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Eastern Division Barcode Informatica Limitada v. Zebra Technologies Corporation

March 23, 2011

EASTERN DIVISION BARCODE INFORMATICA LIMITADA, PLAINTIFF,
v.
ZEBRA TECHNOLOGIES CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendant Zebra Technologies Corporation's and Defendant Zebra Technologies International, LLC.'s (collectively referred to as "Zebra") motion to dismiss. For the reasons stated below, the court grants the motion to dismiss.

BACKGROUND

Plaintiff Barcode Informatica Limitada (Barcode) is allegedly a Brazilian corporation which sells, distributes and services printers and other technical products. In 1993, Barcode allegedly began selling and distributing printers and other technical products manufactured by Zebra. Barcode allegedly purchased printers from the only authorized dealer of Zebra products in Brazil. Barcode also claims that, in 1998, it registered an internet domain name, which it used to sell Zebra's products. Zebra also allegedly recognized that Barcode was an authorized reseller of Zebra's products. Between 1999 and 2005, Barcode and Zebra were allegedly in a contractual relationship, under which Barcode agreed to promote, market, and sell Zebra products in Brazil at terms and prices set by Zebra, and Zebra agreed to fill the purchase orders secured by Barcode. As part of the contractual relationship, Zebra also allegedly agreed to authorize Barcode to provide warranty, service, and technical support for the Zebra products, and to support Barcode's warranty services.

In September 2004, the Brazilian Post Office allegedly held a public bid for the Brazilian government's purchase of 4,000 mobile printers. Barcode and its partner, Omni Servicos, Ltda. (Omni) were allegedly the successful bidders awarded the contract. According to Barcode, the order for the printers was worth approximately $3,500,000. Barcode alleges that in September 2004, Zebra sent a letter to the Brazilian Post Office falsely asserting that Barcode did not satisfy the technical requirements for completing the process relating to the 4,000 mobile printers identified above. In October or November 2004, representatives from Zebra, such as Carlos Levenstein (Levenstein), allegedly met with representatives from the Brazilian Post Office and requested an annulment or alteration of the bid process to have Barcode and Omni removed as the successful bidders. In December 2004, the Brazilian Post Office allegedly revoked the award of the bid to Barcode and Omni.

In December 2004, Barcode allegedly filed an administrative appeal with the Brazilian government and the administrative tribunal ruled against Barcode. In March 2005, Zebra allegedly sent Barcode a letter terminating its business relationship with Barcode. According to Barcode, the notice of termination did not comply with Brazilian law. (A. Compl. Par. 26). Barcode contends that since the termination of its business relationship with Zebra, Barcode has continued to honor its obligations to repair defective printers during their warranty period and perform all other necessary technical assistance services related to Zebra products, and that Zebra has not honored its obligation to compensate Barcode for such services. Also, since March 2005, Zebra has allegedly refused to sell parts to Barcode and has refused to repair printers sold by Barcode for Zebra during previous years.

Barcode includes in its amended complaint an indemnity claim (Count I), breach of contract claims (Counts II and III), a tortious interference with business expectancy claim brought under Brazilian law (Count IV), and a tortious interference with business expectancy claim brought under Illinois law (Count V). Zebra now moves to dismiss the instant action based on the doctrine of forum non-conveniens.

DISCUSSION

Zebra argues that the court should dismiss the instant action based on the doctrine of forum non conveniens. Zebra contends that a dismissal of this action will leave Barcode with an opportunity to re-file its claims in the Brazilian courts. Under the principle of forum non conveniens, "a trial court may dismiss a suit over which it would normally have jurisdiction if it best serves the convenience of the parties and the ends of justice." Kamel v. Hill-Rom Co., Inc., 108 F.3d 799, 802 (7th Cir. 1997); Abad v. Bayer Corp., 563 F.3d 663, 665 (7th Cir. 2009)(stating that the doctrine of forum non conveniens "allows a court to dismiss a suit if there are strong reasons for believing it should be litigated in the courts of another, normally a foreign, jurisdiction"); Stroitelstvo Bulgaria Ltd. v. Bulgarian-American Enterprise Fund, 589 F.3d 417, 421 (7th Cir. 2009)(stating that "[t]he common law doctrine of forum non conveniens allows a federal district court to dismiss a suit over which it would normally have jurisdiction in order to best serve the convenience of the parties and the ends of justice"). A determination of whether to dismiss an action based on forum non conveniens "is consigned to the trial court's sound discretion." Kamel, 108 F.3d at 802.

The first step in making a forum non conveniens determination is to assess whether there is an available and adequate alternative forum. Id. If there is an available and adequate alternative forum, the court can dismiss an action if "a trial in the chosen forum would result in vexation and oppression to the defendant which would far outweigh the plaintiff's convenience or when the chosen forum would generate administrative and legal entanglements for the trial court. . . ." Id. In making a forum non conveniens determination, a court must consider and balance "all relevant public and private interest factors. . . ." Id.

I. Timing of Instant Motion

Barcode argues that the court should deny Zebra's motion based on the time that elapsed in this action before Zebra filed the motion to dismiss. Barcode argues that since fact discovery has already been completed, it would not be efficient to have the parties shift this dispute to another forum at this juncture. Barcode also contends that the fact that Zebra was able to conduct fact discovery in this forum is an indication that it is not overly inconvenient to Zebra to litigate in this forum. The Seventh Circuit has indicated that the right to seek dismissal based on improper venue can be waived by an undue delay. American Patriot Ins. Agency, Inc. v. Mutual Risk Management, Ltd., 364 F.3d 884, 887-88 (7th Cir. 2004)(indicating that it would not be proper for a defendant to mislead a plaintiff into believing that the defendant was not going to contest venue and stalling in order to wait and see how the action proceeds in the forum chosen by the plaintiff before filing the motion to dismiss). However, the record does not reflect in this case that Zebra purposefully delayed in filing the instant motion or engaged in any gamesmanship in seeking to have this action dismissed at this juncture. Zebra has explained how it became apparent during fact discovery that the Brazilian nexus to this action dominates this action and that the only appropriate forum in which to proceed further and conduct expert discovery would be in a Brazilian court.

Also, as explained below, rather than resulting in a waste of judicial resources, a dismissal of this action will promote the efficient resolution of this dispute. The fact that the parties have engaged in discovery in this action does not prohibit a dismissal based on forum non conveniens at this juncture. The Seventh Circuit has indicated that even "after considerable pretrial discovery," the doctrine of forum non conveniens "allows a court to dismiss a suit if there are strong reasons for believing it should be litigated in the courts of another, normally a foreign, jurisdiction." Abad, 563 F.3d at 665. Zebra has shown that during fact discovery it became apparent that there is a strong reason for this dispute to be litigated in the Brazilian courts. Barcode has not pointed to any ...


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