Opinion
2:19-cv-06914-JWH-JPR
09-05-2023
BCS BUSINESS CONSULTING SERVICES PTE. LTD., a Singaporean company, Plaintiff, v. MICHAEL A. BAKER, individually and in his capacity as Executor of the Estate of Chantal Burnison; BCS PHARMA CORPORATION, a California corporation; HEIKA BURNISON, an individual; BIRKA BURNISON, an individual; GREY PACIFIC LABS, LLC, a Delaware limited liability company; and GREY PACIFIC SCIENCE, INC., a Delaware corporation, Defendants.
ORDER DENYING PLAINTIFF'S MOTION FOR AN ANTI-SUIT INJUNCTION [ECF NO. 193]
JOHN W. HOLCOMB UNITED STATES DISTRICT JUDGE
I. SUMMARY OF DECISION
Before the Court is the motion of Plaintiff BCS Business Consulting Services Pte. Ltd. for an anti-suit injunction against Defendant Michael Baker. Specifically, BCS seeks to enjoin Baker from enforcing the injunction of the Singapore International Commercial Court (the “SICC”) pending this Court's decision on Baker and his co-Defendants' motion for summary judgment. After considering the papers filed in support of and in opposition to the Motion, as well as the arguments of counsel at the hearing, the Court orders that BCS's Motion is DENIED, for the reasons set forth herein.
Pl.'s Mot. for an Anti-Suit Inj. (the “Motion”) [ECF No. 193].
The Court considered the documents of record in this action, including the following papers: (1) Third Am. Compl. (the “Amended Complaint”) [ECF No. 122]; (2) Motion (including its attachments); (3) Defs.' Opp'n to the Motion (the “Opposition”) [ECF No. 196]; (4) Pl.'s Reply in Supp. of the Motion (the “Reply”) [ECF No. 200]; (5) Pl.'s Supplemental Brief (“BCS's Supplemental Brief”) (including its attachments) [ECF No. 211]; and (6) Defs.' Supplemental Brief (“Defendants' Supplemental Brief”) (including its attachments) [ECF No. 214].
II. BACKGROUND
A. The 1999 Bankruptcy Case and the Disputed Ethocyn-Related Rights
According to BCS, the legal saga between BCS and Baker traces its origins to two bankruptcy cases filed in 1999 in the U.S. Bankruptcy Court for the Central District of California (jointly, the “Bankruptcy Case”), which involved Chantal Burnison and her companies, debtors Chantal Pharmaceutical Corporation and Chantal Skin Care Corporation. In the Bankruptcy Case, New Zealand-based Renslade Holdings Limited (“Renslade NZ”) purchased from the debtors the rights to a compound called “Ethocyn,” which was used in skincare products. Chantal Burnison claimed that the use of Ethocyn makes one's “skin look younger and firmer.”
See Amended Complaint ¶ 13. The Bankruptcy Case was pending as Case Nos. 2:99-bk-15936 and 2:99-bk-19412.
Id. at ¶¶ 14-19.
Id. at ¶ 13.
In that transaction-which the Bankruptcy Court approved in October 1999- Renslade NZ acquired all rights to Ethocyn through an asset purchase agreement among the debtors, the creditors' committee, and Renslade NZ. In May 2000, Renslade NZ transferred those Ethocyn-related rights to Renslade Holdings Pte. Ltd., a Singapore Incorporated Company (“Renslade SG”). BCS, in turn, acquired those rights from Renslade SG in April 2002. Renslade NZ, Renslade SG, and BCS were all owned by Marcus Weber. Later that same month, the rights to Ethocyn were once again transferred-this time to Renslade Holdings Hong Kong (“Renslade HK”), another company owned by Weber.
SeeDefs.' Mot. for Summ. J, Joint, Ex. 3 (the “Sale Agreement”) [ECF No. 184-12].
Id. at ¶ 19.
Id. at ¶ 21.
Id.
Id.
Id. at ¶ 23.
BCS claims that in May 2016, shortly before her death, Chantal Burnison met with Weber and discussed extending a supply agreement with NSE Products, Inc., f/k/a Nu Skin International, Inc. (“NSE”). BCS alleges that Baker, who would later act as the executor of Burnison's estate, was present at that meeting. BCS contends that Chantal Burnison informed Weber that she wanted her daughters, Heika and Birka Burnison, to benefit from Ethocyn-related business in the future. To further those ends, Weber and Chantal Burnison coordinated the designation of Weber as the first beneficiary of an incorporated foundation (the “Amarillis Foundation”) that owned all shares of Renslade HK, with Chantal Burnison's daughters as the second beneficiaries of the foundation.
Id. at ¶ 27.
Id.
The Court will refer to Heika and Birka Burnison to by their first names for clarity. No disrespect is intended.
Amended Complaint ¶ 28.
Through a subsequent amendment of the foundation's regulations, all of the outstanding shares of Renslade HK were donated to the Amarillis Foundation. Weber declared that he would renounce his rights as the first beneficiary of the Amarillis Foundation in the event of his death. BCS claims that as a result of those transactions, the Amarillis Foundation became the sole shareholder of Renslade HK and the beneficial owner of bank accounts in Singapore and Switzerland in the name of Renslade HK. The rights to Ethocyn were then held by BCS, and the proceeds thereof were held by Renslade HK-now beneficially owned by the Amarillis Foundation.
