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STATE OF MAINE -. . SUPERIOR COLRT CUMBERLAND, ss. CIVIL ACTION . ,.. .. 1 2 .<. DOCKET NO: CV-03-417 . ,,. . . ;:.i ' : . . "' . '
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BEE LOAD LIMITED,
Plaintiff
ORDER ON DEFENDANT'S MOTION TO DISMISS OR STAY BBC WORLDWIDE LTD,
Defendant
This matter is before the Court on the motion of the defendant BBC
Worldwide Limited ("BBCW") to dismiss plaintiff Bee Load, Ltd.'s ("Bee
Load") amended complaint, or for a stay of proceedings in this court ("Maine
Action") pending resolution of BBCW's claims before the High Court in
England ("British Action").
BACKGROUND
On July 22, 2003, Bee Load filed a complaint against BBCW in .the
Maine Action alleging breaches of contracts, fiaud, conversion and negligent
misrepresentation, and seeking an injunction, imposition of a constructive
trust, damages, and a declaratory judgment. The court later granted Bee
Load's motion to amend the complaint to add a count for breach of fiduciary duty. Bee Load, Ltd. v. British Broadcasting Company Worldwide, Ltd.,
2005 Me. Super. LEXIS 118 (Sept. 20,2005).
As has been amply noted in prior orders by this and other courts, the
Maine Action arises out of agreements for the licensing and distribution of
recordings from the radio archives of the BBC. Although the amended
complaint refers to three agreements -Masterrights, Led Zeppelin and
Archangel - it does not expressly assert any claims under the Masterrights
Agreement.
On October 2, 2003, BBCW moved to dismiss the amended complaint
on the grounds offorum non conveniens, arguing, inter alia, that Bee Load's
claims were, in fact, founded upon the Masterrights Agreement and that the
High Court was .the exclusive forum for resolving those claims. Bee Load
countered that Masterrights was not part of the Maine Action. The court
denied BBCW's motion concluding that, after balancing the relevant private
and public interest factors, dismissal was not strongly favored. Bee Load,
Limited v. British Broadcasting Company Worldwide, Limited, PORSC-CV-
2004-03417 (Me. Super. Ct., Cumb. Cty., January 28,2004).
On March 30, 2004, BBCW brought a second motion to dismiss,
pursuant to M.R. Civ. P. 12 (b)(6), directed to Bee Load's claims for breach
of the Led Zeppelin Agreement, for conversion of royalties due Bee Load 2 under that agreement, and for declaratory judgment relating to Bee Load's
rights under the Masterrights or Led Zeppelin Agreements. BBCW also
moved for reconsideration of .the denial of its first motion. The court denied
the second motion and concluded that, "examining the complaint in the light
most favorable to theplaintg the forum selection clause in .the Masterrights
Agreement" did not deprive .the Maine court of jurisdiction. Bee Load, Ltd.
v. British Broadcasting Company Worldwide, Ltd., PORSC-CV 2004-03417
(Me. Super. Ct., Cumb. Cty., August 2,2004.)
On November 18,2005, BBCW commenced the British Action
against Bee Load seeking a declaratory judgment regarding construction of
the Masterrights, Led Zeppelin, and Archangel Agreements. In that action,
the High Court is asked to construe the meaning and status of the three
agreements and the parties' rights under each, all of which are concededly
governed by the laws of England.
On December 2,2005, Bee Load petitioned the Maine court for a
temporary restraining order to stay the British Action. This court denied the
petition, stating that "any claim preclusion that may result from an earlier
decision by the High Court [would not] usurp this court's jurisdiction.. .. A
parallel proceeding in the High Court that yields an interpretation of the
Masterrights Agreement could aid this court in resolving the parties' 3 dispute." Bee Load, Ltd v. British Broadcasting Company Worldwide, Ltd.,
2005 Me. Super. LEXIS 191 (Dec. 6,2005).
On January 12,2006 BBCW filed a motion for summary judgment in
the British Action. On February 7, 2006, Bee Load petitioned the High
Court to stay the British Action "on case management grounds",' arguing
that the Maine Action was ripe for trial and would likely resolve many if not
all of the issues presented in the British Action. On March 3,2006, the High
Court denied Bee Load's request for a stay indicating that disputes arising
out of any or all of the three agreements are subject to its exclusive
jurisdiction.
