In 1998, the Park Company (Park), a State X importer of art objects, contracted with Wholesale (W), a wholesaler based in Italy, to purchase a shipping container of vases for $800,000. The agreement, which was negotiated entirely in Italy, specified that “disputes concerning this contract shall be subject to non-binding arbitration in State X prior to the commencement of any action on the contract.”
Before entering into this contract, W had never done business with Park. W sells most of its goods to buyers in Spain. However, in 1996 W had sold to a State X company three shipping containers of vases worth $700,000 per container. These sales had been negotiated during a month-long sales trip to State X by W's president.
Park rejected the 1998 container of vases on the ground that over half the shipment did not conform to contract specifications. Two months following an unsuccessful private arbitration in State X, Park sued W in federal court in State X alleging $100,000 in lost profits. W timely moved to dismiss the complaint on the ground that the court lacked jurisdiction and on the alternative ground of forum non conveniens. The court denied W's motion in its entirety.
All of W's witnesses to its design and manufacturing process are located in Italy. Italian courts provide a forum for Park's claim; however, Italian law recognizes fewer theories for recovery than State X law and imposes a limitation on damages, which State X does not.
Did the court correctly decide W's motion to:
1. Dismiss for lack of jurisdiction? Discuss.
2. Dismiss on the ground of forum non conveniens? Discuss.