Edible International, LLC et al v. Google, LLC
Filing
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ORDER: For the reasons set forth in the attached, Google's 46 motion is DENIED.Signed by Judge Michael P. Shea on 3/5/2019. (Ram, Megha)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
EDIBLE INTERNATIONAL, LLC and Edible IP,
LLC
Plaintiffs,
No. 3:18-cv-00216 (MPS)
v.
GOOGLE, LLC,
Defendant.
RULING ON GOOGLE’S MOTION FOR A PRELIMINARY INJUNCTION AND
CONTEMPT ORDER
Defendant Google, LLC (“Google”) has filed a motion for preliminary injunction and
order of contempt against Plaintiff Edible IP, LLC (“Edible IP”). ECF No. 46. Arguing that
Edible IP’s recent filing of a new lawsuit against Google in Georgia state court has flouted my
earlier order in this case granting Google’s motion to compel arbitration, Google seeks to stop
Edible IP from prosecuting the Georgia action. Id. Primarily because the requested relief is
barred by the Anti-Injunction Act, 28 U.S. C. § 2283, I deny Google’s motion.
I.
Background
Because the parties have requested an expedited ruling in this matter, I assume the
parties’ familiarity with the complaint, briefing, and previous rulings in this case, and I set forth
only the facts, procedural history, and legal standards necessary to explain this ruling.
On February 2, 2018, Plaintiffs Edible International, LLC and Edible IP brought this suit
against Google, alleging violations of the Lanham Act and Connecticut law. ECF No. 1. Google
filed a motion to compel arbitration and dismiss the action. ECF No. 28. On July 13, 2018, the
Court granted Google’s motion to compel arbitration, but declined to dismiss the case, instead
staying and administratively closing it pending the arbitration. ECF No. 37 at 2. On December
21, 2018, one of the Plaintiffs, Edible IP, filed suit against Google in the Superior Court of
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Georgia alleging violations of Georgia law (the “Georgia Action”). ECF No. 39-1. On January
11, 2019, Google filed an emergency motion to reopen this action and, after I reopened the case,
filed a motion seeking a preliminary injunction and contempt order. ECF No. 46.
II.
Discussion
Google argues that Edible IP’s claims in the Georgia Action “are based on the same
allegations as those asserted before this Court and [therefore] subject to arbitration.” ECF No. 47
at 7. Accordingly, Google requests an order “(i) enjoining Edible IP from continuing to prosecute
the Georgia Action, (ii) enjoining Plaintiffs Edible International, LLC and Edible IP from filing
additional lawsuits based on claims covered by the Court’s July 13, 2018 order, (iii) finding that
Edible IP is in contempt of this Court’s July 13, 2018 order, and (iv) requiring Edible IP to cover
Google’s expenses, including attorneys’ fees and costs, associated with the Georgia Action,
unless Edible IP dismisses the Georgia Action.” ECF No. 46 at 2. As to the first request for
relief, however, I conclude that the Anti-Injunction Act prohibits an injunction preventing Edible
IP from prosecuting the Georgia Action.
A. Anti-Injunction Act
The Anti-Injunction Act provides that “[a] court of the United States may not grant an
injunction to stay proceedings in a State court except as expressly authorized by Act of Congress,
or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” 28 U.S.C.
§ 2283. Because “the statutory prohibition against such injunctions in part rests on the
fundamental constitutional independence of the States and their courts, the exceptions should not
be enlarged by loose statutory construction.” Atlantic Coast Line R. Co. v. Bhd. of Locomotive
Engineers, 398 U.S. 281, 287 (1970). Here, only the latter two exceptions are at issue, as Google
does not argue that the requested injunction is “expressly authorized” by Congress. See ECF No.
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47 at 8 (arguing that an injunction is proper under the Anti-Injunction Act’s exceptions for
injunctions that are “necessary in aid of [the Court’s] jurisdiction, or to protect or effectuate [the
Court’s] judgments”).
i. “Protect or Effectuate [the Court’s] Judgment”: The Re-Litigation
Exception
“The relitigation exception was designed to permit a federal court to prevent state
litigation of an issue that previously was presented to and decided by the federal court. It is
founded in the well-recognized concepts of res judicata and collateral estoppel.” Chick Kam
Choo v. Exxon Corp., 486 U.S. 140, 147 (1988). 1 For this exception to apply, “the issue the
federal court decided must be the same as the one presented in the state tribunal.” Smith v. Bayer
Corp., 564 U.S. 299, 307 (2011). “[A]n essential prerequisite for applying the relitigation
exception is that the claims or issues which the federal injunction insulates from litigation in
state proceedings actually have been decided by the federal court.” Chick Kam Choo, 486 U.S. at
148 (emphasis added). “Moreover, . . . this prerequisite is strict and narrow. The [Supreme]
Court [in an earlier decision] assessed the precise state of the record and what the earlier federal
order actually said; it did not permit the District Court to render a post hoc judgment as to what
the order was intended to say.” Id. (emphasis in original).
