Imamura v. Gen. Elec. Co.
Imamura v. Gen. Elec. Co.
Opinion of the Court
INTRODUCTION
Plaintiffs, four individuals and six business entities from Fukushima Prefecture in Japan, bring this proposed class action against Defendant General Electric Co. ("GE") seeking monetary damages for property damage and economic harm caused by the tragic 2011 tsunami and resulting nuclear disaster at the Fukushima Daiichi Nuclear Power Plant ("FNPP"). Plaintiffs sue individually and on behalf of putative classes of over 150,000 citizens and hundreds of businesses that suffered property damage or economic injury as a result of the FNPP disaster. They seek both compensatory and punitive damages. Plaintiffs allege that GE negligently designed the FNPP's nuclear reactors and safety mechanisms. GE has moved to dismiss this lawsuit on a number of grounds, including forum non conveniens. Because Plaintiffs have an adequate remedy for their injuries in Japan and trial in Massachusetts would be overly burdensome for the parties and the Court, the Court ALLOWS GE's motion to dismiss for forum non conveniens (Docket No. 38).
FACTUAL BACKGROUND
As required on a motion to dismiss for forum non conveniens, the following factual background is drawn from the amended complaint. See Vivendi SA v. T-Mobile USA Inc.,
*4I. The Fukushima Daiichi Nuclear Power Plant ("FNPP")
The FNPP was built for the Tokyo Electric Power Company ("TEPCO") in Fukushima Prefecture in Japan in the late 1960s. The FNPP contains six boiling water reactors, all of which were designed by GE. GE constructed Units 1, 2, and 6 and provided expertise and the designs for Units 3, 4, and 5, which were built by Toshiba Corp. and Hitachi Ltd. GE also designed the rest of the facility and has participated in regular maintenance ever since.
Plaintiffs allege many problems with GE's design of the plant, including 1) lowering the bluff over the ocean where the plant was built by twenty-five meters to reduce costs; 2) placing the emergency generators and seawater pumps in the basement of the turbine building without protection against flooding; 3) not ensuring a backup power source in case the generators failed; and 4) not including space to accommodate sufficient emergency equipment. These design issues were especially problematic given the region's well-known history of tsunamis, including a 38.2-meter wave that killed 27,000 people in 1896 and a 28.7-meter wave that killed 3,000 people in 1933.
II. 2011 Tsunami and Meltdown
On the afternoon of March 11, 2011, a 9.0-magnitude earthquake struck Japan. The FNPP's nuclear reactors shut down automatically, and control rods were inserted into the core to stop the nuclear reactions. The plant disconnected from the power grid, but the diesel backup generators continued to run the cooling systems. Within an hour, a 45-foot tsunami triggered by the earthquake reached shore, flooded the plant, disabled the generators, and destroyed the emergency cooling pumps. Government authorities soon began evacuating neighboring communities.
Without power, the plant's cooling systems could not function properly. As the coolant and water levels dropped in the reactors, the nuclear cores began to heat up and melt down. The melting released hydrogen gas, which further increased the heat and pressure. The operators of the plant considered opening vents to relieve the heat and pressure, but there was no mechanism to filter out radioactive material and the neighboring communities had not yet been fully evacuated. Hydrogen gas continued to accumulate within the reactors, and Units 1, 3, and 4 all exploded over the next four days. The explosions released dangerous radioactive materials into the environment. Plaintiffs allege that GE's problematic design of the plant and reactors caused the nuclear explosions.
III. Aftermath of the Disaster
Fukushima Prefecture suffered immense damage from the disaster. Many of the citizens who were evacuated from the surrounding communities lost their homes, land, and jobs. Much of the area around the FNPP remains uninhabitable today due to the risk of exposure to radioactive materials. Even some property outside the evacuation zone sustained damages from radioactive ash.
