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Edible International, LLC v. Google, LLC

United States District Court, D. Connecticut

March 5, 2019

EDIBLE INTERNATIONAL, LLC and Edible IP, LLC Plaintiffs,
v.
GOOGLE, LLC, Defendant.

          RULING ON GOOGLE'S MOTION FOR A PRELIMINARY INJUNCTION AND CONTEMPT ORDER

          MICHAEL P. SHEA, U.S.D.J.

         Defendant Google, LLC (“Google”) has filed a motion for preliminary injunction and order of contempt against Plaintiff Edible IP, LLC (“Edible IP”). ECF No. 46. Arguing that Edible IP's recent filing of a new lawsuit against Google in Georgia state court has flouted my earlier order in this case granting Google's motion to compel arbitration, Google seeks to stop Edible IP from prosecuting the Georgia action. Id. Primarily because the requested relief is barred by the Anti-Injunction Act, 28 U.S.C. § 2283, I deny Google's motion.

         I. Background

         Because the parties have requested an expedited ruling in this matter, I assume the parties' familiarity with the complaint, briefing, and previous rulings in this case, and I set forth only the facts, procedural history, and legal standards necessary to explain this ruling.

         On February 2, 2018, Plaintiffs Edible International, LLC and Edible IP brought this suit against Google, alleging violations of the Lanham Act and Connecticut law. ECF No. 1. Google filed a motion to compel arbitration and dismiss the action. ECF No. 28. On July 13, 2018, the Court granted Google's motion to compel arbitration, but declined to dismiss the case, instead staying and administratively closing it pending the arbitration. ECF No. 37 at 2. On December 21, 2018, one of the Plaintiffs, Edible IP, filed suit against Google in the Superior Court of Georgia alleging violations of Georgia law (the “Georgia Action”). ECF No. 39-1. On January 11, 2019, Google filed an emergency motion to reopen this action and, after I reopened the case, filed a motion seeking a preliminary injunction and contempt order. ECF No. 46.

         II. Discussion

         Google argues that Edible IP's claims in the Georgia Action “are based on the same allegations as those asserted before this Court and [therefore] subject to arbitration.” ECF No. 47 at 7. Accordingly, Google requests an order “(i) enjoining Edible IP from continuing to prosecute the Georgia Action, (ii) enjoining Plaintiffs Edible International, LLC and Edible IP from filing additional lawsuits based on claims covered by the Court's July 13, 2018 order, (iii) finding that Edible IP is in contempt of this Court's July 13, 2018 order, and (iv) requiring Edible IP to cover Google's expenses, including attorneys' fees and costs, associated with the Georgia Action, unless Edible IP dismisses the Georgia Action.” ECF No. 46 at 2. As to the first request for relief, however, I conclude that the Anti-Injunction Act prohibits an injunction preventing Edible IP from prosecuting the Georgia Action.

         A. Anti-Injunction Act

         The Anti-Injunction Act provides that “[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” 28 U.S.C. § 2283. Because “the statutory prohibition against such injunctions in part rests on the fundamental constitutional independence of the States and their courts, the exceptions should not be enlarged by loose statutory construction.” Atlantic Coast Line R. Co. v. Bhd. of Locomotive Engineers, 398 U.S. 281, 287 (1970). Here, only the latter two exceptions are at issue, as Google does not argue that the requested injunction is “expressly authorized” by Congress. See ECF No. 47 at 8 (arguing that an injunction is proper under the Anti-Injunction Act's exceptions for injunctions that are “necessary in aid of [the Court's] jurisdiction, or to protect or effectuate [the Court's] judgments”).

         i. “Protect or Effectuate [the Court's] Judgment”: The Re-Litigation Exception

         “The relitigation exception was designed to permit a federal court to prevent state litigation of an issue that previously was presented to and decided by the federal court. It is founded in the well-recognized concepts of res judicata and collateral estoppel.” Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 147 (1988).[1] For this exception to apply, “the issue the federal court decided must be the same as the one presented in the state tribunal.” Smith v. Bayer Corp., 564 U.S. 299, 307 (2011). “[A]n essential prerequisite for applying the relitigation exception is that the claims or issues which the federal injunction insulates from litigation in state proceedings actually have been decided by the federal court.” Chick Kam Choo, 486 U.S. at 148 (emphasis added). “Moreover, . . . this prerequisite is strict and narrow. The [Supreme] Court [in an earlier decision] assessed the precise state of the record and what the earlier federal order actually said; it did not permit the District Court to render a post hoc judgment as to what the order was intended to say.” Id. (emphasis in original).

         The analysis of the relitigation exception takes place against the background understanding that “[d]eciding whether and how prior litigation has preclusive effect is usually the bailiwick of the second court.” Smith, 564 U.S. at 307. “For that reason, every benefit of the doubt goes toward the state court” and “an injunction can issue only if preclusion is clear beyond peradventure.” Id.

         I decided a single issue in the ruling granting Google's motion to compel arbitration, namely, whether the allegations in this case fell within the scope of the broad arbitration clause in the pertinent agreement. See ECF No. 37 at 5-7 (addressing “[t]he plaintiffs' sole argument in opposition to the defendant's motion to compel arbitration, ” which “aver[red] that arbitration should not be compelled because their claims fall outside the scope of the arbitration clause.”). It is unclear that the Georgia state court will need to reach that issue-even if the factual allegations in the Georgia Action are substantially identical to those here, as Google contends. Assuming Google raises the Federal Arbitration Act in the Georgia Action, the Georgia court will first need to decide a threshold issue that I was not asked to decide, i.e., whether Edible IP, one of two plaintiffs here but the only plaintiff in the Georgia action, is bound by the relevant arbitration agreement. Schnabel v. Trilegiant Corp., 697 F.3d 110, 118 (2d Cir. 2012) (“The threshold question facing any court considering a motion to compel arbitration is therefore whether the parties have indeed agreed to arbitrate, ” i.e. “the question of whether such an agreement exists” between the parties involved). If the Georgia court finds that Edible IP is not so bound, it will have no occasion to address the issue I decided regarding the scope of the arbitration agreement.

         Edible IP has alleged in the Georgia Action that it is not a party to any agreement with Google, let alone an arbitration agreement. ECF No. 39-1 at 17 (“Edible IP has never entered into any contract with Google of any kind. . . No. entity that participates as a customer or advertiser in any google program has the right to contract on behalf of Edible IP or waive any of Edible IP's rights.”). It made no similar assertion in resisting Google's motion to compel arbitration before me, and I did not address such an assertion.[2] Edible IP argues that it had no reason to raise that point because its co-plaintiff, Edible International, was a party to the arbitration agreement with Google. I agree that there would have been little point in resisting arbitration on a ground that would have applied to only one of two related plaintiffs, both of whom were ...


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