Sarl Louis Feraud Intern. v. Viewfinder Inc.

• Decision Date: 29 September 2005
• Docket Number: No. 04 Civ.9760 GEL.,No. 04 Civ.9761 GEL.,04 Civ.9760 GEL.,04 Civ.9761 GEL.
• Parties: SARL LOUIS FERAUD INTERNATIONAL, Plaintiff, v. VIEWFINDER INC. d/b/a Firstview, Defendant. S.A. Pierre Balmain, Plaintiff, v. Viewfinder Inc. d/b/a Firstview, Defendant.
• Court: U.S. District Court — Southern District of New York

406 F.Supp.2d 274

SARL LOUIS FERAUD INTERNATIONAL, Plaintiff, v. VIEWFINDER INC. d/b/a Firstview, Defendant.

S.A. Pierre Balmain, Plaintiff, v. Viewfinder Inc. d/b/a Firstview, Defendant.

No. 04 Civ.9760 GEL.

No. 04 Civ.9761 GEL.

United States District Court, S.D. New York.

September 29, 2005.

COPYRIGHT MATERIAL OMITTED

James P. Duffy, III, Berg and Duffy, LLP, Lake Success, NY, for Plaintiffs Sarl Louis Feraud International and S.A. Pierre Balmain.

Steven J. Hyman and Paul H. Levinson, McLaughlin & Stern, LLP, New York City, for Defendant Viewfinder Inc.

OPINION AND ORDER

LYNCH, District Judge.

The plaintiffs in these consolidated and essentially identical actions, French corporations that design and market high-fashion clothing, bring this action to enforce a default judgment obtained by them in a French court against Viewfinder Inc., a Delaware corporation that maintains websites on which it posts photographs from fashion shows and other information about fashion events. In the French action, plaintiffs maintained that defendant made unauthorized use of their intellectual property and engaged in unfair competition by posting photographs of models wearing clothing of their design at various fashion shows. Defendant moves for dismissal and/or summary judgment on various grounds. The motions will be granted and judgment entered for defendant.

BACKGROUND

The following facts appear to be undisputed, except where otherwise noted.

In January 2001, plaintiffs brought an action against Viewfinder in the Tribunal de Grande Instance de Paris, seeking damages for unauthorized use of their intellectual property and unfair competition.¹ Although Viewfinder was served in the action by the United States Marshal in accordance with the Hague Convention, it failed to answer the complaint or appear in the French action. Accordingly, in May 2001 the French court entered a default judgment, and granted relief in favor of the plaintiffs. The relief included damages totaling 1,000,000 francs ($183,007.42)² — 500,000 francs for each plaintiff — as well as the costs of the action, and a coercive fine ("astreinte") of 50,000 francs per day for each day that Viewfinder failed to comply with each judgment. In October 2003, Viewfinder appealed the judgment to the Cour d'Appel de Paris, but the appeal (which was apparently untimely in any event) was withdrawn without opposition in January 2004, after plaintiffs filed their brief, and the appeal was duly dismissed in February 2004.

Plaintiffs eventually brought this action in December 2004, seeking to enforce the French judgment. Because Plaintiffs are French corporations (Compl. ¶ 3), defendant is a Delaware corporation (Ashby Decl. ¶ 2), and the amount in controversy exceeds $75,000 (Compl. ¶ 1) this Court has jurisdiction pursuant to 28 U.S.C. § 1332.

DISCUSSION

Defendant moves to dismiss or for summary judgment. Since all of the facts relevant to the resolution of the matter are contained either in the complaint, or in materials (such as the records of the French proceedings or the defendant's websites) that are either referred to in the complaint or of which the Court may take judicial notice, and are in any event undisputed, it matters little how the motions are characterized. Neither party has opposed summary judgment on the ground that material issues of fact preclude resolving the case as a matter of law on the present record, or on the ground that further discovery is needed, see Fed.R.Civ.P. 56(f).

Defendant argues against enforcement of the French judgment on a variety of grounds. Only one of its arguments has merit; however, since that argument is of constitutional dimension, the Court must address all other issues first in order to assure that it is necessary to resolve the constitutional question.

I. Finality

The original motion papers submitted by the parties devote a great deal of attention to whether the French judgment is or is not an enforceable final judgment. The principal bone of contention was the astreinte imposed by the French court for violation of its order that Viewfinder remove from its website the material about which plaintiffs complained. Viewfinder argued that under French law, this aspect of the judgment was incomplete, and needed to be reduced to a fixed judgment in separate proceedings before another French tribunal. (Def.Mem.7-9.) Plaintiffs, in contrast, contended that the judgment was final and enforceable. (Pl. Mem.3-4.)

