Heine v.

New York Life Insurance Company

Facts
The New York Life Insurance Company and the Guardian Insurance Company ("the insurance
companies") were corporations created in New York, USA. As conditions to be allowed to
conduct business in Germany, they were made to agree (1) to be supervised by German
authorities, (2) to invest the proceeds of policies in German securities, and (3) to establish a local
agency to whom summons may be served.

The insurance companies were later sued before courts in both the US and Germany for the
recovery on some 240 life insurance policies issued in Germany to German nationals, payable
in German currency.

Arguments for the Plaintiff

As the US courts have jurisdiction over the subject matter and the parties, they have no choice but
to try the case.

Issue
Whether or not the US courts may dismiss the case on the ground of forum non conveniens.

Held
Yes. Under the circumstances, the case may be more suitably tried before German courts.

Ratio Decidendi

The courts in both jurisdictions are competent to try the case and summons may be served
upon the insurance companies in both jurisdictions. Requiring the insurance companies to
defend their interests in the US would subject them to great and unnecessary inconvenience and
expenses, including the possibility of having to bring documentary evidence all the way from
their office in Germany. Moreover, trying the case in the US additionally burden the courts in that
jurisdiction, to the detriment of other litigants. The assumption of jurisdiction over a case the
cause of action of which arose from another jurisdiction and wherein both parties are non-
residents is discretionary upon the court.

Heine v. New York Life Ins. Co., 45 F.2d 426 (D. Or.
1930)
US District Court for the District of Oregon - 45 F.2d 426 (D. Or. 1930)
December 1, 1930

45 F.2d 426 (1930)

HEINE
v.
NEW YORK LIFE INS. CO.
No. 10465.

District Court, D. Oregon.

December 1, 1930.
C. T. Haas and E. B. Seabrook, both of Portland, Or., for plaintiff.

Huntington, Wilson & Huntington and Clark & Clark, all of Portland, Or.,
for defendant.

BEAN, District Judge.

This is one of a series of cases pending in this court against the New York
Life Insurance Company and the Guardian Insurance Company, each of
which is a New York corporation, to recover on some two hundred and
forty life insurance policies made and issued by the defendants in
Germany, in favor of German citizens and subjects, and payable in
German marks. The policies of the New York Life Insurance Company
were issued prior to August 1, 1914, and those of the Guardian prior to
May 1, 1918. As a condition to their right to do business in Germany, the
insurance companies were required to and did submit to the supervision
and control of the German insurance officials, to invest the reserves
arising from German policies in German securities, and to establish, and
they do now maintain, an office in that country with a resident
representative or agent upon whom service of process can be made.

The actions now pending are brought and prosecuted in the name of, or
as assignee of the insured by, certain parties in the United States and
Germany, under an irrevocable power of attorney, by which they are
authorized and empowered to sue for, collect, receive, and receipt for all
sums due or owing under the policies, or compromise the same in
consideration of an assignment and transfer to them of the undivided 25
per cent. interest in the policies and all rights accruing thereunder.

None of the parties to the litigation are residents or inhabitants of this

district. The plaintiffs reside in, and are citizens of, the republic of
Germany. The defendants are corporations organized and existing under
the laws of New York, with their principal offices in that state, with
statutory agents in Oregon, upon whom service can be made. None of the
causes of action arose here, nor do any of the material witnesses reside in
the district, nor are any of the records of the defendant companies
pertaining to the policies in suit in the district, but such records are either
at the home office in New York or at their offices in Germany. The courts
of Germany and New York are open and functioning and competent to
take jurisdiction of the controversies, and service can be made upon the
defendants in either of such jurisdictions. To require the defendants to
defend the actions in this district would impose upon them great and
unnecessary inconvenience and expense, and probably compel them to
produce here (three thousand miles from their home office) numerous
records, books, and papers, all of which are in daily use by it in taking
care of current business.
In addition, it would no doubt consume months of the time of this court to
try and dispose of these cases, thus necessarily disarranging the
calendar, resulting in delay, inconvenience, and expense to other litigants
who are entitled to invoke its jurisdiction.

Under these circumstances, the defendants, while conceding that the

court has jurisdiction of the person and subject-matter, urges that it
should refuse, in its discretion, to exercise such jurisdiction.

I unhesitatingly concur in this view, for, as said by Mr. Justice Holmes in

Cuba Railroad Co. v. Crosby, 222 U.S. 473, 32 S. Ct. 132, 133, 56 L. Ed.
274, 38 L. R. A. (N. S.) 40: "It should be remembered that parties do not
enter into civil relations in foreign jurisdictions in reliance upon our courts.
They could not complain if our courts refused to meddle with their affairs,
and remitted them to the place that established and would enforce their
rights. * * * The only just ground for complaint would be if their rights
and liabilities, when enforced by our courts, should be measured by a
different rule from that under which the parties dealt."

