We return today to the case of the day from September 27, 2011, H-D Michigan, LLC v. Hellenic Duty Free Shops S.A. The claim was for breach of a trademark licensing agreement, and the issue back in September was whether the court could extend a temporary restraining order beyond the normally applicable time limit until the Greek defendant was served with process under the Hague Service Convention. I followed up with a post on that issue in October.
In today’s case of the day, the parties have gotten past the preliminaries. DFS, the Greek defendant, was served with process, and the judge extended the temporary restraining order and ultimately issued a preliminary injunction.
Shortly before the hearing on the motion for a preliminary injunction, DFS brought a parallel action in Greece. According to the declaration Harley-Davidson (the plaintiff) filed with the Wisconsin court, DFS filed a petition for an injunction with the First Instance Court of Athens seeking to enjoin Harley Davidson from “obstructing DFS’s distribution and sale” of the goods in question in the case and from “stating that DFS is not an authorized Harley-Davidson licensee”. The Athens court scheduled a hearing and required DFS to summon Harley-Davidson five days before the hearing. The court went ahead with the hearing, even though Harley Davidson did not appear and later denied having had any notice of the hearing. DFS, on the other hand, asserted (without proof) that the notice had been served “by cable.” The Greek court issued the equivalent of a temporary restraining order, which was to be effective until March 2012, when a full hearing would be held. (Sidebar: this raises a really interesting point. Was service “by cable” proper under the Hague Convention? If in fact Harley-Davidson was not served, did the Greek court have jurisdiction to enter its order? I don’t propose to answer those questions, other than to point out that in a sense what goes around comes around—remember that Harley-Davidson had successfully, and correctly in my view, argued that the US court had jurisdiction to enter preliminary injunctive relief even before service of process on a foreign defendant).
Not surprisingly, Harley-Davidson sought an anti-suit injunction. The judge found that DFS had not provided notice of the Greek proceedings to Harley-Davidson and that DFS had not provided notice of the US proceedings to the Greek court. The judge held that the threshold questions were whether the foreign case involved the same parties and whether the US proceedings would be dispositive of the foreign proceedings. Following Seventh Circuit precedent, he went on to apply the “liberal” approach, under which the question is whether “letting the two suits proceed would be gratuitously duplicative, or as the cases sometimes say, ‘vexatious and oppressive.’” If so, then an injunction should issue unless the opposing party can show that an injunction would “actually harm” US foreign relations. (Other circuits adopt the “conservative” approach, under which comity concerns have more weight and an injunction can issue “only in the most compelling circumstances”).
The judge found that an injunction was warranted. The key factor was that parties’ licensing agreement had a choice of court clause selecting the Wisconsin courts for resolution of disputes. But the judge also found that DFS had brought the Greek action in bad faith, since it failed to inform the Greek court about the US proceedings and thus deprived the Greek court of the ability to hold a meaningful hearing. DFS failed to show that an anti-suit injunction would have any effect on US relations with Greece. Indeed, the case for an injunction was so strong that the judge found that it would be warranted even under the more conservative approach used in other circuits, since the injunction was necessary to protect the court’s jurisdiction and to foil DFS’s “blatant attempt … to relitigate issues.”