RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 09a0055p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellee/Cross-Appellant, -
ANSWERS IN GENESIS OF KENTUCKY, INC.,
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Nos. 08-6014/6032
v.
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CREATION MINISTRIES INTERNATIONAL, LTD., -
Defendant-Appellant/Cross-Appellee. -
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Appeal from the United States District Court
for the Eastern District of Kentucky at Covington.
No. 08-00053—William O. Bertelsman, District Judge.
Argued: January 21, 2009
Decided and Filed: February 13, 2009
*
Before: COLE and GIBBONS, Circuit Judges; BELL, District Judge.
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COUNSEL
ARGUED: Richard Alan Getty, GETTY & CHILDERS, Lexington, Kentucky, for
Appellant. Anthony J. Biller, COATS & BENNETT, Cary, North Carolina, for
Appellee. ON BRIEF: Richard Alan Getty, GETTY & CHILDERS, Lexington,
Kentucky, for Appellant. Anthony J. Biller, COATS & BENNETT, Cary, North
Carolina, for Appellee.
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OPINION
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JULIA SMITH GIBBONS, Circuit Judge. This appeal presents multiple issues
of first impression for our circuit. Defendant-appellant Creation Ministries International,
Ltd., (“CMI”) appeals the district court’s order compelling arbitration of its disputes with
*
The Honorable Robert Holmes Bell, United States District Judge for the Western District of
Michigan, sitting by designation.
1
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fellow ministry Answers in Genesis of Kentucky, Inc. (“AiG”). Specifically, CMI
asserts that the district court erred in declining to dismiss AiG’s suit on the basis of the
contracts’ forum selection clause, declining to abstain in favor of CMI’s prior-filed
Australian litigation, and compelling arbitration on all of AiG’s claims. AiG cross-
appeals the district court’s order declining to issue a foreign antisuit injunction to block
CMI from further pursuing its Australian litigation. We hold that the district court
properly compelled the parties to arbitration and did not abuse its discretion in declining
to issue an antisuit injunction based upon the facts as they now stand. We therefore
affirm the judgment of the district court in its entirety.
I.
This case arises from a motion to compel arbitration filed under the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 206, by AiG, a Kentucky non-profit corporation
headquartered in Petersburg, Kentucky, against CMI, an Australian non-profit
corporation organized under the laws of the State of Queensland, Australia. In 1980, a
group of Australian religious adherents joined together to form the Creation Science
Foundation (“Foundation”), CMI’s predecessor organization. According to one of the
original members, the Foundation’s purpose “was to promote creationism and
apologetics” throughout Australia. Among the founders was Ken Ham, an Australian
minister and “creation science” advocate. Since the 1970s, another Australian creation
science supporter, Carl Wieland, began publishing a magazine known as Ex Nihilo to
publicize advances in creation science. The magazine would later become known as
Creation Magazine. Wieland transferred production responsibility to the Foundation for
his magazine sometime “in the late 1970's or early 1980's.” Wieland joined the
Foundation and, along with Ham, became one of the Foundation’s two main leaders.
In 1987, Ham moved from his native Australia to the United States. Seven years
later, Ham founded an American counterpart to the Foundation headquartered in
Kentucky, which would become known as AiG. The two organizations were separate
entities but worked closely together until the events that gave rise to the current litigation
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occurred. As AiG grew in membership and financial resources, it began to eclipse its
Australian counterpart, which had by now come to be led largely by Wieland. AiG
established and funded a website, www.answersingenesis.org, that both AiG and the
Foundation used to spread the discoveries of creation science. AiG also purchased
significant numbers of each issue of Creation Magazine for distribution to American
subscribers. AiG’s growth caused significant tension to develop between Ham and
Wieland, as each vied for control of what was becoming an increasingly international
movement to teach creationism.
