Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 1 of 37
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`KISANO TRADE & INVEST LIMITED,
`TRASTECO, LTD., and VADIM SHULMAN,
`Plaintiffs,
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`vs
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`DEV LEMSTER, STEEL EQUIPMENT CORP.,
`AKIVA SAPIR, and SAPIR ENTITIES 1-100,
`Defendants.
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`Civil Action No. 11-852
`Judge Conti
`Magistrate Judge Mitchell
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`REPORT AND RECOMMENDATION
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`Recommendation
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`I.
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`It is respectfully recommended that the motion to dismiss on the grounds of forum non
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`conveniens (ECF No. 115) filed on behalf of defendant Akiva Sapir, be granted.
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`II.
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`Report
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`Plaintiffs, Kisano Trade & Invest Limited (“Kisano”), Trasteco, Ltd. (“Trasteco”), and
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`Vadim Shulman (“Shulman”), bring this action under the Racketeer Influenced and Corrupt
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`Organizations Act, 18 U.S.C. §§ 1961-68 (RICO), and state law against the Defendants, Dev
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`Lemster (“Lemster”), Steel Equipment Corporation (“SEC”), Akiva Sapir (“Sapir”) and Sapir
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`Entities 1-100. The Complaint alleges that Defendants engaged in at least six acts of fraud and
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`secret deals through a pattern of related predicate acts of racketeering designed to defraud five
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`principles for which Sapir served as agent – Shulman and Kisano, Trasteco, Plama, Ltd.
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`(“Plama”), and Warren Steel Holdings, Inc. (“Warren Steel”), which were managed by George
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`Svishchov (“Svishchov”) on behalf of Shulman.
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`Currently pending before the Court is a motion filed by Sapir. He requests that the
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`complaint be dismissed based on the doctrine of forum non conveniens on the basis that it could
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 2 of 37
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`be filed in Israel, where it more properly belongs. For the reasons that follow, the motion should
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`be granted and this case should be dismissed with the understanding that it can be refiled in
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`Israel.
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`Facts
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`Kisano is a corporation organized under the laws of the Republic of Cyprus. (Am.
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`Compl. ¶ 6.)1 Trasteco is a limited liability company organized under the laws of Malta (Am.
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`Compl. ¶ 7.) Shulman is a citizen of Israel. (Am. Compl. ¶ 8.) Svischov is a citizen of Ukraine
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`who assisted Trasteco, Kisano and Shulman in the business dealings at issue. (Am. Compl.
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`¶ 10.) SEC is a Pennsylvania corporation with a principal place of business in Pittsburgh,
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`Pennsylvania. SEC buys and sells used steel-making equipment and provides advisory, appraisal
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`and consulting services. It is owned by Lemster, a citizen of Pennsylvania. (Am. Compl. ¶¶ 11-
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`12.) Sapir is a citizen of Israel. (Am. Compl. ¶ 13.) Sapir Entities 1-100 are entities, identity
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`unknown, owned or controlled by Sapir which allegedly received funds from the acts alleged in
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`the Amended Complaint. (Am. Compl. ¶ 14.)
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`Plaintiffs allege that Defendants engaged in six acts of fraud as follows:
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`The Warren Equipment Fraud
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`In 2001, Sapir assisted Shulman in acquiring a steel facility in Warren, Ohio owned by
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`Copperweld Steel Corp. (“CSC”) in bankruptcy. Shulman appointed Sapir as his agent to
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`acquire the plant (the “Warren Plant”) and equipment (the “Warren Equipment”). Sapir arranged
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`for Eckert Seaman’s Pittsburgh office to handle the transactions. The Warren Plant was acquired
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`from CSC by Warren Steel Holdings, LLC, incorporated by Eckert, for Shulman. (Am. Compl.
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`¶¶ 19-22.)
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`1 ECF No. 47.