This dispute, however, has become moot. On February 9, 2005, ten days before plaintiffs responded to defendant's motion to dismiss, plaintiffs in fact undertook the necessary proceedings before the Juge de l'Exécution of the French court to reduce the astreinte to a fixed amount. Plaintiffs advised the Court in a letter dated March 7, 2005, that the matter should be held in abeyance until these proceedings were concluded, thus eliminating any question as to the finality of the judgment in question.

On June 13, 2005, however, the French judge entered an order declining to enforce the penalty by reducing it a liquidated amount, finding that plaintiffs had submitted insufficient proof of a continuing violation of the court's order. Tribunal de Grande Instance [T.G.I.] [County Court] Paris, June 13, 2005, RG No. 05/81354.³ Accordingly, there can now be no question that the astreinte is no longer enforceable.⁴

The unenforceability of the astreinte, however, does not affect the judgment for damages. As the Second Circuit has recognized, "courts are not limited to recognizing a [foreign] judgment entirely or not at all. Where a foreign judgment contains discrete components, the enforcing court should endeavor to discern the appropriate `extent of recognition,' with reference to applicable public policy concerns." Ackermann v. Levine, 788 F.2d 830, 844 (2d Cir.1986) (citation omitted). Although defendant argues, without citation to authority, that the Court cannot determine, without an affidavit from an expert in French procedure, whether the French judgment is severable, logic points in the opposite direction. The French judgment clearly contains both backward-and forward-looking remedies, awarding damages and costs for past harm, and also awarding prospective relief in the nature of an injunction backed by coercive penalties analogous to a civil contempt fine under American law. The decision of the Juge de l'Exécution refusing to reduce this fine to a fixed amount is based on a finding that plaintiffs had failed to prove an ongoing violation of the original order. That decision has no logical bearing on the award of compensation for past violations, and absent citation of some authority to the contrary by defendant, there is no reason whatsoever to believe that the compensatory aspect of the original judgment is affected in any way by the failure to enforce the astreinte.

II. Repugnance

Defendant argues that the French judgment's compensatory remedies may not be enforced because they are "repugnant" to American law, and therefore unenforceable, in three different respects: first, because the damages awarded are excessive and bear no reasonable relation to plaintiffs' actual damages; second, because the underlying French law is inconsistent with American copyright and intellectual property principles; and third, because enforcement of the judgment would be inconsistent with the First Amendment. Only the last of these arguments has merit.

A. General Principles

"The extent to which the law of one nation ... shall be allowed to operate within the dominion of another nation, depends upon what our greatest jurists have been content to call `the comity of nations.' ... `Comity' ... is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws." Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S.Ct. 139, 40 L.Ed. 95 (1895). "Comity will be granted to the decision or judgment of a foreign court if it is shown that the foreign court is a court of competent jurisdiction, and that the laws and public policy of the forum state and the rights of its residents will not be violated." Cunard S.S. Co. v. Salen Reefer Servs. AB, 773 F.2d 452, 457 (2d Cir.1985).

Where, as here, federal jurisdiction rests on diversity of citizenship, federal courts look to the law of the forum state in determining the enforceability of foreign judgments. S.C. Chimexim S.A. v. Velco Enters., Ltd., 36 F.Supp.2d 206, 211 (S.D.N.Y.1999). Under New York's Uniform Foreign Judgment Recognition Act, N.Y. C.P.L.R. 5302, foreign civil judgments are generally enforceable, with certain exceptions set forth in C.P.L.R. 5304. In particular, New York gives courts discretion to refuse to enforce a foreign judgment that "is repugnant to the public policy of this state." C.P.L.R. 5304(b)(4). Viewfinder relies on this principle in resisting enforcement of plaintiffs' judgment.

B. Calculation of Damages

Viewfinder first argues that the award of 500,000 francs ($91,503.71) in damages and 15,000 francs ($2,745.11) in costs was not based on specific proof of actual damages, but rather was "arbitrarily selected." (Def.Mem.9.) Viewfinder then goes on to attack the French judgment for inconsistency with French law, arguing that French law permits only the award of proven loss or damage, but that in this case no evidence was presented, and identical awards were entered in favor of a number of similarly situated plaintiffs. Noting that New York law disfavors contractual liquidated damage clauses that impose a penalty for breach and are excessive in relation to actual damage, see e.g., Truck Rent-A-Center, Inc. v. Puritan Farms 2nd, Inc....