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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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiff,
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vs.
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John Wiley & Sons, Inc., and John Doe)
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Printers 1-10,
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Defendants.
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DRK Photo, a sole proprietorship,
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No. CV 11-08133-PCT-FJM
ORDER

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We have before us defendant John Wiley & Sons, Inc.'s ("Wiley") motion to dismiss
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or transfer (doc. 18), plaintiff's response (doc. 22), and defendant's reply (doc. 23). Wiley
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asks that we transfer this case to the United States District Court for the Southern District of
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New York.
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Wiley filed an action in the Southern District of New York on August 5, 2011,
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seeking a declaration that it is not liable to DRK for fraud or copyright infringement. DRK
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Photo ("DRK") filed this case on August 25, 2011, alleging copyright infringement. (Doc.
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1). Wiley argues we should dismiss or transfer this case because the New York action was
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filed first.
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The first-to-file rule allows us to "decline jurisdiction over an action when a complaint
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involving the same parties and issues has already been filed in another district." Pacesetter
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Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). Exceptions to the rule
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include bad faith, anticipatory suit, and forum shopping. Alltrade, Inc. v. Uniweld Prods.,
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Inc., 946 F.2d 622, 628 (9th Cir. 1991); Employers Ins. of Wausau v. Fox Entertainment

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Group, Inc., 522 F.3d 271, 275-76 (2d Cir. 2008) (exceptions are balance of convenience and

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special circumstances, including improper anticipatory declaratory judgment action). When

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the first-to-file rule applies, "the second district court has discretion to transfer, stay, or

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dismiss the second case in the interest of efficiency and judicial economy." Cedars-Sinai

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Med. Center v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997). "[W]here the first-filed action

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presents a likelihood of dismissal, the second-filed suit should be stayed, rather than

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dismissed." Alltrade, 946 F.2d at 629.

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The parties agree that the first-to-file rule applies, but DRK contends that an exception

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applies and, as a result, we should deny Wiley's motion or defer ruling. A complaint seeking

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only declaratory relief may be categorized as an anticipatory suit if it is "filed in response to

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a direct threat of litigation that gives specific warnings as to deadlines and subsequent legal

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action." Employers Ins. of Wausau, 522 F.3d at 276. The first court should determine

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whether an exception applies and which forum will hear the case. See, e.g., MSK Ins., Ltd.

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v. Employers Reinsurance Corp., 212 F. Supp. 2d 266, 267 (S.D.N.Y. 2002).

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Wiley's complaint in the Southern District of New York was dismissed with leave to

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amend. DRK's motion to dismiss on grounds of an exception to the first-to-file rule was

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denied with leave to renew. Wiley filed an amended complaint on November 2, 2011 and

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DRK resubmitted its motion to dismiss. This motion is currently pending before the

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Southern District of New York. Once that motion is decided, either we will transfer this case

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to New York, or the New York court will transfer that case here. It is thus premature to

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decide the motion to dismiss or transfer now.

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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.

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