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`2
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 3 of 37
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`Sapir, as Shulman’s agent, purchased the Warren Equipment from CSC. Shulman alleges
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`that Sapir led Shulman to believe the purchase price was approximately $13 million. In October,
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`2001, Shulman wired $500,000 to Sapir for an alleged down-payment on the Warren Equipment
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`to a UBS account, and then $6.6 million to Eckert in Pittsburgh, which paid $6 million to the
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`seller of the equipment and $600,000 to the broker. (Am. Compl. ¶¶ 20-26, 78 & Ex. F.)
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`In October, 2001, Sapir sent two memorandum faxes dated October 28, 2001 from area
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`code 412 (i.e. Pittsburgh) to Shulman, explaining that Shulman needed to wire $500,000 to a
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`Credit Suisse account “for the service that we got from Mr. Bob Stamp (helping us get the
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`purchase price we wanted)” for the Warren Equipment, and for the balance of the purchase price,
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`to make six payments of approximately $908,000 each to SEC “for the financing of the
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`purchase” of the Warren Equipment. This fax stated “Steel equipment Corp will provide me in
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`the next few days full wire instructions.” (Am. Comp. ¶¶ 23-25, 78 & Ex. F.)
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`On November 6, 2001 a fax on the letterhead of SEC was sent to Shulman instructing
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`that four payments be made to what appeared to be SEC’s Credit Suisse account “re: Lemster”
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`and two payments be made to SEC’s account in this District. In 2001 and early 2002, Shulman
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`made the $500,000 down payment, the $500,000 for Stump, and the six $908,000 payments.
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`(Am. Compl. ¶¶ 22-26, 78(b), (d) & Ex. F.) Shulman alleges that, unbeknownst to him, $6.6
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`million was the full price of the Warren Equipment and Sapir kept the $500,000 down payment,
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`$500,000 for Stamp, and the six $908,000 payments. Plaintiffs allege that Sapir obtained secret
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`profits of approximately $6.4 million. (Am. Compl. ¶¶ 23-26, 78(b), (d), (f).) Lemster/SEC
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`received a $22,000 “commission” for “processing” each of the two $908,000 payments through
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`SEC’s Pennsylvania account to Sapir’s account at Credit Suisse. (Temkin Decl. ¶ 22 & Ex. 13.)2
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`2 ECF No. 138-2.
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`3
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 4 of 37
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`The Trasteco Secret Deal
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`In 2004, Trasteco contracted with West Virginia based Winding Gulf, LLC (“Winding
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`Gulf”) to purchase 120,000 metric tons of metallurgical coal at $120 per ton to ship to Ukraine.
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`Shulman alleges that Winding Gulf entered into a secret agreement to pay SEC $2 per ton as
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`Trasteco’s “buyer’s agent” and Winding Gulf increased the prices to cover its commission. SEC
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`received a secret commission of $260,000 and Sapir secretly received $130,000 of this amount.
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`(Am. Compl. ¶¶ 29-37, 79(e).)
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`The Kisano Secret Deal
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`In 2007, Kisano contracted with Winding Gulf to purchase 2 vessels of coal at $117.50
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`per ton. Kisano amended the agreement adding eight more vessels of coal for up to $128 per ton.
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`Shulman alleges that Winding Gulf entered into a secret agreement to pay SEC $5 per ton as
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`Kisano’s “buyer’s agent” and Winding Gulf increased the prices to cover the commission. SEC
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`received a secret commission of $729,532.16 and Sapir received $516,184.90 of this amount.
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`(Am. Compl. ¶¶ 38-46, 80, 95.)
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`The Plama Secret Deal
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`In August 2005, Plama contracted with Pennsylvania based Williams Industrial Services,
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`Inc. (“WIS”) to dismantle the Warren Plant for $6,230,750. In September 2005, Plama
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`contracted with WIS to ship dismantled equipment to Ukraine for $3,646,100. Plaintiffs allege
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`that, unbeknownst to Plama, WIS had a secret deal to pay SEC a 15% commission. WIS charged
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`Plama a higher price to cover the commission. SEC received a secret commission of $183,773.01
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`and Sapir received $50,647.90 of this amount. (Am. Compl. ¶¶ 48-61, 81, 95.)
