Detroit International Bridge Company v. Government of Canada ( 2015 )

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
1
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
5
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
6
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
9