The Foundation1 had joined with AiG in founding Answers in Genesis
International (“AiGI”) to foster relationships among creation science organizations in
other Commonwealth countries, such as Canada, South Africa, New Zealand, and the
United Kingdom. Ownership of AiGI was split between the Foundation and AiG. AiG
held a fifty percent share in AiGI. Around March 2005, Wieland proposed a new model
for control of AiGI. Wieland referred to this new proposal as a much needed
“democratic reform” in the structure of the international ministry. The “reform” would
give each branch of the international ministry one vote at AiGI board meetings. From
AiG’s perspective, the sole purpose of this reform was to dilute the American
organization’s influence over the creation science movement and concomitantly place
Wieland in sole control of AiGI. AiG believed that the small organizations in countries
such as South Africa and New Zealand were under Wieland’s control to the extent that
their votes would merely parrot his. Unsurprisingly, AiG rejected Wieland’s democratic
reform, and relations between the American and Australian ministries deteriorated
rapidly.
Some of the Foundation’s board members sought to heal the developing schism.
They tried to accomplish this by moving toward a more business-like relationship with
AiG. On October 11-13, 2005, the boards of directors of both AiG and the Foundation
1
By this time, the Foundation had changed its name to Answers in Genesis-Australia. For clarity,
this opinion will continue to refer to the Australian entity as the Foundation until the time when the
Foundation’s name changed to its current appellation, Creation Ministries International.
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met in Petersburg, Kentucky, in an attempt to settle their differences over the control
structure of AiGI as well as the disputes that arose over Creation Magazine’s content
and distribution and the content found on the two ministries’ joint website. The
meetings produced a series of signed agreements that form the basis of the current
litigation on two continents.
On October 13, 2005, the members of both organizations’ boards of directors
executed a Memorandum of Agreement (“MOA”). The MOA provided for several
transfers of property and contractual rights in an attempt to divide each organization’s
responsibilities within the larger creation science movement. Among other provisions,
the MOA required the Foundation to transfer to AiG ownership of certain international
copyrights and the competing domain name www.answersingenesis.com. MOA at 1.
The Foundation would also begin to pay a fee to AiG for AiG’s maintaining their joint
website www.answersingenesis.org. MOA at 2. In return, AiG would transfer to the
Foundation AiG’s fifty percent voting share in AiGI, giving the Foundation complete
control over the international organization. MOA at 1. AiG also agreed to pay a fee to
the Foundation for each future article the Foundation provided for the joint website. The
Foundation concomitantly agreed to grant an express license to AiG for the use of all
articles that had previously appeared on either the website or in AiG’s publications.
MOA at 2. Most importantly, the MOA closed with an arbitration clause that provided
“in the event of a disagreement” the parties would “submit the matter to Christian
arbitration.” MOA at 2-3.
That same day, the parties also executed a Deed of Copyright License (“DOCL”).
The DOCL granted AiG a license to continue to use the articles the Foundation had
provided for its website and publications. DOCL at 5-6. Thus, the DOCL fulfilled the
Foundation’s obligations under the MOA to validate AiG’s use of the Foundation’s
intellectual property. The DOCL closed by noting that “the law applicable to the State
of Victoria, Australia” applied and “[t]he parties submit to the non-exclusive jurisdiction
of its courts and courts of appeal.” DOCL at 7-8.
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Although the two boards had ratified the agreements, Wieland fiercely objected
to their content. Deepening internal tension led the membership of the Foundation’s
board to resign. Wieland replaced the board’s membership with appointees of his own
liking. This new board joined Wieland in seeking to reject the MOA and DOCL. The
board also voted to change the name of the Foundation to its current name of Creation
Ministries International (“CMI”) effective January 19, 2006. The CMI board sought to
explain its actions by commissioning an internal inquiry to examine the circumstances
that led to the schism between CMI and AiG. This inquiry, known as the “Briese
Report,” released its findings on February 16, 2007. The Briese Report concluded that
the position of Wieland and his new board was correct and that the new board had
properly sought to renounce the prior board’s actions. The Briese Report also sought to
cast blame for the schism onto AiG.
AiG rebuffed CMI’s efforts to invalidate the agreements. With both sides having
reached an impasse over the status of the MOA and DOCL, legal action commenced.
CMI struck first; and on May 31, 2007, it filed suit in the Supreme Court of Queensland2
against both AiG and AiG’s leader Ken Ham. CMI’s “Statement of Claim” sought
declaratory, injunctive, and monetary relief as to both defendants. The complaint did not
seek to compel arbitration.