The disaster wiped out Fukushima Prefecture's well-known tourist and agriculture industries. Hotels, golf courses, and other tourist attractions in and around the evacuation zone are still unusable. The region used to grow many agriculture products, but it is now unsafe to consume any food from the region. Radioactive discharge also continues to flow into the Pacific Ocean and contaminate the local fish stock.
The disaster forced more than 1,700 companies to close. Some business properties *5are covered in radioactive waste, and the remediation measures required to reopen are extremely expensive. Other business, such as privately owned hospitals, medical and dental clinics, restaurants, and educational facilities, had to close because they had no customers. Much of the infrastructure in and around the evacuation area has not been repaired, including government buildings, sidewalks, roads, sewers, schools, hospitals, and roads.
IV. Japanese Compensation System
Under the Act on Compensation for Nuclear Damage ("the Act"), only TEPCO is liable for damages arising from the FNPP disaster. No other entity or individual involved in the construction or operation of the FNPP plant or the response to the disaster is required to provide compensation to victims. The Act creates strict liability for TEPCO, so claimants must only prove causation and damages to secure compensation. TEPCO is liable for all damages proximately caused by the FNPP disaster. The statute of limitations for claims against TEPCO is ten years. There is no cap on TEPCO's overall liability.
Victims may pursue compensation from TEPCO via three methods: 1) submission of direct claims to TEPCO; 2) mediation of claims against TEPCO through the Nuclear Damage Claim Dispute Resolution Center ("ADR Center"); and 3) lawsuits against TEPCO. These avenues for compensation are not mutually exclusive: for example, a victim may file an administrative claim and then initiate a lawsuit if she is unsatisfied with her compensation.
A victim seeking compensation directly from TEPCO submits a standard form with evidence of her loss. TEPCO reviews the form and pays the victim based on its uniform guidelines. Among other forms of damages, TEPCO's guidelines call for compensation to businesses for reputational harm and loss of sales. Over two million victims have filed claims directly with TEPCO.
The ADR Center is a public mediation service under the supervision of the Dispute Reconciliation Committee for Nuclear Damage Compensation ("DRC"). The ADR Center is overseen by a three-member committee comprised of two independent lawyers and a law professor. A victim may file a claim with the ADR Center in addition to, or as an alternative to, a direct claim with TEPCO. The DRC has issued a number of guidelines for compensation for the FNPP disaster. Although these guidelines do not have the force of law, they provide the framework for mediations through the ADR Center. The guidelines provide for compensation for lost real estate value and business interruption damages, including "rumor damages" for businesses in certain industries that are subject to customer concerns about radioactive contamination. There is no filing fee for submitting a claim to the ADR Center, and claimants can proceed pro se or with an attorney. The mediations are supervised by attorneys. As of February 1, 2019, claimants have filed 24,426 cases with the ADR Center, 18,890 of which have resulted in settlements.
Because the claims process with TEPCO and through the ADR Center is confidential, there is little publicly available information on the value of these settled claims. Settlements through the ADR Center appear to vary widely. Certain claimants, including some who reside outside the designated evacuation zones, have received nothing from TEPCO. Others have received as little as two-and-a-half percent of the damages sought. On the other hand, TEPCO has agreed to pay a number of businesses more than $ 500,000 for property damage and business losses.
*6A victim may file a lawsuit against TEPCO right away or after receiving an unsatisfactory settlement through these other mechanisms. Japanese law recognizes tort causes of action and awards damages for harm to property and business losses. Although there is no mechanism under Japanese law to file a class action for claims arising from a nuclear disaster, multiple plaintiffs may join together in one lawsuit. In fact, a number of parties have already joined together in mass actions against TEPCO. To file a lawsuit, a plaintiff must pay a filing fee of no more than one percent of the value of the case. As of March 30, 2018, around 440 lawsuits had been filed against TEPCO, 50 of which ended with judgments and 110 with settlements.
