Exist, Inc. v. The Vermont Country Store, Inc.

Filing 44

OPINION AND ORDER Denying 31 Plaintiff's Motion to Dismiss or Strike Defendant's Counterclaim and in the Alternative Motion to Transfer and Granting 32 Plaintiff's Motion for Voluntary Dismissal. Plaintiff's claim is dismissed without prejudice. Defendant's counterclaim shall remain pending before the court. Signed by Judge Christina Reiss on 10/21/2019. (pac)

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
EXIST, INC.,
Plaintiff,
V.

THE VERMONT COUNTRY STORE, INC.,
Defendant.

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Case No. 2: 19-cv-00058

OPINION AND ORDER
DENYING PLAINTIFF'S MOTION TO DISMISS OR STRIKE DEFENDANT'S
COUNTERCLAIM AND IN THE ALTERNATIVE MOTION TO TRANSFER
AND GRANTING PLAINTIFF'S MOTION FOR VOLUNTARY DISMISSAL
(Docs. 31 & 32)
Plaintiff Exist, Inc. ("Plaintiff') is a Florida-based resort apparel company which
filed suit in the United States District Court for the Southern District of Florida against
Defendant The Vermont Country Store, Inc. ("Defendant") seeking a declaration of rights
with regard to an alleged copyright infringement. On April 18, 2019, the case was
transferred to this court after the Southern District of Florida determined it did not have
personal jurisdiction over Defendant. Following the transfer, on April 19, 2019,
Defendant filed an Answer to Plaintiffs Amended Complaint which interposed a
counterclaim alleging copyright infringement and seeking injunctive relief and damages.
(Doc. 25.)
David M. Pocius, Esq. and Nancy J. Flint, Esq. represent Plaintiff. Mark F. Werle,
Esq., Matthew Scott Nelles, Esq., and Stacy 0. Stitham, Esq. represent Defendant.

I.

Factual and Procedural Background.
A.

Factual Allegations.

The facts are derived from the parties' pleadings, briefing, and declarations.
Plaintiff sells resort apparel imprinted with original fabric designs that are the subject of
copyright registration with the United States Copyright Office. One such design is the

Fish Print Design, which Plaintiff alleges was created in Florida in 1993 and was
registered with the United States Copyright Office in 1997. The individual who created
the Fish Print Design, Shaul Ashkenazy, is still employed by Plaintiff and located in
Florida, as are all records related to the Fish Print Design.
The Rock Fish Design was created and published in 1996 by Demy, Inc., d/b/a M.
Mac, Inc., a now dissolved California corporation. Defendant acquired "all of the
exclusive rights" to the Rock Fish Design through assignment in April of 2018. (Doc. 25
at 4,

~

8.) The timing of the creation date of the Fish Print Design and the publication

date of the Rock Fish Design are disputed, as is whether Plaintiff had access to the Rock
Fish Design and copied it.
Plaintiff operates an interactive website through which apparel is available for
purchase. Plaintiff also sends mail-order catalogs directly to merchants and attends a
number of trade shows in the United States and other locations at which it advertises its
apparel. Plaintiff asserts that it has not sent any catalogs to any entity or person in
Vermont, is not registered to do business in Vermont, has not conducted any business in
Vermont, and has no agents conducting business on its behalf in Vermont. Since 2015,
Plaintiff has fulfilled one purchase order for $489 .00 for a customer located in Vermont,
which constituted less than 0.001 % of Plaintiffs gross revenues for that year.
In late summer 2018, Defendant "became aware" that Plaintiff was selling
clothing items with the Fish Print Design. (Doc. 25 at 4, ~ 9.) Defendant sent a cease
and desist letter to Plaintiff in September of 2018 asserting that the Fish Print Design
infringed upon the Rock Fish Design copyright. Thereafter, Plaintiff filed its declaratory
judgment action in the Southern District of Florida "with respect to Defendant's threat of
copyright infringement," seeking to clarify the parties' respective copyright rights. (Doc.
5at2,~7.)
Plaintiff alleges that Defendant "has communicated an imminent threat to
Plaintiff' regarding the infringement of the Rock Fish Design copyright, which Plaintiff
asserts was registered on June 2, 1998. Id. at 1, ~ 5. It further alleges that Defendant "is
not the owner of the ROCK FISH Fabric Design copyright" and thus "has no rights to
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enforce [it.]" Id. at 2, 1 6. In the alternative, Plaintiff claims that it "has not infringed
any such alleged copyright," id., and that the 1998 registration is "invalid." Id. at 2, 19.

