Mrinalini, Inc. v. Valentino S.p.A.

Background

Mrinalini, Inc., described in the opinion as a New York-based fashion designer and manufacturer, sued Valentino S.p.A. and Valentino U.S.A., Inc. The claims included copyright infringement, unjust enrichment, trade-secret misappropriation, conversion, breach of contract, and unfair competition. Mrinalini alleged that Valentino copied its fashion designs and misappropriated a stitching technique that Mrinalini had developed.

Mrinalini and Valentino S.p.A. entered into a 2014 Purchasing Agreement. The agreement included an arbitration clause covering “[a]ny dispute” connected to the agreement or to its “execution, interpretation, enforcement, [or] validity.” Valentino S.p.A. later began an arbitration in Italy. Mrinalini filed this federal lawsuit and separately asked the court to stop the Italian arbitration.

Rulings on Arbitration

Valentino moved to dismiss the lawsuit for failure to state a claim, under the doctrine requiring a case to be litigated in a more appropriate forum, or based on the arbitration agreement. In the alternative, Valentino asked the court to compel arbitration and stay the federal case.

The court held that the Purchasing Agreement clearly and unmistakably assigned the question of arbitrability to the arbitrator. “Arbitrability” means whether a particular dispute must be arbitrated. Because deciding whether Mrinalini’s claims were covered would require interpreting or enforcing the agreement, the court ruled that the arbitrator must decide that question. The court expressly did not decide whether the claims actually fall within the agreement’s scope.

The court also concluded that it had federal-question jurisdiction because the lawsuit and arbitration involved federal copyright issues. It did not reach Valentino’s forum argument or the merits of Valentino’s failure-to-state-a-claim argument.

Disposition

The court denied Mrinalini’s motion for oral argument and denied its motion to enjoin the Italian arbitration. The court stated that the same delegation of arbitrability to the arbitrator required both results.

The court granted in part Valentino’s motion to dismiss, to the extent that Valentino’s alternative request to compel arbitration and stay the case was granted. The court compelled arbitration and stayed all proceedings in the federal action. It did not dismiss any party or claim. The parties were ordered to provide periodic status reports about the arbitration and a joint report after the arbitration ends.