Innovative Technologies, LLC v. Nanoprotech Fl et al

Filing 41

MEMORANDUM & ORDER, For the foregoing reasons, the Court DENIES Defendants' motion to dismiss the Amended Complaint under the forum non conveniens doctrine. (D.E. # 33 .) The Court ORDERS the parties no later than March 29, 2018, to file a letter informing the Honorable Peggy Kuo, United States Magistrate Judge, of proposed next steps. (See D.E. dated Apr. 13,2017.) So Ordered by Judge Carol Bagley Amon on 3/22/2018. (Lee, Tiffeny)

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK
X

INNOVATIVE TECHNOLOGIES,LLC,
Plaintiff,

.againstNANOPROTECH FL, LLC and EDWARD

NOT FOR PUBLICATION
MEMORANDUM & ORDER
I6-CV-3797(CBA)
(PK)

KOPSHIN,
Defendants.

AMON,United States District Judge:

PlaintiffInnovative Technologies,LLC brings this action against Defendants Nanoprotech

FL, LLC ("Nanoprotech FL") and Edward Kopshin ("Kopshin"), asserting claims under the
Lanham Act, 15 U.S.C. § 1051 et seq.: New York General Business Law, N.Y. Gen. Bus. Law

§ 349; and New York common law. Plaintiff filed an Amended Complaint on April 13, 2017.

(D.E. # 29("Am. Compl.").) Before the Court is Defendants' motion to dismiss the Amended
Complaint under the forum non conveniens doctrine.' (D.E.# 33.) For the reasons set forth below,
the Court denies the motion.
BACKGROUND

For purposes ofthe instant motion,the Court draws the following facts from the pleadings,
affidavits, and briefs, and without the aid of discovery or a fact hearing.

Alcoa S.S. Co. v.

M/W Nordic Regent.654 F.2d 147, 149 & n.2(2d Cir. 1980k see also Acosta v. JPMorean Chase

'In their two-page Notice of Motion, Defendants request "an order pursuant to Rule of the Federal Rules of Civil
Procedure 12(b)(3) [sic] because of improper venue and the doctrine of forum non conveniens to dismiss this

action

"(^ D.E. # 33.) The Notice's single citation to the Federal Rules and mention of"improper venue"

apparently led Plaintiff to believe that Defendants were seeking a dismissal under Rule 12(b)(3). (See D.E. # 36-9 at
6-7 (describing legal standards relating to Rule 12(b)(3) motions).) But not once in the initial or reply brief do
Defendants invoke the Rule or argue that the Eastern District ofNew York is an "improper venue." Rather, Defendants
contend that a forum-selection clause obligates the parties to make their claims in Russia, and that, even if the clause

were not binding, common-law principles offorum non conveniens would counsel the Court to dismiss this case. (See
generallv id.) The Supreme Court has found that the parties may make such arguments in a motion to dismiss pursuant
to the forum non conveniens doctrine, not pursuant to Rule 12(b)(3). See Atl. Marine Const. Co. v. U.S. Dist. for the
W. Dist. of Tex.. 134 S. Ct. 568,580(2013).
1

& Co.. 219 F. App'x 83,85(2d Cir. 2007). Unless noted,the parties have not disputed these facts.
Plaintiff is a Russian company that, since 2007, has created anticorrosion lubricants under the
NANOPROTECH brand and has distributed the lubricants around the world. (D.E. # 29("Am.

Compl.")

1, 4-5.) Defendants are a Florida company and its sole owner, the latter of whom

served as Plaintiffs exclusive distributor of NANOPROTECH products in the Czech Republic
from 2010 to 2012. (Id

2-3,9.)

At issue in the case are a trademark and a disputed contract. Plaintiff registered a

"NANOPROTECH" trademark with the Russian government on March 24, 2011; with the

international Madrid System on January 9,2014; and with the United States Patent and Trademark
Office on December 9, 2014. (Id,

6-8.) Plaintiff alleges that Defendants have registered and

profited from numerous trademarks substantially similar to the NANOPROTECH trademark, in
violation of federal and New York trademark law. (S^ Am. Compl.

33-110, 114-39, 176-

87.) Plaintiff also contends that Defendants are unlawfully using its original trademark. (S^ Am.
Compl. 111 111-13, 118-39, 176-87.)