B.

Southern District of Florida Proceedings.

On March 19, 2019, Defendant filed a motion to dismiss or transfer in the
Southern District of Florida, seeking dismissal for lack of personal jurisdiction under
Florida's long-arm statute and the Due Process Clause to the Fourteenth Amendment of
the United States Constitution. Plaintiff opposed dismissal and transfer, arguing that the
Southern District of Florida had specific jurisdiction over its copyright infringement
claim and Defendant had sufficient minimum contacts with Florida because of its
website. Plaintiff also asserted that the relevant factors for transfer under 28 U.S.C.
§ 1404(a) favored Florida over Vermont and addressed those factors at some length in its
briefing. In opposing Defendant's motion to dismiss or transfer, Plaintiff did not argue
that the District of Vermont lacked personal jurisdiction over Plaintiff, rendering that
forum inappropriate as the transferee jurisdiction.
On April 18, 2019, the Southern District of Florida granted Defendant's motion
and transferred the case to the District of Vermont. In doing so, the Southern District of
Florida analyzed Florida's long-arm statute, conducted a due process analysis pursuant to
the Fourteenth Amendment, and concluded that it was "not a close call" to find that the
court lacked personal jurisdiction over Defendant. (Doc. 21 at 4.) It ordered the case
transferred to the District of Vermont.

C.

Defendant's Compulsory Counterclaim.

On April 19, 2019, following transfer to this court, Defendant filed an Answer and
compulsory counterclaim alleging that Plaintiffs distribution of clothing items with the
Fish Print Design infringes on Defendant's right to use the Rock Fish Design copyright in
violation of 17 U.S.C. § 501 et seq. and 17 U.S.C. § 106 of the Copyright Act of 1976.
Defendant alleges that the creator of the Rock Fish Design "complied in all respects with
the requirements of the Copyright Act" in applying for and receiving registration from
the Register of Copyrights, and that Defendant is "the present owner of all of the
exclusive rights to the 'ROCK FISH' copyright." (Doc. 25 at 4, 117-8.) While Plaintiff
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"had access" to and was "on notice" of the Rock Fish Design, Plaintiff, without
authorization, allegedly "caused to be manufactured, has sold, continues to sell ... , and is
causing to be distributed items of clothing entitled 'Fish Print' that are copies of, and bear
constituent elements of, the 'ROCK FISH' design." Id. at 5, 1115-16. Defendant further
asserts that Plaintiff acted willfully and recklessly and "has derived and continues to
derive substantial revenues from the sale of its 'Fish Print' dresses and clothing." Id. at
6, 121.
As a result of Plaintiff's alleged infringement, Defendant states that it "has
suffered and continues to suffer irreparable harm, and is entitled to injunctive relief and
an order impounding all infringing materials." Id. at 6,122. Defendant seeks dismissal
of Plaintiff's claim with prejudice and an award of reasonable attorney's fees incurred in
defending against Plaintiff's action. For further relief, Defendant asks that Plaintiff "be
enjoined and restrained during the pendency of this action, and permanently, from
infringing in any manner the 'ROCK FISH' design" and from using the Fish Print
Design. Id. at 6-7, 1 3. Defendant also seeks an award of actual damages pursuant to 17
U.S.C. § 504(b ); "[p]rofits derived by [Plaintiff] attributable to its 'Fish Print' dresses and
clothing" pursuant to 17 U.S.C. § 504(b), id. at 7, ,r 4(b); and statutory damages pursuant
to 17 U.S.C. § 504(c).
Plaintiff responded on May 13, 2019, moving to dismiss or strike Defendant's
counterclaim or, in the alternative, to transfer it to the Southern District of Florida. (Doc.
31.) On the same day, Plaintiff moved to voluntarily dismiss its declaratory judgment
action. (Doc. 32.) Defendant opposed both motions. On June 21, 2019, Plaintiff replied,
on which date the court took the pending motions under advisement.
II.

Conclusions of Law and Analysis.
A.

Whether Defendant's Counterclaim Should Be Dismissed for Lack of
Personal Jurisdiction or, in the Alternative, Whether It Must Be
Transferred.

