On July 30, 2012, the Indiana Supreme Court, in Otieno v. Rolls-Royce Corp., 971 N.E.2d 654 (Ind. 2012), provided important direction to litigants regarding Indiana Trial Rule 4.4(C) and the doctrine of forum non conveniens. First, the court concluded that it would conflict with the discretionary authority granted to the trial court in Trial Rule 4.4(C) if a motion to dismiss could not be granted unless it was clear that litigation in Indiana would be so inconvenient that “substantial injustice” would be likely to result. This is a departure from more than 30 years of Indiana Court of Appeals precedent, which had built in a “substantial injustice” requirement into its Trial Rule 4.4(C) analysis. Second, the court explicitly adopted the reasoning of the United States Supreme Court in Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981). Reyno is the leading United States Supreme Court decision on forum non conveniens. The court in Reyno held that dismissal cannot be denied merely by showing that the substantive law that would be applied in the alternative forum is less favorable to the plaintiffs than the chosen forum. The court also held that the possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry. Id.

The Otieno case arose from a helicopter accident in British Columbia, Canada, in 2008. Isaiah Omondi Otieno, a Kenyan citizen and student at the Canadian College of the Rockies at Cranbrook, was killed when a helicopter crashed to the ground while he was mailing a letter from Canada to his parents in Kenya. The helicopter was conducting a low-level visual inspection of high-voltage electrical lines when the accident occurred. The Transportation Safety Board of Canada found that the helicopter experienced a loss of power for unknown reasons while flying too low and too slow to execute a successful autorotation. In March 2010, Isaiah’s parents, with no known connection to Indiana, brought a products liability wrongful death action in the Marion Superior Court. They sued Bell Helicopter Textron Inc., Rolls-Royce Corporation, and Honeywell International Inc. The helicopter was manufactured in Texas by Bell Helicopter. The engine was manufactured in Indiana by Allison, which was later purchased by Rolls-Royce. The engine components were designed at a Honeywell facility in Indiana and manufactured in North Carolina. The three other people killed (the pilot and two passengers) in the accident sued in British Columbia.

In June 2010, the defendants moved to dismiss the lawsuit under Trial Rule 4.4(C) on the grounds of forum non conveniens. The defendants asserted that British Columbia provided a more convenient forum for all parties because it is where the accident occurred, where the accident investigation took place, where most physical evidence and witnesses were located, and a parallel lawsuit involving other citizens of British Columbia was pending. The defendants also stipulated that they would subject themselves to the personal jurisdiction of British Columbia.

The Otienos opposed the dismissal and contended that Indiana courts can decline to exercise jurisdiction only when litigation in Indiana creates such a great burden on a defendant that “substantial injustice” is likely to result. In this case, the plaintiffs argued that the measurement of damages in British Columbia was economically inadequate.

In affirming the trial court’s order dismissing the action, the court relied on the express language of Trial Rule 4.4(C) which provides:

(C) More Convenient Forum. Jurisdiction under this rule is subject to the power of the court to order the litigation to be held elsewhere under such reasonable conditions as the court in its discretion may determine to be just.

In the exercise of that discretion, the court may appropriately consider such factors as:

(1) Amenability to personal jurisdiction in this state and in any other alternative forum of the parties to the action;

(2) Convenience to the parties and witnesses of the trial in this state and any other alternative forum;

(3) Differences in conflict of law rules applicable in this state and in the alternative forum; or

(4) Any other factors having substantial bearing upon the selection of a convenient, reasonable and fair place of trial.

Evidence of ‘Substantial Injustice’ is not required under 4.4(C)

The Indiana Supreme Court noted that most decisions from the Indiana Court of Appeals over the last 30 years that addressed Trial Rule 4.4(C) had built into their analyses a burden that a party moving to dismiss a case from an Indiana court based on the doctrine of forum non conveniens had to show “substantial injustice.” See Employers Ins. of Wausau v. Recticel Foam Corp., 716 N.E.2d 1015, 1022 (Ind. Ct. App. 1999) (“The purpose of Trial Rule 4.4(C) is to permit a case to be litigated in another state upon a showing that litigation in Indiana is so inconvenient that substantial injustice is likely to result.”); accord Duncan v. Rogers, 444 N.E.2d 1255, 1258 (Ind. Ct. App. 1983) (“Forum non conveniens permits a cause to be litigated in another jurisdiction upon a showing that litigation in the initiating forum is so inconvenient to the parties and witnesses that substantial injustice is likely to result.”); Kollearn Properties, Inc. v. Lambright, 176 Ind. App. 684, 377 N.E.2d 417, 419 (Ind. Ct. App. 1978) (“The purpose of this rule is to permit a cause to be litigated in another state upon a showing that litigation of the cause in Indiana is so inconvenient that substantial injustice is likely to result.”)

