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GESPA Nicaragua, S.A. v. Europe

United States District Court, W.D. Texas, El Paso Division

December 30, 2019




         On this day, the Court considered:

• Defendant Inabata Europe Gmbh's [hereinafter "Defendant Inabata"] "Notice of Removal" (ECF No. 1), filed on July 8, 2019;
• Plaintiff GESPA Nicaragua, S.A/s [hereinafter Plaintiff] "Motion to Remand to State Court" (ECF No. 12) [hereinafter "Motion to Remand"], filed on August 7, 2019;
• Defendant Inabata's "Response to Motion to Remand" (ECF No. 20) [hereinafter "Remand Response"], filed on August 14, 2019;
• Plaintiffs "Reply in Support of Remand" (ECF No. 21) [hereinafter "Remand Reply"], filed on August 21, 2019; • Defendant Inabata's "Motion to Dismiss" (ECF No. 24), filed on September 4, 2019;
• Plaintiffs "Collective Response in Opposition to Motions to Dismiss ECF 24, 26, and 27" (ECF No. 28) [hereinafter "Motion to Dismiss Response"], filed on September 18, 2019; and
• Defendant Inabata's "Reply in Support of Its Motion to Dismiss" (ECF No. 31) [hereinafter "Motion to Dismiss Reply"], filed on September 25, 2019, in the above captioned cause.

         After due consideration, the Court is of the opinion that Defendant Inabata's Motion to Dismiss should be granted on the basis of collateral estoppel, removing Defendant Inabata from the cause. Without Defendant Inabata as a party, the Court lacks subject matter jurisdiction. Accordingly, the Court is of the opinion that Plaintiffs Motion to Remand should be granted.


         A. Factual Background

         Plaintiff is a foreign firm with its principal place of business in Managua, Nicaragua, which acted as the Engineering, Procurement, and Construction contractor for a solar generating facility near Puerto Sandino, Nicaragua [hereinafter "the Project"]. Notice Removal Ex. A, at 1-3. While coordinating the development of the Project, Plaintiff contracted to purchase solar panels from Defendant Inabata, a German corporation. Id. at 3, 6. Plaintiff initiated the above-captioned cause alleging that on or about October, 2016, through December, 2016, Defendant Inabata conspired with the other named Defendants to fraudulently provide Plaintiff with the wrong solar panels for the Project. Id. at 2, 19. To further illuminate the underlying facts of the above-captioned cause, the Court reviews the contractual relationships and conduct of the parties.

         1. Contractual Agreements of the Parties

         In order to complete the Project, Plaintiff entered into a sales agreement [hereinafter "the Sales Agreement"] with Defendant Inabata to purchase 46, 000 "Recom Bla[c]k Panther"[1] solar panels and "related components required for the solar facility." Id. at 6-7. According to Plaintiff, the Sales Agreement "very specifically designated that the solar panels be delivered as Black Panther panels." Id. at 7. Further, Defendant Inabata agreed to "provide short term financing [for] the purchase of the panels and components on the condition that Plaintiff would use [the] Recom Black Panther solar panels of its affiliate, Defendant Recom." Id. The parties included a forum selection clause in the Sales Agreement, reading:

The Parties hereto [Plaintiff and Defendant Inabata] agree that the law of Germany shall apply, and voluntarily submit to jurisdiction and venue in the courts of Diisseldorf as the exclusive place of jurisdiction (venue) for any and all disputes which may arise out of this Agreement or in connection therewith.

Mot. Dismiss Ex. C, at 6.

         In addition to the Sales Agreement with Plaintiff, Defendant Inabata entered into a separate "Commission and Set-off Agreement" [hereinafter "the Commission Agreement"] with Defendant Recom. Not. Removal Ex. A, at 63. Pursuant to the Commission Agreement, Defendant Recom agreed to "intermediate" a transaction between Defendant Inabata and Defendant Flextronics International USA, Inc. [hereinafter "Defendant Flex"][2] to purchase solar panels. Id. at 63. The Commission Agreement specifies that the panels would be "27OWp Mono Full Black PV modules," but does not clarify whether the panels would be Recom Black Panther panels. Id. The Commission Agreement also provides that it shall be "construed under the laws of Germany and any dispute to arise from or in relation to the specific agreement shall be settled by the Courts of Düsseldorf." Id. at 64.

         Plaintiff entered into a "construct and install" agreement [hereinafter "the Install Agreement"] with Defendant MKG GmbH Montagebau Karl Globel [hereinafter "Defendant MKG"][3] to install the solar panels onsite in Nicaragua. Not. Removal Ex. A, at 7. Pursuant to the Install Agreement, Defendant Inabata would provide the majority of the "components, equipment and material to install the specified Black Panther panels" directly to Defendant MKG, which would then install the panels. Id. at 7. The Install Agreement provides that "the court of jurisdiction for any dispute arising out of or relating to this Letter Agreement, or the validity thereof shall be the Kingdom of Netherlands." Def. MKG's Mot. Dismiss Pi's. Am. Verified Compl. Under Federal Rules of Civil Procedure 12(b)(1), (2), (3), and 12(b)(6), at 19, GESPA Nicaragua, S.A. v. Inabata Europe GmbH, et al., No. EP-17- CV-306-PRM (W.D. Tex. July 27, 2018), ECF No. 86.

