Court Opinion

ID: 626967
Source: CourtListenerOpinion
Date Created: 2012-04-10 14:27:19+00
Date Added: 2024-06-11T17:51:17.879208
License: Public Domain

11-5150-cv
         Leng v. Pinnacle Performance Ltd.

                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl Street, in the City of
 4       New York, on the 10th day of April, two thousand and twelve.
 5
 6       PRESENT: BARRINGTON D. PARKER, JR.,
 7                RICHARD C. WESLEY,
 8                         Circuit Judges,
 9                SIDNEY H. STEIN,*
10                         District Judge.
11
12
13       LAM YEEN LENG, ZHAO YUZHENG, NG SHOOK PHIN SUSAN, CHOH GEK
14       HONG JOHNSON, HO YU WAH PETER, NEO SAY HOE, ANG SOO CHENG,
15       LIM THIAN LOKE, BOEY CHERN YUE, YEO PENG CHYE, NI YAN AMY,
16       LI CHAN CHIH ERIC, SINGAPORE GOVERNMENT STAFF CREDIT
17       COOPERATIVE SOCIETY, LIMITED, LOH TUCK WOH PETER, CHUA HUI
18       LOO, PAN YUEN DAPHNE, CHO SIEW KONG DOUGLAS, GE DANDONG,
19
20                                     Plaintiffs-Appellees,
21
22                      -v.-                                                11-5150-cv
23
24       PINNACLE PERFORMANCE LIMITED, MORGAN STANLEY ASIA
25       (SINGAPORE) PTE, MORGAN STANLEY & CO. INTERNATIONAL, PLC,
26       MORGAN STANLEY CAPITAL SERVICES INCORPORATED, MORGAN STANLEY
27       & CO. INCORPORATED,
28
29                                     Defendants-Appellants.
30

                *
                Judge Sidney H. Stein of the United States District Court
         for the Southern District of New York, sitting by designation.
 1   FOR APPELLANTS:   BRUCE D. ANGIOLILLO (Jonathan K.
 2                     Youngwood, on the brief), Simpson
 3                     Thatcher & Bartlett LLP, New York, NY.
 4
 5   FOR APPELLEES:    ANDREW M. MCNEELA (Daniel Hume, Ira M.
 6                     Press, on the brief), Kirby McInerney
 7                     LLP, New York, NY.
 8
 9        Appeal from the United States District Court for the
10   Southern District of New York (Sand, J.).
11
12       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

13   AND DECREED that the judgment of the district court be

14   AFFIRMED as to Defendants-Appellants Morgan Stanley Asia

15   (Singapore) PTE, Morgan Stanley & Co. International, PLC,

16   Morgan Stanley Capital Services Incorporated, and Morgan

17   Stanley & Co. Incorporated.   As to Defendant-Appellant

18   Pinnacle Performance Limited (“Pinnacle”), we REMAND for the

19   district court to make personal jurisdiction findings.     The

20   injunction will remain in place as to Pinnacle while the

21   district court makes these findings.

22       Appellants, including Pinnacle, appeal from an order of

23   the United States District Court for the Southern District

24   of New York (Sand, J.) issuing a preliminary injunction.

25   The injunction prohibits Appellants from pursuing their own

26   anti-suit injunction from the High Court of the Republic of

27   Singapore (“Singapore Motion”) that would require Appellees

28   to litigate their claims exclusively in Singapore.

                                   2
1    Appellants also seek interlocutory review of the district

2    court’s order denying their motion to dismiss Appellees’

3    complaint.   Appellants ask this Court to consider their

4    argument made below that Appellees’ suit must be dismissed,

5    either on the basis of forum non conveniens or on the basis

6    of a Singapore forum selection clause contained in the

7    Pricing Statements for the credit-linked notes at issue in

8    this litigation.   We assume the parties’ familiarity with

9    the underlying facts, the procedural history, and the issues

10   presented for review.

11       This Court reviews the issuance of an anti-suit

12   injunction for abuse of discretion, namely, the incorrect

13   application of legal standards or reliance on clearly

14   erroneous findings of fact.   Karaha Bodas Co., L.L.C. v.

15   Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 500 F.3d

16   111, 118-19 (2d Cir. 2007).   This Circuit has suggested that

17   before issuing an anti-suit injunction, a court must (1)

18   “address[] the propriety of imposing an anti-suit

19   injunction” under the test established in China Trade & Dev.

