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076 - 2021.04.16 - Brief For Defendants-Appellees
076 - 2021.04.16 - Brief For Defendants-Appellees
IN THE
United States Court of Appeals
for the Second Circuit
___________________
KINGSTOWN CAPITAL MANAGEMENT, L.P, KINGSTOWN PARTNERS MASTERS LTD,
KINGSTOWN PARTNERS II, L.P., KTOWN, LP, KINGSTOWN CAPITAL PARTNERS LLC,
INVESTHOLD LTD, VERALI LIMITED,
Plaintiffs-Appellants,
V.
RADOVAN VITEK, CPI PROPERTY GROUP, S.A., J&T BANKA, A.S., POSTOVA
BANKA, A.S., JAN GERNER, MILADA MALA, JEAN-FRANCOIS OTT, LUMIR
SAFRANEK, PAVEL SPANKO, J&T FINANCE GROUP SE, EGNARO INVESTMENTS
LIMITED, LCE COMPANY LIMITED, JULIUS STRAPEK, LEVOS LIMITED, ROTHSCHILD
& CO., TOMAS DAVID, RENE FOLTAN, MARTIN NEMECEK, PETR SEKANINA,
Defendants-Appellees.
__________________________
the shares of which are listed on the market of the Frankfurt Stock Exchange. CPIPG
has no parent corporation, and no publicly held company has an ownership interest
of 10% or more in CPIPG. CPI FIM SA is a subsidiary of CPIPG and its shares are
listed on the regulated markets of the Luxembourg Stock Exchange and the Warsaw
Stock Exchange.
corporation, and no publicly held company owns 10% or more of J&T Finance’s
stock. J&T Finance is the parent corporation of both J&T BANKA, a.s. (“J&T
Banka”) and Postova banka, a.s. (“Postova”), and no publicly held company owns
Rothschild & Co SCA has 35% of its share capital owned by Rothschild &
Concordia SAS. Rothschild & Concordia SAS is not publicly held, and owns the
largest part of Rothschild & Co SCA’s share capital. No publicly held corporation
i
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TABLE OF CONTENTS
Page
INTRODUCTION ..................................................................................................... 1
ARGUMENT ........................................................................................................... 14
ii
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TABLE OF CONTENTS—Continued
Page(s)
CONCLUSION ........................................................................................................ 57
CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
iii
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TABLE OF AUTHORITIES
CASES:
iv
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TABLE OF AUTHORITIES—Continued
Page(s)
De Cisneros v. Younger,
871 F.2d 305 (2d Cir. 1989) ............................................................................... 38
Denny v. Barber,
576 F.2d 465 (2d Cir. 1978) ............................................................................... 56
v
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TABLE OF AUTHORITIES—Continued
Page(s)
Hilton v. Guyot,
159 U.S. 113 (1895) ............................................................................................ 37
vi
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TABLE OF AUTHORITIES—Continued
Page(s)
In re Bridgestone/Firestone, Inc.,
420 F.3d 702 (7th Cir. 2005) .............................................................................. 30
In re Herald,
540 F. App’x 19 (2d Cir. 2013) ....................................................................21, 23
vii
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TABLE OF AUTHORITIES—Continued
Page(s)
Madanes v. Madanes,
981 F. Supp. 241 (S.D.N.Y. 1997) ..................................................................... 29
viii
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TABLE OF AUTHORITIES—Continued
Page(s)
Royal & Sun All. Ins. Co. of Canada v. Century Int’l Arms, Inc.,
466 F.3d 88 (2d Cir. 2006) ..........................................................................passim
Schertenleib v. Traum,
589 F.2d 1156 (2d Cir. 1978) ............................................................................. 28
ix
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TABLE OF AUTHORITIES—Continued
Page(s)
Weiss v. La Suisse,
313 F. Supp. 2d 241 (S.D.N.Y. 2004) ................................................................ 52
x
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TABLE OF AUTHORITIES—Continued
Page(s)
RULES:
OTHER AUTHORITY:
14D Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure (Jurisdiction) § 3828.3 (4th ed. Oct. 2020 Update) .....................25, 26
xi
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IN THE
United States Court of Appeals
for the Second Circuit
___________________
INTRODUCTION
owned real estate in Central and Eastern Europe. Plaintiffs claim that a Czech
several Slovak, French, and Czech individuals and entities—and sold its assets at
below market value to straw purchasers and shell companies throughout Europe.
Plaintiffs sued in Luxembourg, under European law, to recover for the diminution
their dispute to the United States and asked the District Court to resolve it. The
District Court rightly declined that invitation. First, under the doctrine of forum non
conveniens, it found that the proper forum for resolving this case is Luxembourg,
where the relevant events occurred, the relevant evidence can easily be obtained and
Defendants are subject to the courts’ jurisdiction. Second, under the doctrine of
international comity abstention, the District Court held that it should defer to the
1
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discretion. The District Court acted well within its considerable discretion in
Plaintiffs do not identify any respect in which the District Court misapplied the
governing legal standards. Instead, they invite this Court to reweigh factors the
District Court properly addressed, and to impose novel restrictions that this Court’s
precedents foreclose.
errors and omissions. Plaintiffs repeatedly claim that their amended complaint is
meaningfully distinct from the Luxembourg case because it relies on allegations that
“postdat[e] the Luxembourg Lawsuit’s filing” in 2015. Br. 47; see Br. 16, 31-32.
Remarkably, Plaintiffs neglect to mention that, just months before they filed this
case, they submitted a filing in Luxembourg that updated their suit to reflect
information they purportedly learned in the intervening years. Plaintiffs also assert
that they were “never given the opportunity” to respond to Defendants’ foreign-law
expert. Br. 53. That is simply false. After Defendants filed their foreign-law
2
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Defendants’ expert.
The District Court did not abuse its discretion. And the lengths to which
Plaintiffs go to gin up some error by the District Court only confirm that its opinion
“Kingstown”) are investment firms organized and incorporated in Delaware and the
Cayman Islands that claim New York as their principal place of business. JA 368-
370; SPA 4.1 All of the Kingstown entities are under shared control, and collectively
European stock exchange. JA 125, 128, 383; SPA 5. Those bonds were later
1
The other Kingstown affiliates are Kingstown Partners Master Ltd., Kingstown
Partners II, L.P., Ktown, LP, and Kingstown Capital Partners LLC. JA 368-370.
3
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ORCO at roughly the same time. SPA 5; JA 370. Kingstown alleges that, over the
next two years, Vitek worked with a group of European companies and individuals
to “secretly acquire[ ] control” of ORCO and “strip[ ] [it] of valuable assets.” SPA
4; see JA 382-441. As part of that alleged scheme, Kingstown claims that ORCO’s
CEO, a French citizen named Jean-François Ott, made various false statements to
Kingstown to conceal Vitek’s activities, SPA 5-6; JA 382-384; that Czech Property
Investments (“CPI”) and its employee, Martin Němeček, helped Vitek hide his
assets, SPA 7-8; JA 372-373, 384-390;2 and that Rothschild & Co, a “worldwide
financial advisory group” of which Plaintiffs served only the French holding
company, acted as Vitek’s broker, SPA 7-8; JA 376, 386-387. Kingstown also
alleges that a number of other European companies and individuals acted as shell
companies and straw purchasers to help Vitek acquire ORCO’s assets at below-
2
The J&T Defendants include J&T FINANCE GROUP SE, J&T BANKA, a.s.
(“J&T Banka”), and Postova banka, a.s. See JA 372-373; SPA 7.
3
The entities alleged to have acted as Vitek’s shell companies are Egnaro
Investments Limited, LCE Company Limited, and Levos Limited. JA 375-376. The
individuals alleged to have acted as his straw purchasers are Tomáš David, René
4
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majority stake in ORCO and sold off two of its “most valuable” assets—real estate
funds that owned properties located in Central and Eastern Europe. SPA 7-8, 12; JA
365-367, 410-441. Kingstown alleges that this “artificially depress[ed]” the value
of ORCO’s assets, and that in November 2014, Kingstown was forced to sell all of
Investhold Ltd. and its wholly owned subsidiary Verali Limited (collectively,
the Republic of the Marshall Islands and the Republic of Cyprus, respectively. SPA
4 & n.2; JA 370, 378. Investhold alleges that, beginning in 2008, it entered into a
takeover of ORCO without sharing the proceeds with Investhold. SPA 9; JA 441.
Investhold also claims that Vitek diluted Investhold’s ownership interest when he
Foltán, Jan Gerner, Milada Mala, Lumir Safranek, Petr Sekanina, and Pavel Spanko.
JA 371-376. Mr. Safranek passed away in April 2020. See ECF Nos. 216, 233.
