Gulf Oil Corp. v. Gilbert (1947)

US Civil Procedure

Gulf Oil Corporation v Gilbert
Image: ‘Leyland Octopus Gulf Oil’ by Mike Jeffries

Choice of venue within a civil action, while enjoyed by claimants for honourable reasons, can sometimes prove destructive to the roots of a claim when the right is abused or exercised in error. In this instance, the want of policy ran risk of disrupting and possibly destroying, the need for redress through the use of established legal doctrine.

In 1944, the appellants supplied a delivery of gasoline to the respondent in Lynchburg, Virginia, whereupon an explosion caused significant damage to the establishment, customers property and pecuniary standing of the proprietor. Upon litigation, the respondent sought damages of around $365,000, and when exercising his civil rights, elected to issue proceedings in the state of New York, as explained under 28 § 1391(b)  U.S.C., which reads:

“A civil action may be brought in (1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located.”

And yet with appreciation that the appellants were based in New York, the court elected to challenge the choice of venue on grounds of ‘forum non conveniens’, which translated that although the claimant had a right to choose the venue best suited to their needs, the location of the actual event, the relevant evidence, potential expedience, lower legal costs and optimal attendance of both jurors and witnesses, demonstrated that the hearing was best heard in Virginia, as opposed to a courtroom almost four-hundred miles away.

Taken to the district appeal court, the decision was reversed back in favour of the claimant, whereupon the matter was further escalated to the U.S. Supreme Court under writ of certiorari. Here, it was noted that it was not unusual for claimants to abuse § 1391 by choosing inconvenient forums as a means of vexing and oppressing the defendant, thereby reducing the opportunity of a fair trial, while it also became apparent that on this occasion, the lawyer acting under instruction for the claimant resided in New York, and was retained by the insurance firm for reasons benefiting their own interests, hence arguing strongly in favour of one venue over the other, despite the obvious inconvenience to the claimant.

In light of this glaring disparity, the Court held that there were simply too many reasons for a trial to be held in Virginia, and that despite any contention that the district court had acted ultra vires, the judgment of the appeal court was too narrow an interpretation of the doctrine, and so the decision was reversed with a view to proceedings in Lynchburg on the principle that:

“[T]he doctrine of forum non conveniens can never apply if there is absence of jurisdiction or mistake of venue.”

Donoghue v Stevenson (1932)

English Tort Law

Donoghue v Stevenson
‘Ginger Ale’ by Robert Langford

In this case, the principle of negligence beyond the strictness of contractual duty becomes pivotal to a claim for damages, when a consumer becomes victim to sickness through the consumption of a contaminated beverage.

In 1928, two friends entered a café in central Scotland and proceeded to order some ice-cream and ginger beer. Unknown to the appellant, one of the bottles provided contained the decomposed remains of a snail, which when poured onto the ice-cream, left the appellant in a state of shock, and later subjected to gastro-enteritis, having partially drunk the ginger beer beforehand.

This resulted in litigation on grounds concerning (i) the manufacturer’s inability to safely store the bottles prior to their filling, (ii) a lack of care when considering the potential for those drinks to be consumed by unwitting customers, (iii) failure to implement a suitable quality control/inspection system prior to distribution, and (iv) failure to use clear, as opposed to dark opaque bottles, to avoid such events.

Although the common law position was comparable between English and Scottish law, the claim was unique in that it circumvented the contractual obligations often found in negligence claims. The court in the first instance had allowed the claim, while the Second Divisional court dismissed it by a majority, before the appellant sought relief in the House of Lords.

Here, a number of recent cases were explored, so as to ascertain the extent of liability in matters where there are no contractual obligations. Erring on the side of restraint as to how far a claim such as this might extend, comments mades by Parke B in Longmeid v Holliday suggested that:

“It would be going much too far to say, that so much care is required in the ordinary intercourse of life between one individual and another, that, if a machine not in its nature dangerous, . . . . but which might become so by a latent defect entirely unknown, although discoverable by the exercise of ordinary care, should be lent or given by one person, even by the person who manufactured it, to another, the former should be answerable to the latter for a subsequent damage accruing by the use of it.”

However in George v Skivington, the sale of harmful shampoo, which had been used not by the purchaser but a third party, had allowed claim for negligence caused upon a duty of care by the manufacturer when mixing the ingredients; while in Francis v Cockerell, a racecourse spectator injured through the collapse of a viewing stand, was able to recover not from the builder himself, but the agent of the venue.

On this occasion, the appellant relied upon the words of Lord Brett MR in Heaven v Pender, who clarified that:

“[W]henever one person is by circumstances placed in such a position with regard to another that every one of ordinary sense who did think would at once recognize that if he did not use ordinary care and skill in his own conduct with regard to those circumstances he would cause danger of injury to the person or property of the other, a duty arises to use ordinary care and skill to avoid such danger…”

Therefore it was argued that regardless of contractual elements, there was, by virtue of reasonableness and decency, an inherent encumbrance upon the respondent manufacturer to both evaluate and consider the position of the consumer when preparing and sealing his drinks, and that anything less than that consideration was tantamount to fundamental neglect and tortious liability.

Contrastingly, in Pender Esher LJ had also argued that:

“The question of liability for negligence cannot arise at all until it is established that the man who has been negligent owed some duty to the person who seeks to make him liable for his negligence. What duty is there when there is no relation between the parties by contract? A man is entitled to be as negligent as he pleases towards the whole world if he owes no duty to them.”

While in Bates v Batey & Co Ltd, the manufacturers of ginger beer were not deemed liable for an injury caused to an unsuspecting consumer from a defect unknown, and yet discoverable through reasonable investigation.

Having evaluated the reluctance of the courts to extend in some instances, while offering generous judgment in others, it was, albeit by a narrow margin, decided that despite no contractual duties to envisage the effects of a contaminated product upon an innocent purchaser, there was an almost ethical prerequisite to remain diligent in the preparation and storage of such substances. And so despite the abject refusal by the Second Division of the Court of Session in Scotland to acknowledge the appellant’s rights, the House reversed the finding and restored the order of the first judge.