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Ancile Inv. Co. v. Archer Daniels Midland Co.

United States District Court, S.D. New York

January 16, 2014

ANCILE INVESTMENT COMPANY LIMITED, Plaintiff,
v.
ARCHER DANIELS MIDLAND COMPANY, Defendant

For Ancile Investment Company, Plaintiff: Andrea J. Pincus, Joseph Benjamin Teig, Oliver K. Beiersdorf, LEAD ATTORNEYS, Reed Smith (NYC), New York, NY.

For Archer Daniels Midland Company, Defendant: James S. Yu, LEAD ATTORNEY, Seyfarth Shaw L.L.P., New York, NY; John Carl Sabetta, LEAD ATTORNEY, Seyfarth Shaw LLP(Boston), Boston, MA.

Page 317

Opinion & Order

Kimba M. Wood, United States District Judge.

Plaintiff Ancile Investment Company (" Ancile" ) filed the above-captioned action on November 5, 2008, against Defendant Archer Daniels Midland Company (" ADM" ), seeking damages for alleged violations of Brazilian and state law. [Dkt. No. 1]. After granting ADM's motion to

Page 318

dismiss Ancile's state law claims, [Dkt. No. 79], this Court granted ADM's motion to dismiss Ancile's sole remaining claim--alleging a violation of the extra-contractual duty of good faith under Brazilian law--on November 29, 2012. [Dkt. No. 121]. ADM now seeks to recover attorney's fees that it incurred while successfully defending against Ancile's Brazilian law claim. [Dkt. No. 124].

For the reasons set forth below, ADM's motion for attorney's fees is DENIED.

I. DISCUSSION[1]

ADM seeks to recover $433,193 of attorney's fees pursuant to Federal Rule of Civil Procedure 54(d)(2) and Brazilian Code of Civil Procedure Article 20. Ancile opposes any award, and argues that (A) ADM's eligibility for attorney's fees is governed by New York law, not Brazilian law; and (B) even if Brazilian law applies, ADM has failed to demonstrate that it is entitled to fees. The Court finds (A) that New York law applies to ADM's fee motion and ADM is thus not entitled to fees; and, alternatively, (B) that even if Brazilian law applies to ADM's claims, ADM has failed to demonstrate that it is entitled to fees.

A. Choice of Laws

To determine whether Brazilian or New York law governs ADM's fee motion, the Court must consider two " conceptually distinct" issues. Liberty Synergistics Inc. v. Microflo Ltd., 718 F.3d 138, 151 (2d Cir. 2013). " First, a federal court exercising diversity jurisdiction must apply the choice-of-law rules of the state in which the court sits to determine the rules of decision that would apply if the suit were brought in state court." Id. " Second, after using state conflict-of-laws principles to ascertain the rules of decision that would apply in the state courts of the federal forum, federal courts apply those state rules of decision that are 'substantive' under [ Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)], and are consistent with federal law." Liberty Synergistics, 718 F.3d at 151-52 (quoting Sun Oil Co. v. Wortman, 486 U.S. 717, 726-27, 108 S.Ct. 2117, 100 L.Ed.2d 743 (1988)).

Accordingly, in order to adjudicate ADM's fee motion, the Court must first apply New York's choice-of-law rules to determine which rule of decision--New York attorney's fee law or Brazilian attorney's fee law--would apply to the suit if it were brought in state court. The Court must then determine whether this rule of decision is " substantive" under Erie . If the rule of decision is substantive under Erie, the Court must apply it in this case. For the reasons set out below, the Court finds that (1) New York law governs ADM's fee motion; and (2) the Court must apply New York law because it is ...


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