SEAMAN v. PFIZER INC (1992)

If California is a convenient forum for a shareholders derivative action, may the forum non conveniens doctrine be invoked merely because the named plaintiffs are residents of other states and another state might also offer a convenient forum?   No.

I

Again we review a forum non conveniens controversy involving Pfizer Inc. who, along with its subsidiary, Shiley Inc., has been the target of extensive litigation concerning defective heart valves.   This time heart valve recipients are not involved.  (See Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 1 Cal.Rptr.2d 556, 819 P.2d 14;  Shiley Inc. v. Superior Court (1992) 4 Cal.App.4th 126, 6 Cal.Rptr. 2d 38.)   Rather, this shareholders' derivative action is brought on Pfizer's behalf against thirty-one officers and directors of the two firms, alleging fraud and mismanagement in Pfizer's 1979 acquisition of Shiley and the subsequent marketing of Shiley heart valves.

Plaintiffs are two residents of New York and one from Pennsylvania.   Pfizer, a nominal defendant, is a Delaware corporation with its principal offices in New York, where its board regularly meets.¹  Pfizer is publicly traded on the New York Stock Exchange.   Most, but not all, of the defendants are subject to service in New York and Delaware;  and each has agreed to accept jurisdiction in either forum.²  Twenty-one of the defendants, including all members of Pfizer's board of directors, reside outside California.   Several states have more Pfizer shareholders than California, including Connecticut, Florida, Illinois, New Jersey, and New York.

The second amended complaint, while verified, alleges the following on information and belief:  The officers and directors of Pfizer and Shiley, in pursuit of their own “financial and social benefits,” conspired in a fraudulent scheme to conceal from its shareholders, the financial markets, and federal and state regulators the knowing manufacture and sale of some 86,000 defective heart valves.   Consequently, “Pfizer faces massive tort liability ․ which has had, and will continue to have, catastrophic adverse financial effects on the [c]ompany.”

Shiley is a California corporation based in Irvine.   The defective heart valves were manufactured there.   Several Shiley defendants are California residents, “many of the events complained of occurred in California,” and witnesses to these incidents live here.   The Shiley defendants failed to maintain quality control supervision over the manufacture of the heart valves and breached their duty of care to Pfizer, it is alleged, by mismanaging the company's affairs and failing to disclose material information to the parent company.

Pfizer does a great deal of business in this state, playing a substantial role in our economy, according to plaintiffs.   On the other hand, the company “conducts almost no business in Delaware and has no significant business operations or assets there.”

All defendants knew or should have known Shiley was selling thousands of defective heart valves.   Defendants deliberately suppressed the truth from Pfizer shareholders, the government, and physicians and their patients.³  The valves were withdrawn from the market only when the FDA's authorization was about to be suspended.

In the meantime, the lawsuit asserts, the companies have paid many millions in claims to heart valve recipients and their heirs.   They have insisted on confidentiality agreements and protective orders in every settlement.   All recipients of the offending valves (or their heirs) have a fraud cause of action against the companies.⁴

Pfizer's reputation has been tainted, and federal approval of its products jeopardized, by defendants' knowing sales of defective valves and the subsequent cover-up.   In their reports to the SEC and the California Department of Corporations, the Pfizer defendants did not disclose what they knew of the heart valve failures, the lack of success in correcting the defects, and the ever-widening exposure to tort liability.   Proxy materials and annual reports sent to Pfizer shareholders were similarly deficient between 1986 and 1989, allowing defendant directors to be reelected.

The purpose of the action is to obtain redress for Pfizer and “remedy violations of applicable California law.”   The tortious activity took place in this state and New York;  none is alleged to have occurred in Delaware.

The superior court found this state an inconvenient locus for the lawsuit because (1) plaintiffs are not residents of California;  (2) Pfizer is not a California corporation;  (3) most of the witnesses and individual defendants are located in the East;  (4) similar cases pend there;  and (5) the “interests of substantial justice” require trial of this matter in Delaware or New York.   We will conclude the ruling was erroneous and a clear abuse of discretion—and reverse accordingly.