5
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the ensuing buyout agreement by failing to compensate Investhold for its full share
alleged that Vitek, Ott, and CPI entities, with the aid of various companies and straw
purchasers, “orchestrated . . . the takeover of power” at ORCO and sold the
Kingstown charged that this takeover and sale violated various European and
sought damages equal to the “loss [it] suffered” when it was allegedly “forced to
further detail to [its] claims.” SPA 11. In December 2017, a Luxembourg financial
issued two press releases describing a report it had written concerning Vitek’s
activities from September 2012 to June 2016. JA 214-215; SPA 10 n.7. Kingstown
6
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alleged that this report “confirmed” its allegations, JA 214-215, and it sought
certain defendants, the Luxembourg court held that Kingstown had properly effected
service on some, but not all, of the defendants. JA 236-263. In February 2020, one
of the defendants in the Luxembourg Action moved to dismiss the case on its merits.
D. Proceedings Below
Kingstown and Investhold filed this suit in April 2019. ECF No. 1. Plaintiffs
named as Defendants the same core group listed as defendants in the Luxembourg
Action, along with several alleged co-conspirators. Compare ECF No. 5, ¶¶ 17-31,
with JA 122-123. Plaintiffs accused Defendants of the same scheme alleged in the
Compare ECF No. 5, ¶¶ 1-7, with JA 128. And Plaintiffs sought recovery for the
same losses: the diminution in value that Kingstown allegedly suffered when its
shares declined in value. Compare ECF No. 5, ¶¶ 398, 417, with JA 149.
The complaint differed from the Luxembourg summons in only two salient
Luxembourg law, Plaintiffs claimed that Defendants violated a number of U.S. laws,
7
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including the Racketeer Influenced and Corrupt Organizations Act (“RICO”)—a law
that (unlike its European counterparts) permits recovery of treble damages. JA 476-
499; see also ECF No. 5, ¶¶ 4, 7, 62, 64, 135, 271, 344-363 (alleging violations of
European and Luxembourg law); JA 364, 367, 385, 417, 448, 465-476 (same).
Second, Kingstown joined its claims with Investhold’s wholly distinct allegations
465.
See ECF Nos. 61, 67, 69, 80, 82, 86, 108. The District Court stayed discovery while
the motions to dismiss were pending, and authorized Plaintiffs to amend their
November 2019, which named an additional nine defendants and added dozens of
related factual allegations pulled from the same CSSF report summarized in
Defendants again moved to dismiss. ECF Nos. 140, 142, 143, 146, 153, 158,
expert declaration on Luxembourg law written by Professor André Prüm, the Chair
8
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in Financial and Business Law at the University of Luxembourg and founding Dean
to dismiss—that explicitly addressed Prüm’s claims, ECF No. 211, at 21 n.20, 26-
27, along with a revised declaration from Moyse that contained new points
In September 2020, the District Court (Cote, J.) granted Defendants’ motions
to dismiss. SPA 3-4. Because the District Court concluded the suit should be
dismissed on the basis of forum non conveniens and international comity abstention,
it did not reach the other bases for dismissal raised by Defendants. SPA 22; see
Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 432 (2007) (“A
district court . . . may dispose of an action by a forum non conveniens dismissal”
First, the District Court dismissed the suit “as to all defendants based on the
doctrine of forum non conveniens.” SPA 13. Starting with the first step of the
“three-part analysis” set forth in this Court’s precedents, SPA 22, the District Court
25. The District Court found that Investhold cannot “show any connection between
[its] claims and this jurisdiction,” id., and that litigating Kingstown’s claims in the
9
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United States would be “massively inconvenient and expensive for everyone” and
reward transparent “forum shopping,” SPA 25-26. Turning to the “second step,” the
District Court found that “[t]here can be no serious dispute that Luxembourg is an
adequate forum for this dispute,” as it recognizes claims of fraud similar to the ones
asserted by Plaintiffs, and Plaintiffs “d[id] not dispute” that all of the Defendants are
subject to jurisdiction there. SPA 27-29 & n.17. The District Court then “weigh[ed]
the competing private and public factors” and found that the balance “tips decidedly
parallel suit in Luxembourg against the “same core parties,” alleging “the same
overarching theory of wrongdoing.” SPA 15-16. Further, the District Court found
that “exceptional circumstances” are present that warrant abstention. See SPA 15.
Among other things, it noted that the foreign proceeding was filed first, nearly all of
the operative facts occurred abroad, and the United States has little interest in
10
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SUMMARY OF ARGUMENT
The District Court’s decision may be overturned only upon a showing of abuse
I. The District Court correctly held that, under the three-part test articulated
by this Court, the doctrine of forum non conveniens favors dismissal of this suit.
First, Judge Cote reasonably concluded that Plaintiffs’ choice to sue in the
United States is entitled only to “diminished” deference. SPA 24-25. As the District
Court explained, this suit has little connection to the United States, would be
“massively inconvenient” for the parties and the court to resolve here, and exhibits
“indicia of forum shopping.” SPA 25-26. The District Court properly found that
the handful of tenuous connections relied on by Plaintiffs—such as the fact that they
“adequate alternative forum.” SPA 27-30. As this Court has previously held, and
claims that serve as an adequate substitute for civil RICO. Moreover, all of the
there is refuted by their own authorities and by numerous precedents of this Court.
11
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Third, the District Court appropriately balanced the private and public interest
factors and held that they “weigh heavily in favor of litigating this suit in
Luxembourg.” SPA 30-32. Plaintiffs do not contend that the District Court made
any mistake of law; they just ask this Court to weigh the factors differently. But
weighing the factors lies in the heartland of the District Court’s discretion, and
Plaintiffs offer no reason to conclude the District Court exercised that discretion
improperly.
II. The District Court also did not abuse its discretion by dismissing
well-established doctrine holds that U.S. courts may abstain from exercising
the same core defendants, alleged the same course of misconduct, and is seeking the
same damages. Kingstown argues that “[m]uch of the conduct involved in this case
occurred after the Luxembourg Lawsuit was filed.” Br. 45. That is false; all of the
12
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2018 filing in the Luxembourg Action, which Kingstown fails to mention at any
warrant abstention. Examining each of the eight factors this Court has instructed
district courts to consider in conducting that inquiry, the District Court found that
every one favors abstention—including that the Luxembourg suit was filed first, that
litigating this case in the United States would inflict substantial prejudice, and that
Luxembourg clearly has the predominant interest in the litigation. Kingstown fails
to identify any error in the District Court’s weighing of those factors, most of which
III. Plaintiffs’ efforts to identify some procedural error by the District Court
also fail. The District Court did not deny Plaintiffs an opportunity to respond to
filed a brief and a declaration in which they expressly disputed Professor Prüm’s
discovery below, let alone identified any purpose that would have been served by
such proceedings. And Plaintiffs have offered no reason they should be granted a
third opportunity to replead or refile their deficient allegations. The District Court’s
13
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ARGUMENT
The doctrine of forum non conveniens has “long permitted dismissal of suits
where jurisdiction and venue are proper, but another forum is substantially more
convenient.” Cap. Currency Exch., N.V. v. Nat’l Westminster Bank PLC, 155 F.3d
603, 606 (2d Cir. 1998). This doctrine serves to protect defendants from plaintiffs
who “seek not simply justice but perhaps justice blended with some harassment,” by
“forcing the trial at a most inconvenient place for an adversary.” Gulf Oil Corp. v.
This Court has emphasized that “[t]he decision to dismiss a case on forum non
conveniens grounds lies wholly within the broad discretion of the district court.”
Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001) (en banc) (internal
quotation marks and citation omitted). As a result, this Court’s “review of a forum
conveniens grounds “may be overturned only when [this Court] believe[s] [the
district court’s] discretion has been clearly abused.” Id. (emphases in original;
citations omitted).
This Court has “outlined a three-step process to guide the exercise of that
discretion.” Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 146, 153 (2d Cir.
14
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2005). At “step one,” a district court is required to assess “the degree of deference
properly accorded the plaintiff’s choice of forum.” Id. At “step two,” it asks whether
parties’ dispute.” Id. “Finally, at step three, a court balances the private and public
interests implicated in the choice of forum” to determine whether the suit is better
step one, that Plaintiffs’ choice of forum deserves limited deference; at step two, that
Luxembourg is an adequate alternative forum; and at step three, that the balance of
A. The District Court Did Not Abuse Its Discretion By Giving Plaintiffs’
Choice Of Forum Diminished Deference.
