## Facts

- Royal Bed & Spring Co., Inc., a Puerto Rico corporation, distributed furniture products in Puerto Rico.
- Famossul Industria e Comercio de Moveis Ltda., a Brazilian corporation, manufactured furniture in Brazil.
- The parties began doing business in 1983, with Royal Bed distributing Famossul products in Puerto Rico.
- On January 26, 1984, the parties signed in Brazil a Portuguese-language “Letter of Exclusive Distributorship Appointment” granting Royal Bed exclusive distributorship rights for Puerto Rico and adjacent islands.
- The contract selected the judicial district of Curitiba, State of Parana, Brazil to resolve disputes and specified Brazilian Civil Code law in the event of violation.
- The relationship deteriorated; Royal Bed alleged Famossul wrongfully terminated the arrangement and suspended shipments, causing damages.
- Royal Bed had previously litigated in Brazil and had prevailed.

## Issues

1. Whether the district court abused its discretion by dismissing the Puerto Rico action on forum non conveniens grounds in favor of Brazil, despite Puerto Rico’s Law 75 policy disfavoring foreign forum clauses in dealer contracts.

## Decision

- The First Circuit affirmed the dismissal.
- The court held Brazil was an adequate alternative forum and that the district court did not abuse its discretion in weighing private and public interest factors.
- The court treated the forum-selection and choice-of-law clauses as substantial factors supporting dismissal, without giving them automatic controlling effect.
- The court held Puerto Rico’s Law 75 policy was relevant but not dispositive in the federal forum non conveniens analysis.

## Legal Principles

- A federal court may dismiss for forum non conveniens when an adequate alternative forum exists and private and public interest factors strongly favor the alternative forum; appellate review is for abuse of discretion.
- A forum-selection clause is a significant consideration in forum non conveniens and is generally given weight absent fraud, duress, or comparable inequity, particularly between sophisticated commercial parties.
- State or territorial public policy disfavoring foreign forum clauses (including Puerto Rico’s Law 75 policy) is a factor in federal forum non conveniens, but it does not categorically bar dismissal where the federal balance supports a foreign forum.
- The location of key witnesses and documents, language and place of contracting, and the forum’s familiarity with the governing law are central private/public interest considerations.

## Conclusion

The First Circuit upheld dismissal to Brazil on forum non conveniens grounds because Brazil was an adequate forum and the contractual Brazil forum and Brazilian-law provisions, together with the concentration of proof and the governing law in Brazil, outweighed Puerto Rico’s Law 75 policy in the federal balancing analysis.


Royal Bed & Spring Co. v. Famossul Indus. e Comercio de Moveis Ltda., 906 F.2d 45 (1st Cir. 1990)