_ wee sense RR ESSE IF 18:28 ED RATS ee epee ee ere

consent can be shown only if Fremantle and RTL assumed Pearson’s obligations after
the companies became linked.

Fremantle and RTL contend that they and Pearson are separate corporate entities
and thus that they are not subject to the contractual provisions of the licensing

agreement. They advance the declaration of Ian Ousey, the © finance director for

Fremantle, which states that the ¢ companies are independent. The declaration also

asserts that at no time have RTL or Fremantle assumed any of Pearson’s contractual

obligations.
Colmar counters that the three companies are not separate but rather that Pearson

and Fremantle are divisions of RTL and thus all are subject to the contractual

obligations of Pearson. In support, Colmar offers a press release from Fremantle’s

London office that states Fremantle and RTL underwent a “merger” and that Pearson

is a “division” of the merged companies. Colmar’s offering is problematic in that it is
a nonlegal document prepared by a British author, with its main focus probably a
British audience. We cannot assume that the terms within it were used in a legally
accurate sense, let alone with the substantial meaning they carry as terms of art in
American corporate law. With only this document to buttress the contention that all
three entities are one, Colmar has not persuaded us that Fremantle and RTL are

unlikely to succeed in obtaining declaratory judgment.

-4.



Fremantle and RTL have sought both preliminary and permanent injunctive

Reka mays aig.

relief. Because we have yet to decide whether declaratory judgment is appropriate in

this case, to issue a permanent injunction would be premature. Thus, we address only

the request for a preliminary injunction.

To obtain a preliminary injunction, a party must pass a four-factor test. Ty, Inc.
v. Jones Group, Inc., 237 F.3d 891, 895 (7th Cir. 2001). First, the case must be likely
to succeed on the merits. Id. Second, the party must not have an adequate remedy at
law. Id. Third, the party must show that the balance of the harms is in its favor, that
is, that it would suffer more harm from the denial of the injunction than the nonmoving
party would suffer if the injunction is granted. Id. Finally, the court must consider the
public interest in the granting or denial of the injunction. Id.

It is elementary that arbitration is a purely voluntary undertaking, a creature of
contract and consent. Geneva Securities, Inc. v. Johnson, 138 F.3d 688, 691 (7th Cir.
1998). Parties who do not agree to resolve their disputes via arbitration cannot be
forced to do so. Id. Absent Fremantle and RTL’s consent to arbitration, either
expressly or through assumption of the arbitration provisions of earlier agreements,
Colmar may not compel them to participate. None of the parties contend that

Fremantle or RTL were signatories to the original licensing agreement. Therefore,


Moving to the second factor, we have little if anything to indicate that Fremantle
or RTL ever consented to be a party to Colmar’s agreement, let alone its arbitration
provision. To hold them bound to the terms of a contract to which they did not consent
would cause irreparable harm that could not be adequately addressed by a later award
of money damages. We therefore conclude that Fremantle and RTL have made a

sufficient showing on the second factor.

The latter two factors warrant a similar conclusion. With regard to the balance
of harms, we reiterate that today’s opinion addresses only preliminary injunctive relief
that will allow Fremantle and RTL to preserve the status quo until they can make a full

showing on their claim for declaratory judgment. See Indiana Civil Liberties Union

v. O’Bannon, 259 F.3d 766, 770 (7th Cir. 2001). If forced to submit to an arbitration
to which they did not agree before we can determine whether the claims against them
are arbitrable, Fremantle and RTL suffer irreparable harm. Conversely, Colmar suffers
little harm in waiting until this court can render a final decision as to the arbitrability
of this dispute. As such, the balance of harms tips toward a grant of injunctive relief

for Fremantle and RTL.

Finally, we consider the last factor. Fremantle and RTL have the public interest
firmly in their favor. In short, the public has no interest in enforcing agreements that
do not exist. Also, the amount of time, money, and effort that would be invested

-5-


Minute Order Form (06/97)

United States District Court, Northern District of Llinois

i Sitting J th
seer Magra Jue Charles P, Kocoras than Asigned Sudge
CASE NUMBER 01 C7733 DATE 11/5/2001
CASE FremantleMedia vs. Colmar
TITLE

Ln the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant,
of the motion being presented.]

