Court Opinion

ID: 2769982
Source: CourtListenerOpinion
Date Created: 2015-01-14 21:01:09.517383+00
Date Added: 2024-06-11T12:13:51.896998
License: Public Domain

UNITED STATES DISTRICT COURT
                        FOR THE DISTRICT OF COLUMBIA
____________________________________
                                     )
DETROIT INTERNATIONAL                )
BRIDGE COMPANY, et al.,              )
                                     )
            Plaintiffs,              )
                                     )
      v.                             )   Civil Action No. 10-476 (RMC)
                                     )
GOVERNMENT OF CANADA, et al.,        )
                                     )
            Defendants.              )
____________________________________ )

                                 MEMORANDUM OPINION

               The Detroit International Bridge Company and its wholly-owned subsidiary, the

Canadian Transit Company (CTC) (collectively, DIBC), want to build an adjacent twin span to

their Ambassador Bridge (Twin Span) that crosses the Detroit River and connects Detroit,

Michigan and Windsor, Canada. Despite its best efforts for more than a decade, and lawsuits in

both countries, DIBC has yet to receive full permits from either Canada or the U.S. to construct

and operate a new bridge. In the meantime, the governments of Canada, the Province of Ontario,

the United States, and the State of Michigan have worked in consort to develop plans for a new

publicly-owned bridge, the New International Transit Crossing/Detroit River International

Crossing (NITC/DRIC) (pronounced Nitsy-Drick), two miles from the Ambassador Bridge. The

NITC/DRIC would allegedly destroy the need for a Twin Span and compete with the

Ambassador Bridge.

               DIBC sues Her Majesty the Queen in Right of Canada and the Windsor-Detroit

Bridge Authority (WDBA) (Canada), which would operate the NITC/DRIC on the Canadian side

of the border. Canada has filed a motion to dismiss in reliance on the Foreign Sovereign

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Immunities Act (FSIA), 28 U.S.C. §§ 1602-1611. See Mot. to Dismiss [Dkt. 125]. In the

alternative to ruling on its motion to dismiss, Canada asks the Court to stay this suit as to Canada

because CTC, the owner of the Canadian end of the Ambassador Bridge, has brought

substantially the same claims before a court of competent jurisdiction in Ontario, Canada. After

having thoroughly considered the motion to dismiss on immunity grounds, this Court finds that a

stay is warranted because the scope of CTC’s franchise rights should be decided by Canadian

courts.

                                   I.    BACKGROUND

               In its campaign to build a Twin Span, DIBC has sued in the United States and in

Canada. The Court refers the reader to its earlier opinions 1 and will not belabor this history here.

               As against the Canadian Defendants, Count Two of the Third Amended

Complaint seeks a declaratory judgment that DIBC, through its subsidiary CTC, holds an

exclusive franchise right under Canadian law to build and operate a bridge between Windsor and

Detroit and that no one else can ever build a competing bridge. 3rd Am. Compl. [Dkt. 105]

¶ 312. Specifically, DIBC seeks a declaration that it has a “perpetual right” to operate a toll

bridge between Detroit and Windsor with which Canada cannot interfere. Id. Count Two

alleges that “[u]nder Canadian law, plaintiffs’ statutory and contractual franchise rights under the

special agreement are exclusive, and cannot be subjected to any new bridge that would constitute

contiguous or injurious competition or interference with plaintiffs’ franchise.” Id. ¶ 304. Count

Two further alleges that Plaintiffs’ franchise rights are enforceable “as a matter of Canadian law

(against Canadian government defendants).” Id. ¶ 305. As against all Defendants, DIBC alleges

1
 Opinion dated 5/13/11 [Dkt. 43]; Opinion dated 12/1/11 [Dkt. 55]; Opinion dated 5/30/14 [Dkt.
162]; Order dated 12/17/14 [Dkt. 193].

                                                 2
that “[b]y approving the construction of a different new span two miles away, the Defendants

are, in effect, seeking to relocate plaintiffs’ statutory and contractual franchise to a new location

and to new ownership.” 2 Id. ¶ 311.

