Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_19-cv-04074/USCOURTS-cand-5_19-cv-04074-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Injunctive &amp; Declaratory Relief

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Case No.: 5:19-cv-04074-EJD

ORDER ISSUING PRELIMINARY INJUNCTION 

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

LOCKHEED MARTIN CORPORATION,

Plaintiff, 

v. 

ACEWORLD HOLDINGS PTY LTD, et al., 

Defendants. 

Case No. 5:19-cv-04074-EJD 

ORDER ISSUING PRELIMINARY 

INJUNCTION 

Re: Dkt. No. 2 

On July 16, 2019, Lockheed filed a complaint and an ex parte application for a temporary 

restraining order seeking an anti-suit injunction to prevent Defendants from bringing suit against it 

in Australia. Dkt. Nos. 1, 2. On July 18, 2019, the court granted the application, issued a 

temporary restraining order, and ordered Defendants to show cause why a preliminary injunction 

should not issue. Dkt. No. 23 (the “July 18 Order”). Defendants filed a response, Lockheed 

replied, and Defendants objected to Lockheed’s reply. Dkt. Nos. 38, 41, 42. The parties appeared 

before the court on August 1, 2019. At the hearing the parties agreed to an extension of the 

temporary restraining order, so the court extended it until August 9, 2019 at 5:00 p.m. Hearing Tr. 

at 20:12-21:1, 47:10-13. Having considered the parties’ papers and oral arguments, the court finds 

that Defendants’ arguments do not change the court’s reasoning or the ruling of the July 18 Order. 

Lockheed has shown that a preliminary injunction should issue. This order supplements the July 

18 Order by addressing certain of Defendants’ arguments, but it does not change the reasoning of 

the July 18 Order. 

1. The court overrules Defendants’ objections to evidence submitted by Lockheed. 

Defendants maintained that this evidence—witness declarations describing Defendants’ alleged 

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statements—is subject to two non-disclosure agreements. As to the first agreement, the February 

2019 Agreement re Multi-Party Discussions (“AMPD”), Defendants have not shown that it 

covered the alleged statements underlying Lockheed’s complaint. Ashforth Decl. Ex. B. The 

AMPD pertains to discussions by Lockheed, Collinear, and third-party SA Photonics to form a 

new agreement among those three parties. Id. at 1. While Defendant Michael Ashforth 

participated in those discussions, he did so expressly “as a representative of [Collinear]” and “not 

as a representative of AMB Holdings Pty., Ltd.” Id. § vi. Defendants are, therefore, not party to 

the AMPD. Additionally, the AMPD—by its own terms—would not apply to the alleged threats. 

It provides, “No statements or offers made or Documents or other materials shared by any Party 

during Discussions shall be deemed an admission of any kind or constitute an admission or waiver 

of rights by any Party; All Discussions shall be on a ‘without prejudice’ basis, and any statement 

made in connection with the Discussions shall not be used in any legal proceeding against a Party 

that made such statement or provided such Document or material.” Id. §§ iii-iv (emphasis added). 

The term “Discussions” is defined as “discussion and exchange information related to a new threeparty agreement intended to supersede and replace the [current contracts between Lockheed, 

Collinear, and SA Photonics].” Id. Defendants allegedly threatened litigation arising out of 

Lockheed’s purported misrepresentations or omissions that led Defendants to invest in Collinear. 

Gustafson Decl. ¶ 4 (“[T]he investors claim that they have grounds to sue Lockheed Martin in 

connection with their own decisions to invest in Collinear.”). The alleged threats underlying 

Lockheed’s complaint do not qualify as “Discussions” under the AMPD. 