The District Court began its analysis at “the first step,” by “determin[ing] the
degree of deference properly accorded the plaintiff’s choice of forum.” Id. This
Court has explained that district courts should determine the requisite deference by
applying “a sliding scale” that measures the degree to which the plaintiff’s choice
was “dictated by reasons that the law recognizes as valid.” Iragorri, 274 F.3d at 71-
15
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District Court reasonably concluded that Investhold’s choice of forum merits “[l]ittle
appropriate because neither Investhold nor Kingstown has established that this suit
bears any “bona fide connection to the United States.” Iragorri, 274 F.3d at 72
(footnote omitted). The Investhold entities are foreign entities organized in the
Marshall Islands and the Republic of Cyprus, respectively, SPA 4 n.2, and so a U.S.
forum is “not presumptively the most convenient one.” Norex, 416 F.3d at 153
(citation omitted). Moreover, “all of the events associated with [Investhold’s] claims
occurred outside of New York, and indeed, almost entirely outside the United
States.” SPA 25. Simply put, Investhold has no valid convenience justification for
4
Ignoring these established standards, Plaintiffs contend that the deference due to a
plaintiff’s choice of forum “can vary . . . only when trial in the plaintiff’s chosen
forum would cause ‘oppressiveness and vexation’ to Defendants ‘out of all
proportion to plaintiff’s convenience’ or when the ‘chosen forum is inappropriate
because of considerations affecting the court’s own administrative and legal
problems.’” Br. 29-30 (quoting Koster v. (Am.) Lumbermens Mut. Cas. Co., 330
U.S. 518, 524 (1947)). That formulation, however, describes the balancing test
performed at step three of the forum non coveniens analysis, not the threshold inquiry
performed at step one, which seeks to determine whether the chosen forum is
“convenien[t]” for the plaintiff in the first place. Compare DiRienzo v. Philip Servs.
Corp., 294 F.3d 21, 33 (2d Cir. 2002), with id. at 28-29.
16
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bringing suit in the United States. See Pollux Holding Ltd. v. Chase Manhattan
As for Kingstown, the District Court assumed, arguendo, that New York is
SPA 25 & n.14; but see JA 368-370 (stating that Kingstown is organized and
“other factors, many unique to this litigation, do not entitle Kingstown’s choice of
forum to the customary deference.” SPA 25; see Iragorri, 274 F.3d at 72-73
(explaining that Plaintiffs’ home forum is not automatically the most convenient
one); Carey v. Bayerische Hypo-Und Vereinsbank AG, 370 F.3d 234, 238-239 (2d
Cir. 2004) (same). Among other things, “the source of this litigation was
Kingstown’s alleged injuries purportedly arise from “a plan that was hatched by
European individuals and entities and executed in Europe.” SPA 26-27. The fact
5
Plaintiffs claim that Investhold may piggyback on the deference purportedly due
to Kingstown plaintiffs. See Br. 34 (citing Bigio v. Coca-Cola Co., 448 F.3d 176,
179 (2d Cir. 2006)). Putting aside that Kingstown’s choice of forum is itself entitled
to “significantly diminish[ed]” deference, SPA 27, Plaintiffs misread Bigio. There,
the Court emphasized the “legitimate and substantial reasons” that all of the
plaintiffs had for bringing suit in the United States, including that each of the
plaintiffs had tried and failed to seek relief in Egypt when their commercial holdings
were improperly seized. Bigio, 447 U.S. at 177. Investhold can point to nothing
similar here.
17
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that a few ancillary communications occurred in the United States, see Br. 30, 33,
does not establish a “substantial connection” where “the operative facts of th[e]
action” occurred abroad. Wenzel v. Marriott Int’l, Inc., 629 F. App’x 122, 124 (2d
Cir. 2015) (citation omitted). And that principle applies with particular force where,
foreign entities overseas. Carey, 370 F.3d at 238; see RIGroup LLC v. Trefonisco
Mgmt. Ltd., 949 F. Supp. 2d 546, 552 (S.D.N.Y. 2013), aff’d, 559 F. App’x 58 (2d
Cir. 2014).
Second, the District Court found that because “almost all of the witnesses and
inconvenient and expensive for everyone.” SPA 26; see Iragorri, 274 F.3d at 72
“massive evidence gathering abroad, almost all of which will have to be conducted
in compliance with European privacy and data restrictions.” SPA 26. And that
evidence gathering would be made especially difficult by the fact that “[n]one of the
witnesses apart from those associated with Kingstown are within the subpoena
18
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Plaintiffs’ only response is to assert that some “[k]ey witnesses and evidence
are located in New York.” Br. 33. But the District Court rejected that same
conclusory assertion because Plaintiffs failed to “suggest what this evidence might
be, aside from knowledge possessed by the plaintiffs themselves.” SPA 26. That
remains true on appeal. All that Plaintiffs can point to are a handful of phone calls,
e.g., JA 365, 387, 390. But plainly the cost of producing those scraps of evidence—
the lion’s share of the evidence from third-party entities located in Europe.6
Third, the District Court reasonably found that Plaintiffs’ chosen forum is
inconvenient because several Defendants “may not be amenable to suit here.” SPA
6
Plaintiffs fault the District Court for focusing “on only the New York contacts and
witnesses in its forum non conveniens analysis.” Br. 30. That charge is unfounded.
The District Court repeatedly considered whether Plaintiffs had a legitimate reason
for filing suit in the United States as a whole, rather than in Europe. See SPA 26-27
(explaining that evidence was located in “Europe[],” substantially similar suit was
filed “in Luxembourg,” and underlying conduct occurred “in Europe”).
Furthermore, forum non conveniens does not involve a tabulation of “contacts” in
the chosen forum. Br. 30. Instead, it focuses on the comparative convenience of
litigating the dispute in the District Court versus a Luxembourg court—and it makes
sense for that assessment to train on (the lack of) evidence in New York, rather than
peripheral alleged events elsewhere in the United States. See, e.g., Pollux, 329 F.3d
at 74 (affirming dismissal because plaintiffs “failed to demonstrate that New York
is convenient”); DiRienzo, 294 F.3d at 28-29 (assessing whether there were
“reason[s] that the law recognizes as valid” for “the complaint being filed in the
Southern District of New York”).
19
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All of the Defendants contend they are “not subject to personal jurisdiction in this
action.” SPA 22. By contrast, Plaintiffs “d[id] not dispute” below that all of the
Defendants are subject to jurisdiction in Luxembourg. SPA 26, 29 n.17; see infra
Fourth, the District Court observed that Plaintiffs’ choice of forum “bears
indicia of forum shopping.” SPA 25-26. Plaintiffs filed this action four years after
Kingstown filed “a substantially similar action in Luxembourg,” SPA 25, and only
a few months after it supplemented its Luxembourg pleadings to describe nearly all
of the conduct alleged in the amended complaint, see supra pp. 6-7—a supplemental
filing that Plaintiffs conspicuously fail to acknowledge even once in their brief.7
Moreover, the “salient difference” between the claims here and in Luxembourg is
that Plaintiffs sued here under RICO, SPA 25, a notoriously generous U.S. law that
affords the opportunity for treble damages and whose in terrorem effect at driving
7
Plaintiffs devote several pages to quibbling over whether this suit is truly “parallel”
to the Luxembourg litigation. Br. 31-33. Those distinctions are all incorrect, see
infra pp. 38-43, and they are also beside the point; “parallelism” is not required to
establish forum shopping, and the District Court did not rest its forum non
conveniens analysis on a finding that the suits are parallel. SPA 25-26. Instead, the
District Court reasonably found that Kingstown’s choice to bring a “substantially
similar” suit in Luxembourg before filing here contributes to a plausible inference
of forum shopping. SPA 25.
20
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settlement is well known. See Norex, 416 F.3d at 155 (“recogniz[ing] that the
possibility of a RICO treble damages award might have made the choice of a United
States forum attractive . . . regardless of convenience). And the inference of forum-
shopping is heightened by the fact that Plaintiffs chose to sue here despite the
obvious procedural complexities, the lack of any meaningful connection with the
underlying claims, and “the inconvenience and expense to the defendant.” Iragorri,
274 F.3d at 72; see SPA 26-27. It was at minimum reasonable for the District Court
to conclude that these facts give rise to a “plausible likelihood” of forum shopping.
B. The District Court Did Not Abuse Its Discretion By Concluding That
Luxembourg Is An Adequate Alternative Forum.
