Case of the Day: Publicidad Vepaco v. Mezerhane

The case of the day is Publicidad Vepaco, C.A. v. Mezerhane (Fla. Dist. Ct. App. 2015). Publicidad Vepaco and LaTele Television, C.A., two Venezuelan corporations, sued Nelson Mezerhane, the owner of Banco Federal, C.A. (a Venezuelan bank), and Rogelio Trujillo, the bank’s CEO, claiming that the two had carried out a scheme to defraud them of $72 million in US treasury bills through the bank. According to the complaint, the stolen T-bills passed through entities located in Curaçao. Mezerhane and Trujillo both live in Florida. Both face criminal charges in Venezuela on account of the alleged scheme, and the Venezuelan government has taken over the bank.

Before filing the Florida lawsuit, Vepaco and LaTele brought a lawsuit in Curaçao and sought to attach the T-bills, believing they were still in the hands of the Curaçaoan entities. But when they found that the T-bills were no longer in Curaçao, they sued the Curaçaoan entities and their directors, too, alleging that they were part of the scheme. Back in Florida, Mezerhane and Trujillo moved to dismiss, arguing that the plaintiffs had failed to join indispensable parties (the Curaçaoan entities) and arguing forum non conveniens. The Florida court granted the motion to dismiss on both grounds, and the plaintiffs appealed.

The appellate court quickly disposed of the claim of failure to join indispensable parties. A defendant is not indispensable merely because it may bear some liability. Rather, the question is whether the court could render an effective final decision in its absence. Finding that the defendants had failed to make such a showing, the court rejected the lower court’s decision on this point.

The more difficult issue was the issue of the forum. There was a question whether the Curaçaoan courts would have subject matter jurisdiction over the dispute, because the harm occurred in Venezuela. The lower court said it was “not persuaded that a Curaçaoan court would reject jurisdiction over the Defendants,” but as the appellate court held, this gets things backwards. It’s the defendants’ burden to show that the foreign court would exercise jurisdiction, not the plaintiff’s burden to show that the foreign court would refuse to exercise jurisdiction. Thus the defendants had failed to show the adequacy of the foreign forum.

Although that finding alone should be dispositive, the appellate court went on to consider the private interest factors. The court questioned whether the trial judge was right to discount entirely the plaintiffs’ choice of on the grounds that they are foreign parties; it seemed inclined to hold that a foreigner’s choice of a US forum is entitled to some deference, though perhaps not as much as a domestic plaintiff’s choice of forum. But the court didn’t need to reach a holding on this point, because the other factors strongly favored Florida even if the plaintiffs’ choice of forum was entitled to no deference. There was more access to the witnesses in Florida than in Curaçao; the documentary evidence was in Venezuela and thus neither forum had the advantage on the location of evidence; and the defendants had stated that while they would accept service of process in the Curaçao action, they would not appear there, thus necessitating letters rogatory and the like if the case were tried there.

In light of the fact that the private interest factors did not favor dismissal, the court held there was no need to consider the public interest factors. This aspect of the decision drew a concurring opinion from Chief Judge Shepperd, who was of the view that under Florida law, a court must always consider the public interest factors, even if the private interest factors strongly favor Florida as a forum. The Chief Judge found that the public interest factors favored dismissal in light of the weak nexus of the case with the United States, but he felt bound by the precedents to reverse. Still, it seems clear from the tenor of his concurrence that he would like to see the law change in this area.

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