Xiao Wei Yang Catering Linkage In Inner Mongolia Co., Ltd.et al v. Inner Mongolia Xiao Wei Yang USA, Inc. et al
Judge Denise J. Casper: ORDER entered. MEMORANDUM AND ORDER - The Court ALLOWS Defendants' motion and Counts I, II, III and IV are hereby DISMISSED. D. 63; D. 73.(Hourihan, Lisa)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
XIAO WEI YANG CATERING LINKAGE
IN INNER MONGOLIA CO. LTD et al.,
Civil Action 15-cv-10114-DJC
INNER MONGOLIA XIAO WEI YANG
USA, INC. et al.,
MEMORANDUM AND ORDER
February 6, 2017
Plaintiffs Xiao Wei Yang Catering Linkage in Inner Mongolia Co., LTD. (“Linkage”) and
Fei Xie (“Xie”) (collectively, the “Plaintiffs”) have filed this lawsuit against Defendants Inner
Mongolia Xiao Wei Yang USA, Inc., d/b/a Xiao Wei Yang and/or Little Lamb Restaurant (“Xiao
Wei USA”), Cheng Xu (“Xu”) and Yonghua Qin (“Qin”) (collectively, the “Defendants”) alleging
breach of contract (Count I), breach of the implied covenant of good faith and fair dealing (Count
II), fraudulent inducement (Count III), unjust enrichment (Count IV), statutory and common law
trademark infringement (Count V), false designation of origin under 15 U.S.C. § 1125(a) (Count
VI), trademark dilution under Mass. Gen. L. c. 110H (Count VII), unfair competition (VIII) and
unfair and deceptive trade practices under Mass. Gen. L. c. 93A (Count IX). D.1. The Defendants
renewed their motion to dismiss Counts I, II, III and IV, on jurisdictional grounds, D. 63, after the
Court allowed jurisdictional discovery, and then moved for summary judgment as to those claims.
D. 73. For the reasons stated below, the Court ALLOWS the motion, D. 63; D.73.
Standard of Review
The Court grants a motion for summary judgment when there is no genuine dispute of
material facts and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
“[A]t the summary judgment stage the judge's function is not . . . to weigh the evidence and
determine the truth of the matter but to determine whether there is a genuine issue for trial.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In doing so, the Court “must scrutinize
the record in the light most favorable to the summary judgment [opponent].” Alliance of Auto.
Mfrs. v. Gwadosky, 430 F.3d 30, 34 (1st Cir. 2005) (citing Houlton Citizens’ Coal v. Town of
Houlton, 175 F.3d 178, 184 (1st Cir. 1999)).
Once the moving party has satisfied its burden, the burden shifts to the non-moving party
to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett,
477 U.S. 317, 324 (1986). Although the Court “view[s] the record in the light most favorable to
the nonmovant, drawing reasonable inferences in his favor,” Noonan v. Staples, Inc., 556 F.3d 20,
25 (1st Cir. 2009) (citing Franceschi v. U.S. Dep’t of Veterans Affairs, 514 F.3d 81, 84 (1st Cir.
2008)), “conclusory allegations, improbable inferences, and unsupported speculation” proffered
by the non-movant are insufficient to create a genuine issue of material fact to survive summary
judgment. Sullivan v. City of Springfield, 561 F.3d 7, 14 (1st Cir. 2009) (quoting Prescott v.
Higgins, 538 F.3d 32, 39 (1st Cir. 2008)).