Id. at ¶ 30.
Id.
Id. at ¶ 31.
Id.
Chantal Burnison passed away in October 2016. Heika and Birka incorporated Grey Pacific Science (“GPS”) that same month, and BCS asserts that GPS wrongfully began to collaborate with Baker and Defendant BCS Pharma Corporation-the manufacturer of Ethocyn and a supplier to NSE-“to facilitate the fraudulent conveyance of [BCS's] intellectual property and business earnings away from [BCS].”The crux of BCS's allegations is that Baker and GPS wrongfully patented the means to produce Ethocyn and ultimately cut BCS out of business relationships relating to Ethocyn sales. BCS alleges that Baker redirected payments from NSE to Defendant BCS Pharma and misrepresented to NSE that those payments were going to Plaintiff BCS.
Id. at ¶ 34.
Id. at ¶ 35.
Id. at ¶ 40.
Id. at ¶ 48.
B. The Singapore Action
Baker filed a lawsuit against BCS, Weber, and Renslade HK (the “Singapore Defendants”) in November 2017 in the Singapore High Court, which is Singapore's court of general jurisdiction for civil cases. The action was subsequently transferred to the SICC, which is a hybrid court that was created to attract legal business to Singapore and that incorporates many procedures that are typically found in arbitration proceedings. BCS and Weber consented to the jurisdiction of the SICC, and they waived any right to object in those proceedings to that court's jurisdiction.
Id. at ¶ 51.
Id.
Opposition 5:19-6:2.
Baker and the Singapore Defendants proceeded to trial in the SICC in November 2019. The Singapore Defendants asserted a “no case to answer” defense-similar to a nonsuit in the United States, but with the party asserting the defense waiving its right to present evidence at trial. In April 2020, the SICC entered judgment in favor of Baker and against both BCS and Weber. The Singapore Court of Appeal affirmed the SICC's judgment in January 2019, rendering that judgment final and non-appealable in Singapore.
Id. at 6:14-15.
Id. at 7:16-17.
Id. at 8:5-7.
Following the entry of judgment, the SICC ordered the Singapore Defendants to account for the assets held by BCS and Weber for the benefit of Burnison's estate.Baker disputed the accounting that the Singapore Defendants provided, and in December 2021 the SICC entered another judgment in favor of Baker that compelled the Singapore Defendants to pay to Baker, in his capacity as the executor of Burnison's estate, “tens of millions of dollars.” Following appeal, Burnison's estate was awarded an additional $390,000, and the Singapore Defendants have thus far remitted approximately $35 million to Baker and Burnison's estate.
Id. at 8:14-15.
Id. at 8:16-19.
Id. at 8:19-24.
In November 2021, Baker obtained from the SICC an anti-suit injunction against Weber and BCS, which ordered Weber and BCS to discontinue their collateral attack in this Court on the final judgments from Singapore. The Singapore Defendants appealed, and Baker prevailed. Baker-on behalf of Burnison's estate-demanded that BCS comply with the anti-suit injunction. Stemming from actions taken by the parties in the instant action, in June 2023 Baker sought contempt remedies against BCS in the SICC (the “Contempt Proceeding”). The SICC set a hearing pertaining to the Contempt Proceeding for September 6, 2023-one day prior to the date originally set for the hearing in this Court on Defendants' motion for summary judgment.
Id. at 8:26-9:2.
Id. at 9:2-5.
Motion 15:7-9.
Id. at 15:10-12. This Court subsequently continued the hearing on Defendants' motion for summary judgment to September 21, 2023. See Minute Order [ECF No. 202].
C. The Procedural Posture of This Case
BCS filed its initial Complaint in this Court in August 2019, and it filed its operative Amended Complaint in April 2022. In its Amended Complaint, BCS alleges that Baker and his co-Defendants BCS Pharma, Heika, Birka, GPS, and Grey Pacific Labs, LLC (collectively, “Defendants”) participated in a conspiracy to usurp control over, to convert, and otherwise to exploit assets to which Defendants have no rights. BCS also pleads, in the alternative, claims for conversion and money had and received.
See, e.g., Amended Complaint ¶ 12.
See id. at ¶¶ 209, 215, 218, & 220.
BCS filed a motion to for leave to file a Fourth Amended Complaint in January 2023. The Court conducted a hearing on that motion two months later and continued the matter to September 7, 2023-concurrently with the hearing on Defendants' motion for summary judgment. On July 14, 2023, BCS filed the instant Motion for an anti-suit injunction against Baker, and one week later BCS filed an ex parte application for a temporary restraining order (“TRO”) seeking the same relief on an emergency basis. This Court promptly denied BCS's ex parte application and declined to issue a TRO. Thereafter, the parties stipulated to continue to September 21, 2023, the hearing on Defendants' motion for summary judgment and on BCS's motion for leave to file a Fourth Amended Complaint. BCS's instant Motion for an anti-suit injunction is fully briefed, and the Court conducted a hearing concerning the matter on August 11, 2023. The parties filed their supplemental briefs later that month.
See Hearing re: Pl.'s Mot. for Leave to File Fourth Am. Compl. [ECF No. 174].