There is no comprehensive database of Japanese court judgments. Anecdotally, judgments in cases involving property damage and business losses have ranged from $ 182 to $ 658,462 per plaintiff. To avoid double recovery, courts reduce their judgments to account for compensation the plaintiffs have received from TEPCO via other means.
As of February 15, 2019, TEPCO has paid out more than $ 79 billion to business entities and individuals for losses arising from the FNPP disaster. Many of the claims have involved property damage and economic loss for business activities. To ensure that operators of nuclear plants like TEPCO have the money to pay claims, the Act requires that they carry insurance and enter into an indemnity agreement with the Japanese government. TEPCO has so far received $ 1.7 billion from the government through its indemnity agreement. Furthermore, after the FNPP disaster, the Japanese government set up the Nuclear Damage Compensation and Decommissioning Facilitation Corporation to contribute further capital to TEPCO for compensation. Through bond issuances, the government plans to contribute around $ 121 billion to the NDF.
V. Procedural History
Plaintiffs are four Japanese citizens and six Japanese business entities that lived or operated in Fukushima Prefecture at the time of the FNPP disaster. They filed suit against GE on November 17, 2017. After GE moved to dismiss the original complaint, Plaintiffs filed an amended complaint on May 21, 2018. Plaintiffs bring seven claims: negligence (Count I), strict product liability for manufacturing and design defects (Counts II and III), and damage to real property (Count IV) under Massachusetts law; and negligence (Count V), failure to warn (Count VI), and diminution of value to real property and business interests (Count VII) under Japanese law.
On July 19, 2018, GE moved to dismiss the amended complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and the doctrine of forum non conveniens. GE argues that 1) the Convention on Supplementary Compensation for Nuclear Damage ("CSC") strips the Court of subject matter jurisdiction; 2) Japanese law applies to this lawsuit and Japan's Act on Compensation for Nuclear Damage channels all liability for the FNPP disaster to TEPCO, the operator of the plant; 3) the case should be dismissed under forum non conveniens; 4) Plaintiffs' claims are time-barred by the Massachusetts statutes of limitations and repose; and 5) Plaintiffs fail to state a claim for various other reasons.
If "a foreign tribunal is plainly the more suitable arbiter of the merits of the case," a court may dismiss for forum non conveniens without resolving whether it has subject matter jurisdiction. Sinochem Int'l Co. v. Malay. Int'l Shipping Corp.,
DISCUSSION
Forum non conveniens permits dismissal of a case, even if the court has jurisdiction, when "an alternative forum is available in another nation which is fair to the parties and substantially more convenient for them or the courts." Mercier v. Sheraton Int'l, Inc.,
I. Adequate Alternative Forum
The sine qua non of forum non conveniens is the existence of an adequate alternative forum. See Associação Brasileira de Medicina de Grupo v. Stryker Corp.,
In Piper Aircraft Co. v. Reyno, the Supreme Court described the adequate alternative forum requirement as follows:
Of course, if the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all, the unfavorable change in law may be given substantial weight; the district court may conclude that dismissal would not be in the interests of justice. In these cases, however, the remedies that would be provided by the Scottish courts do not fall within this category. Although the relatives of the decedents may not be able to rely on a strict liability theory, and although their potential damages award may be smaller, there is no danger that they will be deprived of any remedy or treated unfairly.