The analysis of the relitigation exception takes place against the background
understanding that “[d]eciding whether and how prior litigation has preclusive effect is usually
the bailiwick of the second court.” Smith, 564 U.S. at 307. “For that reason, every benefit of the
1
Strictly speaking, neither res judicata – sometimes called “claim preclusion” – nor collateral
estoppel – sometimes called “issue preclusion” – applies in this case, because this Court has not
entered a final judgment, which is a precondition to the application of these preclusion doctrines.
See Leather v. Eyck, 180 F.3d 420, 424 (2d Cir. 1999) (noting that final judgment is required for
claim preclusion and issue preclusion). Neither party has raised this point, however, and so I
assume that the same principles that govern the relitigation exception when there has been a final
judgment also apply in this situation.
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doubt goes toward the state court” and “an injunction can issue only if preclusion is clear beyond
peradventure.” Id.
I decided a single issue in the ruling granting Google’s motion to compel arbitration,
namely, whether the allegations in this case fell within the scope of the broad arbitration clause
in the pertinent agreement. See ECF No. 37 at 5-7 (addressing “[t]he plaintiffs’ sole argument in
opposition to the defendant’s motion to compel arbitration,” which “aver[red] that arbitration
should not be compelled because their claims fall outside the scope of the arbitration clause.”). It
is unclear that the Georgia state court will need to reach that issue—even if the factual
allegations in the Georgia Action are substantially identical to those here, as Google contends.
Assuming Google raises the Federal Arbitration Act in the Georgia Action, the Georgia court
will first need to decide a threshold issue that I was not asked to decide, i.e., whether Edible IP,
one of two plaintiffs here but the only plaintiff in the Georgia action, is bound by the relevant
arbitration agreement. Schnabel v. Trilegiant Corp., 697 F.3d 110, 118 (2d Cir. 2012) (“The
threshold question facing any court considering a motion to compel arbitration is therefore
whether the parties have indeed agreed to arbitrate,” i.e. “the question of whether such an
agreement exists” between the parties involved). If the Georgia court finds that Edible IP is not
so bound, it will have no occasion to address the issue I decided regarding the scope of the
arbitration agreement.
Edible IP has alleged in the Georgia Action that it is not a party to any agreement with
Google, let alone an arbitration agreement. ECF No. 39-1 at 17 (“Edible IP has never entered
into any contract with Google of any kind. . . No entity that participates as a customer or
advertiser in any google program has the right to contract on behalf of Edible IP or waive any of
Edible IP’s rights.”). It made no similar assertion in resisting Google’s motion to compel
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arbitration before me, and I did not address such an assertion. 2 Edible IP argues that it had no
reason to raise that point because its co-plaintiff, Edible International, was a party to the
arbitration agreement with Google. I agree that there would have been little point in resisting
arbitration on a ground that would have applied to only one of two related plaintiffs, both of
whom were making identical claims. Consequently, it cannot be said “beyond peradventure” that
“the issue the federal court decided [is] the same as the one presented in the state tribunal.”
Smith, 564 U.S. at 307. 3
Google nonetheless makes three arguments to support its contention that the Georgia
Action presents the same question already decided by this Court: (1) Edible IP is bound by the
law of the case, ECF No. 47 at 15; (2) Edible IP has judicially admitted that it is bound by the
arbitration agreement, id. at 16; and (3) Edible IP is bound by the arbitration agreement in any
event, id. at 17. I address each argument in turn.
First, Google argues that the law of the case “precludes Edible IP from making a contrary
argument” because this Court has already “found that an arbitration agreement exists between
2
The “Background” section of my ruling on the motion to compel states both that “plaintiff
Edible International, Inc. opened an advertising account with [Google]” and that “[t]he plaintiffs
agreed to [Google’s] updated Terms and Conditions.” ECF No. 37 at 3 (emphasis added). The
latter statement, however, cites paragraph 6 of a declaration submitted by a Google employee
stating that, according to Google’s records, “Edible Arrangements International, Inc. . . . agreed
to the current version of the Terms and Conditions. . . .” ECF No. 30 at ¶ 6. Thus, the evidence I
relied on in support of my ruling on the motion to compel suggested only that Edible
International – and not Edible IP – was a party to the arbitration agreement with Google.
