AMERICAS 93666700
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SHARP CORPORATION; SHARP
ELECTRONICS CORPORATION,
Plaintiffs,
v.
HISENSE USA CORPORATION; HISENSE
INTERNATIONAL (HONG KONG) AMERICA
INVESTMENT CO., LTD.,
Defendants.
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Case No. 1:17-cv-01648-JEB
REPLY IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS
OR, ALTERNATIVELY, STAY THE ACTION
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TABLE OF CONTENTS
Page(s)
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INTRODUCTION ...........................................................................................................................1
ARGUMENT ...................................................................................................................................3
THIS COURT LACKS SUBJECT MATTER JURISDICTION ........................................3 I.
A. Plaintiffs’ Complaint, in Substance, Seeks to Vacate or Annul Material Terms
of the Emergency Order and Is Therefore Barred ...................................................3
B. The New York Convention Does Not Recognize a Cause of Action to “Refuse
Enforcement” of an Award ......................................................................................5
THE COURT LACKS PERSONAL JURISDICTION OVER THE DEFENDANTS .......9 II.
A. Plaintiffs Failed to Establish Specific Jurisdiction ..................................................9
B. Hisense International Can Assert a Personal Jurisdiction Defense .......................11
THE COMPLAINT IS LEGALLY DEFICIENT ..............................................................12 III.
A. Plaintiffs’ Request to Vacate the Emergency Order Is Time Barred .....................12
B. Plaintiffs Have Not Alleged a Cognizable First Amendment Claim to Support
a Public Policy Challenge to the Emergency Order Under the New York
Convention .............................................................................................................13
C. Plaintiffs Fail to State a Claim against Hisense USA ............................................17
ALTERNATIVELY, THIS COURT SHOULD STAY THE PROCEEDINGS IN IV.
FAVOR OF THE APPLICATION TO VACATE FILED WITH THE ARBITRAL
TRIBUNAL .......................................................................................................................18
CONCLUSION ..............................................................................................................................18
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CASES
Alkanani v. Aegis Def. Servs., LLC,
976 F. Supp. 2d 13 (D.D.C. 2014) ...........................................................................................10
Am Optical Co. v. Curtiss,
59 F.R.D. 644 (S.D.N.Y. 1973) ...............................................................................................17
Belize Soc. Dev. Ltd. v. Gov’t of Belize,
5 F. Supp. 3d 25 (D.D.C. 2013) ...........................................................................................7, 13
Blum v. Yaretsky,
457 U.S. 991 (1982) .................................................................................................................14
Bristol-Myers Squibb Co. v. Superior Court,
137 S. Ct. 1773 (2017) ...............................................................................................................9
Charlton v. Mond,
987 A.2d 436 (D.C. 2010) .......................................................................................................17
Companhia Brasileira Carbureto De Calcio v. Applied Indus. Materials Corp., 35
A.3d 1127 (D.C. Cir. 2012) .....................................................................................................10
Coutinho Caro & Co. U.S.A., Inc. v. Marcus Trading, Inc.,
2000 U.S. Dist. LEXIS 8498 (D. Conn. Mar. 14, 2000)............................................................6
Cvoro v. Carnival Corp.,
234 F. Supp. 3d 1220 (S.D. Fla. 2017) ......................................................................................7
Davis v. Prudential Sec., Inc.,
59 F.3d 1186 (11th Cir. 1995) .................................................................................................14
Dole Food Co. v. Patrickson,
538 U.S. 468 (2003) .................................................................................................................11
Envtl. Research Int’l, Inc. v. Lockwood Greene Eng’rs, Inc.,
355 A.2d 808 (D.C. 1976) (en banc) .......................................................................................10
Essex Ins. Co. v. Kasten Railcar Servs, Inc.,
129 F.3d 947 (7th Cir. 1997) ...................................................................................................17
Everett v. Paul Davis Restoration, Inc.,
771 F.3d 380 (7th Cir. 2014) ...................................................................................................14
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Gemini Consulting Grp. Inc. v. Horan Keogan Ryan Ltd.,
2007 U.S. Dist. LEXIS 39509 (N.D. Ill. May 30, 2007) ...........................................................4
Gonsalvez v. Celebrity Cruises, Inc.,
935 F. Supp. 2d 1325 (S.D. Fla. 2013) ....................................................................................12
Gulf Petro Trading Co. v. Nigerian Nat’l Petroleum Corp.,
512 F.3d 742 (5th Cir. 2008) .................................................................................................4, 8
Guttenberg v. Emery,
41 F. Supp. 3d 61, 68 (D.D.C. 2014) .......................................................................................17
Hulley Enters. Ltd. v. Russian Fed’n,
211 F. Supp. 3d 269, 282 ...........................................................................................................6
Ingaseosas Int’l Co. v. Aconcagua Investing Ltd.,
2011 U.S. Dist. LEXIS 13064 (S.D. Fla. Feb. 10, 2011)...........................................................6
Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
335 F.3d 357 (5th Cir. 2003) .....................................................................................................8
Kolel Beth Yechiel Mechil of Tartikov, Inc. v. Yll Irrevocable Tr., 863 F. Supp. 2d
351 (S.D.N.Y. 2012) ..................................................................................................................5
Livnat v. Palestinian Auth.,
851 F.3d 45 (D.C. Cir. 2017) ...................................................................................................11
P.M.I. Trading Ltd. v. Farstad Oil, Inc.,
2001 U.S. Dist. LEXIS 227 (S.D.N.Y. Jan. 16, 2001).............................................................12
Price v. Socialist People’s Libyan Arab Jamahiriya,
294 F.3d 82 (D.C. Cir. 2002) ...................................................................................................11
RFF Family P’ship, LP v. Link Dev., LLC,