See Pl.'s Ex Parte App. for TRO [ECF No. 197].
See Order Denying Pl.'s Ex Parte App. [ECF No. 199].
See BCS's Supplemental Brief; Defendants' Supplemental Brief.
III. LEGAL STANDARD
“‘A federal district court with jurisdiction over the parties has the power to enjoin them from proceeding with an action in the courts of a foreign country, although the power should be used sparingly.'” E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 989 (9th Cir. 2006) (quoting Seattle Totems Hockey Club, Inc. v. Nat'l Hockey League, 652 F.2d 852, 855 (9th Cir. 1981)).
The Ninth Circuit has established a three-part inquiry for assessing a motion for an anti-suit injunction:
• “First, [courts] determine ‘whether or not the parties and the issues are the same' in both the domestic and foreign actions, ‘and whether or not the first action is dispositive of the action to be enjoined.'” Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 881 (9th Cir. 2012) (quoting Gallo, 446 F.3d at 991).
• “Second, [courts] determine whether at least one of the so-called ‘Unterweser factors' applies.” Id. (referring to In re Unterweser Reederei GMBH, 428 F.2d 888, 896 (5th Cir.1970), aff'd on reh'g, 446 F.2d 907 (5th Cir. 1971) (en banc) (per curiam), rev 'd on other grounds sub nom. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)).
• “Finally, [courts] assess whether the injunction's ‘impact on comity is tolerable.'” Id. (quoting Gallo, 446 F.3d at 991).
“The Unterweser factors are a disjunctive list of considerations that may justify a foreign anti-suit injunction, first articulated by the Fifth Circuit . . . and adopted by [the Ninth Circuit].” Id. at 881-82. Courts must consider “[whether the] foreign litigation . . . would (1) frustrate a policy of the forum issuing the injunction; (2) be vexatious or oppressive; (3) threaten the issuing court's in rem or quasi in rem jurisdiction; or (4) where the proceedings prejudice other equitable considerations.” Gallo, 446 F.3d at 990 (quoting Seattle Totems, 652 F.2d at 855).
IV. ANALYSIS
A. Applicability of the Laker Airways Interdictory Actions Test
At the hearing on the Motion and in its Supplemental Brief, BCS asserted that the test that this Court should apply for an anti-suit injunction is not the one argued in the papers and articulated in Microsoft, 696 F.3d at 881. Instead, BCS maintains that the Court should follow the D.C. Circuit's instructions pertaining to interdictory anti-suit injunctions set forth in Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909 (D.C. Cir. 1984). As an initial point, neither BCS nor Defendants raised the Laker Airways test for interdictory anti-suit injunctions in their initial briefs; nevertheless, the Court will address BCS's arguments regarding parallel versus interdictory foreign actions.
Minute Order re H'rg re: the Motion [ECF No. 208]; see BCS's Supplemental Brief.
See Defendants' Supplemental Brief 17:9-11.
Laker Airways “represent[ed] a head-on collision between the diametrically opposed antitrust policies of the United States and United Kingdom.” Id. at 916. On that point alone, Laker Airways is distinguishable from the instant conditions, in which Singapore is asserting its contempt powers against BCS and Weber. Laker Airways was not a case in which two actions were litigated in parallel; instead, the parties there engaged in an “embarrassing race to judgment” in both the United States and the United Kingdom. Id. at 928. The D.C. Circuit determined that, inter alia, comity was not a factor in evaluating the motion for an anti-suit injunction in that case because the British government was blatantly attempting to assert its own interests over those of American courts. See id. at 941 (“If we are guided by the ethical imperative that everyone should act as if his actions were universalized, then the actions of the British Executive in this particular matter scarcely meet the standard of Kant.”).
Those circumstances are not present here. Although the Ninth Circuit has cited Laker Airways with approval in different contexts, it has not directed lower courts to differentiate between parallel or interdictory proceedings when applying the test for anti-sui injunctions. See Microsoft, 696 F.3d at 887 (discussing Laker Airways and comity considerations); Gallo, 446 F.3d at 994-95 (same). Accordingly, the Court is not convinced that the three-part test in Microsoft should be displaced by the D.C. Circuit's analysis in Laker Airways.
B. The Effect of This Case on the Singapore Action
The first step in deciding whether an anti-suit injunction is appropriate is to determine “whether or not the parties and the issues are the same, and whether or not the first action is dispositive of the action to be enjoined.” Applied Med. Distribution Corp. v. Surgical Co. BV, 587 F.3d 909 (9th Cir. 2009) (citing Gallo, 446 F.3d at 991).
1. Similarity of the Parties
“Perfect identity of parties is not required for an anti-suit injunction. Rather, it suffices that the parties be affiliated in such a way that their interests coincide.” Zynga, Inc. v. Vostu USA, Inc., 816 F.Supp.2d 824, 828 (N.D. Cal. 2011).
Here, Baker contests only whether the issues were the same in the two actions. The Court finds sufficient overlap in the parties such that they are functionally the same in both this case and the Singapore action.
Opposition 12:1-14:3.