With respect to the agreement, the parties have presented two versions: Contract A and
Contract B. Although the parties dispute which one controls,(see generallv D.E.# 30),they agree
on basic details ofthe arrangement. On January 14,2014,Plaintiffentered into an agreement with

Kopshin and a predecessor of Nanoprotech FL.^ Both contracts granted the predecessor the
exclusive right to sell NANOPROTECH lubricants in the United States and contrary to what the

2 Contract A—which Defendants assert governs,(see Decl. of Eduard Kopshin ("Kopshin Decl.")^ 3, D.E.# 34-5)—

includes an addendum stating that the predecessor's rights and duties transfer to Nanoprotech FL.(^ D.E.# 34-6
("Contract A")at Addendum # 2.) The copy of Contract B presented to the Court includes no such addendum. (See
generally D.E. # 34-7("Contract B").) Still, Plaintiff—which asserts that Contract B governs,(s^ Am. Compl., Ex.
6; Kopshin Decl. ^ 6)—concedes that Nanoprotech FL is the legal successor of the original contracting party.(^
Am. Compl. ^ 15.) Therefore, the Court has no trouble finding that, regardless of which contract controls, the
predecessor of Nanoprotech FL, LLC signed the January 14, 2014, agreement, and that Nanoprotech FL may assert
its predecessor's rights under the contract.

Amended Complaint alleges, (see Am. Compl. T|1| 13-14)—Canada. (Contract A §§ 2.3, 14;

Contract B §§ 2.3,14.) The predecessor promised not to sell or promote the lubricants outside the
United States and Canada. (See Contract A §§ 14,15.2; Contract B §§ 14,15.2.) Both agreements

also contain the same forum-selection clause.^ (See Contract A § 12; Contract B § 12.) Plaintiff

alleges that Defendants manufacture, promote, and sell NANOPROTECH products around the
world, in violation of the January 14, 2014, agreement. (Am. Compl.

19, 140-47.) Plaintiff

also contends that Defendants have tortuously interfered with business relationships between
Plaintiff and its exclusive distributors abroad, in violation of New York common law. (Am.
Compl. nil 26-32, 162-75.)
DISCUSSION

Defendants, who are citizens of Florida,'^ claim that the "commercial courts of St.

Petersburg" serve as the appropriate forum for this case. (See, e.g., D.E.# 34 at 13.) They base

their argument both on the forum-selection clause in the relevant contract and on general principles
offorum non conveniens. Under either analysis, the Court declines to dismiss the case.
I.

Forum-Selection Clause

Defendants' primary argument is that the relevant forum-selection clause compels

dismissal. Although the parties dispute which contract applies,^ the Court need not resolve that

3 According to Kopshin's declaration, Plaintiffhas argued that a so-called "Voluntary settlement" agreement modified
the forum-selection clauses in Contract A and Contract B. (S^ Kopshin Decl. H 9.) Kopshin points to nowhere m
the record where Plaintiff made such an argument. After reviewing the terms ofthe "Voluntary settlement," the Court
finds that it does not address the forum-selection clauses. (See D.E.# 29, Ex. 11.)

* Defendants do not request of a transfer ofthe lawsuit to a federal court in Florida, pursuant to 28 U.S.C. § 1404.

^ Each page in both contracts includes a version in Russian and English. (See eenerallv Contract A ("This contract is
formulated in Russian and English Languages."); Contract B (same).) Therefore, the Court will rely on the "official

English translation" incorporated into each contract. See, e.g.. Braspetro Oil Servs. Co. v. Modec(USA),Inc., 240 F.
App'x 612, 616 (5th Cir. 2007)(relying, in a forum non conveniens case, on the "official English translation" of a
Portuguese contract).

issue at this stage, since the forum-selection provision in both contracts is the same. It reads as
follows:
12. Arbitration

12.1. All disputes and differences arising in the course ofthe contract should be
resolved through negotiations between the Parties.

12.2. Disputes, unresolved through bilateral negotiations, subject to review by a

competent court of arbitration in the location of the Seller on the basis of
procedural law of^he Seller.

(Contract A § 12; Contract B § 12.)

An agreed-upon forum-selection clause is considered prima facie valid and generally
should be enforced. See Magi XXI. Inc. v. Stato della Citta del Vaticano, 714 F.3d 714, 720(2d

Cir. 2013). Contrary to what Plaintiff repeatedly suggests in its opposition brief,(see, e.g., D.E.
# 36-9 at 9-11), it bears the burden to prove that dismissal is unwarranted where it brings a case
in a forum different from that identified in the clause, see LVAR. L.P. v. Bermuda Commercial

Bank Ltd.("LVARJ"), No. 13-CV-9148 (AT), 2015 WL 1267368, at *2-5 (S.D.N.Y. Mar. 18,

2015), affd.649 F. App'x 25(2d Cir. 2016k cf. Atl. Marine, 134 S. Ct. at 581 (placing burden of
proof on plaintiff because it was "defying the forum-selection clause").