940 F. Supp. 2d 131 (D. Mass. 2012) ......................................................................................17
Shelly v. Kraemer,
334 U.S. 1 (1948) .....................................................................................................................14
Stedman v. Great Am. Ins. Co.,
2007 WL 1040367 (D.N.D. Apr. 3, 2007) .................................................................................5
Tesoro Petroleum Corp. v. Asamera (South Sumatra), Ltd.,
798 F. Supp. 400 (W.D. Tex. 1992)...........................................................................................6
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United States v. Am. Soc’y of Composers, Authors and Publishers,
708 F. Supp. 95 (S.D.N.Y. 1989) ............................................................................................14
United States v. Wiseman,
445 F.2d 792, 795 n.3 (2d Cir. 1971).......................................................................................14
Ziad Sakr Fakhri v. Marriot Int’l Hotels, Inc.,
201 F. Supp. 3d 696 (D. Md. 2016) ...........................................................................................4
STATUTES AND RULES
28 U.S.C. § 1603 ............................................................................................................................11
9 U.S.C. § 12 ..................................................................................................................................12
MISCELLANEOUS
Alan Scott Rau, Understanding (and Misunderstanding) “Primary Jurisdiction,”
21 Am. Rev. Int’l Arb. 47, 176 (2010) ......................................................................................7
Gary B. Born, International Arbitration: Law and Practice, “Annulment of
International Arbitration Awards” (Kluwer Law, 2015) ...........................................................6
Restatement 3d., The U.S. Law of Int’l Commercial Arbitration ....................................................7
W. Michael Resiman, Systems of Control in International Adjudication &
Arbitration, Duke University Press Books (1992) .....................................................................8
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INTRODUCTION
This lawsuit is part of Sharp’s campaign to achieve its publicly stated goal of taking back
the Sharp brand by undoing its Trademark License Agreement (“TLA”) with Hisense
International. Sharp’s efforts to terminate the TLA based on manufactured grounds are currently
subject to a pending arbitration in Singapore. Sharp nonetheless initiated a wave of collateral
litigation in U.S. courts against Hisense International and related entities under the guise of
consumer protection claims. In this action, Sharp seeks another end-run around the arbitration
on the pretext of free speech. This is just another tactical maneuver to pressure Hisense to give
up the Sharp brand. As set out in Defendants’ Motion to Dismiss (“MTD”), this action suffers
from a number of infirmities that warrant dismissal.
As a threshold matter, this Court lacks subject matter jurisdiction because it is in a
secondary jurisdiction and thus not the proper forum under the New York Convention for
Plaintiffs’ application to overturn or modify the Emergency Order. Seeking to avoid this
jurisdictional bar, Plaintiffs argue that their petition to have the Emergency Order declared
“unenforceable” is somehow different than a petition to vacate or modify the order. Regardless
of how Plaintiffs characterize their requested relief, the purpose and effect of Plaintiffs’ action is
to overturn material parts of the Emergency Order. The law is clear: a court of secondary
jurisdiction cannot entertain a petition to vacate or modify an arbitral award (or any portions
thereof), and this Court therefore lacks jurisdiction with regard to Plaintiffs’ affirmative claims
seeking to overturn or set aside as “unenforceable” certain portions of the Emergency Order.
Plaintiffs are not without remedy, and Sharp is currently challenging the Emergency Order
before the SIAC arbitral tribunal.
This Court also lacks personal jurisdiction over Defendants. Plaintiffs’ arguments and
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declarations do nothing more than support the unremarkable fact that Hisense and Sharp-branded
televisions are sold in the District and that the FCC is based in the District. Plaintiffs fail to
demonstrate the requisite nexus between Plaintiffs’ claims and Defendants’ alleged contacts with
the District. The dispute at issue involves a challenge to an Emergency Order issued by a foreign
arbitral tribunal, and generic allegations that Hisense entities may sell goods here or are subject
to regulation by an administrative agency located here are not sufficient to establish jurisdiction,
particularly under recent Supreme Court precedent.
Plaintiffs also do not state a cognizable claim. First, Plaintiffs’ petition is time barred by
the applicable three-month statute of limitations under the New York Convention regardless of
how Plaintiffs may characterize their claims. Second, Plaintiffs have not—and cannot—
establish a violation of the First Amendment because there is no state action. Nor is there any
other public policy basis to overturn the Emergency Order, particularly where the relevant non-
disparagement provision in the order was included by the arbitrator to prevent Sharp from
sabotaging the underlying commercial agreement at issue in a pending arbitration. Third,
Plaintiffs have not stated a claim against Hisense USA. Hisense USA is not a party to the
Emergency Order at issue in this action, and cannot be named as a defendant merely because it
may be a sublicensee under the TLA or has some tangential interest in the dispute.
For all of the foregoing reasons, the Court should dismiss this action in its entirety and
with prejudice. In the alternative, this action should be stayed pending a decision on Sharp’s
Application to Vacate the Emergency Order that Plaintiffs acknowledge will be heard in less
than two months and decided shortly thereafter.
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ARGUMENT
THIS COURT LACKS SUBJECT MATTER JURISDICTION I.
Because Plaintiffs proactively seek a declaration vacating terms of the Emergency
Order—in substance, seeking to void, annul, or modify material parts of the Emergency Order—
this Court, which sits in secondary jurisdiction, lacks subject matter jurisdiction. MTD at 9-12.
That should be the end of this matter.
Plaintiffs do not dispute that the New York Convention applies to this action, that the
Convention recognizes courts of primary or secondary jurisdiction, and that this Court sits in
secondary jurisdiction. Pls.’ Resp. at 9-10. Nor do Plaintiffs dispute that courts of primary
jurisdiction have exclusive authority to set aside, annul, vacate, or modify an arbitration award.