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`The Veolia Secret Deal
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`After cancellation of the WIS contracts, it was decided to reopen the Warren Plant.
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`4
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 5 of 37
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`Plaintiffs allege, however, that SEC and Veolia, a company that owned an adjacent water
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`treatment plant, secretly agreed to split 50/50 any amounts over a $375,000 sale price to the
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`Warren Plant. SEC/Lemster then encouraged the then manager of the Warren Plant to pay
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`$650,000 for the plant; Veolia and SEC split the $275,000 gain. SEC secretly received a profit of
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`$137,500 and Sapir received $23,400 of this amount. (Am. Compl. ¶¶ 65-69.)
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`The N.Y. Real Estate Fraud
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`In 2005, Shulman appointed Sapir as his agent to acquire real estate in New York. The
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`understanding was Shulman would provide 80% of the financing and Sapir would provide 20%.
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`Sapir again engaged Peter Baggerman of Eckert’s Pittsburgh office and New York attorney
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`Lawrence Drath to represent Shulman’s interests. In 2005, Shulman wired over $27 million to
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`Eckert’s escrow account in Pittsburgh to purchase three real estate properties, i.e. 113
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`Christopher Street, 65 Bank Street, and 107 Christopher Street in New York City (the “N.Y. Real
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`Estate”). (Pls.’ Am. RICO Statement at 10-11.)3
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`Shulman believed he was wiring 80% of the costs of the N.Y. Real Estate and Sapir was
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`investing 20%. In 2008, Sapir sold 113 Christopher Street for $6.15 million and kept the
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`proceeds. Shulman believed Sapir was repaying himself the 20% which he invested. In 2011,
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`Shulman learned only his monies were used to purchase the N.Y. Real Estate; thus, he alleges
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`that Sapir took $6.15 million belonging to Shulman. (Am. RICO Statement at 11.) Numerous
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`predicate acts of racketing were involved related to 113 Christopher Street, including (a) wires
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`(emails, telephone calls) regarding its acquisition; (b) wires of $700,000, $60,000, and
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`$4,980,000 for its acquisition; and (c) the wire to Sapir for $6.15 million from its sale. (Am.
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`RICO Statement at 20.)
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`3 ECF No. 93.
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`5
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 6 of 37
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`Procedural History
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`Kisano and Trasteco originally filed their complaint against Lemster and SEC on June 28,
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`2011. The Amended Complaint was filed by Kisano, Trasteco and Shulman on May 11, 2012
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`(ECF No. 47), naming as defendants Lemster, SEC, Sapir and the Sapir Entities. Federal
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`question jurisdiction, 28 U.S.C. §§ 1331, 1337(a) and 18 U.S.C. § 1964(c), is invoked for the
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`RICO claims in Counts I and II (Am. Comp. ¶ 4).4 Count I alleges that Lemster and Sapir
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`violated RICO § 1962(c) by conducting the affairs of SEC through a pattern of racketeering
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`activity, specifically by engaging in acts of mail fraud, wire fraud and bribery, which caused
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`injury to Trasteco in its 2004 contract with Winding Gulf and to Kisano in its 2007 contract with
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`WG. Count II alleges that Lemster and Sapir conspired with one another to violate 18 U.S.C.
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`§ 1962(d). Count III alleges that Lemster, SEC and Sapir intentionally interfered with the
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`contracts between Winding Gulf and Trasteco and Kisano. Count IV alleges that Lemster, SEC
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`and Sapir were unjustly enriched by their actions. Count V alleges that Lemster, SEC and Sapir
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`breached their fiduciary duties and improperly used confidential information and relations.
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`Count VI alleges that Lemster, SEC and Sapir committed acts of fraud. Count VII alleges that
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`all Defendants made fraudulent conveyances in violation of 12 Pa. C.S. §§ 5104 and 5105.
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`On August 27, 2012, Sapir filed a motion to dismiss on the grounds of forum non
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`conveniens (ECF No. 115).5 Shulman submitted a response on November 6, 2012 (ECF No.
