Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-02173/USCOURTS-azd-2_06-cv-02173-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 9:9 Motion to Confirm Arbitration Loan

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Make-A-Wish Foundation International, 

Petitioner, 

vs.

Make-A-Wish Foundation of America, 

Respondent. 

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No. CV 06-02173-PHX-NVW

ORDER

Pending before the court is Make-A-Wish Foundation International's Petition to

Confirm Arbitration Award, Doc. # 4. 

Petitioner urges the court to enter final judgment confirming an arbitration award

issued and served by a duly appointed arbitrator on February 1, 2006, following arbitration

between Make-A-Wish Foundation International (“International”) and Make-A-Wish

Foundation of America (“America”). (Doc. # 4 at 1.) The court has jurisdiction to enforce

this award under the Convention on the Recognition and Enforcement of Foreign Arbitral

Awards, New York, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38 (1970) (“New York

Convention”), as implemented at 9 U.S.C. §§ 201-208. However, Petitioner has not

submitted a Form of Judgment for the court to consider in connection with its Petition to

Confirm the Arbitration Award. The court therefore orders Petitioner to lodge such Form

of Judgment by November 16, 2006. 

Case 2:06-cv-02173-NVW Document 6 Filed 11/02/06 Page 1 of 5
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I. Background

Make-A-Wish Foundation International enjoys a perpetual, royalty-free license to use

Make-A-Wish Foundation of America's service marks and trademarks, including America's

trademarked “Make-A-Wish” logo. (Id. at 3.) The License Agreement authorizes

International to sublicense America's marks to International's affiliates. (Id.) International's

license is subject to territorial restrictions. The Agreement states that neither International

nor its sublicensees may use America's marks “for fund raising purposes by . . . electronic

means within the United States.” (Id. Ex. 1 ¶ 2.4.1.) “All disputes arising in connection with

[the License] Agreement . . .” are to be “finally settled by arbitration . . . in accordance with

the rules and procedures of the American Arbitration Association . . . .” (Id. Ex. 1 ¶ 9.2.) 

A dispute arose in 2004 relating to fund raising conducted by International's affiliates

in Canada, Australia, Mexico, the United Kingdom and the Netherlands on each affiliate's

Internet site. (Id. at 3-4.) America contended that the solicitation and collection of donations

on foreign websites accessible from the United States amounted to a breach of the territorial

restrictions contained in the License Agreement. (Id.) International believed otherwise.

International and America submitted their dispute to binding arbitration in Phoenix, Arizona

under the auspices of the International Centre for Dispute Resolution, the international

division of the arbitral facility previously selected by the parties. (Id Ex. 1 ¶ 9.2.)

The arbitrator rendered his final decision in favor of International on February 1,

2006. The arbitrator found that, although the online solicitation and collection of donations

conducted by the affiliates constituted “fund raising by electronic means,” such activity did

not violate the License Agreement because it did not occur “within the United States.” (Id.

Ex. 2 at 6.) The arbitrator focused upon the foreign location of the web servers, the dominant

language of the websites, the foreign country extensions on the website addresses, and the

small amount of funds actually received from the United States to support his conclusion.

(Id.) Finally, the arbitrator ordered the Canadian, Australian, Mexican, British and Dutch

affiliates impacted by the decision to post a disclaimer in English and the native language on

their donation pages to the effect that the funds solicited by them do not accrue to the benefit

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of America or any of its chapters in the United States. (Id. at 6-7.) In anticipation of this

action for recognition and enforcement under the New York Convention, to which the United

States is a party, the arbitrator stated that “this Final Award was made in the State of Arizona,

United States of America.” (Id. at 7.) 

II. Personal Jurisdiction

Petitioner served a copy of the Petition to Confirm the Arbitration Award on

Respondent, an Arizona non-profit corporation with its principal place of business in this

State. (Doc. # 4 at 8.) This is all the notice that is required under the procedural rules of the

American Arbitration Association, to which the parties have submitted:

R-39 Serving of Notice: (a) Any papers, notices, or process necessary or proper for

the initiation or continuation of an arbitration under these rules, for any court action

in connection therewith, or for the entry of judgment on any award made under these

rules may be served on a party by mail addressed to the party, or its representative at

the last known address or by personal service, in or outside the state where the

arbitration is to be held, provided that reasonable opportunity to be heard with regard

to the dispute is or has been granted to the party.

Commercial Arbitration Rules and Mediation Procedures, available at

http://www.adr.org/sp.asp?id=22440#R39. This mode of service is also authorized by 9

U.S.C. § 9.

The time for Respondent to interpose a responsive memorandum under LRCiv. 7.2

has passed. 

III. Subject Matter Jurisdiction

Petitioner urges the court to recognize and enforce the Make-A-Wish Foundation

arbitration award on three distinct statutory grounds: (1) the Arizona Arbitration Act, A.R.S.

