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NGC Network ASIA, LLC v. Pac Pacific Group International

September 20, 2010

NGC NETWORK ASIA, LLC, PETITIONER,
v.
PAC PACIFIC GROUP INTERNATIONAL, INC., RESPONDENT.



The opinion of the court was delivered by: Paul G. Gardephe, U.S.D.J.

MEMORANDUM OPINION & ORDER

Petitioner NGC Network Asia, LLC ("NGC") brings this action seeking confirmation of an October 1, 2009 arbitration award in the amount of $972,362.09 issued against Respondent Pac Pacific Group International, Inc. ("PPGI").

PPGI moves to transfer, stay or dismiss this action. For the reasons stated below, PPGI's motion to transfer, stay or dismiss will be DENIED.

BACKGROUND

NGC, PPGI, and China Central Television ("CCTV") entered into a Memorandum of Understanding ("MOU") providing that CCTV would air a National Geographic program distributed through NGC. (Oct. 13, 2009 Solum Decl., Ex. C at 1) The MOU provides that PPGI, which brokered the deal between NGC and CCTV, would receive a portion of the advertising revenues generated by the broadcast. (Id., Ex. C at 1-2) NGC's compensation was in the form of air time during the broadcast, which CCTV authorized NGC to sell. CCTV also authorized NGC to sell sponsorships for the program. (Id.) The participants in the MOU were not guaranteed revenue; the amount of money the agreement would generate was dependent entirely on the response of potential advertisers and sponsors. (Id., Ex. C at 2) In September 2001, NGC notified PPGI that the MOU would be terminated effective October 21, 2001, because the arrangement had not generated sufficient revenue. (Id.)

On March 1, 2007, PPGI filed a "Notice of Intent to Arbitrate/Amended Claim" against NGC with the American Arbitration Association ("AAA"). (Id., Ex. A) PPGI alleged that NGC did not use commercially reasonable efforts to sell the air time and sponsorships, depriving PPGI of the compensation it was entitled to under the MOU. (Id., Ex. A at 5-7) PPGI brought claims for breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent inducement, rescission, quantum meruit and unjust enrichment. (Id., Ex. A at 9-14)

On March 21, 2007, NGC petitioned the Supreme Court for the State of New York, New York County, to stay the arbitration and dismiss PPGI's claims on the grounds that they were time-barred. (Id., Ex. F) PPGI removed that action to this court and filed a cross-petition to compel arbitration. (Id., Exs. G, H) On July 31, 2007, the Hon. Paul A. Crotty denied NGC's petition to stay the arbitration and granted PPGI's cross-petition to compel arbitration. (Id., Ex. I)

Before the arbitration hearing was held, the parties conducted discovery and engaged in motion practice. (Id., Ex. C at 5) The arbitration hearing began on March 30, 2009, in New York, New York, before arbitrator Robert C. O'Brien, and continued over four days. (Id.) Both sides were permitted to make opening and closing statements, to submit documents, and to introduce testimony. (Id., Ex. C at 5-6)

On July 11, 2009, O'Brien denied PPGI's claims and permitted NGC to move for an award of attorney's fees and costs as the prevailing party in the arbitration. (Id., Ex. C) O'Brien noted that the MOU "provides for an award of attorneys' fees and costs to the prevailing party in any dispute arising under the MOU." (Id., Ex. C at 21) On October 1, 2009, O'Brien issued the final award, granting NGC $972,362.09 in attorneys' fees and costs. (Id., Ex. E)

On October 13, 2009, NGC petitioned this Court for confirmation of the arbitration award. (Dkt. No. 1)

DISCUSSION

PPGI moves to dismiss NGC's petition for lack of subject matter jurisdiction, lack of personal jurisdiction, and improper venue. In the alternative, PPGI moves to transfer this action to the United States District Court for the Central District of California, so that it may be consolidated with Pac Pacific Group International, Inc. v. NGC Network Asia, LLC, No. 09 Civ. 7878 (GHK), an action filed on October 28, 2009, in which PPGI seeks an order vacating the arbitration award (the "California Action").*fn1 Absent transfer, PPGI seeks a stay of this action, in deference to the California Action.

I. THIS COURT HAS SUBJECT MATTER JURISDICTION

Federal courts have diversity jurisdiction over "civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States." 28 U.S.C. § 1332(a)(1); see also Hallingby v. Hallingby, 574 F.3d 51, 56 (2d Cir. 2009). "[A] corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business. . . ."

28 U.S.C. § 1332(c)(1).

NGC is incorporated in Delaware and its principal place of business is in Hong Kong. (Nov. 16, 2009 Solum Decl. ¶ 2) PPGI is a California corporation with its principal place of business in California. (Id. ¶ 3) NGC's Petition for Confirmation of the Arbitration Award seeks judgment in the amount of $972,362.09. Because the parties are citizens of different states and the amount in controversy exceeds the ...


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