Pls.’ Resp. at 10. Instead, Plaintiffs argue that their Complaint is not a “petition to vacate,”
which they acknowledge would be barred, but rather an action to “prevent enforcement” via a
declaration that the order is “unenforceable.” Pls.’ Resp. at 11. Plaintiffs’ word-play does not
change what this case really is and does not create subject matter jurisdiction for this Court.
A. Plaintiffs’ Complaint, in Substance, Seeks to Vacate or Annul Material
Terms of the Emergency Order and Is Therefore Barred
Under the New York Convention, because this Court sits in secondary jurisdiction (which
is undisputed), its authority is limited to granting or denying an application to enforce a foreign
arbitral award. Hisense has not filed any proceeding seeking to enforce the Emergency Order.
Plaintiffs nonetheless pre-emptively filed this action seeking a declaration that Paragraph 135(iii)
of the Emergency Order is “unenforceable.” Compl., Request for Relief, ¶ A. Regardless of
how Plaintiffs seek to frame the relief sought in the Complaint, in substance, Plaintiffs’ action
seeks to vacate, annul, or modify material terms of the Emergency Order, which is not permitted
in this Court sitting in secondary jurisdiction under the New York Convention. MTD at 9-12.
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Plaintiffs unsuccessfully attempt to distinguish Gemini Consulting Group Inc. v. Horan
Keogan Ryan Ltd., 2007 U.S. Dist. LEXIS 39509 (N.D. Ill. May 30, 2007), which is directly on
point. Pls.’ Resp. at 12-14. In Gemini, the court rejected a similar attempt to set aside an arbitral
order under the guise of a declaration of unenforceability. 2007 U.S. Dist. LEXIS 39509, at *12
(“Gemini is the plaintiff, and the complaint specifically seeks a form of relief—‘a declaration
that the Awards issued by the arbitrator are invalid and not enforceable against Gemini.’ The
Convention does not empower us to enter such an order, which would be akin to setting aside or
vacating the awards.”). Plaintiffs argue this action is different from Gemini because they are
only seeking a determination regarding enforceability, which Plaintiffs contend the Gemini court
recognized was available in a court with secondary jurisdiction. Pls.’ Resp. at 13. Plaintiffs are
wrong. The Gemini court expressly rejected the plaintiff’s attempt to pre-emptively obtain a
declaration that the arbitration award was “unenforceable,” which is exactly what Plaintiffs seek
here.1
This Court should not allow Plaintiffs to elevate form over substance to circumvent the
well-established jurisdictional regime for challenging foreign arbitration awards. See also Gulf
Petro Trading Co. v. Nigerian Nat’l Petroleum Corp., 512 F.3d 742, 753 (5th Cir. 2008) (finding
that a complaint cloaked in a variety of federal and state law claims amounted to no more than an
improper collateral attack seeking to vacate a final arbitral award); Ziad Sakr Fakhri v. Marriot
Int’l Hotels, Inc., 201 F. Supp. 3d 696, 711-712 (D. Md. 2016) (“[A] court in secondary
1 Plaintiffs also ignore that, after dismissing the plaintiff’s pre-emptive declaratory action
challenging the enforceability of the award, the Gemini court reviewed the winning parties’
separately-filed petition to confirm the award and considered arguments that it was
unenforceable only in the context of opposing that petition—consistent with the primary-
secondary jurisdiction dichotomy established by the New York Convention. 2007 U.S. Dist.
LEXIS 39509, at *15-25.
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jurisdiction also lacks subject matter jurisdiction over a suit that seeks [to] vacate, set aside, or
modify a foreign award through claims that are merely dressed up to appear independent of the
award.”); Stedman v. Great Am. Ins. Co., 2007 WL 1040367 (D.N.D. Apr. 3, 2007) (“The
[defendants] contend that by calling the motion to vacate a petition to confirm, [plaintiff] is
simply changing the characterization . . . and asking the [c]ourt to honor form over substance.
The [c]ourt agrees that [plaintiff]’s petition to confirm requests the same action as the motion to
vacate.”).2
B. The New York Convention Does Not Recognize a Cause of Action to “Refuse
Enforcement” of an Award
Contrary to Plaintiffs’ contention that they seek relief “expressly contemplated by the
Convention,” (Pls.’ Resp. at 2, 14-15), the New York Convention does not recognize an
affirmative cause of action to “refuse enforcement” of an arbitral award on public policy
grounds.
The New York Convention provides in relevant part:
Recognition and enforcement of the arbitral award may also be
refused if the competent authority in the country where recognition
and enforcement is sought finds that: . . . (b) the recognition or
enforcement of the award would be contrary to the public policy of
that country.
2 Plaintiffs’ attempt to distinguish Stedman misses the point. Pls.’ Resp. at 14. Stedman
illustrates that a court should focus on substance over form. In Stedman, the plaintiff sought to
vacate a portion of an award under the guise of a “petition to confirm.” Despite characterizing
the action as a petition to confirm, the court recognized that the action in substance sought to
vacate portions of the award and dismissed the action as time-barred. Similarly, Plaintiffs try to
distinguish Kolel Beth Yechiel Mechil of Tartikov, Inc. v. Yll Irrevocable Tr., 863 F. Supp. 2d
351, 356 (S.D.N.Y. 2012) because the plaintiff in that action sought a declaration the arbitral
award was “void” while Plaintiffs here seek a declaration the Emergency Order is
“unenforceable.” Pls.’ Resp. at 14-15. This is specious. There is no effective difference
between a declaration that an award is “void” and a declaration that an award is “unenforceable.”
