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Atlantic Group Ltd. v. Interpublic Group of Companies

July 13, 2007

ATLANTIC GROUP LTD., PLAINTIFF,
v.
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND INITIATIVE MEDIA WORLDWIDE, DEFENDANTS.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.

OPINION AND ORDER

Plaintiff Atlantic Group Ltd. ("Atlantic") brought suit against Defendants The Interpublic Group of Companies, Inc. ("Interpublic") and Initiative Media Worldwide ("Initiative"), alleging that they unlawfully induced employees of Plaintiff's advertising agency in Kiev, Ukraine to breach their employment contracts. Defendants have moved for summary judgment on the five remaining causes of action: (1) tortious interference with contract, (2) civil conspiracy to tortiously interfere with contract, (3) aiding and abetting tortious interference with contract, (4) tortious interference with business relations, and (5) civil conspiracy to tortiously interfere with business relations. For the reasons stated below, the motion is granted.

BACKGROUND

I. Factual Background

Plaintiff Atlantic, formerly known as Perekhid Media Group, is a corporation registered in the Bahamas. (Defs.' Rule 56.1 Statement ¶¶ 1, 4.) Atlantic's founder, Andrew Bain, formed the company to pursue advertising and media opportunities in the former Soviet Union on behalf of American advertising firms. (Pl.'s Rule 56.1 Statement ¶ 182.)

Defendant Interpublic is a Delaware corporation. (Defs.' Rule 56.1 Statement ¶ 10.) Interpublic owns a variety of advertising and communications firms, including Defendant Initiative, a California corporation. (Id. ¶¶ 9, 11.)

Atlantic created several subsidiary companies with principal operations in Ukraine, including Telemedia, Ltd. (Bain Dep. 20-21, 24-25.) Telemedia's general manager, Sergei Mateev, signed an employment contract with Atlantic in 1997. (Defs.' Rule 56.1 Statement ¶¶ 35, 39.) Mateev's contract contained a clause prohibiting him from working for competitors of Atlantic within one year of leaving the firm. (Second Dovgert Aff., Ex. 9.) Six other employees -- Irina Chernenko, Andrey Kolesnik, Ludmila Yurevna Lukyanova, Oksana Semenova, Aleksey Skukin, and Grigorova Yu*fn1 -- signed employment contracts with Telemedia in 1998. (Certificate of Accuracy by Translator Dagmara Krasa-Berstell, Exs. A-F.) These six employees also signed "agreements on confidentiality, non-interference and proprietary information," which stipulated that the employees would not work for competing agencies within six months of leaving Telemedia. (Second Dovgert Aff., Ex. 10.)

In November 1999, Chernenko, Kolesnik, Lukyanova, Mateev, Semenova, Skukin, and Yu left work at Telemedia and joined a competing firm, Initiative Media/Kiev. (Pl.'s Rule 56.1 Statement ¶¶ 300, 307.) Plaintiff has alleged that Defendants either directly or indirectly induced these seven employees to breach their employment contracts with Telemedia and/or Plaintiff. (Am. Compl. ¶¶ 104, 108-10, 113-14, 118-20, 123-25.)

II. Procedural Background

Defendants' motion for summary judgment was initially filed in January 2003. By order dated March 15, 2004, the Court concluded that Ukrainian substantive law governed Plaintiff's claims, and referred the matter for settlement negotiations. After the parties failed to settle, the Court ordered additional briefing on Ukrainian law in December 2004.

On September 15, 2005, the Court ruled on the summary judgment motion. It granted summary judgment on all eight counts of the Amended Complaint: the three counts sounding in contract and quasi-contract (promissory estoppel, quantum meruit, and breach of contract), and the five counts sounding in tort, the latter based on Defendants' expert's statement that Ukraine is the exclusive venue for tort actions under the Civil Code of Ukraine. However, because Defendants raised the issue of venue only in their supplemental submissions, the Court permitted Plaintiff to apply for restoration of the action to the calendar "upon a showing that adjudication of tort claims in a venue outside Ukraine is permissible pursuant to Ukrainian law." Atl. Group Ltd. v. Interpublic Group of Cos., No. 00 Civ. 7845 (KMW), 2005 WL 2277097, at *4 (S.D.N.Y. Sept. 15, 2005). Plaintiff so applied, and Defendants conceded that Plaintiff's tort claims should not have been dismissed for improper venue. The Court therefore reinstated the five tort claims, and Defendants' motion for summary judgment, by order dated November 17, 2005.

STANDARDS OF LAW

Defendants' motion for summary judgment should be granted only if there is no genuine issue as to any material fact and Defendants are entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The Court must view all facts and construe all ambiguities in the light most favorable to Plaintiff, drawing all permissible inferences in Plaintiff's favor. D'Cunha v. Genovese/Eckerd Corp., 479 F.3d 193, 194 (2d Cir. 2007).

In determining the law of Ukraine, the Court may consider any relevant material or source, whether or not submitted by the parties, and whether or not admissible under the Federal Rules of Evidence. Fed. R. Civ. P. 44.1. The Court's ...


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