There is no doubt as to the exclusive jurisdiction in the Masterrights Agreement. To my mind, it is clear also the Led Zeppelin Agreement is a variation of .the Masterrights Agreement in relation to Led Zeppelin recordings and is therefore subject to the same exclusive jurisdiction clause. Equally, the Archangel Agreement has a clear law and jurisdiction clause, albeit not expressed in exclusive jurisdiction terms. Under Article 23 of the [European Union] Regulation, the jurisdiction is exclusive in such circumstances, unless the parties have agreed otherwise, which they have not.
Judgment, 7 27, BBC Worldwide and Beeload Ltd., High Court Queen's
Bench Division, Case No. 20051954, March 3, 2006 (Cooke, J.).
' The High Court concluded that Bee Load's motion was "in truth, a jurisdictional challenge put forward under the guise of case management issues . ..." Judgment, 7 3 1, BBC Worldwide and Beeload Ltd., High Court Queen's Bench Division, Case No. 20051954, March 3, 2006 (Cooke, J.). 4 On March 6,2006, the eve of oral arguments before the High Court on
BBCW's motion for summary judgment, Bee Load filed for Chapter 11
protection in the Bankruptcy Court for the District of Maine. See In Re:
BeeLoad Ltd. (Bankr. D. Me., 2006). As a result, an automatic stay under the
Bankruptcy Code went into effect. Pursuant to the parties' agreement, the
Bankruptcy Court lifted the automatic stay as to the Maine Action, permitting
both parties to proceed here. However, there was no agreement as to the
British Action, and .the Bankruptcy Court denied BBCW's petition for relief
frorn the stay to proceed there. In Re: BeeLoad Ltd., slip op. at 1 (March 16,
2006). An appeal of that decision is now pending before the United States
District Court for the District of Maine. BBC Worldwide, Ltd. v. Bee Load,
Ltd., 2006 U.S. Dist. LEXIS 20604 (D. Me., April 10,2006).~
On March 24,2006, BBCW filed its third motion to dismiss in the
Maine Action, which is the subject of this Order. BBC W argues (1) that the
High Court's recent decision precludes Bee Load frorn seeking relief in this
forum ("Claim Preclusion Argument"), (2) that Bee Load should be estopped
from asserting any claims or damages arising out of the Masterrights
Agreement ("Judicial Estoppel Argument"), and (3) that, based on changed
At hearing on the instant motion, the parties informed this court that BBCW also filed a motion to dismiss Bee Load's bankruptcy case. On March 11, 2006, the Bankruptcy Court heard arguments on the motion and it is now under advisement by the court. 5 circumstances, this court should reconsider its earlier rulings declining to
dismiss the Maine Action on grounds of forum non conveniens
("Reconsideration Argument"). In the alternative, BBCW urges the court to
stay these proceedings arguing that the enforceability of any judgment in the
Maine Action may be in doubt.
I. Motion to Dismiss
A. Claim Preclusion
Contrary to BBCW's assertions, this court does not view the High
Court's recent decision as foreclosing Bee Load from requesting relief under
the Archangel and Led Zeppelin Agreements in the Maine Action. The thrust
of the High Court's pronouncement was not that this court lacks jurisdiction
over Bee Load's claims. Rather, it was a firm denial of Bee Load's request
that .the High Court relinquish jurisdiction over BBC W's claims in the British
Action. The High Court made clear that, according to the terms of the three
agreements, as interpreted under English law, it was the exclusive forum for
hearing the dispute pending before it. See id. Understandably, it seemed
incredible to the High Court that Bee Load would request that it relinquish
jurisdiction under such circumstances. See id.,7 33.
The High Court's reasoning is irrehtable. There is no doubt that it is
appropriate for the British Action to continue before that court. However, in 6 view of the current posture of the Maine Action, the High Court's sound
reasoning does not foreclose continuation of the action pending in this court.
Bee Load's right to present its claims here has already been litigated and
determined. BBC W's arguments to the contrary cannot undo what has
already been decided.
This court has not been presented with a challenge based on improper
venue.' See M.R. Civ. P. 12(b)(3). The time to do so has expired and is
deemed waived. See M.R. Civ. P. 12 (g) and (h). This court is mindhl that
Maine's Law Court has not had occasion to rule on the proper procedure for
seeking dismissal of an action based on an agreement's choice-of-forum
clause. Although the First Circuit has determined that the appropriate vehicle
is a motion to dismiss for failure to state a claim, pursuant to M.R. Civ. P.
12(b)(6), this court finds more persuasive the majority rule of the federal
courts that favor a motion to dismiss for improper venue, pursuant to M.R.
