United States Risk Management, L.L.C. v. U.S. Risk Insurance Group, Inc.
Filing
11
ORDER AND REASONS re 5 MOTION to Transfer Case or, in the alternative MOTION to Dismiss Case or MOTION to Stay re 1 Complaint, 3 Order. ORDERED that the motion to transfer venue, dismiss or stay filed by the defendant, U.S. Ris k Insurance Group, Inc. is PARTIALLY GRANTED as to transfer and PARTIALLY DENIED in all other respects. This matter is hereby TRANSFERRED to the United States District Court for the Northern District of Texas, Dallas Division. Signed by Judge Helen G. Berrigan on 1/25/2012.(mm, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED STATES RISK MANAGEMENT,
L.L.C.,
CIVIL ACTION
VERSUS
NO. 11‐2706
U. S. RISK INSURANCE GROUP, INC.
SECTION ʺCʺ (5)
ORDER AND REASONS
This matter comes before the Court on motion to transfer venue, dismiss or stay
filed by the defendant, U.S. Risk Insurance Group, Inc. (“first‐filed plaintiff”) and the
issue whether the Court should exercise its discretion to entertain this declaratory action.
Having considered the record, the memoranda and the law, the Court has determined
that transfer is appropriate for the following reasons.
This declaratory action was filed by United States Risk Management, L.L.C.
(“second‐filed plaintiff”) seeking a declaration that its trademark and design do not
infringe upon the trademark and design of the first‐filed plaintiff. This complaint was
filed one week after the first‐filed plaintiff filed a complaint against the second‐filed
plaintiff in the United States District Court for the Northern District of Texas, Dallas
Division, alleging that the second‐filed plaintiff is infringing on its trademark. In this
motion, the first‐filed plaintiff herein seeks transfer to the Northern District of Texas
under the “first‐to‐file rule.” The second‐filed plaintiff herein opposes transfer, arguing
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that the Northern District of Texas is an improper venue under 28 U.S.C. § 1391(b) and
that venue in this district is proper under 28 U.S.C. § 1404(a).
“The Fifth Circuit adheres to the general rule 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.” Save Power Ltd. v. Syntek Finance Corp., 121
F.3d 947, 950 (5th Cir. 1997). The first‐to‐file rule is a discretionary rule which allows for
dismissal or transfer of a second case related to a first‐filed case pending before a different
federal court if the two cases “substantially overlap.” International Fidelity Insurance Co. v.
Sweet Little Mexico Corp., ___ F.3d ___, 2011 WL 6413960 at *5 (5th Cir. 2011), quoting Cadle
Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 603 (5th Cir. 1999). The rule is based on
principles of comity and sound judicial administration and is designed “... to avoid the
waste of duplication, to avoid rulings which may trench upon the authority of sister
courts, and to avoid piecemeal resolution of issues that call for a uniform result.” Cadle,
174 F.3d at 603. “The federal courts have long recognized the principle of comity requires
federal district courts – courts of coordinate jurisdiction and equal rank – to exercise care
to avoid interference with each other’s affairs.” Save Power, 121 F.3d at 950, quoting West
Gulf Maritime Ass’n v. ILA Deep Sea Local 24, 751 F.2d 721, 728 (5th Cir. 1985).
The first‐to‐file rule ... is essentially a forward‐looking doctrine. Courts use
this rule 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.
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Cadle, 174 F.3d at 604. The first to file rule applies “in the absence of compelling
circumstances.” Dillard v. Merrill Lynch, 961 F.2d 1148, 1161 (5th Cir. 1992).
“Exceptions to the first‐filed rule apply when the Section 1404(a) factors weigh in
favor of giving priority to the second action.” 15 Charles Alan Wright, Arthur R. Miller &
Edward H. Cooper, Fed. Practice & Procedure § 3854 (3d ed. 2007). Section 1404(a) states
the rule for determining the propriety of transfer to another district for the convenience of
the parties.1 Convenience is determined by private and public interest factors, none of
which are given dispositive weight. Volkswagen AG, 371 F.3d 201,203 (5th Cir. 2004).
The private concerns include: (1) the relative ease of access to sources of
proof; (2) the availability of compulsory process to secure the attendance of
witnesses; (3) the cost of attendance for willing witnesses; and (4) all other
practical problems that make trial of a case easy, expeditious and
inexpensive. ... The public concerns include: (1) the administrative
difficulties flowing f rom court congestion; (2) the local interest in having
localized interests decided at home; (3) the familiarity of the forum with the
law that will govern the case; and (4) the avoidance of unnecessary
problems of conflict of laws of the application of foreign law.
Id.
Here, there is no dispute that the two federal suits present the same issues between
the same parties. The second‐filed plaintiff in this action presents no persuasive argument
for ignoring the first‐to‐file rule. The plaintiff in the first‐filed suit has its principal place
1
Section 1404(a) provides: “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.”
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of business in Dallas. This second‐filed suit is a discretionary declaratory action.2 This
second‐filed plaintiff’s argument that a Texas forum is improper under § 1391 is belied,
for present purposes, by the fact that it is registered to do business in Texas, with a Texas
business address and registered office address, and has appointed the Secretary of State of
Texas as its agent for service of process. Rec. Doc. 6‐3 at 7. This Court finds that, except
for the corporate presence of the second‐filed plaintiff in this district, the weight of the
Section 1404(a) factors do not weigh in favor of overriding the first‐to‐file rule.
Accordingly,
IT IS ORDERED that the motion to transfer venue, dismiss or stay filed by the
defendant, U.S. Risk Insurance Group, Inc. is PARTIALLY GRANTED as to transfer and
PARTIALLY DENIED in all other respects. This matter is hereby TRANSFERRED to the
United States District Court for the Northern District of Texas, Dallas Division.
New Orleans, Louisiana, this ___ day of January, 2012.
25th
___________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE
2
The Federal Declaratory Judgment Act, 28 U.S.C. § 2201(a) provides that “[i]n a
case of actual controversy within its jurisdiction ... any court of the United States ... may
declare the rights and other legal relations of any interested party seeking such
declaration, whether or not further relief is or could be sought.” (Emphasis added).
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