Republic Technologies (NA), LLC et al v. BBK Tobacco & Foods, LLP d/b/a HBI International

Filing 36

MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 10/26/2016. Mailed notice. (mgh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

REPUBLIC TECHNOLOGIES (NA),
LLC and REPUBLIC TOBACCO, L.P.,
Plaintiffs,
v.
BBK TOBACCO & FOODS, LLC d/b/a
HBI INTERNATIONAL,
Defendant.

)
)
)
)
)
)
)
)
)
)
)

No. 16 C 3401

MEMORANDUM OPINION AND ORDER
Before me is a motion by defendant BBK Tobacco & Foods LLP,
d/b/a HBI International (“HBI”) to transfer this action to the
U.S. District Court for the District of Arizona. For the reasons
below, the motion is denied.
I.
Plaintiffs Republic Technologies (NA), LLC and Republic
Tobacco, L.P. (together, “Republic”) filed this suit against HBI
in March 2016, seeking a declaratory judgment that HBI owns no
protectable interest in its trade dress, or that Republic has
not infringed HBI’s trade dress rights. HBI moved to dismiss the
complaint on the ground that there was no actual controversy
between the parties. On July 7, 2016, I granted HBI’s motion to
dismiss, without prejudice to Republic’s right to file an

amended complaint containing additional factual allegations
sufficient to demonstrate the existence of an actual controversy
between the parties.
On August 4, 2016, Republic filed an amended complaint. In
addition to its claim for declaratory relief, the amended
complaint asserts claims for unfair competition under the Lanham
Act, 15 U.S.C. § 1125(a), common law unfair competition, and
violation of the Illinois Uniform Deceptive Trade Practices Act,
815 ILCS 510. Meanwhile, on July 8, 2016 -- the day after I
granted HBI’s motion to dismiss -- HBI filed a separate suit
against Republic in the District of Arizona. HBI’s complaint
alleges federal claims for trademark infringement, 15 U.S.C. §
1114, “Federal False Designation of Origin and Representation,”
15 U.S.C. § 1125, and copyright infringement, as well as claims
under Arizona law for trademark infringement and unfair
competition. HBI did not inform Republic of the action until
three weeks later, on July 28, 2016. According to HBI, this was
because the parties’ counsel had “re-commenced settlement
communications immediately following this Court’s dismissal of
the initial complaint and after the filing of the Arizona
complaint and before service of the Arizona complaint.” Reply
Br. at 3.
Republic filed a motion to stay in the Arizona action. BBK
Tobacco & Foods LLP v. Republic Technologies (NA) LLC et al.,
2

No. 16 C 2263 (D. Ariz. filed Aug. 15, 2016), ECF No. 11. The
motion has not yet been decided. HBI filed a motion to dismiss
the amended complaint or to transfer this action to Arizona. 1
II.
“For 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 might have
been brought or to any district or division to which all parties
have consented.” 28 U.S.C. § 1404(a). “Courts may transfer a
case under Section 1404(a) when: (1) venue is proper in the
transferor district; (2) venue is proper in the transferee
district; (3) the transfer will serve the convenience of the
parties and witnesses; and (4) the transfer will serve the
interests of justice.” Hanover Ins. Co. v. N. Bldg,. Co., 891 F.
Supp. 2d 1019, 1025 (N.D. Ill. 2012). The movant bears the
burden of establishing that the transferee forum is clearly more
convenient. See, e.g., Coffey v. Van Dorn Iron Works, 796 F.2d
217, 219-20 (7th Cir. 1986).
HBI’s initial brief in support of its motion to dismiss or
transfer presents no argument in support of its request for
transfer. Although the brief recites the factors relevant to the

1

In a previous order, I
dismissal of the amended
LLC et al v. BBK Tobacco
No. 16 C 3401 (N.D. Ill.

denied HBI’s motion insofar as it sought
complaint. Republic Technologies (NA),
& Foods, LLP d/b/a HBI International,
Aug. 24, 2016), ECF No. 26.
3

inquiry under § 1404, it is only in its reply brief that HBI
attempts to show why these factors support transfer of the
litigation. This alone warrants denial of HBI’s motion. 2 See,
e.g., Baeco Plastics, Inc. v. Inacomp Fin. Servs., Inc., 51 F.3d
275 (7th Cir. 1995) (“A party’s principal argument must appear
in the opening brief, so that it may be answered. A litigant may
not throw down a gauntlet in the opening brief and reserve its
argument for the reply brief.”). Even on the merits, however,
HBI’s motion fails. Since the parties do not dispute the
propriety of venue in either district, the only question here is
whether transfer would be more convenient for the parties and
witnesses and would promote the interests of justice. I conclude
that it would not.
A.