Proceeding to the second step of the forum non conveniens inquiry, the
forum” to resolve Plaintiffs’ claims. Norex, 416 F.3d at 157. This Court has held
that a foreign forum presents an adequate alternative if (1) “it permits litigation of
the subject matter of the dispute” and (2) “the defendants are amenable to service of
process there.” Pollux, 329 F.3d at 75. Applying these criteria, this Court has
commercial disputes and claims of fraud. See In re Herald, 540 F. App’x 19, 27-28
(2d Cir. 2013); Overseas Nat’l Airways, Inc. v. Cargolux Airlines Int’l, S.A., 712
21
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F.2d 11, 14 (2d Cir. 1983). The District Court correctly found that there “can be no
serious dispute” that these criteria are met here. SPA 27.
the case. Pollux, 329 F.3d at 75. Contrary to Plaintiffs’ suggestion, this standard
“ ‘does not depend on the existence of the identical cause of action in the other
forum,’ nor on identical remedies.” Norex, 416 F.3d at 157-158 (quoting PT United
Can Co. v. Crown Cork & Seal Co., 138 F.3d 65, 74 (2d Cir. 1998)); cf. Br. 54-55
any similar cause of action” (emphasis added)). And that “principle pertains with
particular force to civil RICO actions,” given that “few foreign jurisdictions provide
such an expansive civil vehicle for parties injured by ongoing criminal schemes,”
and “even more rare are foreign provisions for the recovery of treble damages.”
Norex, 416 F.3d at 158. In the civil RICO context, a foreign forum is adequate so
encompassed by civil RICO,” such as actions for “fraud.” Id.; see Transunion Corp.
v. PepsiCo, Inc., 811 F.2d 127, 129 (2d Cir. 1987) (per curiam).
Luxembourg “allows suits based on, inter alia, complex financial fraud, conversion,
breach of fiduciary duty, and other business torts.” SPA 27. This conclusion accords
22
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with the holdings of this Court and other circuits to consider this question. See
S.A., 119 F.3d 935, 952 (11th Cir. 1997); In re Lyondell Chem. Co., 543 B.R. 428,
Defendants’ foreign law expert, Professor André Prüm, who explained that
Luxembourg would allow fraud claims based on the allegations in the amended
complaint. JA 590-603.
François Moyse, who asserted that Luxembourg recognizes only two narrow causes
of action for fraud, and that neither could be raised based on the allegations in this
case. Br. 26-28; see JA 568-569. But Professor Prüm comprehensively rebutted
Luxembourg recognizes many of the same predicate offenses alleged in the amended
599, and that private litigants in Luxembourg can bring suits for civil damages based
had the opportunity to respond to Prüm’s contentions, see supra pp. 8-9, his only
answer was that Prüm’s identified causes of action are infrequently invoked—not
that they are unavailable. See JA 629-630. The District Court did not abuse its
23
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the consensus position of other courts to consider similar questions. See Türedi v.
Coca-Cola Co., 343 F. App’x 623, 626 (2d Cir. 2009) (district court did not abuse
Luxembourg, they are also wrong that the only claims available to them would be
untimely. Br. 28. Professor Prüm explained that the relevant causes of action in tort
have a 30-year statute of limitations, which has not yet run. See JA 592. Plaintiffs
have never disputed that premise, and have therefore failed to rebut the point that
there are claims “presently available” to them in Luxembourg. Norex, 416 F.3d at
159.9
the forum “would have jurisdiction over the parties” if the plaintiff brought suit
8
Plaintiffs also assert that Luxembourg “does not recognize civil or criminal
conspiracy.” Br. 25. But even if that were true—and it is not, see JA 600-01—this
Court has held that “fraud actions in tort” are a sufficient alternative to RICO, even
if the forum does not recognize “respondeat superior and conspiracy theories.” PT
United, 138 F.3d at 74.
9
Moreover, given that Plaintiffs first filed suit in Luxembourg nearly seven years
ago and updated their claims four years later, any failure to comply with a limitations
period has been caused by their own inaction and therefore cannot render the forum
unavailable. See infra pp. 30-32.
24
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there. Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 46 (2d Cir. 1996); see Charles
Alan Wright & Arthur R. Miller, Federal Practice and Procedure (Jurisdiction)
§ 3828.3 (4th ed. Oct. 2020 Update) (defendant is “amenable to process” in a foreign
forum “[i]f the case and all of the parties come within that alternative court’s
jurisdiction” (citation omitted)); R. Maganlal & Co. v. M.G. Chem. Co., 942 F.2d
164, 167 (2d Cir. 1991) (foreign forum is adequate if “the defendant is subject to
[its] jurisdiction”).
Plaintiffs “d[id] not dispute” below “that each defendant is subject to the
other Defendants reside or are incorporated in the European Union; and (3) the
claims are “so closely connected that it is expedient to hear and determine them
together.” JA 585-586 (citation omitted) (setting forth this standard); see JA 626
indeed, it has “declared itself subject to the jurisdiction of Luxembourg over this
dispute.” SPA 29; see JA 533-535. All of the remaining Defendants “reside or are
incorporated in European Union member states.” SPA 28. And Plaintiffs’ claims
against all of these parties are indisputably closely connected to the claims against
CPIPG. SPA 28-29 & n.17. It follows that all of the defendants “are subject to
25
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service of process and the jurisdiction of courts in Luxembourg.” SPA 28; see JA
585-586.
Rather than dispute this conclusion, Plaintiffs try to shift the goalposts,
“expressly agreed” to submit to its jurisdiction. Br. 19. This argument, however,
confuses a sufficient condition for establishing jurisdiction with a necessary one, and
§ 3828.3 (explaining that “[c]ourts often allow a defendant to satisfy the availability
instance, where there is a “potential jurisdictional problem” in the foreign forum that
can be “cured” by consent. PT United, 138 F.3d at 74-75. But that is not the only
way a defendant may establish amenability to process. This Court has repeatedly
subject to jurisdiction in the foreign forum, even if it has not affirmatively consented
to jurisdiction. See, e.g., Wenzel, 629 F. App’x at 125 (finding the defendant
possible were the [plaintiffs] to bring their suit in [the foreign forum]” (emphasis
added)); Seales v. Panamanian Aviation Co., 356 F. App’x 461, 463 n.1 (2d Cir.
26
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2009) (finding Jamaica an adequate forum because the defendant was “subject to
service of process in Jamaica,” even though the defendant did not expressly submit
Kong courts would have jurisdiction over the parties.” (emphasis added)); Overseas
Media, Inc. v. Skvortsov, 441 F. Supp. 2d 610, 617-618 (S.D.N.Y. 2006) (defendant
citizen currently residing in Russia”), aff’d, 277 F. App’x 92 (2d Cir. 2008).10
Several of the cases that Plaintiffs cite prove the point. In Dabbous v.
American Express Co., No. 06 Civ. 11345(DAB), 2009 WL 1403930 (S.D.N.Y. May
8, 2009), the court found the defendants amenable to service in a foreign forum
because they were “either present in [the forum] or ha[d] consented to jurisdiction.”
Id. at *5 (emphases added). And in CF 135 Flat LLC v. Triadou SPY S.A., No. 15-
CV-5345 (AJN), 2016 WL 5945933 (S.D.N.Y. June 21, 2016), the court found that
three of the four defendants were amenable to service in Switzerland because a Swiss
10
Accord Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp.
Worldwide, 545 F.3d 357, 365 (6th Cir. 2008); Tyco Fire & Sec., LLC v. Alcocer,
218 F. App’x 860, 865 (11th Cir. 2007) (per curiam); Dahl v. United Techs. Corp.,
632 F.2d 1027, 1029 n.1 (3d Cir. 1980); cf. Omni Cap. Int’l, Ltd. v. Rudolf Wolff &
Co., 484 U.S. 97, 104 (1987) (explaining that a defendant is “amenab[le] to service”
for purposes of personal jurisdiction inquiry where, “[a]bsent consent,” there is
“authorization for service of summons on the defendant”).
27
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added). Conversely, in Rio Tinto PLC v. Vale S.A., No. 14 Civ. 3042(RMB)(AJP),
2014 WL 7191250 (S.D.N.Y. Dec. 17, 2014), the court found that two defendants
“may not be amenable to service by English courts” because they “reside[d] in the
United States” and had not “consented to jurisdiction in England.” Id. at *12-13.
Norex, 416 F.3d at 157; Pollux, 329 F.3d at 75; see also, e.g., Erausquin v. Notz,
Stucki Mgmt. (Bermuda) Ltd., 806 F. Supp. 2d 712, 726 (S.D.N.Y. 2011); In re
Banco Santander Sec.-Optimal Litig., 732 F. Supp. 2d 1305, 1331 (S.D. Fla. 2010);
Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1178 (9th Cir. 2006). In
defendant would not be subject to jurisdiction in the foreign forum “in the absence
of such a condition.” Jota v. Texaco Inc., 157 F.3d 153, 159 (2d Cir. 1998) (quoting
In re Union Carbide Corp. Gas Plant Disaster, 809 F.2d 195, 203-204 (2d Cir.
