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Friday, December 8, 2023 | Back issues
Courthouse News Service Courthouse News Service

Business Fraud Case to Stay in Calif., Court Says

(CN) - The 9th Circuit revived an attorney's lawsuit against his former business partner over an allegedly fraudulent international business venture, overturning an order stating that Slovakia courts would be a more convenient forum than courts in California.

Robert Wood allegedly induced Roderick Marshall to twice invest $250,000 in a joint venture slated to buy two Bulgarian cable TV companies with backing by a Slovakian bank. Wood led Marshall on for years before Marshall discovered that investment documents had been doctored and "the joint venture had been dissolved long before Wood convinced [him] to invest," the ruling states.

Marshall allegedly discovered that Deloitte & Touche Slovakia, where Wood was a managing partner, never intended to guarantee the investment.

Marshall and his Boston Telecommunications Group brought fraud claims against Wood and other partners in the deal, including Global Cable Systems, CEO George Mainas and several Deloitte entities.

The district court dismissed the claims against Mainas and Global Cable in favor of arbitration, and later dismissed the claims against the Deloitte entities and Wood for lack of personal jurisdiction.

The 9th Circuit affirmed dismissal of all claims but those against Wood, saying Wood had waived his personal jurisdiction defense by raising it too late.

Wood, a U.S. citizen living in Albania, wanted the dispute to be settled by courts in Slovakia, where he said he intended to move.

But the balance of private and public interest factors favor keeping the fraud case in California, the San Francisco-based court ruled. "All but one of the private and public interest factors were either neutral or weighed against dismissal," Judge Clifford Wallace wrote.

"Marshall is a citizen and resident of the United States and his choice of forum is therefore entitled to more deference than that shown by the district court," he added.

Travel expenses, access to evidence, translation costs and difficulty enforcing a judgment were all neutral factors in either locale, Wallace ruled, but the private interest factor for witnesses weighed against dismissal.

Though witnesses on both sides were scattered around the globe, Marshall had explained why his witnesses were crucial to his case, whereas Wood failed to give the same justification.

Marshall was also able to prove that he had sufficient ties to California, the ruling states.

"Marshall alleges that it was in San Francisco that he finally agreed to invest in the ill-fated Bulgarian venture," Wallace wrote.

"The doctrine of forum non conveniens (inappropriate forum) is 'an exceptional tool to be employed sparingly,'" the judge wrote, "and the district court abused its discretion in concluding that this was a proper case for application of that doctrine."

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