SAN FRANCISCO — The U.S. Court of Appeals for the Ninth Circuit has upheld a lower court’s ruling dismissing a complaint by Ayco Farms Inc.
In its opinion, the appeals court determined that the district court didn’t abuse its discretion by comparing the proposed foreign forum (Mexico) with the forum that the plaintiff actually chose (California), rather than with the United States as a whole.
Moreover, it maintained that the district court did not err in affording less deference to Ayco's choice to file a lawsuit in California, where Ayco had limited contacts with California.
The panel held that the district court properly found that the private interest factors strongly favored having the trial in Mexico, and the public interest factors supported the foreign forum. The panel concluded that the district court did not err in balancing the private and public interest factors.
Ayco markets and sells produce in the United States. It is incorporated in Florida, where it maintains its headquarters.
In 2012, the company partnered with Guillermo Rodriguez Ochoa, who is a citizen of both Mexico and the U.S., and Jorge Manuel Del Toro Chavez, a Mexican citizen, to create a new business, Ayco Farms Mexico (AFM) to buy or grow produce, which Ayco would then market and sell on an exclusive basis worldwide.
Rodriguez and Del Toro are also involved in another company, Operadora de Productos Frescos SA de CV (OPF), which helps Mexican farmers import produce to the U.S.
The partnership between the men and Ayco went smoothly, and the company marketed the partnership’s celery, cauliflower, peppers and broccoli to buyers in the U.S.
By 2014, the partnership became bumpy as the partners started having disputes.
OPF first sued Ayco in Mexico. It alleged that AFM was never properly formed, and that Ayco never paid for certain expenses as it had promised.
Ayco then filed this case in U.S. District Court in the Central District of California several months later. It alleged it had am exclusivity agreement with OPF and that Rodriguez and Del Toro breached this agreement by diverting produce to distributors in the United States and Canada.
The pair then moved to dismiss Ayco’s California lawsuit, arguing that the dispute should be litigated in Mexican courts.
In its opinion, appeals court said the district court was correct when it noted that the dispute overwhelmingly details events in other states and countries.
Moreover, the agreement in dispute was signed in Mexico. As a result, California has little interest in the case to justify the burden of a California jury.