Inversiones Y Procesadora Tropical Inprotsa, S.A. v. Del Monte International GMBH

Opinion

Case: 18-14807 Date Filed: 09/05/2019 Page: 1 of 5

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

18-14807 Non-Argument Calendar ________________________

D.C. Docket No. 1:16-cv-24275-FAM

INVERSIONES Y PROCESADORA TROPICAL INPROTSA, S.A., a Costa Rican Corporation,

Plaintiff-Appellant,

versus

DEL MONTE INTERNATIONAL GMBH, a Swiss Corporation,

Defendant-Appellee.

________________________

Appeal from the United States District Court for the Southern District of Florida _________________________

(September 5, 2019)

Before WILSON, NEWSOM and BLACK, Circuit Judges:

PER CURIAM: Case: 18-14807 Date Filed: 09/05/2019 Page: 2 of 5

Inversiones y Procesadora Tropical INPROTSA, S.A. (INPROTSA) appeals

from the district court’s order granting Del Monte International GmbH’s (Del

Monte), motion for attorney’s fees. The district court awarded attorney’s fees to

Del Monte as sanctions under the standard set forth in B.L. Harbert Int’l, LLC v.

Hercules Steel Co., 441 F.3d 905, 913-914 (11th Cir. 2006) after INPROTSA filed

a motion to vacate an arbitration award. Hercules Steel held that courts have

inherent authority to sanction parties who pursue frivolous challenges to arbitration

awards in the court system. Id. at 914. INPROTSA asserts the district court erred

in granting Del Monte’s motion for attorney’s fees for two reasons: (1) the district

court did not have subject-matter jurisdiction over the motion to vacate; and (2) the

district court did not find INPROTSA acted in bad faith by filing the motion to

vacate. After review, we affirm the district court.

I. BACKGROUND

We recount the procedural history relevant to this appeal. Del Monte

initiated an arbitration against INPROTSA in the International Court of Arbitration

of the International Chamber of Commerce in Miami. The arbitration tribunal

issued an award on June 10, 2016, ruling in favor of Del Monte on its claim that

INPROTSA breached an agreement for the production, packaging, and sale of

pineapples.

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In September 2016, INPROTSA filed a petition to vacate the award in

Florida’s Eleventh Judicial Circuit. Del Monte then removed the petition to the

United States District Court for the Southern District of Florida. Soon after, Del

Monte filed a combined motion to dismiss the petition and cross-petition to

confirm the award. INPROTSA, in turn, filed a motion to remand the proceeding

to state court, contending the district court lacked subject-matter jurisdiction.

The district court granted Del Monte’s motion to dismiss the petition to

vacate and denied INPROTSA’s motion to remand, reasoning that INPROTSA’s

petition to vacate—which was based on Florida law—failed to assert a valid

defense under the Convention on the Recognition and Enforcement of Foreign

Arbitral Awards (the Convention), as required by our opinion in Industrial Risk

Insurers v. M.A.N. Gutehoffnungshütte GmbH, 141 F.3d 1434, 1446 (11th Cir.

1998).

Del Monte then moved for attorney’s fees under the court’s inherent

authority, claiming INPROTSA’s grounds to seek vacatur were baseless and

brought in bad faith. A magistrate judge recommended granting Del Monte’s

motion, determining that INPROTSA’s petition to vacate lacked any real basis for

vacatur, and “amount[ed] to little more than an assault on the Tribunal’s

factfinding and contractual interpretation rather than on its actual authority.” The

district court adopted the magistrate judge’s report and recommendation, stating

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“this Court is not charged with overseeing an appeal from an arbitration tribunal,

which is what [INPROTSA] requested this Court do.”

II. DISCUSSION

INPROTSA’s first contention on appeal—that the district court lacked

subject-matter jurisdiction over the motion to vacate the arbitration award, and thus

also lacked subject-matter jurisdiction over this motion for attorney’s fees—is

foreclosed as it was rejected in our previous appeal in this case. Inversiones y

Procesadora Tropical INPROTSA, S.A. v. Del Monte Int’l GmbH, 921 F.3d 1291,

1300 (11th Cir. 2019). The district court had subject-matter jurisdiction over the

petition to vacate the award. Id.

Thus, we are left only with the question of whether the district court abused

its discretion in awarding sanctions to Del Monte under the standard set forth in

Hercules Steel. See Purchasing Power, LLC v. Bluestem Brands, Inc., 851 F.3d

1218, 1222 (11th Cir. 2017) (reviewing a sanctions order for an abuse of

discretion). Hercules Steel states:

When a party who loses an arbitration award assumes a never-say-die attitude and drags the dispute through the court system without an objectively reasonable belief it will prevail, the promise of arbitration is broken. Arbitration’s allure is dependent upon the arbitrator being the last decision maker in all but the most unusual cases. The more cases there are, like this one, in which the arbitrator is only the first step along the way, the less arbitration there will be. If arbitration is to be a meaningful alternative to litigation, the parties must be able to trust that the arbitrator’s decision will be honored sooner instead of later. 4 Case: 18-14807 Date Filed: 09/05/2019 Page: 5 of 5

Hercules Steel, 441 F.3d at 913. To remedy this issue, we determined that “if a

party on the short end of an arbitration award attacks that award in court without

any real legal basis for doing so, that party should pay sanctions.” Id.

The district court did not abuse its discretion in awarding sanctions. The

Hercules Steel standard inherently includes a bad-faith finding because it requires

finding that a party has attacked an arbitration award without any legal basis for

doing so. That is exactly what happened here. INPROTSA attacked the award in

court without any real legal basis for doing so, especially considering that

INPROTSA failed to assert a valid defense under the Convention which it was

required to do pursuant to Industrial Risk. As the magistrate judge stated,

INPROTSA’s “challenge exemplifies the type of behavior that Hercules Steel

sanctions are intended to prevent.” Thus, we affirm the district court.

AFFIRMED.