Iraola & Cia, S.A. v. Kimberly-Clark Corp.

Decision Date31 March 2003
Docket NumberNo. 01-16203.,01-16203.
Citation325 F.3d 1274
PartiesIRAOLA & CIA, S.A., Plaintiff-Counter-Defendant-Appellant, v. KIMBERLY-CLARK CORPORATION, Defendant-Counter-Claimant-Appellee, Geo Med, N.A., J.N. Anderson, George Semones, Defendants-Appellees.
CourtU.S. Court of Appeals — Eleventh Circuit

Edward Griffith, Bolatti & Griffith, New York City, Kevin P. Race, Atlanta, GA, for Iraola & CIA, S.A.

J. Randal Wexler, Thomas K. Cauley, Jr., Sidley & Austin, Chicago, IL, Stephen P. Fuller, Davidson, Fuller & Sloan, L.L.P., Duluth, GA, James A. Lamberth, Lynette Eaddy Smith, Troutman Sanders, LLP, Atlanta, GA, for Kimberly-Clark Corp., Geo Med, N.A., J.N. Anderson and George Semones.

Appeal from the United States District Court for the Northern District of Georgia.

Before ANDERSON and CARNES, Circuit Judges, and POLLAK,* District Judge.

POLLAK, District Judge:

Appellant Iraola & CIA, S.A. ("Iraola") appeals several decisions of the United States District Court for the Northern District of Georgia in this diversity case: first, the decision of February 25, 1998 dismissing Iraola's claims against appellees Kimberly-Clark Corporation ("K-C"), Neal Anderson ("Anderson"), and George Semones ("Semones") for wrongful termination, promissory estoppel, and quantum meruit; second, the decision of July 10, 2001 granting summary judgment against Iraola as to its claims against appellees for breach of contract and tortious interference with contractual relations; and third, the decisions of June 4 and July 10, 2001 denying Iraola's motions to compel and to extend discovery and denying Iraola's Rule 56(f) application for a continuance. We affirm each of the District Court's rulings.

I. Factual Background

At the time of the events giving rise to this litigation, 1) Iraola was an Argentine company specializing in distributing medical supplies to hospitals in Argentina; 2) defendant K-C, a company incorporated in Texas and Delaware, manufactured medical supplies; 3) defendant George Semones, a citizen of Georgia, was K-C's international expansion manager for the medical product lines division; and 4) defendant Neal Anderson, also a citizen of Georgia, served as the general manager of K-C's global business team.

In March 1994, Iraola and K-C entered into an oral agreement pursuant to which Iraola was to distribute K-C's medical products in Argentina. K-C began shipping its products to Iraola and Iraola commenced distribution in Argentina in June 1994. Robert Alpert, a citizen of Argentina employed by Iraola, was initially in charge of Iraola's marketing of the K-C line, but in early 1996 Alpert left Iraola to establish Ultraline, S.A. ("Ultraline"), and began handling K-C's account as an independent contractor for Iraola. Unbeknownst to Iraola, however, K-C also began distributing some of its products directly through Ultraline and another distributor, Geo Med, S.A. ("Geo Med"). In May 1996, Semones and Anderson terminated the distribution agreement with Iraola.

II. Procedural History

Iraola filed this diversity suit against K-C, Anderson, Semones, and Geo Med (which Iraola believed to be a firm located in Georgia) in 1997. Iraola alleged that the distribution agreement between Iraola and K-C (the 1994 oral agreement referred to above) was an exclusive contract of indefinite duration which K-C had no right to terminate. Iraola further alleged that K-C, Anderson and Semones solicited Iraola employees to leave Iraola and establish Ultraline and Geo Med as competitor distributorships. On February 25, 1998, the District Court dismissed Iraola's claims for wrongful termination, promissory estoppel, and quantum meruit, but declined to dismiss Iraola's claims for breach of contract and tortious interference.

In the course of discovery on the breach of contract and tortious interference claims, Iraola learned that, although Geo Med invoices listed a Georgia address, Geo Med was owned by Alpert, and the fact that Alpert was a citizen of Argentina seemed to signify that Geo Med — which had been named as a defendant on the understanding that it was a Georgia entity, but which had not yet been served — was really an Argentine entity. Iraola brought this information to the attention of the District Court. In Iraola's view, while Iraola, a foreign corporation and the sole plaintiff, was entitled to invoke the District Court's diversity jurisdiction to sue American defendants, inclusion of a foreign defendant would undermine that jurisdiction. To remedy this perceived jurisdictional difficulty,1 Iraola proposed to the defendants that they agree to a voluntary dismissal of Iraola's federal court suit, with a view to having Iraola reinstate the suit in a jurisdictionally more hospitable state court. When the defendants declined to agree to a voluntary dismissal, Iraola filed a motion pursuant to Federal Rule of Civil Procedure 41(a)(2) for leave to dismiss without prejudice. The defendants opposed the motion but also contended that, should the motion be granted, the District Court should condition dismissal upon an award of attorneys' fees for work done that would not bear upon the future course of litigation if conducted in state court. Also, K-C moved for default judgment on a counterclaim — to which Iraola had filed no answer — alleging that, subsequent to K-C's termination of Iraola's distributorship, Iraola had failed to pay K-C for K-C products retained in inventory by Iraola.