A remedy available through an administrative compensation scheme can render a foreign country an adequate alternative forum. See, e.g., Veljkovic v. Carlson Hotels, Inc.,
This analysis dovetails with Piper's emphasis on the existence of any adequate remedy for a plaintiff's injury. Thus, "a foreign forum will be deemed adequate unless it offers no practical remedy for the plaintiff's complained of wrong," regardless of the source of that remedy. Id.; see also Tang,
The parties agree that Plaintiffs cannot bring their claims against GE in Japan because the Act channels all liability from the FNPP disaster to TEPCO. GE contends that Plaintiffs still have three avenues for compensation in Japan: 1) direct claims filed with TEPCO, 2) claims against TEPCO through the ADR Center, and 3) damages lawsuits against TEPCO. Plaintiffs do not dispute that these avenues are available to them. Instead, they emphasize that they cannot secure a remedy from GE in Japan. To support this argument, they rely on cases that suggest that a foreign forum counts as an adequate alternative forum only when all parties to the American litigation can come under the jurisdiction of the foreign forum's courts. See, e.g. Associação Brasileira,
In the cases Plaintiffs cite, however, the courts did not directly address the question presented here of whether the foreign forum must permit a remedy against the specific defendant sued in the American litigation where the forum provides an adequate remedy from another party or entity. Based on the language of Piper and the persuasive reasoning of the administrative *9compensation cases, the answer to this question is "no," so long as the alternative forum provides an adequate remedy.
GE must show that the alternative remedy is not "so clearly inadequate or unsatisfactory that it is no remedy at all." Piper,
TEPCO is strictly liable for damages proximately caused by nuclear damage from the FNPP disaster. Plaintiffs can sue TEPCO in Japanese courts until the ten-year statute of limitations expires in 2021. Tort claims are cognizable under Japanese law, and Japanese courts award damages for harm to property and economic losses. Plaintiffs need not pursue mediation through the ADR Center before filing lawsuits. They can also seek compensation by filing claims directly with TEPCO or through the ADR Center. There is no filing fee, and Plaintiffs can be represented by an attorney. The mediations are governed by guidelines issued by the Japanese government. Though it does not provide a judicial remedy, the ADR Center mediation is similar to the administrative compensation schemes upheld in cases like Lueck. TEPCO's unlimited liability and the financial support of the Japanese government ensure that TEPCO will continue to be able to pay compensation via judicial and administrative mechanisms.
Plaintiffs attack these routes to a remedy in a number of ways. First, they argue that the compensation award they can win through either of these routes is inadequate. A remedy is inadequate only if it is "basically unjust." Ahmed v. Boeing Co.,
Second, Plaintiffs raise what they see as two deficiencies in the Japanese judicial system. Plaintiffs are correct that they could not bring a class action against TEPCO in Japan. However, they can join together in a single lawsuit, as many have done in litigation arising from the disaster. See *10Fischer v. Magyar Allamvasutak Zrt.,
Third, Plaintiffs assail the ADR Center mediation process because it is complex, opaque, and managed by TEPCO. They analogize this case to In re Assicurazioni Generali S.p.A Holocaust Insurance Litigation, in which the court found a commission set up by several insurance companies and nonprofits to be an inadequate forum to resolve unpaid Holocaust-era insurance claims because it was a nonjudicial, private entity that was controlled by the insurance companies and there was nothing stopping the companies from withdrawing from the commission. See
Finally, Plaintiffs contend that the guidelines that govern TEPCO's direct claims process and mediations through the ADR Center exclude certain class members from compensation. Specifically, they point to class members outside of the evacuation zones and in areas where government restrictions have been lifted. As Plaintiffs acknowledge, however, the guidelines expressly contemplate awarding compensation to otherwise excluded claimants who can demonstrate a causal relationship between the FNPP disaster and their damages. Most importantly, an individual or business that does not receive compensation through the administrative scheme can seek a remedy through the courts. Accordingly, Japan is an adequate alternative forum for Plaintiffs' claims.
