Argued
and Submitted May 8, 2017 Seattle, Washington
Appeal
from the United States District Court for the Western
District of Washington D.C. No. 3:14-cv-05409-RJB Robert J.
Bryan, Senior District Judge, Presiding
Michael E. Haglund (argued) and Shenoa L. Payne, Haglund
Kelley LLP, Portland, Oregon, for Defendant-Appellant.
Steven
J. Wells (argued), Dorsey & Whitney LLP, Minneapolis,
Minnesota; Peter S. Ehrlichman and Andrea C. Yang, Dorsey
& Whitney LLP, Seattle, Washington; for
Plaintiff-Appellee.
Before: Carlos T. Bea and N. Randy Smith, Circuit Judges, and
William Q. Hayes, [*] District Judge.
SUMMARY[**]
Uniform
Foreign-Court Money Judgments Recognition Act
The
panel affirmed the district court's order granting
summary judgment in favor of Midbrook Flowerbulbs Holland
B.V., and denying Holland America Bulb Farms, Inc.'s
discovery request under Fed.R.Civ.P. 56(d), in Midbrook's
diversity action seeking recognition of an Amsterdam Court of
Appeals judgment under Washington's Uniform
Foreign-Country Money Judgments Recognition Act
("UFCMJRA").
Holland
America, a Washington company, purchased flower bulbs from
Midbrook, a Dutch company, and Midbrook obtained a judgment
against Holland America in Dutch court. On appeal, Holland
America alleged that proceedings in the Dutch courts which
led to the Dutch judgment were "not compatible with the
requirements of due process of law" under section
4(c)(8) of the UFCMJRA.
Concerning
the legal standard governing the issue at hand, the panel
held that the commentary and prefatory notice to the UFCMJRA
demonstrated that under section 4(c)(8), courts need ask only
whether the party resisting judgment "was denied
fundamental fairness in the particular proceedings leading to
the foreign-country judgment, " not whether the foreign
proceedings literally conformed to the requirements of due
process under the U.S. Constitution. The panel held that it
was not necessary to decide whether process accorded to
Midbrook also passed muster under American standards of due
process.
The
panel held that the Dutch courts' treatment of Holland
America's discovery requests were a mere "procedural
difference" that was insufficient to establish that the
Dutch proceedings were fundamentally unfair. The panel
further held that Holland America was not denied due process
when the Amsterdam Court of Appeal overturned the Alkmaar
District Court's factual finding denying the existence of
the parties' alleged October 1999 settlement agreement
because the Court of Appeal gave a good reason for
overturning the finding. In addition, the panel held that
Holland America failed to establish that even the more
exacting standards of constitutional due process would have
required a United States appellant court to defer to a trial
court's factual determination under like circumstances.
Finally,
the panel held that the district court did not abuse its
discretion by denying Holland America's motion for
additional discovery under Fed.R.Civ.P. 56(d).
OPINION
BEA,
Circuit Judge
After
the collapse of the Dutch Tulip Bubble of 1637, we've
heard little about that flower's market. But it
hasn't gone away.
This
action grows out of a family business dispute: The Dutch
shipper of tulip bulbs to his brother in America claims his
brother shorted him. The dispute was litigated at three court
levels in Holland. The shipper won. Now he comes to Seattle
to enforce his judgment. Enforce it the district court did.
The American importer-buyer appeals that judgment. He will
lose.
I.
Background
A.
Factual Background
Holland
America Bulb Farms, Inc. ("Holland America") is a
Washington corporation that grows and sells tulips and other
varieties of cut flowers. Its sole owners, Benno and Klazina
Dobbe, founded Holland America together after immigrating to
the United States from the Netherlands in 1980.
In
1994, Holland America began purchasing flower bulbs from
Midbrook Flowerbulbs Holland, B.V. ("Midbrook"), a
Dutch corporation in which Arie Dobbe, Benno's brother,
was a manager and part owner. Midbrook purchased flower bulbs
from farms in the Netherlands and elsewhere, packaged them
for shipment, and exported them to Holland America's farm
in Washington. Though Holland America and Midbrook never
entered into a written agreement regarding payment, Benno and
Arie orally agreed that Holland America would pay Midbrook
its "actual costs on a one to one basis plus a
commission."