II

 It is axiomatic that the forum non conveniens doctrine only applies to forums that are, for one reason or another, inconvenient.⁵  (See, e.g., Judicial Council com., 14 West's Ann. Code Civ.Proc. (1973 ed.) § 410.30, p. 490.)   Once inconvenience is established, it is then appropriate to search for an alternate forum, not before.   If a suitable forum cannot be found, the doctrine will not be employed, notwithstanding the inconvenience of the local forum.  (Ibid.)

 An inconvenient forum is one where none of the parties is a resident or a substantial or primary nexus of the lawsuit lies elsewhere.   (See, e.g., Annot., “Doctrine of Forum Non Conveniens:  Assumption or Denial of Jurisdiction in Action Between Nonresident Individuals Based Upon Tort Occurring Within Forum State,” 92 A.L.R.3d 797.)   Not only are there California parties to this suit, the alleged wrongdoing occurred mainly in this state, as did the damage to the companies.   California is not an inconvenient forum.

To reiterate, defective heart valves were manufactured by Shiley at its Irvine facility.   At some point Shiley learned of the problem, it is claimed, but continued to sell the products and hide the information from interested parties, such as Pfizer shareholders, government agencies, and prospective valve recipients and their physicians.   It is alleged that Pfizer's leadership was eventually informed and joined the conspiracy of silence.

Assuming any of this occurred, it occurred primarily in this state in a California company managed by California officers and directors, among others.   And, of course, if there was no wrongdoing in California, there was nothing to cover up in the East.   The firestorm of third-party claims has heavily impacted Shiley (and Pfizer, consequently) in California.   Thus, the nexus to this state is quite strong, both as to liability and damages.   The trial court should have gone no further because it is immaterial that another state might also qualify as a convenient forum.⁶  (Judicial Council com., supra, at p. 493.)

III

Defendants, of course, insist the superior court did not abuse its discretion in finding California to be an inconvenient forum for the trial of this lawsuit.   We briefly review their apologia, although most of it is beside the point.

A

 First, we are told, the superior court properly relied upon plaintiffs' non-resident status.⁷  But, assuming it has some role to play, plaintiffs' out-of-state residency is of especially remote significance in a derivative action.   Uniquely, perhaps, in this type of case nothing about plaintiffs will be of evidentiary interest beyond proof of share ownership in Pfizer.   They are merely representatives of a class that surely includes thousands of California shareholders.

Also illustrative of the unimportance of this particular factor is the following:  As of January 1, 1992, California has returned to the rule that forum non conveniens may not be applied to California resident plaintiffs.⁸  (Beckman v. Thompson (1992) 4 Cal.App.4th 481, 6 Cal.Rptr.2d 60.)   Thus, the mere addition of a nominal California shareholder plaintiff in a refiled lawsuit would presumably eliminate the issue.

What is important is this:  California's interest in this matter is considerable.   Very serious wrongdoing is alleged to have occurred here.   A California company and its California officers and directors are among the alleged wrongdoers.   The nature and nexus of the lawsuit, not the residency of the named plaintiffs, were the key factors to consider;  and they simply precluded the finding that this is an inconvenient forum.

B

 Next, it is argued the court correctly ruled New York and Delaware would also be suitable homes for the trial of this case.   This is irrelevant, as we have noted, because California is not an inconvenient forum.   But even if we were to look at this case through the wrong end of the binoculars and apply the “choice of forum” approach the trial court apparently adopted, and our dissenting colleague seemingly approves, the result would be the same.⁹

There is nothing to support the trial court's preference for Delaware over California.   Of the three states the trial court considered, Delaware is least preferable because none of the allegedly tortious behavior occurred there and few, if any, of the witnesses would be found there.   If Delaware law should be applied, a California court may do that.  (See ante, fn. 1.)

In this age of jet travel, teleconferencing, and fax communications it cannot be said, as a practical matter, that New York would be an inconvenient forum.¹⁰  But it would not be more convenient than California.   There are two sets of defendants, the California Shiley people and the eastern Pfizer group.   Since the valves were manufactured in California, most of the witnesses regarding this aspect of the lawsuit will be here.   The Shiley defendants were much closer to the misconduct plaintiffs have pleaded;  and if there is culpability at high levels at Shiley, they will surely be the first to be held responsible.   Thus, what happened in this state must be considered the crucial part of the case, the foundation of the dispute and the site of many of the ensuing claims, lawsuits, and settlements.