3
This circumstance distinguishes the cases relied on by Google, in which federal courts enjoined
the prosecution of ongoing state court actions that raised the same issues of arbitrability actually
decided by the federal courts. See, e.g., Emilio v. Sprint Spectrum, L.P., 315 Fed. Appx. 322, 325
(2d Cir. 2009) (“Because the district court was issuing an order compelling arbitration and Sprint
was seeking a motion in state court to enjoin Emilio to dismiss his arbitration claims, the district
court correctly concluded that an injunction was necessary in order to protect its order.”). Unlike
this case, cases like Emilio do not involve preclusion issues at all, but, instead, mirror-image,
simultaneous races to the courthouse in which one court determines that the same claims in both
actions must be arbitrated and, therefore, enjoins all litigation involving those claims.
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Google and Edible IP.” ECF No. 47 at 15. The law of the case doctrine “counsels a court against
revisiting its prior rulings in subsequent stages of the same case absent cogent and compelling
reasons.” Ali v. Mukasey, 529 F.3d 478, 490 (2d Cir. 2008) (internal quotation marks omitted).
But this doctrine is not applicable at all where the Court was never “squarely presented with the
question.” Stichting Ter Behartiging Van de Belangen Van Oudaandeelhouders In Het Kapitaal
Van Saybolt Intl. B.V. v. Schreiber, 407 F.3d 34, 44 (2d Cir. 2005); see also Quern v. Jordan,
440 U.S. 332, 348 n.18 (1979) (“The doctrine of law of the case comes into play only with
respect to issues previously determined.”). As shown, I did not decide whether Edible IP was
independently bound by an arbitration agreement between Google and Edible International, as
Edible IP did not raise that issue in resisting arbitration and there would have been little reason to
do so under the circumstances. Thus, I was not “squarely presented” with the separate question
of whether Edible IP would have been bound by an arbitration agreement between Edible
International and Google if it had brought an action on its own. 4 Thus, to the extent that the law
of the case doctrine carries the same weight as the doctrine of issue preclusion would in this
context, but see note 1, supra, its application here would not overcome the Anti-Injunction Act
because, as in the case of issue preclusion, the identity of issues element is missing.
Google next argues that Edible IP is “barred from arguing that it is not bound by an
arbitration agreement with Google by the doctrine of judicial admissions.” ECF No. 47 at 16.
“Facts admitted by a party are judicial admissions that bind that party throughout the litigation.”
Hoodho v. Holder, 558 F.3d 184, 191 (2d Cir. 2009) (internal quotation marks, citation, and
alterations omitted). “Judicial admissions must be clear and unambiguous admissions of fact.”
4
My ruling noted that the Terms and Conditions in the contract between Edible International and
Google referred to “claims brought by or against . . . Advertiser, the respective affiliates and
parent companies of . . . Advertiser.” ECF No. 37 at 4. Nonetheless, I did not decide whether this
language independently bound Edible IP to arbitrate claims against Google.
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Hausler v. JP Morgan Chase Bank, N.A., 127 F. Supp. 3d 17, 37 (S.D.N.Y. 2015) (internal
quotation marks, citations, and alterations omitted). In this case, Google argues that Edible IP
admitted it was bound to an arbitration agreement because, in its brief in opposition to the
motion to compel arbitration, it “defined ‘Edible Arrangements’ as referring to both ‘Edible
International, LLC and Edible IP, LLC’ collectively,” and “then went on to repeatedly
acknowledge that ‘Edible Arrangements’ (i.e. Edible International and Edible IP) had accepted
Google’s agreement.” ECF No. 47 at 16. But that sort of definitional shorthand falls short of a
“clear and unambiguous admission[] of fact,” especially in light of the factual information in the
record, see note 2, supra, and in an action brought jointly by two plaintiffs in which there was
little reason to raise defenses to arbitrability that would apply to only one of them.
Finally, Google argues that Edible IP is bound to arbitrate because “Edible International
was acting as Edible IP’s agent” when it entered into the arbitration agreement, “and thus bound
Edible IP.” ECF No. 47 at 17. Specifically, it argues that “when Edible International, Edible IP’s
co-plaintiff and licensee, agreed to the Terms as a ‘Customer,’ it represented and warranted that
Edible IP would be bound by Google’s Terms as an ‘Advertiser.’” ECF No. 47 at 17. But no one
raised this issue in connection with the motion to compel arbitration, and I did not address it.
Thus, the question of whether Edible International’s agreement binds Edible IP is for the Georgia
Court to decide, assuming it is raised there.
In this case, preclusion is far from “clear beyond peradventure,” Smith, 564 U.S. at 307,
and thus the relitigation exception to the Anti-Injunction Act does not apply.
ii. “In Aid of Jurisdiction” Exception
The in aid of jurisdiction exception applies “where the effect of a state court proceeding
would be to defeat or impair the jurisdiction of the federal court.” Wyly v. Weiss, 697 F.3d 131,
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137 (2d Cir. 2012) (internal quotation marks, citation, and alteration omitted). Historically, this
exception “was seen as expressing the ‘well settled rule that if an action is in rem the court first
obtaining jurisdiction over the res could enjoin suits in other courts involving the same res.’”
