Opinion
Case No. CV 11-8675-JFW (SSx)
12-13-2011
Bibiji Inderjit Kaur Puri v. Hearthside Food Solutions LLC, et al.
CIVIL MINUTES -- GENERAL PRESENT: HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE Shannon Reilly
Courtroom Deputy None Present
Court Reporter ATTORNEYS PRESENT FOR PLAINTIFFS:
None ATTORNEYS PRESENT FOR DEFENDANTS:
None PROCEEDINGS (IN CHAMBERS): ORDER GRANTING HEARTHSIDE FOOD SOLUTIONS, LLC'S MOTION TO DISMISS, STAY OR TRANSFER [filed 11/14/11; Docket No. 12]; and
ORDER DENYING WITHOUT PREJUDICE HEARTHSIDE FOOD SOLUTIONS, LLC'S MOTION TO DISMISS COMPLAINT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(B)(6) [filed 11/14/11; Docket No. 11]
On November 14, 2011, Defendant Hearthside Food Solutions, LLC ("Defendant") filed a Motion to Dismiss, Stay, or Transfer and a Motion to Dismiss Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6). On November 28, 2011, Plaintiff Bibiji Inderjit Kaur Puri ("Plaintiff") filed her Oppositions. On December 5, 2011, Defendant filed Replies. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court finds that these matters are appropriate for decision without oral argument. The hearing calendared for December 19, 2011 is hereby vacated and the matters taken off calendar. After considering the moving, opposing, and reply papers and the arguments therein, the Court rules as follows:
I. Factual and Procedural Background
On October 19, 2011, Plaintiff filed this action against Defendant, alleging claims for: (1) federal statutory and common law trademark infringement of "yogi" and "peace cereal" trademarks; (2) violation of Section 43(a) of the Lanham Act; (3) unfair competition; (4) unfair trade practices; (5) imposition of constructive trust; (6) declaratory relief; (7) assignment of trademark applications and registrations to all "peace" marks; and (8) cancellation of registered marks. In her Complaint, Plaintiff alleges that she is the rightful owner of the "yogi" marks used on tea products and the "peace cereal" marks used on cereal products, and that Defendant's use of those marks is a violation of the Lanham Act and various state statutory and common law provisions.
On October 13, 2011, Defendant filed an action against Plaintiff in the United States District Court for the District of Oregon, seeking a declaration of trademark non-infringement pursuant to 28 U.S.C. § 2201 (the "Oregon action"). In its Complaint in the Oregon action, Defendant alleges that it is the authorized owner of the "peace cereal" marks, the "golden temple" marks, and the authorized user and licensee of the "yogi" marks.
II. Legal Standard
A. First-to File Rule
Under the well-established "first to file rule," a district court may transfer, stay, or dismiss an action when a similar complaint has already been filed in another district court. See, e.g., Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 623 (9th Cir. 1991). The rule follows the "generally recognized doctrine of federal comity which permits a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district." Pacesetter Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982). In applying this rule, the Court must consider three threshold factors: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the similarity of the issues. See, e.g., Alltrade, 946 F.2d at 625; see also Ward v. Follett Corp., 158 F.R.D. at 645, 648 (N.D. Cal. 1994). "The 'first to file' rule normally serves the purpose of promoting efficiency well and should not be disregarded lightly." Church of Scientology of California v. U.S. Dept. of the Army, 611 F.2d 738, 750 (9th Cir. 1979). Thus, "unless compelling circumstances justify departure from the rule, the first-filing party should be permitted to proceed without concern about a conflicting order being issued in the later-filed action." Guthy-Renker Fitness, LLC, v. Icon Health & Fitness, Inc., 179 F.R.D. 264, 269 (C.D. Cal. 1998); see also Pacesetter Systems, 678 F.2d at 95 (noting that "[n]ormally sound judicial administration would indicate that when two identical actions are filed in courts of concurrent jurisdiction, the court which first acquired jurisdiction should try the lawsuit and no purpose would be served by proceeding with a second action"). However, the first-to-file rule "is not a rigid or inflexible rule to be mechanically applied, but rather is to be applied with a view to the dictates of sound judicial administration." Pacesetter Systems, 678 F.2d at 95. "The circumstances under which an exception to the first-to-file rule typically will be made include bad faith, anticipatory suit, and forum shopping." Alltrade, 946 F.2d at 628 (internal citations omitted).