In other words, the liability of the Pfizer defendants will derive, if at all, by a procession up the corporate chain of command.   The superior court's order would make plaintiffs' task more difficult, it seems to us, by requiring them to prove the foundation of the case in the East with facts and witnesses imported from the opposite side of the country.

The charges boil down to the knowing manufacture and sale of defective heart valves from California, followed by a cover-up of this irresponsible behavior, first in California and later in New York.¹¹  Under no scenario we visualize could the sum of these allegations be deemed to militate in favor of a forum non conveniens stay or dismissal here.

C

Defendants claim the pendency of a certain securities lawsuit in the Southern District of New York justifies the superior court's decision.   We disagree.   That is a federal class action.   This derivative suit could not be joined in that court because there would be no diversity of citizenship.

The district court case seeks money damages against Pfizer based on the same general facts outlined in the complaint filed here, but would require the company to reimburse persons who held stock between March 27, 1987, and February 26, 1990.   By contrast, the present lawsuit is brought on Pfizer's behalf to recoup losses incurred by alleged fraudulent conduct and mismanagement by its officers and directors.   There is no relationship between these cases that suggests New York or Delaware should be preferred over California for trial of this matter.¹²

To summarize, the forum non conveniens doctrine “ ‘protect[s] the defendant against a vexatious choice of forum.’   In both English and American courts, forum non conveniens has traditionally dictated [stay or] dismissal of a suit when neither party was a resident of the chosen forum or when virtually all of the evidence relating to the cause of action was located in another forum.”   (Note, Products Liability—Forum Non Conveniens—California Supreme Court Rejects Consideration of the Favorable Law of a Foreign Plaintiff's Chosen Forum as an Element in Forum Non Conveniens Analysis—Stangvik v. Shiley Inc., 54 Cal.3d 744, 1 Cal.Rptr.2d 556, 819 P.2d 14 (Cal.1991) (1992) 105 Harv.L.Rev. 1813, 1816.)   In this case there are California parties, and most of the witnesses and evidence is surely here.   The forum non conveniens motion was not protective;  it amounted to reverse forum shopping.   California is a convenient forum for the trial of these allegations.

The judgment is reversed with directions to enter an order denying the motion to stay or dismiss on forum non conveniens grounds.   Appellants shall have their costs.

I dissent because I believe the majority opinion departs from the forum non conveniens analysis set forth in Piper Aircraft Co. v. Reyno (1981) 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 and Stangvik v. Shiley, Inc. (1991) 54 Cal.3d 744, 1 Cal.Rptr.2d 556, 819 P.2d 14, and ignores the role of an appellate court in reviewing the trial court's decision on this matter.

The majority concludes that if California is a convenient forum, the forum non conveniens doctrine may not be invoked against out-of-state plaintiffs “when trial in their home states might also be convenient.”  (Maj.opn., p. 478)  But the conclusion begs the question.   The majority states that, “Once inconvenience is established, it is then appropriate to search for an alternate forum, not before.”  (Maj.opn., p. 479)  I believe that misstates the law.   To say the forum non conveniens doctrine only applies to forums that are inconvenient stands the doctrine on its head.  “Inconvenience” is not a threshold question, but a conclusion to be reached by a trial court after it has properly applied the forum non conveniens analysis.

“In determining whether to grant a motion based on forum non conveniens, a court must first determine whether the alternate forum is a ‘suitable’ place for trial.   If it is, the next step is to consider the private interests of the litigants and the interests of the public in retaining the action for trial in California․”  (Stangvik v. Shiley, Inc., supra, 54 Cal.3d at p. 751, 1 Cal.Rptr.2d 556, 819 P.2d 14, emphasis added.) ¹  The question of whether a suitable alternative forum exists depends on whether the courts of that forum have or can attain jurisdiction over the defendant and whether the action would be barred by the alternative forum's applicable statute of limitations.  (Id. at p. 752, 1 Cal.Rptr.2d 556, 819 P.2d 14;  Shiley Inc. v. Superior Court (1992) 4 Cal.App.4th 126, 131–132, 6 Cal.Rptr.2d 38.)