For
each shipment, Midbrook sent Holland America an invoice in
Dutch guilders.[1] Instead of paying these invoices directly
to Midbrook in guilders, Holland America deposited a lump sum
of dollars into a Dutch bank account in Midbrook's name
(the "dollar account"). At "fixed intervals,
" Midbrook withdrew dollars from the dollar account,
exchanged them into guilders, and then deposited them into a
second Dutch bank account (the "guilder account"),
which was also in its name. Then, when the invoices became
due, Midbrook paid itself the invoiced amount of guilders
from the guilder account. Midbrook regularly sent Holland
America statements for the two accounts, and Holland America
was responsible for ensuring that there were enough dollars
in the dollar account to cover the periodic transfers to the
guilder account.
Sometime
in 1997, Benno Dobbe noticed that Midbrook's costs
"appeared to be higher than the bulb import costs that
[his] competitors were obtaining from other Dutch
suppliers." Benno became suspicious that Midbrook was
overcharging Holland America, and he asked Arie to provide
documentation substantiating Midbrook's costs. Arie
assured Benno that Midbrook's invoices were correct, but
he refused to provide the requested documentation. In June
1999, the parties agreed that they would "terminate
their relationship" the following year, but that
Midbrook would "still handle the export of the flower
bulb harvest [in the fall] of 1999." Between January 11
and May 22, 2000, Midbrook sent Holland America invoices for
the 1999 harvest which totaled 3, 211, 568 guilders. Holland
America never deposited dollars into the dollar account
sufficient to cover these invoices, and Midbrook overdrew the
dollar account to pay itself for them.
B.
Procedural Background
1.
Proceedings in the Alkmaar District Court
In
2002, Midbrook filed a lawsuit against Holland America in the
Alkmaar District Court in the Netherlands, seeking payment
for the 1999 harvest shipments. Holland America did not deny
that it had not paid Midbrook for the 1999 harvest; rather,
it argued that Midbrook had "invoiced [Holland America]
for too high an amount for years, " and that Holland
America had "[over]paid more in total during the period
from 1994 to August 2000 . . . than Midbrook had invoiced
[for the 1999 harvest]." Though Holland America
"provisionally estimated" the amount of the
overcharge to be $4, 434, 387 (roughly 9 million guilders),
it asked the court to "order Midbrook to provide its
bookkeeping records for the years 1984 up to and including
December 2000" so that Holland America could "more
particularly specif[y]" its damages.
In a
series of "judgments, "[2] four of which were
"interlocutory" and one of which was final, the
Alkmaar District Court rejected Holland America's
counterclaim and entered judgment in Midbrook's favor. In
its first interlocutory judgment, entered after the court had
reviewed the parties' pleadings and briefs, the court
made several rulings. First, it noted that Midbrook claimed
in its briefing "that it [had] agreed with [Holland
America] on October 22, 1999 that [Holland America], after
receiving a credit note in the amount of . . . 100, 000
[guilders], would have no more right to compensation for
damages from improper invoicing in the past." The court
ruled that Midbrook would be given "the opportunity []
to provide evidence for [this] agreement."
Second,
although the court agreed with Holland America that "in
principle, [it is] Midbrook's responsibility to specify
and justify its invoice[s]" with documentation, it noted
that "the period for which Midbrook must specify and
substantiate its invoice[s]" would depend on whether
Holland America had settled its claims for the harvests of
1994-1998; if it had, then it would not be entitled to any
discovery with respect to the invoices for that period. Thus,
the court deferred ruling on the parties' remaining
claims until after it had heard evidence on the alleged
settlement agreement.