The background facts of this case were previously laid out in the Court’s December 14,
2015 Order, D. 26, addressing the Defendants’ initial motion to dismiss and the Court incorporates
that background, by reference, here. Thus, for present purposes, the Court only recounts facts
relevant to the forum-selection clause at issue. Unless otherwise noted, the facts below are
In or about early 2011, Xu and Qin, residents of Massachusetts, traveled to Xiao Wei Yang
Catering Linkage in Inner Mongolia Co., Ltd.’s (“Linkage”) headquarters in Inner Mongolia to
engage in negotiations regarding Linkage’s franchise. D. 75 ¶ 6. Linkage is one of the leading
and best known restaurant chains in China and the Defendants were interested in discussing
opportunities to license Linkage’s brand name, as well as negotiate related business developments
that could bring Linkage restaurants to the United States. Id. ¶¶ 1, 6. The negotiations resulted in
a contract, the Cooperation Agreement, Contract No.: XWYOS/001/20110706 (“Cooperation
Agreement”). Id. ¶ 9. According to the Cooperation Agreement, all parties agreed to form and
invest in a corporation in China called the Inner Mongolia Xiao Wei Yang Catering Chain
Overseas Management Company (the “Overseas Management Company”). D. 76-1 ¶ 2. The
Cooperation Agreement noted, however, that the corporation’s name was a “temporary name,”
with “actual name . . . subjected [sic] to registration.” Id. The Cooperation Agreement also
contemplated the formation of a new corporation in the United States that would be registered as
a subsidiary of Linkage (“Xiao Wei USA”). Id. Within one year of the formation of both Xiao
Wei USA and the Overseas Management Company, Linkage also agreed to transfer its entire
interest in Xiao Wei USA to the Overseas Management Company. Id. ¶ 3. This, in effect, would
result in Xiao Wei USA being wholly owned by the Overseas Management Company in China.
Id. Additionally, under the Cooperation Agreement, any arbitration or litigation resulting from a
dispute over the contract would be “the place of registration” of the Overseas Management
Company. Id. ¶ 15.
On or about October 8, 2011, a limited liability company called Inner Mongolia Xiao Wei
Yang Catering Chain Management, Co., Ltd. (“Catering Chain Management”), located at Floor 6,
Xiao Wei Yang Plaza, No. 77, Wenhua Road, Qingshan District, Baotou City, was formed and
registered in China. D. 76-2 at 1. According to a foreign investment census, the corporate shares
of Catering Chain Management were held by Qin, Xu and Inner Mongolia Xiao Wei Yang Stock
Raising Science & Technologies Co., Ltd., with the parties holding 43%, 42% and 15% of the
shares, respectively. D. 65-12 at 4. The first and only shareholders meeting of Catering Chain
Management took place in September 2012 and was attended by Xu, Qin and a representative of
Linkage, Jiarong Yu (“Yu”). D. 65-6. At the meeting, Yu discussed the need to transfer Linkage’s
stock holdings in Xiao Wei USA from Linkage to Catering Chain Management. Id. at 3. The
shareholders passed a resolution agreeing to this transfer. D. 65-7. The foreign investment census,
which shows that, as of 2013, Catering Chain Management held 100% of Xiao Wei USA’s stock,
confirms the transfer took place. D. 65-12 at 2.
Plaintiffs instituted this action on January 16, 2015. D.1. The Defendants originally moved
to dismiss all counts. D. 8. The Court heard the parties on that motion, D. 23, and denied the
motion to dismiss without prejudice as to Counts I, II, III and IV (the “contract claims”). D. 26.
As to the contract claims, the Court was unable to determine at that time whether the forumselection clause had been triggered. Id. As a result, the Court granted limited discovery on the
forum-selection clause issue and also noted that it would permit the Defendants to file for a
renewed motion to dismiss once this discovery had been completed. Id. The Defendants
subsequently filed a renewed motion to dismiss the contract claims. D. 63, 65, 66. The Court
heard the parties on the motion. D. 70. At that hearing, and for the reasons discussed below, the
Court informed the parties that it would be treating the motion to dismiss as a motion for summary
judgment and invited supplemental briefing. The Defendants subsequently filed a motion for
summary judgment, which supplemented the original motion to dismiss. D. 73.
