Mueller Systems, LLC v. Teti et al
Filing
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Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER, granting in part and denying in part 12 MOTION to Dismiss Teti ITET Corp MOTION to Dismiss for Lack of Jurisdiction Teti ITET Corp filed by ITET Corporation, Robe rt Teti. "For the foregoing reasons, defendants' motion to dismiss (Docket No. 12) is, with respect to want of personal jurisdiction, DENIED, but is, with respect to the Court's discretion pursuant to the Declaratory Judgment Act, ALLOWED. So ordered."(Lima, Christine)
United States District Court
District of Massachusetts
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MUELLER SYSTEMS, LLC,
Plaintiff
v.
ROBERT TETI and
ITET CORPORATION,
Defendants.
Civil Action No.
15-12916-NMG
MEMORANDUM & ORDER
Gorton, J.
Mueller Systems, LLC (“plaintiff” or “Mueller Systems”)
brings this action against ITET Corporation (“ITET”) and Robert
Teti (“Teti”) (collectively “defendants”) seeking a declaratory
judgment that plaintiff did not misappropriate defendants’
alleged trade secrets or confidential information.
At issue
here is defendants’ motion to dismiss for lack of personal
jurisdiction and pursuant to the Court’s discretion under the
Declaratory Judgment Act.
Alternatively, defendants ask this
Court to stay the proceedings pending the outcome of related
litigation in Canada.
For the reasons that follow, this motion
to dismiss will be allowed.
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I.
Background
A.
Factual Background
Mueller Systems is a limited liability company (“LLC”)
organized under Delaware law with its principal place of
business in Middleboro, Massachusetts.
Plaintiff does not
divulge the residency of the member (or members) of the LLC but
the Court presumes for the purpose of this memorandum and order
that such member or members are jurisdictionally diverse from
the defendants.
Robert Teti is a resident of Ontario, Canada
and the President and sole owner of ITET Corporation, an Ontario
corporation.
In 2002, Teti began developing an electronic water valve
system.
To facilitate development, Teti approached Mueller
Canada Ltd. (“Mueller Canada”) and the parties executed a
confidentiality agreement in April, 2002.
That agreement was
executed by Mueller Canada on behalf of Mueller Co. Ltd.
(“Mueller Co.”) and created a perpetual confidentiality
obligation for Mueller Canada, Mueller Co. and their affiliates,
including Mueller Water Products Inc. (“Mueller Water Products”)
and Mueller International, LLC (“Mueller International”)
(collectively “the Mueller entities”).
The parties worked for
years to develop and test the valve, identifying some issues
with the design.
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In September, 2009, ITET and Mueller Canada on behalf of
itself and Mueller Co. entered a two-year Supply Agreement
(“Agreement”) for the ITET Digital Water System.
Under that
Agreement, Mueller Canada received the exclusive right to market
the valve in North America in exchange for development, testing
and mass production expertise, which were already being provided
by Mueller.
ITET retained ownership of all intellectual
property and patents related to the valve.
That Agreement
expired in September, 2012 when Mueller Canada allowed the
Agreement to lapse.
In 2008, Mueller Technologies, LLC, acquired Arkion Systems
Inc. (“Arkion”) and changed its name to Mueller Systems.
That
newly formed entity is an indirect subsidiary of Mueller Water
Products.
In 2010, Mueller Systems began developing a remotely
controlled water valve based on technology purportedly developed
by Arkion.
It began publicly advertising that valve as the 420
RDM device in 2012.
After reviewing that technology and the
patent Mueller acquired on it, ITET and Teti filed suit in
Canada alleging, inter alia, misappropriation of confidential
information and intellectual property in the development of
Mueller’s 420 RDM device.
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B.
Procedural Background
1.
The Canadian Litigation
In October, 2013, defendants brought an action in Canada
against the Mueller entities, claiming, inter alia, that those
entities as a common enterprise misused defendants’ confidential
information and intellectual property and thereby breached a
duty owed based on the contractual relationship between the
parties (“the Canadian Litigation”).