The
district court entered its second interlocutory judgment
after hearing from witnesses from both parties regarding the
settlement agreement, which allegedly took place at a meeting
between Benno and Arie Dobbe in October 1999 at
Midbrook's offices in the Netherlands. Midbrook's
witnesses were Johannes Elling, Midbrook's tax advisor;
and Elisabeth Dobbe-Ruygrok, Arie Dobbe's wife and a
secretary at Midbrook. Elling and Dobbe-Ruygrok both
testified that they were present at the meeting when Benno
and Arie agreed to settle Holland America's claims for
100, 000 guilders. Holland America's two witnesses, Benno
Dobbe and Hugo Dobbe (another of Benno's brothers),
testified that no such agreement was reached at the meeting,
and that they had come to the Netherlands only because Arie
had promised them that they could examine Midbrook's
records, which Arie ultimately did not allow them to do. The
district court found that Midbrook's witnesses were not
credible[3] and therefore determined that no
settlement agreement had been reached.
Having
disposed of the settlement issue, the court proceeded to
address the parties' claims regarding the invoices for
the harvests of 1994-99. It directed Holland America to
"specify the [] invoices [to which it objected]
concretely, submitting them . . . and indicat[ing] which
amounts Midbrook invoiced unjustifiably to [Holland America]
and why." Then, the court explained, Midbrook would
"be given the opportunity to respond" by
"provid[ing] insight into the structure of the
invoices" identified by Holland America with
"documented evidence."
After
receiving documents and additional briefing from the parties,
the court entered its third interlocutory judgment. In that
judgment, the court concluded that Holland America
"ha[d] not complied with the recommendations of the
court in its second interim judgment" with respect to
Midbrook's invoices for the harvests of 1994-1998.
Although Holland America had "submitted the invoices
whose correctness it disputes" and had "state[d]
the items that, in its opinion, [were] incorrect" with
each invoice, it had "neglect[ed] to substantiate the
basis for the amount of the claimed damages." Because of
this failure, the district court dismissed Holland
America's counterclaim for the harvests of 1994-1998.
With
respect to the 1999 harvest, the district court noted that
Midbrook had provided only "cost summaries"
explaining "the structure of its invoices." The
court did not fault Midbrook for "not having submitted
at this moment all the underlying documents concerning costs
that it incurred for the 1999 harvest, " however,
because Holland America had specified which "cost items
it disputed" only after the court had entered its second
interlocutory judgment. The court then summarized Holland
America's objections to 1999 harvest invoices,
[4] and
stated that Midbrook would be given "the opportunity to
respond to [these objections] with documentation."
The
district court entered its fourth interlocutory judgment
after receiving Midbrook's responses. In that judgment,
the district court addressed each of Holland America's
objections to the 1999 harvest invoices in detail, rejecting
some but granting others.[5] In total, the district court concluded
that Midbrook had wrongly charged Holland America 40, 403
guilders for the 1999 harvest.
The
court then explained how it would calculate Midbrook's
damages. Because Midbrook had paid itself for the 1999
harvest by overdrawing the dollar account, Midbrook's
damages were equal to "the overdraft position of the
dollar account" in March 2004 (when Midbrook closed that
account and converted the deficit into euros), less the
amount that Midbrook had "wrongfully charged" to
Holland America. In October 2006, after receiving some
additional information from Midbrook regarding its bank
statements, the district court entered its fifth and final
judgment, in which it awarded Midbrook 1, 033, 291 (at the
time, the equivalent of $1, 250, 592), plus any interest that
had accrued since Midbrook converted the dollar account
balance into euros in March 2004.
2.
Proceedings in the Amsterdam Court of Appeal
Holland
America then appealed the Alkmaar District Court's
judgment to the Amsterdam Court of Appeal. On appeal, Holland
America reiterated its argument that its overpayments for the
harvests of 1994-1998 had more than compensated Midbrook for
its shipments following the 1999 harvest. It also reiterated
its discovery requests for documentation of the costs
underlying Midbrook's invoices from 1994 through 2000,
and it requested bank statements for the dollar and guilder
accounts. Midbrook cross-appealed, arguing that the Alkmaar
...