II. Private and Public Interest Factors
A. Legal Standard
The Court therefore proceeds to analyze the private and public interest factors. In doing so, a court must give the plaintiff "some degree of deference for his original choice of forum." Adelson v. Hananel,
Among the private interest factors courts consider are 1) the relative ease of access to proof; 2) the availability and costs of compulsory process for attendance of unwilling witnesses; 3) comparative trial costs; 4) the ability to enforce a judgment; and 5) other practical problems that would make the trial cumbersome, time-consuming, or costly. Iragorri,
B. Deference to Plaintiffs' Choice of Forum
Plaintiffs are all Japanese citizens and businesses with no connection to the United States. It seems they sought an American forum at least in part to avoid Japanese law absolving GE of liability for the FNPP disaster. Plaintiffs' choice to file their lawsuit in Massachusetts is thus entitled to some, but not great, deference. The lesser deference given to Plaintiffs' choice of forum differentiates this forum non conveniens analysis from the Ninth Circuit's analysis in Cooper, another lawsuit arising from the FNPP disaster where the plaintiffs were U.S. citizens and members of the U.S. Navy whose choice of an American forum was entitled to more deference. See
C. Private Interest Factors
The private interest factors weigh in favor of dismissal because of the difficulty of accessing relevant evidence for use in this Court and the Court's inability to compel production of important Japanese documents and testimony from Japanese witnesses and to implead potentially liable third parties.
1. Relative Ease of Access to Sources of Proof
Because the vast majority of the events giving rise to Plaintiffs' claims took place in Japan, GE plausibly states that it would use significant material evidence currently located in Japan at the trial. As GE notes, all evidence concerning the plant's layout at the time of the disaster, changes TEPCO made after GE installed the reactors, safety measures and maintenance steps TEPCO took or failed to take, what occurred when the tsunami struck, and how TEPCO and the government responded to the disaster is located in Japan. So is all evidence about whether GE's design *12caused Plaintiffs' property damage and economic harm and what damages Plaintiffs suffered. Most witnesses would be current and former TEPCO employees and officers, Japanese government officials, and Plaintiffs and their associates. GE's attorney states in an affidavit that he expects to rely on all of this evidence at trial. The burdens of obtaining this evidence and translating it for an American court are substantial. See Blanco v. Banco Indus. de Venez., S.A.,
Plaintiffs argue that documents and witnesses relating to the design, manufacture, and maintenance of the reactors are located in the United States within GE's control. Some important evidence relevant to this case, specifically concerning GE's maintenance of the FNPP in the years immediately preceding the disaster, is likely in the United States. However, since the FNPP's reactors were designed and deployed more than fifty years ago, it is unlikely there are many witnesses in the United States knowledgeable about the original design. The witnesses and documents in Japan likely far outnumber those in the United States, and the Japanese evidence is central to many core issues in the litigation, such as causation, damages, and apportionment of liability among third parties. See Mercier,
The Court does not discount that modern litigation often requires transporting witnesses transnationally. But litigation in this Court would increase the burden of accessing material evidence. The difficult access to sources of proof therefore favors dismissal.
2. Availability of Compulsory Process and Cost of Obtaining Attendance of Unwilling Witnesses
The Court's inability to compel the production of documents or other key physical evidence from sources in Japan increases the evidentiary problems with litigating this case in Massachusetts. J.C. Renfroe & Sons, Inc. v. Renfroe Japan Co.,
Nor could the Court require the attendance at trial of the many key witnesses located in Japan. J.C. Renfroe,
*13See Interface Partners,
Furthermore, the Hague Convention's streamlined method of securing transcribed testimony is not available here because Japan has not signed on to the Convention. See J.C. Renfroe,
3. Ability to Enforce a Judgment
GE argues that the fact that a Japanese court may not enforce a class action judgment against it supports dismissal. Since GE is a Massachusetts corporation with significant assets here, it is unclear why Plaintiffs would need to seek to enforce an American judgment in Japan. This factor does not support either party.
4. Other Practical Problems
If the litigation remains in Massachusetts, GE could not implead third parties who may share responsibility for the disaster: TEPCO, the operator of the FNPP; Toshiba and Hitachi, which were involved in its construction; and the Japanese government, which helped respond to the disaster. It is unclear whether this Court has personal jurisdiction over Toshiba, Hitachi, or TEPCO, as Plaintiffs point to no contacts these Japanese corporations had with Massachusetts that relate to the FNPP plant. See LP Sols. LLC v. Duchossois,
Because GE plans to pin at least some responsibility on these third parties, it would suffer prejudice from its inability to implead them. "Such an accusation is surely less persuasive when aimed at a set of empty chairs." Satz v. McDonnell Douglas Corp.,
D. Public Interest Factors
The public interest factors also favor dismissal because Japan's interest in this lawsuit far outweighs the local interest, the case involves complex choice of law and foreign law questions, and adjudication of this lawsuit would significantly burden the Court.
