Sikorsky Aircraft Corp., et al. v. Lloyds TSB General Leasing (No. 20) Limited, et al., Civil Action No. 3:10-CV-00954 (CSH) (D. Conn. Apr. 2011), demonstrates how two insightful courts are managing international litigation pending in two different countries.
The case involves a forum battle arising from the crash of a helicopter into international high seas waters in the Atlantic Ocean during a flight from St. John’s, Newfoundland, Canada and offshore oil production facility. The plaintiff is an American company and had contracted to build the helicopter and sell it to the Canadian company. Plaintiff sought declaratory relief in a Connecticut court seeking a declaration that it could not be sued in breach of contract or tort anywhere in the world by reason of the crash. The case was the first filed.
Thereafter, litigation was commenced in a Canadian court. The Canadian court denied a motion to dismiss based on forum non conveniens grounds. The current federal case in Connecticut addressed motions to dismiss for want of subject matter jurisdiction and, separately, based on the priority of the Canadian action.
The issues of international practice analyzed in the decision include the following:
First, the Court ruled that the declaratory nature of the federal suit did not provide a basis for federal court jurisdiction and that the plaintiff helicopter company would have to demonstrate an independent basis for subject matter jurisdiction.
Second, the Court found that diversity jurisdiction was lacking based on the existence of nondiverse entities forming the Lloyd’s syndicates. The decision analyzed at length the series of decisions by the United States Court of Appeals for the Second Circuit in and following E.R. Squibb & Sons, Inc. v. Accident & Casualty Ins. Co., 160 F.3d 925 (2d Cir. 1998)(in which the author was lead counsel). See generally the issue of detemining subject matter jurisdiction in our e-book, International Practice: Topics and Trends.
Third, the Court found admiralty jurisdiction present by reason of the underlying wrongful death claims, since such claims arose out of activity “traditionally performed by water-borne vessels: the ferrying of passengers from the mainland over the high seas to an island”.
Finally, however, the Court ruled that it had substantial discretion to dismiss the case given that the action sought declaratory relief only. Of “cardinal importance”, said the Court, “is the litigation pending in the Trial Division of the Supreme Court of Newfoundland and Labrador”. The Court was concerned that a declaration granting relief might “increase friction between the sovereign legal systems of the United States and Canada, or improperly encroach on the domain of the Canadian Court”. The District Court therefore dismissed the action.