Plaintiff seeks dismissal of Defendant's counterclaim, asserting this court lacks
personal jurisdiction over Plaintiff. In the alternative, Plaintiff requests that this lawsuit

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be transferred back to the Southern District of Florida. Defendant responds that this court
need not establish independent jurisdiction over a compulsory counterclaim or personal
jurisdiction over a plaintiff that has initiated a lawsuit which has been transferred.
28 U.S.C. § 1404(a) provides that: "[f]or 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." The Court of Appeals for the Federal Circuit has held that,
under 28 U.S.C. § 1404, "[t]here is no requirement under§ 1404(a) that a transferee court
have jurisdiction over the plaintiff or that there be sufficient minimum contacts with the
plaintiff; there is only a requirement that the transferee court have jurisdiction over the
defendants in the transferred complaint." In re Genentech, Inc., 566 F.3d 1338, 1346
(Fed. Cir. 2009).
In other words, "there is no due-process concern, at least to the level of requiring
minimum contacts with the new forum, for plaintiff when a case is transferred under
§ 1404(a)," because "even with a counterclaim, plaintiff chose to initiate litigation

enabling the counterclaim. In no sense is plaintiff unilaterally being haled into court to
defend." Murray v. Scott, 176 F. Supp. 2d 1249, 1255-56 (M.D. Ala. 2001). "To the
extent [plaintiff] is seeking minimum procedural due-process protection, § 1404(a)
provides such." Id at 1256 (emphasis in original). When a transferring court finds
"transfer to [the transferee] district proper, [] there is no reason to question its decision."

Id. at 1256.
Correspondingly, a '"[p]laintiff may not object that the court lacks personal
jurisdiction or that venue is improper for purposes of adjudicating a compulsory
counterclaim that defendant has interposed."' Gary Friedrich Enters., LLC v. Marvel
Enters., Inc., 2011 WL 13262163, at *2 (S.D.N.Y. May 4, 2011) (quoting 6 Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure§ 1416 (3d
ed. 2010)) (alteration in original). "[When] the transferring court has already deemed
[the transferee] district appropriate, defendants are free to assert their counterclaim even
though venue might have been improper if it had been brought as an independent action."
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Id. "[N]o independent basis of federal jurisdiction is needed for the court to adjudicate

the ancillary issues [including compulsory counterclaims] thus raised, if the main claim
itself presents a colorable federal issue." Harris v. Steinem, 571 F.2d 119, 121-22 (2d
Cir. 1978).
"Under law-of-the-case principles, if the transferee court can find the transfer
decision plausible, its jurisdictional inquiry is at an end." Christianson v. Colt Indus.
Operating Corp., 486 U.S. 800, 819 (1988). The Second Circuit has not articulated a

standard for evaluating when a retransfer is appropriate. However, district courts in the
Second Circuit have followed the Fifth Circuit's standard that "[i]f [a] motion to transfer
is granted and the case is transferred to another district, the transferee-district should
accept the ruling on the transfer as the law of the case and should not re-transfer except
under the most impelling and unusual circumstances or if the transfer order is manifestly
erroneous." In re Cragar Indus. Inc., 706 F.2d 503, 505 (5th Cir. 1983) (internal
quotation marks omitted); see Repp v. Webber, 142 F.R.D. 398, 400-01 (S.D.N.Y. 1992)
(quoting In re Cragar, 706 F.2d at 505); Gary Friedrich Enters., LLC, v. Marvel Enters.,
Inc., 2008 WL 4129640, at *3 (S.D.N.Y. Sept. 4, 2008) (same). "Impelling and unusual

circumstances arise when 'unanticipatable post-transfer events frustrate the original
purposes of the transfer.'" Repp, 142 F.R.D. at 400-01 (quoting In re Cragar, 706 F.2d
at 505); see also Washington Nat. Life Ins. Co. ofN Y v. Morgan Stanley & Co. Inc., 974
F. Supp. 214,220 (S.D.N.Y. 1997) (noting that, in the context of a motion for retransfer,
"[t]he Court may depart from the law of the case if the previous decision is clearly
erroneous").
"Motions to retransfer are highly disfavored under the doctrine of law of the case."
Gorzynski v. JetBlue Airways Corp., 10 F. Supp. 3d 408, 412 (W.D.N.Y. 2014). "Indeed,

