Borden, Inc. v. Meiji Milk Products Co., Ltd.
| Citation | 919 F.2d 822 |
| Decision Date | 21 November 1990 |
| Docket Number | D,No. 793,793 |
| Parties | BORDEN, INC., Appellant, v. MEIJI MILK PRODUCTS CO., LTD., Appellee. ocket 90-7840. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Kevin J. Plunkett, New York City (William F. Plunkett, Jr., Arthur J. Semetis, and Plunkett & Jaffe, New York City; Walter W. Kocher, Hans Fischer and H. Stephen Harris, Jr., Columbus, Ohio, on the brief) for appellant Borden, Inc.
Samuel Kadet, New York City (Barry H. Garfinkel, Steven J. Kolleeny, Chase A. Caro; Brian D. Graifman, and Skadden, Arps, Slate, Meagher & Flom, New York City on the brief), for appellee Meiji Milk Products Co., Ltd.
Before FEINBERG, TIMBERS and MINER, Circuit Judges.
Appellant Borden, Inc. (Borden) appeals from an order entered October 3, 1990 in the Southern District of New York, Mary Johnson Lowe, District Judge, dismissing the action on the ground of forum non conveniens.
Borden commenced this action on August 30, 1990, seeking a preliminary injunction in aid of arbitration. The court granted the motion of appellee Meiji Milk Products Co., Ltd. (Meiji) to dismiss.
On appeal, Borden contends that the court erred in dismissing the action because (1) Meiji failed to sustain its burden of showing that an adequate remedy was available in the alternate forum; (2) the court relied on erroneous factual assumptions; and (3) New York procedural rules barred dismissal of the action. Meiji contends that the dismissal should be affirmed on the ground of forum non conveniens or, in the alternative, on the ground that the court lacked subject matter jurisdiction.
For the reasons set forth below, we affirm the order dismissing the action on the ground of forum non conveniens.
We shall set forth only those facts and prior proceedings believed necessary to an understanding of the issues raised on appeal.
Borden, a New Jersey corporation with offices in New York City, is a multi-national corporation engaged in the manufacture and distribution of food, dairy and consumer products in the United States and throughout the world. Meiji, a Japanese corporation with offices in New York City, is engaged in the manufacture of milk and milk products in Japan and other parts of the world. In 1983, Borden and Meiji entered into a Trademark License and Technical Assistance Agreement (the agreement), pursuant to which Borden licensed the use of its name and logo to Meiji to be used on a variety of margarine products manufactured and sold by Meiji in Japan for a period of seven years. The agreement, which was performed entirely in Japan, expired by its terms on October 3, 1990.
For the past seven years, Meiji has sold a number of margarine products bearing the Borden trademark. The formulas and techniques used to manufacture the margarine products are owned by Meiji. Meiji has obtained protection under Japanese Design Patent law for the margarine packaging it has used.
Although the agreement has now expired, Meiji continues to market margarine, in Japan, in the packaging it had been using while the agreement was in force, but now without any use of the Borden trademark or logo. Borden contends that the use of the packaging is an "appropriation" in violation of the agreement.
Section 16 of the agreement specifically provides that all disputes arising in connection with the agreement shall be finally settled by arbitration pursuant to the Japanese-American Trade Arbitration Agreement of September, 1952. Accordingly, on August 24, 1990, Borden filed a demand for arbitration, alleging that Meiji had breached the agreement and unfairly competed with Borden. Meiji contends that Japanese patent law authorizes its continued use of the packaging and asserts that the agreement between the parties is silent as to any use by Meiji of packaging after termination of that agreement. The site of arbitration--which will be either New York or Japan--has not yet been determined.
On August 30, 1990, Borden commenced this action in the Southern District of New York, alleging claims for breach of contract and wrongful destruction of goodwill. Borden sought to compel arbitration pursuant to 9 U.S.C. Sec. 206 (1988). It also sought a preliminary injunction against Meiji's use of the disputed packaging. Jurisdiction was based both on diversity and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention).
On August 30, Borden obtained a temporary restraining order from the Part I Judge, Hon. Robert P. Patterson, Jr. The case subsequently was assigned to Hon. Mary Johnson Lowe for all purposes. On September 5, after hearing arguments from both sides on the preliminary injunction motion, Judge Lowe declined to extend the TRO granted by Judge Patterson. Instead she allowed it to expire by its own terms. Meiji indicated at the September 5 hearing that it intended to file a motion to dismiss on grounds of extraterritoriality and forum non conveniens.
Judge Lowe scheduled a further hearing on the preliminary injunction motion for September 25. She also indicated that the forum non conveniens motion would be heard on that day. She asked that the papers on the forum non conveniens motion be filed in advance of the 25th.
Meiji served and filed its motion to dismiss on September 7. The papers indicated that Meiji would bring on its motion before Judge Lowe on or after September 24; that answering papers were required to be served and filed by September 17; and that any reply by Meiji would be due September 21. On Thursday, September 20, Judge Lowe's chambers informed counsel for Meiji that it wished to receive any reply papers on its motion to dismiss by 3:00 p.m. on September 21. Meiji complied with that request.
Also on September 21, counsel for Borden and Meiji agreed that, at the hearing scheduled for September 25, no Japanese residents would be called to testify as witnesses. That agreement was not communicated to Judge Lowe.
At approximately 6:15 p.m. on Friday, September 21, Judge Lowe's law clerk informed counsel that Judge Lowe had decided to dismiss Borden's action on the ground of forum non conveniens. On October 3, Judge Lowe filed her written opinion. This expedited appeal followed.
As a threshold matter, we address the question of the court's subject matter jurisdiction to entertain the application for preliminary injunctive relief in aid of arbitration.