The parties attempted one last time to reach an out-of-court settlement by
meeting with a mediator in Hawaii on August 14-15, 2007. Ultimately, the parties were
unable to agree upon any settlement. On January 29, 2008, the parties halted all efforts
to reach an amicable agreement, and CMI instructed AiG to proceed with its defense in
the Australian action.
Instead, on March 24, 2008, AiG moved to compel arbitration in the Eastern
District of Kentucky under the FAA. AiG additionally sought to enjoin CMI from
pursuing its Australian suit. Both parties informed the district court that the parties had
agreed voluntarily to adjourn the Australian proceedings pending final resolution of the
2
The Supreme Court is the State of Queensland’s trial court.
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American litigation. The district court conducted a hearing and on August 8, 2008,
issued its order and opinion. In its opinion, the district court read the multiple
agreements in para materia because they were all executed on the same day as part of
an effort to achieve a settlement of all outstanding issues. Answers in Genesis of Ky.,
Inc. v. Creation Ministries Int’l, Ltd., No. 2:08-cv-00053-WOB, slip op. at 2 (E.D. Ky.
Aug. 8, 2008). The district court further found that the arbitration clause was broadly
written and covered all of the issues for which AiG sought resolution. Id. Consequently,
the district court entered an order compelling arbitration as to all the disputes between
the parties. Id. at 3-4. Because the contract did not select a site at which to hold the
arbitration, the district court ordered the arbitration to occur within the Eastern District
of Kentucky. Id. See also 9 U.S.C. § 4 and § 208. Finally, the district court declined
to issue a foreign antisuit injunction to halt the Australian litigation. Answers in Genesis,
slip op. at 3. CMI timely appealed the district court’s final judgment. AiG timely filed
its notice of cross-appeal as to the district court’s refusal to issue an antisuit injunction.
On August 15, 2008, AiG instituted an arbitration proceeding against CMI with
the International Centre for Dispute Resolution. The district court denied CMI’s motion
to stay the arbitration pending appeal after CMI refused to agree to a joint stay order that
would prevent CMI from reactivating its Australian litigation. CMI has filed a motion
with this court to stay the arbitration proceedings. In light of our disposition of this
appeal, we will deny the motion to stay as moot.
II.
A.
We first note the issue of our jurisdiction. While neither of the parties has
questioned this court’s jurisdiction to hear this appeal, federal courts have a duty to
consider their subject matter jurisdiction in regard to every case and may raise the issue
sua sponte. See Thornton v. Southwest Detroit Hosp., 895 F.2d 1131, 1133 (6th Cir.
1990); see also Capron v. Van Noorden, 6 U.S. (2 Cranch) 126, 127 (1804) (“[I]t [is] the
duty of the Court to see that they had jurisdiction, for the consent of the parties could not
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give it.”). The FAA generally prohibits interlocutory appeals of orders compelling
arbitration. See 9 U.S.C. § 16(b)(3). However, because AiG petitioned the district court
to enjoin the Australian proceedings pending arbitration, we do have jurisdiction under
9 U.S.C. § 16(a)(1) and 28 U.S.C. § 1292 (a)(1) to hear this appeal. See Albert M.
Higley Co. v. N/S Corp., 445 F.3d 861, 863 (6th Cir. 2006).
B.
Having concluded that we have jurisdiction to consider this appeal, we now
consider the arguments raised by both parties. CMI contends that the explicit language
of the forum selection clause requires that the only proper forum for any suit between
CMI and AiG concerning these agreements is in Australia. Importantly, CMI does not
challenge on appeal either the ruling of the district court that the multiple contracts at
issue are to be read in para materia or that the MOA and DOCL are valid, enforceable
contracts. AiG responds that the arbitration and forum selection clauses are mutually
exclusive such that the forum selection clause only applies if neither party seeks to
arbitrate the dispute. Therefore, AiG asserts that because it seeks to compel arbitration,
the forum selection clause is inapplicable. Both parties’ arguments are misguided, and
the plain language of the contractual provisions at issue provides that Australia is only
one possible forum for any potential litigation.