Rule 12(b)(6) is the Procedural Mechanism for Addressing a Forum-Selection
“In this Circuit, ‘we treat a motion to dismiss based on a forum-selection clause as a motion
alleging the failure to state a claim for which relief can be granted under Rule 12(b)(6).’” ClaudioDe León v. Sistema Universitario Ana G. Méndez, 775 F.3d 41, 46 (1st Cir. 2014) (quoting Rivera
v. Centro Médico de Turabo, Inc., 575 F.3d 10, 15 (1st Cir. 2009)). While some circuits viewed
forum-selection clauses as abdicating the jurisdictional authority of the district court, see Murphy
v. Schneider Nat’l, Inc., 362 F.3d 1133, 1139 (9th Cir. 2003) (noting that a forum-selection clause
“foreclose[s] suit in the jurisdiction of plaintiff's choice” (alteration in original) (quoting New
Moon Shipping Co. v. Man B & W Diesel AG, 121 F.3d 24, 29 (2d Cir. 1997))), the First Circuit
maintains an analytical framework that rejected that notion. See Silva v. Encyc. Britannica Inc.,
239 F.3d 385, 388 n.6 (1st Cir. 2001) (noting that “even a mandatory forum-selection clause does
not in fact divest a court of jurisdiction that it otherwise retains . . . [r]ather, ‘[the clause] merely
constitutes a stipulation in which the parties join in asking the court to give effect to their
agreement by declining to exercise its jurisdiction’” (second alteration in original) (quoting LFC
Lessors, 739 F.2d at 6)).
In Atlantic Marine Construction Co. v. U.S. District Court for the Western District of
Texas, 134 S. Ct. 568 (2013), the Supreme Court stated that in general, “the appropriate way to
enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of
forum non conveniens.” Id. at 581. The Court explicitly ruled out dismissal based on venue under
“§ 1406(a) and Rule 12(b)(3) [as not being] proper mechanisms to enforce a forum-selection
clause,” and held instead “that § 1404(a) and the forum non conveniens doctrine provide
appropriate enforcement mechanisms.” Id. at 580. The Supreme Court, however, also included a
caveat that is relevant to the approach utilized by this Circuit:
[a]n amicus before the Court argues that a defendant in a breach-of-contract action
should be able to obtain dismissal under Rule 12(b)(6) if the plaintiff files suit in a
district other than the one specified in a valid forum-selection clause. . . . Petitioner,
however, did not file a motion under Rule 12(b)(6), and the parties did not brief the
Rule's application to this case at any stage of this litigation. We therefore will not
Id. (citation omitted). In a footnote, the Supreme Court observed, however, that:
a motion under Rule 12(b)(6), unlike a motion under § 1404(a) or the forum non
conveniens doctrine, may lead to a jury trial on venue if issues of material fact
relating to the validity of the forum-selection clause arise. Even if [the amicus] is
ultimately correct, therefore, defendants would have sensible reasons to invoke
§ 1404(a) or the forum non conveniens doctrine in addition to Rule 12(b)(6).
Id. at n.4.
Here, Defendants did not move for dismissal under § 1404(a) or the forum non conveniens
doctrine. Rather, they moved to dismiss under Rule 12(b)(6). D. 63. While the First Circuit has
reaffirmed the applicability of Rule 12(b)(6) in this context, Claudio-De León, 775 F.3d at 46 n.3
(citing Atlantic Marine Constr. Co., 134 S.Ct. at 579-80 and noting that “absent a clear statement
from the Supreme Court to the contrary, the use of Rule 12(b)(6) to evaluate forum selection
clauses is still permissible in this Circuit, and we will not decline to review or enforce a valid
forum selection clause simply because a defendant brought a motion under 12(b)(6) as opposed to
under § 1404 or forum non conveniens”), there is a procedural consequence to bringing a motion
solely under that rule.
Namely, while a court generally “enjoys broad authority to . . . consider extrinsic evidence,
and hold evidentiary hearings in order to determine its own jurisdiction,” Skwira v. United States,
344 F.3d 64, 72 (1st Cir. 2003) (quoting Valentin v. Hosp. Bella Vista, 254 F.3d 358, 363 (1st Cir.
2001)), it may not do so where the procedural mechanism used to bring effect to a forum-selection
clause is Rule 12(b)(6). In other words, while a jurisdictional inquiry “permits (indeed, demands)
differential factfinding” by the district court, Valentin, 254 F.3d at 363, a Rule 12(b)(6) motion
expressly forecloses it. See, e.g., Gen. Elec. Co. v. G. Siempelkamp GmbH & Co., 809 F. Supp.