2. Similarity of the Issues
Because there is no dispute that the parties are functionally the same in this action and the Singapore action, the analysis turns to “whether or not . . . the issues are the same, and whether or not the first action is dispositive of the action to be enjoined.” Gallo, 446 F.3d at 991; see also Applied Medical Distribution, 587 F.3d at 915 (“[T]he crux of the functional inquiry in the first step of the analysis is to determine whether the issues are the same in the sense that all the issues in the foreign action . . . can be resolved in the local action.”).
BCS claims that the issues are the same because the SICC's anti-suit injunction “purports to restrain BCS from prosecuting this action with respect to formation, existence, or enforcement of the Purported Trust, and the Contempt Proceeding is the enforcement mechanism of the SICC Injunction.” BCS asserts that the “[e]nforcement of a judgment in this action therefore would be dispositive of issues raised in the Singapore proceedings.”
Motion 17:4-7.
Id. at 17:11-12.
Baker opposes the Motion by arguing that the parties are not the same and that, in a previous opposition to a motion to dismiss for forum non conveniens, BCS argued that the two lawsuits involve different subject matter. In that opposition, BCS claimed that “the pending litigation in Singapore concerns product rights to Ethocyn. The suit here involves interference and conversion by Defendants stemming from a contract entered into by BCS Consulting and non-party NSE.”
Opposition 12:14-16.
Pl.'s Opp'n to Defs.' Mot. to Dismiss for Forum Non Conveniens (the “Forum Opposition ”)[ECF No. 24] 6:12-15.
Although it is true that the Singapore action and this case involve issues pertaining to Ethocyn-related rights, the only matter before the Court in this Motion is whether Baker should be enjoined from pursuing the Contempt Proceeding against BCS in Singapore. The Singapore action was fully adjudicated by the SICC, and all appeals were resolved in Baker's favor. BCS's characterization of the “Contempt Proceeding, the SICC Injunction, and this action address[ing] the same transactions involving the Ethocyn Rights” is incorrect, because the SICC Injunction and the subsequent Contempt Proceeding are aimed solely at stopping BCS's collateral attack on the SICC's judgment.
Motion 2:7-11.
Id. at 14:3-10.
Reply 6:12-14.
In the anti-suit injunction that the SICC entered, that court ordered that BCS was restrained from prosecuting its case before this Court “insofar as such proceedings relate to the existence, validity and/or enforceability of the Trust in the Ethocyn Rights . . . and any issues relating to the reliance on and/or assertion of the said Trust or any issues litigated before the Singapore Courts[.]” However, the SICC's order specifically did not restrain BCS:
Motion, Ex. B (“Exhibit B”) [ECF No. 193-2] ¶ 0383 ¶ 1.
from pursuing claims against [Defendants in the United States action] for claims against [Baker] for allegedly holding himself out as an officer of [BCS] or for signing of the assignment agreement transferring the trademark rights, and the settlement agreement with [NSE], and for claims against [Heika] for allegedly willingly entering into the assignment agreement for the trademark rights knowing that [Baker] is not an officer of [BCS], or for claims related thereto, provided always that they do not relate to the existence, validity and/or enforceability of the Trust in the Ethocyn Rights and assets held on behalf of [Burnison and her Estate], and any issues relating on and/or assertion of the said Trust or any issues litigated before the Singapore Courts[.]
Id. at ¶ 0384 ¶ 2.
It is apparent that the issues in the SICC injunction and the instant Motion for an anti-suit injunction against Baker are not the same. While BCS attempts to portray the Motion as an effort to resolve the same issues litigated in the SICC, the SICC's anti-suit injunction specifically distinguished issues already litigated in Singapore from BCS's claims before this Court. Although BCS argues differently now, it was correct in its opposition to the motion to dismiss for forum non conveniens-the issues are different. Accordingly, this Court is not convinced that this action would be dispositive of the issues raised in the Singapore proceedings. See Sun World, Inc. v. Lizarazu Olivarria, 804 F.Supp. 1264, 1267 (E.D. Cal. 1992) (assessing whether the resolution of a U.S. action would be dispositive of a parallel foreign action).
3. Potential for an Advisory Opinion
An important issue that the parties ignore is whether an anti-suit injunction against Baker would prevent Singapore's Contempt Proceeding from sanctioning BCS. The Contempt Proceeding does not concern the underlying litigation of Ethocyn-related rights-as Defendants explain, the Singapore Defendants (including BCS) have already satisfied the vast majority of the monetary portion of the judgment. The SICC's injunction against BCS concerns what it perceives to be BCS's collateral attack on its judgment here in the United States:
Opposition 8:22-24.
[W]e are of the view that many of the claims pursued by BCS in the Californian Proceedings amount to an attempt at relitigating matters already decided by this court, and thus vexatious and oppressive and amount to an abuse of process. We also find that BCS's claims are vexatious and oppressive towards the [Burnison] Estate. Moreover, these claims relitigating the same issues that have been decided by this court amount to a collateral attack of this court's Judgment. This justifies the issuance of an [anti-suit injunction] against BCS, to restrain BCS from relitigating the subject-matter of the Suit against the [Burnison] Estate and the U.S. Defendants through the Californian Proceedings.In that order concerning the anti-suit injunction, the SICC also specifically stated that “we have also noted that not all of the claims pursued by BCS are attempts at relitigating issues already decided by this court. To that extent, BCS is allowed to pursue these claims, which do not impinge on any findings and rulings contained in the Judgement of this court.” In that context, it is apparent that the Contempt Proceeding stands separate from any claim before this Court by BCS against Defendants.
