is not controlling. At the same time the record is bare as to what remedy
an English court would provide a RICO claim. Consequently, we remand to the
district court to determine in the light of this opinion whether the Choice
Clauses are reasonable in their impact on the obligations established by RICO. Forum non conveniens. Lloyd’s asks
us to affirm on the basis of forum non conveniens as a ground apparent on the
record although not a ground adopted by the district court. We decline to do
so. Dismissal for forum non conveniens requires a balancing of a multitude of
factors first properly found and weighed by the district court. We do note the
heavy burden to be sustained by the defendants in the light of our holding that
Lloyd’s by contract cannot avoid application of the federal securities
statutes. The Blue Sky Claims. The Blue Sky Law claims
are pleaded perfunctorily and without reference to any particular state law
prohibitions against the Choice Clauses. For the reasons stated by the several
circuit courts that have upheld the Choice Clauses, we hold that they bind the
parties in the absence of any statutory provision annulling them. The Common Law Fraud And Breach Of Fiduciary
Duty Claims. These claims, too, must be pursued according to the Choice
Clauses. No statute of the United States is to the contrary. The English
remedies appear adequate. The Status Of The Unincorporated Association.
Fed. R. Civ. P. 17(b) provides: The capacity of a corporation to sue or be
sued shall be determined by the law under which it was organized. In all other
cases capacity to sue or be sued shall be determined by the law of the state in
which the district court is held, except (1) that a partnership or other
unincorporated association, which has no such capacity by the law of such
state, may sue or be sued in its common name for the purpose of enforcing for
or against it a substantive right existing under the Constitution or laws of
the United States. See, e.g., Sierra Ass’n v. FERC, 744
F.2d 661, 662 (9th Cir. 1984). The district court did not rule on the
plaintiffs’ motion to grant a default against the Unincorporated
Association, which did not answer the plaintiffs’ complaint. On
remand, the district court should rule on the motion in the light of Rule 17(b)
and in the light of such facts as the district court finds after a hearing. CONCLUSION For the reasons stated, the judgment of the
district court is AFFIRMED in its dismissal of the Blue Sky law, common law
fraud, and breach of fiduciary duty claims. The judgment of the district court
is REVERSED as to its dismissal of the federal securities and RICO claims and
the dismissal of the plaintiffs’ default motion against the
Unincorporated Association. The case is REMANDED to the district court. GOODWIN, Circuit Judge, Concurring and
Dissenting: I would affirm the judgment dismissing the
action pursuant to Fed. R. Civ. P. 12(b)(3). The Choice Clauses are valid and
are not preempted by extraterritorial application of the United States
securities laws. Appellants, all citizens or residents of the
United States, claim that Section 14 of the 1933 Act and Section 29a of the
1934 Act, give them the right to repudiate their insuring agreements. Section
14 reads: Any condition, stipulation, or provision
binding any person acquiring any security to waive compliance with any
provision of this subchapter or of the rules and regulations of the Commission
shall be void. The key question is whether the transactions
described in the complaint made the appellants “persons acquiring any
security.” The majority concludes, without deciding whether these
foreign insurance undertakings are securities, that the appellants have brought
themselves within the protection of a law designed to protect domestic
investors from being victimized by combinations of their own greed and the
artifices of sellers of investment schemes. The majority holds that just
because the Appellants alleged in their complaint that they were
“persons acquiring any security,” United States securities
law renders void the carefully written terms of the engagements by which the
Appellants brought themselves into the English insurance underwriting scheme
popularly known as “Lloyd’s of London.” The same reasoning would bring protections
under our securities laws to any one who loses his or her savings betting on
chicken fights in Zamboanga. An American could simply allege she had purchased
a security, and thus repudiate any contractual obligations entered into around
the world. There must be some limit to the reach of the United States
government as nanny. There are a number of prudential reasons,
based on the augmentation of trade, as well as domestic legal reasons, based
upon United States precedent, why the majority’s willingness to
jettison solemn international contracts in order to pursue a perceived policy
goal on the part of Congress must be called into question. I accept, as one must for Rule 12(b)(3)
purposes when examining pleadings, the majority’s statement of the
facts. But the facts as pled do not compel the majority’s conclusions
of law. United States residents, having heard of the
profits to be made and the risks to be run by investing in the worldwide
underwriting pools in the peculiar form of risk insurance popularly known as
Lloyd’s of London, wanted to become “Names”
(hereinafter referred to as Names). They ventured their assets, as all Names
must, and those who lost money sued. Those who did not lose money apparently
have not sued, but may be waiting in the wings to see how this case comes out
and to sue if they ever do lose money. It is precisely this effect on the
worldwide insurance business, and upon other international contracts, that
makes this case strange, and troubling. The Appellants did not sue in the courts of
the United Kingdom, which they solemnly agreed to do if they deemed themselves
wronged. Instead, they sought out the courts of this circuit, and repudiated
that part of their agreement with the defendants which the Appellants found
inconvenient to their litigation strategy. It appears from their complaint, and
reference to English law, that if Appellants can prove their essential facts,
English law would provide a plain, speedy, and adequate remedy for any fraud
that was practiced upon them, and fraud is what they now say made their bargain
improvident. The majority virtually ignores the contracts
the parties negotiated and executed, contractual undertakings without which
their opportunity to venture their assets would not have been open. The
majority also ignores the century of historic success the nation’s
insurance lobby has enjoyed in keeping federal law largely out of the insurance
business. It assumes that because the Appellants claimed they had acquired
securities, the securities laws trumped all other law that might bear upon the
subject at hand. The implications of this holding on
international business transactions are not likely to lubricate commerce.
