CrossBorder Solutions v. Macias

Background

The plaintiffs, CrossBorder Solutions, Inc. n/k/a Exactera Inc. and Cross Border Transactions, LCC d/b/a CrossBorder Solutions n/k/a Exactera LLC, sued former defendants Liga Hoy, Jiaxin “Claire” Song, and Liyun “Maggie” Tian over alleged trade-secret misappropriation and alleged violations of employment-agreement obligations. The plaintiffs later added Macias, Gini & O'Connell LLP and Sangay Agarwal as defendants. The claims against Hoy and Song proceeded to arbitration.

The arbitrator issued a final award in the plaintiffs’ favor on June 29, 2021, and a corrected final award on July 30, 2021. The award included $981,635.40 in compensatory damages against Hoy and Song jointly, $35,250 in compensatory damages against Hoy alone, and punitive damages against Hoy alone. Hoy and Song paid the award in full on October 7, 2021. The court later dismissed Hoy and Song from the action with prejudice, while stating that they remained bound by the permanent injunction.

Motion and Legal Standard

The plaintiffs moved under the Federal Arbitration Act to confirm the award. Confirmation would turn the arbitration award into a federal court judgment. The court explained that an award generally should be confirmed unless it is vacated, modified, or corrected, and that a party seeking to avoid confirmation ordinarily faces a high burden.

But federal courts may decide only live cases or controversies. A dispute becomes moot when the parties no longer have a legally recognized interest in its outcome. Standing requires a concrete injury that the court’s decision could likely remedy.

Court’s Analysis

The court relied on a recent Second Circuit decision involving an arbitration award that had also been paid in full. That decision held that a party does not have a concrete interest in confirming an award after receiving full payment and that the Federal Arbitration Act itself does not create standing without a concrete injury.

The court reached the same conclusion here. Because Hoy and Song had fully satisfied the award, the plaintiffs no longer had a concrete interest in enforcing it. The court therefore concluded that the plaintiffs lacked standing and that the motion was moot. The court expressly stated that it did not reach any other grounds for granting or denying the motion.

Disposition

Judge Nelson S. Roman denied the plaintiffs’ motion to confirm the arbitration award. The clerk was directed to terminate the motion at ECF No. 204.