March 4, 2015

Forum Non Conveniens

Whenever a client states that they have assets outside of California or abroad, it is standard to tell the client that administration of such assets will take place in that jurisdiction. For example, if the client is an heir to an Iowa farm, the courts of Iowa provide the judicial avenue for redress. Similarly, if the client is an heir to a Texas cattle ranch, the courts of Texas will be the place for adjudication. However, just like almost every law, there are exceptions. This brings up a recent appellate decision involving a California lawsuit centered around real estate transactions in Iran. Yes Iran.  

Aghaian v. Minassian, ___ Cal.App.4th ___ (2015) 

The plaintiffs were the children and heirs of Iranian land owners, Gagik Galstian and Knarik Galstian, who had executed powers of attorney in favor of the defendants to reclaim their land in Iran.  The couple had fled Iran in 1978 as the Iranian Revolution was gaining momentum. Unable to divest themselves of all their Iranian assets prior to their departure, their properties fell into limbo. Years later, the couple learned from the Iranian government that they could return to Iran and reclaim all of their property.

To facilitate the reclamation, the couple executed powers of attorney in favor of the defendants, Iranian nationals. Inexplicably, the defendants transferred the properties to themselves for little or no consideration, per the opinion. Naturally, the couple sought legal redress in Iran but the success of such endeavors was unknown given that the opinion did not address it.

The couple died in 2012 and their children brought the instant suit in Los Angeles County Superior Court in 2013. The defendants moved to dismiss the case, inter alia, on the grounds of forum non conveniens. This legal doctrine permits courts to "exercise their discretionary power to decline to proceed in those causes of action which they conclude, on satisfactory evidence, may be more appropriately and justly tried elsewhere." Price v. Atchison, T. & S. F. Ry. Co. (1954) 42 Cal.2d 577, 584. Here, the defendants argued that Iran, not Los Angeles County Superior Court, was the proper venue for litigation.

The trial court agreed and dismissed the case on the grounds of forum non conveniens. On appeal, this decision was reversed by the California Court of Appeal. 

It found that the courts of Iran did not provide an adequate alternative forum. The opinion noted that "the evidence is overwhelming that Iranian courts discriminate against women and non-Muslims." For example, "the testimony of a woman counts for half the value of that of a man." (Author's comment: I have no idea how you quantify that). Furthermore, Iranian courts unequally treat Muslims over non-Muslims. The three litigants in this case involved 2 women and all the plaintiffs were not Muslim. Hmmm. Suffice to say, I was not surprised by the decision.