Therefore, I would follow the other circuits that have enforced the
Names’ obligations to litigate their claims in the English courts. See
Roby v. Corporation of Lloyd’s, 996 F.2d 1353 (2d
Cir.), cert. denied, 510 U.S. 945 (1993); Bonny v. Society of Lloyd’s,
3 F.3d 156 (7th Cir.
1993), cert. denied, 510 U.S. 1113 (1994); Riley v. Kingsley Underwriting
Agencies, Ltd., 969
F.2d 953 (10th Cir.), cert. denied, 506 U.S. 1021 (1992); Shell v. R.W.
Sturge, Ltd., 55
F.3d 1227 (6th Cir. 1995); Allen v. Lloyd’s of London, 94 F.3d 923 (4th
Cir. 1996). I. International v. Domestic
The Supreme Court indicated in M/S Bremen v.
Zapata Offshore Co., 407 U.S. 1,
15 (1972) that forum selection clauses are presumptively valid where the
underlying transaction is fundamentally international in character. This
presumption also holds for actions under the securities acts. See Scherk v.
Alberto-Culver Co., 417 U.S.
506 (1974). The majority seeks to weaken Scherk by treating the dispute in this
case as basically domestic. While Appellants allege that they were solicited in
the United States and many Appellants signed the General Undertaking in the
United States, international traders sign documents every day and transmit
signatures electronically overseas with the locus of the signing a wholly
immaterial historical fact. Signing a document in a ski lodge in Austria does
not bring Austrian law to bear upon all future disputes arising out of the
document. These arguments rehearse the usual “points of
contact” aggregation that occurs in interstate litigation within the
United States when competing state laws are invoked by the parties and the
court must choose the law to apply in a diversity case. This is a diversity
case, but it is not a points of contacts case. The case is about international
commerce. Appellants also argue that the ROTA Committee
meeting in England that all Names must attend is simply a formality that should
not have presumptive weight in determining whether to characterize these
transactions as international. Becoming a Name is not a matter of empty
formality. The ROTA Committee meeting is an essential part of becoming a
Member. Whether solicited in California or in Hong
Kong, the Names freely and voluntarily contracted to become members of an
English insurance marketplace that underwrites insur ance worldwide. 1
Subjecting Lloyd’s to the varying requirements of the different
countries in which Names might reside would inject counterproductive uncertainty
into the operation of the Lloyd’s marketplace. Such uncertainty
interferes with the smooth functioning and growth of global commerce, see
Bremen, 407 U.S. at 9 , and destroys the predictability needed for financial
planning and for the resolution of disputes. See Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473
U.S. 614, 629 (1985). Lloyd’s structured its system to
avoid this uncertainty and to create predictability through use of forum
selection and choice-of-law clauses. See Scherk, 417 U.S. at 518 ; Roby, 996
F.2d at 1363. Further, international comity dictates that United States courts
enforce choice-of-forum clauses out of respect for the integrity and competence
of foreign tribunals. See Mitsubishi, 473 U.S. at 629 . Finally, our failure to
enforce the Choice Clauses could lead to “unseemly and mutually
destructive jockeying by the parties to secure tactical litigation
advantages.“ Scherk, 417 U.S. at 516 -17. If Lloyd’s
“had anticipated that [Appellants] would be able in this country to
enjoin [enforcement of the forum selection clause, Lloyd’s] might have
sought an order in [England] enjoining [Appellants] from proceeding with
[their] litigation in the United States.” See id. at 517. In any
event, without the certainty of the Choice Clauses, it is unlikely that
Lloyd’s would engage to underwrite, at premiums anyone would pay, the
kind of risks in the various venues of the earth in which losses could occur. II. Are the Choice
Clauses Unreasonable Under the Circumstances? The presumption in favor of choice-of-forum
clauses in international transactions can be overcome by a clear showing that
the clauses are “unreasonable under the circumstances.”