In February, 2015, Mueller
moved to amend their answer by withdrawing the admission that
Mueller Systems was an unincorporated division of Mueller Water
Products.
Mueller would not consent to adding Mueller Systems
to the Canadian Litigation on the grounds that they were already
party to a similar proceeding in the Eastern District of
Virginia.
Mueller then filed a motion to dismiss in the
Canadian Litigation, claiming, inter alia, that Mueller Systems
was the sole developer of the 420 RDM device.
In July, 2015,
the Ontario court denied Mueller’s motion for summary judgment
and subsequently, Mueller Systems was added as a party to the
Canadian Litigation.
2.
The U.S. Litigation
In February, 2015, shortly before the Mueller entities
amended their answer in Canada, Mueller Systems and Mueller
International filed a complaint against defendants in the
Eastern District of Virginia (“the Virginia Litigation”).
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Mueller sought a three part declaratory judgment stating that
Mueller Systems and Mueller International were not infringing an
ITET U.S. patent, that a Mueller U.S. patent was not subject to
a claim of joint ownership by defendants, and that Mueller
Systems and Mueller International did not misappropriate
defendants’ trade secrets or confidential information.
During
the early course of that litigation, ITET and Teti agreed not to
pursue their two potential U.S. patent claims.
2.
Present Action
In July, 2015, Mueller Systems filed the present action in
the District of Massachusetts against defendants seeking a
declaratory judgment that plaintiff did not misappropriate
defendants’ confidential information or trade secrets.
One day
later, Mueller Systems and Mueller International voluntarily
dismissed their suit in the Eastern District of Virginia.
In
November, 2015, defendants filed a motion to dismiss this action
for lack of personal jurisdiction and pursuant to the Court’s
discretion under the Declaratory Judgment Act.
III. Analysis
A.
Personal Jurisdiction
On a motion to dismiss for want of personal jurisdiction,
plaintiff bears the burden of showing that the Court has
authority to exercise jurisdiction over defendants. See Mass.
Sch. of Law at Andover, Inc. v. ABA, 142 F.3d 26, 33-34 (1st
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Cir. 1998).
The Court must take facts alleged by plaintiff as
true and construe disputed facts favorably towards plaintiff.
See Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st
Cir. 1994). Facts alleged by defendants are relevant as long as
they are not contradicted by plaintiff. See ABA, 142 F.3d at 34.
In a diversity suit, this Court acts as “the functional
equivalent of a state court sitting in the forum state.” See
Astro-Med, Inc. v. Nihon Kohden America, Inc., 591 F.3d 1, 8
(1st Cir. 2009).
As such, this Court must determine whether (1)
jurisdiction is permitted by the Massachusetts long-arm statute
and (2) the exercise of jurisdiction coheres with the Due
Process Clause of the United States Constitution. Id.
The Massachusetts long-arm statute, MASS. GEN. LAWS. ch. 223A,
§ 3, extends jurisdiction to the limits of the United States
Constitution. See Tatro v. Manor Care, Inc., 625 N.E.2d 549, 553
(Mass. 1994).
Accordingly, this Court need not further consider
the statute’s applicability and may proceed to the due process
question. See Daynard v. Ness, Motley, Loadholt, Richardson &
Poole, P.A., 290 F.3d 42, 52 (1st Cir. 2002).
Due process demands a showing of general or specific
jurisdiction by plaintiff. See Negron-Torres v. Verizon Commc’n,
Inc., 478 F.3d 19, 24 (1st Cir. 2007).
Plaintiffs must
demonstrate that defendants have made sufficient contacts with
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the forum state to justify the exercise of either specific or
general jurisdiction by this Court. Id.
1.