         2. Conduct of the Parties

         Pursuant to the Commission Agreement, Defendant Flex shipped over 46, 000 solar panels from its warehouse in El Paso, Texas to Nicaragua. First Am. Compl. 3, Aug. 21, 2019, ECF No. 22. Plaintiff contends that Defendants conspired to fraudulently provide Plaintiff with panels "from a SunEdison[4] bankruptcy," rather than Recom Black Panther solar panels. Id. at 2.

         Plaintiff alleges that as part of the conspiracy, Defendant Flex hired a contractor in El Paso, Texas to remove SunEdison labels on the solar panels themselves, or place counterfeit labels over old SunEdison labels. Id. at 3. Plaintiff also alleges that "Defendants Flex, Recom, and Inabata . . . worked in concert to cover the 'Sun Edison' logo on the shipping boxes" containing the panels. Id. Plaintiff contends that to cover up the fraud in Nicaragua, Defendant MKG "attempted to destroy all of the shipping boxes before Plaintiff could discover that they had received SunEdison panels with counterfeit labels." Id.

         After the panels arrived in Nicaragua, Plaintiff "became suspicious of the true identity of the panels." Id. at 11. Accordingly, Plaintiff made inquiries about the panels, "including multiple emails, telephone conferences and in-person conferences in Nicaragua and Florida." Id. Plaintiff alleges that Defendants, in response, stated that the "relabeled SunEdison panels were actually the correct Black Panther panels." Id. at 11-12. For example, Hamlet Tunyan of Defendant Recom wrote in an e-mail that his firm had sold Plaintiff "RECOM modules that were produced by Flex and not SunEdison." Id. Ex. 7, at 1.

         As a result of receiving a different type of solar panel for the Project in Nicaragua, Plaintiff alleges that it suffered economic harm, including impacts to the "financing, insurability, marketability, regulatory authorization, and ultimate viability of the Project." Id. at 26. Plaintiff also alleges it lost the ability to complete phase two and three of the Project. Id. According to Plaintiff, its "contracting, permitting, financing, insurance, and engineering were all premised on the use of a specific solar panel known as a 'RECOM Black Panther, '" which it did not receive from the Defendants. Id. at 2.

         B. Procedural Background

         This dispute between the parties now comes before the Court for the second time, as a result of Plaintiff obtaining a voluntary dismissal in a prior action, refiling its claims in state court, and Defendant Inabata removing those claims to the Court. The Court reviews each of the actions associated with this dispute in turn.

         1. GESPA Nicaragua. S.A. v. Inabata Europe GmbH, et al., No. EP-17-CV-306-PRM (W.D. Tex. July 27. 2018) [hereinafter "GESPA I”]

         Plaintiff first filed an action before the Court regarding Defendants* alleged fraud on October 2, 2017. Mot. Dismiss Ex. D. In its original complaint, Plaintiff alleged three causes of action- fraudulent misrepresentation, conspiracy to commit fraud, and unjust enrichment and breach of contract (pled in the alternative)-against all Defendants, Id. at 7-12. Additionally, Plaintiff alleged a claim only against Defendant Inabata pursuant to 18 U.S.C. § 1962(c)-the Racketeer Influenced and Corrupt Organizations [hereinafter "RICO"] Act. Id. at 9. The original complaint did not mention a forum selection clause. Id.

         On January 24, 2018, Defendant Inabata filed its "Motion to Dismiss Plaintiffs Complaint Under the Doctrine of Forum Non Conveniens" Mot. Dismiss Ex. A, at 6-7. Defendant Inabata alleged that the Court should dismiss the action because the Sales Agreement between Defendant Inabata and Plaintiff contained a valid forum selection clause, designating Germany as the parties' exclusive forum for dispute resolution. Id. at 7.

         In response, Plaintiff argued that Defendant Inabata fraudulently induced the forum selection clause in favor of Germany in the Sales Agreement, invalidating the clause. Pl's Resp. Opp'n Def. Recom AG's Mot. Dismiss 12, GESPA I, ECF No. 72. Specifically, Plaintiff alleged that in agreeing to a forum selection clause in favor of Germany, it had relied on Defendants' representations that Plaintiff would receive Recom Black Panther panels meeting German quality assurance standards pursuant to the Sales Agreement. First Am. Verified Compl. Jury Demand 17, GESPA I, ECF No. 78. Mr. Morten Nygart, the largest shareholder and principle control person of Plaintiff, also stated in a declaration that "Plaintiff would never have agreed to any forum other that Texas, United States, if we had known that the panels were being sent from Texas." Decl. Morten Nygart, GESPAJ, ECF No. 57-1.

         The Court granted Defendant Inabata's Motion to Dismiss on March 29, 2018. Mot. Dismiss Ex. A, at 27. Accordingly, the Court entered a partial final judgment dismissing Defendant Inabata pursuant to Rule 54(b). Mot. Dismiss 4. In conducting a forum non conveniens analysis, the Court determined that the forum selection clause in the Sales Agreement was enforceable and mandatory, requiring Plaintiff to assert its claims against Defendant Inabata in the "courts of Düsseldorf," Germany, where there was exclusive venue and jurisdiction. Mot. Dismiss Ex. A, at 11.

         As to the Plaintiffs fraudulent inducement arguments, the Court found that Plaintiff failed "to demonstrate that the forum selection clause itself was the product of fraud." Id. at 14. In other words, the Court found any possible fraudulent inducement that might have occurred, in this case inducement related to Defendants' misrepresentations, did not ...

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