In either circumstance, the effect of the declaration would be to set aside and vacate the award,
which is not something a court sitting in secondary jurisdiction has the authority to do under the
New York Convention.
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New York Convention, Art. V(2)(b) (emphasis added). Thus, the express statutory language of
the Convention requires that recognition and enforcement be sought before a court can determine
whether or not recognition or enforcement of a foreign arbitral award would be contrary to U.S.
public policy. In other words, public policy arguments are to be presented defensively, if and
only when a recognition and enforcement action is filed. Ingaseosas Int'l Co. v. Aconcagua
Investing Ltd., 2011 U.S. Dist. LEXIS 13064, at *10 (S.D. Fla. Feb. 10, 2011) (stating that the
“plain text of the Convention[] and case law . . . overwhelmingly confirms that the Convention
provides for causes of action only for recognition and enforcement of arbitral awards”);
Coutinho Caro & Co. U.S.A., Inc. v. Marcus Trading, Inc., 2000 U.S. Dist. LEXIS 8498, at *20
(D. Conn. Mar. 14, 2000) (“Pursuant to Article V of the Convention, this court may hear
objections raised in opposition to a petition to confirm an award”) (emphasis added); Tesoro
Petroleum Corp. v. Asamera (South Sumatra), Ltd., 798 F. Supp. 400, 404-05 (W.D. Tex. 1992)
(noting that Article V of the New York Convention “sets forth the specific, limited
circumstances in which, in a suit to enforce an award, a court may decline to do so.”) (emphasis
added).3
Leading commentators, including those relied upon by Plaintiffs, confirm this is the law.
See Gary B. Born, International Arbitration: Law and Practice, “Annulment of International
Arbitration Awards” (Kluwer Law, 2015) at Ch. 16.02 [A] (“[T]he Convention’s language and
structure clearly impose such limits, requiring that actions to annul a Convention award be
3 Hulley Enters. Ltd. v. Russian Fed’n, 211 F. Supp. 3d 269, 282 n.9 (D.D.C. 2016), relied on by
Plaintiffs, see Pls.’ Resp. at 2, 10-11, further supports Defendants’ position. The Hulley court
did not, as Plaintiffs imply, authorize a pre-emptive vacatur action in a secondary-jurisdiction
court. The plaintiff in Hulley initiated the action as a petition to confirm, see 1:14-cv-1996, Dkt
No. 1, and arguments against enforceability were set forth merely as defenses—as the New York
Convention envisions.
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pursued exclusively in the place where the award was made.”) (emphasis added); Restatement
3d., The U.S. Law of Int’l Commercial Arbitration (“[T]he competent authority at the seat of
arbitration has exclusive power to vacate awards rendered there.”); Alan Scott Rau,
Understanding (and Misunderstanding) “Primary Jurisdiction,” 21 Am. Rev. Int’l Arb. 47, 176
(2010) (“A U.S. court ‘sitting in secondary jurisdiction’ ‘accordingly’ lack[s] jurisdiction ‘over
claims seeking to vacate’ a foreign arbitral award; ‘under the framework of the New York
Convention, the proper method of obtaining this relief is by moving to set aside or modify the
award in a court of primary jurisdiction.’”).
Plaintiffs’ reliance on Cvoro v. Carnival Corp., 234 F. Supp. 3d 1220 (S.D. Fla. 2017) is
misplaced. The court exercised subject matter jurisdiction in order to permit the plaintiff in that
case to pursue a federal statutory claim under the Jones Act and raise whether the arbitration
clause in question effected a prospective waiver of such statutory claims—claims and arguments
which are not at issue here and otherwise inapplicable. Ultimately, Cvoro was incorrectly
decided, considering the court did not cite or rely on any relevant precedents, did not analyze the
New York Convention’s relevant language, and even held that vacatur actions are proper under
the New York Convention in a secondary-jurisdiction court, which even Plaintiffs acknowledge
is not the law. Pls.’ Resp. at 2 n.3, 10.4
Nor is there any merit to Plaintiffs’ suggestion that somehow this Court has jurisdiction
4 Plaintiffs also misconstrue Belize Social Dev. Ltd. v. Gov’t of Belize, 5 F. Supp. 3d 25 (D.D.C.
2013), suggesting that a U.S. court sitting in secondary jurisdiction determined that an arbitration
award was unenforceable by way of declaratory relief. See Pls.’ Resp. at 13-14. However, the
unspecified declaratory relief referenced in that case was issued by a Belize court, not a U.S.
court. Belize Soc. Dev. Ltd., 5 F. Supp. 3d at 31. Furthermore, the plaintiff in Belize filed a
petition to confirm a foreign award, and thus the case reinforces the limited role of secondary-
jurisdiction courts and further illustrates that arguments against enforceability are to be asserted
as a shield (i.e., in defense to a petition to confirm), not a sword. Id. at 42-43.
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because Plaintiffs “merely seek[ ] a declaration that the award will not be enforced within the
United States.” Pls.’ Resp. at 13. Any action seeking to modify an arbitral award can only be
brought in a primary jurisdiction, regardless of the geographic scope of the modification sought.