1987));11 see Schertenleib v. Traum, 589 F.2d 1156, 1160 (2d Cir. 1978) (explaining
11
Contrary to Plaintiffs’ puzzling claim, the court in Jota did not find the defendant
“subject to Ecuadorean courts’ personal jurisdiction as a legal matter.” Br. 22. Just
the opposite: It held that “the only defendant in the present case . . . is not subject to
suit in Ecuador,” and that consent was required for that reason. Jota, 157 F.3d at
159 (“[a]ccordingly, dismissal for forum non conveniens is not appropriate, at least
absent a commitment by Texaco to submit to the jurisdiction of the Ecuadorean
courts) (emphases added).
28
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that, even where plaintiff could not “have forced defendant to defend the three tort
Alcon S’holder Litig., 719 F. Supp. 2d 263, 267, 279 (S.D.N.Y. 2010) (requiring
consent where two defendants resided in the United States and five resided in various
European countries); Madanes v. Madanes, 981 F. Supp. 241, 266 (S.D.N.Y. 1997)
(requiring consent because it was unclear whether “an Argentine court would be
unable to assert personal jurisdiction”). Far from helping Plaintiffs’ case, these
As a final argument, Plaintiffs note that they have failed to perfect service on
Luxembourg law that would prevent them from attempting to serve Ott again. See
JA 258-259 (Luxembourg court’s finding that other defendants were properly served
after service of a “resummons”). No party has argued that Ott would not be subject
12
Because jurisdiction is not in question, there is no basis for Plaintiffs’ request (Br.
25) that the Court condition dismissal on waiver of “any” defenses in the
Luxembourg forum. In any event, Plaintiffs failed to request a conditional dismissal
below, see ECF No. 178 at 61-68, so their newfound request for such a dismissal has
been forfeited. See United States v. Botti, 711 F.3d 299, 313 (2d Cir. 2013) (issues
raised without “developed argumentation . . . are deemed waived” (citation
omitted)). Defendants reserve their rights to raise all available defenses in the
Luxembourg action.
29
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to the jurisdiction of the Luxembourg courts if Plaintiffs served him properly. See
JA 586.
In any event, even if Plaintiffs’ failure to serve Ott properly placed him
beyond the Luxembourg court’s jurisdiction, that would not render Luxembourg
unavailable as a forum. See SPA 28 n.15. This Court has joined “several Courts of
Appeals” in holding that “a plaintiff may not overcome a forum non conveniens
Co., 499 F. App’x 54, 56 (2d Cir. 2012) (quoting Compania Naviera Joanna SA v.
Koninklijke Boskalis Westminster NV, 569 F.3d 189, 203 (4th Cir. 2009)). Applying
that principle, this Court and others have repeatedly held that plaintiffs cannot
of their own making,” id.—such as failing to “return[ ] [a] summons,” MBI Grp., Inc.
v. Crédit Foncier du Cameroun, 616 F.3d 568, 572-573 (D.C. Cir. 2010), “notify the
(7th Cir. 2005), or file an appeal, Palacios, 499 F. App’x at 57. As one court in this
himself into a New York court by missing the statute of limitation in the proper
forum.” Castillo v. Shipping Corp. of India, 606 F. Supp. 497, 504 (S.D.N.Y. 1985).
30
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None of the “[c]ountless decisions” that Plaintiffs cite (Br. 23) refutes this
principle. In not one of those cases did a court excuse a plaintiff from effecting
proper service, or following any other procedural requirements, in the foreign forum.
See, e.g., Erausquin, 806 F. Supp. 2d at 726 (stating simply that the defendants
Order Regarding Consent to Conditions ¶¶ 1, 3, In re Alcon S’holder Litig., No. 1:10-
Here, the District Court found that “Ott was dismissed from the Luxembourg
Action due to plaintiffs’ failure to properly serve him.” SPA 28 n.15. And as the
Luxembourg court explained, that error was due to Plaintiffs’ repeated failure to
comply with basic service rules: Plaintiffs never attempted to serve Ott in person,
but instead mailed summonses to various wrong addresses they pulled from
13
Plaintiffs claim that Norex establishes that they cannot be “fault[ed]” for “their
failure to meet Luxembourg’s service requirements.” Br. 24 n.4. But Plaintiffs
simply ignore this Court’s subsequent decision in Palacios, which held that Plaintiffs
could not complain that a forum was unavailable due to a procedural defect “entirely
of their own making.” 499 F. App’x at 56; see id. at 56-57 (explaining that the
plaintiffs failed to file an appeal for which they had a “strong, good-faith basis” in a
Guatemala proceeding they themselves initiated). In Norex, by contrast, the
plaintiffs were “precluded” from litigating in a foreign jurisdiction due to a
preexisting judgment in a case in which they had not been properly served, and their
only means of overcoming that preclusive judgment was “remote” and “not . . .
likely” to succeed. 416 F.3d at 158-160. Like in Palacios, and unlike in Norex,
Plaintiffs could easily have obtained jurisdiction over Ott in the Luxembourg
proceeding they themselves filed by serving him in person or at the correct address.
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defect” on Mr. Ott, Br. 21 (quoting JA 626), that is an unpleaded invention flatly
contradicted by the record and the findings of two courts. See SPA 28 n.15; JA 255-
256. If Plaintiffs still cannot manage to serve Ott correctly, that will be a procedural
defect “entirely of their own making,” Palacios, 499 F. App’x at 56, and thus would
C. The District Court Did Not Abuse Its Discretion In Weighing The Public
And Private Interest Factors.
the District Court properly proceeded to the final step of the forum non conveniens
analysis: It “balanced” the public and private interest factors “to ascertain whether
forum proposed by [Defendants].” Iragorri, 274 F.3d at 73. The District Court
concluded that, even taking into account “the deference to be accorded Kingstown’s
choice of forum,” SPA 32,14 those factors “weigh heavily in favor of litigating this
Plaintiffs do not claim that, in performing this analysis, the District Court
applied an incorrect legal standard. See Pollux, 329 F.3d at 70. Instead, they argue
14
In light of this statement, Plaintiffs’ suggestion that the District Court afforded
Kingstown’s choice of forum “no deference at all,” Br. 34, is demonstrably untrue.
See also SPA 32 (noting that the court’s decision would be the same if Kingstown
received “the deference customarily given to a plaintiff suing in his home forum”).
32
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simply that the District Court should have weighed the factors differently. But the
function of weighing factors lies at the core of the District Court’s considerable
discretion. See Yáñez Osuna v. Citigroup Inc., 820 F. App’x 38, 42-43 (2d Cir.
2020); Gilstrap v. Radianz Ltd., 233 F. App’x 83, 85-86 (2d Cir. 2007); Peregrine,
89 F.3d at 46. Plaintiffs do not come close to showing the District Court abused that
discretion here.
As to the private interest factors, the District Court properly observed that
adjudicating this case would require “massive foreign discovery” and that “[t]he
difficulties in obtaining witnesses and evidence located abroad are significant.” SPA
30-31; see JA 355-357 (Plaintiffs’ counsel describing the complex foreign discovery
needed to litigate their case). By contrast, it found that Plaintiffs have little interest
in adjudicating this case in the United States, given that it concerns “a purported
States.” SPA 31; see Iragorri, 274 F.3d at 73-74 (availability of witnesses and
found that “[t]he private interest factors weigh heavily in favor of litigating this case
33
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In response, Plaintiffs blithely assert that “the private interests are a wash”
because “some” evidence is located in the United States, “some” parties are at home
here, and “some” sliver of the conduct occurred here. Br. 36-37. But that is pure
ipse dixit. Plaintiffs do not meaningfully engage with the District Court’s finding
that the overwhelming majority of evidence is located in Europe, that obtaining that
evidence would be “massively inconvenient and expensive for everyone,” and that
almost the entirety of the alleged scheme occurred in Europe. SPA 26. Simply
ignoring the considerations the District Court relied on is not the recipe for a
The District Court reasonably found that “[t]he public interest factors also
weigh heavily in favor of dismissal.” SPA 31. “Luxembourg has the predominant
interest” in resolving this suit, given that “[i]t was that jurisdiction’s corporate
governance laws that Vitek and the other defendants allegedly violated” and
“questions of foreign law will be significant in this litigation.” Id. And “[w]here,
as here, there is little connection to New York, those questions should be left to
Plaintiffs claim that the District Court “fail[ed] to consider” two of the factors
34
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with the forum court’s hearing the case,” and “the unfairness” of requiring the case
evidence located in Europe. SPA 30-32. And it found that the public interest
weighed in favor of dismissal precisely because the United States has little or no
relation to the litigation, while the dispute arose in and concerns residents of
Plaintiffs also assert that “there is no ground to conclude that Luxembourg has
a ‘predominant’ interest in the case.” Br. 38. Plaintiffs “d[id] not dispute” this point
in the District Court, and so have failed to preserve it for review. SPA 20.