The second agreement—the June Multi-Party Non-Disclosure Agreement (“MPNDA”)—

covers Defendants and applies to “a potential investment in [Collinaer] by Lockheed,” but it does 

not protect the alleged threats from disclosure. Ashforth Decl. Ex. C at 1. The MPNDA provides 

that “[a]ll Confidential Information exchanged by the Parties shall be on a ‘without prejudice’ 

basis, and no Confidential Information shall be used in any legal proceeding against a Party that 

made such statement or provided such materials.” Id. at 4. However, Confidential Information is 

defined as “confidential or proprietary business, financial and technical information,” examples of 

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which include “financial statements, documents, business plans and strategies, source code, 

documentation, financial analysis, marketing plans, budgets, forecasts or projections, customer 

names, customer lists, customer data, product plans, products, services, inventions, processes, 

know-how, designs, drawings, [and/or] engineering or hardware configuration information.” Id. at 

1. The MPNDA covers confidential information, not threats made during negotiations. 

Accordingly, the court finds that neither the AMPD nor the MPNDA prohibited Lockheed from 

submitting the challenged evidence. 

2. Defendants’ arguments that, under Delaware law, Lockheed is not “closely related” 

to Collinear are unpersuasive. First, Defendants argue that the “closely related” standard is “only 

satisfied when the non-signatory is an officer, director, or affiliate of a signatory.” Resp. at 1. 

While such a relationship may meet the “closely related” standard, Delaware law does not require 

that sort of relationship. See e.g., McWane, Inc. v. Lanier, 2015 WL 399582, at *8 (Del. Ch. Jan. 

30, 2015) (non-signatory stock holders were “closely related”); Capital Grp. Companies, Inc. v. 

Armour, 2004 WL 2521295, at *6 (Del. Ch. Oct. 29, 2004) (finding trustee was “closely related” 

to the subject contract). 

Rather, “Delaware law . . . allows non-signatories to invoke [forum-selection] provisions 

in cases where they are closely related to one of the signatories such that the non-party’s 

enforcement of the clause is foreseeable by virtue of the relationship between the signatory and the 

party sought to be bound.” Lexington Servs. Ltd. v. U.S. Pat. No. 8019807 Delegate, LLC, 2018 

WL 5310261, at *5 (Del. Ch. Oct. 26, 2018); see July 18 Order at 4-5. Here, Lockheed and 

Collinear entered a contract wherein Lockheed agreed to help Collinear raise capital to fund 

product development. Ashforth Decl. ¶ 11; see also Ashforth Decl. Ex. A § 2.3(b). Lockheed 

personnel solicited Defendants to invest in Collinear, including by providing information to 

Defendants that was “critically important to AMB’s and [Ashforth’s] decision to invest.” 

Ashforth Decl. ¶ 17; see also Taylor Decl. ¶¶ 4-5. Defendants believed that Collinear would be 

“commercializing unique and groundbreaking Lockheed technology.” Ashforth Decl. ¶ 12. It was 

“in reliance on Lockheed’s representations” that Defendants decided to invest in Collinear. 

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Ashforth Decl. ¶ 19; see also Taylor Decl. ¶ 6. Defendants’ own evidence establishes that 

Collinear and Lockheed were so closely related—and that Lockheed was so “critically important” 

to Defendants’ decision to invest—that Lockheed’s enforcement of the Shareholder Agreement 

was foreseeable. 

Next, Defendants argue that the third-party beneficiary clause of the Shareholders 

Agreement prevents Lockheed from invoking the forum selection clause. That clause provides: 

Binding Effect; No Third-Party Beneficiary. . . . Nothing in this 

Agreement, express or implied, is intended or shall be construed to 

confer upon, or give to, any Person, firm, corporation or other entity 

other than the parties hereto any remedy or claim under or by reason 

of this Agreement or any terms or conditions hereof, and all of the 

terms, conditions, promises and agreements contained in this 

Agreement shall be for the sole and exclusive benefit of the parties 

hereto. 

Compl. Ex. A § 4.8. But third-party beneficiary clauses do not limit the “closely related” doctrine. 

Capital Grp. Companies, 2004 WL 2521295, at *6 (finding trustee was “closely related” to the 

subject contract even though the contract “expressly excludes third-party beneficiaries.”). The 

court’s prior ruling that Lockheed may invoke the forum selection clause stands. 