*427 It is apparent that the plaintiffs are seeking by these actions to

impose on the defendants a liability under a different rule than "that
under which the parties dealt."

The courts of Germany have ruled that any person seeking to recover on
a civil contract made in Germany prior to August, 1924, and payable in
marks, can only recover on the basis provided in the monetary law of
1924. Manifestly the plaintiffs are not proceeding on any such theory.

It is argued by the plaintiffs that, because the court has jurisdiction of the
subject-matter and the parties, it has no discretion, but should proceed
with the case, regardless of where the cause of action arose, or the law
by which it is controlled, or the residence or convenience of the parties
and witnesses, or the difficulty the court would encounter in attempting to
interpret and enforce a foreign contract, or the interference with the other
business of the court. But that is a matter resting in its discretion. It may
retain jurisdiction, or it may, in the exercise of a sound discretion, decline
to do so, as the circumstances suggest. The courts have repeatedly
refused, in their discretion, to entertain jurisdiction of causes of action
arising in a foreign jurisdiction, where both parties are nonresidents of the
forum. Gregonis v. Philadelphia & R. Coal & Iron Co., 235 N.Y. 152, 139
N.E. 223, 32 A. L. R. 1, and note; Pietraroia v. New Jersey & Hudson
River Ry. & Ferry Co., 197 N.Y. 434, 91 N.E. 120; Gregonis v. P. & R. Coal
& Iron Co., 235 N.Y. 152, 139 N.E. 223, 32 A. L. R. 1; Stewart v.
Litchenberg, 148 La. 195, 86 So. 734; Smith v. Mutual Life Insurance Co.,
14 Allen (96 Mass.) 336-343; National Telephone Mfg. Co. v. Du Bois, 165
Mass. 117, 42 N.E. 510, 30 L. R. A. 628, 52 Am. St. Rep. 503; Collard v.
Beach, 81 App. Div. 582, 81 N.Y.S. 619; Great Western Railway Co. v.
Miller, 19 Mich. 305; Disconto Gesellschat v. Umbreit, 127 Wis. 651, 106
N.W. 821, 15 L. R. A. (N. S.) 1045, 115 Am. St. Rep. 1063.

As said by Mr. Justice Bradley in The Belgenland, 114 U.S. 355, 5 S. Ct.
860, 864, 29 L. Ed. 152: "Circumstances often exist which render it
inexpedient for the court to take jurisdiction of controversies between
foreigners in cases not arising in the country of the forum; as, where they
are governed by the laws of the country to which the parties belong, and
there is no difficulty in a resort to its courts; or where they have agreed
to resort to no other tribunals * * * not on the ground that it has not
jurisdiction, but that, from motives of convenience, or international
comity, it will use its discretion whether to exercise jurisdiction or not."

See, also, Charter Shipping Co. v. Bowring, 281 U.S. 515, 50 S. Ct. 400,
74 L. Ed. 1008.

These, in my judgment, are cases of that kind. They are actions brought
on causes of action arising in Germany. The contract of insurance was
made and to be paid there and in German currency. It is to be construed
and given effect according to the laws of the place where it was made. 22
Am. & Eng. Ency. of Law (2d Ed.) 1350. The courts of this country are
established and maintained primarily to determine controversies between
its own citizens and those having business there, and manifestly the court
may protect itself against a flood of litigation over contracts made and to
be performed in a foreign country, where the parties and witnesses are
nonresidents of the forum, and no reason exists why the liability, if any,
cannot be enforced in the courts of the country where the cause of action
arose, or in the state where the defendant was organized and has its
principal offices. True, the courts of New York have declined to exercise
jurisdiction over actions brought on insurance policies similar to those in
suit. Higgins v. N. Y. Ins. Co., 220 App. Div. 760, 222 N.Y.S. 819, and
Von Nessen-Stone v. N. Y. Life Ins. Co.[1] But that affords no reason why
this court should do so. It is to me unthinkable that residents and citizens
of Germany may import bodily into this court numerous actions against a
nonresident defendant, on contracts made and payable in Germany, and
insist as a matter of right that, because it has obtained jurisdiction of the
defendant by service of its statutory agent, the taxpayers, citizens, and
residents of the district having business in the court should stand aside
and wait the conclusion of the case, where, as here, the courts of
Germany and of the home state of the defendant are open and
functioning.

Judge Tucker, in the state court of Multnomah county, in an able and

well-considered opinion in a case brought on one of the German policies
(Kahn v. New York), reached the same conclusion.

Motion allowed.