Beijing Sinotau Medical Research Co., Ltd v. Navidea Biopharmaceuticals, Inc. et al

Filing 36

MEMORANDUM ORDER re 21 Joint MOTION to Stay is GRANTED. Status report due by 3/15/17. Signed by Judge Leonard P. Stark on 3/1/17. (ntl)

IN THEUNITED STATES DISTRICT·COURT
FOR THE DISTRICT OF DELAWARE
BEIJING SINOTAU MEDICAL RESEARCH
CO., LTD.,
· .Plaintiff,

v.

C.A. No. 17-110-LPS-MPT

NAVIDEA BIOPHARMACEUTICALS, INC.
and CARDINAL HEALTH 414,.LLC~
Defendants.

MEMORANDUM ORDER
Pending before the .Court is Defendants·' Joint .Motion to Stay. (D.I. 22) ("Motion") For .
the reasons stated below, Defendants' Motion is GRANTED.
On February 1, 2017, Defendant Navidea Biophannaceuticals, fuc. ("Navidea") sued
Plaintiff Beijing Sinotau Medical Research Co., Ltd. ("Sinotau") in the United States District
Court forthe Southern District of Ohio ("S.D. Ohio"). The next day, 011February 2, 2017,
Sinotau filed the instant action against N avidea ·and co-Defendant Cardinal Health 414, LLC
("Cardinal"). On that same day, February 2, Sinotau filed a tnotfon for temporary restraining.
order and preliminary injunction, which remains pending.
On February 18, Navidea and Cardinal jointly filed their Motion to stay. Sinotau filed its
briefin opposition to the Motion on February22. On February 28, the Court received status
reports from the parties.
The Court agrees with Defendants that this action should be stayed in light of the "first'.

filed" rule, which provides that "in all cases of federal concurrent jurisdiction, the court which

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. first has possession of the subject must decide it." Crosley Corp. v. Hazeltine Corp., 122 ·F.2d
925, 929 (3d.Cir. 1941). "The first-filed rule encourages soundjudicial administration and
promofos comity among federal courts of equal rank. It gives a court 'the power' to enjoin the
,gubsequent prosecution of proceedings involving the same pai.i:ies and the same issues already
before another.district court." E.E.O.C. v. Univ. ofPa., B50 F.2d 969,.971 (3d Cir. 1988).
Here, it cannothe disputed thatthe S.D. Ohio action was filed before the instant action
was filed in this Court. (See, e.g.., D.I. 32 at 2 (Sinotau: "One day before Siriotau filed its
Complaint in this Court, on February 1, 2017, Navidea filed.a similar lawsuit in the Southern
District of Ohio against Sinotau .... ")).Both actions relate.to the same Asset-Purchase
. Agreement ("APA") between Navidea and Cardinal as well as the same Exclusive Licensing and
DiStribution Agreement ("China Agreement") relating to Sinotau and Navidea. As Defendants
put it, "the Ohiff Action and this action involve the same exact ultimate issue - whether Sinotau ·
(a Chinese company) should be able to stop N avidea and Cardinal Health (who are both
headquartered in Ohio) from closing a transaction that was negotiated and executed in Ohio."
(D.I. 33 at 1)
Sinotau has failed to

demonst~ate

that the "rare or extraordinary circumstances" under

which the Court should decline to follow the first-filed rule are existenthere. Univ. ofPa.; 850
F.2d at 972. Sinotau's contention that the Court should not apply the first-filed rule because the
S.D. Ohio action is an anticipatory suit filed in bad faith is unpersuasive. As of February 1,
. 2017, N avidea was not in receipt of specific, concrete· details of the action Sinotau prepared to
file here. See, e.g., Woodbolf.Distribution, LLC v. Natural Alts. Int'!, Inc., 2013 WL 247041, at
*4 (D. Del. Jan . .23, 2013); see also TSMC Tech., Inc.

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v. Zond, LLC, 2014 WL 7251188, at *8 (D.

Del. Dec. 19, 2014) (stating that even if first-filed suit is anticipatory that may not be, "in and of.
itself, ... a sufficient basis to deviate from the first~filed rule") (internal citation omitted).
An additional note is in ·order. While the Court is not at this time making a decision on

the merits of the motion for a temporary restraining order and preliminary injunction, it appears
from Sinotau' s status report that the relief it seeks from this Court vividly illustrates the necessity
for application of the first-filed rule. Sinotau suggests that the presiding judge in S.D. Ohio is
violating Federal Rule of Civil Procedure 65 by extending a temporary restraining order multiple
times and complains that, in the absence of action from this Court, "the AP A is certain to close
with no Court evaluating the factors for.injunctive relief, including likelihood of success on the
merits." (D.I. 32 at 5) These are issues that should be addressed (if at all) to one, and only one,
district court at a time, and here it is plain that the appropriate district court in which to raise such
concerns is S.D. Ohio, which first had possession ofthe disputes between the parties.
Accordingly, IT IS HEREBY ORDERED that: (1) Defendants' Motion to Stay (D.I. 22)
is GRANTED, and (2) the parties shall file a joint status report no later than March 15, 2017 ..

~r11+:

HONORABLELEONARDP.STARK
UNITED STATES DISTRICT COURT

March 1, 2017
Wilmington, Delaware

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