As we explained in our case summary, the issue in this case was whether a court may dismiss a complaint on forum non conveniens grounds before deciding whether it has personal jurisdiction over the defendant. In a 5–1 decision, with Judge Rivera taking no part, the Court (Cannataro, J.) held that a court may dismiss for forum non conveniens before considering personal jurisdiction. The Court went on to hold that Supreme Court did not abuse its discretion in dismissing for forum non conveniens.
Before Margaret Kainer fled Nazi Germany for Switzerland, the Nazis stole hundreds of artworks from her, including Daneuses, a painting by Edgar Degas. That painting was first sold by a Japanese gallery in a private sale and then at public auction for more than $10 million. Part of the sale proceeds went to a Swiss foundation established by Kainer’s father’s will and controlled by UBS. The foundation had claimed that it was the rightful heir to the painting and bargained for a cut of the sale price in exchange for renouncing its ownership claim.
Kainer’s heirs sued the foundation, UBS, and the auction house in Supreme Court, claiming that the foundation was never a rightful heir to the painting. Supreme Court dismissed the claims against all defendants except the auction house on forum non conveniens grounds, and the First Department affirmed.
The majority agreed with the courts below. First, the majority held that Supreme Court properly considered forum non conveniens before deciding that it had personal jurisdiction over all the defendants. Although Ehrlich-Bober & Co. v. University of Houston, 49 N.Y.2d 574 (1980), had stated that forum non conveniens “has no application unless the court has obtained in personam jurisdiction over the parites,” the majority explained that Ehrlich-Bober made that statement in summarizing the decision below in that case, not in formulating a rule. Second, the majority held that while the availability of another forum for the lawsuit is the most important factor in the forum non conveniens analysis, it is not a prerequisite. Finally, the majority ruled that because Supreme Court considered all the relevant forum non conveniens factors, it had not abused its discretion, meaning that the case presented no question reviewable by the Court of Appeals. The majority acknowledged that “special and unusual circumstances favoring suit” in New York could make a forum non dismissal an error of law that the Court could review, but did not believe that circumstances here were sufficiently special and unusual.
Judge Fahey dissented. While he agreed with the majority that forum non conveniens questions are generally reserved to Supreme Court’s discretion and so are unreviewable by the Court of Appeals, he believed that this case presented special and unusual circumstances favoring New York as a forum. He grounded that view on the forum non conveniens statute, CPLR 327(a), which allows Supreme Court to dismiss “in the interest of substantial justice.” Justice, in his view, required litigating the case in New York, which the Court had previously recognized holds “a worldwide reputation as a preeminent cultural center” and thus has a public policy “to protect the true owners of stolen artwork and to reject legal doctrines or policies that encourage illicit trafficking in stolen art.” That public policy applied with extra force, Judge Fahey wrote, when the claims involve art looted during the Holocaust—“one of the greatest crimes in human history.”