This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
IN COURT OF APPEALS
Dr. Tassilo Bonzel,
Pfizer, Inc., a Delaware corporation, et al.,
Schneider (USA) Inc., a Minnesota corporation
now known as Boston Scientific Scimed, Inc., et al.,
Hennepin County District Court
File No. CT 00-011184
William M. Hart, Jeffrey M. Thompson, James F. Roegge, Livia E. Babcock, Michael T. Browne, Damon L. Highly, Meagher & Geer P.L.L.P., 33 South Sixth Street, Suite 4200, Minneapolis, MN 55402 (for appellant)
Gary J. Haugen, Justin H. Perl, Michael C. McCarthy, Maslon Edelman Borman & Brand LLP, 3300 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402; and
Joseph Ferraro (admitted pro hac vice), Karen L. DeMeo, Clifford, Chance, Rogers & Wells LLP, Two Hundred Park Avenue, New York, NY 10166 (for respondents Pfizer, Inc. and Pfizer Research & Development Company N.V./S.A. of Dublin, Ireland)
Paul J. Robbennolt, Dorsey & Whitney LLP, 50 South Sixth Street, Suite 1500, Minneapolis, MN 55402; and
Martin Cunniff, Mark D. Wegener, Matthew M. Wolf (admitted pro hac vice), Ahmed J. Davis, Howrey, Simon, Arnold & White, LLP, 1299 Pennsylvania Avenue, N.W., Washington, D.C. 20004 (for respondents Boston Scientific Corporation, Schneider (U.S.A.) Inc., and Schneider (Europe) GmbH).
Considered and decided by Schumacher, Presiding Judge, Randall, Judge, and Halbrooks, Judge.
U N P U B L I S H E D O P I N I O N
In this appeal from the district court’s dismissal of his claims on the basis of forum non conveniens, appellant contends that the district court abused its discretion by dismissing the case without proper consideration of the relevant factors. Because we conclude that the district court understood and applied the proper standard, we affirm.
Appellant Bonzel is the inventor of the monorail catheter. His invention is widely used in cardiovascular procedures and has brought great success for his licensees and himself. The dispute in this case arises out of license agreements between Bonzel and certain licensees and parties related to those licensees.
After completing his invention in the early 1980s, Bonzel entered into a relationship with Fraunhofer, a government-funded research institute that, among other things, aids inventors in marketing their inventions. Under this relationship, Fraunhofer participated in licensing negotiations and received a portion of whatever proceeds these licenses produced. In 1986, Bonzel entered into his first license agreement between himself and Schneider Medintag, (now known as Schneider AG), which was then a subsidiary of Pfizer. This agreement was amended in 1988, 1989, 1990, and 1992. One portion of the license agreement required that Schneider AG share with Bonzel any proceeds received from infringement actions that it brought against third parties. Two infringement actions were filed relating to this patent, one against Scimed Life and one against Advanced Cardiovascular Systems, Inc. (ACS). The ACS suit settled in 1991, and that settlement is confidential.
In 1993, Bonzel sued Schneider AG in a German court, alleging a breach of this license agreement over unpaid patent-litigation proceeds arising from litigation with ACS and Scimed Life. The parties settled this case with Bonzel receiving a confidential sum.
In 1995, Bonzel and Schneider AG again determined that an amendment was needed. Bonzel, with help from Fraunhofer, submitted a proposed amendment, which is known as Agreement IV. Schneider AG’s CEO, Heliane Canepa, made revisions to this amendment and renamed the proposal Agreement V, which she submitted to Bonzel. After some additional meetings, Bonzel and Canepa executed a version of Agreement V. Agreement V sets Bonzel’s portion of patent-litigation proceeds at 25% (down from the 50% the previous agreements gave him), but gives Bonzel 50% of “any other monetary recovery.”
Boston Scientific Corporation (BSC) became involved in 1995 with its acquisition of Scimed Life. (Scimed Life was one of the alleged infringers sued by Pfizer in the early 90s). Boston Scientific also produced a catheter that Pfizer believed infringed the Bonzel patent and Pfizer threatened litigation. In response, BSC filed a declaratory-judgment action against Schneider US and Schneider AG in Massachusetts federal district court seeking a ruling of non-infringement. The next day, Schneider US and Schneider AG filed a patent-infringement action in Minnesota federal district court. The Minnesota action was stayed, and the Massachusetts case proceeded. The Massachusetts case was settled by a stipulated dismissal of both actions at the end of March 1998.