The District Court acted in two steps. First, the District Court granted K-C's motion for default judgment. Second, the District Court granted Iraola's motion for voluntary dismissal. The District Court did not act on the defendants' request that voluntary dismissal be contingent on an award of attorneys' fees.

Iraola appealed to this court, contending that the District Court lacked subject-matter jurisdiction on two grounds. One was the ground which Iraola had argued in the District Court: namely, that the inclusion as a defendant of Geo Med, apparently a foreign entity, undermined diversity jurisdiction.2 The other ground urged by Iraola on appeal was that 28 U.S.C. § 1332(a)(2), establishing diversity jurisdiction in suits between "citizens of a state and citizens or subjects of a foreign state," required that all American litigants — i.e., all parties adverse to the "citizens or subjects of a foreign state" — be "citizens of" the same "state." That asserted requirement, Iraola contended, was not met in the case at bar, since the American defendants included citizens of Georgia (Anderson and Semones) and also Delaware and Texas (K-C).

This court's disposition of Iraola's first appeal is reported at Iraola & CIA, S.A. v. Kimberly-Clark Corp., 232 F.3d 854 (11th Cir.2000). Our opinion addressed Iraola's jurisdictional arguments in reverse order. First, we ruled that Section 1332(a)(2) did not mandate that all the American defendants be citizens of the same state. Id. at 857-60, 232 F.3d 854. Next, acknowledging "that federal courts do not have diversity jurisdiction over cases where there are foreign entities on both sides of the action, without the presence of citizens of a state on both sides," and recognizing that "unincorporated entities are attributed to the citizenship of their owners ... [and therefore] Geo Med is an Argentinian entity because its owner, Alpert, is Argentinian," it followed that "if Geo Med, an Argentine entity, is considered in the diversity analysis, this court would not have jurisdiction." Id. at 860.3 However, we went on to determine that Geo Med was a dispensable party that could properly be removed from the litigation in order to preserve federal jurisdiction.

In sum, we held that the District Court had subject-matter jurisdiction. We concluded our opinion by directing the District Court, on remand, to address defendants' request for an award of attorneys' fees as a condition of authorizing voluntary dismissal — a request that the District Court had not addressed in making the rulings appealed from. Approximately four months later this court also affirmed the District Court's denial of Iraola's Rule 60(b) motion for relief from K-C's counterclaim judgment. See Iraola & Cia, S.A. v. Kimberly-Clark Corp., 250 F.3d 750 (11th Cir.2001) (decision without published opinion).

On remand, the District Court ordered Iraola to pay attorneys' fees as a corollary of voluntary dismissal. In light of this award, Iraola moved to withdraw its motion for voluntary dismissal. Since Iraola had not previously been put on notice that dismissal would be conditioned upon payment of attorneys' fees, the District Court permitted Iraola to withdraw its motion to dismiss and vacated the attorneys' fees award on June 4, 2001. The District Court also denied Iraola's outstanding motions to compel and to extend discovery on its remaining claims for breach of contract and tortious interference with contractual relations. On July 10, 2001, the District Court denied Iraola's request for additional discovery and granted summary judgment against Iraola as to the breach of contract and tortious interference claims.

Iraola now appeals the District Court's February 25, 1998 order dismissing Iraola's claims for wrongful termination, promissory estoppel, and quantum meruit; the District Court's July 10, 2001 order granting summary judgment against Iraola on its claims for breach of contract and tortious interference; and the District Court's June 4 and July 10, 2001 orders denying Iraola's motions for additional discovery and for a continuance.

III. Discussion
A. February 25, 1998 Order Dismissing Claims for Wrongful Termination of Contract, Promissory Estoppel, and Quantum Meruit

We review the District Court's Rule 12(b)(6) dismissal de novo. A complaint will only be dismissed where it appears beyond doubt that no set of facts could support the plaintiff's claim for relief. Fed.R.Civ.P. 12(b)(6); see ...

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