U.S. v. Schurkman, 728 F.3d 129, 136 (2d Cir. 2013) (quoting Wright & Miller, Federal Practice
& Procedure § 4225 (3d ed.)). Google does not argue that this case involves in rem jurisdiction,
but argues that “neither the statute nor Schurkman creates such a restriction [to cases based on in
rem jurisdiction].” ECF No. 47 at 5. The Second Circuit was clear in Schurkman, however, that
“the in aid of jurisdiction exception generally applies only where necessary to protect a federal
court’s jurisdiction over a res,” Schurkman, 728 F.3d at 137 (internal quotation marks omitted).
This reaffirmed a prior Second Circuit decision explaining that the exception is “generally
reserved for state court actions in rem.” Wyly, 697 F.3d at 137.
Although the “Supreme Court has never held that a district court may enjoin a parallel in
personam action under the ‘in aid of jurisdiction’ exception,” id. at 138, the Second Circuit
permits a federal court to enjoin an in personam action in “exceptional circumstances,”
Schurkman, 728 F.3d at 137. For instance, the Second Circuit permitted an injunction in In re
Baldwin-United Corp., explaining that “the jurisdiction of a multidistrict court is analogous to
that of a court in an in rem action.” In re Baldwin-United Corp., 770 F.2d 328, 337 (2d Cir.
1985) (internal quotation marks omitted). The Baldwin-United litigation “consist[ed] of
consolidated multidistrict class actions which, following two years of settlement negotiations
brokered by the district court, was in the final stages of settlement at the time the state court suit
is filed.” Schurkman, 728 F.3d at 138. In that case, “the need to enjoin conflicting state
proceedings [arose] because the jurisdiction of a multidistrict court is analogous to that of a court
in an in rem action . . . where it is intolerable to have conflicting orders from different courts.”
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Baldwin-United, 770 F.2d at 337. This case is easily distinguishable as a single-district, nonclass action. As such, there is no reason to depart from “the general rule that an in personam state
court action may not be enjoined merely because it is duplicative of, or conflicts with, a prior
federal judgment.” Schurkman, 728 F.3d at 138.
Google’s request for a preliminary injunction enjoining Edible IP from prosecuting the
Georgia Action is therefore DENIED.
***
In light of this disposition, the Court need not review Google’s additional argument that
the claims in the Georgia Action are “based on the same allegations as those asserted before this
Court.” ECF No. 47 at 7.
B. Future Lawsuits
Google’s request to enjoin Edible IP and Edible International from “filing additional
lawsuits based on claims that ‘arise out of or relate in any way’ to Google’s advertising programs
and services,” ECF No. 47 at 24-25, is DENIED, because, apart from Anti-Injunction Act
concerns, Google can show no irreparable harm from lawsuits that have not been and may never
be filed.
C. Contempt Order
Google further seeks an order finding Edible IP in contempt. ECF No. 47 at 25-27. It
notes that such a finding requires a three-part showing: “(1) the existence of a clear and
unambiguous order; (2) clear and convincing proof of noncompliance, and (3) a party’s lack of
reasonable diligence in complying with the order.” ECF No. 47 at 25; see also Weston Capital
Advisors, Inc. v. PT Bank Mutiara, Tbk, 738 Fed. Appx. 19, 21–22 (2d Cir. 2018). Google has
not established any of these requirements.
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First, for reasons discussed in detail above, this Court did not issue a “clear and
unambiguous” order finding that Edible IP alone must arbitrate all claims against Google that
arise out of or relate in any way to Google’s advertising programs or services. Nor did it issue a
“clear and unambiguous” order about the claims in the Georgia Action, which, whatever may be
said about their factual overlap with this case, are plainly based on different legal theories.
Rather, the Court held only that the allegations in this case, brought by both plaintiffs, fell within
the scope of the broad arbitration clause in the pertinent agreement. See ECF No. 37 at 5-7. For
similar reasons, Google has not demonstrated “clear and convincing proof of noncompliance” or
a “lack of reasonable diligence in complying with the [Court’s] order.” Accordingly, Google’s
requests for a contempt order and litigation expenses stemming from the Georgia Action are
DENIED.
III.
Conclusion
For the reasons set forth above, Google’s motion, ECF No. 46, is DENIED.
IT IS SO ORDERED.
/s/ MICHAEL P. SHEA
Michael P. Shea, U.S.D.J.
Dated:
Hartford, Connecticut
March 5, 2019
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