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`4 Although not expressly stated, supplemental jurisdiction, 28 U.S.C. § 1367(a), is presumably
`the basis for the state law claims in Counts III-VII because they “form part of the same case or
`controversy” as the federal claims.
`5 On that same date, he also filed a motion to dismiss for failure to state a claim under Rule
`12(b)(1) and 12(b)(6) (ECF No. 117). That motion has also been fully briefed. However, the
`Supreme Court has held that courts have discretion to decide the order in which they address
`threshold issues. Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (2007). The
`Court should first address whether a foreign tribunal is plainly the more suitable arbiter of the
`merits of this case. Because the forum non conveniens motion should be granted, the motion to
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`6
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`138). Sapir filed a reply brief on November 30, 2012 (ECF No. 144).6
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`Standard of Review
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`The Supreme Court has explained that:
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`A federal court has discretion to dismiss a case on the ground of forum non
`conveniens “when an alternative forum has jurisdiction to hear [the] case, and ...
`trial in the chosen forum would establish ... oppressiveness and vexation to a
`defendant ... out of all proportion to plaintiff's convenience, or ... the chosen
`forum [is] inappropriate because of considerations affecting the court’s own
`administrative and legal problems.” American Dredging Co. v. Miller, 510 U.S.
`443, 447–448, 114 S.Ct. 981, 127 L.Ed.2d 285 (1994) (quoting Piper Aircraft Co.
`v. Reyno, 454 U.S. 235, 241, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981), in turn
`quoting Koster v. (American) Lumbermens Mut. Casualty Co., 330 U.S. 518, 524,
`67 S.Ct. 828, 91 L.Ed. 1067 (1947)). Dismissal for forum non conveniens reflects
`a court’s assessment of a “range of considerations, most notably the convenience
`to the parties and the practical difficulties that can attend the adjudication of a
`dispute in a certain locality.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 723,
`116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) (citations omitted). We have characterized
`forum non conveniens as, essentially, “a supervening venue provision, permitting
`displacement of the ordinary rules of venue when, in light of certain conditions,
`the trial court thinks that jurisdiction ought to be declined.” American Dredging,
`510 U.S., at 453, 114 S.Ct. 981; cf. In re Papandreou, 139 F.3d [247,] 255 [(D.C.
`Cir. 1998)] (forum non conveniens “involves a deliberate abstention from the
`exercise of jurisdiction”).
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`Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 429-30 (2007).
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`Forum non conveniens is a non-merits ground for dismissal; “it is a determination that the
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`merits should be adjudicated elsewhere.” Id. at 432 (citations omitted).
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`The Court of Appeals for the Third Circuit has set forth the procedure for evaluating a
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`forum non conveniens motion as follows:
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`“[W]hen considering a motion to dismiss on forum non conveniens
`grounds, a district court must first determine whether an adequate alternate forum
`can entertain the case.” If an adequate alternative forum exists, the district court
`must determine next the appropriate amount of deference to be given the
`plaintiff’s choice of forum. After the district court has determined the amount of
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`dismiss on other grounds can be addressed in Israel.
`6 Sapir has requested oral argument, but upon review, the Court concludes that oral argument is
`not necessary to resolve this motion.
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`7
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 8 of 37
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`deference due to the plaintiff's choice of forum, the district court must balance the
`relevant public and private interest factors. “If the balance of these factors
`indicates that trial in the chosen forum would result in oppression or vexation to
`the defendant out of all proportion to the plaintiff’s convenience, the district court
`may, in its discretion, dismiss the case on forum non conveniens grounds.”
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`Eurofins Pharma US Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 160 (3d Cir. 2010)
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`(quoting Windt v. Qwest Comms. Int’l, Inc., 529 F.3d 183, 189, 190 (3d Cir. 2008) (internal
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`citations omitted), cert denied, 555 U.S. 1098 (2009)).
