Defendant Repsol, S.A. (Repsol) moves to dismiss the complaint filed by plaintiffs, Bridas International S.A. and Bridas Energy Holdings Ltd. (collectively, Bridas). CPLR 327, 3211. Bridas are companies incorporated in the British Virgin Islands. Defendant's motion is granted for the reasons that follow.

I. Factual Background & Procedural History

This action has its roots in the expropriation of Repsol's controlling stake in non-party YPF S.A. (YPF) by the Republic of Argentina (Argentina). For most of its history, YPF was Argentina's public energy company. In the early 1990s, Argentina privatized YPF by selling its shares on the New York Stock Exchange. In 1999, Repsol, a Spanish energy company, purchased the majority of YPF's shares. In May 2012, the Argentinian government renationalized YPF through the expropriation of 51% of its shares, thereby seizing control of the company. Repsol maintains that this expropriation violates YPF's bylaws, Argentina's constitution, and is illegal under Argentinian law, U.S. federal securities law, and international law. Since the expropriation, Repsol has commenced at least five lawsuits in New York state and federal court to seek redress for the expropriation of its interest in YPF. See Repsol YPF, S.A. v Republic of Argentina, 12-CV-3877 (SDNY May 15, 2012); Repsol YPF, S.A. v Republic of Argentina, 12-CV-4018 (SDNY May 21, 2012); Repsol YPF Tesorería y Gestión Financiera, S.A. v YPF Sociedad Anónima, Index No. 652265/2012 (Sup Ct, NY County June 28, 2012) (Kornreich, J.); Repsol S.A. v The Bank of New York Mellon, Index No. 652653/2012 (Sup Ct, NY County July 31, 2012) (Bransten, J.); Repsol S.A. v Chevron Corp., 12-CV-8799 (SDNY Dec. 4, 2012) (the Chevron Action).

On August 29, 2012, YPF and non-party Bridas Corporation (an affiliate of plaintiffs that is also incorporated in the British Virgin Islands) entered into a confidential Memorandum of Understanding (the MOU) regarding the development of YPF's energy assets in Argentina. Complaint ¶¶ 20-21. On December 28, 2012, Bridas agreed to a term sheet with YPF to carry out the transaction contemplated in the MOU. ¶ 22. Shortly thereafter, Repsol learned of the pending deal between Bridas and YPF. On January 2, 2013, Repsol sent Bridas a letter stating [*2]that

Repsol is the victim of an unlawful seizure of its controlling interest in YPF by the Argentine government. As a result, any agreement between any third party and YPF (or any body, agency, division or subdivision of the government of the Republic of Argentina, or the illegitimate YPF's directors) related to YPF's strategic assets is also unlawful, is unfair, constitutes undue interference, and causes Repsol irreparable harm.

¶ 23. Repsol's letter demanded that Bridas stop negotiating or doing business with YPF. Id. Repsol threatened to commence litigation within 48 hours if Bridas did not provide written notice and publicly announce that it was acceding to Repsol's demands. Id.

The next day, January 3, 2013, Bridas commenced this action against Repsol. The complaint seeks a declaratory judgment and asserts tortious interference with business relations. Specifically, Bridas ask the court to declare that:

(a) the question of who are the legal owners of YPF is one for the Argentine legal system and not for determination by non-Argentine courts; and (b) unless and until the Argentine legal system determines that YPF's current owners are not its actual legal owners, business entities such as [Bridas] and their affiliates are not entitled to enter into ordinary course business transactions with YPF through its current management and to rely on the validity and binding effect of such transactions.

¶ 32.

Shortly after Bridas commenced this action, Repsol sued Bridas in Spain (the Spanish Action) in Commercial Court No. 1 of Madrid (the Spanish Court). The gravamen of the Spanish Action is that Bridas allegedly violated Spain's Unfair Competition Law by attempting to do business with YPF after Repsol's control over YPF was expropriated by the Argentinian government. Bridas does not do business and has no presence in Spain. Consequently, Bridas moved to dismiss the Spanish Action on the grounds that the Spanish Court lacks both personal jurisdiction over Bridas and subject matter jurisdiction over the parties' dispute. Based on a translation of a recent order of the Spanish Court submitted by Repsol, it appears that the Spanish Court has ruled that Bridas is subject to personal jurisdiction in Spain and that the Spanish Court has subject matter jurisdiction over the Spanish Action.

Repsol now moves to dismiss this action on three grounds: (1) that this court should defer to the Spanish Court and allow the parties' dispute to be resolved in the Spanish Action; (2) that this court cannot grant Bridas' requested declaratory judgment; and (3) that Bridas has failed to properly plead a claim for tortious interference with business relations.