Here, the majority has placed the cart before the horse.   It attempts to determine the convenience of trying the case in California in the abstract.   But forum non conveniens is “an equitable doctrine invoking the discretionary power of a court to decline to exercise the jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere.”  (Stangvik v. Shiley, Inc., supra, 54 Cal.3d at p. 751, 1 Cal.Rptr.2d 556, 819 P.2d 14, emphasis added.)   It makes no sense to decide whether California is a convenient forum unless one first determines whether an alternative forum exists.

In support of its claim that a court must first decide whether California is an inconvenient forum before ascertaining whether a suitable alternative forum exists, the majority cites but one authority—the Judicial Council's comment to Code of Civil Procedure section 410.30.   Even if the comment did support the majority's position, it would be contrary to the Supreme Court's analysis in Stangvik v. Shiley Inc., supra, 54 Cal.3d 744, 1 Cal.Rptr.2d 556, 819 P.2d 14.   Furthermore, the comment does not support the majority's position.   While the comment notes both the present forum's inconvenience and the existence of a suitable alternative forum must be shown, it does not even suggest, much less require, that inconvenience of the current forum be established before considering the suitability of other forums.²

The majority also ignores the applicable standard of review for this court.   It concludes, based upon plaintiffs' allegations—which are themselves based on information and belief—that “There was no basis to find California to be an inconvenient forum.”  (Maj.opn., p. 479)  However, we are not fact finders.   The trial judge is.   We may not merely pay lip service to the trial court's discretion in ruling on a motion for forum non conveniens.  “The granting or denial of such a motion is within the trial court's discretion, and substantial deference is accorded its determination in this regard.”   (Stangvik v. Shiley, Inc., supra, 54 Cal.3d at p. 751, 1 Cal.Rptr.2d 556, 819 P.2d 14, emphasis added;  see also Piper Aircraft Co. v. Reyno, supra, 454 U.S. at p. 257, 102 S.Ct. at p. 266;  Gulf Oil Corp. v. Gilbert (1947) 330 U.S. 501, 511–512, 67 S.Ct. 839, 844, 91 L.Ed. 1055;  Lacey v. Cessna Aircraft Co. (3d Cir.1991) 932 F.2d 170, 178;  Credit Lyonnais Bank Nederland, N.V. v. Manatt, Phelps, Rothenberg & Tunney (1988) 202 Cal.App.3d 1424, 1436, 249 Cal.Rptr. 559.)   The majority seems to have lost sight of this rule and substitutes its own judgment for that of the trial court.

Here, there is no suggestion that the trial court erred by failing to apply the proper test in ruling on the forum non conveniens motion.   The court found the alternate forums to be suitable places for trial.   And the majority concedes “it cannot be said, as a practical matter, that New York would be an inconvenient forum.”  (Maj.opn., pp. 480–481, fn. omitted.)

The court also considered the private interests of the litigants and the interest of the public in retaining the action for trial in California and concluded California was an inconvenient forum.   The trial court found the matter should be tried in an alternate forum because the plaintiffs are not California residents, Pfizer is not a California corporation, “most key parties and witnesses” are in the East, similar actions are pending in the United States District Court for the Southern District of New York,³ and the interests of justice require trial in the alternate forum.   The court also found that the action was based on decisions made primarily in New York by Pfizer's board of directors.   The majority disagrees with the trial court's balancing of the appropriate factors and concludes, in essence, that plaintiffs' problems of proof mandate trial in California.   But, plaintiffs' perceived problems of proof were considered by the trial court.

