7th Circuit: Proper venue for Zimmer Biomet bribery trial is Mexico

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Allegations that Zimmer Biomet Holdings Inc. engaged in a scheme to bribe Mexican government officials led to an “unusual twist” by Zimmer and the Mexican plaintiff, each arguing against trying the case before their respective courts, but on the 7and The Circuit Court of Appeals agreed with the medical device maker that under the doctrine of forum non conveniens, the case should be dismissed in the Northern Indiana District Court.

The Instituto Mexicano del Seguro Social filed a lawsuit in the U.S. District Court for the Northern District of Indiana alleging that Zimmer Biomet orchestrated an international bribery scheme to bribe Mexican government officials to sell products unregistered doctors in Mexico.

Zimmer Biomet argued that the best forum to try the case was the Mexican courts because the documents and witnesses were in Mexico and because the burden of translating the evidence and testimony from Spanish to English would be eliminated.

Consequently, the medical device manufacturer requested that the complaint be dismissed under the doctrine of forum non conveniens. This “venue provision” allows a court to dismiss a lawsuit where litigating in that court, as opposed to another forum, would place an unreasonable burden on the defendant.

The IMSS countered that the ratification of the United Nations Convention against Corruption by the United States prevented the application of the doctrine of forum non conveniens. Further, the plaintiff asserted that the US federal court system is the best forum because the discovery procedures are comparatively more comprehensive and the litigation process is faster.

The District Court granted Zimmer Biomet’s motion based on the doctrine of forum non conveniens, and on 7and Circuit confirmed in Instituto Mexicano del Seguro Social v Zimmer Biomet Holdings, Inc.., 21-1224.

Write for the 7and Circuit Judge Amy St. Eve noted that the case presented a “slightly unusual twist.” The IMSS filed the lawsuit in federal court which is located in Zimmer Biomet’s home in northern Indiana and normally the plaintiff’s choice of court is where the litigation would be conducted.

However, the IMSS acknowledged that the Mexican courts provided an alternative forum which, according to the appeal panel, led the district court to consider the private and public interest factors and correctly determine that the other venue was a viable option for litigation.

“IMSS characterizes its lawsuit as presenting a ‘local controversy’ to Indiana and asserts that the district court improperly discounted the strong national interest of the United States in the fight against corruption,” St. Eve wrote. “First, we are not convinced of an alleged scheme involving Biomet 3i, a company located in Mexico, bribing “Mexican agents” to allow them to sell medical devices in Mexico, intended for use by Mexican doctors in Mexican hospitals on Mexican patients, through a Mexican government agency, under contracts performed in Mexico, presents a “local controversy” in Warsaw, Indiana, regardless (from) where it was orchestrated.”

Also, the 7and Circuit found IMSS’s argument regarding UNCAC to be unhelpful. Specifically, the court found that Congress failed to pass legislation implementing the UNCAC, so the treaty is not binding federal law.

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