Heimburger S.A.S. v. Brands Within Reach LLC

Background

Heimburger, S.A.S. and Brands Within Reach, LLC entered into a distribution agreement under which Brands Within Reach would sell Heimburger’s Grand Mere pasta for seven years. Heimburger alleged that Brands Within Reach did not pay 26 invoices issued between June 30, 2020, and October 29, 2020. The principal amounts totaled 545,164.80 euros, or $621,624.62.

Heimburger terminated the distribution agreement and began arbitration through the International Centre for Dispute Resolution, the international division of the American Arbitration Association. Brands Within Reach initially participated, filing an answer and counterclaim. Its lawyers later withdrew. The arbitrator denied a request to delay the hearing for 60 days but said a new lawyer could seek a delay upon a showing of good cause. The arbitration hearing proceeded on April 12, 2022, without Brands Within Reach appearing.

On June 6, 2022, the arbitrator awarded Heimburger 602,400.80 euros: 545,164.80 euros on the unpaid-invoice claim and 57,236 euros in interest. The arbitrator also awarded $21,022.50 for an allocated portion of the arbitration fees and expenses. The arbitrator treated Brands Within Reach’s counterclaim as withdrawn because the company did not make final payments to the American Arbitration Association, did not appear at the hearing, and did not present evidence supporting the counterclaim.

Proceedings in federal court

Heimburger filed an amended petition asking the court to confirm the arbitration award under the Federal Arbitration Act. The court described confirmation as a streamlined proceeding that turns an arbitration award into a court judgment. Although Brands Within Reach received notice through several methods and the court gave it additional time to oppose confirmation, it did not respond or appear. The Clerk entered a certificate of default.

The court treated the amended petition as a motion for summary judgment. Summary judgment is a decision entered when the record shows that no genuine dispute over an important fact requires a trial. The court nevertheless independently reviewed the petition and supporting materials rather than granting the request solely because Brands Within Reach had defaulted.

Court’s analysis

Federal courts review arbitration awards narrowly and with substantial deference. An award generally should be confirmed when the arbitrator was arguably interpreting or applying the parties’ contract and acted within the arbitrator’s authority. The court also required Heimburger to show that no material factual dispute prevented judgment.

The court found that the distribution agreement required payment under specified terms. Brands Within Reach had not disputed in the arbitration that it failed to pay the outstanding invoices or that the parties agreed to arbitration. Evidence presented to the arbitrator included testimony from Heimburger’s export manager and records concerning the unpaid invoices, purchase orders, and bills of lading. The court noted that the invoices had not been challenged and that no evidence showed nondelivery, defective merchandise, or another defense.

The court concluded that the arbitrator had more than a minimally sufficient basis for finding that Brands Within Reach breached the distribution agreement by failing to pay the 26 invoices. It therefore confirmed the award.

Disposition

The court granted Heimburger’s unopposed amended petition to confirm the arbitration award. It entered judgment for Heimburger and against Brands Within Reach, confirmed the June 6, 2022 award, ordered Brands Within Reach to pay 602,400.80 euros, ordered payment of $21,022.50 for arbitration fees and expenses, and ordered post-judgment interest at the statutory rate under 28 U.S.C. § 1961(a).

The opinion’s final text says Heimburger sought costs under Federal Rule of Civil Procedure 54(d), but did not provide supporting information or describe the costs. The provided opinion text does not state how the court ruled on that request.