Exhibit B JE 0378 ¶ 91 (italics in original).
Id. at ¶ 0378 ¶ 92 (italics in original).
Even if this Court were to grant the Motion and enjoin Baker from prosecuting the Contempt Proceeding against BCS in Singapore, it is far from certain that the SICC would refrain from holding BCS in contempt. Singapore has a common law-based legal system in which its courts-much like those in the United States-have inherent powers to hold parties in contempt. See Dandong v. Pinnacle Performance Ltd., 2011 WL 6156743 (S.D.N.Y. Dec. 12, 2011), aff'd in part, remanded in part sub nom. Lam Yeen Leng v. Pinnacle Performance Ltd., 474 Fed.Appx. 810 (2d Cir. 2012) (collecting legal treatises on Singaporean courts' contempt powers).
According to Singapore's Attorney-General's Chambers, “[c]ontempt of court takes many forms and is essentially conduct that may impede the functionality of the court.” Parties may be held in contempt in Singapore for both interference with and disobedience of court orders-with contempt by disobedience defined as a category including “intentional disobedience of court orders as well as intentional breaches of undertakings given to the court.” “Under § 10(1) of the [Administration of Justice (Protection)] Act [2016], the Court of Appeal and the High Court have the jurisdiction to try and power to punish for contempt of court.” “There are two stages to commencing proceedings for contempt of court,” consisting of both an application for leave to apply for an order of contempt and then an actual application for a contempt finding. “A hearing date will then be fixed for the court to hear both parties and to determine whether the person had committed contempt of court. If the person is found guilty, the court may impose punishment for contempt of court.”
Attorney-General's Chambers, Contempt of Court, ¶ 1 https://www.agc.gov.sg/legal- processes/contempt-of-court (accessed Sept. 3, 2023).
Id. at ¶ 1(b).
Id. at ¶ 2.
Id. at ¶ 4(a)-(b).
Id. at ¶ 4(b).
According to BCS, in June 2023 Baker requested an expedited Contempt Proceeding from the SICC against BCS, in addition to filing an amendment seeking an order of disqualification to bar Weber from serving as a director of BCS. In view of the facts that the Contempt Proceeding materials have already been filed and that the SICC set a hearing on the matter for September 6, 2023, it is unclear what relief this Court could provide to BCS by granting the Motion. Regardless of whether Baker is enjoined by this Court from enforcing the SICC's anti-suit injunction against BCS, the SICC still possesses the authority to sanction BCS for its defiance of the SICC's orders.
Motion 15:7-14.
Explained differently, granting the Motion would not provide BCS with the actual relief it seeks-namely, preventing the imposition of sanctions against BCS in Singapore's Contempt Proceeding. “[F]ederal courts do not issue advisory opinions,” but “instead decide only maters ‘of a Judiciary Nature.'” TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2203 (2021) (citation omitted). Accordingly, “a federal court may resolve only ‘a real controversy with real impact on real persons.'” Id. (citing American Legion v. American Humanist Assn,139 S.Ct. 2067, 2103 (2019)). Here, BCS has failed to show that enjoining Baker would materially alter the pending Contempt Proceeding in Singapore, nor has BCS explained how enjoining Baker from enforcing the judgment would stop the SICC from sanctioning BCS for violating the SICC's anti-suit injunction. See Coal. for a Healthy California v. F.C.C., 87 F.3d 383, 386 (9th Cir. 1996) (dismissing the plaintiff's petition because it sought relief that the court was unable to give, thus rendering that relief “an advisory opinion prohibited under Article III of the Constitution”).
To be clear, this Court takes no position regarding whether BCS did or did not violate the SICC's anti-suit injunction nor whether any sanctions are or are not warranted.
C. The Unterweser Factors
Although the Court concludes that BCS's Motion flunks the first step of the anti-suit injunction analysis, the Motion also fails because BCS does not meet the requirements of any of the Unterweser factors.
1. Violation of Public Policy
BCS contends that allowing Baker to enforce the SICC's anti-suit injunction frustrates U.S. public policy because Baker re-litigated an issue in Singapore that was already decided by a United States court and because Baker secured the SICC injunction through impermissible forum shopping.
Id. at 17:20-24.
a. The SICC Contempt Proceeding
As a threshold issue, the Court is not convinced that BCS's Motion concerns the underlying issues of the Ethocyn litigation. Although BCS argues that Baker is attempting to re-litigate an issue in Singapore that it claims was already decided in U.S. Bankruptcy Court, the only matter currently being litigated is the Contempt Proceeding before the SICC. A court's imposition of contempt sanctions-at least without a showing of procedural unfairness or lack of due process-does not violate public policy, because common law courts “have an ‘inherent authority' to sanction ‘bad faith' or ‘willful misconduct,' even in the absence of express statutory authority to do so.” In re Dyer, 322 F.3d 1178, 1196 (9th Cir. 2003) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 42-47 (1991)).
Id.
