Transatlantic Lines LLC v. Amergent Techs, LLC
| Decision Date | 06 January 2017 |
| Docket Number | 16 Civ. 3549 (PAE) |
| Parties | TRANSATLANTIC LINES LLC, Petitioner, v. AMERGENT TECHS, LLC, Respondent. |
| Court | U.S. District Court — Southern District of New York |
This case is one of several in which either TransAtlantic Lines LLC ("TransAtlantic") or Amergent Techs, LLC ("Amergent") has attempted to compel the other to arbitrate their dispute over money Amergent claims it is owed by TransAtlantic, pursuant to a contract between them. Here, TransAtlantic seeks to compel Amergent to arbitrate in New York. See Dkt. 1 ("Petition" or "Pet."). Four motions are now pending. Amergent is the movant as to two: It moves to dismiss under Federal Rule of Civil Procedure 12(b)(2) and (6), Dkt. 14, and for sanctions under Rule 11, Dkt. 30. For its part, TransAtlantic moves to compel arbitration, Dkt. 6, and under Rule 72(a) to overturn a ruling by the Honorable Sarah Netburn, United States Magistrate Judge, to strike a memorandum, Dkt. 53.
For the reasons below, the Court grants Amergent's motion to dismiss, on the ground that it lacks personal jurisdiction over Amergent, and on that basis denies TransAtlantic's motion to compel arbitration. The Court, however, denies Amergent's motion for sanctions, and affirms Judge Netburn's decision to strike the memorandum.
On or about March 12, 2010, the parties entered into an agreement under which Amergent agreed to provide certain services and assistance to TransAtlantic with respect to TransAtlantic's obligations as a vessel manager to ensure regulatory compliance. See Pet. Ex. A ("Agreement"). There is now, both parties agree, a dispute as to whether, as Amergent claims, it is owed money under the Agreement, or whether, as TransAtlantic claims, Amergent's bills reflect excessive work and costs. See Pet. ¶ 6; see also Amergent Opp'n 2.
The Agreement contains an arbitration clause. It states that the "Agreement shall be construed under Connecticut law" and that "[a]ll disputes under this Agreement shall be resolved through arbitration." Agreement ¶ 17. The parties agree that the clause is valid, and they appear to agree that their dispute is, ultimately, to be resolved in arbitration. Pet. ¶ 7; Amergent's Opp'n 2. The Agreement does not, however, specify an arbitral forum, and the parties have not agreed to one. As a result, Amergent has initiated an arbitration, and three lawsuits have been filed in different districts, in each of which either TransAtlantic or Amergent has petitioned to compel arbitration in a forum of the petitioning party's choice.
TransAtlantic filed the first petition, on November 17, 2015, in the United States District Court for the District of Connecticut. There, TransAtlantic moved to compel arbitration in the District of Connecticut, and asked the district court to appoint a single arbitrator from a list of five members of the Society of Maritime Arbitrators ("SMA"). See TransAtlantic Lines LLC v. Amergent Techs, LLC, No. 15 Civ. 1681 (AWT), 2016 WL 2946143, at *1 (D. Conn. May 11, 2016). On May 11, 2016, the district court in Connecticut dismissed the petition. The district court noted that, on November 25, 2015, soon after TransAtlantic's petition was filed, Amergent had commenced an arbitral proceeding in California, under the auspices of the Marine Arbitration Association ("MAA"), and that TransAtlantic had refused to participate in the proceeding. Id. at *4.2 The district court reasoned that because "the arbitration clause does not specify a venue for arbitration," "Amergent's attempt to arbitrate in California was not contrary to the parties' agreement," and there was, therefore, no basis to find "a refusal to arbitrate on Amergent's part." TransAtlantic Lines LLC, 2016 WL 2946143, at *4. Accordingly, the district court held, there was no basis on which it could compel Amergent to arbitrate elsewhere. Id. at *3-4.
On May 12, 2016, the day after the Connecticut lawsuit was dismissed, each party formally demanded that the other arbitrate in its preferred forum. Referring to the arbitration it had commenced in California, Amergent demanded of TransAtlantic: "Please advise no later than 5:00 p.m. EST on May 13, 2016, if you agree to arbitrate Case No. 11301501 with the [MAA]." Gutowski Rule 11 Decl. Ex. 6. TransAtlantic, in turn, demanded of Amergent: Pet. Ex. B, Dkt. 1-1.