the policies supporting the doctrine [of law of the case] apply with even greater force to
transfer decisions than to decisions of substantive law; transferee courts that feel entirely
free to revisit transfer decisions of a coordinate court threaten to send litigants into a
vicious circle of litigation." Christianson, 486 U.S. at 816. The Supreme Court has
cautioned that "a perpetual game of jurisdictional ping-pong" in which "the litigants are
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bandied back and forth helplessly between two courts, each of which insists the other has
jurisdiction," is "exasperating for the litigants" and "wasteful for all concerned[]." Id. at
818.
In this case, Plaintiff was afforded due process when the Southern District of
Florida conducted its§ 1404(a) analysis. If Plaintiff "could successfully assert lack of
personal jurisdiction as a defense to the counterclaim, [D]efendant[], while still required
to defend in the original action, would have to forfeit [its] claims arising from the same
transaction." Grupke v. Linda Lori Sportswear, Inc., 174 F.R.D. 15, 18 (E.D.N.Y. 1997).
This would encourage forum shopping, as well as the needless expenditure of party and
judicial resources as a case is transferred back and forth between competing jurisdictions.
See U.S. Bank N.A. v. Bank ofAm. N.A., 916 F.3d 143, 153 (2d Cir. 2019) (observing that
allowing the case to remain in the transferee court "notwithstanding that the ... transfer
order was based on a mistake of law, is a far lesser evil than subjecting the parties to the
further expense and delay of a retransfer, with the attendant risk of still further rounds of
transfers").
The Southern District of Florida rejected Plaintiff's arguments as to why the
relevant factors under 28 U.S.C. § 1404(a) favored Florida. The only changed
circumstances Plaintiff cites is Defendant's filing of a counterclaim. There was no error
in the Southern District of Florida's § 1404(a) analysis; the Southern District of Florida
found that transfer was appropriate, its decision was plausible, and there is no factual or
legal basis to disturb it. See All.first Bank v. Progress Rail Servs. Corp., 178 F. Supp. 2d
513, 517 (D. Md. 2001) (rejecting a motion to retransfer, noting that the movant was "in
effect requesting this Court to act as an appellate court and reverse," and holding that "[a]
transferee court should accept the ruling of the transferor court as the law of the case and
should not retransfer except under the most impelling and unusual circumstances or if the
transfer order is manifestly erroneous") (citation and internal quotation marks omitted).
For the reasons stated above, Plaintiff's motion to dismiss for lack of personal
jurisdiction or, in the alternative, to transfer Defendant's counterclaim to the Southern
District of Florida is DENIED.
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B.

Whether Defendant's Counterclaim Should Be Struck as Duplicative.

Citing Fed. R. Civ. P. 12(f), Plaintiff moves to strike Defendant's counterclaim as
duplicative, contending the counterclaim is "merely a 'mirror image' of Plaintiffs cause
of action." (Doc. 31 at 14.) Defendant counters that while Plaintiff seeks only
declaratory relief, its counterclaim requests declaratory relief as well as injunctive relief,
actual and statutory damages, profits, costs, and attorney's fees. Defendant points out
that if it prevailed on Plaintiffs declaratory judgment claim, it would not be entitled to
the additional remedies it seeks.
Fed. R. Civ. P. 12(f) provides that "[t]he court may strike from a pleading ... any
redundant ... matter." "[W]hen a counterclaim is merely a 'mirror image' of the
complaint, the counterclaim serves no purpose and may be dismissed." Arista Records
LLC v. Usenet.com., Inc., 2008 WL 4974823, at *3 (S.D.N.Y. Nov. 24, 2008);
Orientview Techs. LLC v. Seven For All Mankind, LLC, 2013 WL 4016302, at* 1

(S.D.N.Y. Aug. 7, 2013) ("A redundant counterclaim may be dismissed [w]hen a
counterclaim is merely the 'mirror image' of an opposing party's claim and the
counterclaim serves no independent purpose.") (alteration in original) (internal quotation
marks omitted). "A mirror image counterclaim is generally the exact opposite of the
original claim with no added nuances." Canon US.A., Inc. v. F & E Trading LLC, 2017
WL 4357339, at* 10 (E.D.N.Y. Sept. 29, 2017). "[A] counterclaim is not duplicative or
redundant if it asserts an independent case or controversy that survives the dismissal of
the plaintiffs claim." Marvel Worldwide, Inc. v. Kirby, 756 F. Supp. 2d 461,467
(S.D.N.Y. 2010).

