United States District Court, W.D. Michigan, Southern Division
OPINION AND ORDER
HONORABLE PAUL L. MALONEY JUDGE
matter is before the Court on Defendant LDC's motion to
dismiss or transfer. (ECF No. 17.) Defendant argues, among
other things, that Plaintiff Snapology surreptitiously sought
to file this declaratory action in Michigan while inducing
Defendant to delay its own intentions to file an infringement
action in Rhode Island.
Court agrees. Plaintiff filed what is known as an
“anticipatory” declaratory judgment action that
was irrefutably improper under the circumstances. Two
independent bases justify dismissing this action without
prejudice to allow Plaintiff to file a counter-complaint in
the United States District Court for the District of Rhode
Island: (1) the “generally recognized doctrine of
federal comity which permits a district court to decline
jurisdiction over an action when a complaint involving the
same parties and issues has already been filed in another
district, ” Pacesetter Sys., Inc. v. Medtronic,
Inc., 678 F.2d 93, 94-95 (9th Cir. 1982); and (2) the
Court's “[d]iscretion not to hear a declaratory
judgment action, even [though] jurisdiction exists, ”
Zide Sport Shop of Ohio, Inc. v. Ed Tobergte Assocs.,
Inc., 16 F. App'x 433, 437 (6th Cir. 2001) (citing
Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491,
494 (1942)). Accordingly, this action must be dismissed
between federal district courts, . . . though no precise rule
has evolved, the general principle is to avoid duplicative
litigation.” Colorado River Water Conservation
Dist. v. United States, 424 U.S. 800, 817
(1976). Application of this generally recognized
doctrine of federal comity necessitates that “an ample
degree of discretion, appropriate for disciplined and
experienced judges, must be left to the lower courts.”
Kerotest Mfg. Co., 342 U.S. at 183-84; accord.
Medtronic, 678 F.3d at 95.
sound judicial administration would indicate that when two
identical actions are filed in courts of concurrent
jurisdiction, the court which first acquired jurisdiction
should try the lawsuit and no purpose would be served by
proceeding with a second action. However, this ‘first
to file' rule is not a rigid or inflexible rule to be
mechanically applied, but rather is to be applied with a view
to the dictates of sound judicial administration.”
Medtronic, 678 F.2d at 94-95.
that weigh against enforcement of the first-to-file rule
include extraordinary circumstances, inequitable conduct, bad
faith, anticipatory suits, and forum shopping. Zide,
16 F. App'x at 437 (citing Alltrade, Inc. v. Unwield
Prods., Inc., 946 F.2d 622, 628 (9th Cir. 1991) and
E.E.O.C. v. Univ. of Pennsylvania, 850 F.2d 969, 972
(3d. Cir. 1988)). Similarly, “[d]iscretion not to hear
a declaratory judgment action, even where jurisdiction
exists, is undisputed”-and discretion in that vein is
particularly appropriate where plaintiffs “engage in
procedural fencing.” Zide Sport Shop of Ohio,
Inc., 16 F. App'x at 437.
Zide, the Sixth Circuit affirmed a district
court's reconciliation and application of an exception to
the first-to-file rule and the declaratory judgment standard.
Id. There, the plaintiffs misled defendants by going
along with written negotiations while proceeding to file a
lawsuit. Id. The plaintiffs knew if a settlement was
not reached, the defendants would seek legal recourse.
Id. Plaintiffs filed a lawsuit the day before a
negotiation period expired. Id.
Sixth Circuit quoted the district court's findings, and
If Plaintiffs' conduct was not mere deceptive
gamesmanship, then they would have informed Defendants that
they did not intend to make another settlement offer and
would prefer to seek a judicial resolution. If it was not
gamesmanship, Plaintiffs would not have filed suit in this
Court during the extension period they requested . . . .
Id. at 438.
facts in this case closely resemble those in Zide
and a host of other cases. See, e.g., Tempco Elec. Heater
Corp. v. Omega Eng'g, Inc., 819 F.2d 746, 749 (7th
Cir. 1987); Teledyne Tech. Inc. v. Harris Corp.,
2011 WL 2605995, at *3 (C.D. Cal. July 1, 2011); NSI
Corp. v. Showco, Inc., 843 F.Supp. 642, 646 (D. Or.
14, 2016, LDC's counsel sent a demand letter to
Snapology. (ECF No. 18-3 at PageID.255.) Two weeks later,
LDC's counsel engaged in settlement with Snapology's
counsel on the telephone regarding the claims asserted by
LDC. (Id.) Snapology's counsel led LDC's
counsel to believe “the parties had reached an
understanding of working toward a prompt out of court
settlement.” (Id.) Correspondence continued.
On July 8, 2016, LDC's counsel sent further
correspondence to Snapology's counsel, giving ten days to
respond “if [Snapology] is still willing to attempt to
resolve this matter voluntarily.” (Id. at
PageID.269.) On July 15, 2016, Snapology's counsel
responded: “I have a meeting with my client on Monday
to review and respond to your demand. I will follow up by
Tuesday”- roughly within the ten-day timeframe.
Snapology did not “respond to [LDC's] demand,
” as promised, on Tuesday; rather, on that very same
day, it rushed to file a declaratory judgment action in
Muskegon County ...