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`Sapir contends that Israel is an adequate alternative forum that has jurisdiction to hear the
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`case, that Shulman’s choice of this forum is entitled to reduced deference because he is a foreign
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`plaintiff, and that balancing the relevant public and private factors demonstrates that trial in this
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`forum would establish oppressiveness and vexation to him out of all proportion to Shulman’s
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`convenience. Shulman responds that Israel is an inadequate alternative forum, that his choice of
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`forum is entitled to the equivalent of the deference provided to a United States citizen because of
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`a treaty between the United States and Israel, and that when the factors are properly weighed,
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`there is no basis for concluding that trial in this forum would establish oppressiveness and
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`vexation to Sapir.
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`Whether Israel is an Adequate Alternative Forum
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`The Court of Appeal has stated that:
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`The requirement of an adequate alternative forum is generally satisfied
`“when the defendant is ‘amenable to process’ in the other jurisdiction.” Piper
`[Aircraft], 454 U.S. at 254 n. 22, 102 S.Ct. at 265 n. 22 (citation omitted).
`Occasionally, however, if the alternative forum offers a clearly unsatisfactory
`remedy, it will nonetheless be inadequate. The latter situation arises, for instance,
`when the subject matter of the suit is not cognizable in the alternative forum. Id.
`at 254 n. 22, 102 S.Ct. at 265 n. 22.
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`Lacey v. Cessna Aircraft Co., 932 F.2d 170, 180 (3d Cir. 1991) (footnote omitted). See Auxer v.
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`Alcoa, Inc., 2010 WL 1337725, at*7 (W.D. Pa. Mar. 29, 2010) (Cercone, J.), aff’d, 406 Fed.
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 9 of 37
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`Appx. 600 (3d Cir. 2011).
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`Sapir is an Israeli citizen; he indicates that he is subject to the jurisdiction of the Israeli
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`courts. (Sapir FNC Decl. ¶ 6; Weinroth Decl. ¶¶ 17-19.)7 He further states that Israeli courts
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`have a mechanism for joining parties such as Lemster and SEC (Weinroth Decl. ¶ 21) and that
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`those parties have voluntarily agreed to the jurisdiction of the Israeli courts for the matters that
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`are the subject of this case (Lemster Decl. ¶ 4.)8 Thus, he contends that all defendants are
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`amenable to process in Israel and that Plaintiffs could access that court system to assert claims
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`against them, so Israel is an adequate alternative forum. He also notes that Israel is already the
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`forum for a dispute between him and Shulman (Sapir FNC Decl. ¶ 51 & Ex. 5.)
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`Shulman disputes that SEC and Lemster are subject to process in Israel. However, Sapir
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`has proffered the declaration of Jacob Weinroth, an Israeli lawyer, who states that Israeli courts
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`have a procedure that could be used to serve process on SEC and Lemster and/or that they can
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`voluntarily consent to jurisdiction, in which case the Israeli courts can obtain jurisdiction over
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`them. As noted, they have also consented to jurisdiction in Israel. Shulman has cited no law or
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`evidence to the contrary. Rather, he criticizes their willingness to consent to jurisdiction in Israel
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`as “reverse forum shopping.” However, the Supreme Court has stated that:
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`this possibility ordinarily should not enter into a trial court’s analysis of the
`private interests. If the defendant is able to overcome the presumption in favor of
`plaintiff by showing that trial in the chosen forum would be unnecessarily
`burdensome, dismissal is appropriate—regardless of the fact that defendant may
`also be motivated by a desire to obtain a more favorable forum.
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`Piper Aircraft, 454 U.S. at 252 n.19.
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`In fact, courts routinely condition the granting of a forum non conveniens motion upon
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`the defendants’ willingness to consent to jurisdiction in the alternate forum. See Miller v.
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`7 ECF No. 119 Exs. A, E.
`8 ECF No. 119 Ex. B.