                 As against Canada, Count Three seeks a declaratory judgment that DIBC has a

franchise right to build the Twin Span, which is not subject to Canada’s preference for a

government-owned bridge, id. ¶ 321, and that no Canadian agency or officer can defeat or

frustrate this right by accelerating approval of the NITC/DRIC and delaying approval of the

Twin Span or by discriminating in favor of the NITC/DRIC. 3 Id. ¶¶ 322-23.

2
    Count Two seeks the following relief against all Defendants, including Canada:

            Plaintiffs therefore seek a declaratory judgment that (a) plaintiffs possess
            a statutory and contractual franchise right to operate an international
            bridge between Detroit and Windsor under concurrent and reciprocal
            United States and Canadian legislation that constitutes a Special
            Agreement under the 1909 Boundary Waters Treat [Treaty Between the
            United States and Great Britain Relating to Boundary Waters between
            the United States and Canada; 36 Stat. 2448; T.S. 548]; (b) that franchise
            right is exclusive of all contiguous and injurious competition in the form
            of any other bridge between Detroit and Windsor; (c) in the alternative,
            and at a minimum, that franchise right is exclusive of any other bridge
            being built between Detroit and Windsor unless and until the United
            States Congress and the Canadian Parliament enact concurrent or
            reciprocal legislation constituting a special agreement under the 1909
            Boundary Waters Treaty that grants a franchise right to another entity to
            construct, maintain, and operate an additional international bridge
            between Detroit and Windsor; (d) that franchise right is a perpetual right
            that prohibits the government as grantor from building a bridge that
            would diver toll revenues from DIBC . . . ; . . . (g) therefore no entity
            other than plaintiffs may construct, maintain, and operate an
            international bridge between Detroit and Windsor.

3rd Am. Compl. ¶ 312.
3
    Count Three seeks the following relief against all Defendants, including Canada:

                 Plaintiffs therefore seek a declaratory judgment that (a) plaintiffs
                 possess a statutory and contractual franchise right to build the
                                                  3
               Notably, CTC filed a separate action against the Attorney General of Canada on

February 15, 2012 (the Canadian Litigation). See Mot. to Dismiss at 6. CTC amended that

claim on February 19, 2013. Id.

                                II.    LEGAL STANDARD

               Inherent in the power of an Article III court to control its docket is the

discretionary power to stay a case pending the outcome of foreign litigation. See Ronar, Inc. v.

Wallace, 649 F. Supp. 310, 318 (S.D.N.Y. 1986). “Although federal courts have a ‘virtually

unflagging obligation’ to exercise the jurisdiction conferred on them by Congress, in exceptional

cases, a federal court should stay a suit and await the outcome of parallel [foreign] proceedings

as a matter of ‘wise judicial administration, giving regard to the conservation of judicial

resources and comprehensive disposition of litigation.’” Finova Capital Corp. v. Ryan

Helicopters, 180 F.3d 896, 898 (7th Cir. 1999), reh’g en banc, 433 F.3d 1199 (9th Cir. 2006)

(citing Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976)).

Courts weighing a stay based on foreign litigation apply a multi-factor balancing test,

considering: the similarity of the parties, “the similarity of the issues, the order in which the

actions were filed, the adequacy of the alternate forum, the potential prejudice to either party, the

               [Twin] Span; (b) the agencies and officers of the United States and
               Canada may not frustrate or defeat plaintiffs’ franchise right to
               build the [Twin] Span and are preempted from doing so; (c) the
               agencies and officers of the United States and Canada may not
               discriminate in favor of the NITC/DRIC over the [Twin] Span, and
               may not accelerate the regulatory approvals for the NITC/DRIC
               and/or delay the regulatory approvals for the [Twin] Span; (d) . . .
               the agencies and officers of the United States and Canada may not
               approve the NITC/DRIC unless they are able to demonstrate that
               the NITC/DRIC is necessary even after construction by plaintiffs
               of the [Twin] Span.