II. Discussion

On a motion to dismiss, the court must accept as true the facts alleged in the complaint as well as all reasonable inferences that may be gleaned from those facts. Amaro v Gani Realty Corp., 60 AD3d 491 (1st Dept 2009); Skillgames, L.L.C. v Brody, 1 AD3d 247, 250 (1st Dept 2003), citing McGill v Parker, 179 AD2d 98, 105 (1992); see also Cron v Harago Fabrics, 91 NY2d 362, 366 (1998). The court is not permitted to assess the merits of the complaint or any of its factual allegations, but may only determine if, assuming the truth of the facts alleged, the [*3]complaint states the elements of a legally cognizable cause of action. Skillgames, id., citing Guggenheimer v Ginzburg, 43 NY2d 268, 275 (1977). Deficiencies in the complaint may be remedied by affidavits submitted by the plaintiff. Amaro, 60 NY3d at 491. "However, factual allegations that do not state a viable cause of action, that consist of bare legal conclusions, or that are inherently incredible or clearly contradicted by documentary evidence are not entitled to such consideration." Skillgames, 1 AD3d at 250, citing Caniglia v Chicago Tribune-New York News Syndicate, 204 AD2d 233 (1st Dept 1994). Further, where the defendant seeks to dismiss the complaint based upon documentary evidence, the motion will succeed if "the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law." Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 (2002) (citation omitted); Leon v Martinez, 84 NY2d 83, 88 (1994).

A. Venue

This court recently addressed how to apply the "first-filed" rule to determine where a lawsuit should be venued when the first-filed action is alleged to be the product of procedural gamesmanship. See In re NYSE Euronext Shareholders/ICE Litigation, 39 Misc 3d 619 (Sup Ct, NY County 2013) (NYSE). In NYSE, which dealt with duplicative merger litigation, this court noted that

Dismissal may be granted under CPLR 3211(a)(4) when "there is another action pending between the same parties for the same cause of action in a court of any state or the United States; the court need not dismiss upon this ground but may make such order as justice requires" (emphasis added). The standard on a motion to dismiss under CPLR 3211(a)(4) "is similar to that undertaken in applying the doctrine of forum non conveniens — whether the litigation and the parties have sufficient contact with this State to justify the burdens imposed on our judicial system." Flintkote Co. v Am. Mut. Liability Ins. Co., 103 AD2d 501, 506 (2d Dept 1984).

New York's forum non conveniens statute, CPLR 327(a), provides that "[w]hen the court finds that in the interest of substantial justice the action should be heard in another forum, the court . . . may stay or dismiss the action in whole or in part on any conditions that may be just." The decision as to forum non conveniens is a matter of discretion, and the party challenging the forum bears the burden of demonstrating inconvenient forum. Islamic Republic of Iran v Pahlavi, 62 NY2d 474, 478-79 (1984). Among the factors traditionally considered in determining the issue are: the hardship faced by the defendant in defending in New York; the availability of an alternate forum; and the residence of the parties and the jurisdiction in which the transaction occurred. Id. The rule of forum non conveniens is flexible and has as its goal, fairness, justice and convenience. Id.

[T]he forum in which the litigation was first commenced is not the dispositive factor in deciding whether to grant a motion under CPLR 3211(a)(4). See L-3 Comm'ns Corp. v Safenet, Inc., 45 AD3d 1, 9 (1st Dept 2007) ("New York courts have [*4]consistently held that even though the first-in-time rule is a factor to be considered in choosing the appropriate forum for litigation, it is not controlling, especially when commencement of the competing action[s] has been reasonably close in time.'" [citations omitted]); In re Topps Co. S'holder Litig., 19 Misc 3d 1103(A), at *3 (Sup Ct, NY County 2007) (Cahn, J.) ("Although priority in the commencement of the action is a factor to be considered in determining whether dismissal pursuant to CPLR 3211(a)(4) is appropriate, it is not necessarily dispositive"), citing Roberts v 112 Duane Assoc. LLC, 32 AD3d 366 (1st Dept 2006).

The appellate and federal courts in this state have recognized that enforcing a strict "first to file" rule is tantamount to sanctioning " procedural gamesmanship' and reward[s] a party for winning a race to the courthouse.'" White Light Prods., Inc. v On the Scene Prods., Inc., 231 AD2d 90, 98 (1st Dept 1997), citing Factors Etc., Inc. v Pro Arts, Inc., 579 F2d 215 (2d Cir 1978). The "literal application of the first to file rule under such circumstances would create disincentives to responsible litigation' by discouraging settlement negotiations out of apprehension that an adversary might take advantage of the opportunity to file a preemptive suit in an advantageous forum." Id. at 98-99, quoting Don King Prods., Inc. v Douglas, 735 F Supp 522, 532 (SDNY 1990).