Here, Defendant requests not only a declaratory judgment under the Rock Fish
Design copyright but also affirmative relief in the form of an injunction, actual and
statutory damages, profits attributable to Plaintiffs alleged infringement, costs, and
attorney's fees. Because the relief Defendant seeks would not be available even if it
prevailed on Plaintiffs request for declaratory judgment, Defendant's counterclaim is not
a mirror image. See Five Star Dev. Resort Cmtys. LLC v. iStar RC Paradise Valley LLC,
2012 WL 1003557, at *5 (S.D.N.Y. Mar. 26, 2012) ("[T]he Court finds that Claim I and
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the First Counterclaim are not simply mirror images of one another, as the Counterclaim
also seeks a declaration that iStar is entitled to exercise default remedies under specified
documents."). For this reason, the court DENIES Plaintiffs request to strike Defendant's
counterclaim on "mirror image" grounds.
C.

Whether Plaintiff May Voluntarily Dismiss Its Claim.

In the alternative to the court dismissing or transferring Defendant's counterclaim,
Plaintiff requests to voluntarily dismiss its suit without prejudice. Fed. R. Civ. P.
41(a)(2) provides that:
[A]n action may be dismissed at the plaintiffs request only by court order,
on terms that the court considers proper. If a defendant has pleaded a
counterclaim before being served with the plaintiffs motion to dismiss, the
action may be dismissed over the defendant's objection only if the
counterclaim can remain pending for independent adjudication. Unless the
order states otherwise, a dismissal under this paragraph ... is without
prejudice.
"A voluntary dismissal without prejudice under Rule 41(a)(2) will be allowed if the
defendant will not be prejudiced thereby." D'Alto v. Dahan Cal., Inc., 100 F.3d 281,283
(2d Cir. 1996) (citation and internal quotation marks omitted); see also Gap, Inc. v. Stone
Int'! Trading, Inc., 169 F.R.D. 584, 588 (S.D.N.Y. 1997) ("[T]he presumption in this

circuit is that a court should grant a dismissal pursuant to Rule 41(a)(2) absent a showing
that defendants will suffer substantial prejudice as a result.") (citations omitted).
The Second Circuit has identified two distinct lines of authority for determining
when dismissal without prejudice will harm a defendant. First, legal prejudice to a
defendant renders a dismissal without prejudice improper. See Kwan v. Schlein, 634 F .3d
224,230 (2d Cir. 2011). "Legal prejudice would occur, for example, if dismissal of the
plaintiffs case also impairs the ability of a defendant to pursue a counterclaim in the
same action that plaintiff seeks to dismiss." Brown v. Nat'! R.R. Passenger Corp., 293
F.R.D. 128, 131 (E.D.N.Y. 2013) (citation omitted); see also Camilli v. Grimes, 436 F.3d
120, 124 (2d Cir. 2006) (holding that "plain legal prejudice" concerns "the plight of a
defendant who is ready to pursue a claim against the plaintiff in the same action that the
plaintiff is seeking to have dismissed") (emphasis in original).

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Because Defendant's counterclaim can remain in this court independent of
Plaintiffs request for a declaratory judgment, dismissal of Plaintiffs claim would not
legally prejudice Defendant. Defendant, as the alleged assignee of the Rock Fish Design
copyright, may bring an affirmative claim for copyright infringement against Plaintiff.
See 17 U.S.C. § 50l(b) ("The legal or beneficial owner of an exclusive right under a

copyright is entitled ... to institute an action for any infringement of that particular right
committed while he or she is the owner of it."); John Wiley & Sons, Inc. v. DRK Photo,
882 F.3d 394,410 (2d Cir. 2018), cert. denied, 139 S. Ct. 237 (2018) ("[A]n exclusive
licensee is a 'legal owner' of an exclusive right for purposes of a copyright infringement
action under section 501(b)[.]").
In addition, a court may continue to exercise jurisdiction over a compulsory
counterclaim despite voluntary dismissal of a plaintiffs original claim "so long as it ha[s]
subject matter jurisdiction over the main claim." Eberhard Inv. Assocs., Inc. v. Santino,
2004 WL 594728, at *2 (S.D.N.Y. Mar. 25, 2004) (quoting 8 James Wm. Moore et al.,
Moore's Federal Practice,§ 41.40[8][a] (3d ed. 1997)) (holding court could
independently adjudicate counterclaim for declaratory judgment of copyright
ownership). 1 Defendant's counterclaim is compulsory under Fed. R. Civ. P. 13(a)
because its allegations of infringement "arise[] out of the transaction or occurrence that is
the subject matter of the opposing party's claim." Fed. R. Civ. P. 13(a). 28 U.S.C. §

