800-Flowers, Inc. v. Intercontinental Florist, Inc., 94 Civ. 4224 (PKL).

Citation860 F. Supp. 128
Decision Date04 August 1994
Docket NumberNo. 94 Civ. 4224 (PKL).,94 Civ. 4224 (PKL).
Parties800-FLOWERS, INC., Plaintiff, v. INTERCONTINENTAL FLORIST, INC., Defendant.
CourtU.S. District Court — Southern District of New York

COPYRIGHT MATERIAL OMITTED

Baer, Marks & Upham, New York City, Howard Graff, Neal S. Barlia, Jennifer Bush, of counsel, for plaintiff.

Varet & Fink, New York City, Andrew L. Deutsch, Mitchell E. Radin, Diane S. Wolfson, of counsel, Rumberger, Kirk & Caldwell P.A., Orlando, FL, Michael R. Levin, Craig P. Niedenthal, Christopher T. Hill, of counsel, for defendant.

OPINION AND ORDER

LEISURE, District Judge,

This action arises from an alleged infringement of plaintiff 800-Flowers, Inc.'s ("800-Flowers") mnemonic, 800-Flowers or 800-356-9377, by defendant Intercontinental Florist, Inc.'s ("ICF") mnemonic, 800-FLOWERS or 800-350-9377. Plaintiff 800-Flowers seeks a preliminary injunction in this Court. In response to plaintiff's motion for injunctive relief, defendant has moved this Court for an order dismissing the action on the following grounds: (i) the first filed rule; (ii) lack of personal jurisdiction; and (iii) improper venue. Alternatively, defendant moves for an order transferring the action pursuant to 28 U.S.C. § 1404(a). Plaintiff opposes defendant's motion to dismiss or transfer. The preliminary injunction which plaintiff seeks would prohibit defendant's use of the mnemonic 800-FLOWERS, a toll free number used by ICF to solicit orders for flower deliveries. For the following reasons, defendant's motion to dismiss pursuant to the first filed rule is hereby granted. Accordingly, the Court need not reach the other issues raised in the instant cross-motions.

BACKGROUND
A. Factual Background

Plaintiff 800-Flowers is a Texas corporation in the business of telemarketing flowers and floral arrangements nationwide through the use of an 800 toll-free number, 1-800-356-9377. 800-Flowers' principal place of business is in Westbury, New York. Typically, customers place orders for delivery of flowers by dialing 1-800-FLOWERS and speaking with a telerepresentative. A customer's order is filled either by one of 800-Flowers' retail stores or by a participating local florist. Plaintiff owns the following United States Servicemark registrations permitting it to receive and transmit flowers and floral products to customers: "DIAL-1-800-FLOWERS," "800-FLOWERS," "CALL 1-800-FLOWERS" and "THE ONE 800 NUMBER FOR FLOWERS".

Defendant ICF, a Florida corporation with its sole place of business in Florida, is also in the business of telemarketing flowers and floral arrangements through the use of an 800 toll-free number, 1-800-350-9377. See Affidavit of Richard Borguss at P. 2-3 To solicit orders for flower deliveries, ICF advertises itself nationally in newspapers and on television, referring to its business as "1-800-350-9377." After negotiating the rights to this number, 1-800-350-9377, with Mr. Greg Parrish of Telemarketing Incorporated in or about January 1994, ICF began using the number in or about March of 1994. Affidavit of Thomas Gregory Parrish at 3.

ICF routinely receives calls for flower orders and then, to coordinate the actual delivery, ICF contacts local florists within the caller's state. See Affidavit of William James Marquez at 1-2, 6. ICF receives a commission on the sale and delivery of flowers by the local florist. ICF contends, however, that it maintains no other business contacts with New York and, furthermore, that it is not registered to do business in New York. Id. at 6. ICF contends that 800-Flowers has been on notice of ICF's use of ICF's 800 number since March of 1994 at which time, ICF contends, 800-Flowers began making disparaging remarks about ICF. ICF alleges that plaintiff told ICF customers that ICF employees were "crooks and thieves" as well as falsely asserted that ICF and plaintiff were in litigation over use of the telephone number.

B. Procedural Background

On May 19, 1994, attorneys for ICF filed a motion for declaratory judgment action in the Circuit Court for Orange County. Intercontinental Florist, Inc. v. 800-Flowers, Inc. and McCann Companies, Inc., 94-664-CIV-ORL-19,1 seeking a declaration of ICF's right to use the number 1-800-350-9377. ICF contends that, prior to that action, ICF and 800-Flowers were not involved in any type of negotiations. Id. at 7.