3. During the hearing, Defendants argued strongly that an anti-suit injunction should 

not issue because no underlying substantive actions are pending in Australian and American 

courts. See Hearing Tr. at 17:12-20:1; see also Resp. at 15 (“It is impossible for this Court to find 

that the parties and issues in the two jurisdictions are the same; there is no litigation pending in 

Australia and no substantive litigation pending in the United States.”). Counsel argued, “[n]o court 

in the Ninth Circuit has ever issued an anti-suit injunction where there wasn’t already a lawsuit 

pending in the foreign jurisdiction that the court could compare.” Hearing Tr. at 17:17-20. The 

two Ninth Circuit cases addressing anti-suit injunctions and forum-selection clauses, E. & J. Gallo 

Winery v. Andina Licores S.A., 446 F.3d 984 (9th Cir. 2006), and Applied Medical Distribution 

Corp. v. Surgical Co. BV, 587 F.3d 909 (9th Cir. 2009), both dealt with situations where foreign 

litigation had already been initiated. So, this court is confronted with an issue of first impression: 

whether the first step of the E & J Gallo anti-injunction test can be satisfied where there is a valid 

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forum-selection clause, and where foreign litigation has been threatened but has not commenced. 

The court first notes that Lockheed does not tilt at windmills. Defendants have threatened 

on multiple occasions to sue Lockheed in Australia under Australian law on claims arising out of 

purported misrepresentations or omissions by Lockheed that induced Defendants to invest in 

Collinear. Ashforth Decl. ¶ 35; Blair Decl. ¶ 6; Gustafson Decl. ¶¶ 4, 6-7; see also Ashforth Decl. 

¶¶ 17-19. Defendants went so far as to reference three Australian statutes as the bases for the 

threatened litigation, and to represent that they had already spent significant money in anticipation 

of litigation and they were prepared to testify. Gustafson Decl. ¶¶ 6-7. Defendants have not 

denied making these representations and Defendant Michael Ashforth conceded, “As a negotiating 

tactic, I have, on a number of occasions over the last six months, referenced litigation as being the 

last resort in the event that the parties were unable to agree on a new commercial arrangement.” 

Ashforth Decl. ¶ 35. Defendants’ threats generally identified the purported facts and laws that 

would support the litigation. 

The Court further notes that—as discussed in the July 18 Order—the forum-selection 

clause and the governing-law clause of the Shareholders Agreement are broadly written and would 

encompass the threatened claims. Shareholders Agreement §§ 4.9 (“This Agreement and any 

claim, controversy or dispute arising under or related thereto . . . and/or the interpretation and 

enforcement of the rights and duties of the parties, whether arising in Law or in equity, in contract, 

tort or otherwise, shall be governed by, and construed and interpreted in accordance with, the 

Laws of the State of Delaware.”) (emphasis added), 4.11 (“Each party irrevocably and 

unconditionally submits to the personal jurisdiction of the federal and state courts of the United 

States in each and every jurisdiction where venue is proper . . . [and] agrees that any actions or 

proceedings arising in connection with this Agreement or the transactions contemplated by this 

Agreement shall be brought, tried and determined only in such courts”) (emphasis added). 

Based on these facts, the reasoning of E & J Gallo and Applied Medical compel the 

issuance of the anti-suit injunction. In E & J Gallo, the Ninth Circuit held that “the first step in 

determining whether an anti-suit injunction is appropriate is to determine whether or not the parties 

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and the issues are the same, and whether or not the first action is dispositive of the action to be 

enjoined.” 446 F.3d at 991 (quotation and citations omitted).1 In Applied Medical, the Ninth 

Circuit returned to this step. It reasoned that in cases where the parties are the same, “the issues 

[between the foreign and U.S. courts] are meaningfully ‘the same,’” where “the domestic action is 

capable of disposing of all the issues in the foreign action and all the issues in the foreign action 

fall under the forum selection clause.” 587 F.3d at 915. In other words, “the 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 fall under the forum selection clause and can be resolved in 

the local action.” Id. 

