Gessler, et al. v. Sobieski Destylarnia, et al., No. 07-2273 (2d Cir. 2009)

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07-2273-cv Gessler, et al. v. Sobieski Destylarnia, et al. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2008 (Argued: September 22, 2008 Decided: July 13, 2009 Docket No. 07-2273 ALTVATER GESSLER-J.A. BACZEWSKI INTERNATIONAL (USA) Inc. and ALTVATER GESSLER-J.A. BACZEWSKI GmbH, Plaintiffs-Counter-Defendants-Appellants, v. SOBIESKI DESTYLARNIA S.A. and INTERNET WINES & SPIRITS, INC. and DOES 1-20, Defendants-Appellees, ADAMBA IMPORTS INTERNATIONAL, Defendant-Counter-Claimant-Appellee. ________________ _____ Before: WESLEY, HALL, and GIBSON,1 Circuit Judges. Appeal from an order of the United States District Court for 34 the Southern District of New York (Harold Baer Jr., District 35 Judge, presiding), entered on May 2, 2007, granting Defendants- 36 Appellees motion to dismiss for improper venue and dismissing 37 action in its entirety against all defendants. 38 court found that the Plaintiffs were bound by valid and 39 enforceable forum selection clauses which specified venue in 1 The district The Honorable John R. Gibson, Circuit Judge, United States Court of Appeals for the Eighth Circuit, sitting by designation. 1 Poland. 2 forum selection clauses at issue and remand for further 3 proceedings. We conclude that Gessler s claims are not subject to the 4 ________________ 5 CHRISTOPHER L. DEININGER, for 6 Plaintiffs-Counter-Defendants- 7 Appellants. 8 9 JAMIE D. UNDERWOOD, for Defendants- 10 Appellees. 11 _______________ 12 JOHN R. GIBSON, Circuit Judge. BACKGROUND2 13 14 Plaintiffs-Appellants Altvater Gessler-J.A. Baczewski 15 International (USA) Inc. ( Gessler USA )and Altvater Gessler-J.A. 16 Baczewski GmbH ( Gessler GmbH ) (collectively Gessler ) are 17 closely held corporations owned by members of the Gessler family. 18 Gessler is the corporate continuation of two businesses that have 19 manufactured and sold alcoholic beverages since the 1700s. 20 the products Gessler manufactures and distributes is a honey 21 liqueur known as krupnik, which is made using a one-hundred-year- 22 old secret family recipe. 23 as a trademark with the Austrian Patent Office in 1960, and has Among Gessler registered the word KRUPNIK 2 Because Gessler appeals an order granting DefendantsAppellees motion to dismiss, the facts are stated in the light most favorable to Gessler. 2 1 marketed krupnik in the United States and elsewhere in the world 2 since the early 1960s. 3 into two written agreements with a Polish company, Polmos, 4 authorizing it to produce krupnik using the secret Gessler family 5 recipe. 6 1996, contain forum selection clauses stating that any disputes 7 arising out of the agreements would be resolved by the Economic 8 Court in Gdansk, Poland, under Polish law.3 During the 1990s, Gessler USA entered These licensing agreements, entered into in 1991 and These licensing 3 The agreements were executed in Polish and both parties have provided English translations. Gessler s translations of the relevant clauses read as follows: [1991 Agreement:] §9 Any disputes resulting from this agreement will be adjudicated according to Polish law by the Economic Court in Gdansk. §10 In matters not regulated by this agreement the rules of the Civil Code and the obligatory laws concerning trademarks will apply. [1996 Agreement:] §24 Any disputes resulting from this agreement will be adjudicated according to Polish law by the Economic Court in Gdansk. §25 In matters not regulated by this agreement the rules of the Civil Code will apply as well as the obligatory laws concerning trademarks. Sobieski has translated the agreements somewhat differently: [1991 Agreement:] §9 Any disputes concerning this agreement will be settled in accordance with the Polish law by the Economic Court in Gdansk. §10 To issue[s] not regulated by this agreement, provisions of the Civil Code and the current Trademark Act apply. [1996 Agreement:] Article 24 Any disputes resulting from this Agreement shall be resolved in compliance with Polish law by the Economic Court in Gdansk, Poland. 3 1 agreements ended by mutual agreement on December 31, 2000, 2 thereby terminating Polmos s authority to produce Gessler s 3 krupnik recipe. 4 Thereafter, in 2003, Defendant-Appellee Sobieski Destylarnia 5 S.A. ( Sobieski ), a Polish corporation, acquired rights in 6 Polmos. 7 unauthorized access to Gessler s secret recipe for krupnik. 8 January 2006, Gessler discovered advertisements on the internet 9 website of Sobieski allegedly trading upon the goodwill, trade At this time, according to Gessler, Sobieski gained In 10 name, trademark, and historic reputation of Gessler and 11 referencing Gessler s historic Baczewski Distillery. 12 advertisements allegedly claimed that Sobieski was manufacturing 13 krupnik in accordance with Gessler s secret recipe. 