General Jurisdiction
This Court may assert general jurisdiction over defendants
when the present case is not based on contact with the forum
state but defendants maintain unrelated, continuous and
systematic activity in the forum. See United Elec., Radio and
Mach. Workers of Am. v. 163 Pleasant St., 960 F.2d 1080, 1088
(1st Cir. 1992).
Exercising general jurisdiction over an entity
that is neither incorporated nor has its principal place of
business in the forum is exceptional. See Dailmer AG v. Bauman,
134 S. Ct. 746, 761 (2014).
Teti is a Canadian citizen and ITET
Corporation is a Canadian corporation operating principally in
Canada.
Plaintiff alleges four unexceptional meetings in
Massachusetts between the defendants, Mueller Co. and Asahi
America, Inc. (“Asahi”), a manufacturer working to prototype the
water valve.
Those meetings occurred over a four-year period
but because defendants cannot be deemed “at home” in
Massachusetts based on such contacts, this Court will not
exercise general jurisdiction over them. Id.
2.
Specific Jurisdiction
Alternatively, this Court may assert specific jurisdiction
when defendants have certain minimum contacts with Massachusetts
such that the maintenance of the suit does not offend
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“traditional notions of fair play and substantial justice.”
Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. &
Placement, 326 U.S. 310, 316 (1945) (internal quotation marks
omitted).
When assessing contacts, this Court must consider
three factors: relatedness, purposeful availment and
reasonableness. See Astro-Med Inc., 591 F.3d at 9.
a. Relatedness
The relatedness factor depends upon “whether the claim
underlying the litigation... directly arise[s] out of or
relate[s] to, the defendant’s forum-state activities.” Id.
(internal quotation marks omitted).
The relationship between
the claim and the forum-state conduct cannot be remote. See
Harlow v. Children’s Hosp., 432 F.3d 50, 61 (1st Cir. 2005).
The relatedness inquiry is, however, a “flexible, relaxed
standard.” Pritzker v. Yari, 42 F.3d 53, 60–61 (1st Cir. 1994).
Plaintiff alleges four meetings between defendants, Mueller
Co. and Asahi in Massachusetts to develop defendants’ water
valve, resulting in a prototype manufactured by Asahi in Malden,
Massachusetts.
The present case focuses upon whether plaintiff
misappropriated trade secrets and confidential information
disclosed to a related entity in the forum; it arises from
forum-based activities between defendants and plaintiff’s
affiliate. See Phillips Exeter Acad. v. Howard Phillips Fund,
196 F.3d 284, 290 (1st Cir. 1999).
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Mueller’s claim appears
intended to clarify its potential liability as it relates to a
related entity’s conduct.
As such, defendants’ forum state
contacts are neither “attenuated” nor “indirect” with respect to
the present declaratory judgment action. Harlow, 432 F.3d at 61.
b. Purposeful Availment
This Court must also consider whether defendants
purposefully availed themselves of the forum, taking advantage
of the state’s laws and making their appearance before the Court
foreseeable. See Sawtelle v. Farrell, 70 F.3d 1381, 1389 (1st
Cir. 1995).
This factor concerns whether defendants’ contacts
were voluntary and foreseeable. See Astro-Med, Inc., 591 F.3d at
10.
If defendants do not benefit from a contact “in a way that
makes jurisdiction foreseeable,” then they have not purposefully
availed themselves of the forum even if the contact is
voluntary. See Phillips Exeter Acad., 196 F.3d at 292.
Defendants’ contacts, a handful of business meetings in
Massachusetts, cannot be characterized as either “random,
fortuitous, or attenuated” or “the unilateral activity of
another party or a third person.” See Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 (1985) (internal quotation marks
omitted).
Moreover, defendants took advantage of Massachusetts
law while meeting in the forum, making the exercise of
jurisdiction foreseeable. See Burnham v. Superior Court of
California, Cty. of Marin, 495 U.S. 604, 606 (1990) (concluding
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defendants take advantage of state benefits, such as public
safety services, roadways, legal protections and the right to
bring an action in court, by briefly visiting a state).