Furthermore, such a result would undermine the efficiency and finality of arbitration. It would
allow a losing party to bring piecemeal attacks challenging portions of awards in various
jurisdictions of their choosing. See W. Michael Resiman, Systems of Control in International
Adjudication & Arbitration, Duke University Press Books (1992) at 117 (“If any of the almost
eighty fora of the convention enjoyed the power accorded to primary jurisdictions, the
unscrupulous arbitration loser could quickly abandon the neutral forum upon which both parties
had agreed and seek a favorably inclined jurisdiction.”). Rather, the New York Convention has
entrusted the primary jurisdiction with the exclusive role of overturning or modifying an arbitral
award because it is the jurisdiction specifically selected by the parties. See also Gulf Petro
Trading Co., 512 F.3d at 753 (citing M & C Corp. v. Erwin Behr GMBH & Co., KG, 87 F.3d
844, 849 (6th Cir. 1996)) (“[T]he role assigned to courts of secondary jurisdiction is a limited
one. It is undisputed that the Convention precludes a court of secondary jurisdiction from
vacating, setting aside, or modifying a foreign arbitral award. And given the particular interests
at stake in arbitration, it is not surprising that this limitation has been implemented in the form of
a jurisdictional bar . . . thereby encouraging finality and limiting costs.”).5
5 Plaintiffs cite Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
335 F.3d 357 (5th Cir. 2003) to incorrectly suggest that the New York Convention envisions
multiple judicial proceedings challenging a final arbitral award. Not so. The New York
Convention does allow for multiple judicial proceedings (e.g., multiple confirmation
proceedings, or an annulment proceeding in the primary jurisdiction and confirmation
proceedings in one or more secondary jurisdictions), but it does not permit a secondary-
jurisdiction court to usurp the exclusive jurisdiction of a primary-jurisdiction court with respect
to any challenges to a final arbitral award.
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THE COURT LACKS PERSONAL JURISDICTION OVER THE DEFENDANTS II.
A. Plaintiffs Failed to Establish Specific Jurisdiction
As explained in the MTD, this Court does not have general personal jurisdiction over
either Defendant. MTD at 13-14. Plaintiffs do not contest, and thus concede, that there is no
general jurisdiction here.
This Court also lacks specific jurisdiction because Plaintiffs have not alleged a sufficient
causal nexus between Defendants’ alleged contacts with the District and the claims at issue.
MTD at 15-16. Plaintiffs’ response on this issue is relegated to a footnote, where Plaintiffs
contend that Hisense’s sales of Sharp-branded products to U.S. consumers throughout the U.S.
gave rise to the arbitration in Singapore and therefore satisfy the requirements for specific
jurisdiction. Pls.’ Resp. at 18, n. 18. In support of this, Plaintiffs cite two inapposite out-of-
district trademark and patent infringement cases to argue that there is a connection between
Defendants’ alleged television sales in the District and this dispute. Id. (citing Hilsinger Co. v.
FBW Invs., LLC, 109 F. Supp. 3d 409 (D. Mass. 2015) (alleging trademark infringement by
products sold in the district); Fusionbrands, Inc. v. Suburban Bowery of Suffern, Inc., 2013 U.S.
Dist. LEXIS 138138 (N.D. Ga. Sept. 26, 2013) (alleging products sold in the district infringed
plaintiffs’ patents and trademarks)). Both cases cited by Plaintiffs, however, alleged that the
products sold in the relevant forum infringed upon trademarks or patents that were at issue in the
litigation, a direct relationship that is plainly missing here, where the alleged sale of televisions is
not sufficiently related to Plaintiffs’ attempt to challenge a foreign arbitration award as violating
their rights to free speech. See Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773,
1780 (2017) (confining specific jurisdiction to “adjudication of issues deriving from, or
connected with, the very controversy that establishes jurisdiction”).
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In the alternative, Plaintiffs argue that Hisense’s filings with the FCC—filings submitted
by other Hisense entities not parties to this action—are enough to establish personal jurisdiction
against both Hisense International and Hisense USA. Pls.’ Resp. at 19-20. However, Hisense’s
alleged contacts with the FCC are not sufficient to establish specific jurisdiction. Any regulatory
submissions made in the ordinary course by unidentified Hisense entities are not sufficiently
related to the relief obtained in the Emergency Order from a SIAC arbitrator, which Sharp now
seeks to challenge on public policy grounds. Alkanani v. Aegis Def. Servs., LLC, 976 F. Supp.
2d 13, 27 (D.D.C. 2014) (“For the purpose of the D.C. long-arm statute . . . the claim raised must
‘have a discernible relationship’ to the defendant's business transacted in the district.”).
In any event, a nonresident making filings to a government agency in the District is not a
basis for personal jurisdiction. The case cited by Plaintiffs, Companhia Brasileira Carbureto De
Calcio v. Applied Indus. Materials Corp., 35 A.3d 1127 (D.C. Cir. 2012), makes this clear. In
Companhia Brasileira, the court recognized under the “government contacts” doctrine that
“entry into the District of Columbia by nonresidents for the purpose of contacting federal
governmental agencies” is not a basis for the assertion of in personam jurisdiction.6 Id. at 1131;
see also App Dynamic ehf v. Vignisson, 87 F. Supp. 3d 322, 324-35 (D.D.C. 2015) (finding no
personal jurisdiction in the District because the “government contacts” doctrine applied to filings
with the U.S. Copyright Office); Envtl. Research Int’l, Inc. v. Lockwood Greene Eng’rs, Inc.,
355 A.2d 808, 811 (D.C. 1976) (en banc) (refraining from exercising personal jurisdiction based
on contacts with the federal government in the district). Accordingly, Hisense’s contacts with
the FCC, as alleged, are not sufficient to establish personal jurisdiction over either Defendant.
6 While the court recognized a very limited exception to this doctrine where individuals
fraudulently petition the government, there are no allegations to support the application of the
exception here.
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B. Hisense International Can Assert a Personal Jurisdiction Defense
Plaintiffs also contend that Hisense International cannot assert a personal jurisdiction
defense because it is a subsidiary of Hisense Co. Ltd., a Chinese state-owned entity, and
therefore Hisense International is not a person under the Fifth Amendment and has no right to
assert a personal jurisdiction defense. Pls.’ Resp. at 20-21.