3rd party plaintiff, and (b) state briefly the nature

MOTION:

DOCKET ENTRY:

() a] Filed motion of [ use listing in “Motion” box above.]

(2) oO Brief in support of motion due

(3) qa Answer brief to motion due___. Reply to answer brief. due.

(4) a Ruling/Hearingon___set for at

(5) | Status hearing held and continued to 2/5/2002 at 9:30 A.M..

(6) oO Pretrial conference[held/continued to} [set for/re-set for] on set for at.

(7) oO Trial[set for/re-set for] on at

(8) Oo [Bench/Jury trial] [Hearing] held/continued to____at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) OGeneralRule21 O FRCP41(a)(1) 1 FRCP41(a)(2).

qo) «x [Other docket entry] _ Ruling held. ENTER MEMORANDUM OPINION: Plaintiffs’ motion

(Doc 4-1) to enjoin arbitration proceedings is granted. We preliminarily enjoin Colmar from including
Fremantle and RTL in the pending arbitration matter. As discussed in open court, defendant’s motion
for declaratory judgment or discovery is treated as defendant’s amended answer and counterclaim.
Plaintiffs are given to November 26, 2001 to respond to said counterclaim. All discovery to be completed
by February 5, 2002.

“Say

ee

No notices required, advised in open court.

ay

[For further detail see order attached to the original minute order. ]

No notices required.
ices required. number of notices

Notices mailed by judge's staff.

Nov 9 16.4408)

Notified counsel by telephone.

Docketing to mail notices.

Mail AO 450 form.

ig deputy initiats

Copy ig judge/magishrate judge.

courtroom
deputy's
initials

scT

Date/time received in
contrat Clerk’s Office

amnailing deputy initials



unnecessarily in an arbitration to which parties did not consent cements our decision

that a preliminary injunction should be granted.
CONCLUSION

For the reasons stated above, we preliminarily enjoin Colmar from including

Fremantle and RTL in the pending arbitration matter,

pho

Charles P. Kocoras
United States District Judge

Dated: November 5, 2001



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION 0 CKETED

NOV og 2007

FREEMANTLEMEDIA-LTD. (formerly _)
named PEARSON TELEVISION, LTD.), _)
and RTL GROUP, )
)

Plaintiffs, )

)

vs. ) 01 C 7733

)

COLMAR, LTD., )
)

Defendant. )

MEMORANDUM OPINION
CHARLES P. KOCORAS, District Judge:

This matter comes before the court on the motion of Plaintiffs FremantleMedia
and RTL Group to enjoin arbitration proceedings. For the reasons set forth below, we
grant Plaintiffs a preliminary injunction.

BACKGROUND

Plaintiff RTL Group (“RTL”) is the parent of several other corporations,
including Plaintiff FremantleMedia-Ltd. (“Fremantle”) and another named Pearson
Television, Ltd. In 1994, prior to its transfer to RTL and resulting association with
Fremantle, Pearson entered into a licensing agreement with Defendant Colmar, Ltd.

(“Colmar”) to distribute a film that Colmar had produced. The agreement provided that

14


Pearson would “actively and aggressively” market the film and that any disputes
arising from it would be resolved by arbitration in New York or Chicago.

Colmar, unsatisfied with Pearson’s marketing efforts, initiated an arbitration
action against Pearson in March 2000. The following February, the arbitrator denied
all of Colmar’s claims. Despite the final resolution of that action, Colmar has instituted
another arbitration action, this time against Pearson, Fremantle, and RTL. Colmar
claims that the three entities are actually one, thus making Fremantle and RTL subject
to the contractual obligations of Colmar through the expiration of the contract in 2003.

Fremantle and RTL have asked this court for a declaratory judgment that they
are not subject to the contractual obligations of the license agreement. We have
already granted two temporary restraining orders in this case. Fremantle and RTL now
wish us to enjoin Colmar from including them in the pending arbitration.

DISCUSSION

Although we have serious doubts that Colmar will be able to maintain what
seems to be an identical second arbitration proceeding, we cannot tell from the
documents the parties have submitted whether the second proceeding would in fact be
identical. For the purposes of this motion only we assume that Colmar advances a

viable claim, different from those already denied by the arbitrator.