Regardless, the reasons the District Court gave are entirely valid: This suit involves
persons, entities, and conduct in Luxembourg and implicates Luxembourg law. SPA
31; see Pollux, 329 F.3d at 76 (country where purchase and alleged fraud occurred
had stronger interest). Plaintiffs’ suggestion that their claims “arise[] under U.S. law
argument that Luxembourg lacks an adequate substitute for civil RICO. See supra
pp. 22-24. Luxembourg is fully capable of resolving Plaintiffs’ claim, and the
15
In any event, the private and public interest factors to be considered vary
depending on the circumstances. See, e.g., DiRienzo, 294 F.3d at 29-30 (finding that
“[o]nly the first three [private interest] factors are implicated here”).
35
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District Court did not abuse its discretion by holding that their suit should be
adjudicated there.
Corp., where the district court found that the relevant factors “were either neutral or,
at most, slightly favored” the foreign forum, yet nonetheless granted the forum non
conveniens motion; this Court, crediting the District Court’s “own analysis,”
reversed. 386 F.3d 224, 232-233 (2d Cir. 2004). Here, the District Court found that
both the private and public interest factors “weigh[ed] heavily” in favor of the
foreign forum, SPA 30-32, and its bases for that conclusion are sufficiently
unassailable that Plaintiffs have not seriously tried to dispute them. The District
Court reasonably exercised its discretion, and its dismissal of this suit under forum
international comity.” SPA 13. That conclusion was also a reasonable exercise of
International comity is “the recognition which one nation allows within its
36
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Chase Bank v. Altos Hornos de Mexico, S.A. de C.V., 412 F.3d 418, 423 (2d Cir.
2005) (quoting Hilton v. Guyot, 159 U.S. 113, 164 (1895)). One branch of the
holds that courts may abstain from exercising jurisdiction over an action where a
This abstention doctrine is neither novel nor limited to the Second Circuit. It
traces its roots to “the English common law,” JP Morgan Chase Bank, 412 F.3d at
423-424, and has been recognized by many other circuits, see Royal & Sun All. Ins.
Co. of Canada v. Century Int’l Arms, Inc., 466 F.3d 88, 92-94 (2d Cir. 2006). Nor
Although this Court has held that comity is “particularly appropriate” in the
bankruptcy context, Allstate Life Ins. Co. v. Linter Grp. Ltd., 994 F.2d 996, 999 (2d
Cir. 1993) (emphasis added), it has repeatedly recognized that comity may be
granted “[o]utside the bankruptcy context” as well, Royal & Sun, 466 F.3d at 93; see
Bigio v. Coca-Cola Co., 239 F.3d 440, 454 (2d Cir. 2000). Indeed, international
Royal & Sun, 466 F.3d at 92-93 (citing Colorado River Water Conservation Dist. v.
United States, 424 U.S. 800 (1976)), and this Circuit has applied Colorado River in
37
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a wide array of contexts, see, e.g., De Cisneros v. Younger, 871 F.2d 305, 309 (2d
Cir. 1989).
are satisfied: first, the alternative proceeding must be “parallel” to the plaintiff’s
case, Royal & Sun, 466 F.3d at 93, and, second, “exceptional circumstances” must
counsel in favor of abstention, id. at 93, 95. “The decision whether to dismiss a case
on international comity grounds ordinarily lies within the discretion of the district
court,” Bigio, 239 F.3d at 454, and is reviewed for abuse of discretion, see Finanz
AG Zurich v. Banco Economico S.A., 192 F.3d 240, 246 (2d Cir. 1999); Allstate Life
Ins. Co., 994 F.2d at 999. Although review of a district court’s abstention decision
is “more rigorous” than the ordinary abuse-of-discretion standard, Royal & Sun, 466
even if abstention is not “the sole result consistent with a proper exercise of the
district court’s discretion.” Bigio, 239 F.3d at 454; see Finova Cap. Corp. v. Ryan
Helicopters U.S.A., Inc., 180 F.3d 896, 900 (7th Cir. 1999).
“parallel” to this suit. SPA 15. To be parallel, two cases need not be identical; it is
sufficient that “substantially the same parties are litigating substantially the same
issues simultaneously in two fora.” Royal & Sun, 466 F.3d at 94 (quoting Schneider
38
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Nat’l Carriers, Inc. v. Carr, 903 F.2d 1154, 1156 (7th Cir. 1990)). Kingstown itself
filed the Luxembourg Action four years before it brought this case. SPA 9-11. In
its Luxembourg summons, it named as defendants the same “core parties” it accuses
of misconduct here, including Vitek, Ott, and CPIPG. SPA 15-16; see JA 122-123.
It accused them of the same core scheme of misconduct that it alleges in its amended
complaint below. See SPA 10-11. And it measured damages in essentially the same
way, asking for compensation for the alleged reduction in the value of its shares
Indeed, many of the allegations in the two filings track each other point-for-
point. To offer just two examples: In Luxembourg, Kingstown accused Vitek and
Ott of “orchestrat[ing] a ‘cabal’” to take over ORCO. JA 128. Here, it alleges they
Vitek and Ott sold ORCO’s “Endurance Real Estate Fund’s Office Sub-fund” assets
“under hazy circumstances,” to J&T Banka, which in turn sold it to Sidoti, an entity
“owned by Milada Mala, who is none other than Mr Radovan Vitek’s mother.” JA
138-139. In its amended complaint, Kingstown makes the same claim: that Vitek
and Ott “[c]onceal[ed] the [d]etails” of the sale of the “Endurance Office Sub-fund”
to J&T Banka, which then sold it to Sidoti, “an entity nominally owned by Milada
39
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Kingstown tries but fails to identify any salient difference between these two
cases. It notes that it chose to include a handful of parties in this action that it did
not list in the Luxembourg Action. Br. 43-44. But “[t]he existence of additional
parties in one suit does not of itself destroy parallelism”; otherwise, abstention could
“be avoided by the stroke of a litigant’s pen.” Schneider, 903 F.2d at 1156. Here,
the only new plaintiffs Kingstown added to the later-filed case are its own corporate
affiliates, who share common ownership, are represented by the same attorneys, and
assert precisely the same claims and injuries as the other Kingstown Plaintiffs. SPA
16-17; JA 368-370; see Tarazi v. Truehope Inc., 958 F. Supp. 2d 428, 434 (S.D.N.Y.
2013) (noting that courts have widely held that “affiliates” of existing parties are
“substantially similar” for purposes of the parallelism inquiry). Similarly, the only
new defendants Kingstown added are “the financial institutions and straw
purchasers” that Kingstown alleges were “used by the defendants named in the
Luxembourg Action to effect their alleged scheme.” SPA 17; see JA 371-377.
Kingstown discussed nearly all of these individuals, including J&T Banka and
Rothschild & Co, cf. Br. 44-45, in its Luxembourg filing. See JA 135, 138, 156.
Kingstown does not identify any respect in which adding these “essentially ancillary
parties”—many of whom are not alleged to have acted until after Kingstown suffered
its alleged injuries, see JA 405-408—meaningfully changed its case. SPA 16-17.
40
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Kingstown also argues that the suits are non-parallel because in the
Luxembourg Action it raised claims under European and Luxembourg law, whereas
in the United States it raised claims under U.S. law. See Br. 45-46. But, of course,
simply suing under the parallel laws of each respective forum does not render two
“substantially the same issues.” Royal & Sun, 466 F.3d at 94 (emphasis added); see
Krondes v. Nationstar Mortg., LLC, 789 F. App’x 913, 914 (2d Cir. 2020) (cases
parallel because they both challenged “the validity of [an] allegedly fraudulent
mortgage,” “even though [one case] raise[d] federal claims” and the other raised
state-law claims). Here, Kingstown is pressing the same allegations of fraud, against
the same core group of entities, to recover for the same alleged injury. SPA 18. On
every relevant dimension, the “issues” in the two cases are “substantially the same.”
Finally, Kingstown suggests that the questions at stake in the two cases differ
because “[m]uch of the conduct involved in this case occurred after the Luxembourg
Lawsuit was filed.” Br. 45; see Br. 47. That is doubly incorrect. First, all of the
Kingstown sold its shares in ORCO and its alleged injury occurred. JA 382-441;
see JA 492, 499. The only allegations postdating the filing of the Luxembourg
summons in January 2015 relate to Investhold. See JA 441-465. But the District
41
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Court did not find that there is a parallel Luxembourg proceeding involving
2014 that affected its damages calculations, that information has already been
page of his declaration that Plaintiffs cite, see Br. 44-45, 47—Kingstown “increased
[its] request for damages” in the “October 2018 brief” it filed in Luxembourg to
reflect “a new valuation of ORCO that incorporated events and records postdating
the filing of the 20 January 2015 summons.” JA 635; see JA 214-216. Indeed, that
“new valuation” was based on the very same CSSF report Plaintiffs later relied on
as the basis for the post-2014 allegations in their amended complaint here. Compare
October 2018 Luxembourg filing even once in its brief, that filing incorporates any
information Kingstown has learned since 2014 that is even arguably relevant to its
claims.
