Case of the Day: Montebueno Marketing v. Del Monte Foods

The case of the day is Montebueno Marketing, Inc. v. Del Monte Foods Corp.—USA (N.D. Cal. 2012). Montebueno was Del Monte’s distributor in the Philippines. When Del Monte terminated the distribution contract in 1996, Montebueno sued, in the Philippines courts, for breach of the contract, even though the contract had an agreement to arbitrate. While the case was ongoing, Del Monte filed a petition in the Northern District of California seeking to compel arbitration. The US judge granted the petition, but Montebueno nevertheless continued to press its case in the Philippines. The litigation resulted in a judgment for nearly a million dollars in favor of Montebueno. Montebueno sought recognition and enforcement in the Northern District of California. The judge denied recognition and enforcement on the grounds that under the UFMJRA, a court may refuse to recognize a judgment if “the proceeding in the foreign court was contrary to an agreement between the parties under which the dispute in question was to be determined other than by proceedings in that foreign court.”

The decision seems correct on its face, and Montebueno apparently did not put up much of a fight. I wonder, though, whether Del Monte sought dismissal of the Philippines litigation. If not, why not? If so, then does the Philippines judgment have some preclusive effect? I simply pose these questions, which may or may not be significant. But since the opinion does not address them, it’s impossible to say.

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