3rd Am. Compl. ¶ 323.
                                                  4
convenience of the parties, the connection between the litigation and the United States, and the

connection between the litigation and the foreign jurisdiction.” LG Display Co. Ltd. v. Obayashi

Seikou Co., Ltd., 919 F. Supp. 2d 17, 24 (D.D.C. 2014) (quoting Royal & Sun Alliance Ins. Co.

of Can. v. Century Intern. Arms, Inc., 466 F.3d 88, 94 (2d Cir. 2006)). “In the context of parallel

proceedings in a foreign court, a district court should be guided by the principles upon which

international comity is based: the proper respect for litigation in and the courts of a sovereign

nation, fairness to litigants, and judicial efficiency.” Royal & Sun Alliance Ins. Co. of Canada,

466 F.3d at 94; see also Brinco Mining LTD v. Federal Ins. Co., 552 F. Supp. 1233, 1240

(D.D.C. 1982).

                                    III.    ANALYSIS

               Canada contends that the “CTC is currently advancing similar claims and seeking

similar declarations under Canadian law against Canada in Canadian courts.” Mot. to Dismiss at

23; see Reply, Ex. 1 [Dkt. 136-1] Amended Statement of Claim, CTC v. Attorney General of

Canada, Court File No. CV-12-446428 (Ontario Superior Court of Justice) (Am. St. of Claim).

Canada argues that a stay of this U.S. litigation is appropriate because DIBC is “making the same

exclusive franchise claim in the Canadian Litigation . . . [and is] also making the exact same

claim in that case regarding the [T]win [S]pan.” Reply at 14. Moreover, the “adequacy of the

Canadian courts . . . is beyond dispute” and a stay would “promote judicial efficiency and avoid

the risk of inconsistent declarations on the same issue of [DIBC’s] rights under Canadian law.”

Mot. to Dismiss at 24.

               DIBC opposes a stay. Acknowledging that there is a single issue in common to

both proceedings, the exclusivity of its franchise under Canadian law, DIBC argues that the

Canadian Litigation does not address its claim that “Canada’s effort to build the NITC/DRIC is

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infringing [its] right to maintain its franchise by building its Twin Span.” Opp’n [Dkt.134] at

117. DIBC also maintains that the “Ontario Litigation would not in fact provide resolution of the

exclusivity issue” because the United States is not a party. Id. Thus, a stay would be prejudicial

because it would “delay[] this lawsuit indefinitely” and “[t]ime is of the essence in this case,

where the parties are effectively in a race to build their respective bridges.” Id.

               Upon consideration of each of the enumerated factors, the Court concludes that a

stay is appropriate in DIBC’s case as against Canada. Although none of the U.S. defendants in

this case is a named defendant in the Canadian Litigation, the parties relevant to the claims

advanced against Canada are substantially similar. Here, DIBC sues Canada and WDBA; in

Canada, CTC sues the Attorney General of Canada. While DIBC is not a named plaintiff in the

Canadian Litigation, CTC is its wholly-owned subsidiary and “parties are ‘similar’ for purposes

of international comity when one party is a subsidiary of the other or one party has a substantial

ownership interest in the other.” Taub v. Marchesi Di Barolo S.p.A., No. 09-CV-599, 2009 WL

4910590, at *6 (E.D.N.Y. Dec. 10, 2009) (citation omitted). Similarly, although WDBA is not a

named defendant in the Canadian Litigation, WDBA is a Canadian Crown corporation, which is

wholly-owned by Canada. See Mot. to Dismiss at 9. Thus, with respect to the claims advanced

against Canada in Counts Two and Three of the Third Amended Complaint and in the Canadian

Litigation, the parties are more than substantially similar even though not all names are repeated.