14 discovered that Sobieski was importing its krupnik into the 15 United States through its agent, Defendant-Appellee Adamba 16 Imports International, Inc. ( Adamba ), which has offices located 17 in Brooklyn, New York. 18 four shipments of Sobieski s krupnik into the United States, two 19 of which were shipped to an office building in New York. 20 The Gessler then Gessler alleges that there were at least Gessler brought suit against Sobieski and Adamba4 in the Article 25 Provisions of the Civil Code and the applicable Act on trademarks shall apply to any issues not governed herein. 4 Gessler s suit also included claims against DefendantsAppellees Internet Wines & Spirits, Inc., an Illinois corporation that sells alcoholic beverages in the U.S. and maintains the website www.internetwines.com, and against John Does 1-20, whom 4 1 United States District Court for the Southern District of New 2 York, alleging claims of unfair competition, trademark dilution, 3 trademark infringement, deceptive trade practices, and unjust 4 enrichment. 5 improper venue, lack of personal jurisdiction, and insufficiency 6 of service of process. 7 motion to dismiss for improper venue based on the forum selection 8 clauses without reaching the other two issues and dismissed the 9 complaint in its entirety against all defendants. Sobieski moved to dismiss the claims based on The district court granted Sobieski s 10 11 DISCUSSION Gessler argues that the district court erred in dismissing 12 its claims against Sobieski and the other defendants based on the 13 forum selection clauses. 14 there is no evidence in the record to support the conclusion that 15 Sobieski, a non-party to the licensing agreements, is entitled to 16 enforce the forum selection provisions against Gessler. 17 also argues that Sobieski failed to establish why Gessler GmbH, 18 also a non-party to the agreement, should be subject to the 19 clauses. 20 clauses do not apply to the subject matter of this suit because 21 the claims against Sobieski do not arise out of the licensing 22 agreements and because the agreements terminated before the 23 events that give rise to this suit took place. In particular, Gessler claims that Gessler Further, Gessler claims that the forum selection Finally, Gessler Gessler asserts are individuals and entities who are conscious, dominant, active, forces behind the wrongful acts of Defendants. 5 1 asserts that even if dismissal of its claims against Sobieski was 2 proper, the court erred in dismissing its claims against the 3 other defendants. 4 Where the district court has relied on pleadings and 5 affidavits to grant a Rule 12(b)(3) motion to dismiss on the 6 basis of a forum selection clause, our review is de novo. 7 Phillips v. Audio Active Ltd., 494 F.3d 378, 384 (2d Cir. 2007). 8 In general, to obtain dismissal based on a forum selection clause 9 the party seeking enforcement of the clause must demonstrate 10 that: (1) the clause was reasonably communicated to the party 11 resisting enforcement; (2) the clause was mandatory and not 12 merely permissive; and (3) the claims and parties involved in the 13 suit are subject to the forum selection clause. 14 After the party seeking enforcement has established these three 15 conditions, the burden shifts to the party resisting enforcement 16 to rebut the presumption of enforceability by making a 17 sufficiently strong showing that enforcement would be 18 unreasonable or unjust, or that the clause was invalid for such 19 reasons as fraud or overreaching. Id. (quoting M/S Bremen v. 20 Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)). 21 trouble with the third element. 22 Sobieski failed to demonstrate below that Gessler s claims are 23 subject to the forum selection clauses at issue, we need not 24 address the other Phillips elements. 25 Id. at 383-84. Sobieski runs into Because we conclude that Here, Sobieski moved to dismiss for improper venue pursuant 6 1 to Federal Rule of Civil Procedure 12(b)(3), arguing that Gessler 2 was bound by the forum selection clauses contained in the 1991 3 and 1996 licensing agreements between Gessler USA and Polmos. 4 Even if we were to assume that Sobieski is the successor in 5 interest to Polmos and thereby entitled to enforce the agreements 6 against Gessler, we conclude that the subject matter of Gessler s 7 claims is not covered by the forum selection clauses contained in 8 those agreements. 9 The forum selection clauses relied on by Sobieski specify 10 venue in Poland for all claims resulting from the licensing 11 agreements.5 12 the licensing agreements because its claims are limited causes 13 of action sounding in infringement and dilution of a United 14 States trademark, application of United States trademark laws, 15 unfair competition under the laws of the United States and New 16 York State, deceptive trade practices under New York State law, 17 and the related claim of unjust enrichment from the defendant s 18 unauthorized use and exploitation of the plaintiff s trade name, 19 trademark, and proprietary recipes. 