The proper construction of a contract is an issue of law; therefore, this court
reviews questions of contract interpretation under a de novo standard. Noe v. PolyOne
Corp., 520 F.3d 548, 551 (6th Cir. 2008). The language of the forum selection clause
appears in Section 6.2 of the DOCL. It reads:
This Deed is governed by the law applicable to the State of Victoria,
Australia. The parties submit to the non-exclusive jurisdiction of its
courts and courts of appeal from them. The parties will not object to the
exercise of jurisdiction by those courts on any basis.
DOCL at 7-8 (emphasis added). The district court held that one must read the DOCL
and MOA in para materia because the parties executed both agreements on the same
day. As neither party has appealed this ruling of the district court, we will read the
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forum selection clause contained in the DOCL together with the arbitration language in
the MOA. Paragraph eight of the MOA provides:
The parties will enter to [sic] such other agreements as are necessary to
accomplish the purposes and provisions of this Memorandum of
Agreement. In the event of a disagreement of the parties regarding the
meaning or application of any provision of this Agreement or any related
agreements, the parties agree to submit such matter to Christian
mediation to a Christian mediator agreed upon by them. In the event
such matter is not resolved by mediation, then the parties will submit the
matter to Christian arbitration to a Christian arbitrator agreed upon by
them, and the decision of the arbitrator shall be final.
MOA at 2-3. Notably, the arbitration agreement is silent as to where the arbitration
should take place.
The plain language of the agreements quoted above forecloses CMI’s argument
that the only proper forum is in Australia and makes AiG’s complicated argument
unnecessary. The forum selection clause expressly provides that the “courts and courts
of appeal” of the “State of Victoria, Australia” are the “non-exclusive jurisdiction” in
which the parties may file suit. CMI’s argument that this contractual provision required
the district court to dismiss AiG’s motion to compel arbitration would read the word
“non-exclusive” out of the contract. AiG’s argument would have us read into the
contract an entire clause that does not appear; namely, that the forum selection clause
only applies if no one seeks arbitration. As we have noted, “If a contract is clear and
unambiguous . . . there is no issue of fact to be determined.” Royal Ins. Co. of Am. v.
Orient Overseas Container Line Ltd., 525 F.3d 409, 421 (6th Cir. 2008) (alteration in
original) (quoting Lincoln Elec. Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672,
684 (6th Cir. 2000)). Reading the provision’s language “as a whole” and giving it “its
ordinary and natural meaning,” the contract language clearly and unambiguously
provides that the courts of the State of Victoria are only one possible forum. Id.
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(citation omitted). The district court did not err in refusing to dismiss AiG’s motion to
compel arbitration based upon the contract’s forum selection clause.3
C.
CMI next contends that if the district court properly construed the forum
selection clause, the district court nonetheless should have abstained on the basis of
international comity. CMI suggests that this court combine the Eleventh Circuit’s
analysis in Turner Entm’t Co. v. Degeto Film GmbH, 25 F.3d 1512 (11th Cir. 1994),
with the factors enumerated by the Supreme Court in Colorado River Water
Conservation Dist. v. United States, 424 U.S. 800 (1976), to come to the conclusion that
comity and fairness dictate staying the American litigation. AiG responds that
abstention is inappropriate in this case – both because the factors suggested by CMI
weigh against abstention and the strong public policy of the United States supporting
arbitration makes abstention inappropriate.
We review a district court’s decision on issues of abstention de novo because of
the complex interaction of federal jurisdictional and comity concerns. See Chellman-
Shelton v. Glenn, 197 F. App’x 392, 393 (6th Cir. 2006) (citing Superior Beverage Co.,
Inc. v. Schieffelin & Co., Inc., 448 F.3d 910, 913 (6th Cir. 2006)). Cf. Traughber v.
Beauchane, 760 F.2d 673, 676 (6th Cir. 1985). “Abstention from the exercise of federal
jurisdiction is the exception, not the rule.” Colorado River, 424 U.S. at 813. Abstention
“is an extraordinary and narrow exception to the duty of a District Court to adjudicate
a controversy properly before it.” Id. (internal quotes and citation omitted). Despite
this truism, “in some private international disputes the prudent and just action for a
federal court is to abstain from the exercise of jurisdiction.” Turner, 25 F.3d at 1518.
