Travel Spike, LLC v. Travel Ad Network, Inc.

Filing 43

ORDER granting Plaintiff's Request to withdraw its Status Report and the Status Report 39 is deemed WITHDRAWN. Defendant's 5 Motion to Transfer the Case is GRANTED. The Clerk shall TRANSFER this action to the United States District Cour t for the Eastern District of New York. In light of this ruling, Defendant's Motion to Dismiss [5-1], Defendant's Motion to Stay Discovery and Pretrial Deadlines Pending Resolution of Motion to Dismiss or Transfer 12 , Defendant's 40 Motion to Strike Status Report, and Plaintiff's 42 Motion Seeking an Order Allowing Discovery to Commence and Compelling Defendant to respond to discovery are DENIED, as moot. Signed by Judge Richard W. Story on 3/15/12. (cem)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
TRAVEL SPIKE, LLC,
Plaintiff,
v.
TRAVEL AD NETWORK, INC.,
Defendant.

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CIVIL ACTION NO.
1:11-CV-3199-RWS

ORDER
This case is before the Court for consideration of Defendant’s Motion to
Dismiss, or, in the alternative, Transfer the Case [5], Defendant’s Motion to
Stay Discovery and Pretrial Deadlines Pending Resolution of Motion to
Dismiss or Transfer [12], Defendant’s Motion to Strike Status Report [40], and
Plaintiff’s Motion Seeking an Order Allowing Discovery to Commence and
Compelling Defendant to Respond to Discovery [42]. After reviewing the
record, the Court enters the following Order.
As an initial matter, Plaintiff filed a Response [41] to Defendant’s
Motion to Strike Status Report [40] in which Plaintiff requested permission to
withdraw its Status Report [39]. After due consideration, Plaintiff’s request is

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GRANTED and the Status Report [39] is deemed WITHDRAWN and
Defendant’s Motion to Strike [40] is DENIED as moot.
The Complaint was filed in the present case on the same day that a
Complaint was filed by Defendant against Plaintiff in the United States District
Court for the Eastern District of New York (the “New York case”). The New
York case was filed earlier than the present action. Defendant filed a Motion to
Dismiss or, in the Alternative, to Transfer the Case to the Eastern District of
New York [5] on September 28, 2011. On October 13, 2011, Defendant filed a
Motion to Stay Discovery and Pretrial Deadlines Pending Resolution of the
Motion to Dismiss or Transfer [12]. In that Motion, Defendant seeks to have
the discovery and disclosure requirements in the present case stayed until a
decision is made concerning whether this case shall proceed in this Court or the
Eastern District of New York. Plaintiff filed a Motion Seeking an Order
Allowing Discovery to Commence and Compelling Defendant to Respond to
Discovery on March 13, 2012 requesting that the Court order that discovery
proceed in the present case.
In Defendant’s Motion to Transfer the Case [5-2], Defendant argues that
under the “first-filed” rule, this case should be transferred to the Eastern District
of New York, and therefore, discovery should not proceed in this action. “The
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‘first-filed’ rule provides that ‘when parties have instituted
competing or parallel litigation in separate courts, the court initially having
jurisdiction should hear the case.’ ” Barnett v. Alabama, 171 F. Supp. 2d 1292,
1296 (S.D. Ala. 2001) (decision of three judge panel) (quoting Allstate Ins. Co.
v. Clohessy, 9 F. Supp. 2d 1314, 1315-16 (M.D. Fla. 1998); see also Manuel v.
Convergys Corp., 430 F.3d 1132, 1135 (11th Cir. 2005) (“Where two actions
involving overlapping issues and parties are pending in two federal courts, there
is a strong presumption across the federal circuits that favors the forum of the
first-filed suit under the first-filed rule.”). “The rule rests on principles of
comity and sound judicial administration” and serves “to maximize judicial
economy and minimize embarrassing inconsistencies by prophylactically
refusing to hear a case raising issues that might substantially duplicate those
raised by a case pending in another court.” Cadle Co. v. Whataburger of Alice,
Inc., 174 F.3d 599, 604 (5th Cir. 1999). In the Eleventh Circuit, “the party
objecting to jurisdiction in the first-filed forum [must] carry the burden of
proving ‘compelling circumstances’ to warrant an exception to the first-filed
rule.” Manuel, 430 F.3d at 1135; see also Merrill Lynch, Pierce, Fenner &
Smith, Inc. v. Haydu, 675 F.2d 1169, 1174 (11th Cir. 1982) (“In [the] absence