Convenience of the Parties and Witnesses

In evaluating the convenience of the parties and witnesses,
courts weigh: “(1) the plaintiff’s choice of forum; (2) the
situs of the material events; (3) the relative ease of access to
sources of proof; (4) the convenience of the witnesses; and (5)
the convenience to the parties of litigating in the respective
forums.” Hanover Ins., 891 F. Supp. 2d at 1025.
The first factor -- the plaintiff’s choice of forum -- is
typically accorded significant weight where, as here, the
2

Republic has moved on this ground to strike HBI’s reply. In
light of my ruling on the motion to transfer, the motion is
denied as moot.
4

plaintiff resides in the chosen forum. See, e.g., Basile v.
Prometheus Glob. Media, LLC, No. 15-CV-10138, 2016 WL 2987004,
at *5 (N.D. Ill. May 24, 2016). However, as HBI correctly points
out, where there are parallel cases “involv[ing] a declaratory
judgment action and a mirror-image action seeking coercive
relief[, courts] ordinarily give priority to the coercive
action, regardless of which case was filed first,” Research
Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d
973, 980 (7th Cir. 2010). Since Republic’s suit initially sought
only declaratory relief and HBI’s suit seeks coercive relief,
HBI claims that the Arizona action should be given priority.
This argument fails for at least two reasons. First, in
light of the additional claims asserted in Republic’s amended
complaint, both parties’ actions are “coercive.” While
Republic’s original complaint sought only declaratory relief,
HBI cites no authority suggesting that this ought to make a
difference in the transfer analysis.
Second, the Seventh Circuit has never held that coercive
actions automatically take precedence over declaratory judgment
actions. On the contrary, Research Automation, on which HBI
principally relies, emphasizes that “there is no precise rule
for resolving the problem created by mirror-image lawsuits in
two different federal courts,” 626 F.3d at 982 (quotation marks
omitted), and that the transfer statute permits a “flexible and
5

individualized analysis and affords district courts the
opportunity to look beyond a narrow or rigid set of
considerations in their determinations,” id. at 978. While the
court noted that priority is “ordinarily” given to coercive
actions, the circumstances of this case are not ordinary.
Typically, parallel suits are filed within days of one another.
See, e.g., Research Automation, 626 F.3d at 976 (coercive action
filed seventeen days after declaratory judgment action); Tempco
Elec. Heater Corp. v. Omega Eng’g, Inc., 819 F.2d 746, 749 (7th
Cir. 1987) (infringement action filed four days after
declaratory judgment action). Here, by contrast, HBI’s suit was
filed roughly four months after Republic’s action -- and only
after the parties had litigated a motion to dismiss Republic’s
suit. HBI does not explain why its suit should be accorded
priority despite the fact that it waited so long before filing
it.
HBI also argues that Republic’s choice of forum should be
accorded no weight because Republic’s suit was an improper
anticipatory filing. “Courts have ... departed from a first-tofile rule where one party files its lawsuit in anticipation of
an impending suit by the opposing party.” Research Automation,
626 F.3d at 980; see also Palmer-Tech Servs., Inc. v. Alltech,
Inc., No. 14 C 1005, 2014 WL 1758452, at *2 (N.D. Ill. Apr. 30,
2014) (“In a declaratory judgment action,... but for the
6

preemptive filing of declaratory judgment ...[the defendant]
would have been entitled to file whenever it wanted, wherever it
wanted. The defendant is the natural plaintiff -- the one who
wishes to present a grievance for resolution by a court, and the
plaintiff’s choice of forum is therefore entitled to less
deference ... than it would otherwise receive.”) (quotation
marks, brackets, and citations omitted).
But despite its repeated accusations of procedural fencing
on Republic’s part, HBI has not shown that Republic’s suit was
anticipatory. Republic maintains that it brought the declaratory
judgment action because HBI had used the specter of litigation
as part of a campaign to intimidate Republic and its customers
while deliberately avoiding a determination of the parties’
rights. The Declaratory Judgment Act’s purpose is to afford
relief to parties in just this predicament. See, e.g., Med.
Assur. Co. v. Hellman, 610 F.3d 371, 377 (7th Cir. 2010) (“The
remedy made available by the Declaratory Judgment Act ...
relieves potential defendants from the Damoclean threat of
impending litigation which a harassing adversary might brandish,
while initiating suit at his leisure—or never.”) (quoting 10B
Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice and Procedure § 2751 (3d ed. 1998)).
HBI has not pointed to anything in the record to refute
Republic’s representations. Moreover, HBI’s own conduct in the
7