Civ. P. 12(b)(3).' See Lipcon v. Underwriters at Lloyd's. London, 148 F.3d
1285, 1290 (1 1' Cir. 1998); Richards v. Lloyd's of London, 135 F.3d 1289,
In its second motion to dismiss, made pursuant to M.R. Civ. P. 12(b)(6), BBCW challenged this court's jurisdiction to decide claims directed to the Led Zeppelin Agreement.
The text of FRCP 12(b)(3) is the same as the text of M.R. Civ. P. 12(b)(3). 1292 (9mCir. 1998); Longwall-Associates, Inc. v. Wolfgag Reinfalk GmbH,
2001 U.S. Dist. LEXIS 8113, * 6 (W.D.Va., June 12,2001).
Even if this court were to adopt the First Circuit's analysis and permit a
challenge pursuant to Rule 12(b)(6) in this cir~umstance,~ the result would be
the same.6 See LFC Lessors, Inc. v. Pacifc Sewer Maintenance Corp., 739
F.2d 4, 6 (1'' Cir. 1984). The First Circuit considers forum selection clauses
merely ... a stipulation in which the parties join in asking the court to give effect to their agreement by declining to exercise its jurisdiction. [I There will always be open to either party the opportunity to present whatever evidence will move a court in the particular circumstances not to decline to exercise its undoubted jurisdiction.
Id. The posture of the Maine Action militates against this court abrogating its
jurisdiction. See id.
The High Court's determination that the Led Zeppelin Agreement is
subject to Masterrights' exclusive forum-selection clause compels this court
to reconsider its earlier denial of BBCW's second motion to dismiss.
12(b)(6) motions, unlike 12(b)(3) motions, may be made at any point in the proceedings. 6 Nor is the result different under English procedural rules. CPR Parts 58.7(1) and (2) require an application disputing a Commercial Court's jurisdiction to be made within 28 days after the filing of an acknowledgement of service. This court understands the English rule to apply to an argument that the court should refrain from exercising jurisdiction due to a contractual forum-selection clause. 8 However, in doing so, this court is mindful that decisions rendered in the
context ofjurisdictional issues, rather than on the merits, are entitled to h.11,
binding effect. The determination in the Maine Action regarding the Led
Zeppelin Agreement was such a decision, and, at least from this court's
perspective, has full, binding effect. See RESTATEMENT (SECOND) $ JUDGMENTS
17 ("a judgment in favor of either the plaintiff or the defendant is conclusive
in a subsequent action between them on .the same or a different claim, with
respect to any issue actually litigated and determined.") This is true,
moreover, whether the decision was correct or incorrect. See RESTATEMENT
(SECOND) OF CONFLICT OF LAWS,§ 106 ("A judgment will be recognized and
enforced in other states even though an error of fact or of law was made in the
proceedings before judgment."); RESTATEMENT (THIRD)OF FOREIGN RELATIONS
LAWOF THE UNITED STATES, cmt. c. ("a foreign judgment is generally entitled
to recognition by courts in the United States to the same extent as a judgment
of a court of one State in the courts of another State.").
Accordingly, while this court accords great deference to the High
Court's construction and application of English law, it does not consider that
the High Court's decision has stripped this court ofjurisdiction over Bee
Load's claims under the Archangel or Led Zeppelin Agreements in the Maine
Action. B. Judicial Estoppel
BBCW has consistently maintained that the forum selection clause of
the Masterrights Agreement vests exclusive jurisdiction in the High Court;
that the Masterrights, Led Zeppelin and Archangel Agreements are
intertwined; and that deciding claims under the Led Zeppelin and Archangel
Agreements cannot be done without also construing the Masterrights
Agreement. Conversely, BBCW urges this court to find that Bee Load has
been inconsistent and has changed positions regarding the role of the
Masterrights Agreement in the Maine Action - first, arguing that it was not
seeking relief under Masterrights, and then asserting that it was.
On its face, Bee Load's claims in the amended complaint in the Maine
Action are based on breaches and damages relating to the Led Zeppelin and
Archangel Agreements, not ~ a s t e r r i ~ h tFurther, s.~ Bee Load's declaratory
judgment claim seeks a determination of the parties7 rights and obligations
under Archangel. In this regard, there are two significant features of the
Archangel Agreement: first, Bee Load's contributions under the agreement
expressly include its benefits under the Masterrights Agreement; and, second,
Rightly or wrongly, in its order on BBCW's second motion to dismiss, this court earlier determined that the exclusive forum selection clause in Masterrights did not apply to Led Zeppelin or Archangel. In fact, both parties acknowledged that Archangel's forum selection clause was permissive. The second motion was made pursuant to Rule 12(b)(6) and the court's decision was made after "examining the complaint in the light most favorable to the plaintiff.'' 10 Archangel "sets aside ... the Masterrights Agreement, the rights in which
have now been assigned to Archangel for the Term of this [Archangel]
Agreement only." Thus, this court has understood that there was a period of
time in which the terms of the Masterrights Agreement, including its forum-
selection clause, were set aside by the Archangel Agreement, and that Bee
Load's benefits under the former agreement were incorporated into the later.