Although the Indiana Supreme Court was not as clear as it could have been, the court’s holding in Otieno eliminated a “substantial injustice” requirement because it could potentially infringe upon the explicit discretionary authority granted to the trial court judge. The language of Trial Rule 4.4(C) does not have a “substantial injustice” element. Trial Rule 4.4(C)(4) allows the trial judge to consider “any other factors having a substantial bearing upon the selection of a convenient, reasonable and fair place of trial,” but the rule does not mandate that a party moving to dismiss under the rule establish that substantial injustice is likely to result if the case goes forward in Indiana. In footnote 2, the court in Otieno stated, “It would conflict with the explicit discretionary authority granted to the trial court in Trial Rule 4.4(C) if a motion to dismiss could not be granted unless it was clear that litigation in Indiana would be so inconvenient that ‘substantial injustice’ would be likely to result.” In other words, the trial judge is not required to consider whether substantial injustice would result but may in her discretion consider it as a factor under Trial Rule 4.4(C)(4).

Indiana Adopts the Reasoning of Piper Aircraft Co. v. Reyno

The second important upshot of the Otieno decision is the court’s express adoption of Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981). The facts of Otieno and Reyno are very similar. In Reyno, Scottish citizens were killed in a plane crash in Scotland. Their estates sued the manufacturers of the plane and propeller in the United States. The plaintiffs filed the lawsuit in the United States because the Scottish forum was much less favorable than the United States forum. The potential damages recovery under Scottish law was a fraction of the potential recovery under California law. The trial court granted the defendants motion based on forum non conveniens. The 3rd Circuit reversed, holding that the dismissal is automatically barred where the law of the alternative forum is less favorable to the plaintiff than the law of the forum chosen by the plaintiff. The United States Supreme Court rejected the 3rd Circuit’s approach:

We do not hold that the possibility of an unfavorable change in the law should never be a relevant consideration in a forum non conveniens inquiry. Of course, if the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all, the favorable change in law may be given substantial weight; the district court may conclude that dismissal would not be in the interest of justice. In these cases, however, the remedies that would be provided by the Scottish courts should not fall within this category. Although the relatives of the decedent may not be able to rely on a strict liability theory and although the potential damages award may be small, there is no danger that they would be deprived of remedy or treated unfairly.

The size of a potential award is not a substantial factor in a forum non conveniens analysis, as long as the alternative forum provides a remedy and there is no danger that the parties will be treated unfairly. Relying on the analysis in Reyno, the court concluded that although the Otienos could potentially recover only nominal damages under British Columbia wrongful death law, there was no danger that they would be treated unfairly or deprived of a remedy.

The court’s heavy reliance on the Reyno decision is not a significant divergence from prior Indiana precedent. In McCracken v. Eli Lilly & Co., 494 N.E.2d 1889 (Ind. Ct. App. 1986), the court affirmed the dismissal based on Trial Rule 4.4(C) on the grounds that Britain was a more convenient forum. The court stated that there was no danger that the plaintiffs would be treated unfairly or deprived of their remedy. Conversely stated, the present plaintiff would have to demonstrate that the alternative forum is so inadequate or unsatisfactory that there is no remedy at all. Id. The dismissal was appropriate even though the potential award in Britain was smaller and the litigation would be more expensive. The Indiana Supreme Court in Otieno rejected the rule that the adequacy of the alternative forum required the scope of relief available to be at least as great as the forum selected by plaintiffs. The Indiana Supreme Court concluded that Reyno has the better rule. Accordingly, dismissal of the Indiana action was proper.

The Indiana Supreme Court has now provided more concrete guidance for Indiana litigants addressing Trial Rule 4.4(C) and the doctrine of forum non conveniens. “Substantial injustice” is not a required consideration of the trial judge, and the reasoning of the United States Supreme Court in Piper Aircraft Co. v. Reyno is now controlling in Indiana.•

Mr. Mortier is a partner in the Indianapolis office of Frost Brown Todd and is a member of the Defense Trial Counsel of Indiana. His practice focuses on product liability law. The opinions expressed in this article are those of the author.