Because
defendants met voluntarily in Massachusetts to develop the water
valve system, this Court is satisfied that they have
purposefully availed themselves of the forum.
c. Reasonableness
Finally, this Court must consider a number of “Gestalt
factors,” including: (1) defendants’ burden of appearing, (2)
the forum state’s interest in adjudicating the dispute, (3)
plaintiff’s interest in convenient and effective relief, (4) the
judicial system’s interest in obtaining efficient resolution of
controversies and (5) the common interest of all sovereigns in
promoting substantive social policies. See Burger King Corp.,
471 U.S. at 477.
These factors are not a checklist but a set of
considerations used “to put into sharper perspective the
reasonableness and fundamental fairness of exercising
jurisdiction....” See Pritzker, 42 F.3d at 64.
Taken together,
these factors “may tip the constitutional balance” in close
calls. Id.
With respect to the first factor, defendants argue that
subjecting defendants, both from Canada, to a foreign court
proceeding is burdensome.
Defending a claim in a foreign
jurisdiction is, however, inherently inconvenient. See Pritzker,
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42 F.3d at 64.
Furthermore, defendants’ burden is neither
special nor unusual. Id.
While defendants are often the natural
plaintiffs in a declaratory judgment action, the action is
designed to give the natural defendant an opportunity to
expedite conflict resolution, minimize losses and prevent the
accumulation of damages. See Dow Jones & Co. v. Harrods, Ltd.,
237 F. Supp. 2d 394, 405 (S.D.N.Y. 2002), aff'd, 346 F.3d 357
(2d Cir. 2003).
Furthermore, in light of the Court’s discussion
of defendants’ forum contacts, the conflict is sufficiently
related to and arises in part from conduct in Massachusetts.
As
such, the first factor weighs in favor of exercising
jurisdiction.
The remaining factors do not, however, strongly weigh in
favor of this Court asserting jurisdiction.
While Massachusetts
has an interest in affording justice when an injury has occurred
within its borders, the state’s interest is less clear when the
dispute involves a Canadian citizen, an Ontario corporation and
a Delaware corporation. See Ticketmaster-New York, Inc., 26 F.3d
at 211.
Further, this Court’s intervention will not provide
effective or efficient relief.
This Court must, admittedly,
credit plaintiff’s choice of forum. Id.
Nevertheless, the
necessary evidence to resolve this claim has been developed
outside of the forum in Canada. Id. (finding that witnesses and
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key evidence outside the forum weighs against exercising
jurisdiction).
Plaintiff is also subject to a mirror-image suit
in Canada, making the present claim duplicative and inefficient.
Finally, no strong substantive social policy favors
resolution of the claims in this forum.
This Court in this case
is not providing a convenient forum for residents to seek
redress against non-resident actors which is its prime policy
consideration. See Sawtelle, 70 F.3d at 1395.
In light of the Court’s relatedness and purposeful
availment findings, these “Gestalt factors” are mixed and,
consequently, do not tip the balance either in favor of or
against exercising jurisdiction.
d. Conclusion
Tallying the results, plaintiff has satisfied its burden of
showing sufficient contacts with Massachusetts to justify the
exercise of personal jurisdiction. The question of whether it
should proceed to consider plaintiff’s petition for declaratory
judgment weighs in the balance.
B.
Declaratory Judgment
1.
Legal Standard
In addition to dismissal under Fed. R. Civ. P. Rule
12(b)(2), defendants also ask the Court to exercise its
discretion to dismiss plaintiff’s declaratory judgment claim.
The Declaratory Judgment Act provides this Court with authority
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“...[to] declare the rights and other legal relations of any
interested party seeking such declaration....” 28 U.S.C.A. §
2201.
Litigants, however, do not have an “absolute right” to
declaratory relief. See Wilton v. Seven Falls Co., 515 U.S. 277,
287 (1995).