In determining the enforceability of a forum-selection clause, the Court must consider

(1) whether the forum-selection clause was "reasonably communicated to the party resisting
enforcement";(2) whether the clause is "mandatory" by requiring the parties to bring a dispute in

a designated forum; and(3)whether "the claims and parties involved in the suit are subject" to the
clause. LVAR 1.2015 WL 1267368, at *2: see also Martinez v. Bloomberg LP,740 F.3d 211,217

(2d Cir. 2014)(quoting Phillips v. Audio Active Ltd.. 494 F.3d 378, 383 (2d Cir. 2007)). If the
Court answers yes to all three questions, then the forum-selection clause is "presumptively
enforceable." LVAR I. 2015 WL 1267368, at *2. Plaintiff may overcome the presumption only

by "making a sufficiently strong showing that enforcement would be unreasonable or unjust, or
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that the clause was invalid for such reasons as fraud or overreaching." Martinez. 740 F.3d at 217
(quoting Phillips. 494 F.3d at 383-84). If Plaintiff fails to make this showing,then the clause has

"controlling weight" in the forum non conveniens analysis, and the Court must dismiss the case.
See LVAR. L.P. v. Bermuda Commercial Bank Ltd.("LVARJI"), 649 F. App'x 25, 26-27 (2d
Cir. 2016)(quoting Atl. Marine. 134 S. Ct. at 581).

As a preliminary matter in conducting this analysis, the Court must determine what law
applies. The choice-of-law provision in both contracts points to Russian law. (See Contract A at

1 ("Adaptive law for this contract is the civil law of the Russian Federation."); Contract B at 2

(same).) Yet neither side invokes Russian law in its briefing, and neither side identifies differences

between principles of Russian and federal contract law,(see also D.E. # 34 at 6 n.l; D.E. # 36-9
at 10). When parties acquiesce in the application of a forum's law, it is not error for the Court to

assume that the foreign law is similar. See,e.g.. Martinez. 740 F.3d at 223. The Court thus applies

"general contract law principles and federal precedent to discern the meaning and scope of the
forum clause." Global Seafood Inc. v. Bantrv Bav Mussels Ltd.. 659 F.3d 221, 224 n.3 (2d Cir.

2011)(quoting Phillips. 494 F.3d at 385-86).
A. Whether the Forum-Selection Clauses Were "Reasonably Communicated"

Plaintiff fails to show that the clauses at issue here were not "reasonably communicated"

to it. "Absent substantive unconscionability or fraud[,]... parties are charged with knowing and

understanding the contents of documents they knowingly sign." Horvath v. Banco Comercial
Portugues. S.A.. 461 F. App'x 61, 63 (2d Cir. 2012). Plaintiff argues that it did not receive
reasonable notice because (1) the parties cannot agree which of the two contracts controls, and
(2)"Plaintiff has specifically alleged" one of the contracts to be "fraudulent and forged." (D.E.
# 36-9 at 12.)

Plaintiffs arguments lack merit because, as Defendants note in their briefing, (see D.E.
# 34 at 8), each contract adopts the same language for purposes of its forum-selection clause.

Although Plaintiff decries as fraudulent one of the contracts. Plaintiff concedes being bound by
the other. (See D.E.# 30 at 3-5.) Therefore, no matter which contract is valid. Plaintiff knowingly

and voluntarily signed an agreement with the forum-selection clause (Section 12.2) quoted above.
Plaintiff had reasonable notice of the provision. See, e.g.. Arial Techs. LLC v. Aerophile S.A..
No. 14-CV-4435 (LAP), 2015 WL 1501115, at *3 (S.D.N.Y. Mar. 31, 2015)(noting that the

provision satisfies the first element of the forum non conveniens analysis when "it appears on the
face of the contract that [the plaintiff] signed and now seeks to enforce").
B. Whether the Forum-Selection Clauses Are Mandatory

Plaintiff argues that "the purported forum selection clause does not mandate objectively

and exclusively venue in the Russian Federation." (D.E. # 36-9 at 12.) To the extent Plaintiff
contends that the provision is permissive,the Court finds this argument persuasive. In determining
whether a forum-selection clause is mandatory under federal common law, the Court must take

"initial focus ... on the language of the contract." Phillips. 494 F.3d at 386. "A forum selection
clause is viewed as mandatory when it confers exclusive jurisdiction on the designated forum or

incorporates obligatory venue language." Id "The general rule in cases containing forum
selection clauses is that '[wjhen only jurisdiction is specified the clause will generally not be
enforced without some further language indicating the parties' intent to make jurisdiction
exclusive.'" John Boutari & Son. Wines & Spirits. S.A. v. Attiki Imps. & Distribs. Inc.. 22 F.3d

51, 52 (2d Cir. 1994)(quoting Docksider. Ltd. v. Sea Tech.. Ltd.. 875 F.2d 762, 764 (9th Cir.
1989)).