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of compelling circumstances, the court initially seized of a controversy should
be the one to decide the case.”).
In this case, it is beyond dispute that there is substantial overlap between
the case pending in this Court and the New York case. The parties do not
dispute that the New York case was filed in advance of the present case.
Plaintiff contends that the New York case was filed in a strategic race to the
courthouse.
“‘[T]he ‘first to file rule’ not only determines which court may decide
the merits of substantially similar issues, but also establishes which court may
decide whether the second suit filed must be dismissed, stayed or transferred
and consolidated.’ ” Cadle, 174 F.3d at 606 (quoting Sutter Corp. v. P & P
Indus., Inc., 125 F.3d 914, 920 (5th Cir. 1997)). Courts applying this rule
generally agree “that the court in which an action is first filed is the appropriate
court to determine whether subsequently filed cases involving substantially
similar issues should proceed.” Id. (quotations omitted); e.g., Perkins v. Am.
Nat. Ins. Co., 446 F. Supp. 2d 1350, 1353 (M.D. Ga. 2006) (“[U]nder the
‘first-filed rule,’ the court where the subsequently filed action has been filed
should defer to the court where the first action was filed to allow that court to
decide whether it should exercise jurisdiction over both cases in a consolidated
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action.”); Street v. Smith, 456 F. Supp. 2d 761, 768 (S.D. Miss. 2006) (same);
Kate Aspen, Inc. v. Fashioncraft-Excello, Inc., 370 F. Supp. 2d 1333, 1338
(N.D. Ga. 2005) (“[T]he first-filed rule generally requires the first court to
decide whether the first-filed rule should apply, or whether a narrow exception
to the rule that only applies in ‘compelling circumstances,’ favors transfer of the
first-filed case to the second court for consolidation.” (citations omitted)).
Thus, once the Court determines that a likelihood of substantial overlap exists
between the two suits, it is no longer up to the second-filed court to resolve the
question of whether both should be allowed to proceed. Cadle, 174 F.3d at 606;
Mann Mfg. v. Hortex, Inc., 439 F.2d 403, 408 (5th Cir. 1971).1 Rather, “the
proper course of action [is] for the court to transfer the case to the [first-filed]
court to determine which case should, in the interests of sound judicial
administration and judicial economy, proceed.” Cadle, 174 F.3d at 606.
Because, as noted above, it is beyond dispute that the present action postdates the New York case, and it is clear that there is a likelihood of substantial
overlap between the two cases, the United States District Court for the Eastern

1

In Bonner v. City of Prichard, 661 F.2d 1206,1209 (11th Cir. 1981), the
Eleventh Circuit adopted as binding precedent all Fifth Circuit decisions handed down
prior to October 1, 1981.
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District of New York is the appropriate court to decide whether the this action
should be allowed to proceed, or whether it should be consolidated with the
New York case. Given the Court’s authority under 28 U.S.C. § 1406(a) to
transfer a case to another district or division “in which it could have been
brought,” the Clerk is directed to TRANSFER this action to the United States
District Court for the Eastern District of New York.
Conclusion
Based on the foregoing, Defendant’s Motion to Transfer the Case [5-2] is
GRANTED. The Clerk shall TRANSFER this action to the United States
District Court for the Eastern District of New York. In light of this ruling,
Defendant’s Motion to Dismiss [5-1], Defendant’s Motion to Stay Discovery
and Pretrial Deadlines Pending Resolution of Motion to Dismiss or Transfer
[12], Defendant’s Motion to Strike Status Report [40], and Plaintiff’s Motion
Seeking an Order Allowing Discovery to Commence and Compelling
Defendant to Respond to Discovery [42] are DENIED, as moot.
SO ORDERED, this 15th day of March, 2012.

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RICHARD W. STORY
United States District Judge
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