Federal courts maintain discretion to grant a
declaratory judgment and are permitted, if not required, to note
similar or parallel proceedings, including those in foreign
countries. See Farrell Lines Inc. v. Ceres Terminals Inc., 161
F.3d 115, 117 (2d Cir. 1998) (declining declaratory relief due
to a parallel suit in a foreign country).
The present action is the near-mirror image of the claims
pending in Canada.
Defendants are pursuing a claim of trade
secret and confidential information misuse against plaintiff and
plaintiff’s affiliates.
Given that pending parallel suit, this
Court must consider whether declaratory judgment here is
appropriate.
The parties contest the appropriate standard to guide the
Court’s discretion.
Defendants argue the Court should rely on
four factors used by this jurisdiction to evaluate parallel
state court proceedings. See U.S. Liability Ins. Co. v. Wise,
887 F. Supp. 348, 350 (D. Mass 1995) (quoting Cont'l Cas. Co. v.
Fuscardo, 35 F.3d 963, 966 (4th Cir. 1994)).
In contrast,
plaintiffs assert the Court should rely on factors tailored to
assess parallel foreign court proceedings.
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Because the present
case concerns a parallel foreign court proceeding as opposed to
a parallel state claim, the Court will follow the Second Circuit
Court of Appeals’ five factor test. See Dow Jones & Co., 237 F.
Supp. 2d at 437-47.
To determine whether to enter a declaratory judgment when
there is a pending parallel suit in a foreign jurisdiction, the
Court ought to consider the following five factors:
(1) whether the judgment will serve a useful purpose in
clarifying or settling the legal issues involved;
(2) whether a judgment would finalize the controversy
and offer relief from uncertainty; ...
(3) whether the proposed remedy is being used merely for
procedural fencing or a race to res judicata;
(4) whether the use of a declaratory judgment would
increase friction between sovereign legal systems or
improperly encroach on the domain of a state or foreign
court; and
(5) whether there is a better or more effective remedy.
In re Air Crash Near Nantucket Island, Massachusetts, on October
31, 1999, 392 F. Supp. 2d 461, 473 (E.D.N.Y 2005).
2.
Application
a. Useful Purpose
First, the Court must determine whether “the judgment will
serve a useful purpose in clarifying and settling the legal
relations in issue.” Dow Jones & Co., 346 F.3d at 432.
Under
this factor, Courts normally consider the extent and effect of a
judgment. See In re Air Crash, 392 F. Supp. 2d at 475.
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While a declaratory judgment may clarify and settle the
present controversy, it is not likely to settle the broader
allegations of trade secret misuse.
This Court is not satisfied
that its judgment will discourage defendants from pursuing their
claims against plaintiffs in Canada. See Dow Jones & Co., 346
F.3d at 439.
To date, the present action has failed to deter
the Ontario court or defendants.
They proceeded to add Mueller
Systems to the Canadian proceedings even after this complaint
was filed.
While this Court may enter an order and, in effect,
preemptively declare that a foreign judgment against the
plaintiff will have no effect in the United States, “a foreign
tribunal may just as cavalierly ignore this Court’s order.” See
id. at 438.
A decision from a court in the United States is not
binding on Canadian courts.
As such, this Court is not
convinced that a declaratory judgment will serve to clarify or
settle the misappropriation allegations and may, in fact, create
the potential for conflicting judgments.
Furthermore, the exercise of jurisdiction under the
Declaratory Judgment Act is generally not justifiable
where a pending coercive action, filed by the natural
plaintiff, would encompass all the issues in the
declaratory
judgment...
[as]
the
policy
reasons
underlying the creation of the extraordinary remedy of
declaratory judgment are not present.
AmSouth Bank v. Dale, 386 F.3d 763, 787 (6th Cir. 2004).