Applying the Ninth Circuit’s reasoning to the facts here, the court concludes that the issues 

in the threatened Australian litigation are “functionally the same.” Id. As discussed above, the 

threatened claims are subject to the forum-selection clause of the Shareholders Agreement. And 

they are to be considered under Delaware law, meaning that this forum can resolve them. In E & J 

Gallo, the Ninth Circuit rejected an argument that the claims were different because “[f]irst, it is 

not clear that [the foreign party] has claims under Ecuadorian law, as the contract contains a 

choice-of-law clause in favor of California. Second, to the degree that Ecuadorian law does apply, 

federal courts are capable of applying it to [the foreign party’s] claims.” 446 F.3d at 991. The 

Applied Medical Court reasoned, “Because all of [the enjoined party’s] claims . . . as a practical 

matter depend on termination of the Agreement, they all ‘aris[e] out of th[e] Agreement’ and are 

subject to the forum selection clause.” 587 F.3d at 914. The circumstances here are analogous. 

The July 18 Order and the preliminary injunction laid out below apply only to “claims. . . relating 

 

1

 The Ninth Circuit provided a “see also” citation to a law review article and parenthetically noted 

that the article “stat[ed] that courts ‘will not consider issuing anti-suit injunctions’ in the absence 

of ‘parallel local and foreign actions between the same parties over the same claim.’” Id. (quoting 

George A. Bermann, The Use of Anti–Suit Injunctions in International Litigation, 28 Colum. J. 

Transnat’l L. 589, 626 (1990)). The complete sentence quoted from the article reads, “The 

traditional view expressed in the American cases is that courts will not consider issuing anti-suit 

injunctions unless in fact there are (or could be) parallel local and foreign actions between the 

same parties over the same claim.” Bermann, supra (emphasis added). This court understands the 

parenthetical as addressing the same parties and same claim analyses, and not as a requiring preexisting parallel domestic and foreign litigation. 

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to the Defendants’ investments in Collinear.” July 18 Order at 7. Put another way, only claims that 

are subject to the forum-selection clause and the governing-law clause are enjoined. 

Of course, Defendants are correct that there is no substantive litigation pending here; 

Lockheed’s complaint seeks only to restrain Defendants from initiating the threatened litigation in 

Australia. But the onus to pursue the threatened claims belongs to Defendants, not Lockheed. 

Enjoining Defendants from suing in Australia merely enforces the forum-selection clause and will 

not deprive them of legal recourse. See Bermann, supra, at 626 & n.142 (stating that the existence 

of or possibility for parallel litigation is important because “an anti-suit injunction ought not issue 

if it would result in depriving the plaintiff of his or her only remedy,” and noting, “The 

requirement of actual or potential concurrent proceedings mirrors forum non conveniens case law. 

It is well established that a competent court should not decline jurisdiction on grounds of 

inconvenience unless the more convenient forum is legally and practically available to the 

plaintiff.”). Defendants may protect their rights by bringing suit in the United States, as they have 

already agreed to do. 

Turning to the question of whether the parties are the same, the court finds that they are for 

similar reasons. The July 18 Order and this preliminary injunction merely enforce the forumselection clause, to which all Defendants have agreed. Compl. ¶ 29; Compl. Ex. B. Thus, they are 

not overly broad. If a Defendant has no desire to pursue claims against Lockheed, then they are 

not impacted by the court’s orders, and to the extent that they wish to pursue the threatened claims, 

they are bound by their own agreement to do so in the United States. 

The July 18 Order and this order promote the strong policy favoring forum selection 

clauses. See Applied Med., 587 F.3d at 918-19 (“[T]here is a strong policy favoring robust forum 

selection clauses.”). The U.S. Supreme Court has stated that “clause[s] establishing ex ante the 

forum for dispute resolution ha[ve] the salutary effect of dispelling any confusion about where 

suits arising from the contract must be brought and defended, sparing litigants the time and 

expense of pretrial motions to determine the correct forum and conserving judicial resources that 

otherwise would be devoted to deciding those motions.” Carnival Cruise Lines, Inc. v. Shute, 499 

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U.S. 585, 593-94 (1991). They are especially useful in international business, because “[w]hen 

included in freely negotiated commercial contracts, they enhance certainty, allow parties to choose 

the regulation of their contract, and enable transaction costs to be reflected accurately in the 

transaction price.” E. & J. Gallo, 446 F.3d at 992. For all of these reasons, the Ninth Circuit has 

held that they “should be enforced absent strong reasons to set them aside.” Id. (quoting Northrop 

Corp. v. Triad Int’l Mktg., S.A., 811 F.2d 1265, 1270 (9th Cir.1987)). There is no such strong 

reason here. 

