Opinion
02 CIV. 3691 (DLC)
November 12, 2002
Russell H. Falconer, Paul J. Reilly, Kimberly J. McGraw, Baker Botts LLP, New York, New York, Attorneys for the Plaintiff.
Robert A. Jaffe, Bartholomew L. McLeay, Richard P. Jeffries, New York, New York, Attorneys for the Defendant.
OPINION AND ORDER
Defendant First National Bank of Omaha ("FNBO") moves to dismiss this declaratory judgment action in favor of a later filed action pending in the District of Nebraska, or in the alternative, to transfer this action to Nebraska. These motions are denied.
BACKGROUND
The relevant facts are few. On April 10, 2002, the defendant sent the plaintiff Mastercard International Incorporated ("Mastercard") a letter demanding that Mastercard "immediately" cease and desist using the mark One Smart to identify certain credit card products and services, asserting that its use infringed the defendant's mark Smart One. Before the ten days specified in the letter for a response had elapsed, Mastercard requested additional information. When it received the requested information, it indicated that it would provide a response in a few days. A Mastercard executive also contacted the defendant and requested a conference to discuss the trademark dispute and to avoid litigation. In the ensuing telephone conference, Mastercard represented that it would send FNBO information in order to continue their discussions.
On May 15, 2002, Mastercard filed this declaratory judgment action. Mastercard did not serve the complaint, but FNBO quickly learned of the filing as a result of press inquiries. FNBO was angered by the filing, and the parties made only feeble efforts thereafter to continue their discussions.
On July 30, 2002, FNBO filed its own lawsuit alleging trademark infringement in the District of Nebraska. It served Mastercard on August 5, 2002. At that point, Mastercard served FNBO with the May 15 complaint.
DISCUSSION
The relevant law is well established. Pursuant to the "first filed" rule, "where an action is brought in one federal district court and a later action embracing the same issue is brought in another federal court, the first court has jurisdiction to enjoin the prosecution of the second action." City of New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir. 1991) (citation omitted). Such an injunction should not issue, however, where "there are special circumstances which justify giving priority to the second action." Id. (citation omitted). Filing a declaratory judgment action in response to a letter giving notice of an intent to bring suit may in some circumstances constitute an exception to the first filed rule. See SS Candies, Inc. v. Hershey Foods Corp., No. 00 CIV. 5243 (DLC), 2000 U.S. Dist. LEXIS 13975, at *3-*4 (S.D.N.Y. Sept. 26, 2000) (collecting cases). See also Citigroup Inc. v. City Holding Co., 97 F. Supp.2d 549, 555 (S.D.N.Y. 2000).
FNBO has not shown that special circumstances exist in this case to justify an exception to the principle that the first filed action should be given priority. FNBO never made an explicit threat of litigation and inexplicably waited more than two months after being sued to file its own lawsuit. While it is undisputed that Mastercard filed this lawsuit in response to FNBO's letter, there were no meaningful settlement discussions between the parties such that Mastercard can be accused of using those discussions to lull FNBO into delaying the filing of its own lawsuit while Mastercard prepared to file the first suit. Finally, Mastercard filed suit in a location with a significant connection to the litigation, undermining any assertion that this forum has been chosen for an improper purpose. Mastercard's delay in serving FNBO, while weighing in favor of FNBO's motion, is insufficient in these circumstances to support dismissal of the lawsuit.
FNBO has moved in the alternative to transfer this lawsuit to Nebraska pursuant to 28 U.S.C. § 1404 (a). Section 1404(a) allows for a transfer of venue "[f]or the convenience of parties and witnesses, [and] in the interest of justice." Such motions are in the court's discretion to grant or deny and are "`determined upon notions of convenience and fairness on a case-by-case basis.'" Hall v. South Orange, 89 F. Supp.2d 488, 493 (S.D.N.Y. 2000) (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992)). Deference is ordinarily given to plaintiff's choice of venue, but the plaintiff's choice is entitled to substantially less deference when the "operative facts upon which the litigation is brought bear little material connection to the chosen forum." Berman v. Informix Corp., 30 F. Supp.2d 653, 659 (S.D.N.Y. 1998) (citation omitted); see also Invivo Research, Inc. v. Magnetic Resonance Equip. Corp., 119 F. Supp.2d 433, 438 (S.D.N.Y. 2001); ZPC 2000, Inc. v. SCA Group, Inc., 86 F. Supp.2d 274, 280 (S.D.N.Y. 2000).
To determine whether a transfer is warranted, it is necessary to determine first whether the case could have properly been brought in the transferee court. Berman, 30 F. Supp.2d at 656. If the transferee court appears to have jurisdiction over the case, the following factors are weighed:
(1) the convenience of witnesses, (2) the convenience of the parties, (3) the location of relevant documents and the relative ease of access to sources of proof, (4) the locus of operative facts, (5) the availability of process to compel the attendance of unwilling witnesses, (6) the relative means of the parties, (7) the forum's familiarity with the governing law, (8) the weight accorded the plaintiff's choice of forum, and (9) trial efficiency and the interest of justice, based on the totality of the circumstances.Id. at 657; see also Lighting World, Inc. v. Birchwood Lighting, Inc., No. 01 Civ. 4751 (BSJ), 2001 U.S. Dist. LEXIS 16981, at *10 (S.D.N.Y. Oct. 16, 2001).
It is undisputed that this case could have been brought in Nebraska. None of the factors, however, weigh to any significant degree in the defendant's favor. For example, the operative facts that will determine this litigation exist in both districts. Critical witnesses exist in both districts, as do relevant documents. While Mastercard may have greater financial resources, FNBO has not shown that it is unable to litigate effectively in this forum. In brief, none of the pertinent factors suggest that this is the appropriate case in which to disturb the presumption in favor of plaintiff's choice of forum.
CONCLUSION
The defendant's motions to dismiss and transfer are denied.