Global Experience Specialists, Inc. v. Cunniffe

Filing 24

ORDER Adopting 21 Report and Recommendation. FURTHER ORDERED that 8 MOTION to Transfer Venue is GRANTED. Signed by Judge James C. Mahan on 7/30/14. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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GLOBAL EXPERIENCE
SPECIALISTS, INC.,

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2:14-CV-421 JCM (NJK)

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Plaintiff(s),

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v.

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PAUL CUNNIFFE,

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Defendant(s).

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ORDER

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Presently before the court are Magistrate Judge Nancy Koppe’s report and recommendation,

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(doc. # 21), granting the defendant’s motion to transfer venue, (doc. # 8), and denying the

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defendant’s motions to stay and dismiss, (doc. # 6, 7), as moot.

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I.

Background

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The defendant entered into an employment, covenant not to compete, and confidentiality

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agreement with the plaintiff in 2008. The agreement provides for a two year period following the

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employment term in which the defendant would not work for two of the plaintiff’s competitors.

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On October 24, 2013, while still employed by the plaintiff, the defendant accepted an offer

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of employment from one of the two competitors — the Freeman Companies. A few days later, the

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defendant resigned from his employment with the plaintiff. However as of the time of filing of the

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complaint, the plaintiff has not yet begun his employment with the Freeman Companies.

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...

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James C. Mahan
U.S. District Judge

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On March 20, 2014, after failing to agree to arbitration, the defendant and the Freeman

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Companies filed a complaint in Massachusetts Superior Court (the “Massachusetts action”) and six

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hours later the plaintiff filed its complaint in Nevada (the “Nevada action”). At issue is the plaintiff’s

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objection to the report and recommendation granting a change of venue, claiming that the magistrate

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judge improperly applied the first-to-file rule and relevant factors in recommending the court grant

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the defendant’s motion to transfer venue.

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II.

Legal Standard

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This court “may accept, reject, or modify, in whole or in part, the findings or

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recommendations made by the magistrate.” 28 U.S.C. § 636(b)(1). Where a party timely objects to

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a magistrate judge’s report and recommendation, then the court is required to “make a de novo

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determination of those portions of the [report and recommendation] to which objection is made.”

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28 U.S.C. § 636(b)(1).

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III.

Discussion

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28 U.S.C. section 1404(a) gives discretion to the district court to transfer venue “[f]or the

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convenience of parties and witnesses, in the interest of justice.” A district court may transfer any

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civil action to any other district or division based on an “individualized, case-by-case consideration

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of convenience and fairness.” Van Dusen v. Barrack, 376 U.S. 612, 622 (1964).

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The first-to-file rule “permits a district court to decline jurisdiction over an action when a

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complaint involving the same parties and issues has already been filed in another district.” Pacesetter

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Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94–95 (9th Cir. 1982); see also Olin Corp. v. Cont’l Cas.

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Co., 2011 WL 1337407, *2 (D. Nev. April 6, 2011) (holding that the purpose of the first-to-file rule

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is to “avoid the waste of duplication, to avoid rulings which may trench upon the authority of sister

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courts, and to avoid piecemeal resolution of issues that call for a uniform result”). In the instant case,

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the magistrate judge properly found that the parties and issues in both actions were sufficient to

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warrant application of the first-to-file rule and that the rule favors the defendant.

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Although the plaintiff claims that the Massachusetts action was filed in anticipation of the

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Nevada action, (doc. # 22), the plaintiff improperly brings this argument for the first time before this

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James C. Mahan
U.S. District Judge

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court. See Greenhow v. Secretary of Health & Human Services, 863 F.2d 633 (9th Cir. 1998)

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(affirming that a district court may decline to hear arguments first raised in a party’s objection to a

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magistrate judge’s report and recommendation and that the Magistrate Judge Act, 28 U.S.C. section

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636 was not “intended to give litigants an opportunity to run one version of their case before the

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magistrate, then another past the district court”). More importantly, the argument has no merit. In

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fact, it was the defendant who notified the plaintiff’s counsel regarding the filing of the

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Massachusetts action and the plaintiff who tried to file an anticipatory suit.

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Furthermore, the magistrate judge properly considered the relevant factors in determining

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whether to transfer this matter. Although the original agreement was drafted in Nevada, and the

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defendant has attended trade shows in the state, these factors are insufficient to prevent transfer to

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Massachusetts. Considering the interests of justice and convenience for all the parties, transfer is

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favored because the defendant was employed by the plaintiff in Massachusetts, his inability to obtain

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further employment affects him within that state, and the defendant—a Massachusetts resident, as

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well as both employers, have significant contacts within the state.

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IV.

Conclusion

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The magistrate judge properly determined that the first-to-file rule applies. Furthermore,

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considerations of the interests of justice and convenience and review of the relevant factors support

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that the instant case be transferred to the district of Massachusetts. Nothing in this order shall affect

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the pending motions to dismiss, (doc. # 6), and to stay, (doc. # 7).

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Accordingly,

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IT IS ORDERED, ADJUDGED, AND DECREED that magistrate judge’s report and

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recommendation (doc. # 21) be, and the same hereby are, ADOPTED in their entireties.
IT IS FURTHERED ORDERED that the defendant’s motion to transfer venue (doc. # 8) be,
and the same hereby is GRANTED.
DATED July 30, 2014.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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