1

According to a leading treatise:
The purpose ofth[e] [counterclaim] portion of [Fed R. Civ. P. 41(a)(2)] is to
preserve the district court's jurisdiction over the parties and the counterclaim.
Ordinarily the defendant's counterclaim can stand on its own and a dismissal can
be granted on the plaintiffs claims without affecting the adjudication of the
counterclaim. If the counterclaim is compulsory, it is settled that the district court
has ancillary jurisdiction, which is now called supplemental jurisdiction under
Section 1367 of Title 28 of the United States Code, to decide it even though the
plaintiffs claim is dismissed.

9 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure§ 2365 (3d ed. 2019)
(footnotes omitted).

10

1338(a) confers original and exclusive subject matter jurisdiction to federal courts over
copyright claims. The court thus retains jurisdiction over Defendant's counterclaim even
if Plaintiff's claim is dismissed. See Empire United Lines Co., Inc. v. Presniakovas, 2017
WL 4233032, at *3 (E.D.N.Y. Sept. 22, 2017) ("[W]hen counterclaims are compulsory,
as they are here, the Court may retain jurisdiction over the counterclaims, even if
plaintiff's claims are dismissed."); View 360 Solutions LLC v. Google, Inc., 310 F.R.D.
47, 50-51 (N.D.N.Y. 2015) (observing that despite dismissal of certain claims, the court
"possesse[ d] original subject-matter jurisdiction ... under 28 U.S.C. §§ 1331 and 1338,"
as the remaining cross-counterclaims were compulsory).
The possibility that Plaintiff will reinitiate litigation against Defendant is not a
basis for finding legal prejudice. "[S]tarting a litigation all over again does not constitute
legal prejudice" unless "'the cause has proceeded so far that the defendant is in a position
to demand on the pleadings an opportunity to seek affirmative relief and he would be
prejudiced by being remitted to a separate action."' D'Alto, 100 F.3d at 283 (quoting
Jones v. Sec. & Exchange Comm 'n, 298 U.S. 1, 19-20 (1936)). Defendant thus will not

suffer legal prejudice from dismissal of Plaintiff's action for declaratory judgment
because Defendant can still "insist that the cause proceed to a decree" in this court
despite dismissal. D'Alto, 100 F.3d at 283 (quoting Jones, 289 U.S. at 20).
In the absence oflegal prejudice, the Second Circuit's second line of authority
requires the court to consider the following factors in determining whether a claim should
be dismissed with prejudice: (1) "plaintiff's diligence in bringing the motion;" (2) "any
'undue vexatiousness' on plaintiff's part;" (3) "the extent to which the suit has
progressed, including the defendant's effort and expense in preparation for trial;" (4) "the
duplicative expense of relitigation;" and (5) "the adequacy of plaintiff's explanation for
the need to dismiss." Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990).
The first and third Zagano factors favor dismissal without prejudice because
Plaintiff waited only a month to seek voluntary dismissal after transfer of its lawsuit to
this court, although the action itself has been pending since October of 2018. See
Wambolt v. State's Attorney of Chittenden Cty., 2008 WL 2217045, at* 1 (D. Vt. May 27,
11