There is no support for the proposition that a state-owned corporation has no right to
assert a personal jurisdiction defense (much less a subsidiary of a state-owned corporation). The
only case cited by Plaintiffs makes clear that only “an actual foreign government” is restricted in
asserting a personal jurisdiction defense. Price v. Socialist People’s Libyan Arab Jamahiriya,
294 F.3d 82, 99-100 (D.C. Cir. 2002).7 The D.C. Circuit has expressly declined to express any
view “as to whether other entities that fall within the FSIA’s definition of ‘foreign state’
including corporations in which a foreign state owns a majority interest could yet be considered
persons under the Due Process Clause.” Id. (citation omitted). The application of Price to only
foreign states was re-affirmed by the D.C. Circuit as recently as March of this year. See Livnat v.
Palestinian Auth., 851 F.3d 45, 49 (D.C. Cir. 2017) (allowing personal jurisdiction arguments to
be made by entity functioning as a foreign government and confirming a narrow interpretation of
Price that puts “foreign sovereigns in a separate constitutional category from ‘private entities,’”
noting that Price “applies only to sovereign foreign states”).8
7 Plaintiffs also cite to 28 U.S.C. §1603, but that relates to the Foreign Sovereign Immunities Act,
which is not implicated here.
8 Plaintiffs also do not actually allege that Hisense International is a state-owned entity or
instrumentality. While Plaintiffs assert that Hisense Co., Ltd. is state-owned, Hisense
International is a separate and independent legal entity and is not “state controlled” simply
because it may be a subsidiary of Hisense Co., Ltd. See Dole Food Co. v. Patrickson, 538 U.S.
468, 480 (2003) (holding that a corporate subsidiary is not an instrumentality of a foreign state
under the FSIA because it is not directly state-owned).
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THE COMPLAINT IS LEGALLY DEFICIENT III.
A. Plaintiffs’ Request to Vacate the Emergency Order Is Time Barred
Plaintiffs do not dispute that the Federal Arbitration Act’s (“FAA”) three-month statute
of limitations applies to actions to vacate or modify an arbitration award under the New York
Convention, but contend that it does not apply to their action challenging the “enforceability” of
the Emergency Order. Pls.’ Resp. at 25. As discussed above, regardless of the words Plaintiffs
use, the substantive result is the same: Plaintiffs seek to modify the Emergency Order by
vacating Paragraph 135(iii), exactly the type of proceeding to which the three-month statute of
limitation applies. MTD at 16-17.
Even if Plaintiffs contend that the relief they seek arises under the New York Convention,
the FAA’s three-month statute of limitations still applies via the New York Convention’s
residual clause. Gonsalvez v. Celebrity Cruises, Inc., 935 F. Supp. 2d 1325, 1331 (S.D. Fla.
2013) (applying the FAA’s three-month statute of limitation to an action seeking to vacate);
P.M.I. Trading Ltd. v. Farstad Oil, Inc., 2001 U.S. Dist. LEXIS 227 at *5 n.2 (S.D.N.Y. Jan. 16,
2001) (“Under § 12 of the FAA (which applies in this respect since it is not in conflict with the
Convention), a motion to vacate must made within ‘three months after the award is filed or
delivered.’”). Thus, Plaintiffs application is untimely no matter how it is characterized.
Plaintiffs’ request that this Court interpret the three-month statute of limitations narrowly
does nothing to salvage Plaintiffs’ claims. There is no ambiguity—the terms of the statute of
limitations apply squarely to the relief Plaintiffs seek. Plaintiffs’ suggestion that a statute of
limitations does not apply to injunctive relief actions also has no support in the law, and would
undercut the specific language of the FAA, which sets a strict time limit for challenging a final
arbitral award. There is also no equitable basis to disregard the strict time limitation Congress
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imposed to ensure finality of arbitration awards. Sharp delayed for months before seeking to
challenge the Emergency Order in this Court, while in the interim filing multiple lawsuits in
California and New York attacking the jurisdiction of the arbitration, and seeking to have the
Emergency Order vacated in the arbitration.9
B. Plaintiffs Have Not Alleged a Cognizable First Amendment Claim to Support
a Public Policy Challenge to the Emergency Order Under the New York
Convention
Plaintiffs seek a declaration, under Article V(2)(b) of the New York Convention, that the
Emergency Order is unenforceable as contrary to U.S. public policy because it violates the First
Amendment. Pls.’ Resp. at 26.10 Putting aside the jurisdictional and procedural infirmities in
this action, Plaintiffs have not and cannot allege a violation of the First Amendment because the
requisite state action is absent. MTD at 17-19.
In response, Plaintiffs do not dispute that state action is a necessary prerequisite to
establish a First Amendment violation, but contend that a judicial order enforcing the Emergency
Order qualifies as state action. Pls.’ Resp. at 30. Plaintiffs are incorrect. Enforcement of the
non-disparagement provisions of the Emergency Order would not qualify as state action merely
because a court would be asked to determine whether there has been a violation of the Order.
Courts routinely enforce all aspects of arbitration awards, including equitable or injunctive relief,
and that does not somehow constitute state action. See Davis v. Prudential Sec., Inc., 59 F.3d
9 Plaintiffs also assert that they needed time to retain counsel and assess the issues before
bringing this action. Pls.’ Resp. at 36. That is never an acceptable basis to exceed a statute of
limitations.
10 Plaintiffs seek to downplay the standard for an alleged public policy violation under the New
York Convention, but as the D.C. Circuit has made clear, the public policy defense is seldomly
invoked and only applies “‘where enforcement would violate the forum state’s most basic
notions of morality and justice’”. Belize Soc. Dev. Ltd., 5 F. Supp. 3d at 43 (quoting TermoRio
S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 938 (D.C. Cir. 2007)).