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`Boston Scientific Corp., 380 F. Supp. 2d 443, 448 (D.N.J. 2005) (citing cases). Shulman’s
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`counsel is certainly aware of this point of law. See Base Metal Trading SA v. Russian
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`Aluminum, 253 F. Supp. 2d 681, 698 (S.D.N.Y. 2003) (case where plaintiffs were represented
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`by, inter alia, Marks & Sokolov, who represent Plaintiffs her, the court noted that all 20
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`defendants explicitly consented to jurisdiction in Russian courts, thus making it an “available”
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`alternative forum), aff’d, 98 Fed. Appx. 47 (2d Cir. 2004). Therefore, this Court concludes that
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`SEC and Lemster are subject to process in Israel.9
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`The next issue is whether Israeli law provides causes of action that would allow Plaintiffs
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`to seek redress based on the conduct alleged in the Amended Complaint. Sapir indicates that
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`Israel has causes of action for fraud, breach of an agency relationship and improper use of
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`confidential information. (Weinroth Decl. ¶¶ 26-28.) He further submits that, although Israel
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`does not have an equivalent to RICO, it does provide causes of action for the predicate acts of
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`RICO claims. (Weinroth Decl. ¶ 29.) Finally, he argues that lack of a precise matching cause of
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`action for RICO has been held to be no bar to dismissal on the grounds of forum non conveniens.
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`Windt, 529 F.3d at 193; Stroitelstvo Bulgaria Ltd. v. Bulgarian-American Enterprise Fund, 589
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`F.3d 417, 422 (7th Cir. 2009) (noting that RICO is a “uniquely American effort to target
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`organized crime”). Sapir notes that a number of United States courts have found Israel to be an
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`adequate alternative forum in a forum non conveniens analysis. See Wilson v. Eckhaus, 349
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`Fed. Appx. 649 (2d Cir. 2009); Miller v. Boston Scientific Corp., 380 F. Supp. 2d at 448. In
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`Wilson, the court specifically rejected the argument that the unavailability of RICO in Israel
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`rendered it an inadequate alternative forum. Wilson v. ImageSat Int’l, N.V. 2008 WL 2851511,
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`9 Lemster has also indicated that neither he nor SEC will raise any statute of limitations defense
`not previously available to them if this action is dismissed and refiled in Israel within one year
`from the date of dismissal. (Lemster Decl. II ¶ 4) (Sapir Reply Br. (ECF No. 144) Ex. A.)
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`at *6 (S.D.N.Y. July 22, 2008), aff’d, 349 Fed. Appx. 649 (2d Cir. 2009).
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`Shulman does not dispute these assertions. The Court concludes that Israeli law provides
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`sufficient causes of action that would allow Plaintiffs to seek redress based on the conduct
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`alleged in the Amended Complaint and that the lack of a precise counterpart to RICO does not
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`alter that conclusion. Therefore, Israel represents an adequate alternative forum.
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`Amount of Deference Owed to Shulman’s Choice of Forum
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`Sapir argues that, as a foreign plaintiff, Shulman receives a lesser amount of deference in
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`his choice of forum. Shulman responds that, because of a treaty between the United States and
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`Israel, he is entitled to the same amount of deference as that provided to a United States citizen.
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`The Court of Appeals has stated that:
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`Ordinarily, a strong presumption of convenience exists in favor of a domestic
`plaintiff’s chosen forum, and this presumption may be overcome only when the
`balance of the public and private interests clearly favors an alternate forum. Piper
`Aircraft Co., 454 U.S. at 255, 102 S.Ct. 252. “When the plaintiff is foreign,
`however, this assumption is much less reasonable. Because the central purpose of
`any forum non conveniens inquiry is to ensure that the trial is convenient, a
`foreign plaintiff’s choice deserves less deference.” Id. at 256, 102 S.Ct. 252.
`Foreign plaintiffs, however, may bolster the amount of deference due their choice
`by making a strong showing of convenience. Thus, in performing its forum non
`conveniens inquiry in a case filed by a foreign plaintiff, the “district court must
`assess [, and articulate,] whether the considerable evidence of convenience has ...
`overcome any reason to refrain from extending full deference to the foreign
`plaintiff’s choice.”
