First Circuit Holds Japan is an Adequate Alternative Forum
On April 24, 2020, the First Circuit affirmed the District of Massachusetts’ dismissal of a case against General Electric on forum non conveniens grounds.
In 2011, an earthquake-induced tsunami struck the Fukushima Daiichi Nuclear Power Plant in Japan. Individuals and businesses who suffered property damage and/or economic harm from the disaster filed a class action lawsuit against General Electric, which designed the power plant’s nuclear reactors and safety mechanisms, in the District Court for the District of Massachusetts. The district court held Japan provided an adequate alternative forum and dismissal was in both the private and public interest.
Plaintiffs had contended venue was proper in the District of Massachusetts because General Electric’s corporate headquarters and principal place of business are in Boston, Massachusetts. Plaintiffs alleged the district court had subject matter jurisdiction because the Convention on Supplementary Compensation for Nuclear Damage, a treaty to which both Japan and the United States are parties, did not apply so as to retroactively vest Japanese courts with exclusive jurisdiction.
The district court granted General Electric’s motion to dismiss under the doctrine of forum non conveniens. On appeal, plaintiffs argued Japan is not an adequate alternative forum because under Japan’s Act on Compensation for Nuclear Damage, the Tokyo Electric Power Company, the power plant’s operator, incurs all liability and plaintiffs cannot pursue their claims against General Electric. Although General Electric said it was amenable to suit in Japan, plaintiffs contended that Japan’s Act on Compensation immunizes General Electric.
The First Circuit reviewed for abuse of discretion and held an alternative foreign forum is available if the forum has personal jurisdiction and subject matter jurisdiction over the dispute. “[W]hile Plaintiffs may not be able obtain recovery in Japan specifically from [General Electric], Japan nevertheless adequately addresses the same types of claims through a carefully designed tripartite compensation scheme.” Imamura, et al. v. General Electric Company. Under Japan’s Act on Compensation, plaintiffs can sue the Tokyo Electric Power Company until the ten-year statute of limitations expires in 2021 or mediate their claims through an administrative compensation scheme. In fact, many members of the putative class have already obtained compensation under the Act against the power plant operator. “So long as Japanese courts continue to allow Plaintiffs their day in court, where they may obtain full and fair compensation – regardless of which entity ultimately foots the bill – there is no meaningful absence of jurisdiction.” Id. at 24. The First Circuit was persuaded by the Ninth Circuit’s conclusion in a similar case that a forum is still adequate even if it does not provide the particular remedy plaintiffs seek.
Lastly, the First Circuit found that even if plaintiffs litigated against General Electric in Massachusetts, Japanese law likely applies under local choice of law rules. In such a scenario, Japan’s Act of Compensation might be another ground for dismissal of plaintiffs’ claims in Massachusetts.