Case of the Day: Pinnacle Packaging Co. v. Constantia Flexibles GmbH

The case of the day is Pinnacle Packaging Co. v. Constantia Flexibles GmbH (N.D. Okla. 2015). Pinnacle and the other plaintiffs served a notice for the deposition of Thomas Unger, the CEO of Constantia, and for the depositions of corporate representatives of Constantia and One Equity Partners. Unger resides in Germany. Constantia’s offices are in Austria, and One Equity’s officers are in Germany. The depositions were to take place in New York. The defendants moved for a protective order, arguing that the depositions should take place in Germany and Austria rather than in New York.
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RSVP for “Service of Process and Taking of Evidence Abroad”

Readers, here is the official program for the November 2 event on the Hague Service and Evidence Conventions, with a link to the preregistration page. I hope you can make it!

Service of Process and Taking of Evidence Abroad: The Impact of Electronic Means” on the Operation of the Hague Conventions
An Event to Celebrate the 50th Anniversary of the 1965 Hague Service Convention and the 45th Anniversary of the 1970 Hague Evidence Convention
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Case of the Day: McAllister-Lewis v. Goodyear

Harley Davidson Ultra Classic
Harley Davidson Ultra Classic. Credit: Maxwell Hamilton. CC BY 2.0 license
The case of the day is McAllister-Lewis v. Goodyear Dunlop Tires North America, Ltd. (D.S.D. 2015). Judith McAllister-Lewis sued Goodyear Dunlop Tires North America and the Goodyear Tire & Rubber Co. for wrongful death after her husband died in a motorcycle accident on the highway when the tire of his Harley Davidson Ultra Classic had a “catastrophic deflation.” The tire was designed, manufactured, and sold in the US but built at a Goodyear and Dunlop plant in Montlucon, France. The plaintiff served a discovery on the defendants, both US entities, seeking information in the possession of GDTF, an indirect subsidiary of Goodyear in France. The defendants argued that answering the questions McAllister-Lewis had posed about “which GDTF employees were involved in the manufacturing and/or inspection process” might violate French privacy law.
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Case of the Day: In re Application of Kazakhstan

The case of the day is In re Application of Republic of Kazakhstan (S.D.N.Y. 2015). I love this case, because it raises one of my favorite issues under § 1782. In 2013, an arbitral tribunal in Sweden awarded Anatolie Stati and related parties $199 million against Kazakhstan on account of the illegal seizure of a gas plant. Kazakhstan brought an action to set aside the award in the Swedish courts, and it sought leave in New York to take discovery from Clyde & Co., which had acted as counsel for third parties in other arbitrations where the value of the gas plant was at issue. Kazakhstan’s hope was that it would find evidence that Stati had used a lower valuation for the plant in those arbitrations than it used in the arbitration against Kazakhstan.
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Case of the Day: Micula v. Government of Romania

The case of the day is Micula v. Government of Romania (D.D.C. 2015). Viorel Micula alleged that he had made investments in Romania in reliance on certain incentives offered by the Romanian government. He claimed that Romania later revoked the incentives, causing him to suffer a loss, and that Romania had acted in violation of its bilateral investment treaty with Sweden. Micula demanded an ICSID arbitration, which resulted in an award in his favor (and in favor of several other investors) of more than $116 million.

Romania asked ICSID to annul the award, and at Romania’s request, ICSID’s secretary-general granted an initial stay of enforcement of the award. Shortly thereafter, Micula brought a petition in Washington under 22 U.S.C. § 1605a seeking ex parte confirmation of the award. (Ex parte confirmation is a well-established procedure in the SDNY; I discussed the issue in a post on Mobil Cerro Negro v. Venezuela). ICSID later constituted an ad hoc committee to consider whether the award should be stayed pending a decision on annulment. The committee agreed to a further stay, but only if Romania gave a written assurance that it would pay the award in full if annulment were denied. Romania failed to give the written assurance, and the committee revoked the initial stay.
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Case of the Day: Stichting Shell Pensionenfonds v. Krys