20 its claims do not sound in breach of contract or otherwise Gessler argues that its claims do not result from 5 In sum, Gessler argues that Both parties agree that the proper translation of the relevant language in the 1996 agreement is resulting from. Sobieski, however, claims that the 1991 agreement instead employs language applying to all claims concerning the licensing agreement. At this stage in the litigation we must view the facts in the light most favorable to Gessler. Phillips, 494 F.3d 384. Accordingly, we consider the resulting from language to be the prevailing interpretation. 7 1 2 result from the licensing agreements. This Court recently explained that [h]owever important a 3 forum selection clause is to the efficient functioning of 4 international business, it is a creature of contract. 5 494 F.3d at 387 (internal citation omitted). 6 plaintiff s choice of forum will not be disregarded unless the 7 contract evinces agreement by the parties that his claims cannot 8 be heard there. 9 [a plaintiff s] claims as they relate to the precise language of 10 11 Id. Phillips, As such, a The court must examine the substance of the specific clause at issue. Id. at 389. In Phillips, the district court had dismissed the 12 plaintiff s copyright claims based on a determination that any 13 dispute concerning the defendant s rights to exploit 14 [plaintiff s] music was primarily contractual because the 15 defendants had acquired possession of the music legitimately 16 under the contract. 17 a forum selection clause stating that it governed any legal 18 proceedings that may arise out of the agreement, this Court 19 rejected the district court s analysis. 20 Phillips Court explained that it did not understand the words 21 arise out of as encompassing all claims that have some possible 22 relationship with the contract, including claims that may only 23 relate to, be associated with, or arise in connection with 24 the contract. 25 International Dictionary 117 (1981)). Id. at 383. After interpreting language in Id. at 382. The Id. at 389 (citing Webster's Third New 8 Rather, it saw no reason 1 to presume the parties meant anything other than the dictionary 2 definition of the term: to originate from a specified source. 3 Id. at 390. 4 Drawing on this definition, the Phillips Court went on to 5 conclude that plaintiff s rights did not originate from the 6 recording contract: [Plaintiff] does not rely on the recording 7 contract to establish his ownership of the relevant copyrights, 8 but on his authorship of the work . . . . [His] copyright claims 9 do not arise out of the contract because [he] has asserted no 10 rights or duties under that contract . . . . 11 Further, because the contract was only relevant as a defense, 12 the court could not say that plaintiff s copyright claims 13 originate from, and therefore arise out of the contract. 14 at 391. 15 We find Phillips to be controlling here. Id. at 390-91. Id. Although the forum 16 selection clauses advanced by Sobieski employ the language 17 resulting from as opposed to arising out of, the two phrases 18 have very similar meanings. 19 International Dictionary uses the term arise when defining 20 result. 6 21 in contract and are not based on rights originating from the 22 licensing agreements. In fact, Webster s Third New Here, as in Phillips, Gessler s claims do not sound In fact, Gessler s claims may begin in 6 The term result is defined as to proceed, spring, or arise as a consequence, effect, or conclusion. WEBSTER S THIRD NEW INTERNATIONAL DICTIONARY 1937 (1981). 9 1 court without any reference to the contract. 2 Accordingly, Gessler s claims are not subject to the forum 3 selection clauses. 4 claims against Sobieski and the other defendants based on the 5 forum selection clauses. Id. at 392. The district court erred in dismissing the 6 We decline Sobieski s invitation to affirm the district 7 court s dismissal on the alternative grounds of lack of personal 8 jurisdiction or failure to effect service of process. 9 conclude that, given the limited record available at this stage We 10 of the proceedings, those are issues best addressed by the 11 district court on remand. 12 Confezioni Semeraro Paolo, S.R.L., 264 F.3d 32, 37-38 (2d Cir. 13 2001) (where record on appeal is limited, personal jurisdiction 14 best determined by the district court on remand). See Mario Valente Collezioni, Ltd. v. 15 CONCLUSION 16 For the reasons stated above, the order of the district 17 court is reversed and this matter is remanded for further 18 proceedings consistent with this opinion. 10

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