Civil Practice – Forum Non Conveniens – Product Liability – Infant Formula – Chinese Residents

Tang v. Synutra Int’l Inc. (Lawyers Weekly No. 11-01-0938, 19 pp.) (Wynn, J.) No. 10-1487, Sept. 6, 2011; USDC at Greenbelt, Md. (Chasanow, J.) 4th Cir. Click here for the full-text opinion.

Holding: Chinese citizens and residents who allege injury from melamine-contaminated infant formula may not sue a Chinese subsidiary of a company incorporated in Maryland in a Maryland federal court; the 4th Circuit says China is an available, adequate and more convenient forum to redress the plaintiffs’ grievances, and it affirms the district court’s dismissal on forum non conveniens grounds.

In 2008, Chinese officials learned of widespread reports that infants in China had died or become severely ill after consuming infant formula. An investigation showed that infant formula manufactured by 22 Chinese companies was contaminated with melamine, a chemical which is unfit for human consumption and may afflict the kidneys. One of these companies was Sheng Yuan, a subsidiary of Synutra International Inc., which has its principal place of business in Maryland. In a Sept. 16, 2008, press release, Synutra acknowledged that batches of its U-Smart products were found to be contaminated.

Many victims and their families took advantage of compensation from a fund set up by the Chinese government. Some victims elected to bring civil lawsuits in China’s courts in lieu of accepting compensation from the fund. There is record evidence that some of the contaminated infant formula lawsuits were stymied by China’s courts and government officials. Plaintiffs in this matter chose to institute this action against Synutra in the U.S. District Court in Maryland.

The Maryland district court found China to be an available forum based on the affidavit of Synutra’s president, Weiguo Zhang, who affirmed that Synutra would not contest service of process if plaintiffs filed this lawsuit in China. The district court said the District of Maryland had comparatively little interest in a case involving the extent of liability, if any, of an international holding company and its subsidiary for injuries inflicted abroad. The district court dismissed the complaint under the doctrine of forum non conveniens.

We uphold the district court’s determination that China is an adequate forum because the government fund is available to compensate plaintiffs for their losses, and substantial evidence supports the district court’s finding that a judicial remedy is available in China.

We hold that Synutra carried its burden and showed that plaintiffs can obtain a remedy for their injuries either from the Chinese courts or the government fund. The district court did not abuse its discretion in finding that China is an adequate alternative forum. Nor did the district court err by weighing the public and private interest factors and finding that China is a more convenient forum in which to adjudicate this dispute.

Dismissal of the suit affirmed.