United States District Court, S.D. New York
Padmaja Chinta, Cittone & Chinta LLP, New York, NY.
David Gregg, Trachtendberg, Trachtendberg, Rodes, and Friedberg, NY, NY.
OPINION & ORDER
LORETTA A. PRESKA, District Judge.
Plaintiff Arial Technologies, LLC ("Arial") brings this diversity action against Defendants Aerophile S.A. ("Aerophile") and Aerophile Orlando, LLC ("Orlando") (collectively, "Defendants") alleging breach of contract, fraud and tortious interference relating to a contract for a helium passenger balloon that Arial sought to operate at the San Diego Zoo. This is the third forum to hear this dispute. Arial brought a nearly identical action in the New York County Supreme Court that was dismissed without prejudice on the grounds that the contract between Arial and Aerophile required the parties to proceed to mediation in France before bringing the suit to court. After the parties failed to reach an agreement in mediation, Defendants filed suit in France seeking a declaratory judgment that the contract is no longer in force or effect, and now Arial seeks to land the dispute in the Southern District of New York. Defendants move to dismiss on the grounds that the contract between Aerophile and Arial contains a forum selection clause granting the French courts exclusive jurisdiction over this dispute. Defendants also move to dismiss the claims against Orlando on the grounds that this Court lacks in personam jurisdiction. For the reasons that follow, Defendants' motions are GRANTED.
Arial is a Delware company established to operate a helium passenger balloon ride at the San Diego Zoo in California. (Compl. ¶ 2.) Aerophile is a French manufacturer of tethered helium balloons. (Id. ¶¶ 3-4.) On April 28, 2005, Arial and Aerophile executed a contract in New York providing for the sale and installation of a passenger balloon at the San Diego Zoo and for equipment and services related to the operation of the balloon. (Id. ¶¶ 8, 15-16.) The contract prohibited Aerophile from directly or indirectly soliciting business with the San Diego Zoo and granted Arial territorial exclusivity for passenger balloons within a 250-mile radius of the zoo. (Id. ¶ 17; Ex. A ("Contract") at 12 § 11.)
Arial alleges that in 2011 the balloon became inoperable. (Id. ¶¶ 24-26.) When Aerophile came to inspect the balloon, Aerophile offered to enter into a joint venture with Arial to operate the balloon at the San Diego Zoo and then, without permission from Arial, began to negotiate directly with the zoo in violation of the exclusivity clause. (Id. ¶¶ 25-27.) Arial's contract with the San Diego Zoo was not renewed. (Id. ¶ 30.) Because the contract was not renewed, Arial defaulted on loans, and the balloon and equipment were foreclosed on. (Id. at ¶ 30.) Aerophile then purchased the foreclosed on equipment for a substantially reduced price, a scheme Arial contends is a repeated practice. (Id. ¶ 32.)
Contractual Provisions Designating Choice of Forum and Law
The contract between Arial and Aerophile contains various provisions governing the procedure, forum and choice of law for any disputes. Disputes relating to "the interpretation or performance" of the contract must first go before a conciliator (French mediation). (Contract at 12 §§ 10.1-10.2.) If the parties fail to reach an agreement in conciliation, "either party may file suit for resolution of the dispute in the SENLIS Courts" in France, "which shall have exclusive jurisdiction." (Id. § 10.3.) The contract further provides that "[j]urisdiction for VENDOR insurance issues shall be Paris - France and for all other legal matters shall be New York USA." (Id. § 10.5.) The choice of law clause, appearing under the heading "Applicable Law - Interpretation - Disputes, " states that "[t]he present contract is in accordance with French Law." (Id. § 10.4.)
New York Action
On August 13, 2012, Arial initiated proceedings in the Supreme Court of New York alleging breach of contract, fraud and tortious interference, and seeking a restraining order to prevent Aerophile from operating a balloon in San Diego. (Compl. ¶ 33 n.2.) On August 24, 2012, Judge Oing dismissed the action without prejudice, finding that Arial had failed to satisfy the requirement that disputes relating to the interpretation or performance of the contract be referred to a conciliator before the parties could file suit in court. (Decl. of Gwenaëlle Madec ("Madec Decl.") ¶ 2, Ex. 2 at 20-21, ECF No. 12; Contract at 12 §§ 10.1-10.3.)
French Conciliation and Action
Arial and Aerophile attempted to reach an agreement in French conciliation, but on November 8, 2013, an impasse was declared. (Madec Decl. ¶ 4, Ex. 3.) That day, Aerophile filed an action in French court asking for a declaratory judgment that the contract is no longer in effect. (Madec Decl. ¶ 5, Exs. 4-5.) A court date was set for June 24, 2014. (Id. ¶¶ 6-7.) Courtesy copies of the French legal papers were transmitted to Arial's French counsel via e-mail on June 13, 2014. (Id. ¶ 6.) On June 24, 2014, two French firms appeared before the French court claiming to represent Arial. (Id. ¶ 7.) At a hearing on July 15, 2014, Arial identified the firm that that would represent it in the French action, and Arial's counsel confirmed that he had received the Writ of Summons and accompanying exhibits. (Id. ¶ 8.) The French court set November 4, 2014 as the date for Arial to respond to Aerophile's action. (Id.)
Instant Action and Motion to Dismiss
On June 19, 2014, Arial filed the instant diversity action in the Southern District of New York against Defendants Aerophile S.A. and Aerophile Orlando alleging nearly identical claims to those initially raised in New York state court - breach of contract, fraud, and tortious interference with contract and business relations. (Compl. ¶¶ 38-64.) On August 11, 2014, Defendants filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6) and the doctrine of forum non conveniens on the grounds that the contract contains a forum selection clause granting exclusive jurisdiction to the French court. (Mem. of Law in Supp. of Defs.' Mot. to Dismiss ("Defs.' Mem."), ECF No. 13.) Defendants also moved to dismiss the complaint as it relates to Defendant Orlando for lack of in personam jurisdiction in accordance with Fed.R.Civ.P. 12(b)(2). (Id.) Plaintiffs filed an ...