1306, 1309 (S.D. Ohio 1993) (noting that “if the enforceability of the clause is a matter to be
considered under Rule 12(b)(6), then the court, upon the submission of evidentiary materials
outside the pleadings, must employ the standards applicable to a summary judgment motion under
Fed. R. Civ. P. 56”).
Here, because resolution of the issue before the Court depends upon the Court's
consideration of matters outside the pleadings, the Court converts the motion to dismiss to a motion
for summary judgment to consider that material. Under Rule 12(d), “[i]f, on a motion under Rule
12(b)(6) . . . matters outside the pleadings are presented to and not excluded by the court, the
motion must be treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d); see
Nales v. Carnival Corp., No. 11-cv-1526-JAF, 2012 WL 1854242, at *1 (D.P.R. May 21, 2012)
(noting that because “Federal Rule of Civil Procedure 12(b)(6) provides the proper vehicle for a
motion to dismiss based on a forum-selection clause . . . “if matters outside the pleadings are
considered, the motion must be decided under the more stringent standards applicable to a Rule 56
motion for summary judgment” (citation omitted) (quoting Trans-Spec Truck Serv., Inc. v.
Caterpillar, Inc., 524 F.3d 315, 321 (1st Cir. 2008))). Pursuant to Fed. R. Civ. P. 12(d), the Court
informed the parties at oral argument of its intention to convert the motion to a summary judgment
motion on the forum-selection clause issue. The parties then filed Rule 56.1 statements and
additional briefing. D. 73, 74, 75, 76, 79, 80. Accordingly, the Court now treats Defendants’ Rule
12(b)(6) motion as one for summary judgment under Rule 56.
The Forum-Selection Clause Is in Effect and Dismissal Of the Contract Claims
When this Court first addressed whether the Cooperation Agreement’s forum-selection
clause had been triggered, D. 26, several uncertainties precluded resolution of the matter. The
forum-selection clause itself was clear: “[i]n the event of dispute, and arbitration or litigation is
needed, the location shall be the place of registration of the Overseas Management Company.”
D. 76-1 at 5. But, as this Court indicated, “[t]he plain language of the Cooperation Agreement
supports the conclusion that registration [of the Overseas Management Company] [is] a condition
precedent triggering the forum-selection clause . . . [i]t rests on the fulfillment of the parties’
obligation to register Overseas Management Company so that ‘the place of registration’ with
which the forum-selection clause is concerned exists.” Xiao Wei Yang Catering Linkage in Inner
Mongolia Co. v. Inner Mongolia Xiao Wei Yang USA, Inc., 150 F. Supp. 3d 71, 77 (D. Mass.
2015). Without a finding that the Overseas Management Company having been registered, the
forum-selection clause was functionally meaningless. See Knopick v. UBS Fin. Servs., Inc., No.
14-cv-05639, 2015 WL 1650070, at *4 (E.D. Pa. Apr. 14, 2015) (citing Shovel Transfer & Storage,
Inc. v. Pa. Liquor Control Bd., 739 A.2d 133, 139 (Pa. 1999); Oppenheimer & Co. v. Oppenheim,
Appel, Dixon & Co., 660 N.E.2d 415, 418 (N.Y. 1995))) (ruling that “[t]he language preceding
the forum selection clause describes a condition precedent to its applicability” and explaining that
“[t]he non-occurrence of this condition precedent renders the forum-selection clause
inapplicable”). But the Court was initially unable to make a determination regarding the Overseas
Management Company’s registration status based upon only a Chinese business license for a
company with a name that did not match the name of the Overseas Management Company in the
Cooperation Agreement. The Court explained:
[T]he facts contained in the business license do not alone establish that Inner
Mongolia Xiao Wei Yang Catering Chain Management, Co., Ltd is the Overseas
Management Company contemplated by the Cooperation Agreement, an assertion
that Plaintiffs hotly contest. That is, the business license reflects that a company
named the Inner Mongolia Xiao Wei Yang Catering Chain Management, Co., Ltd.
was registered in China, but not necessarily that this company is the Overseas
Management Company that meets the other elements enumerated in Paragraph 2 of
the Cooperation Agreement, including, inter alia, sharing of the actual registered
capital and registration fees, distribution of the regular maintenance and annual
renewal fees and the specific division of shares. Whatever relative responsibilities
the parties bore regarding the registering of the Overseas Management Company
there remains a factual dispute about the registration of same.
