7th Circuit: Proper venue for Zimmer Biomet bribery trial is Mexico

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Allegations that Zimmer Biomet Holdings Inc. engaged in a bribery scheme of Mexican government officials led to an “unusual twist” of Zimmer and the Mexican plaintiff each arguing against trying the case in their respective home courts, but the 7th Circuit Court of Appeals agreed with the medical device manufacturer that under the forum non conveniens doctrine, the case should be dismissed from the Northern Indiana District Court.

The Instituto Mexicano del Seguro Social filed a complaint in the U.S. District Court for the Northern District of Indiana, alleging Zimmer Biomet orchestrated an international bribery scheme to bribe Mexican government officials to sell unregistered medical products in Mexico.

Zimmer Biomet argued the best forum for trying the case was in the Mexican courts because the documents and witnesses were in Mexico and because the burden of translating the evidence and testimony from Spanish to English would be eliminated.

Consequently, the medical device manufacturer moved to dismiss the complaint under the doctrine of forum non conveniens. This “supervening venue provision” enables a court to dismiss a lawsuit when litigating in that court as opposed to another forum would unreasonably burden the defendant.

IMSS countered that the ratification of the United Nations Convention Against Corruption by the United States precluded application of the forum non conveniens doctrine. Also, the plaintiff asserted the American federal court system was the better forum because the discovery procedures are comparatively more comprehensive and the litigation process is more expedient.

The district court granted Zimmer Biomet’s motion based on the forum non conveniens doctrine, and the 7th Circuit affirmed in Instituto Mexicano del Seguro Social v. Zimmer Biomet Holdings, Inc., 21-1224.

Writing for the 7th Circuit, Judge Amy St. Eve noted the case presented a “slightly unusual twist.” IMSS filed the lawsuit in the federal court that is in Zimmer Biomet’s home of northern Indiana and, normally, the plaintiff’s choice of court is where the litigation would be conducted.

However, IMSS acknowledged that Mexican courts do provide an alternative forum which, the appellate panel found, led to the district court examining the private and public interest factors and correctly determining the other venue was a viable option for the litigation.

“IMSS characterizes its suit as presenting a ‘local controversy’ to Indiana and claims the district court improperly discounted the United States’s strong national interest in combating corruption,” St. Eve wrote. “First, we are unconvinced an alleged scheme involving Biomet 3i, a company located in Mexico, bribing ‘Mexican agents,’ to enable them to sell medical devices in Mexico, to be used by Mexican doctors in Mexican hospitals on Mexican patients, through an agency of the Mexican government, pursuant to contracts executed in Mexico, presents a ‘local controversy’ to Warsaw, Indiana, regardless (of) where it was orchestrated.”

Also, the 7th Circuit ruled IMSS’ argument regarding the UNCAC was unavailing. Specifically, the court found Congress did not pass legislation implementing the UNCAC, so the treaty is not binding federal law.

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