Circuit’s law: It believes that the suits must be “totally duplicative,” not just
precisely what this Court has time and again held is not required to establish
42
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parallelism. See Royal & Sun, 466 F.3d at 93.16 Under the standards set forth in this
B. The District Court Did Not Abuse Its Discretion In Finding That
“Exceptional Circumstances” Warrant Abstention.
The District Court also did not abuse its discretion in holding that “exceptional
Luxembourg. SPA 19 (quoting Royal & Sun, 466 F.3d at 93). This Court has
[1] the similarity of the parties, [2] the similarity of the issues, [3] the order in
which the actions were filed, [4] the adequacy of the alternate forum, [5] the
potential prejudice to either party, [6] the convenience of the parties, [7] the
connection between the litigation and the United States, and [8] the
connection between the litigation and the foreign jurisdiction.
Leopard Marine & Trading, Ltd. v. Easy Street Ltd., 896 F.3d 174, 190-191 (2d Cir.
2018) (quoting Royal & Sun, 466 F.3d at 94). Courts also must consider “the
Royal & Sun, 466 F.3d at 94 (quoting Finova, 180 F.3d at 900). Here, the District
16
Kingstown also suggests that suits are parallel only where “there is a ‘substantial
likelihood’ that the foreign litigation ‘will dispose of all claims presented in the
federal case.’” Br. 43 (quoting AAR Int’l, Inc. v. Nimelias Enters., S.A., 250 F.3d
510, 518 (7th Cir. 2001)). This Court has never adopted that restrictive standard.
And even if AAR International were this Court’s guide, its standard would be
satisfied here, as a judgment in the Luxembourg proceeding would likely be res
judicata in this case. See SPA 17-19; Advantage Int’l Mgmt. Inc. v. Martinez, No.
93 CIV. 6227 (MBM), 1994 WL 482114, at *4 (S.D.N.Y. Sept. 7, 1994).
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Court reasonably found that each of the factors this Court has identified, as well as
Similarity of the parties and the issues. For the reasons already noted, the
substantially the same issues as this case. SPA 15-19; see supra pp. 38-43. The first
two factors thus favor abstention. See Leopard Marine, 896 F.3d at 190.
The order in which the actions were filed. “Kingstown waited more than
four years after filing the Luxembourg Action to press its rights in this lawsuit.”
SPA 19. What is more, the Luxembourg Action has proceeded further than this case,
which has not passed the jurisdictional stage. See SPA 11. The timing of the suits
thus favors abstention, as well. See Semmes Motors, Inc. v. Ford Motor Co., 429
F.2d 1197, 1203 (2d Cir. 1970) (“[W]hen the same party is plaintiff in both actions,
the instances where the second court should go forward despite the protests of a party
to the first action where full justice can be done, should be rare indeed.”).
The adequacy of the alternate forum. “There can be no serious dispute that
center with an advanced legal system,” which permits adjudication of the claims of
fraud presented here. Id. Moreover, unlike the District Court, the Luxembourg court
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prejudiced by being required to litigate in New York.” SPA 21. Nearly all the
relevant documents and witnesses are located in Europe, and the parties would need
of “European data protection and privacy laws,” to obtain relevant evidence here.
Id. By contrast, “it is difficult to envision how Kingstown would be prejudiced from
proceeding in the forum it chose many years ago.” SPA 22. Kingstown has pointed
to no evidence, “apart from that in its own files,” that is located in the United States,
Id. at 21-22, and Kingstown’s complaint that proceedings are moving too slowly in
Kingstown’s own actions have delayed resolution of the Luxembourg Action,” SPA
The convenience of the parties. For similar reasons, Luxembourg is the more
issue. Id. Although Kingstown has an office in New York, it voluntarily initiated
business in Europe and chose to file suit there years before it thought to sue in New
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The connection between the litigation and the United States. This case has
at best a “tenuous” connection to the United States. SPA 19-20. The only domestic
links that Kingstown has identified are “the existence of Kingstown offices in New
York, a few visits by Ott to New York and roughly a score of communications
received by Kingstown.” Id. This Court has previously found that ancillary
the suit. See Bigio, 239 F.3d at 454. And the United States has no meaningful stake
[a] foreign company, decided to invest in [the] foreign company, and chose in the
first instance to litigate its claims in that company’s home jurisdiction.” SPA 20;
see Ingersoll Milling Mach. Co. v. Granger, 833 F.2d 680, 685 (7th Cir. 1987).
contrast, Kingstown “do[es] not dispute that Luxembourg has the predominant
interest in resolving the issues surrounding Vitek’s conduct.” SPA 20. “[A]ll of the
events relevant to this litigation occurred in Europe.” Id. “The scheme involves a
corporate law at stake.” Id.17 These factors plainly give Luxembourg a greater
17
Kingstown analogizes to cases in which courts said abstention was “ ‘disfavored’ ”
because “the ‘applicable substantive law’ ” was “federal.” Br. 46 (quoting Vill. of
Westfield v. Welch’s, 170 F.3d 116, 124 (2d Cir. 1999)). But in those cases, both the
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abstention. Royal & Sun, 466 F.3d at 94 (citation omitted). As the District Court
system be given the opportunity to resolve the Luxembourg Action, which is a suit
of the factors laid out in this Court’s precedents, Kingstown asserts that the
litigation.” Br. 50. That is quite obviously untrue. It will be the “exceptional” case
in which a plaintiff filed in a foreign forum years before suing in the United States,
all of the operative facts occurred abroad, all of the defendants are foreign,
adjudicating the suit in the United States would be highly costly and inconvenient,
foreign proceeding and the domestic one were governed by U.S. law. See Leopard
Marine & Trading, Ltd. v. Easy Street, Ltd., No. 15-cv-3064, 2015 WL 4940109, at
*3 (S.D.N.Y. Aug. 6, 2015) (parties’ contract “provide[d] for [the] application of
United States law”); Welch’s, 170 F.3d at 124 (explaining that “[f]ederal law will
govern” in both state and federal proceedings, because both cases pertained to
compliance with federal law). Here, by contrast, the Luxembourg proceeding is
governed entirely by foreign law, while the U.S. case implicates significant issues
of Luxembourg law. The governing “rule of decision” in both cases thus cuts in
favor of, rather than against, abstention. Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 23 (1983).
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and the foreign court is more competent to exercise jurisdiction, conduct discovery,
and adjudicate the foreign-law issues at the heart of the case. This Court has never
found abstention unwarranted in the face of remotely comparable facts. Cf. Bigio,
239 F.3d at 454 (holding that abstention would not be an abuse of discretion where
only confirm how far afield this case is from ones in which this Court has deemed
abstention improper. In Bugliotti, the district court “did not identify any exceptional
circumstances” to justify its decision to abstain from a dispute over Argentine tax
credits. 952 F.3d at 415 (emphasis added and citation omitted). The entirety of its
rationale consisted of eleven words: that abstention was proper “[g]iven the
Jan. 15, 2019). This Court simply held that this cursory explanation was insufficient,
415 n.4.
mountain of factors: Among other things, it noted that the parties’ contract expressly
provided that their disputes would be resolved in U.S. court under U.S. law; that the
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parallel foreign proceeding was filed only “three days” before the U.S. suit; and that
the parties had “no special connection” with a foreign country other than the fact
that their ship had briefly docked there. 2015 WL 4940109, at *2-3. This Court
unsurprisingly held that, in reaching that conclusion, the district court “did not abuse
its discretion.” Leopard Marine, 896 F.3d at 193. This case differs in every
respect—which is why here, unlike in Leopard Marine, the District Court found
abstention warranted. That holding was a permissible exercise of its discretion and
should be affirmed.
III. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN THE
PROCEDURES IT APPLIED.
Plaintiffs claim that the District Court “abused its discretion” by considering
Professor Prüm’s declaration, which was filed with Defendants’ reply brief, and by
declaration. Br. 52-53. This argument rests on a serious misstatement of both the
submitted with . . . reply papers.” Bayway Refin. Co. v. Oxygenated Mtkg. & Trading
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A.G., 215 F.3d 219, 227 (2d Cir. 2000); see Cifarelli v. Vill. of Babylon, 93 F.3d 47,
53 (2d Cir. 1996); see also S.D.N.Y. Local Civil Rule 6.1(a) (allowing “reply
affidavits”). A district court does not abuse its discretion where a reply affidavit
“address[es] new material issues raised in the opposition papers” and the court
Bayway Refin. Co., 215 F.3d at 226-227 (quoting Litton Indus. v. Lehman Bros.
