California court declines to hear case, saying it should be brought in Iran instead

April 9, 2014

The decision is Aghaian v. Minassian (Cal. Super. Ct. Oct. 25, 2013), but I just learned about it because it’s on appeal, and the opening appellate brief was only recently filed and posted online.

According to the facts as claimed by the Aghaians (I quote from their appellate brief), the plaintiffs are non-Muslim Iranian-Americans who live in the Los Angeles area. Their parents — who died just a few years ago — left during the disturbances preceding the 1979 revolution.

After the revolution, the Islamic Republic of Iran became the overseer of properties owned by persons who fled the country during that time period, including [the parents’] properties.

In 1991, [the parents] learned that persons meeting certain criteria could seek to reclaim possession of their properties in Iran. In a series of complicated transactions, [the parents] executed several power of attorney documents in favor of various persons so those persons could assist [the parents] in reclaiming their Iranian properties. As the result of a transaction in July 2003, 100 percent of the powers of attorney over [the father’s] properties in Iran were held by defendant Minassian and Nader Izadi.

Minassian proved to be an unfaithful fiduciary. He took steps to misappropriate Gagik’s properties. Specifically, in March 2008, Minassian and Izadi executed a quitclaim deed transferring title to all of Gagik’s properties to themselves for little or no consideration. Minassian also took steps to conceal this information from Gagik. Gagik did not learn of the 2008 quitclaim deed until late 2012, just before he died.

The Aghaians sued in California court, which would usually be the right place to sue: They live in Los Angeles, and the one defendant who remains in the case (Minassian) also lives there, so the court had jurisdiction over the defendant. But defendant asked that the case be dismissed or stayed under the doctrine of “forum non conveniens,” basically Latin for “the forum is not convenient” — which is to say that some other court (defendant says Iranian court) is a much better place to try the issue than this court.

The California court agreed. On one hand, it noted, there is evidence that the Iranian judicial system is unfair in various ways, including by being biased against women and non-Muslims. (The Aghaians also argue that it’s unduly politically influenced, and biased against those who fled around the Revolution.)

On the other hand, the court noted, the litigation is about events in Iran and, in particular, real estate in Iran, and at least one key witness — Izadi — lives in Iran and can’t be compelled to testify in American court. On balance, the court said, the case should be stayed pending the outcome of any possible Iranian action. Here is the core of the court’s opinion (some paragraph breaks added):

Determination of [a forum non conveniens] motion involves analysis of a number of related issues: (1) whether the alternate forum is a suitable place for trial; (2) consideration of private factors, such as case of access to sources of proof, cost of obtaining the attendance of witnesses, and the availability of compulsory process for unwilling witnesses; and (3) consideration of public factors, such as avoiding overburdening overcrowded courts, protecting local jurors from deciding cases where there is no local concern, and weighing the competing interest of California and the alternate forum in the litigation. Stangvik v. Shiley, Inc. (1999) 54 Cal.3d 744.

Suitable Alternative Forum

Defendant argues that Iran is a suitable alternative forum because the Iranian civil court has jurisdiction over both Defendants, Plaintiffs’ claims would not be barred by the statute of limitations in Iran, and Iranian law provides remedies for each of Plaintiffs’ claims. Defendant offers Reza Athari on this issue. Mr. Athari’s declaration contains enough information to qualify him as an expert on the issue of the Iranian judicial system. Specifically, Mr. Athari was born in Iran and received his license to practice law there in 1976. He states that in his expert opinion the Iranian civil court is the only suitable forum for this litigation. He states that Iranian law is a mix of civil law and Islamic tenets and notes that there are remedies for all of Plaintiffs’ claims there.

Plaintiffs oppose this motion with an expert of their own. Patrick Clawson’s declaration contains sufficient information to qualify him as an expert on the Iranian judicial system. He states that in his opinion the Iranian legal system is heavily influenced by the executive and religious authorities, that it discriminates based on sex, religion and politics, that there is no guarantee of representation by a qualified lawyer, and that judges are not always guided by codified law.

Based upon all the evidence presented, the Court finds that Iran is a suitable alternative forum. This is not a clear and obvious decision, however. The Court gives great weight to the Clawson declaration, based on the exceptional qualifications of this expert. Clawson’s opinion that the Iranian courts are not always guided by the law and that they discriminate based on sex and religion is particularly compelling.

However, courts are not to deny motions for forum non conveniens based on evidence that the alternative court has less favorable laws; the scales are only tipped where the alternative forum provides no remedy at all. Stangvic at 764. The Court declines to find this to be such a situation. In Rasoulzadeh v. Associated Press (S.D. NY) 574 F. Supp. 854, the court declined to find Iran to be a suitable alternative forum but only because plaintiffs there were likely to be shot if they returned to Iran.

Here, the evidence is that Plaintiffs’ father had safely traveled to and from Iran a number of times before he became to infirm to do so; Plaintiffs have not presented evidence that they are high-profile persons in Iran, like the plaintiffs in Rasoulzadeh, such that they would be subject to travel restrictions or threats to their safety if they returned.

Balancing of Private and Public Factors

A balancing of the private and public factors generally weighs in favor of granting this motion. Defendant is being sued for actions that he took with respect to real property in Iran, and therefore all witnesses and documentary evidence of such transactions is located in Iran.

Plaintiffs’ complaint originally named Defendant Nader Izadi; Plaintiffs later dismissed him, presumably because they were unable to serve him with process. Yet Mr. Izadi is Mr. Minassian’s alleged co-conspirator and therefore whether or not he is currently a party (presumably Mr. Minassian will name him in a cross-complaint), he is a minimum a key witness.

As Mr. Izadi is not subject to compulsory process, the Court finds that consideration of this private factor requires granting of Defendant’s motion; Defendant would be severely prejudiced without the ability to call Mr. Izadi as a witness.

With regard to public factors, while California does have a strong interest in providing a forum for its residents, the facts of this case concern property in a foreign country, and transactions involving such property; even if evidence of these transactions were feasible and not unreasonably expensive to obtain, California courts would have little interest in them. Iran has a far greater interest in its real property than does California.

Plaintiffs argue strongly that this is not a real property case and that all they seek from Mr. Minassian is money damages. While it is true that most of Plaintiffs’ claims do seek monetary damages, (1) all of their damages are based on real property transactions that occurred in Iran, such that private factors weigh in favor of finding Iran the proper forum; and (2) Plaintiffs do pray for an order requiring Defendant to execute documents necessary to transfer title to Plaintiffs (4th cause of action for Injunctive Relief), such that public factors weigh in favor of finding Iran to be the proper forum….

Note that, if the decision is reversed on appeal, and the trial court does decide the lawsuit, it would probably rely on Iranian substantive law — at least unless that law is highly repugnant to California public policy (for instance, if the substantive rules discriminate based on sex or religion) — in dealing with behavior that took place in Iran. The question here isn’t whether the court has jurisdiction (the court has it over Minassian, though not over Izadi, who has been dismissed from the case) or which law the court should apply, but rather whether this court is the proper place to apply that law.

Eugene Volokh teaches free speech law, religious freedom law, church-state relations law, a First Amendment Amicus Brief Clinic, and tort law, at UCLA School of Law, where he has also often taught copyright law, criminal law, and a seminar on firearms regulation policy.
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