3
We further note that CMI’s own actions ratify our interpretation. If CMI’s reading of the clause
is correct, the only possible forum for any suit concerning these agreements is “the State of Victoria,
Australia.” DOCL at 7 (emphasis added). CMI filed its suit in the State of Queensland, Australia. Thus,
CMI’s proposed interpretation would mean that CMI itself has failed to file in the proper forum.
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Whether to abstain in regard to a motion to compel arbitration because of
international comity concerns is an issue of first impression in this circuit. Case law is
available from other circuits in the area of abstention based upon international comity
in general. “One approach has taken the criteria enunciated in Colorado River and
applied them to the international context” while another approach has developed a
similar test with more of a focus on the “special concerns” injected by international
comity. Id. (collecting cases). CMI suggests adopting the approach of the Eleventh
Circuit in Turner, which combined the two complementary lines of cases to develop a
multi-factor balancing test weighing international comity, concerns about “fairness to
litigants,” and the “efficient use of scarce judicial resources.” Id.
By contrast, Colorado River instructed courts to consider several factors in
determining whether to abstain in favor of a parallel proceeding in the courts of another
sovereign. The “most important” factor courts are to consider is whether there exists a
“clear federal policy evinc[ing] . . . the avoidance of piecemeal adjudication.” 424 U.S.
at 819. Additional factors include how far the parallel proceeding has advanced in the
other sovereign’s courts, the number of defendants and complexity of the proceeding,
the convenience of the parties, and whether a sovereign government is participating in
the suit. Id. at 820. For the purposes of this appeal, it is not necessary that we decide
whether abstention is ever appropriate when one party seeks to compel arbitration with
regard to an agreement in which the other party is international in origin. We conclude
that even assuming that abstention might be appropriate in such a circumstance, CMI has
not met its burden in proving that abstention is required. We base our conclusion upon
weighing the factors found in the Colorado River test. We believe the factors found in
Colorado River are the most applicable to the case at bar because those factors and their
relative weight match most closely the public-policy concerns the Supreme Court has
identified as vital in the area of arbitration.
Colorado River instructs that the “most important” factor a court must consider
is whether there is a “clear federal policy evinc[ing] . . . the avoidance of piecemeal
adjudication” found within the statutory scheme at issue. Id. at 819. In the case of the
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Federal Arbitration Act, there most clearly is not such a policy. In Dean Witter
Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985), the Supreme Court considered whether
concerns over “bifurcated proceedings” should cause a district court to refuse to compel
arbitration when one set of state-law claims was subject to arbitration and another
interrelated set of federal-law claims was not. Id. at 216-17. Dean Witter wished to stay
arbitration of the arbitrable state-law claims in favor of allowing the federal-law claims
to proceed first in the district court. Id. at 215. Dean Witter raised many of the same
concerns CMI raises here, including duplication of resources and the possible res
judicata effect should one proceeding end prior to the other. Id. at 216-17, 221-22. The
Supreme Court rejected Dean Witter’s arguments and held that the “Arbitration Act
requires district courts to compel arbitration of . . . arbitrable claims when one of the
parties files a motion to compel, even where the result would be the possibly inefficient
maintenance of separate proceedings in different forums.” Id. at 217 (emphasis added).
The Court further observed that “[t]he preeminent concern of Congress in passing the
Act was to enforce private agreements into which parties had entered.” Id. at 221. This
concern should govern even if “piecemeal litigation” was the inevitable result. Id.
(internal quotes omitted). Thus, CMI cannot point to a clearly articulated policy against
bifurcated litigation with regard to the FAA.
International law, as incorporated by congressional action, supports our
conclusion that abstention is inappropriate in this case. A similar concern for enforcing
private agreements led to the adoption of the international treaty under which AiG seeks
to vindicate its right to arbitrate. AiG filed this action under § 206 of the FAA. 9 U.S.C.