B. Section 1404(a) Transfer
Pursuant to 28 U.S.C. § 1404(a), "[f]or 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 may have been brought." 28 U.S.C. § 1404(a). The purpose of Section 1404(a) is to "prevent the waste 'of time, energy and money' and 'to protect litigants, witnesses and the public against unnecessary inconvenience and expense.'" Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (quoting Continental Grain Co. v. The Barge FBL-585, 364 U.S. 19, 26-27 (1960)). "Under § 1404(a), the district court has discretion to adjudicate motions for transfer 'according to an individualized, case-by-case consideration of convenience and fairness.'" Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)).
"To support a motion for transfer the moving party must show: (1) that venue is proper in the transferor district; (2) that the transferee district is one where the action might have been brought; and (3) that the transfer will serve the convenience of the parties and witnesses and will promote the interest of justice." Goodyear Tire & Rubber Co. v. McDonnell Douglas Corp., 820 F. Supp. 503, 506 (C.D. Cal. 1992). Once the Court has determined that venue is proper in the transferor and transferee districts, the Court turns to "the central inquiry of a § 1404(a) motion" - the convenience of the parties and witnesses and the interests of justice." Joe Boxer Corp. v. R. Siskind & Co., Inc., 1999 WL 429549, at *8 (N.D. Cal. June 8, 1999). In determining the convenience of the parties and witnesses and the interests of justice, the Court may consider multiple factors, including, inter alia: (1) the plaintiffs' choice of forum; (2) the respective parties' contacts with the forum; (3) the contacts relating to the plaintiffs' claims for relief in the chosen forum; (4) the ease of access to sources of proof; (5) familiarity of each forum with applicable law; and (6) the availability of compulsory process to compel attendance of unwilling non-party witnesses. See, e.g., Jones, 211 F.3d at 498-99.
III. Discussion
A. This Action Should Be Transferred Under the First-to-File Rule.
District courts look to three threshold factors in deciding whether to apply the first-to-file rule: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the similarity of the claims. Ward, 158 F.R.D. at 648 (N.D.Cal. 1994). In this case, it is undisputed that the Oregon action was filed before this action, and that the parties in the two actions are identical. Plaintiff also does not dispute that the claims in the two actions "substantially overlap." Dumas v. Major League Baseball Properties, Inc., 52 F.Supp. 2d 1183, 1189 (S.D.Cal. 1999) (holding that the "substantial overlap" rule allows courts "to avoid the waste of duplication, to avoid rulings that trench upon the authority of sister courts, and to avoid piecemeal resolution of issues that call for a uniform result."), vacated on other grounds, 104 F.Supp. 2d 1224 (S.D. Cal. 2000), aff'd, 300 F.3d 1083 (9th Cir. 2002).
Plaintiff argues that this action should be considered the first filed because "the Central District of California was the first court to acquire jurisdiction over the parties" because Plaintiff served its Complaint on Defendant before Defendant served its Complaint in the Oregon action on Plaintiff. However, the Ninth Circuit has found this argument to be "without merit" and held that "[a] federal action is commenced by the filing of the complaint, not by service of process." Pacesetter Systems, 678 F.2d at 96 n. 3.
Plaintiff argues that the Oregon action should not be given priority because it was anticipatory of Plaintiff's action in this Court and constitutes forum shopping. However, Defendant's Oregon action is not anticipatory of Plaintiff's action because it seeks judgment on issues beyond the scope of Plaintiff's action, namely, the use and ownership of the "golden temple" marks. See, e.g., Kerr Corp. v. North American Dental Wholesalers, 2011 WL 4965111 (C.D. Cal. Oct. 18, 2011) (holding that defendant's declaratory judgment action sought a "benefit beyond the scope of what [the plaintiff] could be expected to bring suit for," and, thus, was non-anticipatory). In addition, Defendant's Oregon action does not constitute forum shopping or a "race to the courthouse" because it was filed only after Defendant engaged in substantial negotiations and communications with Plaintiff and settlement discussions proved futile. See, e.g., Summit Entertainment, LLC v. Bath & Body Works Brand Management, 2011 WL 2649973 (C.D. Cal. July 5, 2011) (holding that there was an absence of forum shopping where declaratory relief action was filed after settlement negotiations failed, in forum with which filer had substantial connections).
