Opinion
Civil No. 05-CV-1676-L(NLS).
April 11, 2006
ORDER GRANTING MOTION TO TRANSFER [doc. #4-2]; DENYING MOTION TO DISMISS [doc. 4-1]; and DIRECTING TRANSFER OF THIS ACTION
Defendant Max Rack, Inc. ("Max Rack") filed a motion to dismiss or in the alternative to transfer this case to the Southern District of Ohio. The matter has been fully briefed and the Court finds this matter suitable for determination on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1(d)(1). For the reasons set forth below, the Court enters the following decision.
Background
On August 19, 2005, Max Rack filed an action for infringement of its patents, United States Patent Nos. 5,215,510 ("`510 Patent") and 5,669,859 ("`859 Patent") against Hoist Fitness Systems, Inc. ("Hoist") in the Southern District of Ohio. On August 24, 2005, Hoist filed the present action against Max Rack seeking declaratory judgment that Hoist does not infringe the Max Rack patents, the patents are invalid, and the patents are unenforceable.
As noted above, Max Rack seeks to have this action dismissed because Max Rack is not subject to personal jurisdiction in California arguing that neither general or specific jurisdiction should be asserted in the present circumstances. Alternatively, Max Rack contends the case should be transferred to the Southern District of Ohio under 28 U.S.C. § 1404(a). Because the Court finds transfer of the action to the Southern District of Ohio appropriate under the first to file rule and section 1404, the Court will not review whether jurisdiction of Max Rack can or should be exercised in California.
Motion to Transfer Venue and the First-to-File Rule
When two actions involving similar parties and issues are commenced in separate forums, a court may exercise its discretion under the venue statute to transfer one of the actions; in so doing, preference is given to the first-filed plaintiff's choice of forum under the "first-to-file" rule. Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997); Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir. 1991); Serco Servs. Co. v. Kelley Co., 51 F.3d 1037, 1039 (Fed Cir. 1995). But a party to the later-filed action may request the court to disregard the first-to-file rule based on certain equitable factors such as bad faith, anticipatory filing, forum shopping, judicial economy, or the convenience of the parties and witnesses. Alltrade, 946 F.2d at 628-29; Serco, 51 F.3d at 1039; Genentech, Inc. v. Eli Lilly Co., 998 F.2d 931, 938 (Fed. Cir. 1993), overruled on other grounds by Wilton v. Seven Falls, Co., 515 U.S. 277, 281-82 (1995). Accordingly, "`the trial court's discretion tempers the preference for the first-filed suit, when such preference should yield to the forum in which all interests are best served.'" Serco, 51 F.3d at 1039 ( quoting Genentech, 998 F.2d at 938). Here, Max Rack argues that the Ohio case was first filed, and there are no equitable factors that take the action outside the first-to-file rule. Moreover, judicial economy counsels in favor of transferring this action to the Southern District of Ohio under 28 U.S.C. § 1404(a).
Hoist notes that it has filed a motion in the Southern District of Ohio requesting that it undertake the venue analysis as the venue where the first action was filed. The court has received notice of the decision entered in the Max Rack v. Hoist Fitness case filed in the Southern District of Ohio. ( See Notice of Ruling in Related Case, doc. #20). The Ohio court affirmed and adopted the magistrate judge's Report and Recommendation in its entirety; overruled Hoist's motion for reconsideration of the Report and Recommendation; and denied Hoist's motion to change venue. (Exh. A, Notice of Ruling). As a result of that decision, the Ohio case is proceeding and will not be transferred to the Southern District of California.
Hoist notes in its opposition to Max Rack's motion to dismiss or to transfer venue that "[a]s a practical matter, Hoists [sic] declaratory judgment action along with Max Rack's contemporaneously filed patent infringement claim will be consolidated in one venue: Ohio or California." (Opp. at 7). The Court agrees.
Hoist has provided no basis for this Court to disregard the first-to-file rule. Because the Ohio court has considered carefully and fully the factors for a discretionary transfer under 28 U.S.C. § 1404(a) and found that transfer to the Southern District of California not warranted, and having balanced the material circumstances of this case in light of the factors relevant to motions to transfer under section 1404(a), the Court finds that Max Rack has satisfied its burden of demonstrating that transfer is appropriate. Accordingly, the first-to-file rule requires the present action to be transferred to the Southern District of Ohio and the motion to transfer be granted.
Conclusion
Based on the foregoing, IT IS ORDERED granting defendant's motion to transfer the action to the Southern District of Ohio [doc. #4-2]. IT IS FURTHER ORDERED denying as moot defendant's motion to dismiss. [doc. #4-1]. IT IS FURTHER ORDERED directing the Clerk of the Court to transfer the file in this case to the United States District Court for the Southern District of Ohio.
IT IS SO ORDERED.