Skiva International, Inc. v. Minx International, Inc.
OPINION & ORDER re: 19 FIRST MOTION to Dismiss the action. filed by Minx International, Inc. For the reasons stated above, defendant's motion to dismiss is GRANTED. The Clerk of Court is directed to terminate the motion at ECF No. 26 and the action. (As further set forth in this Order) (Signed by Judge Katherine B. Forrest on 10/7/2015) (lmb)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SKIVA INTERNATIONAL, INC.,
MINX INTERNATIONAL INC.,
DOC #: _________________
DATE FILED: October 7, 2015
OPINION & ORDER
KATHERINE B. FORREST, District Judge:
Plaintiff Skiva International Inc. (“Skiva”), an apparel wholesaler, brings this
action under the Declaratory Judgment Act (“DJA”) against defendant Minx
International Inc. (“Minx”), a textile design company. At issue is whether Skiva
infringed upon a design to which Minx holds the copyright. Before this Court is
defendant Minx’s motion to dismiss the complaint as an improper anticipatory filing
and for improper venue. For the reasons set forth below, defendant’s motion to
dismiss is GRANTED.
On June 4, 2015, defendant Minx sent a cease-and-desist letter to plaintiff
Minx. (Declaration of Chan Yong Jeong Ex. 3 (“the Letter”).) The Letter alleges
that Skiva was “producing, manufacturing, distributing, and/or offering for sale
garments . . . which infringe [Minx’s] rights in a two-dimensional artwork,
110308(80225) . . . which has been approved by the United States Copyright Office
as of May 17, 2011 . . . .” (Id.) The Letter identifies the garment by label name,
product number, price, and attached photos. (Id.)
In the Letter, Minx demands that Skiva “IMMEDIATELY CEASE AND
DESIST from all distribution and/or sales of the fabric and garments discussed
above” and that Skiva provide “for an accounting” of 20 informational requests,
including quantity manufactured and sold, price paid, profits rendered, and identity
of purchasers, converters, and manufacturers. (Id. at 2 (emphasis in original).)
The Letter states that if Skiva does not verify by “3:00 pm PST on June 15, 2015,
that your company has ceased and desisted in its sale of the infringing garments
which exploit our client’s designs” and “produce the documentation requested,”
Minx “will have no alternative but to file a complaint against your company seeking
immediate injunctive relief, as well as compensatory, statutory and punitive
damages, attorneys’ fees and cost of suit.” (Id. at 3.) This entire section was in bold
Skiva filed the instant action for declaratory judgment on June 12, 2015,
three days before the deadline to respond to the cease-and-desist letter that Minx
imposed. The Complaint attaches the cease-and-desist letter as an exhibit. (See
Compl. Ex. A.) On June 16, 2015, Minx filed a lawsuit under the Copyright Act, 17
U.S.C. §101, in the U.S. District Court for the Central District of California. (Kakar
Decl. Ex. B.) That suit originally did not name Skiva as a defendant, but Minx
amended it on July 6, 2015 to add Skiva and other defendants. (Kakar Decl. Ex. B,
Defendant argues that the Court should dismiss this action because 1) the
action qualifies as an exception to the first-filed rule because it is improperly
anticipatory and 2) venue is improper. As set forth below, the Court GRANTS the
motion to dismiss because action was plainly filed as a preemptive strike—and is
there for an improper anticipatory filing.1
Generally, “[w]here there are two competing lawsuits, the first suit should
have priority.” Employers Ins. of Wausau v. Fox Entm’t Grp., Inc., 522 F.3d 271,
274–75 (2d Cir. 2008). There are, however, exceptions to the first-filed rule. Id. at
275. One of those exceptions is when the “first-filed lawsuit is an improper
anticipatory declaratory judgment action . . . filed in response to a direct threat of
litigation that gives specific warnings as to deadlines and subsequent legal action.”
Id. at 275–76; see also Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 219 (2d Cir.
1978) (“When the declaratory action has been triggered by a notice letter, this
equitable consideration may be a factor in the decision to allow the later filed action
to proceed to judgment . . . .”), abrogated on other grounds by Pirone v. MacMillan,
Inc., 894 F.2d 579 (2d Cir. 1990); Akers Biosciences, Inc. v. Martin, 2015 WL
1054971 at *2 (S.D.N.Y.) (“Special circumstances may exist either where a party
improperly files an anticipatory declaratory judgment or where they are attempting
to forum shop.”).2
Accordingly, defendant’s motion to dismiss on improper venue grounds is moot.