BCS's argument on this point is even weaker, because Singapore courts possess statutory contempt authority in addition to the authority that arises under common law. Instead of focusing on the Contempt Proceeding, BCS's Motion goes all-in on the underlying Ethocyn litigation, which resulted in a final judgment in Singapore. Even if this Court was persuaded that Baker should have first filed his litigation here-in the Bankruptcy Court for the Central District of California-the issuance of the anti-suit injunction that BCS now seeks would do nothing to change the SICC's judgment, nor would it reverse the Singapore Defendants' payment to Baker of the monetary portion of the judgment.
See Attorney-General's Chambers, Contempt of Court, https://www.agc.gov.sg/legal- processes/contempt-of-court (accessed Sept. 3, 2023).
b. The U.S. Bankruptcy Case
BCS contends that Baker's SICC litigation was an impermissible collateral attack on the Bankruptcy Court's jurisdiction and that Baker violated the public policy prong of Unterweser by not first seeking relief before the Bankruptcy Court. BCS asserts that Baker violated certain portions of the Bankruptcy Court's order approving the Sale Agreement, including that: (1) the sale was conducted at arm's length between the purchaser and debtor, and in good faith within the meaning of 11 U.S.C. § 363(m); and (2) the sale was free and clear of all liens, encumbrances, and interests in the property being sold under 11 U.S.C. § 363(f). BCS then asserts that the Singapore action was an impermissible “collateral attack that is shielded by res judicata principles” and that it was “precluded by the proscribed method of challenging bankruptcy orders.”
Motion 19:12-20:14.
Id. at 18:14-17; see also Sale Agreement.
Motion 18:21-23.
First, it is unclear why BCS did not seek relief before the Bankruptcy Court, which was the tribunal that approved the Sale Agreement. See In re Zetta Jet USA, Inc., 644 B.R. 12, 52 (Bankr. C.D. Cal. 2022) (the bankruptcy court issued an anti-suit injunction, finding that res judicata barred the trustee from pursuing its claims in Singapore); In re Icenhower, 398 B.R. 902, 910-11 (Bankr. S.D. Cal. 2008) (concerning a motion for an anti-suit injunction before a bankruptcy court). Nor did BCS first seek relief before this Court. Indeed, district courts may withdraw cases or proceedings from bankruptcy courts for cause under 28 U.S.C. § 157(d), but BCS did not make such a request here. See Sec. Farms v. Int'l Bhd. of Teamsters, Chauffers, Warehousemen & Helpers, 124 F.3d 999, 1008 (9th Cir. 1997) (“In determining whether cause exists, a district court should consider the efficient use of judicial resources, delay and costs to the parties, uniformity of bankruptcy administration, the prevention of forum shopping, and other related factors.”).
Second, BCS has failed to show that the Bankruptcy Court retained exclusive jurisdiction over Ethocyn-related rights. The Bankruptcy Court approved the Sale Agreement in October 1999 and explicitly stated that “[t]he Bankruptcy Court shall retain jurisdiction to the fullest extent necessary to consummate the transactions contemplated hereby and to resolve any disputes with respect thereto.” That sale was consummated shortly after the Sale Agreement was approved, and in October 1999 Renslade NZ acquired the Ethocyn-related rights from Chantal Burnison for $325,000. See In re Lewis, 515 B.R. 591, 595 (B.A.P. 9th Cir. 2014) (discussing the requirements for the consummation of a sale within the bankruptcy context, including that “this will typically involve payment”). The Ethocyn rights were then transferred multiple times among companies owned by Weber. Because the sale of Ethocyn-related rights was consummated decades ago, there is no reasonable interpretation of the Sale Agreement in which BCS can show that the Bankruptcy Court still possessed jurisdiction, much less exclusive jurisdiction.
Sale Agreement ¶ 16 (emphasis added).
See Defs.' Mot. for Summ. J, Joint Ex. 1 (the “SICC Judgment”) [ECF No. 184-4] JE 0023 ¶ 22.
See id. at ¶ 0024 ¶ 23.
Finally, the SICC's analysis of the Bankruptcy Court's Sale Agreement did not violate public policy. Although BCS claims that the SICC “performed no meaningful analysis on its own subject matter jurisdiction to decide anew the nature of the Ethocyn Rights Transfer,” the SICC's Judgment shows that it assessed the Bankruptcy Court's Sale Agreement and the resolution of the underlying Bankruptcy Case. The SICC considered “the parties' cases on the formation of a trust under California law” and evaluated California probate law and statutes on the matter. The SICC concluded, based upon the evidence, that “Chantal [Burnison] intended to and did create a trust and it is recognizable under California law.” Further, the Singapore Defendants appealed the SICC's judgment, and Singapore's appellate court affirmed. While this Court does not now evaluate the merits of the SICC's decision, BCS has not shown that the SICC's analysis or judgment violated the public policy of the United States or California.
Motion 20:3-7.
SICC Judgment JE 0143 ¶ 231.
Id. at ¶ 0146 ¶ 240.
c. Forum Shopping
Next, BCS makes a strained argument that Baker inappropriately forum-shopped when it sued the Singaporean defendants in a Singapore court. BCS argues that Baker attempted to evade the Bankruptcy Court's jurisdiction by filing the Singapore action, but, as explained above, Baker's litigation in Singapore did not violate public policy.Although it may seem counterintuitive for BCS to argue that an American plaintiff suing a Singaporean defendant in Singapore constitutes forum shopping, BCS insists that Baker obtained an unfair advantage because: (1) Singapore does not recognize judicial estoppel; (2) the SICC did not analyze whether collateral estoppel barred Burnison's estate from relitigating whether Chantal Burnison retained an interest in Ethocyn-related rights; and (3) the SICC's “no case to answer” procedure did not consider evidence proffered by the Singapore Defendants.
