Bacardi USA, Inc. v. Young's Market Co.

273 F. Supp. 3d 1120
CourtDistrict Court, S.D. Florida
DecidedMay 31, 2016
DocketCase No. 16-cv-20070-PAS
StatusPublished
Cited by5 cases

This text of 273 F. Supp. 3d 1120 (Bacardi USA, Inc. v. Young's Market Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bacardi USA, Inc. v. Young's Market Co., 273 F. Supp. 3d 1120 (S.D. Fla. 2016).

Opinion

ORDER DENYING MOTION FOR DISCOVERY AND GRANTING MOTION TO DISMISS

PATRICIA A. SEITZ, UNITED STATES DISTRICT, JUDGE .

THIS MATTER is before the Court on Defendant’s Motion to Dismiss the Complaint [DE-19] and Plaintiffs Motion for Leave to Conduct Jurisdictional Discovery [DE-23], Plaintiff, ■ Bacardi , USA (“BUSA”), filed this Declaratory Judgment Act action after terminating its 2004 distributor agreement with Defendant, Young’s Market Company in California (‘Young’s”), and selecting a new distributor in a request for proposals (“RFP”) process.1 BUSA’s seven-count Complaint [1124]*1124seeks numerous declarations, including that BUSA’s termination of Young’s and new distributor selection did not violate the 2004 distributor agreement, the RFP process, or various antitrust laws. BUSA also seeks a declaration that no basis exists to interfere with BUSA’s decision to use a new distributor.2

Defendant Young’s motion asserts the Court lacks subject matter jurisdiction because no justiciable controversy existed when BUSA filed its Complaint. While Young’s was notified in September of 2015 that BUSA was terminating the 2004 distributor agreement (effective March 2016), Young’s never threatened BUSA with litigation or otherwise disputed that termination. Further, Young’s was not notified that BUSA had selected a different distributor until after BUSA’s Complaint was filed. Therefore, Young’s says no actual controversy existed at the time of the Complaint. In response, BUSA claims jurisdiction attached when BUSA selected a different distributor, regardless of Young’s awareness of that decision. BUSA also maintains that the litigiousness of the alcohol industry, generally, combined with discontent among other terminated distributors and Young’s post-Complaint behavior, establishes a controversy sufficient for jurisdiction.

After Young’s motion to dismiss became ripe, BUSA moved to conduct jurisdictional discovery. BUSA’s broad request sought, for example, information regarding Young’s assessment of potential claims and Young’s internal communications before and after BUSA’s Complaint was filed. [DE-26, p. 1-3.] However, jurisdictional discovery is not necessary for the resolution of Young’s motion. Even if the Court has subject matter jurisdiction over some or all of BUSA’s claims, BUSA’s cause of action does not align with the purpose of the Declaratory Judgment Act. Therefore, for the reasons discussed below, the Court declines to accept jurisdiction, denies BUSA’s request for jurisdictional discovery, and dismisses the Complaint without prejudice.3

I. FACTUAL BACKGROUND

The basic facts are undisputed. In 2004, BUSA and Young’s entered into a Distributor Agreement (the “2004 Agreement”) whereby Young’s was appointed as BUSA’s distributor of Bacardi products in California. The 2004 Agreement remained in place in the summer of 2015, when BUSA notified Young’s it was initiating an RFP process to select future distributors. Young’s agreed to participate by signing an Intent to Bid form and the Terms and Conditions—collectively, the “RFP Agreement.” On September 29, 2015, while Young’s was participating in the RFP process, BUSA notified Young’s that it would be terminating the 2004 Agreement as of March 31, 2016. Young’s continued to participate in the RFP process until January 8, 2016 when BUSA notified Young’s that Young’s had not been selected in the RFP process—and of this lawsuit—via letter, which read in pertinent part:

BUSA anticipates a smooth and amicable transition of the [sic] services. However, as a precautionary measure to protect its interests, BUSA has filed declaratory judgment actions in the Southern District of Florida and in Miami-Dade State Court to confirm BUSA’s [1125]*1125rights to terminate our relationship. It is BUSA’s hope that these actions will not be necessary and BUSA is willing to dismiss these lawsuits if the parties are able to amicably achieve a- swift and efficient • transition and an agreement that there will be no litigation regarding the termination or transition to a new distributor and broker..

[DE-19-1, p. 5-6.]

Three days later, on January 11, 2016, BUSA issued a press release announcing BUSA had appointed Southern Glazer’s Wine and Spirits, LLC, as BUSA’s new distributor. [DE-19-1, p. 3.] Young’s was not aware of BUSA’s new distributor prior to January 11, 2016. Id.

In its January 7, 2016 Complaint, BUSA notes that the 2004 Agreement explicitly permitted at-will termination, with or without cause, by either party, and contained an expansive waiver clause.4 [DE-1, p. 5-6.] Further, the Agreement’s forum .selection clause identified the Southern- District of Florida and Florida state law as the sole venue and governing authority, respectively, for contract disputes.5 [DE-1-2, p. 12.]

BUSA alleges “upon information and belief’ and “BUSA’s experience with such termination cases” that a dispute exists as to whether Young’s is bound by the 2004 Agreement, whether BUSA violated the 2004 Agreement by terminating Young’s without cause or by selecting a new distributor, whether BUSA is liable for damages from its termination of the 2004 Agreement or, instead, whether Young’s released all potential claims arising out of the termination of the 2004 Agreement. [DE-1, p. 1-2.] BUSA then request the following declarations regarding the terms of the 2004 Agreement:

[T]hat Young’s Market is bound by the terms of the 2004 Agreement, that the [1126]*1126terms of the 2004 Agreement are valid and enforceable, and that BUSA did not violate the terms of the 2004 Agreement in terminating Young’s Market [and] ... that Young’s Market waived and released BUSA from any claims arising out of the 2004 Agreement.

[DE-1, p.17.].

Turning to- the RFP Agreement, BUSA alleges Young’s expressly waived any claims, arising out of the termination of Young’s and the selection of the new distributor through the RFP. [DE-1, p. 2.] BUSA then claims “based on past experience” that a dispute exists as to BUSA’s selection of a new distributor and termination of Young’s through the RFP. Id. BUSA requests the following declarations as to the RFP Agreement:

[T]hat Young’s Market and its affiliates are bound by the terms of the RFP Agreement, that the terms of the RFP Agreement are valid and enforceable, and that BUSA did not violate the terms of the RFP Agreement; [and] ... that Young’s Market and its affiliates, per the terms of the RFP Agreement, waived and released BUSA from any claims arising out of the 2004 Agreement and the RFP Agreement.

[DE-1, p. 17.]

BUSA also seeks declarations that BUSA’s termination of Young’s and selection of a new distributor did not violate various federal antitrust statutes and that “no basis exists to enjoin or otherwise interfere with BUSA’s business decision to be serviced by another distributor.” Id. As the basis for a declaratory judgment that BUSA did not violate Section 1 of the Sherman Act, BUSA simply states that it acted independently when terminating Young’s and did not act in restraint of trade or commerce, BUSA’s decisions have not harmed competition in any relevant market, and Young’s cannot allege any injury that antitrust laws were meant to prevent. [DE-1, p.

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Bluebook (online)
273 F. Supp. 3d 1120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bacardi-usa-inc-v-youngs-market-co-flsd-2016.