§§ 12-1501-18; (2) the Federal Arbitration Act, 9 U.S.C. §§ 1-16; and (3) the New York

Convention as implemented at 9 U.S.C. §§ 201-208. (Doc. # 4 at 2.) Only the last of these

three grounds is sufficient to overcome the presumption against federal jurisdiction created

by Article III of the United States Constitution. See Fed. R. Civ. P. 8(a). 

Neither the Arizona Arbitration Act nor the Federal Arbitration Act independently

confers subject matter jurisdiction upon this court. See Southland Corp. v. Keating, 465 U.S.

1 at 16 (1984). Petitioner does not assert federal question jurisdiction under 28 U.S.C. 

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§ 1331. Nor is there diversity of citizenship under 28 U.S.C. § 1332: Make-A-Wish

Foundation of America and Make-A-Wish Foundation International are both incorporated

in Arizona, and they have their principal places of business here as well. (Doc. # 4 at 2.)

Subject matter jurisdiction therefore exists exclusively under the municipal law implementing

the New York Convention, 9 U.S.C. § 203: “An action or proceeding falling under the

Convention shall be deemed to arise under the laws and treaties of the United States.” 

 The Convention on Recognition and Enforcement of Foreign Arbitral Awards applies

to the Make-A-Wish Foundation arbitration award, despite the fact that it was rendered in

the United States, is to be recognized and enforced in the United States, and is the product

of a contract dispute between two corporate citizens of the United States. This rather

surprising result follows from the second and third sentences of 9 U.S.C. § 202, which

provide: 

An . . . award arising out of [a commercial legal relationship involving interstate

commerce] which is entirely between citizens of the United States shall be deemed

not to fall under the Convention unless that relationship involves property located

abroad, envisages performance or enforcement abroad, or has some other reasonable

relation with one or more foreign states. For the purpose of this section a corporation

is a citizen of the Untied States if it is incorporated or has its principal place of

business in the United States. 

After consulting the text of the Convention and surveying the applicable legislative

histories, the court in Lander Co. v. MMP Invs., 107 F.3d 476 (7th Cir. 1997), cert. denied,

522 U.S. 811 (1997), decided that the inclusive language of 9 U.S.C. § 202 brought an

otherwise domestic arbitral award within the ambit of the New York Convention. In that

case, as in this one, a federal court confronted a petition for enforcement of an arbitration

award that was rendered in the United States and which settled a contract dispute arising

between two United States corporations. In that case, as in this one, the New York

Convention applied because the domestically rendered award touched foreign jurisdictions

in the manner required by 9 U.S.C. § 202. 

Petitioner reasonably asserts that the Make-A-Wish arbitration award “involves

property abroad” (i.e., the web servers of International's five affiliates) and also that the

decision “envisages performance or enforcement abroad” (i.e., the foreign affiliates may

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continue to use America's marks to solicit funds on their own websites, but must provide

appropriate disclaimers on the relevant webpages). (Doc. # 4 at 5-6.) Therefore, the court

is persuaded to adopt Judge Posner's reasoning in Lander to dispose of this case under the

New York Convention. Accord Jones v. Sea Tow Servs., 30 F.3d 360, 366 (2nd Cir. 1994)

(mining the legislative history of 9 U.S.C. § 202 to define the term “reasonable relation with

one or more foreign states”); Bergesen v. Joseph Muller Corp., 710 F.2d 928, 933 (2nd Cir.

1983) (arbitral awards rendered in the United States may qualify for enforcement in the

United States under the New York Convention); Jacada Ltd. v. Int'l Mktg. Strategies, Inc.,

401 F.3d 701 (6th Cir. 2005) (same); cf. Maletis v. Perkins & Co., 2005 U.S. Dist. LEXIS

21444 (D. Or. 2005) (New York Convention not applicable because degree of connection

with foreign jurisdiction insufficient under 9 U.S.C. § 202). 

The Court of Appeals for the Ninth Circuit is in implicit agreement with Lander,

although it has not reached the precise issue of statutory construction decided in that case.

Minister of Defense of Islamic Republic of Iran v. Gould, Inc., 887 F.2d 1357, 1362 (9th Cir.

1989) (holding that “three basic requirements exist for jurisdiction to be conferred upon the

district court [under the New York Convention]: the award (1) must arise out of a legal

relationship (2) which is commercial in nature and (3) which is not entirely domestic in

scope.”). 

IT IS THEREFORE ORDERED that Make-A-Wish Foundation International's

Petition to Confirm Arbitration Award, Doc. # 4, is granted. 

IT IS FURTHER ORDERED that Make-A-Wish Foundation International shall lodge

a Form of Judgment by November 16, 2006.

DATED this 2nd day of November 2006.

Case 2:06-cv-02173-NVW Document 6 Filed 11/02/06 Page 5 of 5