Xiao Wei Yang Catering Linkage, 150 F. Supp. 3d at 78. That is, the Cooperation Agreement
outlined several specific attributes that would be possessed by the Overseas Management
Company and the Court could not glean from the limited record before it then whether the company
that Defendants had claimed was the Overseas Management Company possessed those particular
The Court was focused upon the elements enumerated in Paragraph 2 of the
All 3 parties agreed to form and invest in a corporation in China. The name of the
corporation to be formed shall be Inner Mongolia Xiao Wei Yang Catering Chain
Overseas Management Company (temporary name, actual name is subjected to
registration is subjected to registration) (hereafter referred as “Overseas
Management Company”). Party A [Linkage] will invest 15% of the corporate
shares for its right to use the trademarks “LITTLE LAMB” and “HAPPY
GRASSLAND”; Party B [Xu] will hold 42%, Party C will hold 43% [Qi]. Party A
is responsible for registration issues of Overseas Management Company in China.
Parties B and C are responsible for sharing the actual registration capital and
registration fees. After registration of the Overseas Management Company, to
ensure it operates properly, Parties B and C shall be responsible for the regular
maintenance and annual renewal fees. Party A shall be responsible for any issues
of annual renewal and taxation, as well as providing supporting [sic] directly or
through the Overseas Management Company in China to Xiao Wei Yang USA
D. 76-1 at 1-2.
Now, with the benefit of additional briefing and having had the opportunity to consider the
undisputed facts, the Court can address the elements outlined in the Cooperation Agreement and
decide based on those elements whether Catering Chain Management is in fact the Overseas
Management Company discussed in the Cooperation Agreement.
First, the Cooperation
Agreement was exacting in its articulation of how the shares of the Overseas Management
Company would be held: Linkage would hold 15%, Xu would hold 42% and Qi would hold 43%.
D. 76-1 at 2. Defendants have submitted screenshots from a publicly accessible database run by
the State Administration for Industry and Commerce of the People’s Republic of China that shows
a company profile of Catering Chain Management with the precise 15%-42%-43% shareholder
distribution anticipated by the Cooperation Agreement. D. 65 ¶ 18; D. 65-13. Linkage attempts
to argue that the document is inadmissible as unauthenticated under Fed. R. Evid. 902. D. 79 at
13. That is, the documents cannot be considered by the Court because they are not the type of selfauthenticating documents that fall within Rule 902’s umbrella. Linkage also contends that the
screenshots are hearsay. Id. Even if a “foreign public document” does not meant the requirements
of a self-authenticating document under Fed. R. Evid. 902(3), it may still be authenticated under
Fed. R. Evid. 901. See Minh Tu v. Mutual Life Ins. Co. of N.Y., 136 F.3d 77, 81 (1st Cir. 1998)
(distinguishing authentication pursuant to Rule 901 from self-authentication pursuant to Rule 902).
Under Rule 901(b)(4), a document satisfies the authentication requirement if the “appearance,
contents, substance, internal patterns, or other distinctive characteristics of the item, taken together
with all the circumstances” support a finding that the evidence is what the proponent claims it to
be. Fed. R. Evid. 901(b)(4). Here, the screenshots come from a website bearing the standard
“.gov.cn” domain used by the Chinese Central Government's official web portal, a fact of which
the Court may take judicial notice. See Fed. R. Evid. 201(b)(2).1 Furthermore, the website states
that it is run by the State Administration for Industry and Commerce of the People’s Republic of