§ 206. Section 206 provides that district courts may compel arbitration upon motion of
a party to an agreement covered by the 1958 Convention on the Recognition and
Enforcement of Arbitral Awards (“Convention”).4 Chapter Two of the FAA
incorporates the provisions of the Convention into American domestic law. See
9 U.S.C. §§ 201-208. Both Australia and the United States are signatories to the
4
The Convention is more popularly known as “The New York Convention,” after the place of
its negotiation. See Status: 1958 - Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, http://www.uncitral.org/uncitral/en/uncitral_texts/ arbitration/NYConvention_status.html.
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Convention, and thus its terms govern the resolution of this dispute. See Status:
1958 - Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
http://www.uncitral.org/uncitral/en/uncitral_texts/ arbitration/NYConvention_status.html
(listing both Australia and the United States as signatories). Article II of the Convention,
as incorporated by the FAA, establishes the requirements necessary for an arbitration
agreement to come within the Convention’s terms. The agreement must be in writing,
concern a “legal relationship . . . which is considered as commercial,” and either at least
one party to the contract must not be an American citizen or the commercial relationship
must have a “reasonable relation with one or more foreign states.” 9 U.S.C. § 202. Cf.
Convention on the Recognition and Enforcement of Foreign Arbitral Awards art. II, June
10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38. [hereinafter Convention] The MOA and
DOCL, which concern the transfer of multiples pieces of intellectual property and
corporate stock, are in writing and clearly concern a commercial topic. Furthermore, it
is undisputed that AiG is an American corporation; and CMI is Australian in citizenship.
All of the Convention’s requirements are therefore met. Consequently, “when one of the
parties” to the arbitration agreement requests a court refer the dispute to arbitration, that
court “shall” do so. Convention art. II(3). Cf. 9 U.S.C. § 208.
As other courts construing the Convention’s language have observed, “there is
nothing discretionary about Article II(3) of the Convention.” Tennessee Imports, Inc.
v. Filippi, 745 F. Supp. 1314, 1322 (M.D. Tenn. 1990) (quoting McCreary Tire &
Rubber Co. v. CEAT S.P.A., 501 F.2d 1032, 1037 (3d Cir. 1974)). The language of the
treaty and its statutory incorporation provide for no exceptions. When any party seeks
arbitration, if the agreement falls within the convention, we must compel the arbitration
unless the agreement is “null and void, inoperative, or incapable of being performed.”
Convention art. II(3). CMI makes no such argument before us. Further, it is difficult to
see how comity concerns could come into play where both Australia and the United
States, as signatories to the Convention, apply the same law. CMI did not seek to
compel arbitration in its action. AiG instead filed the first action seeking to compel
arbitration. To assume that the district court’s order infringes on comity concerns is to
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assume that Australian courts would not follow their obligation under the Convention,
as CMI’s argument must rest upon an assumption that an Australian court would be less
likely to order arbitration. Such an argument both demeans the foreign tribunal and
hardly advances the comity interests that CMI claims to seek to vindicate. Cf. Gau Shan
Co. v. Bankers Trust Co., 956 F.2d 1349, 1355 (6th Cir. 1992) (noting that federal courts
should not seek to convey a message that they have “little confidence in the foreign
court’s ability to adjudicate a given dispute fairly”).
Finally, we note that the other factors delineated in Colorado River do not clearly
weigh in CMI’s favor. The Australian proceeding is only in its initial stages, and the
Australian courts have yet to consider AiG’s jurisdictional and venue defenses. Because
one group of witnesses is in Australia and another separate group is in Kentucky, either
forum will be inconvenient for half of the parties such that this factor is a draw. The
issues raised by the parties involve the interpretation of a half-century-old Convention
whose terms are largely unambiguous, and no sovereign is participating in these
proceedings. Cf. Colorado River, 424 U.S. at 820. Consequently, because neither
international comity nor the traditional abstention factors applicable to parallel
proceedings require abstention, we hold that the district court did not err in declining
to abstain in favor of the prior-filed Australian proceedings.
D.
CMI’s third issue on appeal is that the district court erred in submitting all of
AiG’s numerous causes of action against CMI to binding arbitration. CMI claims that
the text of the arbitration clause only requires issues concerning the ownership of the
AiG trademark, the copyright licenses contained in the MOA and DOCL, and whether
CMI breached its obligations under those two documents to be submitted to arbitration.