Thus, it seems apparent on the face of the complaint that aspects of the
Masterrights Agreement must be construed in the Maine Action in order to
understand what Bee Load has contributed to the Archangel Agreement. In
turn, that understanding is relevant to a determination of whether Archangel
has been breached and, if so, what damages flow from that breach.
Bee Load's recent arguments before this court, the High Court, and
the Bankruptcy Court, that the relief sought by BBCW in the British Action
is the same as the relief sought by Bee Load in the Maine Action, do not
appear to be a change of position. In -theBritish Action, BBCW has styled
its claims before the High Court as declaratory judgments involving the
efficacy and meaning of the Masterrights Agreement. These would
apparently be governed by Masterrights' exclusive forum-selection clause,
except for the fact that, under the Archangel Agreement, there is a period of
time during which .the terms of the Masterrights Agreement are set aside in 11 favor of Archangel's terms. Nor does the fact that Bee Load may seek
damages for breaches of Archangel, calculated according to a formula
contained in Masterrights, signal a change. The terms of the two agreements
anticipate this happening, and Bee Load did not represent otherwise to the
court. Accordingly, judicial estoppel is inapplicable in this case.
C. Reconsideration of forum non conveniens
BBCW also argues that changed circumstances necessitate
reconsideration of its originalforum non conveniens argument, including: (1)
Bee Load's change of position with regard to claims arising under the
Masterrights Agreement, (2) this court's finding that parallel proceedings in
the British Action are appropriate, (3) the High Court's finding that Bee Load
has deceived and misled this Court with respect to the Masterrights
Agreement, (4) the High Court's findings that the Led Zeppelin and
Archangel Agreements are both subject to the exclusive jurisdiction of the
High Court, (5) Bee Load's recent concession that English law governs Bee
Load's claims, and (6) Bee Load's recent bankruptcy filing, which BBCW
asserts is intended to shut down proceedings before the High Court.
With respect to points (1) and (3), as explained in Part I.B., above, this
court cannot conclude that Bee Load has changed its position in the Maine
Action. Likewise, with respect to point (4), the court has substantively addressed the effect of the High Court's declaration on this court's
jurisdiction in Part I.A., above. Nor, with regard to point (2), should it be
inferred from this court's opinion denying Bee Load's motion for a TRO that
this court intended to relinquish its own jurisdiction of the parties' dispute.
With regard to point (9,Bee Load's recent concession that English law
applies to its claims does not affect the forum non conveniens analysis. In its
January 28,2004 order, the court stated, "[Elven if England's laws were to
apply to all of [Bee Load's] claims.. . BBCW has not established that
applying England's laws would be demonstrably difficult for this court." Bee
Load, Limited v. British Broadcasting Company Worldwide, Limited,
PORSC-CV-2004-03417 (Me. Super. Ct., Cumb. Cty., January 28,2004).
Finally, with regard to point (6)' just as this court declined to infer bad
faith from BBCW's actions in filing a declaratory judgment in the High
Court, the court declines to infer bad faith in Bee Load's voluntary
bankruptcy filing. To be sure, Bee Load filed its petition on the eve of oral
arguments on summary judgment in the British Action, which ultimately led
to a stay proceedings in that forum. However, the possibility, among other
possibilities, that this was a tactical decision does not alter its legality.
Moreover, the Bankruptcy Code provides a remedy, where appropriate, for
the effects of the automatic stay, which BBCW has pursued and which is still 13 in play on appeal. See 11 U.S.C. $362(d). In sum, neither Bee Load's
election to file for bankruptcy, nor the fact that BBCW did not prevail on its
petition before the Bankruptcy Court for relief from stay constitute changed
circumstances affecting BBCW's original argument for dismissal under forum
non conveniens.
Accordingly, after reconsideration, the court declines to grant BBCW's
renewed motion to dismiss on the grounds of forum non conveniens.
11. Stay of Proceedings
Finally, BBCW argues that this court should exercise its discretion to
stay proceedings in the Maine Action pending a resolution of its claims before
the High Court. Its argument is compelling. As noted, the High Court has
been asked to construe the three agreements in issue here, constructions that
must be based on English law. This court's earlier observation in its order on
Bee Load's motion for a TRO retains its full vitality.