D. 65-13 at 2.
The information presented in the database—including shareholder
investment information, foreign investment information and enterprise asset status—is of the type
one would expect to find on a public government database. Given the substance and internal
patterns of these specific attributes of the website screenshots, the Court concludes they may be
properly authenticated pursuant to the standard under Rule 901. Furthermore, for similar reasons,
they fall within hearsay exceptions. See Fed. R. Evid. 803(6), (8). Consequently, the Court may
consider the evidence showing a Chinese government database displaying Catering Chain
Management’s shareholder breakdown that matches the Cooperation Agreement’s contemplation
of the Overseas Management Company’s division of shares.2
Second, the Cooperation Agreement stated that Xu and Qin would be responsible for the
regular maintenance and annual renewal fees of the Overseas Management Company. They have
submitted two documents purporting to demonstrate their payment of these fees. One document
consists of receipts sent by Linkage’s accountant to Qin, which shows a payment on behalf of
Catering Chain Management of RMB 800.00 for a “[r]enewal [f]ee” and a payment of RMB 50.00
The website, whose heading bears the title “National Enterprise Credit Information Public
Disclosure System,” can be found at gsxt.saic.gov.cn.
The Defendants also point the Court to a certified translation of a document titled Foreign
Investment Census, D. 65 ¶ 17, which shows the same 15%-42%-43% shareholder distribution
contemplated by the Cooperation Agreement, and that Defendant Qin declares under penalty of
perjury was sent to her by an employee of Linkage. D. 65-12. While Linkage again argues that
the document is unauthenticated hearsay, the Court notes that whatever the merits of Linkage’s
argument, it would reach the same conclusion regardless of whether the document were
considered. Nonetheless, the Court finds that the document is not hearsay as it is at least arguably
the statement of a party opponent (Linkage) as it was sent, in its substantially completed form, to
Defendants by Linkage for completion. D. 65 ¶ 17. Moreover, for the reasons addressed above,
the document may be authenticated under Fed. R. Evid. 901(b)(4).
for “[d]omestic enterprise annual renewal.” D. 65-10 at 2-3. Both payments were made in June
2012. Id. Plaintiffs argue that consideration of these receipts by the Court would be improper.
D. 67 at 7; D. 79 at 13. They maintain that that the receipts are unofficial, freely available, nongovernmental receipts. Id. But Defendants have also submitted Catering Chain Management’s
November 2012 financial report, consisting of a spreadsheet detailing the company’s capital and
expenses. D. 65-11. This spreadsheet, which was sent in an e-mail from Linkage’s accountant,
Xuemin Wu, to Qin, shows a June 2012 line item entitled “[a]nnual renewal fees” for a total of
RMB 850.00, the exact amount accounted for in the receipts. Id. at 7.
Additionally, other evidence supports the claim that Catering Chain Management is the
Overseas Management Company contemplated in the Cooperation Agreement. Paragraph 3 of the
Cooperation Agreement reads as follows:
Within one year from the formation of Xiao Wei Yang USA subsidiary and
Overseas Management Company, above 3 parties agreed that Linkage shall transfer
its entire right interest in Xiao Wei Yang USA subsidiary to Overseas Management
Company. Thereafter, Xiao Wei Yang USA subsidiary shall be a wholly owned
subsidiary of Overseas Management Company (in China). Thereafter, Parties A,
B, C’s share percentages shall remain the same, which are: 15%, 42%, and 43%
D. 76-1 at 2. That is, the Cooperation Agreement anticipated that Linkage would transfer all of
the shares it held in Xiao Wei USA to the Overseas Management Company within one year of the
Overseas Management Company’s formation.
On September 13, 2013, Catering Chain
Management held its first and only shareholder meeting in Flushing, New York. D. 65-6. Xu, Qin
and Yu—the legal representative of Linkage—attended this meeting. Id. According to the minutes
of this meeting, Yu stated, “It is not so easy for me to come here, so today let us start the first board
meeting, sign the board resolution, and transfer the US company to the management company
according to the agreement to avoid affecting the catering linkage company.” Id. at 2. Linkage
argues that the minutes cannot be considered because they were not admitted to, authenticated or
properly certified. D. 79 at 11. Even without considering these minutes, the Court would reach
the same conclusion. Indeed, according to an undisputed business record entitled “Shareholder
Resolution,” the Catering Chain Management shareholders did, in fact, pass a resolution agreeing
to transfer “100% of the ‘Xiao Wei Yang US Subsidiary’ shares held by [Linkage] to [Catering
Chain Management],” just as the Cooperation Agreement anticipated. D. 65-7. And the foreign
investment census that Linkage sent to Defendants shows that as of 2013 Catering Chain
Management held 100% of Xiao Wei USA’s stock, thereby confirming the transfer took place.3
D. 65-12 at 2.
Lastly, the Court recognizes that the Cooperation Agreement expected Qi and Xu to
provide the registration capital and registration fees for the Overseas Management Company.