AiG responds that, contrary to CMI’s assertions, the arbitration clause is broadly
worded, and therefore the district court properly submitted all of the parties’ disputes to
the arbitrator.
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We “review[] de novo a district court’s conclusions of law regarding whether to
compel arbitration pursuant to the Federal Arbitration Act.” Watson Wyatt & Co. v. SBC
Holdings, Inc., 513 F.3d 646, 649 (6th Cir. 2008). To determine the breadth of the
arbitration clause at issue, we must refer to the actual wording found in the MOA, which
provides in pertinent part: “In the event of a disagreement of the parties regarding the
meaning or application of any provision of this Agreement or any related agreements
. . . . then the parties will submit the matter to Christian arbitration . . . and the decision
of the arbitrator shall be final.” MOA at 2-3 (emphasis added). Contrary to CMI’s
arguments, the arbitration agreement is not limited to only the MOA and DOCL. The
clear language of the arbitration clause says “this Agreement or any related agreements.”
To limit the scope of the arbitration clause to only the MOA and DOCL would read the
words “or any related agreements” out of the contract. See Royal Ins. Co. of Am., 525
F.3d at 421 (“clear and unambiguous” terms should be enforced as written). Therefore,
we hold that the district court did not err in its finding that the arbitration clause is not
limited to only those issues whose origin one can find within the four corners of the
MOA and DOCL.
We next turn to the question of whether the remaining disputed issues should be
submitted to arbitration. CMI concedes that those issues concerning the intellectual
property directly referenced in the DOCL and MOA are arbitrable.5 CMI, however,
continues to assert that the district court erred in compelling arbitration as to the claims
that deal with the Distribution Agreement of 1994, which governed how AiG would
purchase copies of Creation Magazine and distribute them to American subscribers, and
whether CMI has defamed or tortiously interfered with AiG’s contracts through CMI’s
statements concerning the DOCL, MOA, and related agreements. Determining whether
the disputes are arbitrable requires examining the breadth of the arbitration clause.
5
To the extent that CMI argues that it is inappropriate for an American court to interpret the
validity of foreign intellectual property rights, we note that this case does not require any American court
to do so. Our role is merely to interpret and enforce the arbitration agreement. The question of the
construction and validity of the underlying trademark and copyright provisions at issue is for the arbitrator.
Cf. Mars Inc. v. Kabushiki-Kaisha Nippon Conlux, 24 F.3d 1368, 1375-76 (Fed. Cir. 1994) (finding that
district courts do not have jurisdiction to determine directly the validity of a foreign patent).
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Watson Wyatt, 513 F.3d at 649. The clause requires “disagreement[s] . . . regarding the
meaning or application of any provision . . . [of] any related agreements” to be arbitrated.
MOA at 2-3. In Watson Wyatt, we considered an arbitration agreement that provided
“any dispute or claim arising from or in connection with this agreement” is subject to
arbitration and concluded that the arbitration clause was broad. 513 F.3d at 649
(emphasis removed). Comparing the language in Watson Wyatt to that in the agreement
between AiG and CMI, we conclude that the language is similarly broad as long as an
issue concerning “the meaning or application of any provision . . . [of] any related
agreements” is involved. Therefore, the dispositive question is whether one may fairly
characterize the remaining disputes as concerning the “meaning” or “application” of the
agreements’ provisions.
We have held that where a dispute involves a broadly written arbitration clause
“only an express provision excluding a specific dispute, or the most forceful evidence
of a purpose to exclude the claim from arbitration, will remove the dispute from
consideration by the arbitrators.” Highlands Wellmont Health Network, Inc. v. John
Deere Health Plan, Inc., 350 F.3d 568, 577 (6th Cir. 2003) (internal quotes and citation
omitted). Furthermore, district courts are “required to give a general presumption of
arbitrability and to resolve any doubts in favor of arbitration.” Watson Wyatt, 513 F.3d
at 650. This general rule governs “unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation that covers the asserted dispute.”