Also on May 12, 2016, after the 1 p.m. deadline it had set had passed, TransAtlantic filed the Petition in this case. In it, TransAtlantic sought to compel arbitration in New York; it asked the Court to appoint one of five SMA-affiliated arbitrators. Pet. ¶¶ 18, 20. TransAtlantic contended that Amergent—which had been found in the Connecticut case not to have refused to arbitrate—was now refusing to do so, by failing to accede to TransAtlantic's demand of the same day that it arbitrate pursuant to the SMA in New York. Pet. ¶ 14.
Finally, on May 12, 2016, after TransAtlantic filed the Petition here, Amergent filed a petition in the United States District Court for the Southern District of California. Amergent sought to compel TransAtlantic to arbitrate in California, specifically, in the arbitration it had initiated before the MAA. See Petition, Amergent Techs, LLC v. TransAtlantic Lines LLC, No. 16 Civ. 1140 (JLS) (S.D. Cal. May 12, 2016) (). The district court in California has stayed that case pending this Court's ruling on Amergent's motions to dismiss. See Order Extending Stay, Amergent Techs, LLC, No. 16 Civ. 1140 (JLS) (S.D. Cal. July 7, 2016) ().
Amergent moves to dismiss on multiple grounds. These include the same ground on which the Connecticut district court found dismissal required: that Amergent, far from resisting arbitration so as to justify an order compelling it to arbitrate, had itself initiated an arbitration on terms that appeared consistent with the parties' arbitration agreement and repeatedly expressed willingness to arbitrate. While that basis for dismissal appears substantial, this Court need not reach that issue. That is because dismissal of the Petition is required, at the threshold, for lack of personal jurisdiction over Amergent.
TransAtlantic's Petition does not recite any basis on which this Court could find personal jurisdiction over Amergent. It does not allege that Amergent has any contacts with this District, nor that Amergent has undertaken activities within it. Indeed, apart from alleging that TransAtlantic (1) demanded arbitration in New York, Pet. ¶¶ 12-13, and (2) now seeks to arbitrate in New York, id. ¶ 18, the Petition does not mention New York. And the section of the Petition entitled "Jurisdiction," while reciting the Federal Arbitration Act, 9 U.S.C. §§ 2 et seq. as the basis for subject matter jurisdiction, is conspicuously silent as to personal jurisdiction.
Defending against Amergent's motion to dismiss for lack of personal jurisdiction, TransAtlantic has instead filed materials with the Court, which, it asserts, reflect that the parties agreed to arbitrate before the SMA, an arbitral body headquartered in New York, and argues that Amergent thereby can be sued here. See, e.g., Dkts. 19, 27. Specifically, TransAtlantic argues that Amergent, in a January 28, 2016 email by its counsel, Jeffrey D. Poindexter, entered into "a plenary agreement to New York arbitration." Pet'r's Sur-Reply 1; see also Gutowski Decl. Ex. 6 (the "Poindexter Email"), Dkt. 20-1. Poindexter's email was sent to TransAtlantic's counsel, Peter Gutowski, and copied another counsel for Amergent, Rick Horn. In relevant part, Poindexter's email stated:
My client initiated an arbitration with SMA, which you caused to be dismissed. My client has agreed to arbitrate with SMA, and has been pushing for arbitration for months. I'm very certain that if there is a disagreement over the specific arbitrator that SMA will have the ability to decide that even if it does not have a specific rule addressing the topic.
Poindexter Email 1.
Amergent disputes that the Poindexter Email reflects a meeting of the minds between the parties to arbitrate before the SMA. As proof of this, Amergent submits the email Gutowski sent Poindexter in response the same day, on TransAtlantic's behalf. See Poindexter Decl. Ex. 7 (the "Gutowski Response"), Dkt. 22-1.3 To denote his response to the Poindexter Email, Gutowski inserted parenthetical comments into its text. The relevant part of the exchange is as follows, with Gutowski's response appearing in bold and underlined:
My client has agreed to arbitrate with SMA, and has been pushing for arbitration for months. (Inaccurate - you only recently said you would agree to SMA but only to the shortened procedure, which we consider inappropriate - see mine today). I'm very certain that if there is a disagreement over the specific arbitrator that SMA will have the ability to decide that even if it does not have a specific rule addressing the topic. (Not accurate - no such mechanism.)
Gutowski Response 1-2 (emphasis added).
"[T]he plaintiff bears the burden of establishing that the court has jurisdiction over the defendant." DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001) (quoting Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999)). "[T]he showing a plaintiff must make to defeat a defendant's claim that the court lacks personal jurisdiction over it 'varies depending on the procedural posture of the litigation.'" Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 84 (2d Cir. 2013) (per curiam) (quoting Ball v....
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