United States Court of Appeals, Seventh Circuit affirms United States District Court for the Northern District of Indiana, South Bend Division denying antisuit injunctive relief

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Date: January-March 2017
From: International Law Update(Vol. 23, Issue 1)
Publisher: American Bar Association
Document Type: Article
Length: 1,418 words
Lexile Measure: 1560L

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In 2009, Joaquim Salles Leite Neto entered into a trust agreement with Wells Fargo Bank to purchase an airplane for use in his business. Wells Fargo borrowed $6 million from 1st Source and pledged the aircraft as collateral. In January 2011, Neto signed a guarantee for that loan. [section] 3.02 of the Guarantee dealt with governing law and disputed choice-of-law and venue provisions. In June 2012, the Brazilian government seized the airplane. For several years, Neto continued to pay 1st Source for his debt on the plane, making almost $3 million in payments. Neto stopped making payments in December 2014. In June 2015, 1st Source sued Neto in the Northern District of Indiana to collect the remainder of the debt. In July 2016, 1st Source filed a substantively similar complaint against Neto in Sao Paolo, Brazil, seeking to recoup the remainder of the debt from the airplane transaction. At the time that 1st Source filed the Brazil lawsuit, Neto maintained certain assets, including the airplane at issue, in Brazil. In October, Neto sought antisuit injunctive relief in Indiana district court in an effort to prevent 1st Source from proceeding with the parallel action in Brazil. He argued that [section] 3.02 of the loan guarantee prohibited 1st Source from bringing suit in Brazil, and that the Brazil litigation was vexatious and duplicative. The district court denied Neto's motion, concluding that [section] 3.02 allowed for the parallel litigation, and that Neto had not met his burden for showing that the Brazil litigation was vexatious. The appeal followed. *610

On appeal from decisions on injunctive relief, the Court of Appeals will review legal conclusions de novo, findings of fact for clear error, and equitable balancing for abuse of discretion." Korte v. Sebelius, 735 F3d 654, 665 (7th Cir. 2013).

Neto first argued that [section] 3.02 forbids 1st Source from filing suit in Brazil because giving effect to [section] 3.02's second clause rendered the first clause--which, in Neto's view, limited the venue to Indiana--meaningless. This reading of the loan guarantee was incorrect for two reasons. First, the language of the first clause only applied to Neto, not to...

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Gale Document Number: GALE|A549156113