RECOM CORP. v. MILLER BROTHERS, A DIVISION OF WAMPOLE-MILLER, INC.

Filing 34

OPINION fld. Signed by Judge Stanley R. Chesler on 8/24/16. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
____________________________________
:
Hon. Stanley R. Chesler
RECOM CORP.,
:
Civil Action No. 16-3320
:
Petitioner,
:
:
v.
:
:
OPINION
MILLER BROTHERS, A
:
DIVISION OF WAMPOLE-MILLER, INC.,:
:
Respondent.
:
____________________________________:
CHESLER, U.S.D.J.
This matter comes before the Court on two motions: 1) the motion to vacate the
arbitration award by Petitioner Recom Corp. (“Recom”); and 2) the motion to dismiss the
Petition to vacate the arbitration award by Respondent Miller Brothers (“Miller”). For the
reasons stated below, the motion to dismiss the Petition will be granted and the motion to vacate
the arbitration award will be denied.
Briefly, this case arises from a dispute between Recom, an equipment supplier, and
Miller, a purchaser, over a supply agreement. The dispute went to arbitration, and, on March 10,
2016, the arbitral tribunal issued an Award. There is no dispute that the Award concludes:
“Accordingly, Recom and its parents, successors, affiliates and assigns, jointly and severally,
shall pay to Miller Bros. the total awarded amount of $1,850,099.31.” (Haridi Dec. Ex. I at 29.)
Recom initiated this case by filing a Petition with this Court seeking to vacate the Award,
pursuant to the Federal Arbitration Act, 9 U.S.C. § 10(a). Recom seeks to vacate the Award on
two grounds: 1) the arbitrators committed serious misconduct by depriving Recom and its

parents, successors, affiliates, and assigns of due process; and 2) the arbitrators exceeded their
powers. The crux of these arguments is that, in making the Award against not only Recom, but
also its parents, successors, affiliates and assigns, the arbitrators rendered an award against
entities that were not party to the arbitration proceeding (“the non-party Entities”), and also
deprived Recom of due process on the issue of joint and several liability.
Miller responded by moving to dismiss Recom’s Petition on three grounds: 1) Recom
waived judicial review of the Award in the original supply agreement; 2) Recom does not have
standing to seek vacatur on behalf of the non-party Entities; and 3) under the first-filed rule,
because Miller filed an earlier petition to confirm the Award in the United States District Court
for the Southern District of New York, this action should be dismissed.
This Court finds that Recom lacks standing to bring the present case and need not reach
the other issues. In Lujan, the key case on standing, the Supreme Court held:
Over the years, our cases have established that the irreducible constitutional
minimum of standing contains three elements. First, the plaintiff must have
suffered an “injury in fact” – an invasion of a legally protected interest which is
(a) concrete and particularized, and (b) “actual or imminent, not ‘conjectural’ or
‘hypothetical.’” Second, there must be a causal connection between the injury
and the conduct complained of – the injury has to be “fairly . . . trace[able] to the
challenged action of the defendant, and not . . . the result [of] the independent
action of some third party not before the court.” Third, it must be “likely,” as
opposed to merely “speculative,” that the injury will be “redressed by a favorable
decision.”
The party invoking federal jurisdiction bears the burden of establishing these
elements. Since they are not mere pleading requirements but rather an
indispensable part of the plaintiff's case, each element must be supported in the
same way as any other matter on which the plaintiff bears the burden of proof, i.
e., with the manner and degree of evidence required at the successive stages of the
litigation.

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Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992) (citations omitted). Under Lujan,
Recom, the party invoking federal jurisdiction, bears the burden of establishing the elements of
standing. It has not done so.
The first element of the standing analysis is the “injury in fact,” which the Court defined
as “an invasion of a legally protected interest” which is actual, not conjectural. Id. at 560. The
Petition does not adequately allege that Recom suffered an actual invasion of a legally protected
interest. Rather, it complains primarily of an invasion of the interests of other entities. Recom
attempts to frame this as an invasion of its own interest by arguing that it was denied due process
when the tribunal decided the issue of joint and several liability without giving Recom notice
and the opportunity to be heard.
This sounds plausible as a pure abstraction but appears to be the kind of hypothetical
injury that cannot give rise to standing. This Court inquires: how was Recom actually injured by
the fact of joint and several liability for the Award? As a thought experiment, suppose the
tribunal had made Recom solely liable for the award – would that have put it in a better position
than it is now? Recom has not explained how it would have benefitted from that. Absent there
being some advantage to an award of sole liability, and some relative disadvantage to an award
of joint and several liability, there is no actual injury to a party which is made jointly and
severally liable with others rather than solely liable.
Recom states: “RECOM is now left in a position in which it has no way of knowing
whether it is solely liable for the amount awarded to Miller Bros. under the award, whether it
may share that liability with one other entity, or whether it may share that liability with any other
number of entities.” (Pet. Vacate Br. 12.) Again, this Court queries, how is this an injury in

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fact?1 Generally, the possibility that someone else might pay part of your bills is a plus, not a
minus. Recom has failed to persuade this Court that the joint and several character of the Award
is an actual injury to its legally protected interests.
This Court finds that Recom has failed to adequately allege the elements of standing.
“Absent Article III standing, a federal court does not have subject matter jurisdiction to address a
plaintiff’s claims, and they must be dismissed.” Davis v. Wells Fargo, 824 F.3d 333 (3d Cir.
2016). The Petition must therefore be dismissed for lack of subject matter jurisdiction. The
motion to dismiss the Petition to vacate the arbitration award will be granted. This moots the
motion to vacate the Award.

/s Stanley R. Chesler
STANLEY R. CHESLER. U.S.D.J.
Dated: August 24, 2016

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Recom contends that it has been subjected to “uncertainty” by the imposition of joint
and several liability. The third element of the Lujan standing analysis is redressability: would a
decision by this Court to vacate the Award be likely to redress this uncertainty? No. Recom has
not persuaded this Court that it is likely that a decision to vacate the Award will favorably
impact its alleged uncertainty about joint and several liability. Moreover, as to the second
element of the standing analysis, causation, the Petition does not challenge conduct of the
Respondent, Miller, but rather the independent action of a third party not before the Court.
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