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IBC AVIATION SER. v. COMPANIA MEXICANA DE AVIACION

December 19, 2000

IBC AVIATION SERVICES, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
V.
COMPAINA MEXICANA DE AVIACION, S.A. DE C.V., D/B/A/ MEXICANA AIRLINES, A MEXICAN CORPORATION; AEROMEXPRESS, S.A. DE C.V., A MEXICAN CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Conti, U.S. District Judge.

ORDER GRANTING PLAINTIFF'S MOTION TO AMEND COMPLAINT AND DENYING DEFENDANTS' MOTION TO TRANSFER VENUE

I. INTRODUCTION

Plaintiff IBC International Services, Inc. filed a complaint against Defendants in Superior Court of California, County of San Mateo. The complaint alleges breach of contract, breach of the covenant of good faith and fair dealing, defamation, trade libel, intentional interference with contract, international interference with prospective business advantage, unfair competition, and declaratory relief arising out of a Cargo Handling Agreement between IBC and Mexicana. Defendants removed the matter to this Court pursuant to 28 U.S.C. § 1332 (a)(2), and the Court has jurisdiction based on diversity. Presently before the Court are Plaintiff's motion for leave to amend the complaint and Defendants' motion to transfer the action to the Central District of California, Los Angeles Division.

II. BACKGROUND

Plaintiff IBC International Services, Inc. ("IBC") is a California corporation that provides cargo handling services to airlines. Defendant Compañia Mexicana de Aviacion ("Mexicana") is a Mexican corporation, operating a cargo airline with operations in Mexico and internationally, including in the United States. Defendant AeroMexpress is a Mexican corporation responsible for overseeing IBC's cargo services for Mexicana.

IBC and Mexicana entered into a Cargo Handling Agreement on March 12, 1997, under which IBC was to handle Mexicana's cargo at Los Angeles International Airport.*fn1 Pursuant to an addendum, the start date of the agreement was September 16, 1997. The initial term of the agreement was five years from the start date, and either party could terminate the agreement "with 90 days written notice at anytime after the initial term three (3) years." The agreement also contains an arbitration clause stating that controversies or claims arising out of the agreement shall be determined and settled in accordance with the laws of California and "effected under the Commercial Arbitration rules of the American Arbitration Association of Los Angeles California."

Plaintiff began providing cargo handling services on September 16, 1997. In 1998, AeroMexpress assumed oversight responsibilities of the cargo operations at the facility. Plaintiff alleges that AeroMexpress, principally through its Vice President of Sales, Steven Connolly, refused to cooperate with IBC, failed to provide equipment as provided in the agreement, interfered with IBC performance of the contract, and denigrated IBC to IBC's affiliates and customers. In its moving papers, IBC alleges that it was Mr. Connolly who refused to provide IBC support, instructed IBC employees to follow procedures in violation of federal regulations and AeroMexpress' policy, complained about IBC's service to business affiliates, blocked IBC's access to the Cargo Handling Facility, and ultimately, instigated Mexicana's breach of the Cargo Handling Agreement.

On March 13, 1998, December 10, 1999, and June 16, 2000, Mexicana sent IBC notice that it wished to terminate the agreement. The June 16, 2000 notice indicated that termination was to be effective as of September 16, 2000, three years to the day of the start date. Plaintiff informed Mexicana that it believed Mexicana could not provide notice until September 16, 2000 with termination occurring 90 days thereafter. On September 16, 2000, Plaintiff was denied access to the facility, and another cargo handling services company assumed cargo handling for Mexicana.

On August 2, 2000, Plaintiff filed a complaint in the Superior Court of California, County of San Mateo, against Mexicana and AeroMexpress asserting claims for breach of contract, breach of the covenant of good faith and fair dealing, defamation, trade libel, intentional interference with contract, international interference with prospective business advantage, unfair competition, and declaratory relief.

On September 8, 2000, Defendants removed the action to the Northern District of California. On September 15, 2000, Defendants filed their answer to the complaint and counterclaimed for declaratory relief, breach of contract, defamation, trade libel and disparagement, tortious interference with contract, interference with prospective business advantage, and unfair competition. On September 29, 2000, Defendants filed the present motion seeking transfer of the action to the district court in the Central District of California, Los Angeles Division.

On October 12, 2000 Plaintiff sought leave to file an amended complaint adding Steven G. Connolly as a Defendant. The amended complaint also dropped the declaratory relief claim and sought to add a claim for unfair business practices in violation of California Business and Professions Code § 17200.

III. PLAINTIFF'S MOTION AMEND COMPLAINT

A. Legal Standard


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