*141. Local Interest in the Lawsuit
Japan's interest in this lawsuit dwarfs any interest of the United States or Massachusetts. "[A] sovereign has a very strong interest when its citizens are allegedly victims and the injury occurs on home soil." SME Racks, Inc v. Sistemas Mecanicos Para Electronica, S.A.,
Additionally, this lawsuit raises complex questions about the safe design of nuclear reactors and the future of nuclear energy in Japan. Through the Act on Compensation for Nuclear Damage's scheme for providing compensation for nuclear disasters, the Japanese government has shown a strong interest in determining how to allocate liability and compensation for disasters occurring on its soil. This allocation is key for ensuring that companies are willing to enter the nuclear power business in Japan and citizens are adequately compensated when something goes wrong, which the Act lists as its two purposes. Adjudicating this lawsuit in the United States would interfere with the system Japan has set up for handling nuclear disasters.
The United States and Massachusetts certainly have an interest in deterring their corporate citizens from distributing dangerous products, but this interest is not strong in comparison to Japan's interest in this lawsuit. Piper,
Plaintiffs argue that the local interest is strong here because GE reactors are present in nuclear power plants in Massachusetts and throughout the United States. However, this lawsuit centers on the Japanese nuclear regulatory system and other circumstances unique to the FNPP. Any local interest in the litigation cannot match Japan's extremely strong interest.
2. Choice of Law and Application of Foreign Law
This case involves complex choice of law and foreign law issues. For tort cases, Massachusetts choice of law rules generally require application of "the substantive laws of the jurisdiction wherein the tort occurred." Cosme v. Whitin Mach. Works, Inc.,
3. Court Congestion and Burden
Adjudicating this dispute would place a heavy burden on the Court. Plaintiffs seek *15to certify two classes of over 150,000 Japanese individuals and business entities. As a preliminary matter, certification of a damages class is unlikely because defendant would have a strong argument that the individual damages issues would predominate. Assuming this Court certifies a class under Federal Rule of Civil Procedure 23(b)(3), discovery into Japanese damages would be complex and extensive. Trial would require expending significant time and resources on interpreting witness testimony and translating reams of documents into English. Given the lack of a significant local interest in the lawsuit, the burdens this lawsuit would place on the Court also favor dismissal. See Lueck,
E. Conclusion
Many of the private and public interest factors support dismissal, most notably the difficulty in accessing evidence located in Japan, the difficulty of compulsory process, and the lack of a strong local interest in the dispute. Although one factor, the enforceability of a judgment, is neutral, none supports continuing to adjudicate this lawsuit in Massachusetts. Accordingly, although Plaintiffs' choice of forum is entitled to some deference, GE has met its burden of demonstrating that "considerations of convenience and judicial efficiency strongly favor [resolving] the claim in the alternative forum." Iragorri,
ORDER
The motion to dismiss is ALLOWED (Docket No. 38).
SO ORDERED.
Reference
- Full Case Name
- Shinya IMAMURA, Iryo Hojin Nishikai, Iryo Hojin Shadan Imamura Clinic, Kabushiki Kaisha Bellevue Trading, Kabushiki Kaisha Maruhi, Koeki Zaidan Hojin Jinsenkai, Konno Geka Clinic, Akira Konno, Masahiro Yamaguchi, and Junko Takahashi on behalf of themselves and all others similarly situated v. GENERAL ELECTRIC COMPANY, and Does 1-100, inclusive
- Cited By
- 5 cases
- Status
- Published