In June 1998, Pfizer sold, among other assets, all the stock in Schneider AG’s successor, Schneider (Europe) GmbH and Schneider USA to BSC for $2.1 billion. This deal was the acceptance of BSC’s offer to pay a premium of $200 million more than any other bona fide bidder.
In July 2000, Bonzel sued Pfizer, Schneider USA, and Schneider GmbH in a nine-count complaint relating to the sale of Schneider AG to BSC. The defendants removed the case to federal district court asserting federal-question jurisdiction because of what were arguably patent claims. The federal district court remanded the case to state court based in part on Bonzel’s assurance there were no issues of patent law involved. Bonzel then filed an amended complaint in state court. In it, he added claims 10-14 against BSC for allegedly underpaying royalties due under Agreement V. These claims originated after the sale of Schneider AG by Pfizer in 1998.
In April 2001, the defendants, which now include BSC, Scimed (now a BSC subsidiary), Pfizer, and Schneider AG and Schneider USA (formerly Pfizer subsidiaries, now BSC subsidiaries), jointly moved to dismiss for forum non conveniens, arguing that Minnesota was an inappropriate forum. The district court heard argument on this motion in June 2001. On July 26, 2001, in a court-sponsored mediation between Bonzel and BSC, the parties settled the royalty claims (claims 10-14 of the amended complaint). This settlement prevented Bonzel from terminating his license or obtaining an injunction against Scimed to stop its Minnesota factory that produced allegedly infringing parts. Throughout this time, discovery was still proceeding.
In response to what they learned in the depositions of Nierhaus and Dr. Gross, both agents of Fraunhofer, the defendants filed a new motion to sever the royalty claims and dismiss the remaining claims on forum non conveniens grounds while the prior motion was still pending. The district court never ruled on the first motion, but granted the second motion. Bonzel sought leave for reconsideration under Minn. R. Gen. Prac. 115.11, which the district court denied. Pfizer moved to fix a clerical omission in the order because the order did not direct the entry of judgment. Bonzel moved for clarification, modification, or amendment on (1) defendant’s waiver of any statute of limitations defense in other forums; (2) conditioning the dismissal on defendant ensuring witnesses are present in other potential forums; or (3) amending the order such that the motion to sever and dismiss is denied. The district court heard arguments and directed entry of judgment of dismissal.
A district court’s decision to dismiss a case on grounds of forum non conveniens will not be disturbed on appeal unless there has been an abuse of discretion. Bergquist v. Medtronic, Inc., 379 N.W.2d 508, 511-12 (Minn. 1986). In Bergquist, the Minnesota Supreme Court adopted the rule set forth in the United States Supreme Court case of Piper Aircraft Co. v. Reyno for Minnesota forum non conveniens cases. Id. at 512 (adopting rule of Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S. Ct. 252 (1981)). In Piper Aircraft, the Supreme Court stated:
The forum non conveniens determination is committed to the sound discretion of the trial court. It may be reversed only when there has been a clear abuse of discretion; where the court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonable, its decision deserves substantial deference.
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 102 S. Ct. 252, 266 (1981). There, the Court also considered less deference to the choice of forum by a foreign plaintiff to be “fully justified.” Id. at 255, 102 S. Ct. at 266.
In Gulf Oil Corp. v. Gilbert, the Supreme Court enumerated both public and private factors to be considered in deciding whether a forum was appropriate. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S. Ct. 839, 843. The court stated:
An interest to be considered, and the one likely to be most pressed, is the private interest of the litigant. Important considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. There may also be questions as to the enforceability of a judgment if one is obtained. The court will weigh relative advantages and obstacles to fair trial.
Id. at 508, 67 S. Ct. at 843. The court also discussed public factors to consider, stating:
Factors of public interest also have place in applying the doctrine. Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself
Id. at 508-09, 67 S. Ct. at 843.
In the present case, the district court looked at both the public and private factors in its decision and concluded, “[c]learly, there is no perfect forum for this case.” The district court was right. The complex assortment of issues, defendants, different states in the United States, and foreign countries together does not lead to any one ideal venue. With that in mind, we determine if the district court’s weighing of the applicable factors, and then applying forum non conveniens to Minnesota, was an abuse of its discretion.
A. Private Interest Factors.
The private-interest factors make up the practical aspects of litigating a case. The district court considered these “the most important factors” and concluded that a German court would be the more appropriate forum. Bonzel argues that because none of the relevant defense witnesses lives in Germany, there is no way to assure their attendance. Bonzel asserts that the district court ignored this because of respondent’s assurances that the witnesses would be made available.