20   Corp. v. M.V. Choong Yong, 837 F.2d 33, 35 (2d Cir. 1987)

21   (the “China Trade” test), and then (2) “make findings on

22   whether it is appropriate to enter a preliminary

                                   3
1    injunction.”       In re Millenium Seacarriers, Inc., 458 F.3d

2    92, 98 (2d Cir. 2006) (per curiam) (emphasis removed).

3            The district court properly determined that Appellees

4    satisfied both of these tests.        First, the district court

5    properly found that Appellees had satisfied the two

6    threshold elements of the China Trade test: (1) the parties

7    to both proceedings are the same, and (2) “resolution of the

8    case before the enjoining court [will] be dispositive of the

9    action to be enjoined.”       China Trade, 837 F.2d at 35.

10   Appellees have also met their burden under the additional

11   China Trade factors.       See Karaha Bodas Co., 500 F.3d at

12   119.1       Most importantly here, the district court found that

13   the enjoined Singapore Motion would threaten the district

14   court’s jurisdiction.       See China Trade, 837 F.2d at 36

15   (“[I]f a foreign court is not merely proceeding in parallel

16   but is attempting to carve out exclusive jurisdiction over

17   the action, an injunction may . . . be necessary to protect

18   the enjoining court’s jurisdiction.”).        Appellants’

             1
           These factors include whether the enjoined action would
     “(1) frustrate . . . a policy in the enjoining forum; (2) . . .
     be vexatious; (3) . . . threaten . . . the issuing court’s . . .
     jurisdiction; (4) . . . prejudice other equitable considerations;
     or (5) . . . result in delay, inconvenience, expense,
     inconsistency, or a race to judgment.” Karaha Bodas Co., 500
     F.3d at 119 (internal quotation marks and alterations omitted).

                                       4
1    Singapore Motion seeks a determination that Singapore is the

2    proper forum for Appellees’ suit.    Faced with this clear

3    threat to its jurisdiction over the case, the district court

4    properly exercised its discretion in finding that this

5    factor weighed heavily against Appellants.

6        The district court also properly determined that

7    Appellees satisfied the traditional test for the issuance of

8    a preliminary injunction.    Under that test, Appellees must

9    show (1) irreparable harm, (2) sufficiently serious

10   questions going to the merits, and (3) a balance of

11   hardships tipping decidedly towards them.    See Citigroup

12   Global Mkts., Inc. v. VCG Special Opportunities Master Fund

13   Ltd., 598 F.3d 30, 35 (2d Cir. 2010).    We agree with the

14   district court that Appellees have demonstrated irreparable

15   harm through the “actual and imminent possibility that

16   [they] will be enjoined from prosecuting their suit in this,

17   or in any other non-Singaporean, forum,” and that there are

18   sufficiently serious questions going to the merits.    Dandong

19   v. Pinnacle Performance Ltd., No. 10 Civ. 8086, 2011 WL

20   6156743, at *7    (S.D.N.Y. Dec. 12, 2011) (internal quotation

21   marks omitted).    Finally, the district court properly found

22   that the balance of hardships “tips decidedly in favor of

                                    5
1    [Appellees]” due to the timing of Appellants’ Singapore

2    Motion, the danger that Appellees will be enjoined from

3    proceeding in their chosen forum, and the potential expense,

4    delay, and inconvenience involved in requiring Appellees to

5    litigate in Singapore and possibly abandoning their case in

6    New York.   Id.

7        However, the district court erred in enjoining Pinnacle

8    without first making any findings as to its jurisdiction

9    over that party.     Where a challenge to personal jurisdiction

10   is interposed on an application for a preliminary

11   injunction, the district court must determine that the party

12   moving for the injunction has established “at least a

13   reasonable probability of ultimate success on the question

14   of the court’s in personam jurisdiction” over the non-moving

15   party.   Weitzman v. Stein, 897 F.2d 653, 659 (2d Cir. 1990);

16   Visual Scis., Inc. v. Integrated Commc’ns Inc., 660 F.2d 56,

17   59 (2d Cir. 1981).

18       Here, Appellants initially moved to dismiss the

19   complaint on the grounds that Pinnacle was an indispensable

20   party under Fed. R. Civ. P. 19(b) and that the court did not

21   have personal jurisdiction over Pinnacle.     In deciding that

22   motion, however, the district court focused solely on

                                     6
1    whether Pinnacle was an indispensable party.     Having

2    concluded that it was not, the court saw no need to resolve

3    the jurisdictional question.