That district courts have the power to dismiss declaratory judgment suits filed in
anticipation of other coercive action is well-recognized. See, e.g., Michael Miller Fabrics, LLC v.
Studio Imports Ltd., Inc., 2012 WL 2065294 (S.D.N.Y. 2012) (collecting cases); see also Dow Jones &
Plaintiff plainly filed this suit in anticipation of defendant filing a copyright
infringement suit against it. “When a notice letter informs a defendant of the
intention to file suit, a filing date, and/or a specific forum for the filing of the suit,
the courts have found, in the exercise of discretion, in favor of the second-filed
action.” J. Lyons & Co. v. Republic of Tea, Inc., 892 F. Supp. 486, 491 (S.D.N.Y.
1995); see also Cephalon, Inc. v. Travelers Companies, Inc., 935 F. Supp. 2d 609,
614 (S.D.N.Y. 2013). Here, defendant Minx’s June 4, 2015 cease-and-desist letter
serves as appropriate notice giving “specific warnings as to deadlines and
subsequent legal action.” Employers Ins. of Wausau at 275–76. While Minx did not
provide a date certain by which it would file suit, it specified both intent to sue and
a deadline after which it would sue. See Cephalon, 935 F. Supp. 2d at 615 (“[A] date
and forum are not fixed prerequisites, but mere indicia of notice.”). There is no
question that Skiva understood the letter to mean that a lawsuit against it by Minx
was imminent unless it complied with the letter’s demands.
“[T]he federal declaratory judgment is not a prize to the winner of a race to
the courthouses.” Factors, 579 F.2d at 219 (internal citations and quotation marks
Co. v. Harrods, Ltd., 237 F. Supp. 2d 394, 440 (S.D.N.Y. 2002) aff’d, 346 F.3d 357 (2d Cir. 2003) (“A
rush to file first in anticipation of litigation in another tribunal, thereby enabling a potential
defendant to choose the forum and governing law by which to adjudicate the dispute, and otherwise
to interfere with or frustrate the other party’s pursuit of claims elsewhere, is one of the equitable
considerations a court may weigh in ruling on a request for declaratory relief.”); Reliance Ins. Co. v.
Bend’N Stretch, Inc., 935 F. Supp. 476, 478 (S.D.N.Y. 1996) (“If a court finds that a declaratory
judgment action was brought in anticipation of the coercive suit for the purpose of gaining ‘home
field advantage,’ the coercive suit is given precedence.”); Great Am. Ins. Co. v. Houston Gen., 735 F.
Supp. 581, 584 (S.D.N.Y. 1990) (“Even if the basic requirements for a declaratory judgment action
are met, it is still within the discretion of the district court to decline to hear a declaratory judgment
action, particularly when there is a pending proceeding in another court . . . that will resolve the
controversies between the parties.”).
omitted). Minx “should not be deprived of the first-filed rule’s benefit simply
because its adversary used the resulting delay in filing to proceed with the mirror
image of the anticipated suit.” Id.3 Plaintiff’s early arrival at the courthouse steps
will not be rewarded with procedural advantage and frustration of defendant’s
pursuit of the claims in California. See Dow Jones & Co., Inc. v. Harrods, Ltd., 237
F.Supp.2d 394, 440 (S.D.N.Y. 2002).
For the reasons stated above, defendant’s motion to dismiss is GRANTED.
The Clerk of Court is directed to terminate the motion at ECF No. 26 and the
New York, New York
October 7, 2015
KATHERINE B. FORREST
United States District Judge
That plaintiff was not named as a defendant in the California action until the amended
complaint does not have significant bearing on the analysis above. While the time between two
actions can be a relevant consideration for deference to the first-filed forum, the difference of less
than three weeks does not affect the determination that Minx gave sufficient notice of its intent to
file suit. See Michael Miller Fabrics, LLC v. Studio Imports Ltd., Inc., 2012 WL 2065294 at *6
(S.D.N.Y. 2012) (“[W]here two actions are filed within a short span of time . . . less deference may be
afforded to the forum of the first filing”); Kakar Decl. Exs. B, C.)
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