Motion for Judgment Pending Appeal from the U.S. District
Court for the Northern District of Indiana, South Bend
Division. No. 3:15-cv-00261 - William C. Lee, Judge.
Posner, Kanne, and Williams, Circuit Judges.
POSNER, CIRCUIT JUDGE.
Joaquim Neto, an international businessman from Brazil,
entered into a trust agreement with Wells Fargo Bank in 2009
to purchase an aircraft for use in his business. Wells Fargo
borrowed $6 million from plaintiff 1st Source Bank (a major
Indiana bank), pledging the aircraft as collateral, and Neto
signed a personal guarantee backing the loan. Three years
later the Brazilian tax authorities seized the plane as part
of an investigation into Nero's attempt to avoid paying
Brazilian import tax. Neto continued to pay the amount due on
the loan until December 2014, but after he stopped paying,
1st Source sued him in a federal district court in Indiana,
basing jurisdiction on diversity of citizenship. 1st Source
filed a second lawsuit in July 2016 in Brazil, where the
December 2016 Neto moved the district court in Indiana to
enjoin the Brazilian lawsuit on the grounds that the language
of the guarantee did not permit duplicative litigation and
that the Brazilian litigation was "vexatious and
oppressive." 1st Source opposed the motion, countering
that the express language in the guarantee gives it
"sole and exclusive discretion" to pursue
litigation where the assets (primarily, perhaps exclusively,
the plane) are held (Brazil), in addition to litigating in
Indiana. Brazilian law permits a prejudgment attachment of
assets that would give Neto only three days to pay the debt
after being served with a summons, and if he failed to comply
the court would be entitled to seize as many assets as
necessary to guarantee payment of the debt, though Neto could
file a motion to stay the seizure within 15 days after the
issuance of the summons, advancing defenses such as
unfeasible or undue obligation, inaccurate attachment,
excessive execution, or the court's lack of jurisdiction.
district court denied Neto's motion, reasoning that
"it ma[de] perfect sense, from a business
standpoint" for 1st Source to have included a clause in
the guarantee, authorizing it to pursue legal proceedings in
any jurisdiction in which its collateral was located.
Remarking that "Indiana courts zealously defend the
freedom to contract/' State v. Int'l Business
Machines Corp., 51 N.E.3d 150, 160 (Ind. 2016) (citation
omitted), the judge rejected Nero's argument that having
to defend the two actions was unduly burdensome because as
part of the Indiana litigation Neto had had to travel to
Chicago from Brazil for a mediation session (which had
involved another case as well) and a deposition immediately
before the mediation session.
appealed the denial and moved the district court for an
emergency injunction pending appeal, on the ground that 1st
Source intended to serve its summons on him in the Brazil
case forthwith and that upon service of the summons he would
have only three days within which to pay the alleged amount
due-and if he missed that tight deadline his assets (enough
to pay the debt) would be seized. The district court denied
the motion on the ground that although the Brazilian
prejudgment attachment would freeze Neto's assets he
hadn't shown a sufficient likelihood of prevailing on his
claim that the Brazilian litigation was improper to warrant
our interfering with that litigation. Neto then turned to the
appellate court, asking us for an emergency stay of the
Brazilian proceeding during his appeal. We denied his motion
three days later, promising an explanation to follow.
argues that 1st Source shouldn't be allowed to sue him
wherever he has assets, for that he argues would undermine
the purpose of a forum selection clause, and there is such a
clause in the guarantee that Neto signed agreeing to back the
loan that 1st Source had made to Wells Fargo to pay for the
plane. The clause selects the federal court for the Southern
District of Indiana for "all legal proceedings in
connection with this guarantee, " but it goes on to
state- crucially-that 1st Source reserves the option to sue
Neto, for the money he owes the bank, "in any
jurisdiction where the aircraft may be located."
expresses fear that the district court's ruling permits
1st Source to sue him all over the world, raising the specter
of inconsistent judgments or piecemeal litigation. But that
specter is insufficiently concrete to warrant an emergency
injunction. It's true as he reminds us that we allow an
injunction against litigating in a foreign forum if the
foreign suit would be gratuitously duplicative of pending
domestic litigation. Allendale Mutual Ins. Co. v. Bull
Data Systems, Inc.,10 F.3d 425, 431 (7th Cir. 1993).
But he has not provided sufficient information about the
nature of the Brazilian lawsuit to support his contention
that it is identical to or duplicative of the Indiana suit.
Cf. id. at 429. And he has neither responded to the
bank's contention that he can ask ...