Bremen, 407 U.S. at 10 . Forum selection clauses are unreasonable (1) if their
incorporation into the agreement was the result of fraud or overreaching,
Bremen, 407 U.S. at 12 -13; (2) if the complaining party “will for all
practical purposes be deprived of his day in court,” due to the grave
inconvenience or unfairness of the selected forum, id. at 18; (3) if the
fundamental unfairness of the chosen forum may deprive the plaintiff of a
remedy, Roby, 996 F.2d at 1363; or (4) if the clauses contravene a strong
public policy of the forum state, Bremen 407 U.S. at 15 . A. The Antiwaiver Provisions In international agreements, the Supreme
Court has enforced choice clauses even where similar agreements in purely
domestic transactions might not be recognized. Still, the majority holds that
the antiwaiver provisions and the securities laws embody a public policy
offended by the Choice Clauses. However, none of the other courts of appeals
that have addressed the enforceability of the Choice Clauses in the General
Undertaking have failed to enforce the forum selection clause. 2 See Roby, 996 F.2d 1353;
Bonny, 3 F.3d 156;
Riley, 969 F.2d 953;
Shell, 55 F.3d 1227;
Allen, 94 F.3d 923.
But see Leslie v. Lloyd’s of London, Civ. A. No. H-901907, 1995 WL
661090 (Aug. 20, 1995 S.D. Tex.). It is true that none of the cited cases
specifically addressed Appellants’ contention, and the
majority’s holding, that the antiwaiver provisions explicitly prohibit
the enforcement of the clauses. Rather, the courts engaged in judicial
balancing to determine whether enforcement of the clauses would contravene the
strong public policy embodied in the antiwaiver provisions. Judicial balancing
is the appropriate course. The other courts of appeals, citing Bremen,
have implicitly crafted an exception to the antiwaiver provisions in
international agreements where the remedies available in the selected forum are
sufficient to “deter issuers from exploiting American
investors.” Roby, 996 F.2d at 1364; see Bonny, 3 F.3d at 161 (holding
that so long as “remedies available in the selected forum [do not]
subvert the public policy” of the securities laws the court will
enforce the clauses). In Bremen, the Supreme Court enforced a choice-of-forum
clause even though the English courts would give effect to an exculpatory
clause in the contract that United States courts would not if the case arose in
a domestic setting. Bremen, 407 U.S. at 15 16. The Court held that the
“considerations with respect to the towage business strictly in
American waters … are not controlling in an international commercial
agreement. ” Id. Further, the Court quoted the dissent in the court of
appeals stating that “we should not invalidate the forum selection
clause here unless we are firmly convinced that we would hereby significantly
encourage negligent conduct within the boundaries of the United
States.” Id. at 16. Similarly here, we should not invalidate the
Choice Clauses unless we are firmly convinced that England does not provide
adequate remedies to deter fraud upon United States Names. The majority disregards Bremen because it did
not involve a federal statute but rather federal admiralty law. Bremen,
however, does not rely on distinctions between statutory and judge made law.