The evidence submitted in support of the motion asserted the decisions made by Pfizer's board were generally made at its principal executive office in New York.   The evidence indicated Pfizer held but one board meeting in California in 10 years.   Pfizer's board members—17 past and present members of which are named defendants—reside in the East.   Although plaintiffs' attorney represented that key witnesses were in California, he would not represent that most witnesses were here.   The majority states that “Since the valves were manufactured in California, most of the witnesses regarding this aspect of the lawsuit will be here․  Thus, what happened in this state must be considered the crucial part of the case, the foundation of the remaining allegations and the site of most of the damage.”  (Maj. opn., p. 481)  The argument misses the point.   The trial court apparently rejected plaintiffs' contention that the bulk of the relevant documents are located in California.   Although there are numerous documents at Shiley's headquarters in Irvine regarding the manufacture of the heart valve, this is not a product liability case.   It is a shareholder derivative action seeking damages for breach of fiduciary duties, waste of corporate assets, unfair business practices and fraud, filed by residents of New York and Pennsylvania on behalf of Pfizer Inc., a Delaware corporation traded on the New York Stock Exchange and having its principal executive offices in New York.   As the trial court found, the documents regarding Pfizer's corporate decisions are located in New York.

The majority makes much of the allegations, on information and belief, in plaintiffs' second amended complaint.   However, those allegations support the trial court's finding that this action is more appropriately and justly tried in New York.   Plaintiffs allege that “In 1979, Pfizer, without adequate investigation, due diligence or evaluation, acquired Shiley․”  As a result of Shiley's alleged manufacture of defective heart valves, Pfizer was forced to pay out millions of dollars in settlements and federal approval of its products has been jeopardized.   Plaintiffs allege that through financial reports, SEC filings, and press releases, Pfizer defrauded the public and its shareholders.   The trial court found these actions emanated from Pfizer's offices in New York.   It is alleged that at an annual meeting in March 1987, defendants succeeded in obtaining shareholder approval for a “Raincoat Provision,” amending Pfizer's articles to eliminate defendants' liability for breach of the duty of care.   It is alleged the Pfizer board authorized the company “to quietly settle ․ litigation ․, meanwhile concealing information concerning the valve fractures from the public.   Settlement details have been kept out of the public domain by virtue of Pfizer's insistence upon and receipt of protective orders.”   Plaintiffs allege that “In furtherance of the plan and conspiracy to defraud heart implant recipients and the investing public, and cover up their own wrongdoing, Pfizer's various reports to the Securities and Exchange Commission ․ such as its Form 10–Qs and 10–Ks and reports to other regulatory bodies ․, and other reports or press releases publicly disseminated by the Pfizer defendants, failed to disclose material adverse information about the severity and cause of the ․ valve defects, Pfizer's inability to correct the defects, efforts to conceal these defects, and, the Company's massive tort liability exposure arising therefrom.”   It is alleged that between 1986 and 1989, Pfizer distributed proxy statements to its shareholders which failed to disclose the nature and extent of the Pfizer defendants' participation in the wrongdoing committed.   In my view, this constitutes more than substantial evidence upon which the trial court could find that this action is more appropriately and justly tried elsewhere.

The majority claims plaintiffs here “are merely representatives of a class that surely includes thousands of California shareholders.”  (Maj. opn., p. 480)  Nothing in the record indicates there are thousands of California shareholders.   Second, as the majority notes, there are more shareholders in each of at least five states, including New York.  (Maj. opn., p. 478)  Last, but most important, the point is irrelevant because there are no California plaintiffs here.   The majority contends that “the mere addition of a nominal California shareholder plaintiff in a refiled lawsuit would presumably eliminate the issue.”  (Maj. opn., p. 480)  Perhaps.   But that has not been done.

Undaunted, the majority argues repeatedly that there are “California parties” to this action.  (Maj. opn., pp. 480, 481, 482)  Again, the point is irrelevant.   There were California parties in Stangvik v. Shiley, Inc., supra, 54 Cal.3d 744, 1 Cal.Rptr.2d 556, 819 P.2d 14 and Shiley, Inc. v. Superior Court (1992) 4 Cal.App.4th 126, 6 Cal.Rptr.2d 38, but none was a plaintiff.   In neither case did the presence of “California parties” change the analysis.

Here, the trial court, balancing the appropriate factors, found that in the interest of substantial justice the action should be heard in a forum outside the state.⁴  Because the court considered the relevant private and public interest factors and engaged in the appropriate forum non conveniens analysis, we may not substitute our judgment for that of the trial court.   (Piper Aircraft Co. v. Reyno, supra, 454 U.S. at p. 257, 102 S.Ct. at 266.)   Stated otherwise, the issue is not what conclusion we might have made after balancing the relevant forum non conveniens factors, but whether the trial court abused its discretion in granting the motion.