At present, this case deals with only two things: (1) Agreement V and (2) Pfizer’s sale of the Schneider entities to BSC. The first is a license agreement governed by German law, entered into by Bonzel, a German citizen, and Schneider AG, a Swiss corporation, that is now a subsidiary of BSC, a Delaware corporation. The second is the sale of a variety of subsidiaries between Pfizer, Inc. and BSC. The only Minnesota connection to this case is that Scimed is a Minnesota corporation that Bonzel alleged was producing infringing components that could be assembled elsewhere into infringing goods. Moreover, the settlement between Bonzel and BSC forecloses Bonzel from obtaining injunctive relief against Scimed to stop production of these allegedly infringing components in Minnesota.
i. Progression of the case and Minnesota witnesses
Because of the limited scope of what is left in the case, Bonzel’s argument that this case has progressed too far to move it out of Minnesota, although we understand his argument, is not persuasive. Some of the claimed expenses and attorney fees arose from the settled royalty claims. Though Bonzel wishes to view everything in this protracted litigation as intertwined, the record reflects that this is not so. For instance, Bonzel points to an affidavit by one of his lawyers that identifies 13 witnesses who live or work in Minnesota. In addition, there are nine other names that the attorney does not have addresses for, but who he believes might live in Minnesota. Specific descriptions of what these witnesses know are only provided for 13, while more general descriptions are provided for the rest. Of these, it appears that only two witnesses (Bender and Berman) are believed to have evidence relevant to the remaining issues. Though impossible to state conclusively by the general descriptions given for the rest, it appears that they have evidence that is primarily, if not completely, related to the royalty claims or possible claims of patent infringement. The Minnesota witnesses are not nearly as significant as Bonzel argues that they are.
ii. Connections to Germany vs. Minnesota
Until recently, the extent of Fraunhofer’s (Bonzel’s German agents) role was not known to extend to drafting Bonzel’s proposed agreement (Agreement IV). But, Bonzel appears correct that Pfizer’s counsel, in the United States, drafted the majority of what ended up as Agreement V. The drafting has more geographical ties to Germany than anywhere else because the terms were finalized in negotiations conducted in Germany in the German language. The document was also executed there.
As relates to compulsory attendance of witnesses, the repercussions of forum are not fully known. Bonzel has tried to force the attendance of Heliane Canepa, Schneider AG’s ex-CEO. Unfortunately, she is a Swiss citizen and resident who is beyond the jurisdiction of either Minnesota or German courts. Bonzel wants the respondents to stipulate that it will produce all witnesses it would have had to in this forum if the case is moved to Germany. Logically, respondents do not wish to stipulate to this. Bonzel has provided a “statutory declaration” of Judge Hans A. Bader, which is really an opinion letter about German law. This was attached in support of Bonzel’s motion to “amend, clarify or modify order dismissing.” This motion is nothing more than a motion for reconsideration, filed without the court’s leave to do so, captioned as something else and improperly attempting to add evidence and get another bite at the substantive apple.
Bonzel argues that the district court abused its discretion in applying the private interest factors by: (1) imposing a “settlement penalty”; (2) shifting the burden of persuasion from defendants to Bonzel; and (3) deciding the issue based on the need to apply foreign law unbalanced by the other factors.
The public-interest factors in Gulf Oil discuss the desire to hold trials in the view of these people who have an interest. Id. at 509, 67 S. Ct. at 843. This factor weighs slightly in favor of Germany. Another factor is the “local interest in having localized controversies decided at home.” Id. The people of Germany have a significant stake in seeing that their law is properly interpreted and applied. This was a significant, though not exclusive, consideration of the district court. In this case, there are issues of both German and Swiss law. As stated by the Court in Gulf Oil,
There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.
Id. Both parties have pointed out significant differences between the German and American courts. The parties chose German law, and no one disputes that it should be applied. The only question left is who should apply it. The district court judge looked at the entirety of this case and decided two things: (1) there are not significant connections with Minnesota, and (2) German law is best interpreted and applied by German courts. Both of these conclusions are reasonable. The addition of Swiss law on piercing the corporate veil strengthens this argument.
The final public-interest factor that appears relevant to this case is the burden of jury duty and administrative cost in trying this case. This case has already been a significant burden to the Minnesota courts.
This is not an easy case; the district court admitted as much when it said that there is no perfect forum for this case. The district court understood and properly applied the Gulf Oil factors. There were legitimate arguments both for and against dismissal on the basis of forum non conveniens.
After examination of this record, we cannot conclude the district court abused its discretion nor erred as a matter of law.