This matter was not ruled on by the district court; but, in a brief filed by Meiji just hours prior to the oral argument before us on the instant appeal, Meiji claimed that the district court lacked jurisdiction. Although Meiji's timing in presenting this claim was not ideal, particularly in light of the posture Borden has maintained throughout these proceedings in which it has pressed urgently for an expedited determination on the merits, we recognize that we are required to consider whether there is federal jurisdiction. Roco Carriers, Ltd. v. M/V Nurnberg Express, 899 F.2d 1292, 1294 (2 Cir.1990). We have carefully examined the jurisdictional claim. We conclude that we do have jurisdiction.
Meiji's argument is that, since the agreement between the parties contains an arbitration clause, the Convention is applicable. Article II(3) of the Convention provides that "[t]he court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration...." (The full text of the Convention is published following 9 U.S.C.A. Sec. 201 (West Supp.1990)). Borden concedes that the Convention is applicable, but argues that the Convention does not oust the court of jurisdiction to issue an injunction in aid of arbitration. We agree.
Federal courts are charged with enforcing the Convention. 9 U.S.C. Sec. 201 (1988). Specifically, a court Id. at Sec. 206. Furthermore, the courts are empowered to confirm an arbitration award once rendered. Id. at Sec. 207.
Meiji argues that a court's jurisdiction is limited to compelling arbitration or confirming an arbitration award. In the instant case, however, Borden specifically invoked Sec. 206, seeking to have the district court compel arbitration and appoint arbitrators. We hold that entertaining an application for a preliminary injunction in aid of arbitration is consistent with the court's powers pursuant to Sec. 206. Cf. McCreary Tire & Rubber Co. v. CEAT S.p.A., 501 F.2d 1032, 1037-38 (3 Cir.1974) (); International Shipping Co. v. Hydra Offshore, Inc., 875 F.2d 388, 391 n. 5 (2 Cir.) (district court properly held that jurisdiction could not be premised on the Convention because "the party invoking its provisions did not seek either to compel arbitration or to enforce an arbitral award"), cert. denied, --- U.S. ----, 110 S.Ct. 563, 107 L.Ed.2d 558 (1989).
In the instant case, far from trying to bypass arbitration, Borden sought to have the court compel arbitration. New York law specifically provides for provisional remedies in connection with an arbitrable controversy, N.Y.Civ.Prac.L. & R. (CPLR) Sec. 7502(c) (McKinney Supp.1990), and the equitable powers of federal courts include the authority to grant it. Murray Oil Products Co. v. Mitsui & Co., 146 F.2d 381 (2 Cir.1944). Entertaining an application for such a remedy, moreover, is not precluded by the Convention but rather is consistent with its provisions and its spirit. In Murray, we held that an arbitration clause "does not deprive...
To continue reading
Request your trial
-
Republic of Ecuador v. Chevrontexaco Corp., 04 Civ. 8378(LBS).
...seeking to stay arbitration, let alone one also seeking to obtain broader declaratory and injunctive relief. In Borden v. Meiji Milk Products Co., 919 F.2d 822, 826 (2d Cir.1990), the Second Circuit expanded the category of parties allowed to invoke the New York Convention somewhat when it ......
-
Banco De Santander Cen. Hispano v. Consalvi Intn.
...local law, Art. V(1)(e), and recognizes defenses to the enforcement of an award." (citation omitted)); Borden, Inc. v. Meiji Milk Prods. Co., Ltd., 919 F.2d 822, 826 (2d Cir.1990) (citing International Shipping Co. with approval); Gulf Petro Trading Co., Inc. v. Nigerian Nat'l Petroleum Cor......
-
Schueler v. Roman Asphalt Corp.
...may be confirmed and judgment entered upon them in any court of competent jurisdiction. 9 U.S.C. § 9; see Borden, Inc. v. Meiji Milk Products Co., 919 F.2d 822, 827 (2d Cir.1990), cert. denied ___ U.S. ___, 111 S.Ct. 2259, 114 L.Ed.2d 712 (1991); Oklahoma City Associates v. Wall-Mart Stores......
-
Aguinda v. Texaco, Inc.
...232 F.3d at 57-59; Lockman Found. v. Evangelical Alliance Mission, 930 F.2d 764, 768 (9th Cir.1991); Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822, 829 (2d Cir.1990); Potomac Capital Inv. Corp. v. Koninklijke Luchtvaapt Maatschapplj N.V., 1998 WL 92416, at *5 (S.D.N.Y. Mar. 4, 1998); ......
-
Foreign corporations: forum non conveniens and change of venue.
...allegedly due from sale of cement to Nigeria), cert. denied. 489 U.S. 1067 (1989). (31.) See also Borden v. Meiji Milk Prods. Co., 919 F.2d 822 (2d Cir. 1990), cert. denied, 1 1 1 S.Ct. 2259 (1991), citing Shields v. Mi Ryung Constr. Co., 508 F.Supp. 891, 895 (S.D. N.Y. 1981); Sigalas v. Li......
-
A call for stricter appellate review of decisions on forum non conveniens.
...41, 46 (2d Cir. 1996). It may reverse "only when there has been a clear abuse of discretion." See Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822, 827 (2d Cir.1990) (citation omitted). "There can be a clear abuse of discretion only if a court fails to carefully consider the Gilbert fact......
-
Survey of 2004-2005 Developments in International Law in Connecticut
...60 E.g., Borden, Inc. v. Meji Milk Products Co., 919 F.2d 822 (2d Cir. 1990). 61 I.e., the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958, entered into force 7 June 1959, entered into force for the United States 29 Dec. 1970, subject to decla......