Madden v. Lew, Index No. 650209/2015 (N.Y. Sup. Ct. Jan. 15, 2016)

Plaintiff Steve Madden is a well-known designer and seller of footwear, handbags, and jewelry, and is based in New York, New York.  Lew is a major distributer of footwear in Australia.  In 2009, the parties entered into a licensing agreement under which Lew would be the exclusive licensor and distributor of Madden footwear in Australia.

Prior to the agreed-upon termination date of the agreement, Lew declared that it intended to wind down its Madden product lines.  Madden immediately notified Lew that it considered Lew’s announcement to be an anticipatory repudiation of the parties’ agreement.  Lew responded by suing Madden in Australia, seeking, among other relief, a declaration that it had the right to terminate the agreement and damages for breach of contract.

Madden adamantly fought Lew’s standing to bring a lawsuit in Australia on the basis that the parties’ agreement unambiguously provided that “any and all actions or proceedings arising out of or relating to this Agreement . . . shall be exclusively heard only in . . . state or federal court [in New York].”  Nevertheless, the Australian court presiding over Lew’s lawsuit ruled that Lew could proceed in Australian court because certain remedies were available to Lew under Australian law that would not be available to it in New York.

After Madden’s appeals in Australia failed, it brought a lawsuit in New York against Lew seeking an order enjoining Lew from prosecuting its action in Australia.  The court noted that the dispute presented a “thorny issue” because Lew was trying to flout its agreement to litigate in New York, but the court in Australia had determined that public policy demanded that Lew be able to seek relief in Australia that would not be available to it in New York.  It ultimately determined that Madden’s contract right trumped international comity concerns.  It stated, “Madden presumably negotiated a New York choice of law clause and New York forum selection clause in the Agreement so that it could fully understand and plan for its potential liability in a dispute with Lew.  To force Madden to litigate under Australian law, and subject it to potential damages unavailable under New York law, would eviscerate this essential contractual right.”  It then noted that, rather than stand by its contractual commitment, “Lew has purposefully flouted it, and sued in a foreign jurisdiction for damages not recoverable in New York.”  Accordingly, it found that Madden had sustained its burden and granted Madden’s motion for a preliminary injunction barring Lew from prosecuting its Australian action.