“The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason.   When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court.”  (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478–479, 243 Cal.Rptr. 902, 749 P.2d 339;  see also Walker v. Superior Court (1991) 53 Cal.3d 257, 272, 279 Cal.Rptr. 576, 807 P.2d 418.)

I would affirm the trial court's order.

FOOTNOTES

1.   Plaintiffs remind us that Corporations Code section 2116 authorizes California courts to apply the corporate law of another jurisdiction.

2.   Most live in New York.   Some reside in other eastern states, and one calls Illinois home.   Plaintiffs complain that nothing was filed in the superior court to document defendants' willingness to submit to any particular jurisdiction beyond a representation from defense counsel.   The court failed to condition the dismissal on a submission to jurisdiction elsewhere.

3.   When the valves began to fail soon after they were placed on the market, plaintiffs allege Shiley attempted new manufacturing procedures while continuing production, “a strategy dubbed ‘earn while you learn’ by the U.S. House of Representatives Energy and Commerce Subcommittee.”   Sales were “soaring”;  but Dr. Viking Bjork, inventor of the valves, warned Shiley in 1982 that continuing to market one of the two current models was “tantamount to murder.”

4.   See Khan v. Shiley Inc. (1990) 217 Cal.App.3d 848, 266 Cal.Rptr. 106.

5.   Remarkably, it is on this foundational point that we lose our dissenting colleague.   But the decisions he relies on all involve situations where a substantial aspect of the litigation would have been inconvenient to try in this jurisdiction, and inconvenience is simply assumed in most of them.   Joining the trial court's finding of inconvenience in this case would expand the law of forum non conveniens into a “choice of forum” doctrine, something it was never intended to be.

6.   At first blush, this may appear inconsistent with the holdings in Stangvik v. Shiley Inc., supra, 54 Cal.3d 744, 1 Cal.Rptr.2d 556, 819 P.2d 14 and Shiley Inc. v. Superior Court, supra, 4 Cal.App.4th 126, 6 Cal.Rptr.2d 38.   Not so.   A close analysis of Stangvik reveals the crux of that case was the question of damages, not liability, and the evidence on that issue was to be found in Scandinavia:  “It is true that much, but not all, of the evidence concerning liability exists in California;  but virtually all of the evidence relating to damages is in Scandinavia.”  (Stangvik, 54 Cal.3d at p. 762, 1 Cal.Rptr.2d 556, 819 P.2d 14.)   Moreover, while defendants agreed, among other things, to cooperate in discovery and produce documents and witnesses in Scandinavia upon request concerning liability, plaintiffs made no such commitment with respect to evidence of damages in a California proceeding.  (Id., at p. 750, fn. 2, 1 Cal.Rptr.2d 556, 819 P.2d 14.)In Shiley Inc. v. Superior Court, we dealt with the same situation in the context of out-of-state plaintiffs whose heart valves had not yet malfunctioned.   The issue there was whether the alleged failure of other states to recognize a fraud cause of action in such circumstances, as we have (see Khan v. Shiley Inc., supra, 217 Cal.App.3d 848, 857–858, 266 Cal.Rptr. 106), should bar application of forum non conveniens.   As in Stangvik, that California qualified as an inconvenient forum was a given because an essential component of plaintiffs' cases, damages, had no nexus to this state.   By contrast, the bulk of the damage evidence here will revolve around the litigation targeted at California-based Shiley.

7.   Plaintiffs respond with citations to now outdated California cases holding courts should give deference to a plaintiff's choice of forum.   Since the briefing in this matter, our Supreme Court has decided “the fact that [nonresident] plaintiffs chose to file their complaint in California is not a substantial factor in favor of retaining jurisdiction here.”  (Stangvik v. Shiley Inc., supra, 54 Cal.3d at p. 755, 1 Cal.Rptr.2d 556, 819 P.2d 14.)

8.   Arguably treating California residents different from other citizens of the United States would violate the Privileges and Immunities Clause of the federal Constitution.  (U.S. Con., art. 4, § 2;  but see Missouri ex rel. Southern R. Co. v. Mayfield (1950) 340 U.S. 1, 71 S.Ct. 1, 95 L.Ed. 3.)   We leave that problem for another day.

