DRK Photo v. John Wiley & Sons Incorporated et al

Filing 27

ORDER DENYING defendant's motion to dismiss or transfer (doc. 18) on grounds of prematurity. Signed by Judge Frederick J Martone on 11/18/2011.(KMG)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 ) ) ) Plaintiff, ) ) vs. ) ) John Wiley & Sons, Inc., and John Doe) ) Printers 1-10, ) ) Defendants. ) ) DRK Photo, a sole proprietorship, 9 10 11 12 13 14 No. CV 11-08133-PCT-FJM ORDER 15 We have before us defendant John Wiley & Sons, Inc.'s ("Wiley") motion to dismiss 16 or transfer (doc. 18), plaintiff's response (doc. 22), and defendant's reply (doc. 23). Wiley 17 asks that we transfer this case to the United States District Court for the Southern District of 18 New York. 19 Wiley filed an action in the Southern District of New York on August 5, 2011, 20 seeking a declaration that it is not liable to DRK for fraud or copyright infringement. DRK 21 Photo ("DRK") filed this case on August 25, 2011, alleging copyright infringement. (Doc. 22 1). Wiley argues we should dismiss or transfer this case because the New York action was 23 filed first. 24 The first-to-file rule allows us to "decline jurisdiction over an action when a complaint 25 involving the same parties and issues has already been filed in another district." Pacesetter 26 Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). Exceptions to the rule 27 include bad faith, anticipatory suit, and forum shopping. Alltrade, Inc. v. Uniweld Prods., 28 1 Inc., 946 F.2d 622, 628 (9th Cir. 1991); Employers Ins. of Wausau v. Fox Entertainment 2 Group, Inc., 522 F.3d 271, 275-76 (2d Cir. 2008) (exceptions are balance of convenience and 3 special circumstances, including improper anticipatory declaratory judgment action). When 4 the first-to-file rule applies, "the second district court has discretion to transfer, stay, or 5 dismiss the second case in the interest of efficiency and judicial economy." Cedars-Sinai 6 Med. Center v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997). "[W]here the first-filed action 7 presents a likelihood of dismissal, the second-filed suit should be stayed, rather than 8 dismissed." Alltrade, 946 F.2d at 629. 9 The parties agree that the first-to-file rule applies, but DRK contends that an exception 10 applies and, as a result, we should deny Wiley's motion or defer ruling. A complaint seeking 11 only declaratory relief may be categorized as an anticipatory suit if it is "filed in response to 12 a direct threat of litigation that gives specific warnings as to deadlines and subsequent legal 13 action." Employers Ins. of Wausau, 522 F.3d at 276. The first court should determine 14 whether an exception applies and which forum will hear the case. See, e.g., MSK Ins., Ltd. 15 v. Employers Reinsurance Corp., 212 F. Supp. 2d 266, 267 (S.D.N.Y. 2002). 16 Wiley's complaint in the Southern District of New York was dismissed with leave to 17 amend. DRK's motion to dismiss on grounds of an exception to the first-to-file rule was 18 denied with leave to renew. Wiley filed an amended complaint on November 2, 2011 and 19 DRK resubmitted its motion to dismiss. This motion is currently pending before the 20 Southern District of New York. Once that motion is decided, either we will transfer this case 21 to New York, or the New York court will transfer that case here. It is thus premature to 22 decide the motion to dismiss or transfer now. 23 24 25 IT IS THEREFORE ORDERED DENYING defendant's motion to dismiss or transfer (doc. 18) on grounds of prematurity. DATED this 18th day of November, 2011. 26 27 28 -2-

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