The case of the day is Stichting Shell Pensionenfonds v. Krys [2014] UKPC 41. Shell, a Dutch pension fund, had invested in shares of Fairfield Sentry Ltd., a BVI mutual fund and the largest “feeder fund” for Bernard L. Madoff Investment Securities LLC, which needs no introduction. After Madoff’s arrest, Shell immediately sought to redeem its shares in Fairfield, but of course it received nothing. So Shell applied to a court in Amsterdam, its home jurisdiction, for an order attaching bank accounts of Fairfield held by Citco Bank Nederland BV, Fairfield’s asset custodian, in its Dublin branch. The Dutch court approved the attachment; everyone agreed that the Dutch court had jurisdiction over Citco. The High Court of the BVI ordered Fairfield to be wound up and appointed Krys and Lau as liquidators. Shell submitted a claim in the BVI insolvency claim but its claim was rejected. So the situation was that if Shell was allowed to litigate the merits of its claim in the Netherlands and succeeded there, then it would receive the full amount of its claim on account of the attachment, and in effect to have priority over other creditors, who could not hope for such a recovery in the BVI insolvency proceedings. Indeed, as Shell admitted, that was the point of the attachment. Krys and Lau moved in the BVI court for an anti-suit injunction enjoining Shell from prosecuting its claim in the Netherlands and requiring Shell to procure a release of the attachment. The BVI Court of Appeal held in favor of the liquidators, and Shell appealed to the Privy Council.
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Case of the Day: Kumkang Valve Manufacturing Co. v. Enterprise Products

The case of the day is Kumkang Valve Manufacturing Co. v. Enterprise Products Operating LLC (Tex. Ct. App. 2014). Enterprise purchased 1,000 high-pressure valuves from Kumkang, a Korean firm, for use in its gas-processing plants in Colorado and Wyoming. The valves failed, and Enterprise paid $11 million to replace them. Enterprise sued Kumkang in 2007 for breach of warranty in the Texas state court. In 2009, while the case was pending, Kumkang sought protection under Korean bankruptcy law, and it then filed a Chapter 15 petition in a bankruptcy court in the Southern District of Texas seeking recognition of the Korean main proceeding. The bankruptcy court recognized the Korean proceeding, which had the effect of staying the Texas litigation.

Enterprise did not appear in the Korean bankruptcy case, and it was not included on the list of creditors in the Korean proceeding, or mentioned in the plan of reorganization the Korean court approved. Kumkang did not inform the US bankruptcy court of the approval of the plan in Korea, and Kumkang’s US lawyer informed the US bankruptcy court that he had been unable to communicate with his client and had no information about the status of the Korean proceedings. The US bankruptcy court, after providing a final opportunity for the US lawyer to obtain information from his client, dismissed the Chapter 15 case and lifted the stay.

In the main case, the parties stipulated that Enterprise had suffered $11 million in damages due to breach of express warranty and breach of the warranty of fitness for a particular purpose, and Kumkang moved for summary judgment on the affirmative defense of discharge in bankruptcy. Enterprise cross-moved for summary judgment. The trial court gave judgment for Enterprise, and Kumkang appealed.
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Case of the Day: Landauer Ltd. v. Joe Monani Fish Co.

The case of the day is Landauer Ltd. v. Joe Monani Fish Co. (N.Y. 2014). This is the appeal of the case of the day from January 9, 2013. The trial court had dismissed an action for recognition and enforcement of an English judgment on personal jurisdiction grounds, and the Appellate Division (New York’s intermediate court) affirmed. In today’s appeal, the Court of Appeals (New York’s highest court) reversed.
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Case of the Day: Elobied v. Baylock

The case of the day is Elobied v. Baylock (E.D. Pa. 2014). Hashim Elobied sued Trescott Baylock for breach of an oral contract for the purchase and sale of a Bentley Continental GT. Let me just pause to marvel at an oral contract for the purchase of a Bentley. I’m not sure which law applies to the substance of this case, but I hope the governing law doesn’t have the Statute of Frauds!
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