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1186, 1192 (11th Cir. 1995) (“[M]ere confirmation of a private arbitration award by a district
court is insufficient state action to trigger the application of the Due Process Clause.”); United
States v. Am. Soc’y of Composers, Authors and Publishers, 708 F. Supp. 95, 96-97 (S.D.N.Y.
1989) (mere court approval of arbitration is not state action).
Plaintiffs cite Blum v. Yaretsky, 457 U.S. 991, 1004 (1982) in support, but that case
recognized that there is no state action when a court merely “approv[es] or acquiesce[s] in the
initiatives of a private party.” Id. at 1004-05. Plaintiffs’ reliance on Shelly v. Kraemer, 334 U.S.
1 (1948), is also misplaced. The Court in Shelly held that there was state action where “the
States have made available . . . the full coercive power of government to deny to petitioners, on
the grounds of race or color, the enjoyment of property rights.” Id. at 19.11 Enforcement of
obligations arising out of a private agreement to arbitrate under particular rules bargained and
agreed to by two sophisticated private parties does not constitute state action for purposes of a
First Amendment claim. See Everett v. Paul Davis Restoration, Inc., 771 F.3d 380, 386-87 (7th
Cir. 2014) (holding plaintiff to the obligations under an arbitration agreement where it was
negotiated between two highly sophisticated private parties that agreed upon the very structure of
the arbitration and arbitration panel that plaintiff challenged).12
The Emergency Order is a product of the parties’ agreement, not some state action.
Sharp agreed to arbitrate its disputes before SIAC. Sharp also agreed to the SIAC rules that
11 Shelly also involved a racially restrictive covenant, and its holding has been limited to the
context of racial discrimination which is not at issue here. United States v. Wiseman, 445 F.2d
792, 795 n.3 (2d Cir. 1971).
12 Plaintiffs seek to dismiss as “irrelevant” analogous cases enforcing private non-disparagement
agreements. Pls.’ Resp. at 31. But that would ignore the very nature of arbitration, which is a
product of parties’ bargained-for agreement. Indeed, the principal reason why enforcement of an
arbitral award does not qualify as state action is because it is a product of parties’ private
agreement. MTD at 17-18.
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provide for confidentiality of “all matters relating to the proceedings,” (SIAC Rule 39), and that
give an Emergency Arbitrator “the power to order or award any interim relief that he deems
necessary.” (SIAC Rules, Schedule 1, ¶ 8) (emphasis added). The result of that agreement is the
Emergency Order. Sharp, a sophisticated party, is free to agree to limit its “speech rights” any
way it wants to and that is effectively what it has done here by submitting to a confidential
arbitration proceeding that gives an Emergency Arbitrator broad discretion.13 Sharp cannot now
be permitted to convert its own private, commercial agreement into a state sponsored restriction
on its free speech. Moreover, as Sharp’s public statements and litigation tactics evidence, the
Emergency Order is both reasonable and necessary to protect Hisense International’s rights
under the TLA during the pendency of the arbitration.14
As Plaintiffs acknowledge, they have not identified a single analogous foreign arbitration
award not enforced on public policy grounds for violation of the First Amendment. Pls.’ Resp.
at 27-28. Instead, Plaintiffs rely exclusively on non-arbitration cases, including the same three
English money-judgment libel cases cited for the same proposition in the Motion for Preliminary
13 It is worth remembering that the parties expressly incorporated the SIAC Rules into the TLA.
Dkt. No. 23, Ex. A, ¶ 28.1.
14 Plaintiffs want this Court to believe that the Emergency Order is causing them irreparable
harm—both to their free speech rights and brand—and that this action is meant to remedy such
supposed harm. Pls.’ Resp. at 34-35. But Sharp’s true motive is apparent from its Response to
the MTD, which all but admits that Sharp seeks to thwart Hisense International’s ability to meet
required sales targets so it can terminate the TLA on such grounds. See Pls.’ Resp. at 8-9. To
that end, Sharp has already targeted the consumer public. The action pending in the Northern
District of California paved the way for negative press against Hisense, as Sharp made reckless
allegations of “shoddy” manufacturing of Sharp-branded televisions.
In other words, Sharp is manufacturing its own irreparable harm.
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Injunction.15 These cases are inapposite. Opp’n to Prelim. Inj. at 20 n.9. As Plaintiffs concede,
these cases do not involve the enforcement of an arbitration award, do not arise under the New
York Convention, and in none of the cases was a foreign award deemed unenforceable under the
limited public policy exception in the New York Convention. Plaintiffs nonetheless contend,
without any support or citation, that “[r]egardless of whether they come from a foreign arbitrator
or a foreign court, these orders violate U.S. public policy and are thus [un]enforceable.” Pls.’
Resp. at 27 (error in original). This is simply wrong. The mutually agreed-upon private nature
of arbitrations differentiates arbitrations in a fundamental way from foreign court judgments
enforcing that country’s laws, which explains why enforcement of arbitral orders are governed
under different conventions and standards from the enforcement of foreign court judgments.
As a fallback, Plaintiffs argue that even if there is no violation of the First Amendment,
the Emergency Order is still unenforceable because it “undermines the FCC’s authority and
ability to carry out its mission.” Pls.’ Resp. at 26. This is a red herring. The Emergency Order
does not purport to limit or restrict the FCC. Plaintiffs’ assertion that the Emergency Order
frustrates the FCC’s exclusive jurisdiction to regulate and enforce EMI standards in the U.S. is
simply wrong. Pls.’ Resp. at 28-29. The Emergency Order is narrowly drawn to preclude Sharp
from disrupting Hisense International’s business, and does not infringe on the jurisdiction or
authority of the FCC in any way. Moreover, as Plaintiffs acknowledge, the Emergency Order
expressly carves out communications with regulators that are required by law.