The Bremen Court stated that“[a] contractual choice-of-forum clause
should be held unenforceable if enforcement would contravene a strong public
policy of the forum in which suit is brought, whether declared by statute or by
judicial decision.” Bremen, 407 U.S. at 15 (emphasis added).3 Also the
majority attempts to argue that Scherk can be distinguished because the Court
had a competing federal statute, the Arbitration Act, to reconcile with the
securities laws. Scherk’s reliance on Bremen did not depend on the
Arbitration Act. The Arbitration Act only placed arbitration provisions on
equal footing with other contractual clauses, like choice-offorum clauses. See
Scherk, 417 U.S. at 511 (noting that the Arbitration Act puts arbitration
agreements “upon the same footing as other contracts”); Cange
v. Stotler & Co., 826 F.2d 581, 595 (7th Cir. 1987) (Easterbrook, J.,
concurring) (“The Federal Arbitration Act was designed to reverse
centuries of judicial hostility to arbitration not to make arbitration
agreements more readily enforceable than other agreements.” (citations
and internal quotations omitted)). It did not make arbitration clauses more
binding than choice-of-forum clauses. Further, in cases discussing the
extraterritorial effect of the securities laws, courts have been careful to
examine the policies of the securities acts before expanding the securities
acts and violating notions of international comity. See Leasco Data Processing
Equip. Corp. v. Maxwell, 468 F.2d 1326 (2d Cir. 1972); Bersch v. Drexel
Firestone, Inc., 519 F.2d 974, 985 (2d Cir.), cert. denied, 423 U.S. 1018
(1975). 4 Although not done explicitly, the other circuits have determined that
if the policies of the securities acts were adequately protected abroad, then
the antiwaiver provisions should not operate to invalidate forum selection and
choice-of-law clauses and force U.S. laws on parties who have chosen other law.
Given the active judicial role in determining the scope of the securities laws
in international transactions, I believe we should follow the lead of the other
circuits and enforce the clauses if remedies in England are adequate to serve
the policies of the securities laws. See Roby, 996 F.2d at 1364. The Names did
not expect more when they volunteered to sign the General Undertaking. B. Public Policy of the Securities Acts In this case, English law adequately protects
the policies embodied in the securities laws. Appellants have alleged
violations of sections 12(1) and 12(2) of the 1933 Act, 15 U.S.C. S 77l(a), and
section 10(b) and rule 10b-5 of the 1934 Act, 15 U.S.C. S 78j(b); 17 C.F.R. S
240.10b-5. These sections are aimed “at prospectively protecting
American investors from injury by demanding ‘full and fair
disclosure’ from issuers,” Roby, 996 F.2d at 1364, deterring
fraud and manipulative practices in the securities markets, and compensating
defrauded investors. See Randall v. Loftsgaarden, 478 U.S. 647, 664 (1986).
While English and American remedies are not identical, “the
possibility of an unfavorable change in law” should not be dispositive
unless the “remedy provided by the alternative forum is so clearly
inadequate or unsatisfactory that it is no remedy at all.” Piper
Aircraft Co. v. Reyno, 454
U.S. 235, 254 -55 (1981). 5 Though a difficult question, English remedies
seem to serve these policies adequately. 1. Fraud and Manipulative Practices English law provides remedies for fraudulent,
negligent, and even innocent misrepresentation. Further, section 47 of the
English Financial Services Act creates penalties for misleading statements or
omissions made knowingly or recklessly. See Bonny, 3 F.3d at 161.
“While the … Names might have been able to sue `controlling
persons’ under the United States securities laws and establish
liability without proving reliance, it is not unfair for English law to require
proof of actual misconduct and reliance.” Roby, 996 F.2d at 1365. Although section 14 of the Lloyd’s
Act of 1982 exempts the Corporation of Lloyd’s (and its officers and
employees) from liability in damages, Lloyd’s is not exempt for acts
“done in bad faith.” As fraud requires bad faith, even with
section 14, Lloyd’s remains liable in damages for fraud. Further,
section 14 does not preclude the “grant of an injunction, a
declaration or restitutionary relief against Lloyd’s,” and
one of the remedies under English law for misrepresentation is rescission.
Thus, even for negligent misrepresentation, Appellants may rescind their
contract. Finally, section 14 of the Lloyd’s
Act applies only to the Corporation of Lloyd’s and not to Members and
Managing Agents. Although these entities are not named in this action, the
Lloyd’s insurance market cannot function without them and thus suits
against Members and Managing Agents will deter fraud by and lead to closer
supervision by the entities named in this action. 2. Disclosure English law provides Lloyd’s
entities with adequate inducement to disclose material information to American
investors because failure to do so gives rise to liability for breach of
contract. The Members Agent’s Agreement requires each Members’
Agent promptly to provide information to Names regarding the Underwriting
Syndicates. See Roby, 996 F.2d at 1366. Again, the Members Agents are not named
in this suit. But the Lloyd’s structure imposes the disclosure duties
on the Members Agents and thus adequately assures appropriate disclosure. 3. Compensation English law allows Appellants to recover
damages from Lloyd’s for fraud. Further, as an incident of a
rescission remedy, Appellants may obtain indemnity against liabilities incurred.
