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Iran Is Not a Suitable Judicial Forum as a Matter of Law, CA Appellate Court Holds

Tim Kowal     May 25, 2021

The plaintiffs in Aghaian v. Minassian (D2d8 May 24, 2021) no. B296287 are children of Iranians who fled during the Iranian Revolution. Their parents had amassed a large amount of property, and had asked the defendant, a family friend, to recover it for them. Turns out the defendant used the opportunity to enrichment himself by some $34 million. So the children sued.

The defendant moved to dismiss based on inconvenient forum. The defendant argued the courts in a foreign jurisdiction would be more suitable because the dispute was between citizens of that foreign jurisdiction, concerned property in that jurisdiction, and related to litigation that had already progressed in that jurisdiction. All good arguments, the trial court agreed, and granted the motion.

Did we forget to mention the foreign jurisdiction in question was Iran? Well, it was Iran. The Court of Appeal did not overlook that detail. The court held that, where it comes to forum selection, jurisdictions are not treated equally that do not treat equally. As for Iran, specifically, the "evidence is overwhelming that Iranian courts discriminate against women and non-Muslims." So Iran is not a suitable forum as a matter of law, no matter how much sense it otherwise makes to litigate there.

But by the time the case came back down, the plaintiffs had filed a new action against the defendant in – you are not going to believe this – Iran. The defendant filed a new motion for inconvenient forum on that basis, arguing the plaintiffs, having recently availed themselves of the laws of Iran, had waived their objections to venue in Iran. The trial court denied the defendant's motion.

This time, the case proceeded to trial, where the plaintiffs obtained a judgment of $34 million against the defendant. The defendant appealed, arguing that the case should have been tried in – you guessed it – Iran.

Orders Denying Motions to Stay or Dismiss on Inconvenient Forum Grounds May Be Appealed After a Final Judgment:

The plaintiffs argued the defendant should have sought review of the order denying his motion for inconvenient forum by way of a writ petition, and thus his appeal of that motion from the final judgment is untimely. A motion based on inconvenient forum is similar to a motion to quash for lack of personal jurisdiction, the plaintiffs argued, and the latter motion may only be challenged by writ petition. (State Farm General Ins. Co. v. JT's Frames, Inc. (2010) 181 Cal.App.4th 429, 437.) And in fact, the same statute that provides writ review of orders denying motions to quash, Code of Civil Procedure 418.10, also provides for writ review of orders denying motions based on inconvenient forum. The same rule should obtain for motions based on inconvenient forum, the plaintiffs concluded.

The court disagreed. A motion to quash for lack of personal jurisdiction raises jurisdictional questions, which much be raised at the outset of the case. A motion based on inconvenient forum does not carry the same jurisdictional urgency.

"Accordingly, we follow the general rule that an interlocutory order—in this case, the order denying [defendant's] renewed inconvenient forum motion—may be challenged on appeal of the final judgment."

The Law-of-the-Case Doctrine Applies Even Where the Finding Previously Established Is Allegedly Waived:

The court held that it had already found in the prior appeal, rather conclusively actually, that Iran was not a suitable forum "as a matter of law." Under the doctrine of law of the case, that concludes the matter. “ ‘The doctrine of “law of the case” deals with the effect of the first appellate decision on the subsequent retrial or appeal: The decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.’ ” (Morohoshi v. Pacific Home (2004) 34 Cal.4th 482, 491.) The doctrine “precludes a party from obtaining appellate review of the same issue more than once in a single action.” (Katz v. Los Gatos–Saratoga Joint Union High School Dist. (2004) 117 Cal.App.4th 47, 62.)

Ok, so the plaintiffs cannot be made to litigate in Iran if they object to the forum. Fine, says the defendant. But now the plaintiffs are happily litigating other claims in Iran. So they have waived their objections to litigating in Iran, right?

The court rejected the defendant's waiver argument, but could not muster very strong reasons for it. The defendant had failed to provide authority for the proposition, the court pointed out. Then again, perhaps the question, a rather unusual question at that, was one of first impression? The court also said that just because the plaintiffs are litigating in Iran does not mean it is a suitable forum. But that is not quite the argument, is it? The argument is not that the plaintiffs' choosing to litigate in Iran makes Iran suitable, but rather that the plaintiffs should be deemed to have withdrawn their objections to Iran's unsuitability. (I don't know that the defendant's argument carries the day, but the court's treatment of it is unsatisfying.)

But, thin as the analysis is, Aghaian v. Minassian stands for the rule that a finding falling under the law of the case doctrine cannot be waived.

Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at [email protected] or (714) 641-1232.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at CALpodcast.com, and publishes summaries of cases and appellate tips for trial attorneys. Contact Tim at [email protected] or (949) 676-9989.
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