Masco Corp. v. Zurich Am. Ins. Co., 382 F.3d 624, 627 (6th Cir. 2004) (internal quotes
and citation omitted). This is because, “[t]he FAA manifests a liberal federal policy
favoring arbitration agreements.” Watson Wyatt, 513 F.3d at 649 (internal quotes and
citation omitted).
Applying these considerations to the case at bar, the Distribution Agreement of
1994 concerns whether AiG was contractually required to distribute Creation Magazine
to American subscribers. Creation Magazine contained articles written by CMI
members on the topic of creation science. The DOCL expressly grants rights to AiG in
all articles produced by CMI both before and after the execution of the DOCL and
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explicitly mentions Creation Magazine, and all of its prior titles, by name. DOCL at 1,
3. Therefore, the DOCL may well have altered the rights and obligations of the parties
pursuant to the Distribution Agreement. Because the “meaning” of the agreement is at
issue in determining the rights and obligations of the parties in the “related” Distribution
Agreement, the district court properly held that all claims related to the Distribution
Agreement are arbitrable. Cf. Highlands Wellmont, 350 F.3d at 577 (only “the most
forceful evidence” will result in exclusion of a claim from the scope of a broad
arbitration clause).
The second subset of claims consists of AiG’s contention that statements made
in the Briese Report and on CMI’s separate website defamed AiG and/or tortiously
interfered with contracts AiG had with third parties. Truth is an absolute defense to
defamation. See Lassiter v. Lassiter, 280 F. App’x 503, 504 (6th Cir. 2008); see also Li
v. The Herald and Weekly Times Pty. Ltd., 2007 VSC 109 (S. Ct. Victoria Apr. 20,
2007). If CMI is correct in its interpretation of the “meaning” of the agreements, then
CMI cannot have defamed or interfered wrongfully with AiG’s contracts. Once again,
in order to resolve the issue, an adjudicatory body must determine what the proper
“meaning” of the agreements is. Applying the “general presumption of arbitrability,”
Watson Wyatt, 513 F.3d at 650, the district court did not err in submitting these claims
to arbitration.
E.
Finally, AiG cross-appeals the district court’s order declining to issue a foreign
antisuit injunction. We have only considered the propriety of a district court’s issuance
of such an injunction once. See Gau Shan Co., 956 F.2d at 1351. In Gau Shan, we
observed that while it is “well settled that American courts have the power” to issue
foreign antisuit injunctions, “[c]omity dictates that [these injunctions] be issued
sparingly and only in the rarest of cases.” Id. at 1353-54. To determine whether a
foreign antisuit injunction should issue, we are to look at whether an injunction is
necessary to protect the jurisdiction of a federal court or if allowing the foreign litigation
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to continue would allow a party “to evade the forum’s important policies.” Id. at 1355,
1357.
It would be difficult for us to say that CMI was “attempting to evade [an]
important public policy of this forum” by filing suit in an Australian court when
Australia is also a signatory to the Convention. Cf. id. at 1358. However, we need not
interpret the full import of our holding in Gau Shan in order to decide this case in its
current procedural posture. The parties have voluntarily suspended the Australian
proceedings while we consider CMI’s appeal. With the benefit of our opinion, the
parties will be in a much-improved position to consider their future legal options. It
would be unwise for us to speculate as to what course of action CMI will take, and such
speculation would likely be required for us definitively to hold what Gau Shan demands
of injunction-seeking parties. We simply note that with the Australian proceedings
suspended, we believe that the district court clearly did not abuse its discretion in
declining, at this time, to issue a foreign antisuit injunction. Id. at 1352 (noting that the
standard of review is abuse of discretion). Should the status of the Australian litigation
change following the issuance of our opinion, AiG may renew its motion for an
injunction before the district court. At that time, the district court may apply the Gau
Shan factors to the then-present facts and make a new determination.
III.
For the foregoing reasons, we affirm the judgment of the district court in its
entirety. Our affirmance as to the district court’s refusal to issue a foreign antisuit
injunction is without prejudice so that AiG may renew its motion before the district court
should proceedings in the Australian suit resume. We also deny CMI’s motion to stay
arbitration as moot in light of our disposition of this appeal.