Additionally, Names have obtained judgments against Members and Managing Agents
in England. See Arbuthnott v. Fagan & Feltrim Underwriting Agencies, Ltd., 3 Re LR 145; Deeny v. Gooda Walker Ltd., The
Times, October 7, 1994 (Q.B. Commercial Ct.); Henderson v. Merrett Syndicates,
Ltd., 1992 Folio 1496 (Q.B. Commercial Ct.); Henderson v. Merrett Syndicates,
Ltd., 1994. 3 W.L.R. 761 (H.L.). Appellants claim that no Names have
successfully enforced these judgments because the Agents are now insolvent. That
the parties most easily sued in England are insolvent is indeed unfortunate.
The Lloyd’s system met with global disaster in the wake of American
asbestos litigation. That misfortune, however, does not commend itself as a
reason to open up United States courts for the pursuit of solvent defendants in
the plaintiff-friendly environment of California. Without question, England imposes additional
barriers to recovery and will thus not provide deterrence, disclosure, or
compensation equal to that provided by the United States securities laws.
However, the English regulatory structure and the remedies available in England
are not so inadequate that enforcement of the choice-of-forum clause violates
public policy. Cf. Howe v. Goldcorp Invs., Ltd., 946 F.2d 944, 952 (1st Cir.
1991) (dismissing a securities case on forum non conveniens grounds even though
there may be some differences between Canadian and American securities laws),
cert. denied, 502 U.S. 1095 (1992). Though a complex question with respect to the
securities laws, English law does adequately protect the interests reflected in
the American securi ties laws for those United States residents who elect to
participate in English underwriting agreements. C. RICO The majority also remands for a determination
whether “the Choice Clauses are reasonable in their impact on the
obligations established by RICO.” Again, I must respectfully disagree.
The record provides sufficient information to determine the adequacy of English
remedies for a RICO claim. Although RICO provides treble damages not available
in England, the remedies in England are adequate to prevent the fraudulent
securities conspiracy alleged here. See supra Part II.B.; cf. Lockman Found. v.
Evangelical Alliance Mission, 930 F.2d 764, 768-69 (9th Cir. 1991) (holding
that RICO claims may be dismissed on forum non conveniens grounds even when
they would not be available in the alternative forum). Further, even to suggest
that a plaintiff need only plead a cause of action under RICO to invalidate
Choice Clauses in freely negotiated contracts defies reason. A party’s
contractual choices cannot be so easily repudiated by artful pleading. CONCLUSION I concur in that part of the majority opinion
which affirms the dismissal of the Blue Sky law, common law fraud, and breach
of fiduciary claims, and agree with the majority that the clauses were not
procured by fraud. However, I would affirm the district court across the board,
and therefore I dissent from the reversal and remand. Footnotes [ Footnote 1 ] Appellants argue that their
investment in Lloyd’s is no different from an investment in any
predominantly British company. However, other foreign companies do not have
their own elaborate regulatory structure nor do other companies require
investors to sign multiple agreements with foreign agents. Further, the Names
knew they were subjecting themselves to this uniquely English regulatory
structure. [ Footnote 2 ] The issue before the Court
involves the enforcement of the choice-offorum clause on a Rule 12(b)(3) motion
to transfer venue. The choice-oflaw clause is relevant only because the
incidental effect of enforcing the forum selection clause would lead an English
court interpreting the choice-of-law clause to preclude operation of U.S.
statutory law. [ Footnote 3 ] Stewart Org., Inc. v. Ricoh,
487 U.S. 22, 28 (1988), does not compel abandoning Bremen analysis in this
situation. There the Court noted that the Bremen case “may prove
instructive in resolving the parties’ dispute,” Stewart, 487
U.S. at 28 , and unlike 28 U.S.C.S 1404(a) at issue in Stewart, the antiwaiver
provisions do not specifically address transfer of venue. [ Footnote 4 ] The Leasco line of cases did
not address the effect of international choice clauses on the applicability of
the securities laws. [ Footnote 5 ] Piper is a forum non
conveniens case. If the possibility of an unfavorable change in the law does
not control where the parties have not affirmatively selected a forum, then it
certainly should not control where the parties have made a forum choice. |