Motion 21:17-19.
Id. at 21:19-22.
Id. at 22:11-22.
With respect to the larger question of what violates public policy in California in the context of international litigation, courts have held that the “public policy” exception to the comity doctrine “precludes application of a foreign state's law where to do so would violate California's public policy.” Wong v. Tenneco, Inc., 39 Cal.3d 126, 135 (1985). “The standard, however, is not simply that the law is contrary to our public policy, but that it is so offensive to our public policy as to be ‘prejudicial to recognized standards of morality and to the general interests of the citizens[.]'” Id. (quoting Knodel v. Knodel, 14 Cal.3d 752, 765 (1975)). “Moreover, even where it is agreed that a foreign law offends public policy, it may still be applied in a limited context where the potential harm is minimal.” Id. at 136.
Beginning with BCS's claim that Singapore's “no case to answer” procedures violate public policy here in the United States, the Court notes that BCS chose that strategy as its defense before the SICC. As stated in the Singapore Court of Appeal's order affirming the SICC's judgment, “[a]fter they gave their evidence, the appellants submitted that there was no case to answer and elected not to call evidence.” The Singapore Court of Appeal continued, “[t]he parties then filed their written submissions, and the registered U.S. counsel filed their affidavits and submissions on California law.” As Defendants note in their Opposition, the Singapore Defendants told the SICC during trial that they “will be making a submission of no case to answer and we will be electing not to call any evidence.” In view of BCS's consent to the SICC's jurisdiction, as well as its decision voluntarily to file a “no case to answer” defense as part of its litigation strategy, this Court cannot conclude that Singapore's legal procedures violate public policy.
Defs.' Mot. for Summ. J., Joint Ex. Part C (the “ASI Appeal Judgment”) [ECF No. 1846] ¶ 0395 ¶ 13.
Id.
Opposition 15:19-21.
BCS also fails to show that Singapore's treatment of judicial and collateral estoppel issues violates public policy. Although BCS claims that Singapore does not recognize judicial estoppel, both the SICC and the Singapore Court of Appeal evaluated BCS's defenses under California law, and the Singapore Court of Appeal noted that “the principal focus of [the Singapore Defendants'] appeal is on the judicial estoppel claim.”Although BCS disagrees with the Singapore Court of Appeal's analysis of judicial estoppel, nothing in the order prejudicially offends California's standards of morality or the interest of its citizens. See Wong, 39 Cal.3d at 135. Further, as the Singapore Court of Appeal noted, BCS “had submitted to the jurisdiction of the Singapore courts by appearing in the proceedings without objecting to or otherwise challenging the court's jurisdiction.”
ASI Appeal Judgment JE 0403 ¶ 29.
Id. at ¶ 0406-JE 0407 ¶ 37.
Finally, BCS alleges that the SICC's failure to apply collateral estoppel violates public policy, because the issue of whether Ethocyn-related rights were transferred through an arm's-length transaction was already decided by the Bankruptcy Court. BCS states that Chantal Burnison “actually litigated” the issue in the Bankruptcy Court by submitting a declaration stating that she would transfer the Ethocyn-related rights to Renslade NZ without retaining any interest in them. The SICC addressed that issue, and it concluded that Chantal Burnison's “1999 declarations before the U.S. Bankruptcy Proceedings . . . were false, but her subsequent statements were not. We move on to consider the effect of the false declarations on the enforceability of the Trust Agreement under both Singapore law and California law.” Although BCS disagrees with the decisions and conclusions of both the SICC and the Singapore Court of Appeal, BCS has not shown that the Singapore courts' interpretation of collateral estoppel violates California public policy, particularly in light of BCS's consent to the SICC proceedings.
Motion 26:8-11.
Id. at 26:11-13.
SICC Judgment JE 0149 ¶ 249.
2. Presence of Vexatious or Oppressive Behavior
Anti-suit injunctions may be appropriate when foreign litigation is “vexatious or oppressive” and when the foreign litigation prejudices equitable considerations. Microsoft, 696 F.3d at 885. Here, as described above, neither BCS nor any of the Singapore Defendants objected to the SICC's jurisdiction at trial, and the Singapore Court of Appeal determined that the Singapore Defendants consented to its jurisdiction. BCS's consent to the SICC's jurisdiction undermines its argument that the Singapore action was vexatious or oppressive. See Mastronardi Int'l Ltd. v. SunSelect Produce (California), Inc., 437 F.Supp.3d 772, 782 (E.D. Cal. 2020) (concluding that a foreign arbitration proceeding was neither vexatious nor oppressive “because the arbitration was contractually agreed to by the parties”).
ASI Appeal Judgment JE 0406-JE 0407 ¶ 37.
Further, as BCS stated in its opposition to Baker's motion to dismiss, “the pending litigation in Singapore concerns product rights to Ethocyn. The suit here involves interference and conversion by Defendants stemming from a contract entered into by BCS Consulting and non-party NSE.” In view of that admission, the Court cannot find that the Singapore action was duplicative of this action, which BCS filed in this Court. See id. at 783 (“Foreign litigation may be enjoined when it causes substantial inconvenience, unnecessary expense, and duplication of efforts.”).
