M.A.T. Obtains 9TH Circuit Reversal

We just obtained a reversal from the 9th Circuit in a rather interesting case: Uthe Technology Co. v. Aetrium Inc. (9th Cir. 2015) 808 F.3d 755.

Our client, Uthe Corporation, is a New Jersey company who owns a Singapore subsidiary that sells computer parts in Asia. The sub’s largest supplier is Aetrium Co.

One day, Uthe’s CEO received an anonymous letter stating that some of the sub’s Singapore officers were secretly diverting its customers to a new company that the officers had set up. And they had conspired with Aetrium to shift Aetrium’s sales to the new company.

Uthe filed suit against both the officers and Aetrium, alleging violations of RICO, and claiming the treble damages allowed by RICO. The officers (but not Aetrium) invoked an arbitration clause in one of their agreements with Uthe. Over Uthe’s objection, the federal district court in San Francisco sent the case against the officers to arbitration in Singapore, and stayed the case against Aetrium.

In Singapore, the arbitrator awarded Uthe $9 million compensatory damages. However, because Singapore does not recognize RICO claims, no treble damages were awarded. The officers paid the $9 million award.

Uthe then returned to San Francisco, expecting to go to trial against Aetrium for the balance of the treble damages ($18 million). But the district court granted summary judgment against Uthe. The court ruled that, because the underlying amount to be trebled had been satisfied, the “one satisfaction” rule barred further recovery.

The 9th Circuit reversed. “No remedy equivalent to RICO treble damages was available to Uthe under Singapore law, so it was not possible for Uthe to obtain full satisfaction of its RICO claims in the Singapore arbitration.”

Uthe was represented by M.A.T. Legal Director Myron Moskovitz.