The Court finds that the clause is permissive, not mandatory. Section 12.2, the forumselection clause at issue here, is a sentence fragment. It reads: "Disputes, unresolved through

bilateral negotiations, subject to review by a competent court of arbitration in the location of the
Seller on the basis of procedural law of the Seller." (Contract A at 6-7; Contract B at 5-6.)

Without a verb, the only natural reading is permissive. Had the provision included obligatory

venue language such as "must be subject to review" or "are to be subject to review," the Court
could find it to be a mandatory provision. See, e.g.. Phillips. 494 F.3d at 386-87. The clause also

lacks any language suggesting that the "competent court of arbitration in the location of the
Seller"—^that is, a Russian court—is the exclusive jurisdiction for making claims. S^ John
Boutari & Son. Wines & Spirits. 22 F.3d at 52-53;^Phillips. 494 F.3d at 386-87. Because the

clause "leaves open the possibility that an action could be brought in any forum where jurisdiction
can be obtained either inside or outside" Russia, Section 12.2's plain language refiects the

permissive nature of the forum-selection clause. See Provecfin de Venezuela. S.A. v. Banco
Industrial de Venezuela. S.A.. 760 F.2d 390, 396 (2d Cir. 1985); see also John Boutari & Son.
Wines & Spirits. 22 F.3d at 52.

To avoid this conclusion. Defendants offer a "certified translation ofthe Russian language

version of the agreement" that is significantly different from the English version of Section 12.2.
(See D.E. # 34 at 9; see also D.E. # 34-2 ("Translation") at 1.) According to the "certified
translation," the Russian version of Section 12.2 states the following: "Disputes between the

parties unresolved through bilateral negotiations will be reviewed by a competent Commercial
court at the location ofthe Seller and in accordance with the law of procedure of Seller's country."

(Translation at 1 (emphasis added).) Given the obligatory venue language included in the

"certified translation," Defendants argue that the Court must find the clause a mandatory one. (See
D.E.# 34 at 9); see also, e.g.. Phillips. 494 F.3d at 386-87.

The Court declines to consider the newly adv^ced translation. The translation that should
govern is the one signed and included in both Contract A and Contract B.

Braspetro Oil Servs..

240 F. App'x at 616. The parties presumably relied upon this translation in executing their
agreement. The translation is also the version to which both parties referred throughout their

briefing. (See, e.g.. D.E.# 34 at 9; D.E. #36-9 at 11.) Finally, the Court notes that the purported
translation includes a translator's "affidavit" that was neither notarized nor sworn under penalty

of perjury. The purported affidavit therefore fails to comply with 28 U.S.C. § 1746. The Court
declines to credit a translation with a deficient supporting affidavit. See, e.g.. Skates v. Inc. Vill.

ofFreeport. No. 15-CV-l 136(SJF),2017 WL 3017188, at *7(E.D.N.Y. June 28, 2017); Polanco
V. Active Ret. Cmtv..Inc.. No. 14-CV-4145(SJF),2015 WL 12564206,at *10(E.D.N.Y. Dec. 21,

2015). Upon review of the record, the Court is persuaded that Section 12.2 has neither obligatory
venue language nor a mandate that Russia's courts maintain exclusive jurisdiction over claims
involving the January 14, 2014, agreement. Therefore, the Court concludes that it is not required
to dismiss Plaintiffs claims in light of Section 12.2.

II.

Ordinary Forum Non Conveniens Analysis
Because the Court has found that Section 12.2 is not enforceable, default rules ofthe forum

non conveniens doctrine apply. Defendants now have the "heavy burden" ofproof. See Sinochem
Int'l Co. Ltd. V. Malavsia Int'l Shipping Corp., 549 U.S. 422, 430(2007). Although the "forum
non conveniens determination is committed to the sound discretion of the trial court," Piper

Aircraft Co. v. Revno. 454 U.S. 235, 249, 257(1981), the Second Circuit has articulated a three-

pronged test to guide the Court's analysis. The Court must(1)"determine the degree ofdeference

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properly accorded to [Plaintiffs] choice of forum";(2)"consider whether the alternative forum

proposed by [Defendants] is adequate to adjudicate the dispute at issue"; and (3) "balance the
private and public interests implicated in the choice offorum." Chirag v. MT Marida Marguerite
Schiffahrts. 604 F. App'x 16,20(2d Cir. 2015"): see also Iragorri v. United Techs. Corp.. 274 F.3d
65, 73-74 (2d Cir. 2001)(en banc). Because Defendants fail to make their case on the second
element, the Court does not discuss the other two.