litigation -- the fact that it filed suit after initially
seeking dismissal of this action on the ground that there was no
actual controversy between the parties, and the fact that HBI
did not inform Republic of the Arizona suit until weeks after it
was filed -- leaves HBI at least equally vulnerable to charges
of procedural gamesmanship. In short, while Republic’s choice of
forum is not entitled to the deference it might receive in the
absence of a parallel coercive suit, HBI’s action is also not
entitled to deference.
The remaining § 1404 convenience factors likewise are
either neutral or militate against transfer. The second factor
-- the situs of material events -- has been defined in various
ways in trademark and intellectual property cases. Some courts
have held that in determining the “situs of material events
...[in] intellectual property cases ... the focus is on the
activities of the alleged infringer, its employees, and its
documents; therefore, the location of the infringer’s place of
business is often the critical and controlling consideration.”
Corp. Safe Specialists, Inc. v. Tidel Techs., Inc., No. 05 C
3421, 2005 WL 2124483, at *2 (N.D. Ill. July 28, 2005)
(quotation marks omitted); Energaire Corp. v. E.S. Originals,
Inc., No. 99 C 3252, 1999 WL 1018039, at *3 (N.D. Ill. Nov. 2,
1999). So conceived, this factor weighs against transfer because
the alleged infringer, Republic, is located in Illinois.
8

Other courts have stated that the situs of material events
is where the unlawful use of the trademark is alleged to have
occurred. See, e.g., Int’l Truck & Engine Corp. v. Dow-Hammond
Trucks Co., 221 F. Supp. 2d 898, 904 (N.D. Ill. 2002) (“In
trademark infringement actions, the situs of the injury is the
location or locations where the infringing activity takes place,
or where the unlawful use of the mark occurs.”) (citing Beverly
Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1571 n. 31
(Fed. Cir. 1994)). Under the latter criterion, the second factor
is neutral, since the offending conduct is not alleged to have
occurred predominantly in either Illinois or Arizona.
The third factor -- the location of the sources of proof -has become less important in recent years “because documentary
and digital evidence is readily transferable and transporting it
generally does not pose a high burden upon either party.”
Cabellero v. Taylor, No. 12-CV-8645, 2013 WL 2898254, at *3
(N.D. Ill. June 13, 2013) (quotation marks omitted). However, to
the extent that it figures in the calculus at all, the location
of the evidence favors Republic. See, e.g., ESPN, Inc. v.
Quiksilver, Inc., 581 F. Supp. 2d 542, 548-49 (S.D.N.Y. 2008)
(“[I]n infringement cases, it makes sense that the bulk of the
relevant evidence usually comes from the accused infringer.
Consequently, the place where the defendant’s documents are kept

9

weigh in favor of transfer to that location.”) (quotation marks
omitted).
The convenience of the witnesses does not favor either
party. Republic and HBI identify roughly the same number of
witnesses, and HBI points to nothing in the nature or importance
of its witnesses’ testimony that would support transfer. See,
e.g., Gueorguiev v. Max Rave, LLC, 526 F. Supp. 2d 853, 858
(N.D. Ill. 2007) (“I must also consider the convenience of
potential witnesses, looking beyond the number of witnesses to
be called and examining the nature and quality of the witnesses’
testimony with respect to the issues in the case.”). The final
factor -- the parties’ own convenience -- is also a wash. It is
no less convenient for HBI to litigate in Illinois than for
Republic to litigate in Arizona. Taken together, therefore, the
first set of factors does not warrant transfer.
B.

Interests of Justice

In considering the interests of justice, “courts weigh
additional factors, including: (1) the speed at which the case
will proceed to trial; (2) the court’s familiarity with the
applicable law; (3) the desirability of resolving controversies
in each locale; and (4) the relation of each community to the
occurrence at issue.” Hanover Ins., 891 F. Supp. at 1025. Again,
none of these factors warrants transfer of this action.

10

The parties agree that the median length of time from
filing to trial is between thirty-three and thirty-four months
in the District of Arizona and roughly thirty-eight months in
the Northern District of Illinois. A difference of between four
and five months does not tip the scales in either direction.
See, e.g., Brady v. Hanger Orthopedic Grp., Inc., No. 05 C 0492,
2006 WL 2560953, at *3 (N.D. Ill. Aug. 30, 2006) (four-month
difference in disposition between forums was not significant).
The court’s familiarity with the applicable law does not favor
transfer. Indeed, HBI does not argue that this factor favors
transfer; it maintains only that, notwithstanding Republic’s
assertion of claims under Illinois law, the court’s familiarity
with the relevant law does not weigh against transfer. And
finally, the community interest factors -- the desirability of
resolving controversies in each locale and the relationship of
each community to the controversy -- do not favor either party.
Nothing about this dispute suggests that one party’s interest in
resolving it is greater than the other’s.
In short, HBI has failed to show that transferring this
action to Arizona would be more convenient or would serve the
interests of justice. Accordingly, HBI’s motion to transfer is
denied.

11

Conclusion
For the reasons discussed above, HBI’s motion to transfer
is denied.
ENTER ORDER

_____________________________
Elaine E. Bucklo
United States District Judge

Dated: October 26, 2016

12