United States Supreme Court Cases & Opinions

U.S. Supreme Court

Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518 (1947)

Koster v. (American) Lumbermens Mutual Casualty Co.

No. 206

Argued December 19, 1946

Decided March 10, 1947

330 U.S. 518

Syllabus

1. In the circumstances of this case, a federal district court in New York was justified in applying the doctrine of forum non conveniens and dismissing a derivative suit brought in his home district on the ground of diversity of citizenship by a policyholder in an Illinois mutual insurance company alleging breaches of trust in the management of the company's affairs and praying for an accounting and restitution. Pp. 330 U. S. 521-532.

2. In a derivative suit, a federal district court may refuse to exercise its jurisdiction when a defendant shows much harassment and plaintiff's response not only discloses little countervailing benefit to himself in the choice of forum, but also indicates such disadvantage as to support the inference that the forum chosen would not ordinarily be thought a suitable one to decide the controversy. Pp. 330 U. S. 531-532.

3. This Court cannot say that the district court abused its discretion in this case in giving weight to the undenied sworn statements of fact in defendant's motion papers, especially where plaintiff's answering affidavit failed to advance any reason of convenience to the plaintiff. P. 330 U. S. 531.

4. Where the doctrine of forum non conveniens is invoked in a derivative suit, the complexities and unique features of such suits are relevant to the application of the doctrine. Pp. 330 U. S. 522, 330 U. S. 525-526.

5. Although a plaintiff's own interest in a derivative suit may be small, if the conditions laid down by Rule 23 of the Rules of Civil Procedure for secondary actions by shareholders are complied with and jurisdiction is established, the federal courts are empowered to entertain such suits; but the peculiarities of such suits should not be overlooked. Pp. 330 U. S. 523-524.

6. Where there are hundreds of potential plaintiffs, all equally entitled voluntarily to invest themselves with the corporation's cause of action and all of whom could with equal show of right go into their many home courts, the claim of any one plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened. P. 330 U. S. 524.

Page 330 U. S. 519

7. In applying the doctrine of forum non conveniens, the ultimate inquiry is where trial will best serve the convenience of the parties and the ends of justice. P. 330 U. S. 527.

8. Rogers v. Guaranty Trust Co., 288 U. S. 123, considered; Williams v. Green Bay & Western R. Co., 326 U. S. 549, distinguished. Pp. 330 U. S. 528-529.

153 F.2d 888 affirmed.

Applying the doctrine of forum non conveniens, a federal district court in New York dismissed a derivative suit brought by a policyholder in an Illinois mutual insurance company. 64 F.Supp. 595. The Circuit Court of Appeals affirmed. 153 F.2d 888. This Court granted certiorari. 329 U.S. 700. Affirmed, p. 330 U. S. 532.