Forum Opposition 6:12-15.
3. Evaluation of Other Equitable Considerations
BCS did not address the third Unterweser factor. Instead, it lists a few reasons why the Contempt Proceeding violates other equitable considerations. To the extent that those arguments rely on the previous factors that BCS raises, those arguments similarly fail for the reasons described above.
Motion 31:22-32:18.
“To determine whether a foreign action ‘prejudice[s] other equitable considerations,' courts in the Ninth Circuit analyze the ‘convenience to the parties and witnesses, the interest of the courts in promoting the efficient administration of justice, and the potential prejudice to one party or the other[.]'” Zetta Jet USA, 644 B.R. at 59 (quoting Seattle Totems, 652 F.2d at 856).
The Contempt Proceeding does not inhibit the equitable considerations of the parties, nor does it violate the equitable considerations of this Court. As stated above, the SICC's anti-suit injunction specifically allowed for BCS to pursue certain claims before this Court that were not adjudicated in the Singapore action. BCS attempts to append equitable considerations to the other arguments in its instant anti-suit injunction Motion, but it provides no pertinent legal authorities in support of its list of arguments. Accordingly, BCS has not shown that other equitable considerations suggest that this Court should issue an anti-suit injunction to prevent Baker from participating in the Contempt Proceeding.
Exhibit B JE 0384 ¶ 2.
D. The Impact of the Requested Anti-Suit Injunction on Comity
When analyzing a motion for an anti-suit injunction, a court must “assess whether the injunction's ‘impact on comity is tolerable.'” Microsoft, 696 F.3d at 886 (quoting Gallo, 446 F.3d at 991). Courts are not required to “calculate the precise quantum of the injunction's interference with comity, but only [to] estimate whether any such interference is so great as to be intolerable.” Id. The Ninth Circuit instructs that “comity is less likely to be threatened in the context of a private contractual dispute than in a dispute implicating public international law or government litigants.” Id. at 887. Further, “where two parties have made a prior contractual commitment to litigate disputes in a particular forum, upholding that commitment by enjoining litigation in some other forum is unlikely to implicate comity concerns at all.” Id.
Here, while the Court denies the Motion because BCS has not prevailed under the first two prongs of the anti-suit injunction test, the Court also concludes that granting the Motion would be intolerable to international comity. As discussed above, BCS consented to Singapore's jurisdiction throughout the Singapore action, and both BCS and Weber are citizens of Singapore and are conducting business within Singapore. If the proverbial “shoe was on the other foot” and Defendants sought an anti-suit injunction in Singapore to prevent BCS from participating in this Court's hypothetical contempt proceedings against Defendants, this Court would view that action as an attempt to undermine this Court's authority over its own judgment. See Gallo, 446 F.3d at 994 (“Comity is ‘the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws.'”) (quoting Hilton v. Guyot, 159 U.S. 113, 164 (1895)).
BCS's previous admissions before this Court, in particular, implicate international comity, because BCS acknowledged that its actions contravene the SICC's injunction:
The anti-suit injunction in Singapore is very clear by its terms. By standing right here right now pressing these claims my client is violating the anti-suit injunction in Singapore. And I think that arguably . . . I don't want to fully say that we are necessarily violating it in full. But I think that there's a strong argument that we are. And there's considerations that have come into play that could potentially, if the Singapore Court were to find that this is in violation of the anti-suit injunction, could potentially subject my client to various felonies in Singapore. There's no question about that.
March 3, 2023, Hr'g Tr. [ECF No. 190] 6:20-7:6.
When this Court asked BCS's counsel whether “[BCS] wants to proceed in this Court and will take its chances with potential violations of the [Singapore court's] antisuit injunction[,]” BCS's counsel responded, “I think that's right, your honor.” In view of those statements, the Contempt Proceeding against BCS should be interpreted as the SICC's legitimate exercise of its jurisdiction over BCS. See Michaelson v. United States ex rel. Chicago, St. P., M., & O.R. Co., 266 U.S. 42, 65 (1924) (“That the power to punish for contempts is inherent in all courts, has been many times decided and may be regarded as settled law. It is essential to the administration of justice.”). Any attempt by this Court to undermine that jurisdiction would be intolerable to international comity. Thus, BCS also fails to meet the third prong of the test for an anti-suit injunction.
Id. at 14:13-16.
E. BCS's Request for Alternative Relief
BCS requests that if this Court denies its instant Motion for an anti-suit injunction against Baker, then, in the alternative, this Court should grant a TRO against Baker's enforcement of the SICC Injunction until this Court reaches a decision on Defendants' pending motion for summary judgment. The Motion is silent regarding why this Court should issue a TRO in the event that the anti-suit injunction is denied, or why that more limited remedy may be preferrable to the anti-suit injunction. Accordingly, to the extent that the Motion seeks the issuance of a TRO, it is DENIED.
Motion 2:11-14.
V. DISPOSITION
For the foregoing reasons, the Court hereby ORDERS that BCS's instant Motion for an anti-suit injunction is DENIED.
IT IS SO ORDERED.