Opinion
Civil Action No. 3:04-CV-0097-D.
July 23, 2004
MEMORANDUM OPINION AND ORDER
The court dismissed this declaratory judgment action and motion to compel arbitration without prejudice as moot. See Mipharm, S.p.A. v. Access Pharmaceuticals, Inc., 2004 WL 852279 (N.D. Tex. Apr. 20, 2004) (Fitzwater, J.) (" Mipharm I"). Plaintiff Mipharm, S.p.A. ("Mipharm") moves the court to clarify Mipharm I, for reconsideration, to vacate order and judgment, and for leave to file an amended complaint. The court denies the motions.
I
The relevant background facts of this case are set out in Mipharm I and need not be repeated. See id. at *1-*2.
II
Treating Mipharm's motion for reconsideration and motion to vacate order and judgment as a Fed.R.Civ.P. 59(e) motion to alter or amend the judgment, the court denies it. Mipharm I dismissed as moot Mipharm's declaratory judgment action and motion to compel arbitration. See Mipharm I, 2004 WL 852279, at *2. Mipharm had sought to compel defendant Access Pharmaceuticals, Inc. ("Access") to arbitrate in the London Court of International Arbitration ("LCIA") a counterclaim that Access had filed against Mipharm in the International Court of Arbitration of the International Chamber of Commerce ("ICC"). See id. at *1. Access originally based the counterclaim on a Manufacturing Agreement that provided for arbitration in the LCIA, but Access withdrew the counterclaim and filed an amended counterclaim under a Licensing Agreement that provided for arbitration before the ICC. See id. at *2. The court held that "Mipharm's declaratory judgment complaint and motion to compel arbitration — both of which rest on the filing of the counterclaim and its reliance on the Manufacturing Agreement — involve a controversy that is no longer live and is therefore moot." Id. No clarification of Mipharm I is necessary.
Mipharm cites Rule 59(e) in support of its motion. Additionally, the Federal Rules of Civil Procedure do not recognize post-judgment motions for reconsideration or to vacate as such. Instead, post-judgment relief is available under Rule 59(e) — a motion to alter or amend the judgment — or Rule 60(b) — a motion for relief from judgment. The court determines the correct nature of the motion according to the date it was filed. See Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990) (holding that in context of final judgment, motion for "reconsideration" is treated as Rule 59(e) or 60(b) motion, depending on when served). Mipharm filed these motions within ten countable days of the date judgment was entered. Accordingly, its motion should be treated as a Rule 59(e) motion. Id. ("If the motion is [filed] within ten days of the rendition of judgment, the motions falls under Rule 59(e); if it is [filed] after that time, it falls under Rule 60(b)." (footnote omitted)); see Freeman v. County of Bexar, 142 F.3d 848, 852 n. 7 (5th Cir. 1998) ("As an irrelevant aside, we note that after Lavespere was issued, rule 59(e) was amended to measure the 10-day filing period according to the motion's filing date rather [than] its date of service.").
Access appears to counterclaim under one of four agreements, see P. App. 209. Mipharm refers to the License Agreements. See P. Br. at 6.
The court denies Mipharm's motion for Rule 59(e) relief because Mipharm's declaratory judgment action and motion to compel arbitration — both of which rest on the filing of the withdrawn counterclaim and its reliance on the Manufacturing Agreement — involve a controversy that is moot. See id.
III
The court now turns to Mipharm's motion for leave to amend. A court can deny leave to amend when the amendment would be futile. See In re Southmark Corp., 88 F.3d 311, 314-15 (5th Cir. 1996). The court denies Mipharm's motion based on futility.Among the three counterclaims that Access alleges in its amended answer is one for breach of the covenant of good faith and fair dealing. In ¶ 22 of the counterclaim, Access cites the Licensing Agreement as the source of the covenant. See P. App. 210. Mipharm contends that this counterclaim is predicated on duties that cannot arise from the Licensing Agreement and that are instead based on the Manufacturing Agreement. It argues that Access is attempting to avoid the mandatory arbitration provisions of the Manufacturing Agreement by making conclusory allegations that Mipharm had manufacturing obligations that are implied in the Licensing Agreement. Access alleges in the counterclaim that, under the Licensing Agreement, Mipharm breached the covenant of good faith and fair dealing. See P. App. 210-11. There is no dispute that the Licensing Agreement is valid and that it is construed under New York law.
The appendix that the court cites is the one Mipharm has submitted in support of its amended complaint and motion to compel arbitration.
Mipharm's objection to the counterclaim — that there is no implied duty to manufacture in the Licensing Agreement — is an argument about the merits of the counterclaim that does not affect the arbitral forum in which it must be brought. Although Mipharm contends that the facts that Access alleges form the basis of a claim of breach of the covenant of good faith and fair dealing that should be asserted under the Manufacturing Agreement — which would require arbitration in the LCIA — this does not change the fact that Access only alleges a breach that it contends is implied in the Licensing Agreement. The Licensing Agreement provides that any arbitration should be before the ICC. Although Mipharm may ultimately prevail on the merits of Access' claim, it is not entitled to effect a change in the arbitral forum by re-characterizing Access' counterclaim. Therefore, allowing Mipharm to amend its complaint to advance such a basis for relief would be futile. Mipharm's motion for leave to amend is therefore denied.
Mipharm cites Article 6(2) of the ICC's Rules of Arbitration for the proposition that the ICC recognizes that other courts can rule on the correct jurisdiction for arbitration. See P. Rep. Br. at 5 ("any party retains the right to ask any court having jursidiction whether or not there is a binding arbitration agreement." (quoting Article 6(2))). The full text of Article 6(2), however, does not support Mipharm. The Article states:
If the Respondent does not file an Answer, as provided by Article 5, or if any party raises one or more pleas concerning the existence, validity or scope of the arbitration agreement, the Court may decide, without prejudice to the admissibility or merits of the plea or pleas, that the arbitration shall proceed if it is prima facie satisfied that an arbitration agreement under the Rules may exist. In such a case, any decision as to the jurisdiction of the Arbitral Tribunal shall be taken by the Arbitral Tribunal itself. If the Court is not so satisfied, the parties shall be notified that the arbitration cannot proceed. In such a case, any party retains the right to ask any court having jurisdiction whether or not there is a binding arbitration agreement.
P. App. in Support of Mot. Clarify, Recon., and Vacate 4 (emphasis added).
IV
Access requests attorney's fees and costs under 28 U.S.C. § 1927. In Mipharm I the court denied both sides' requests for § 1927 relief, explaining the high threshold that must be met to obtain it. Mipharm I, 2004 WL 852279, at *3. It need not repeat this analysis. The conduct of Mipharm's counsel does not rise to the level necessary to warrant the imposition of § 1927 sanctions. Accordingly, the court denies Access' request for fees and costs.
* * *
Mipharm's May 4, 2004 motion to clarify opinion, motion for reconsideration, and motion to vacate order and judgment with leave to file an amended complaint are denied. Access' motion for § 1927 sanctions is denied.
SO ORDERED.