15 See Pls.’ Resp. at 26-27 (citing S.A.R.L. Louis Feraud Int’l v. Viewfinder, Inc., 489 F.3d 474
(2d Cir. 2007) (seeking enforcement of French foreign (non-arbitration) judgments); Yahoo! Inc.
v. La Ligue Contre Le Racisme, 433 F.3d 1199 (9th Cir. 2006) (same); Telnikoff v. Matusevitch,
702 A.2d 230 (Md. 1997) (UK libel judgment); Matusevitch v. Telnikoff, 877 F. Supp. 1 (D.D.C.
1995) (same); Bachchan v. India Abroad Publ’ns, Inc., 585 N.Y.S.2d 661 (Sup. Ct. N.Y. Cty.
1992)) (same).
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C. Plaintiffs Fail to State a Claim against Hisense USA
As described in the Motion to Dismiss, Hisense USA is not a proper party to this
litigation because it is not a party to the underlying TLA, the pending arbitration, or the
Emergency Order. MTD at 21.
Plaintiffs do not dispute any of this, but nonetheless assert that Hisense USA is a proper
party because it is a sub-licensee under the TLA and “has a separate but related interest to the
issue subject to the declaratory action.” Pls.’ Resp. at 22-23. Plaintiffs’ arguments are specious.
Plaintiffs seek to challenge the Emergency Order and do not assert any claims under the
TLA. Plaintiffs would not have standing to assert claims against Hisense USA under the TLA in
any event because Hisense USA is not a party to that agreement. See Guttenberg v. Emery, 41 F.
Supp. 3d 61, 68 (D.D.C. 2014) (dismissing contract-based claims against a nonparty to that
contract, stating “‘[i]t goes without saying that a contract cannot bind a nonparty,’ but plaintiffs
apparently need this Court to say so” (citation omitted)); see also Charlton v. Mond, 987 A.2d
436, 441 (D.C. 2010) (“Non-parties owe no contractual duty to the contracting parties.”).
Plaintiffs’ argument that Hisense USA has an interest in this dispute and therefore is
properly named as a defendant is likewise without merit. It simply does not follow that because
a third party may have some tangential interest in a dispute that this somehow provides a basis to
name a party as a defendant. The cases Plaintiffs rely on are readily distinguishable; the named
defendants in those cases each had a direct property, monetary, or other contractual interest at
stake and were a properly-named party for such reasons. See, e.g., RFF Family P’ship, LP v.
Link Dev., LLC, 940 F. Supp. 2d 131 (D. Mass. 2012) (a mortgage interest on property); Essex
Ins. Co. v. Kasten Railcar Servs, Inc., 129 F.3d 947 (7th Cir. 1997) (insurance claim); Am.
Optical Co. v. Curtiss, 59 F.R.D. 644 (S.D.N.Y. 1973) (part-ownership in patent). Here, there is
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no such related property interest at stake. Hisense USA is not a party to the TLA, nor a party to
the Emergency Order challenged through this action.
ALTERNATIVELY, THIS COURT SHOULD STAY THE PROCEEDINGS IN IV.
FAVOR OF THE APPLICATION TO VACATE FILED WITH THE ARBITRAL
TRIBUNAL
In the event this action is not dismissed, a stay is warranted because Sharp is seeking the
same relief in the arbitration and a temporary stay would serve judicial economy, avoid
duplicative effort, and lessen the risk of inconsistent decisions. MTD at 22-23.
In opposing any stay, Plaintiffs suggest that the arbitral tribunal is somehow not equipped
to address Plaintiffs’ arguments regarding how the Emergency Order violates U.S. public policy
or their First Amendment rights. This argument has no merit. The SIAC is one of the world’s
premier arbitral institutions and Sharp expressly agreed to this arbitral forum for the resolution of
disputes under U.S. (specifically, New York) law. Moreover, the arbitrators reviewing Sharp’s
Application to Vacate are all eminently experienced, U.S.-qualified lawyers that are more than
capable of adjudicating Sharp’s challenges to the Emergency Order.
Nor is there any merit to Plaintiffs’ alleged concerns about delay. The Emergency Order
was rendered on May 9, 2017. Plaintiffs waited more than three months to commence this
action. Considering this self-imposed delay, Plaintiffs cannot credibly argue any real prejudice
from a short stay while the arbitral tribunal holds a hearing on Sharp’s Application to Vacate in
December and issues a decision shortly thereafter. In any event, any purported prejudice would
be outweighed by the judicial economy and efficiencies that would be served by a stay.
CONCLUSION
For the reasons stated above, this Court should dismiss Plaintiffs’ Complaint with
prejudice or, in the alternative, stay the action.
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Dated: October 20, 2017 WHITE & CASE LLP
By: /s/ Francis A. Vasquez, Jr.
Francis A. Vasquez, Jr.
Francis A. Vasquez, Jr. (D.C. Bar No. 442161)
WHITE & CASE LLP
701 Thirteenth Street, N.W.
Washington D.C., 20005
Telephone: (202) 626-3600
Email: fvasquez@whitecase.com
David G. Hille (Pro Hac Vice)
Gregory M. Starner (Pro Hac Vice)
WHITE & CASE LLP
1221 Avenue of the Americas
New York, NY 10020
Telephone: (212) 819-8200
Email: dhille@whitecase.com
Email: gstarner@whitecase.com
Case 1:17-cv-01648-JEB Document 39 Filed 10/20/17 Page 24 of 24