D. 76-1 at 1. The Defendants state that the contemplated investment of capital was approximately
$400,000 (or about RMB 2,650,000). D. 64 at 5; D. 67 at 6. Although the Plaintiffs dispute that
such capitalization was provided, D. 79-1 ¶ 20; D. 67 at 6; D. 79 at 3-5, they do not point to specific
admissible facts in their summary judgment papers to do so.
Taken together, the undisputed facts here show that Catering Chain Management and the
Overseas Management Company outlined in the Cooperation Agreement are one and the same.
Maintenance and annual renewal fees for Catering Chain Management were paid by Defendants,
as was contemplated by the Cooperation Agreement. One hundred percent of the U.S. subsidiary
was transferred to Catering Chain Management, as was contemplated by the Cooperation
The document presented is a foreign investment census filled out by representatives of
Catering Chain Management. The document has a section entitled “Company Profile” under
which Xiao Wei USA is listed. The total stock information of Xiao Wei USA is laid out—a total
of 40,000 stocks were issued—and it is noted that Catering Chain Management holds all 40,000
of the stock issued. D. 65-12 at 2.
And, notably, the 15%-42%-43% breakdown of Catering Chain Management
shareholdings among Linkage, Xu and Qi is precisely what was called for in the Cooperation
Consequently, the Court concludes that the Overseas Management Company
referenced in the Cooperation Agreement is Catering Chain Management.4 Because “[t]he
prevailing view towards contractual forum-selection clauses is that ‘such clauses are prima facie
valid and should be enforced unless enforcement is shown by the resisting party to be
‘unreasonable’ under the circumstances,’” Silva, 239 F.3d at 386 (quoting M/S Bremen v. Zapata
Off-Shore Co., 407 U.S. 1, 10 (1972)), the Court declines to exercise its jurisdiction over the
contract claims at issue here and, instead, affords the forum-selection clause its due weight. Any
litigation involving Counts I, II, III and IV must take place in China. Accordingly, the contract
claims are DISMISSED.5
Plaintiffs argue that the Court is precluded from making this determination because
language in the Cooperation Agreement states that “[t]he name of the corporation to be formed
shall be Inner Mongolia Xiao Wei Yang Catering Chain Overseas Management Company.” D. 79
at 5-8; D. 76-1 at 1. However, immediately following the contractual phrase in question, the
Cooperation Agreement includes a parenthetical that states, “(temporary name, actual name is
subjected to registration).” D. 76-1 at 1. That is, the agreement anticipated that the actual name
of the Overseas Management Company would likely change upon registration.
Plaintiffs also argue that the Defendants should be precluded in their summary judgment
motion from relying upon documents not produced during discovery. D. 79 at 7-9. In reaching
its conclusion here, the Court relied upon only one document identified by Plaintiffs as not being
produced during jurisdictional discovery, namely the Catering Chain Management’s business
license. D. 76-2. That document, however, was attached to the Defendants’ initial motion to
dismiss reply brief, D. 17-1, so it is difficult to discern any lack of notice or prejudice to the
Plaintiffs in considering it.
To the extent that the Defendants seek to dismiss the other counts of the complaint “based
on Plaintiffs’ misconduct,” D. 64 at 9, and seek attorneys’ fees against the Plaintiffs, D. 64 at 8-9,
the Court, in its discretion, denies such relief.
For the foregoing reasons, the Court ALLOWS Defendants’ motion and Counts I, II, III
and IV are hereby DISMISSED. D. 63; D. 73.
/s/ Denise J. Casper
United States District Judge
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