NYSE, 39 Misc 3d at 623-24. In sum, this court agreed with Chancellor Strine of the Delaware Court of Chancery that first-filed complaints should not automatically be given deference when they are used as a means to forum shop. See id. at 625, citing TCW Tech. Ltd. v Intermedia Comm'ns, Inc., 2000 WL 1654504, at *3 (Del Ch 2000) ("Such pleadings are remarkable, but only because of the speed with which they are filed in reaction to an announced transaction.").

Other Justices of this court have so ruled when faced with almost identical facts — i.e. the preempting of the "true" plaintiff after receipt of a demand letter by filing a suit in a preferential court to obtain a declaratory judgment that the threatened lawsuit has no merit. See Higginson v Linden Capital L.P., Index No. 653142/2012, NYSCEF Doc. No. 29 (Sup Ct, NY County Aug. 2, 2013); Thor Gallery at Beach Place, LLC v Standard Parking Corp., 34 Misc 3d 1215(A) (Sup Ct, NY County 2012). The Appellate Division and the New York federal courts have also disapproved of the tactic. See Higginson, at *7, citing AIG Fin. Prods. Corp. v Penncara Energy, LLC, 83 AD3d 495, 496 (1st Dept 2011); Great Am. Ins. Co. v Houston Gen. Ins. Co., 735 F Supp 581, 586 (SDNY 1990) ("the misuse of the Declaratory Judgment Act to gain a procedural advantage and preempt the forum choice of the plaintiff in the coercive action militates in favor of dismissing the declaratory judgment action.").

That being said, this court understands why Bridas, which has no connection to Spain, would want to avoid being sued there by a Spanish oil company whose home country is outraged at Argentina's expropriation. Moreover, Bridas has established that the forum non conveniens factors mostly, if not all, militate in their favor because the relevant evidence and witnesses are in New York and because such documents and individuals will be or already are part of the numerous New York actions commenced by Repsol in this state (e.g., Repsol commenced the [*5]Chevon Action to prevent Chevron, another well known energy company, from doing business with YPF).^[FN1] Nonetheless, the court declines to weigh in on whether Bridas' conduct merits dismissal on venue grounds since the action is dismissed for other reasons discussed below.

B. Declaratory Judgment

"Declaratory judgments are a means to establish the respective legal rights of the parties to a justiciable controversy. The general purpose of the declaratory judgment is to serve some practical end in quieting or stabilizing an uncertain or disputed jural relation either as to present or prospective obligations." Thome v Alexander & Louisa Calder Foundation, 70 AD3d 88, 99 (1st Dept 2009).

Bridas' complaint seeks two declarations, which, upon closer inspection, really seek adjudication of a number of legal issues. The first — "the question of who are the legal owners of YPF is one for the Argentine legal system and not for determination by non-Argentine courts" — asks this court to determine which of the numerous courts faced with issues surrounding the legal ownership of YPF should determine the issue. The request assumes that this court has the jurisdiction or the will to dictate to courts of concomitant jurisdiction what they can or cannot do. It does not.

Bridas' second requested declaration — "unless and until the Argentine legal system determines that YPF's current owners are not its actual legal owners, business entities such as [Bridas] and their affiliates are entitled [1] to enter into ordinary course business transactions with YPF through its current management and [2] to rely on the validity and binding effect of such transactions" — contains two separate declarations, denoted by the bracketed numbers above. The two declarations also seeks to impact entities not presently before the court. The declarations are highly vague and ambiguous and conflate a number of legal issues.

The first seeks confirmation that Bridas and others are "entitled" to do business with YPF. The effect of this declaration is not clear. Read broadly, being entitled to do business means that doing so violates no law of any jurisdiction. Such a broad proposition is far beyond what this court would be willing to declare. Read more narrowly, being "entitled" means that whatever law actually governs business relations between Bridas and YPF is not violated. At first glance, such a proposition seems reasonable, as a choice of law analysis might conclude that the only law implicated in business dealing between Bridas and YPF in Argentina would be the law where such dealings take place (i.e. Argentinian law) or the law where the companies do business (i.e. Argentina, the British Virgin Islands, and possibly New York). Bridas avers that this court is competent to conduct a choice of law analysis to deduce the appropriate law and render a declaration accordingly. In the abstract, this might be possible.

