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From Intellectual Property Law Daily, May 1, 2019

Federal court correctly confirmed rabbinical ruling on Hasidic Jewish group’s ownership of ‘Bobov’ mark

By Thomas Long, J.D.

District court properly "looked through" an arbitration agreement between two groups competing over rights to the name to determine that it had subject matter jurisdiction under federal trademark law to adjudicate the dispute.

A federal district court did not err in confirming an arbitration award pursuant to the Federal Arbitration Act (FAA), 9 U.S.C. §9, in favor of a group of individuals from the Bobov Hasidic Jewish community in Brooklyn who claimed exclusive trademark rights to the mark BOBOV, the U.S. Court of Appeals in New York City has held. Pursuant to an arbitration agreement, the parties—two groups with competing claims to the "Bobov" name—had agreed to arbitrate the dispute before a rabbinical tribunal, which ruled in favor of the petitioning group. According to the appellate court, the district court properly "looked through" the arbitration petition to the underlying controversy to determine whether subject matter jurisdiction would have existed over the dispute in the absence of an arbitration agreement. The underlying dispute involved questions of federal trademark law, over which district courts had subject matter jurisdiction. Therefore, the district court had jurisdiction to confirm the arbitration award. The Second Circuit affirmed the district court’s finding that there was no indication that the award was procured through fraud or dishonesty, or that any other basis for overturning the award existed (Landau v. Eisenberg, May 1, 2019, per curiam).

The petitioners-appellees asserted that "Bobov" was a federally protected trademark because for decades the word "Bobov" had been used in commerce to distinguish the goods and services of the Bobov community. Central to the dispute was whether the respondents had the right to use the name and mark BOBOV for its new Hasidic community. The arbitration agreement provided that a panel of five rabbis would decide, among other things, who would have the right to be referred to as Bobov and to publish and distribute books and merchandise under that name. In August 2014, the panel ruled that the petitioners owned the mark and were entitled to register it, and that any party could confirm the award in secular court. The petitioners sought confirmation of the arbitration award in the federal district court in Brooklyn under the FAA.

Of 613 respondents who were served, only Baruch Eisenberg filed an opposition, raising subject matter jurisdiction, venue, and merit-based arguments. The district court held that it had subject matter jurisdiction over the petition, rejected his other arguments, and confirmed the award. Eisenberg appealed.

Subject matter jurisdiction. Eisenberg argued that the district court did not properly exercise subject matter jurisdiction over the case. Although Section 9 of the FAA provides that parties to an arbitration agreement may apply for confirmation of an arbitration agreement in federal court in the district in which the award was made, jurisdiction does not exist simply because a party wishes to confirm an award, the appellate court noted. The court had not previously decided whether subject matter jurisdiction existed over a motion to confirm an arbitration award under Section 9. However, the Supreme Court in Vaden v. Discover Bank, 556 U.S. 49 (2009), addressing whether federal subject matter jurisdiction existed over petitions to compel arbitration pursuant to 9 U.S.C. §4, stated that Section 4 of the FAA did not bestow federal jurisdiction but instead required "an independent jurisdictional basis over the parties’ dispute" and held that district courts should "look through" the petition to the underlying substantive controversy to determine whether the claims arose under federal law. District courts should determine whether they would have jurisdiction under Title 28 over the dispute without the arbitration agreement, the Court explained.

In Doscher v. Sea Port Group Securities, LLC, 832 F.3d 372 (2d Cir. 2016), the Second Circuit held that courts should apply Vaden’s look-through approach to petitions to vacate and modify arbitration awards under 9 U.S.C. §10. The court held that it was not "logically possible" for courts to have subject matter jurisdiction over a dispute under Section 4 but not any of the FAA’s other remedies, and that applying the look-through approach to Section 10 was consistent with the FAA’s pro-arbitration purpose. In the current case, the court said that the logic of Doscher applied equally to Section 9, which contained substantially identical language to Section 10.

Applying the "look through" approach here, the district court properly determined that it had subject matter jurisdiction to confirm the arbitration award, according to the Second Circuit. "The substantive controversy underlying the petition involved questions of federal trademark law, over which district courts unquestionably possess subject matter jurisdiction," said the court. "Because the district court would have had jurisdiction over the underlying substantive controversy, it had jurisdiction to confirm the arbitration award pursuant to FAA §9."

Confirmation of award. The appellate court noted that arbitration awards were subject to very limited review and that the FAA created a strong presumption in favor of enforcing awards. "Given this extremely deferential standard of review, the district court did not err in confirming the arbitration award as to the 613 respondents who had been served," the court said. The rabbinical tribunal had assessed the evidence and heard arguments over a nine-year period. The district court found no indication that the award was procured "through fraud or dishonesty, or that any other basis for overturning the award existed. The appellate court said that an independent review of the record revealed no basis for questioning the award. Therefore, the judgment of the district court was affirmed.

This case is No. 17-3963.

Attorneys: David Z. Pinsky (Covington & Burling LLP) for Asher Baruch Landau. Baruch Eisenberg, pro se.

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