On June 8, 1994, twenty days after ICF filed its declaratory judgment action, 800-Flowers filed the instant action in this Court asserting claims of trademark infringement and unfair competition under the Lanham Act and pursuant to New York statutory and common law. Plaintiff 800-Flowers' complaint raises essentially the same issues as those raised in the Florida action commenced by defendant ICF. Plaintiff has since moved for preliminary injunctive relief pursuant to Fed.R.Civ.P. 65(a). In opposing plaintiff's motion for a preliminary injunction, and advancing its own motion to dismiss, defendant contends that the first filed rule prevents this Court from determining whether plaintiff is entitled to injunctive relief. Furthermore, defendant has also cross-moved (i) to dismiss for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(1); (ii) to dismiss pursuant to Fed.R.Civ.P. 12(b)(3) for improper venue; and/or (iii) to transfer pursuant to 28 U.S.C. § 1404(a). Plaintiff opposes defendant's motions to dismiss and to transfer.

DISCUSSION

The propriety of a forum is a threshold matter that the Court must consider before addressing the merits of an action. Adam v. Jacobs, 950 F.2d 89, 92 (2d Cir. 1991). Accordingly, before reaching plaintiff's motion for preliminary injunctive relief, this Court will consider whether, in light of the first filed rule, this action is properly before it.

A. First Filed Rule Prevents This Court From Retaining Jurisdiction of This Action

Where two courts have concurrent jurisdiction over an action involving the same parties and issues, courts will follow a "first filed" rule whereby the court which first has possession of the action decides it. See Ivy-Mar Co. v. Weber-Stephen Prods. Co., 1993 WL 535166, *1-2, 1993 U.S.Dist. LEXIS 17965, *2-3 (S.D.N.Y. Dec. 21, 1993) (Leisure, J.). Generally, there is a strong presumption in favor of the forum of the first-filed suit. See New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir.1991); Columbia Pictures Indus. v. Schneider, 435 F.Supp. 742, 747 (S.D.N.Y.1977).

The first filed rule was developed to "serve the purposes of promoting efficiency and should not be disregarded lightly." Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622 (9th Cir.1991) (quoting Church of Scientology v. United States Dep't of the Army, 611 F.2d 738, 750 (9th Cir. 1979)); see also First City Nat. Bank and Trust Co. v. Simmons, 878 F.2d 76, 80 (2d Cir.1989). Thus, the suit which is first filed should have priority, "absent a showing of a balance of convenience or special circumstances giving priority to the second suit." Ivy-Mar, 1993 WL 535166 at *1, 1993 U.S.Dist. LEXIS 17965 at *2 (citing Simmons, 878 F.2d at 79); see also Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 1246, 47 L.Ed.2d 483 (1976); William Gluckin & Co. v. International Playtex Corp., 407 F.2d 177, 178 (2d Cir.1969) (citing examples of special circumstances). It is well established that the balancing of convenience "should be left to the sound discretion of the district courts." William Gluckin & Co., 407 F.2d at 178; Accord New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir.1991). Additionally, plaintiff bears the burden of demonstrating any special circumstances justifying an exception to the rule. See Ivy-Mar, 1993 WL 535166 at *1, 1993 U.S.Dist. LEXIS 17965 at *2.

Generally, a "special circumstances" exception to the first filed rule exists where "forum shopping alone motivated the choice of the situs for the first suit." William Gluckin, 407 F.2d at 178 (citing Rayco Mfg. Co. v. Chicopee Mfg. Co., 148 F.Supp. 588 (S.D.N.Y.1957)); accord Capitol Records, Inc. v. Optical Recording Corp., 810 F.Supp. 1350, 1353 (S.D.N.Y.1992). In the instant action, plaintiff endeavors to argue that such special circumstances exist. Plaintiff contends that the second suit should have priority, because ICF's suit was commenced under a direct threat of imminent litigation, and, therefore, was an improper anticipatory filing. To support its argument, plaintiff cites defendant's description of plaintiff's disparaging remarks, which include plaintiff's comments to potential customers that ICF and 800-Flowers were involved in litigation. Plaintiff contends that because defendant suggested these remarks were made, defendant's initiation of suit must have been in anticipation of, and under the imminent threat of, an action by 800-Flowers against ICF. Plaintiff's Reply Memorandum at 3-4.

Plaintiff also contends that the fact defendant sought declaratory relief in its complaint is proof that the action was filed under a direct threat of litigation. However, the first filed rule, as defendant correctly notes, has been applied in actions regardless of whether a declaratory judgment was sought in the initial action. See, e.g., Thompson Medical Company, Inc. v. National Center of Nutrition, Inc., 718 F.Supp. 252, 253 (S.D.N.Y.1989). Accordingly, the fact that ICF sought declaratory judgment is not dispositive of the issue. Furthermore, plaintiff 800-Flowers' alleged remarks to customers concerning pending litigation does not necessarily prove an anticipatory filing nor that ICF is not the true plaintiff in the matter. A party has a right to seek declaratory judgment where a reasonable apprehension exists that if it continues an activity it will be sued by another party. See Windsurfing International, Inc. v. AMF, Inc., 828 F.2d 755, 757 (Fed.Cir.1987); Great American Ins. v. Houston General Ins., 735 F.Supp. 581, 585 (S.D.N.Y.1990) ("a declaratory judgment is an...

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