Therefore, the Court concludes that all three factors favor the application of the first-to-file rule in this action, and there is no applicable exception to the first-to-file rule. Because the claims alleged in the two actions are not identical, this Court will exercise its discretion and transfer - rather than dismiss - this action to the District of Oregon. See, e.g., Alltrade, 946 F.2d at 623 (holding that, under the "well-established" first-to-file rule, a district court may transfer, stay, or dismiss an action when a similar complaint has already been filed in another district court).
B. Alternatively, This Action Should Be Transferred Pursuant to Section 1404(a).
Even if this action was not subject to transfer to the United States District Court for the District of Oregon under the first-to-file rule, it would be transferrable pursuant to Section 1404(a). As an initial matter, neither party disputes that venue is proper in this District, or would also be proper in the District of Oregon. Upon review of the statutory and non-statutory factors to be considered in a Section 1404(a) transfer analysis, the only factor which appears to weigh against transfer is Plaintiff's choice of this District as the forum. Generally, courts afford the plaintiff's choice of forum substantial weight in a Section 1404(a) analysis. See, e.g., Decker, 805 F.2d at 843. In fact, the convenience of the parties and the witnesses are often the most important factors considered by the Court when deciding a motion to transfer under Section 1404(a). See, e.g., Los Angeles Memorial Coliseum Commission v. National Football League, 89 F.R.D. 497, 501 (C.D. Cal. 1981). However, "[c]onsideration of the interest of justice, which includes judicial economy, 'may be determinative to a particular transfer motion, even if the convenience of the parties and witnesses might call for a different result.'" Regents of the University of California v. Eli Lilly & Co., 119 F.3d 1559, 1565 (Fed. Cir. 1997) (quoting Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220-21 (7th Cir.1986) and citing Allen v. Scribner, 812 F.2d 426, 436-37 (9th Cir.1987)). "The pendency of related actions in the transferee forum is a significant factor in considering the interest of justice factor." Jolly v. Purdue Pharma L.P., 2005 WL 2439197, at *2 (S.D. Cal. Sept. 28, 2005) (citing A.J. Industries, Inc. v. United States Dist. Court for Cent. Dist., 503 F.2d 384, 389 (9th Cir. 1974)). "Litigation of related claims in the same tribunal is strongly favored because it facilitates efficient, economical and expeditious pre-trial proceedings and discovery and avoid duplicitous litigation and inconsistent results." Durham Prods, Inc. v. Sterling Film Portfolio, Ltd., Series A, 537 F. Supp. 1241, 1243 (S.D.N.Y. 1982) (quoting National Super Spuds, Inc. v. New York Mercantile Exchange, 425 F. Supp. 665, 667 (S.D.N.Y.1977)). "To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent." Continental Grain, 364 U.S. at 26.
Therefore, in this case, the pertinent question for the Court is not "whether this action would be more conveniently litigated in [the alternative forum], but whether it would be more convenient to litigate the [two] actions separately or in a coordinated fashion." Electronics For Imaging, Inc. v. Tesseron. Ltd., 2008 WL 276567, *2 (N.D. Cal. Jan 29, 2008) (transferring second-filed patent action to district where first-filed action was pending and finding that "the interest of justice and judicial economy would be promoted by transferring this case to Ohio to prevent duplicative and unnecessary effort"). The Court concludes that, given the substantial overlap in issues, witnesses, and documents, the interest of justice requires that this action and the Oregon action should be litigated together, and that these considerations strongly outweigh Plaintiff's choice of forum. See, e.g., International Business Machines Corp., v. Fair Isaac Corp., 2006 WL 726034, *3 (S.D.N.Y. Mar. 23, 2006) (transferring second-filed patent action to district where first-filed action was pending on Section 1404(a) grounds, and finding that the overlap of the issues and witnesses was a "compelling reason to have a single judicial officer preside over both cases" and finding that consideration of this and other factors outweighed the plaintiff's choice of forum).
Accordingly, this Court concludes that, pursuant to Section 1404(a), this action should be transferred to the District of Oregon.
IV. Conclusion
For all the foregoing reasons, Defendant's Motion to Dismiss, Stay, or Transfer is GRANTED. This action is hereby TRANSFERRED to the United States District Court for the District of Oregon. Defendant's Motion to Dismiss Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) is DENIED without prejudice to renewing its motion once the action has been transferred to the United States District Court for the District of Oregon.
IT IS SO ORDERED.