9.   Many of plaintiffs' counter-arguments are based on assertions that California procedural and substantive law would be more favorable to plaintiffs.  Stangvik has laid such considerations to rest.   (Stangvik v. Shiley Inc., supra, 54 Cal.3d at p. 753, 1 Cal.Rptr.2d 556, 819 P.2d 14;  see also Shiley Inc. v. Superior Court, supra, 4 Cal.App.4th 126, 6 Cal.Rptr.2d 38.)

10.   We rely on the facts as pleaded to a considerable extent because it is self-defeating to try the merits of an action in the context of a forum non conveniens motion.

11.   Defendants make the related argument that the lower court properly determined the gist of the action is based on decisions taken primarily in New York and the presence of key witnesses and parties in the East.   We reject that contention for the reasons already stated.   The lawsuit is predicated on an eastern decision to join a conspiracy to manufacture and sell defective heart valves.   As pleaded, the alleged negligent and fraudulent activity centered on a California enterprise, as did the bulk of the ensuing litigation.   This is an appropriate forum to test these allegations.   Evidence, assuming any exists, of what Pfizer knew, and when, will presumably be found in both states in the form of memoranda, faxes, letters, and the like—originals in one place, copies in the other.   Our conclusion would only be incorrect, at this stage of the litigation, if plaintiffs pleaded that Pfizer's management engineered the fraud on these thousands of patients from the outset—or Pfizer wished to admit that.   Neither is the case, of course.

12.   There is no reason to discuss defendants' next argument, which is that Corrigan v. Bjork Shiley Corp. (1986) 182 Cal.App.3d 166, 227 Cal.Rptr. 247 and Holmes v. Syntex Laboratories, Inc. (1984) 156 Cal.App.3d 372, 202 Cal.Rptr. 773 were wrongly decided.   We have taken that position for some time, and the Supreme Court has now agreed.   (Stangvik v. Shiley Inc., supra, 54 Cal.3d 744, 763–764, 1 Cal.Rptr.2d 556, 819 P.2d 14.)We also see no purpose in attempting to decide, at this early stage, whether this case will be tried under Delaware or California law.   Defendants concede there is little to differentiate them, and we have already explained why Delaware is a far less convenient forum than California.   Choice of law can be a delicate matter and ordinarily should not be resolved before an adequate opportunity for discovery has been afforded and the trial court is provided facts instead of naked pleadings and untested declarations.

1.   “The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses.   The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation.”  (Stangvik v. Shiley, Inc., supra, 54 Cal.3d at p. 751, 1 Cal.Rptr.2d 556, 819 P.2d 14;  see also Piper Aircraft Co. v. Reyno, supra, 454 U.S. at pp. 259–261, 102 S.Ct. at pp. 267–69.)

2.   Contrary to the majority's opinion, I do not approve or adopt a “choice of forum” analysis.  (Maj. opn., p. 479, fn. 5)  I am merely following the dictates of the California Supreme Court and deferring to the proper exercise of discretion by the trial court.  (Stangvik v. Shiley, Inc., supra, 54 Cal.3d at p. 751, 1 Cal.Rptr.2d 556, 819 P.2d 14.)

3.   Although the federal court actions arise out of the same factual allegations as this action and name members of Pfizer's board of directors as defendants, the majority dismisses the relevance of those pending actions, claiming “This derivative action could not be joined in that court because there would be no diversity of citizenship.”  (Maj. opn., p. 481)  However, jurisdiction in the federal action is predicated not on diversity, but on federal questions arising under section 27 of the Securities Exchange Act of 1934.  (15 U.S.C. § 78aa.)   The federal action's plaintiffs alleged their claims were based on section 10(b) of the Securities Exchange Act (15 U.S.C. § 78j(b), and the Securities Exchange Commission's rules promulgated under it.

4.   Code of Civil Procedure section 410.30, subdivision (a), provides in part:  “When a court ․ finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action ․ on any conditions that may be just.”

CROSBY, Acting Presiding Justice.

SONENSHINE, J., concur.