UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
April 8, 1986
STENDIG INTERNATIONAL, INC., Plaintiff,
B. & B. ITALIA, S.p.A., Defendants
The opinion of the court was delivered by: OWEN
MEMORANDUM AND ORDER
OWEN, District Judge
This action is compel arbitration is before me on cross motions for partial summary judgment and various motions for orders either enforcing of restraining arbitration.
Plaintiff Stendig International, Inc. markets furniture throughout the United States. Until recently, 30% of its business was to distribution of furniture made by defendant B & B Italia, S.p.A., an Italian multinational, for which it held an exclusive United States distributorship. Defendant recently declined to renew that distributorship.
Plaintiff does not now contends that the non-renewal of its distributorship was improper under the distribution agreements between the parties. However, plaintiff does claim that under a non-competition clause embodied in a stockholders agreement between Stendig, its 70% shareholder and president, and B & B, which owns the remaining 30% of Stendig, it is entitled to entirely restrain defendant from distributing in the United States, unless plaintiff is the distributor. Defendant claims that the agreement, which appears to prevent defendant from entering the United States market until the year 2050, violates federal antitrust law. This claim is not substantively before me.
Rather, plaintiff, perceiving defendant's announced intention to begin distributing its furniture in the U.S. as a breach of the stockholders' agreement, now moves to compel arbitration under the broad arbitration clause therein and for a preliminary injunction restraining defendant from competing pending arbitration. Defendant claims that arbitration would be inappropriate since important questions of antitrust law are necessarily involved and by cross motion seeks to enjoin the arbitration. Secondarily, therefore, plaintiff requests that if I deny arbitration, I also enjoin another arbitration pending between the parties until after the resolution of this action.
The law in the Second Circuit is that the right to a judicial determination of anti-trust claims may not be waived contractually, and arbitration clauses purporting to require arbitration of anti-trust claims are not enforceable.American Safety v. J.P. Maguire, 391 F.2d 821 (2d Cir. 1968). The recent Supreme Court case ofMitsubishi v. Soler , 473 U.S. 614, 53 U.S.L.W. 5069, 87 L. Ed. 2d 444, 105 S. Ct. 3346 (1985), although not directly on point
, questions the Second Circuit reasoning inAmerican Safety. However, it does not overrule it;American Safety is therefore binding on this court.
The only question then, is whether a litigable antitrust claim is pled here.
Without expressing any judgment as to the merits, total exclusions of defendant and defendant's products from the entire United States until 2050 clearly raises such a claim.See e.g. Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 53 L. Ed. 2d 568, 97 S. Ct. 2549 (1977);Polk Bros. v. Forest City Enterprises Inc., 776 F.2d 185 (7th Cir. 1985). UnderAmerican Safety, then, the arbitration clause is invalid.
Accordingly, defendant's motion to enjoin arbitration is granted, and plaintiff's motions to stay pending arbitration and for a preliminary injunction pending arbitration are denied as moot.
No reason appearing to stay the arbitration of stock valuation, that motion is denied. All relief requested in the complaint having been denied, the action is dismissed, without prejudice to repleading within 60 days.
Dated: New York, New York
April 8, 1986