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`Windt, 529 F.3d at 190 (quoting Lony v. E.I. du Pont de Nemours & Co., 886 F.2d 628, 634 (3d
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`Cir. 1989)). In Windt, the court afforded the plaintiffs (Dutch attorneys appointed as trustees) a
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`low degree of deference when they chose New Jersey as the forum, because it was not the home
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`forum of all defendants and there was no indication that a substantial amount of conduct giving
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`rise to the dispute occurred there.
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`Shulman contends that “when a treaty with a foreign nation accords its nationals access to
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 12 of 37
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`our courts equivalent to that provided American citizens, identical forum non conveniens
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`standards must be applied to such nationals by American courts.” Blanco v. Banco Industrial de
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`Venezuela, S.A., 997 F.2d 974, 981 (2d Cir. 1993). He cites the Treaty of Friendship,
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`Commerce and Navigation entered into by the United States and Israel on August 23, 1951,
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`which states that:
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`Nationals and companies of either Party shall be accorded national treatment and
`most-favored-nation treatment with respect to access to the courts of justice and to
`administrative tribunals and agencies within the territories of the other Party, in
`all degrees of jurisdiction, both in pursuit and in defense of their rights.
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`(Temkin Decl. ¶ 18 & Ex. 9 Art. V(1).) Based on this treaty, he asserts that he is entitled to be
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`treated as a U.S. citizen with respect to his choice of forum.
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`In his reply brief, Sapir contends that the Blanco case does not goes as far as Shulman
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`proposes, citing a more recent case which stated that “our case law does not support plaintiffs’
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`assertion that such a treaty would require that their choice of forum be afforded the same
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`deference afforded to a U.S. citizen bringing suit in his or her home forum.” Pollux Holding Ltd.
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`v. Chase Manhattan Bank, 329 F.3d 64, 73 (2d Cir. 2003). Rather, the court held, the plaintiffs
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`“are only entitled, at best, to the lesser deference afforded a U.S. citizen living abroad who sues
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`in a U.S. forum.” Id.
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`However, the Court need not resolve any tension which might exist between Pollux and
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`Blanco, or the cases cited therein, because all of these cases are from the Second Circuit.
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`Shulman has not cited any authority suggesting that the Third Circuit would adopt a similar rule.
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`Moreover, it is noted that the Supreme Court has not recognized this exception to the exception.
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`See Sinochem, 549 U.S. at 430 (“When the plaintiff’s choice is not its home forum … the
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`presumption in the plaintiff’s favor ‘applies with less force,’ for the assumption that the chosen
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`forum is appropriate in such cases is ‘less reasonable.’”) This Court concludes that the rule is as
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`12
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 13 of 37
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`stated in Windt: as a foreign plaintiff, Shulman is entitled to less deference than a U.S. citizen
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`unless he makes a strong showing of convenience.
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`Shulman has not made a strong showing of convenience. To review, Shulman is an
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`Israeli citizen, Kisano is a Cypriot corporation, Trasteco is a Maltese LLC, and Svischov is a
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`Ukrainian citizen. Shulman states that:
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`I am a businessman with dealings in the United States. My United States
`dealings include (a) the transactions regarding the Warren Plant and the Warren
`Equipment in 2001-2002; (b) purchasing coal from Winding Gulf in 2004 to
`2008; and (c) purchasing real estate in New York in 2005 (which I sold in 2011).
`I am still a 33.3% beneficial owner of Warren Steel Holdings, Ltd. (“Warren
`Steel”) although I do not serve [as] a director and am not involved in
`management. Warren Steel invested over $100 million in redeveloping the steel
`plant and I believe it employs over one hundred persons. In addition, I currently
`have an investment in a non-public genetics research company in California and
`hope to join its board of directors this fall. Thus, it is fair to say I have substantial
`interests in America.
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`(Shulman Decl. ¶ 9.)10 However, as Sapir observes, most of these dealings do not involve this
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`forum (Pennsylvania), but rather Ohio, New York and California.