In reality, however, whatever law Bridas and this court might believe to be applicable has no bearing on whether Repsol or the courts of another jurisdiction, such as Spain, believe differently. Indeed, the Spanish Action concerns a dispute over whether Spanish law is [*6]implicated in Bridas' dealings with YPF. This court will not duplicate the Spanish Action, regardless of whether Bridas' subjection to personal jurisdiction in Spain would comply with this country's due process requirements. The duplication of the Spanish Action would be a waste of judicial resources and create the possibility of inconsistent rulings (which, rather than clarify the parties' rights — the purpose of a declaratory judgment — would only muddy the waters further because there is little, if any reason to believe that a decision by this court on the merits of the Spanish Action would carry any positive weight in Spain or Argentina).

Next, the ability to "rely on the validity and binding effect of such transactions" is a declaration that is both overly broad and unduly speculative. It is too broad because, again, such a declaration would purport to grant immunity to Bridas in all lawsuits that might arise in all jurisdictions from its dealings with YPF. Moreover, such a declaration impacts countless other entities who are not parties to this action. Such broad relief is akin to the effect of a class action lawsuit, where an opportunity to object for those affected is always afforded before such relief is granted. Additionally, this court cannot issue this declaration because the "transactions" for which Bridas seeks this court's blessing are undefined. The Complaint merely speaks of one contemplated transaction that arises from the MOU and the term sheet. However, the declaration, as written, would impact all business relations between "all business entities such as [Bridas]" and YPF. This court is not in a position to anticipate the countless legal implications of all possible business dealings with YPF and will not engage in such speculation.

This being said, the urgency and importance of resolving the legal uncertainty around Bridas' ability to do business with YPF is not lost on the court. To wit, no sophisticated investor ought to part with its money — especially when that sum is in excess of a billion dollars — absent reasonable assurances that its investment is on solid legal footing. However, a declaratory judgment would not "serve [a] practical end" in resolving the parties' dispute because a judgment by this court is not going absolve Bridas of liability in the Spanish Action nor will it provide assurances that all will go smoothly for Bridas in Argentina. Rather, all this court would be doing is providing Bridas with some possibly persuasive leverage in a broad international dispute that has no quick end in sight. Though it is flattering that Bridas, which are foreign entities, express confidence that the New York State Supreme Court's Commercial Division is a trusted venue for adjudicating complex international commercial disputes, the court has the humility to recognize that it cannot solve their problem. Consequently, Bridas' declaratory judgment cause of action is dismissed without leave to amend.^[FN2]

C. Tortious Interference with Business Relations

Under New York law, to state a claim for tortious interference with business relations, a [*7]plaintiff must plead that "(1) it had a business relationship with a third party; (2) the defendant knew of that relationship and intentionally interfered with it; (3) the defendant acted solely out of malice or used improper or illegal means that amounted to a crime or independent tort; and (4) the defendant's interference caused injury to the relationship with the third party." Amaranth LLC v J.P. Morgan Chase & Co., 71 AD3d 40, 47 (1st Dept 2009).

Under the Noerr—Pennington doctrine,^[FN3] "parties may not be subjected to liability for petitioning the government [and this doctrine] has been applied to bar claims of tortious interference predicated on the commencement of litigation." I.G. Second Generation Partners, L.P. v Duane Reade, 17 AD3d 206, 208 (1st Dept 2005), citing Matsushita Electronics Corp. v Loral Corp., 974 F Supp 345 (SDNY 1997). To overcome the Noerr—Pennington doctrine, the plaintiff must establish that the threatened litigation is a "sham" — i.e. that it is "objectively baseless." Id.; accord Professional Real Estate Investors, Inc. v Columbia Pictures Indus., Inc., 508 US 49, 56-61 (1993).

A ruling by this court declaring that Repsol's litigation threat was "objectively baseless" would be tantamount to calling the Spanish Action a "sham." The court lacks a sufficient record to do so and, even if it did, principles of comity would preclude this court from casting aspersions on currently pending litigation in another court. More to the point, ruling that Repsol's Spanish law claims are frivolous would require a ruling on the merits of the Spanish Action, which, for the reasons discussed earlier, the court is unwilling to do. Thus, Bridas' claim for tortious interference with business relations is dismissed.^[FN4] Accordingly, it is

ORDERED that the motion to dismiss the Complaint by defendant Repsol, S.A. is granted, and the Clerk is directed to dismiss the Complaint with prejudice.

Dated: August 19, 2013ENTER:

__________________________

J.S.C.