[I]n the particular context of this case, a central concern is the interpretation of a contract, known to the parties as the Masterrights Agreement, which both parties concede must be interpreted according to English law. To this end, a parallel proceeding in the High Court that yields an interpretation of the Masterrights Agreement could aid this court in resolving the parties' dispute.
Bee Load, Ltd. v. British Broadcasting Company Worlhide Ltd., PORSC-
CV-2004-03417 (Me. Super. Ct., Cumb. Cty., December 6,2005). These 14 words do not express an intent by this court to abdicate or refuse jurisdiction
over this dispute simply because it is governed by English law. Rather, they
are a recognition of the High Court's superior ability to interpret its own law,
and the likely benefit to this court of interpretive guidance from the High
Court.
In opposition, Bee Load renews its earlier argument that a decision to
stay the Maine proceedings in favor of a resolution before the High Court
would sound the death knell of the Maine Action because Bee Load does not
have the financial resources to defend its position before the High Court.
While, if true, that fact would certainly weigh heavily against granting a stay,
this court is unable to fairly evaluate Bee Load's financial condition on the
record before it. However, the U.S. District Court is. This court understands
that Bee Load has submitted to the Bankruptcy Court information regard.ing
its financial condition and the cost of 1it.igationin the High Court. This court
also understands that BBCW's appeal pending before the District Court will
include an evaluation of .the practical implications of lifting or continuing .the
automatic stay, such as, whether Bee Load would be financially capable of
defending its interests in the High Court. See BBC Worldwide, Ltd. v. Bee
Load Limited, 2006 U.S. Dist. LEXIS 20604 (D. Me., April 10,2006). If the automatic stay is lifted, the High Court has already indicated'that
it can render a decision on summary judgment that would be helphl to this
court, and that it would be able to do so within a short period of time. See
Judgment, T[ 30, BBC Worldwide and Beeload Ltd., High Court Queen's
Bench Division, Case No. 2005/954, March 3, 2006 (Cooke, J.) ("If the
English action is allowed to proceed, there will be a Summary Judgment
Application heard very shortly, which may be (and, in my judgment is, having
examined it) likely to determine ... essential contractual construction
issues."); see also Id. at T[ 22. This is a significant consideration.
Another significant consideration is the three-year pendency of the
Maine Action and the fact that it is ready for trial.8 However, after carefully
weighing those concerns and the interests of the parties, .the court is satisfied
that justice will be promoted by a temporary stay of the Maine proceedings
pending a decision by the District Court on BBCW's appeal. See Cutler
Associates, Inc. v. Merrill Trust Co., 395 A.2d 453,456 (Me. 1978).
8 This case is ready for trial and is first on the court's current trial list, which began May 1,2006. However, it is now uncertain when it can be reached for trial. In September 2002, Maine's Supreme Judicial Court, concerned with the State's significant lack of judicial resources, prioritized the various case types. The purpose of that prioritization was to assure that, if there were not enough resources to timely resolve all cases in the system, high-priority case types (e.g., family matters; criminal cases; etc.) would be handled first. The Maine Action is not a designated high-priority case type. In April 2006, the single justice assigned to the Maine Action was temporarily assigned to other matters having a higher priority designation. 16 The outcome of that appeal will determine whether the parties can
timely proceed to a decision on the pending motion for summary judgment in
the British Action. Accordingly, the Maine Action shall be temporarily
stayed and, within five days of the entry of a decision the District Court, the
parties are each directed to report that decision to this court. Thereafter, this
court shall determine whether the temporary stay should be terminated or
extended.
Pursuant to M. R. Civ. P. 79(a), the Clerk is directed to enter this Order
on the Civil Docket by a notation incorporating it by reference and the entry is
Defendant's motion to dismiss Plaintiffs amended complaint or, in the alternative, for reconsideration is DENIED; and
Defendant's motion to stay proceedings is GRANTED, as follows:
(a) This case shall be stayed, temporarily, pending resolution of Defendant's appeal to the U.S. District Court in BBC Worldwide, Ltd. v. Bee Load, Ltd., 2006 U.S. Dist. LEXIS 20604 (D. Me., April 10,2006); and
(b) Within five (5) days after the entry by the U.S. District Court of a decision on such appeal, the parties are each directed to report that decision to this court in writing, and this court shall thereupon schedule a hearing to determine whether this court's temporary stay should be terminated or extended.
Dated: May 15,2006
Justice, Superior Court