If the court were to dissolve the July 18 Order and refrain from issuing a preliminary antisuit injunction, the forum-selection clause would “effectively become[] a nullity.” Id. While 

Defendants have represented that they will not bring an anti-suit injunction against Lockheed in 

Australia, counsel for Defendants did not rule out Defendants bringing the threatened claims in 

Australia. Hearing Tr. at 15:19-21 (“With respect to what claims we brought in Australia, I don’t 

know if our clients would bring claims, or what they’re going to be.”). If the court does not issue 

an anti-suit injunction, Defendants may well bring the threatened claims against Lockheed in 

violation of the forum-selection clause. Then Lockheed will certainly return to this court to, once 

again, request an anti-suit injunction. Such a result would waste the resources of the parties and 

the U.S. and Australian courts, and it would cause a greater harm to international comity. 

Moreover, in Applied Medical, the Ninth Circuit reasoned that “forum selection clauses would lose 

their reliability and robustness” if a party could avoid them by exploiting the formal requirements 

for an anti-suit injunction. 587 F.3d at 915. Preserving the reliability and robustness of the 

Shareholders Agreement’s forum-selection clause requires this court to issue an anti-suit 

preliminary injunction. 

For the reasons discussed above and in the July 18 Order, the Court finds that Lockheed 

has carried its burden showing an anti-suit preliminary injunction should issue. 

IT IS THEREFORE ORDERED THAT the temporary restraining order issued by the court 

on July 18, 2019 is superseded by the following order. 

IT IS FURTHER ORDERED THAT Defendants AMB Property (Providence) Pty Ltd.; 

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Ivoryrose Holdings Pty Ltd., as Trustee for The Ashforth Superannuation Fund; and Michael F. 

Ashforth (collectively, the “AMB Defendants”); Aceworld Holdings Pty Ltd.; Khaki Investments 

Pty Ltd.; Marbruck Investments, LLC; TFW Corporate Pty Ltd.; Kemper B. Shaw; and James D. 

Taylor (collectively, the “Marbruck Defendants”); and Hoperidge Enterprises Pty Ltd., as Trustee 

for the Jones Family Trust (“Hoperidge,” and collectively with the AMB Defendants and 

Marbruck Defendants, “Defendants”) and their affiliates, officers, directors, shareholders, 

employees, and any other persons who are in active concert or participation with them, whether 

acting directly or indirectly, in the United States or abroad, shall not file claims or initiate litigation 

against Lockheed, its affiliates, officers, directors or employees, relating to the Defendants’ 

investments in Collinear in a jurisdiction other than one in the United States. 

IT IS FURTHER ORDERED THAT Defendants and their affiliates, officers, directors, 

shareholders, employees, and any other persons who are in active concert or participation with 

them, whether acting directly or indirectly, in the United States or abroad, shall not seek to enjoin 

in a foreign tribunal Lockheed Martin from either (i) securing the anti-suit injunctive relief ordered 

in this Order or (ii) securing any available relief in United States courts regarding potential claims 

against Lockheed relating to the Defendants’ investments in Collinear. 

IT IS FURTHER ORDERED THAT this preliminary injunction shall become immediately 

effective upon its entry. 

IT IS FURTHER ORDERED THAT this preliminary injunction shall remain in full force 

and effect through the date on which judgment is entered in this matter. 

IT IS SO ORDERED. 

Dated: August 9, 2019 

______________________________________ 

EDWARD J. DAVILA 

United States District Judge 

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