The question in this case is whether a trial court may dismiss an action on the ground of forum non conveniens before addressing a challenge to personal jurisdiction.
The common law doctrine of forum non conveniens permits a court to dismiss a case if it appears that New York would be an inconvenient place to litigate. There are several factors courts must consider in applying this doctrine, but ultimately the decision to dismiss rests with the discretion of the trial court. By contrast, personal jurisdiction is a limitation on the court’s power to adjudicate a case in the first place. If a defendant successfully challenges personal jurisdiction, the court must dismiss the action. When an action involves both challenges, however, must a court address the jurisdictional issue first?
The U.S. Supreme Court answered that question as a matter of federal common law in Sinochem International Co. v. Malaysia International Shipping Corp., 549 U.S. 422 (2007), holding that a court may address the forum non conveniens challenge first under certain circumstances. The question remains unanswered as a matter of New York law, however, and there is conflicting authority as to how it should be resolved. Most state decisions hold that a court must address the jurisdictional issue first, but some decisions permit a court to assume jurisdiction to resolve the forum non conveniens challenge. None of the state decisions addresses the Supreme Court’s decision in Sinochem.
This case squarely presents the question. It involves a challenge to the sale of a piece of artwork by Christie’s, the New York auction house. The artwork was stolen from the owner by Nazis before World War II, and the owner’s putative heirs dispute who should have inherited it. One putative heir authorized the Christie’s sale; the other heirs–plaintiffs in this action–claim to be the true inheritors and assert that the Christie’s sale was invalid. Two nonparty municipalities in Switzerland also claim an ownership interest in the work. The putative heirs are all domiciled abroad; their competing claims are governed by either Swiss, German or French law; and related actions have been litigated in Swiss and German courts.
Defendants all moved to dismiss the action, asserting either a personal jurisdiction challenge, a forum non conveniens challenge, or both. The trial court noted the ambiguity in New York law about which challenge must be resolved first, found the reasoning of Sinochem persuasive, and dismissed the action on forum non conveniens grounds without resolving the personal jurisdiction challenges. The First Department affirmed, adopting the trial court’s decision to follow Sinochem and agreeing with the trial court that the case should be dismissed on the ground of forum non conveniens.
The Court of Appeals granted leave to appeal.