Kuhn Loeb Inc., 767 F. Supp. 1220, 1235 (S.D.N.Y. 1991)); see Ruggiero v. Warner-
The District Court acted well within the scope of its discretion here.
issues raised in the opposition papers,” Bayway Refin. Co., 215 F.3d at 226-227
raised new issues about the adequacy of Luxembourg as an alternative forum. See
JA 565-574. In responding to those new issues, and providing further support for
See Fed. R. Civ. P. 44.1 (issues of foreign law are “question[s] of law”). Indeed,
given that Prüm’s declaration contained arguments of law, not “new evidence,”
Bayway Refin. Co., 215 F.3d at 227 (citation omitted), the District Court would have
been within its discretion to consider that declaration and deny Plaintiffs any further
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opportunity to respond. See Cifarelli, 93 F.3d at 53; Bonnie & Co. Fashions v.
declaration. Although Plaintiffs fail to acknowledge it, they filed a brief after
statements about foreign law. ECF No. 211, at 21 n.20, 26-27 & n.27. They also
Prüm’s declaration. JA 623-638; see ECF No. 217. Plaintiffs’ assertion (Br. 53)
that they were “never given the opportunity to dispute” Prüm’s declaration is—to
brief and Professor Prüm’s declaration is included in the joint appendix, see JA 623-
638, and is cited repeatedly throughout Plaintiffs’ brief, see Br. 9, 12-13 n.2, 21, 25-
27, 31-33, 45-47, 52-54, including on the very page where they make this erroneous
B. The District Court Did Not Abuse Its Discretion By Declining To Conduct
A Foreign-Law Hearing.
Plaintiffs next claim that the District Court erred by declining to grant their
request for a foreign-law hearing. Br. 56. As an initial matter, Plaintiffs never
validly made such a request below. The only place in which they adverted to a
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on reply, the Court should order discovery and hold a foreign-law hearing pursuant
to Rule 44.1 of the Federal Rules of Civil Procedure.” ECF No. 178, at 65 n.37.
States v. Botti, 711 F.3d 299, 313 (2d Cir. 2013) (citation omitted). “This rule has
particular force where [a party] makes an argument only in a footnote.” Id. (citation
omitted); see Optical Commc’ns Grp., Inc. v. M/V Ambassador, 558 F. App’x 94,
95 (2d Cir. 2014). Here, because Plaintiffs made no effort to explain the basis for
their perfunctory request, buried in a footnote, and phrased in the alternative, they
cannot now fault the District Court for failing to discuss it.
In any event, the District Court acted properly by declining to hold a foreign-
assist them in resolving difficult foreign-law issues, Bugliotti, 952 F.3d at 413, they
are also free to resolve such questions—like all legal questions—on the basis of a
written record alone. See, e.g., Alpert v. Starwood Hotels & Resorts Worldwide,
Inc., 799 F. App’x 89, 91 (2d Cir. 2020); Weiss v. La Suisse, 313 F. Supp. 2d 241,
244 (S.D.N.Y. 2004). Plaintiffs have never identified, either here or below, any
not an abuse of discretion for the District Court to decline to hold one. See United
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States v. Maynard, 117 F. App’x 28, 30 (10th Cir. 2004) (rejecting argument that the
C. The District Court Did Not Abuse Its Discretion By Declining to Order
Discovery.
Plaintiffs are also incorrect that the District Court abused its discretion by
international-comity abstention.” Br. 56. Plaintiffs failed to preserve this claim, too:
Their only “request” for discovery below appeared in the same conclusory footnote
as their “request” for a hearing. See ECF No. 178, at 65 n.37. Given that the District
Court had already granted a stay of discovery following a hearing and argument on
district court has wide latitude to determine the scope of discovery.” Frontera Res.
Azerbaijan Corp. v. State Oil Co. of Azerbaijan Republic, 582 F.3d 393, 401 (2d Cir.
18
For similar reasons, Plaintiffs are wrong that the District Court erred by
supposedly “ignor[ing]” its foreign-law expert and “credit[ing] without explanation
Vitek’s expert” over Plaintiffs’. Br. 55. Declarations about the meaning of foreign
law are not “evidence” that must be accepted as true or weighed for credibility. See
Euromepa S.A. v. R. Esmerian, Inc., 154 F.3d 24, 28 n.2 (2d Cir. 1998); Curtis v.
Beatrice Foods Co., 481 F. Supp. 1275, 1285 (S.D.N.Y.), aff’d, 633 F.2d 203 (2d
Cir. 1980) (table) (mem.). The District Court properly evaluated the competing
affidavits and reached its own “independent interpretation” of what foreign law
means. Bugliotti, 952 F.3d at 414.
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grounds, like other threshold motions under Rule 12(b)(1), “a district court normally
relies solely on the pleadings and affidavits.” Martinez v. Bloomberg LP, 740 F.3d
211, 216 (2d Cir. 2014). Indeed, “[r]equiring extensive investigation would defeat
the purpose” of both the forum non conveniens and abstention doctrines, by requiring
defendants to undergo the very burdens those doctrines are designed to prevent.
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 258 (1981); see Transunion, 811 F.2d at
130 (finding no abuse of discretion where court denied discovery prior to deciding
The District Court did not abuse its discretion by declining to depart from that
standard practice here. Plaintiffs claim that they “sought” discovery regarding
certain documents that they believe might have revealed peripheral connections
between the alleged fraud and the United States. Br. 57. But Plaintiffs never
informed the District Court that they sought those documents (or any others). And
the ancillary facts Plaintiffs belatedly speculate discovery might have unearthed
would not plausibly alter the District Court’s conclusion that the balance of interests
SPA 31-32.
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dismissed their case with prejudice, and that they must be given an opportunity to
“replead or refile.” Br. 58-59. They are wrong on both counts. The District Court’s
decision was a dismissal without leave to amend—it directed the clerk to “close this
case,” SPA 32-33—but that is “not the same thing as a dismissal with prejudice.”
Holcombe v. Ingredients Sols., Inc., 797 F. App’x 630, 634 (2d Cir. 2020) (citation
omitted). Because the district court did not decide the case “on the merits” and did
not state that its dismissal was with prejudice, its dismissal was “without prejudice.”
Verret v. Elliot Equip. Corp., 734 F.2d 235, 238 (5th Cir. 1984); see Georgia Advoc.
Off., Inc. v. Camp, 172 F.3d 1294, 1299 (11th Cir. 1999) (same); cf. Stern v. Gen.
Elec. Co., 924 F.2d 472, 477 n.7 (2d Cir. 1991) (assuming dismissal with prejudice
was intended because case was dismissed on the merits “for failure to state a claim
Dismissal “without prejudice,” however, “does not mean that [Plaintiffs] must
to dismiss on non-merits grounds, Plaintiffs did not gain the power to file a second
amended complaint (or, what amounts to the same thing, the power to refile) without
satisfying the requirements for filing new pleadings under Rules 15, 59, and 60. See
In re Buckskin Realty, Inc., No. 19-3828-bk, 2021 WL 1081480, at *2 (2d Cir. Mar.
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Plaintiffs make no showing that they satisfy those requirements here. They
demonstration that they can cure the jurisdictional defects in their case on a third try.
See Denny v. Barber, 576 F.2d 465, 470-471 (2d Cir. 1978); see also Malin v. XL
Cap., Ltd., 312 F. App’x 400, 403 (2d Cir. 2009) (rejecting plaintiffs’ request for
Express Co. S’holder Litig., 39 F.3d 395, 402 (2d Cir. 1994) (similar). Instead, they
summarily assert that their new pleadings would allege that “Vitek and his co-
Republic and elsewhere.” Br. 59. But by adding more European events to their
allegations, Plaintiffs would simply reinforce the conclusion that this case belongs
in Europe.
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CONCLUSION
Respectfully submitted,
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CERTIFICATE OF COMPLIANCE
1. This brief complies with the type volume requirements of Federal Rule
13,848 words, excluding the parts of the document exempted by Fed. R. App. 32(f).
typeface using Microsoft Word for Office 365 in Times New Roman 14-point font.
CERTIFICATE OF SERVICE
I certify that the foregoing Brief for Defendants-Appellees was filed with the
Clerk using the appellate CM/ECF system on April 16, 2021. All counsel of record
are registered CM/ECF users, and service will be accomplished by the CM/ECF
system.