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Benihana, Inc. v. Benihana of Tokyo, LLC

Benihana, Inc. v. Benihana of Tokyo, LLC

United States Court of Appeals for the Second Circuit

January 6, 2015, Argued; April 28, 2015, Filed

Docket No. 14-841

Opinion

 [*889]  [***1634]   Gerard E. Lynch, Circuit Judge:

Defendant-appellant Benihana of Tokyo, LLC ("Benihana of Tokyo") appeals from a February 26, 2014 order of the United States District Court for the Southern District of New York (Paul A. Engelmayer, J.) granting the application of plaintiff- [*890]  appellee Benihana, Inc. ("Benihana America") for a preliminary injunction in aid of arbitration of a dispute arising under the parties' license agreement. The district court enjoined Benihana of Tokyo from: (1) selling unauthorized food items at the restaurant it operates pursuant to the license agreement; (2) using certain trademarks in connection with the restaurant in a manner not approved by the [**3]  license agreement; and (3) arguing to the arbitral panel, if it rules that Benihana of Tokyo breached the license agreement, that Benihana of Tokyo should be given additional time to cure any defaults.

The district court did not abuse its discretion with respect to the menu offering or trademark use injunctions, because it reasonably concluded that each of the relevant factors favored Benihana America. But it erred in enjoining Benihana of Tokyo from arguing to the arbitral panel for an extended cure period. When a dispute is properly before an arbitrator, a district court should not interfere with the arbitral process on the ground that, in its view of the merits, a particular remedy would not be warranted. Benihana America may challenge an arbitrator's decision in court only after it has been issued. It may not subvert its agreement to arbitrate by obtaining a determination from a district court in advance that there are no grounds for the arbitrator to grant a particular remedy.

We therefore AFFIRM IN PART and REVERSE IN PART the order of the district court.

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784 F.3d 887 *; 2015 U.S. App. LEXIS 7165 **; 114 U.S.P.Q.2D (BNA) 1632 ***

BENIHANA, INC., Plaintiff-Appellee, — v. — BENIHANA OF TOKYO, LLC, Defendant-Appellant.

Subsequent History: Magistrate's recommendation at, Costs and fees proceeding at Benihana, Inc. v. Benihana of Tokyo, LLC, 2015 U.S. Dist. LEXIS 179163 (S.D.N.Y., Aug. 6, 2015)

Prior History:  [**1] Defendant-appellant Benihana of Tokyo, LLC appeals from a February 26, 2014 order of the United States District Court for the Southern District of New York (Paul A. Engelmayer, J.) granting the application of plaintiff-appellee Benihana, Inc. for a preliminary injunction in aid of arbitration of a dispute arising under the parties' license agreement. The district court enjoined Benihana of Tokyo from: (1) selling unauthorized food items at the restaurant it operates pursuant to the license agreement; (2) using certain trademarks in connection with the restaurant in a manner not approved by the license agreement; and (3)arguing to the arbitral panel, if it rules that Benihana of Tokyo breached the license agreement, that Benihana of Tokyo should be given additional time to cure any defaults. We conclude that the district court was within its discretion in granting the first and second components of the injunction. However, the district court erred in restricting the arguments Benihana of Tokyo may make to the arbitral panel.

Benihana of Tokyo, LLC v. Benihana Inc., 73 F. Supp. 3d 238, 2014 U.S. Dist. LEXIS 99933 (S.D.N.Y., July 22, 2014)

Disposition: AFFIRMED IN PART AND REVERSED IN PART.

CORE TERMS

arbitration, cure, district court, termination, injunction, advertising, parties, merits, license agreement, hamburgers, restaurant, menu, burgers, enjoin, unauthorized, trademarks, quotation, marks, defaults, restrictions, irreparably, selling, notice, pending arbitration, violations, preliminary injunction, irreparable harm, provisions, hardship, favored

Civil Procedure, Alternative Dispute Resolution, Arbitration, General Overview, Remedies, Injunctions, Preliminary & Temporary Injunctions, Business & Corporate Compliance, Federal Arbitration Act, Arbitration Agreements, Grounds for Injunctions, Stay Pending Arbitration, Appeals, Standards of Review, Abuse of Discretion, Irreparable Harm, Reviewability of Lower Court Decisions, Preservation for Review, Arbitrability, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Pretrial Matters, Judicial Review, Scope