Opinion
CIVIL ACTION No. 00-2349-GTV.
December 21, 2000.
MEMORANDUM AND ORDER
This case is before the court on Defendants' Motion to Dismiss or, in the Alternative, Motion to Transfer Venue (Doc. 7) and Request for Oral Argument on Defendants' Motion to Dismiss or, in the Alternative, Motion to Transfer Venue (Doc. 17). For the reasons set forth below, Defendants' motion to transfer venue is granted. Defendants' request for oral argument is denied.
Stated in the most simple terms, the facts of this case are as follows: Plaintiff Graphic Technology and Defendant McDonald's Operators Association of Southern California ("MOASC") entered into an agreement whereby Plaintiff would create a hardware and software system for Defendant MOASC. Defendant MOASC then joined with other associations to form McXtraWorld of Southern California ("McXtraWorld"). Defendant McXtraWorld began acting as the contractual party for MOASC. Plaintiff and Defendant McXtraWorld's relationship went sour, and on July 26, 2000, Defendant McXtraWorld sued Plaintiff in California state court, alleging several causes of action including breach of contract. The California case was later removed to the United States District Court for the Central District of California. On July 31, 2000, Plaintiff brought the instant case in the United States District Court for the District of Kansas, claiming breach of contract, promissory estoppel, and quantum meruit. Defendants now ask this court to dismiss Plaintiff's action in Kansas, or transfer venue to the United States District Court for the Central District of California.
Defendants make several arguments in support of dismissal or transfer. However, the court will only address one argument: Defendants' argument regarding the "first-filed" rule. As a matter of comity, a federal court may decline jurisdiction over a case when another case involving the same parties and subject matter already has been filed in another jurisdiction. See Buzas Baseball, Inc. v. Bd. of Regents, No. 98-4098, 1999 WL 682883, at *2 (10th Cir. Sept. 2, 1999). The District of Kansas has held that this "first-filed" rule applies when "essentially the same issues and litigants are involved in two substantially identical causes of action. . . ." Ed Tobergte Assocs. v. Zide Sport Shop of Ohio, Inc., 83 F. Supp.2d 1197, 1198 (D.Kan. 1999); see Stranger Creek v. Dakotah, Inc., 24 F. Supp.2d 1215, 1216 (D.Kan. 1998). Often, the court where the latter case was filed will issue a stay of proceedings until the first court decides where jurisdiction is proper. See, e.g., Ed Tobergte Assocs., 83 F. Supp.2d at 1199-2000. "The principle underlying the [first-filed] rule is to avoid duplicative litigation. . . ." Id. at 1198.
In the instant case, Defendant McXtraWorld filed suit in California before Plaintiff filed suit in Kansas. The two cases involve "essentially the same issues and litigants." Id. at 1198. Judge Moreno of the Central District of California has ruled that jurisdiction and venue are proper in California. See McXtraWorld of S. Cal., LLC v. GraphiCard Sys. Int'l, No. CV 00-09523 CM, slip op. at 5-6 (Dec. 14, 2000 Cent. D. Ca.). Because the California case was the first-filed case, this court may decline to exercise jurisdiction.
Plaintiff argues that because the Kansas action involves a party who is not included in the California action, Plaintiff actually was the first to file. Judge Moreno in the Central District of California rejected this argument, and this court will not reconsider the issue. See McXtraWorld of S. Cal., LLC v. GraphiCard Sys. Int'l, No. CV 00-09523 CM, slip op. at 5-6 (Dec. 14, 2000 Cent. D. Ca.).
Plaintiff argues that because the parties are not identical in the Kansas action and the California action, the court should not dismiss or transfer the Kansas action. The court finds this argument unpersuasive. First, the parties do not need to be identical. See Stranger Creek, 24 F. Supp.2d at 1216. Second, McXtraWorld is a company comprised of MOASC and at least two other cooperative associations. McXtraWorld was formed for the purpose of launching Plaintiff's hardware and software system. The court concludes that MOASC and McXtraWorld are essentially the same litigants.
The court notes that the Kansas action involves a party that the California action does not involve, Defendant MOASC. Because of the additional party, the court elects not to dismiss the case, but instead to transfer venue. 28 U.S.C. § 1404(a) gives district courts the discretion to transfer a case to another district: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." In the interest of justice, the court transfers venue to the Central District of California.
IT IS, THEREFORE, BY THE COURT ORDERED that Defendants' motion to transfer venue is granted and Defendants' request for oral argument is denied. The clerk is directed to transfer the case to the United States District Court for the Central District of California.
Copies of this order shall be mailed to counsel of record.
IT IS SO ORDERED.