A
declaratory plaintiff can rely on such a remedy only when “some
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additional harm, not merely waiting for the natural plaintiff to
sue, will befall the... plaintiff in the meantime.” Id. at 786.
A declaratory judgment serves a useful policy purpose when a
declaratory plaintiff will avoid accruing damages or further
loss through immediate clarification of the legal relations
between parties. Id.
Plaintiff does not allege any additional
harm outside of a “reasonable apprehension” of being sued by
defendants.
Consequently, this Court concludes that the remedy
sought will serve no useful purpose.
b. Settling the Controversy
The second factor this Court must consider is whether the
declaratory judgment will “terminate and afford relief from the
uncertainty, insecurity, and controversy giving rise to the
proceeding.” Dow Jones & Co., 346 F.3d at 432.
Although many of
the same reasons discussed earlier apply, courts particularly
note (1) whether the controversy arose in the United States or a
foreign country and (2) whether the laws of a foreign country or
the United States apply to its resolution. Id. at 437.
Generally, courts are hesitant to resolve claims governed by
foreign law, reasoning that they cannot finalize a controversy
when applying the laws of another sovereign.
To bring into focus both the location of the harm and the
governing law, some courts engage in a choice of law analysis.
See, e.g., Aruba Hotel Enterprises N.V. v. Belfonti, No. CIVA
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307CV-1297 JCH, 2008 WL 185526, at *3 (D. Conn. Jan. 17, 2008).
Plaintiff does not, however, allege sufficient information to
permit this Court to conduct a choice of law inquiry with
confidence.
The location of the alleged wrongdoing and the
applicability of the Confidentiality Agreement between
defendants and parties affiliated with plaintiff, both relevant
variables, are not clear.
For many of the same reasons stated in the previous
section, this Court is not persuaded that its actions will
settle the controversy.
This Court’s decision would only
provide certainty and potential relief in the United States.
Because the Canadian litigation has already progressed farther,
the Canadian court likely will not find a declaratory judgment
to be persuasive or authoritative. See Basic v. Fitzroy Eng'g,
Ltd., 949 F. Supp. 1333, 1341 (N.D. Ill. 1996), aff'd, 132 F.3d
36 (7th Cir. 1997).
Plaintiff has failed to show that the laws
of this jurisdiction govern the controversy, such that a
judgment of this Court “will be neither self-executing nor in
and of itself binding on or recognized by foreign tribunals.”
Dow Jones & Co., 346 F.3d at 438-439.
As such, this Court is
not satisfied that the proposed remedy will settle the
controversy.
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c. Procedural Fencing
This Court must also consider whether plaintiff’s complaint
is being used for procedural fencing or “to provide an arena for
a race for res judicata.” Id. at 432.
This prong focuses on the
claim itself and the timing of competing actions by the parties.
See Basic, 949 F. Supp. at 1339-40.
Plaintiff appears to be pursuing this declaratory judgment
“in the hope that the [foreign] court would relinquish its
jurisdiction over the issues presented.” Id. at 1339.
Aside
from explicitly stating plaintiff’s hope that a judgment will
discourage defendants from pursuing it in Canada, plaintiff’s
procedural conduct suggests this suit is an attempt to control
the forum.
In early 2015, Mueller sought to amend its answer in
Canada to clarify the relationship between Mueller Water
Products and Mueller Systems shortly after filing the initial
declaratory judgment action in Virginia.
Mueller’s subsequent
effort to peg liability on Mueller Systems as the sole developer
of the 420 RDM device via its motion for summary judgment in
Canada indicates an effort to circumvent the Canadian suit and
proceed solely in the United States.
While plaintiff was able
to resolve potential patent liability through the Virginia
litigation, its pursuit of this claim in parallel with the
Canadian litigation strongly suggests procedural fencing.
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In addition to trying to control the forum, plaintiff
appears to be trying to pre-empt a Canadian judgment. See
Eastman Kodak Co. v. Kavlin, 978 F. Supp. 1078, 1090 (S.D. Fla.