               Likewise, this Court concludes that the issues in the two cases are substantially

similar. DIBC admits that it is making the same “exclusive franchise” claim in the Canadian

Litigation. See Opp’n at 117. Having reviewed the Amended Statement of Claim, the Court

rejects DIBC’s argument that the Canadian Litigation does not address its claim that “Canada’s

effort to build the NITC/DRIC is infringing the Plaintiffs’ right to maintain its franchise by

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building its Twin Span.” Opp’n at 117. This claim is presented to the Canadian court insofar as

Plaintiffs seeks the following relief:

               A declaration that the construction of a new bridge in the vicinity
               of the Ambassador Bridge, of which the Canadian Government is a
               proponent, is an unlawful breach of the rights granted to CTC
               pursuant to the CTC Act and a breach of the terms of the Special
               Agreement and Implied agreement;

               A declaration that CTC has the right and/or duty under the CTC
               Act, the Special Agreement and the Implied Agreement to
               maintain an international border crossing in the vicinity of the
               Ambassador Bridge for the public benefit, including a right and/or
               duty to construct and maintain a second span to the existing
               Ambassador Bridge;

               A declaration that steps taken by the Canadian Government to
               prevent or hinder CTC from building a Second Span constitute a
               breach of the rights granted to CTC pursuant to the CTC Act, the
               Special Agreement and the Implied Agreement.

See Am. St. of Claim at 4-5.

               Plaintiffs do not dispute that Canada is an adequate forum to adjudicate claims

involving issues of Canadian law. Indeed, “if this Court cannot extend comity to Canada, the

comity principle has little vitality in our jurisprudence.” See Brinco Mining LTD. V. Federal Ins.

Co., 552 F. Supp. 1233, 1240 (D.D.C. 1982) (citing Fleeger v. Clarkson co. Ltd., 86 F.R.D. 388,

392-93 (N.D. Texas 1980)). DIBC’s concern that it will be prejudiced by an indefinite delay is

too speculative in these circumstances to affect the analysis. DIBC does not dispute Canada’s

assertion that the Canadian lawsuit “is actively being litigated.” Mot. to Dismiss at 13. DIBC

can continue to prosecute its claims against Canada under Canadian law in Canada and, if it

prevails, can petition a U.S. court to give full effect to that foreign judgment. See LG Display

Co. Ltd., 919 F. Supp. 2d at 28. DIBC’s argument against a stay resolves to a claim that no

remedy is available to it unless both the U.S. and Canada are in the same suit since its bridge

                                                 7
touches both shores. The Court disagrees. If this Court finds for DIBC on its pending claims

against the United States, it has full authority to order the United States and/or other United

States defendants to withdraw and to cease and desist from any and all activities in furtherance of

the NITC/DRIC. 4 See Salazar v. Buono, 559 U.S. 700, 714 (2010) (“An injunction is an exercise

of a court’s equitable authority, to be ordered only after taking into account all of the

circumstances that bear on the need for prospective relief.”).

               The Court agrees with Canada that it “has a paramount interest in adjudicating

this dispute concerning matters of legal and practical significance to the nation of Canada and

involving interpretation of Canadian law, in Canada.” Mot. to Dismiss at 23. The Court

concludes that DIBC’s complaint to obtain declaratory judgments on its exclusive franchise

rights to a bridge between Detroit and Windsor under Canadian law is better suited to decision

by Canadian courts. Principles of international comity weigh heavily in favor of a stay

particularly since DIBC seeks a decision in a U.S. court of its rights under Canadian law. See

Royal & Sun Alliance Ins. Co. of Canada, 466 F.3d at 94. Moreover, a decision by this Court on

Plaintiffs’ claims would risk inconsistent judgments between friendly nations on a question of

foreign law. Therefore, even though DIBC first filed in this Court, the Court finds that the

exceptional circumstances in this case dictate a stay.

                                  IV.     CONCLUSION

               For the foregoing reasons, the Court exercises its discretionary authority to stay

this case as between DIBC and Canada pending a decision in the Canadian Litigation. The

parties will be directed to file a joint status report on the Canadian Litigation no later than March

4
  In its Prayer for Relief, DIBC requests “injunctive relief necessary to prevent defendants from
taking any action that infringes upon plaintiffs’ exclusive statutory and contractual franchise
rights under their Special Agreement.” 3rd Am. Compl. at 116.
                                                  8
2, 2015 and to file joint status reports at six-month intervals thereafter. A memorializing Order

accompanies this Memorandum Opinion.

Date: January 14, 2015                                        /s/
                                                 ROSEMARY M. COLLYER
                                                 United States District Judge

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