Norex Petroleum Ltd. v. Access Indus..

Inc. ("Norex Petroleum 11"), 416 F.3d 146, 157, 160 (2d Cir. 2005) ("If the movant fails to

[demonstrate adequacy ofthe alternative forum],the forum non conveniens motion must be denied
regardless of the degree of deference accorded plaintiffs forum choice.").
The second element has two prongs. Defendants must show that (1) Defendants "are

amenable to service of process there," and that(2)the alternative forum "permits litigation ofthe

subject matter of the dispute." Id at 157(quoting Pollux Holding Ltd. v. Chase Manhattan Bank,
329 F.3d 64, 75 (2d Cir. 2003)). As stated above. Defendants assert that the "commercial courts
of St. Petersburg" constitute the adequate alternative forum. (See, e.g., D.E.# 34 at 13.) Because

Defendants represent that they are amenable to service for a lawsuit in those commercial courts,

(see id.), they have satisfied the first prong ofthe adequacy test,

Norex Petroleum II, 416 F.3d

at 157.

However, Defendants fail to offer any proof on this second prong. The record lacks any

indication that St. Petersburg's commercial courts permit litigation of any of Plaintiffs claims.
Defendants have offered no expert testimony or other evidence explaining the jurisdiction of the
commercial courts. As stated above, the forum-selection clause provides that a "competent court

of arbitration in the location of the Seller" may hear disputes, but Defendants do not offer any

evidence showing that the commercial courts are "competent" for purposes of the January 14,

2014, agreement. Defendants stated at oral argument that they cannot afford to produce expert
affidavits or marshal other evidence, but that fact hardly justifies the basic deficiency in their proof.
See, e.g.. DieitAlb. Sh.a v. Setnlex. LLC. No. 17-CV-4102 (WHP), 2018 WL 377381, at *9

(S.D.N.Y. Jan. 11,2018)("Nor has [the defendant] submitted any affidavits or other evidence that
would allow this Court to determine whether any of its proposed fora are adequate.").

Defendants' submission on the second prong consists entirely of citations to three

unpersuasive cases. (See D.E. # 34 at 13.) Erausauin v. Notz. Stucki Management(Bermuda)
Ltd.. 806 F. Supp. 2d 712(S.D.N.Y. 2011), deals with Swiss courts. S^id at 726. Although the
district court in Norex Petroleum Ltd. v. Access Industries. Inc. ("Norex Petroleum I"). 304 F.

Supp. 2d 570(S.D.N.Y. 2004), determined that the Russian courts were adequate for the claims in
that case, s^ id at 577-80, the Second Circuit vacated the opinion and found the lower court's

reasoning erroneous,s^ Norex Petroleum II. 416 F.3d at 157—60,162. Finally, the district court
in Overseas Media. Inc. v. Skvortsov. 441 F. Supp. 2d 610(S.D.N.Y. 2006), affd, 277 F. App'x

92(2d Cir. 2008), relied on evidence that there was already a pending action in "Leninsky District
Court" in Russia,^id at 617. However, the court in Overseas did not address the New York
common-law claims at issue here. Moreover, whereas the Overseas court had before it a proffered

"description" of the analogous action in Russia, s^ id, this Court has no evidence before it
concerning the jurisdiction ofthe "commercial courts of St. Petersburg."

Therefore, Defendants fail to carry their "heavy burden" of proving the adequacy of St.

Petersburg's commercial courts. See Sinochem Int'l. 549 U.S. at 430. Defendants accordingly
fail to show that dismissal is warranted under the forum non conveniens doctrine.

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CONCLUSION

For the foregoing reasons,the Court DENIES Defendants' motion to dismiss the Amended
Complaint under the forum non conveniens doctrine. (D.E.#33.) The Court ORDERS the parties
no later than March 29, 2018, to file a letter informing the Honorable Peggy Kuo, United States
Magistrate Judge, of proposed next steps. (See D.E. dated Apr. 13,2017.)
SO ORDERED.

Dated: March 22,2018

s/Carol Bagley Amon

Brooklyn, New York

Carol Bagley Ai^ion (J '
United States District Judge

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