2008) (holding Zagano factors favored dismissal without prejudice where plaintiff filed
motion "nearly one month after his request for appointed counsel was denied").
Discovery has not yet taken place, and Defendant's "effort and expense in preparation for
trial has been minimal." Elliot v. Buffalo City Sch. Dist., 2018 WL 1726535, at *3
(W.D.N.Y. Apr. 10, 2018) (granting motion for voluntary dismissal without prejudice
despite Defendant filing Answer, two motions, participating in Rule 26(f) conference,
and sending deposition notices and subpoenas); see also Catanzano v. Wing, 277 F.3d 99,
110 (2d Cir. 2001) (holding district court abused discretion in not dismissing claim
without prejudice where the "claim has thus far not been litigated and only halting
discovery has taken place").
The fourth Zagano factor, risk of duplicative relitigation, is in equipoise because
although this case "has barely been litigated at all," Catanzano, 277 F .3d at 110, two
lawsuits on the same subject matter in two different jurisdictions is not cost effective for
either the courts or parties involved and presents the possibility of inconsistent results.
The second and fifth Zagano factors weigh in favor of denying Plaintiffs motion
for voluntary dismissal without prejudice as there is some concern of "undue
vexatiousness" and the lack of an adequate explanation for the dismissal. See Zagano,
900 F .2d at 15 (deeming plaintiffs desire to abandon her claims on the eve of trial as
"evidence that she was perfectly happy to have the lawsuit out there until all of a sudden
she had to do something with it") (internal quotation marks omitted). Plaintiff sought
dismissal of its claim only after Defendant asserted its compulsory counterclaim. In this
respect, Plaintiffs desire to abandon its claim appears strategic.
The court has three options for disposition of Plaintiffs motion for voluntary
dismissal: ( 1) force Plaintiff to litigate a claim it seeks to dismiss in the District of
Vermont; (2) force Plaintiff to forgo the right to bring this claim elsewhere as a condition
of dismissal; or (3) allow Plaintiff to dismiss its claim here and risk the possibility that
Plaintiff will initiate duplicative litigation elsewhere. Among these options, the third best
reflects the procedural posture of the case and Defendant's ability to protect itself from
vexatious litigation in another forum. See Colo. River Water Conservation Dist. v.
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United States, 424 U.S. 800, 817, 819 (1976) (observing that "[a]s between federal
district courts, ... though no precise rule has evolved, the general principle is to avoid
duplicative litigation," and discussing the factors that "clearly counsel against concurrent
federal proceedings").
On balance, the Zagano factors favor dismissal of Plaintiffs claim without
prejudice due to Plaintiffs diligence in filing its motion, the nascent stage of the
litigation, and Defendant's ability to litigate its counterclaim in this court. See Ruggieri-

Lam v. Oliver Block, LLC, 2016 WL 520986, at *2 (D. Vt. Feb. 8, 2016) (granting motion
to voluntarily dismiss without prejudice where the suit "remains in the early stages of
discovery[,] [n]o depositions have been taken, no dispositive motions have been filed, []
no trial date has been scheduled[, and] [t]he ENE session has not yet occurred").
Although this does not prevent Plaintiff from forum shopping, its ability to do so is
circumscribed by the need to establish personal jurisdiction over Defendant in any court
in which Plaintiff brings suit, the requirement that compulsory counterclaims be asserted
or waived, and the federal courts' avoidance of duplicative litigation.

D.

After Dismissal of Plaintiff's Claim, Whether This Court May Exercise
Personal Jurisdiction Over Plaintiff in the Litigation of Defendant's
Counterclaim.

Finally, Plaintiff is incorrect in its premise that any judgment entered against it in
this case after dismissal of its claim will be void for lack of personal jurisdiction.
Personal jurisdiction is waivable, and Plaintiff consented to this court's jurisdiction when
it did not assert lack of personal jurisdiction as a ground for objecting to the transfer from
the Southern District of Florida to the District of Vermont. See Neirbo Co. v. Bethlehem

Shipbuilding Corp., 308 U.S. 165, 168 (1939) (ruling personal jurisdiction "may be lost
by failure to assert it seasonably, by formal submission in a cause, or by submission
through conduct"); City ofNY v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 134 (2d Cir.
2011) ("A court will obtain, through implied consent, personal jurisdiction over a

defendant if the actions of the defendant during the litigation amount to a legal
submission to the jurisdiction of the court, whether voluntary or not.") (alterations and

13

citation omitted). In any event, the Federal Circuit has observed, "[t]here is no
requirement under [28 U.S.C.] § 1404(a) that a transferee court have jurisdiction over the
plaintiff or that there be sufficient minimum contacts with the plaintiffI.]" In re
Genentech, Inc., 566 F.3d at 1346. To hold to the contrary would set in motion the

"perpetual game of jurisdictional ping-pong" which the Supreme Court has proscribed.
Christianson, 486 U.S. at 418.
CONCLUSION

For the foregoing reasons, the court DENIES Plaintiffs motion to dismiss or
strike the counterclaim or, in the alternative, to transfer the counterclaim, (Doc. 31) and
GRANTS Plaintiffs motion to voluntarily dismiss its claim without prejudice. (Doc.
32.) Defendant's counterclaim shall remain pending before the court.

r

SO ORDERED.
Dated at Burlington, in the District of Vermont, this

~I~day of October, 2019.

Christina Reiss, District Judge
United States District Court

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