4        Nor did the district court address whether it had

5    jurisdiction over Pinnacle during the preliminary injunction

6    hearing or in its subsequent memorandum and order granting

7    the preliminary injunction.     Having determined that the

8    parties in the federal action were the “same” as the parties

9    involved in the Singapore Motion for the purposes of China

10   Trade, the district court seemed to think that Pinnacle’s

11   appearance and answer in this case permitted it to grant the

12   injunction.     See Dandong, 2011 WL 6156743, at *4 (“Pinnacle,

13   having answered the complaint, is now a party to the suit in

14   New York.     For this reason, the parties to both suits are

15   identical.”) (internal citation omitted).     But Pinnacle’s

16   presence in the lawsuit did not provide the answer to the

17   jurisdictional question, which is necessary to enjoin

18   Pinnacle because Pinnacle raised jurisdictional objections

19   both in its answer and in the motion to dismiss.

20       In the absence of any jurisdictional determination as

21   to Pinnacle, this Court must remand to the district court to

22   “make factual findings adequate enough to permit intelligent

                                     7
1    appellate review.”    Visual Scis., 660 F.2d at 59.   The

2    injunction will remain in place while the district court

3    makes this finding.    See Millenium Seacarriers, 458 F.3d at

4    98 (keeping anti-suit injunction in place while remanding

5    for court to make China Trade findings).2

6        Finally, we decline to address whether the district

7    court properly ruled on Appellants’ forum non conveniens or

8    forum selection clause arguments.   This Court may exercise

9    pendent jurisdiction to review any issue that is

10   “inextricably intertwined with a question that is the proper

11   subject of an immediate appeal, or . . . where review of a

12   jurisdictionally insufficient issue is necessary to ensure

13   meaningful review of a jurisdictionally sufficient one.”

14   LaForest v. Former Clean Air Holding Co., 376 F.3d 48, 51

15   (2d Cir. 2004) (internal quotation marks omitted).    Two

16   rulings are “inextricably intertwined” when the “same

17   specific question” underlies both orders such that this

18   Court’s resolution of the question “will necessarily resolve

         2
           We express no view on the effect of a finding that
     the court lacks personal jurisdiction over Pinnacle on the
     court’s determination that the parties are the “same” or
     “sufficiently similar” for the purposes of satisfying China
     Trade’s first threshold element. See Paramedics
     Electromedicina Comercial, Ltda v. GE Med. Sys. Info.
     Techs., Inc., 369 F.3d 645, 652 (2d Cir. 2004).
                                    8
1    the appeals from both orders at once.”       Myers v. Hertz

2    Corp., 624 F.3d 537, 553 (2d Cir. 2010) (internal quotation

3    marks omitted).

4        While the issue of the district court’s anti-suit

5    injunction order is properly before this Court pursuant to

6    28 U.S.C. § 1292(a)(1), neither the issue of forum non

7    conveniens nor the applicability of the Singapore forum

8    selection clause involves the “same specific question” such

9    that the rulings are inextricably intertwined.      Appellants’

10   argument that these issues all center on “whether New York

11   is an appropriate forum” is unpersuasive.      Appellants’ Reply

12   Br. 19.   Determining whether to issue an anti-suit

13   injunction involves assessing the harm caused, and the

14   jurisdictional threat imposed, by concurrent or superceding

15   proceedings in another forum.       In contrast, the forum non

16   conveniens inquiry asks whether there is an adequate

17   alternative forum that would better serve the litigation.

18   And the applicability of a forum selection clause depends on

19   contract interpretation, not on harm to litigants, the

20   court, or international comity.      It is not enough that

21   Appellants have shown some similarity between these issues:

22       [T]he pendent jurisdiction standard is not satisfied
23       when we are confronted with two similar, but

                                     9
1        independent, issues, and resolution of the non-
2        appealable order would require us to conduct an inquiry
3        that is distinct from and broader than the inquiry
4        required to resolve solely the issue over which we
5        properly have appellate jurisdiction.
6
7    Myers, 624 F.3d at 553-54 (internal quotation marks

8    omitted).

9        For the foregoing reasons, the judgment of the district

10   court is hereby AFFIRMED as to Defendants-Appellants Morgan

11   Stanley Asia (Singapore) PTE, Morgan Stanley & Co.

12   International, PLC, Morgan Stanley Capital Services

13   Incorporated, and Morgan Stanley & Co. Incorporated.    As to

14   Defendant-Appellant Pinnacle, we REMAND for the district

15   court to make personal jurisdiction findings.    The

16   injunction will remain in place as to Pinnacle while the

17   district court makes these findings.

18       The motion by The Securities Industry & Financial

19   Markets Association, et al. for leave to file an amicus

20   curiae brief in support of Appellants is moot.

21
22                              FOR THE COURT:
23                              Catherine O’Hagan Wolfe, Clerk
24
25

                                  10