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`Shulman states that Lemster and SEC are Pennsylvania citizens, but they have consented
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`to litigate this case in Israel. He further states that:
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`numerous activities relevant to the new “Warren Equipment Fraud” claims took
`place in Pennsylvania and the United States, including (a) Lemster and SEC being
`Pennsylvania residents; (b) the two faxes and the “Bill of Sale” being sent by
`Sapir from Pennsylvania as evidenced by the “412” in the transmission; and (c)
`two of the $908,000 payments for “financing” the Warren Equipment purchase
`being wired to SEC’s bank account in Pennsylvania. In addition, I paid the fees
`for the Eckert firm’s Pittsburgh office to handle the transactions involving the
`purchase of the Warren Plant by Warren Steel Holdings, Inc. and Warren
`Equipment by Sapir.
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`Third, numerous witnesses relevant to the new Warren Equipment Fraud
`claims reside in Pennsylvania or the United States, including (a) Lemster; (b) Bob
`Stump; and (c) Scott Cessar (the attorney at Eckert whose fees I paid to handle the
`transaction).
`
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`10 ECF No. 138-1.
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`13
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 14 of 37
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`(Shulman Decl. ¶¶ 20-21.)11 Finally, he asserts that Bruce Marks and the law firm of Marks &
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`Sokolov have invested thousands of hours learning about the transactions at issue, that they
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`uncovered the Warren Equipment Fraud, and that they speak Russian. He asserts that, if forced
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`to litigate this case in Israel, he would be required to engage new counsel with no familiarity
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`with these matters, the documents would have to be translated from English into Hebrew, and he
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`would need to find Israeli attorneys who speak Russian and English so they could work with Mr.
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`Marks and him, all of which would impose a significant financial burden. (Shulman Decl. ¶¶ 23-
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`25.)
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`
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`Sapir responds that the relevant negotiations regarding the Warren Equipment sale
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`occurred primarily in Israel with at least one of the parties in Israel and that any agreement
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`between them which would form the basis of subsequent purchases of equipment and coal by
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`Sapir originated in Israel. (Sapir Decl. IV ¶¶ 11-12, 55;12 Abraham Sapir Decl. ¶ 8.13) He also
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`notes that Shulman does not even allege that they formed the alleged agency relationship in the
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`United States or that they engaged in negotiations or formed any agreements here. In addition,
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`the level of deference depends on the plaintiff’s connections with the forum, not that of the
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`defendants. See Pollux, 439 F.3d at 74 (“a plaintiff’s choice to initiate suit in the defendant’s
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`home forum-as opposed to any other where the defendant is also amenable to suit-only merits
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`heightened deference to the extent that the plaintiff and the case possess bona fide connections
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`to, and convenience factors favor, that forum.”) Thus, the fact that this forum is home to
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`11 It is noted that Shulman cites Lemster’s Pennsylvania residency three separate times in his
`declaration, but it counts as a factor only once.
`12 ECF No. 144 Ex. B. The declaration is designated as Sapir’s fourth because he submitted two
`declarations in connection with Shulman’s motion for TRO/preliminary injunction (ECF Nos.
`66, 85). The declaration he submitted with the pending motion (designated “Sapir FNC Decl.”)
`is his third.
`13 ECF No. 144 Ex. C.
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`14
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`Case 2:11-cv-00852-JFC-RCM Document 152 Filed 12/17/12 Page 15 of 37
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`Lemster and SEC is not a significant factor unless Shulman and this case possess bona fide
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`connections to this forum and convenience fact favors it. For all of the reasons described herein,
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`those connections are lacking here.
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`Finally, the convenience of a plaintiff’s counsel is not a relevant factor in the analysis.
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`See Miller, 380 F. Supp. 2d at 450. In addition, Weinroth explains that foreign lawyers may
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`consult with their clients and Israeli counsel where appropriate. (Weinroth Decl. II ¶ 4.)14
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`Shulman’s choice of this forum is entitled to a low degree of deference.
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`Evaluation of Private Factors
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`The private factors to be evaluated include:
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`the relative ease of access to sources of proof; availability of compulsory process
`for attendance of unwilling, and the cost of obtaining attendance of willing,
`witnesses; possibility of view of premises, if view would be appropriate to the
`action; and all other practical problems that mak