1997) (observing that plaintiff was “quite clearly” seeking to
minimize the effect of a possible adverse judgment in Bolivia
via a declaratory judgment).
Courts have recognized that
this strategy is improper; the DJA is not a tactical
device whereby a party who would be a defendant in a
coercive action may choose to be a plaintiff by winning
the proverbial race to the courthouse.
Basic, 949 F. Supp. at 1340 (internal quotations omitted).
As
discussed above, aside from showing some immediate or unusual
harm, which plaintiff has failed to demonstrate, plaintiff
cannot utilize a declaratory judgment to control the forum or
render a judgment from another court unenforceable. See AmSouth
Bank, 386 F.3d at 787.
d. Friction Between Sovereign Legal Systems
The fourth item this Court ought to consider is whether a
declaratory judgment would create improper friction between
sovereign legal systems or encroach on another Court’s domain.
See Dow Jones & Co., 346 F.3d at 432.
It can hardly be denied
that this Court would create tension with a foreign tribunal if
it were to apply our own federal law in a declaratory judgment.
See In re Air Crash, 392 F. Supp. 2d at 478.
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The converse is,
however, more complicated.
The First Circuit Court of Appeals
has instructed that
comity is not a matter of rigid obligation, but, rather,
a protean concept of jurisdictional respect [which] like
beauty, sometimes is in the eye of the beholder.
Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361
F.3d 11, 19 (1st Cir. 2004).
Because the present action is a replication of the Canadian
action, a declaratory judgment here for Mueller Systems is
likely to present an unnecessary challenge to the enforceability
of a legitimate foreign court’s decision. See Chevron Corp. v.
Naranjo, 667 F.3d 232, 246 (2d Cir. 2012).
In addition to
standing ready for trial, the Canadian court permitted Mueller
Systems to be added to the case, asserting jurisdiction over the
plaintiff in spite of the pendency of this action.
A
declaratory judgment here may create friction by encouraging
other parties to seek to avoid potential enforcement of Canadian
judgments in the United States. See id.
e. Effectiveness of Remedy
Finally, this Court must consider whether plaintiff has
access to a more effective or efficient remedy. See Dow Jones &
Co., 346 F.3d at 432.
Here, the Canadian action is immediately
available and better suited to serve the interests and
conveniences of the parties.
See id. at 443.
First, after
several years, it has progressed to the summary judgment stage.
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Moreover, the Ontario court in its summary judgment decision
accepted the “group enterprise” theory asserted by defendants,
thus retaining Mueller Canada and its affiliates as parties to
the suit.
Admittedly, Mueller Systems was neither a signatory
to any agreement with defendants nor a party to the Canadian
action until late 2015.
As the alleged independent developers
of the 420 RDM device, however, their liability, if any, is
likely clarified in relation to the larger group of Mueller
affiliates.
Because the Canadian court is poised to consider
the relevant issues at trial, it would be inefficient and
duplicative for this Court to entertain plaintiff’s request for
declaratory relief.
Plaintiff will more appropriately and effectively be able
to raise the present issues in a pleading responsive to any
enforcement action of a Canadian judgment in the United States,
if any is threatened or brought by defendants. See Basic, 949 F.
Supp. at 1341.
As such, this Court is not convinced that the
present action is the most effective or efficient remedy
available to the parties.
3.
Conclusion
In light of the above analysis, the Court will exercise its
discretion and decline to consider this petition for declaratory
relief.
There is therefore no need to stay these proceedings
until the Canadian litigation is resolved.
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ORDER
For the foregoing reasons, defendants’ motion to dismiss
(Docket No. 12) is, with respect to want of personal
jurisdiction, DENIED, but is, with respect to the Court’s
discretion pursuant to the Declaratory Judgment Act, ALLOWED.
So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated: August 4, 2016
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