Comedy Partners v. Street Players Holding Corp., 98 CIV. 6883(JSR).
| Citation | 34 F.Supp.2d 194 |
| Decision Date | 26 January 1999 |
| Docket Number | No. 98 CIV. 6883(JSR).,98 CIV. 6883(JSR). |
| Parties | COMEDY PARTNERS, Plaintiff, v. STREET PLAYERS HOLDING CORPORATION, and David L. Siegel, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Kim J. Landsman, New York City, for Plaintiff.
Robert Owen, New York City, Mark Kremer, Santa Monica, CA, for Defendants.
This action arises from the attempt of defendant Street Players Holding Corporation ("Street Players") to procure a license to market toys based on "South Park," a popular animated cable television series owned by plaintiff Comedy Partners. After Street Players applied for a license in January of 1998, the parties entered into negotiations that Street Players claims resulted in a contractual agreement granting such a license, but that Comedy Partners insists led to neither a contract nor a license. In any event, in June of 1998, Comedy Partners informed Street Players that it would not approve the shipment of any "South Park" products manufactured by Street Players. Street Players thereupon filed suit in the Central District of California, alleging, among other things, fraud and breach of contract. Shortly thereafter, the parties entered into settlement negotiations. When the negotiations temporarily collapsed, Comedy Partners filed this suit, asserting claims for infringement of its copyright, trademark, and trade dress.
Comedy Partners then brought a motion in the California action, seeking a transfer of venue to the Southern District of New York or, in the alternative, a stay or dismissal of the California action. On December 7, 1998, the Honorable Richard A. Paez, to whom the California action had been assigned, denied the motion. See Landsman Decl. Ex. 5, Transcript of Telephonic Conference Held before Judge Paez on Dec. 7, 1998 ("California Tr."), at 17-20. Street Players then moved this Court to stay or dismiss Comedy Partners' claims based on the "first-filed rule." For the following reasons, the motion to dismiss is granted.
The first-filed doctrine is centrally concerned with judicial economy, protecting the plaintiff's choice of forum, and preventing duplicative litigation. See First City Nat'l Bank & Trust v. Simmons, 878 F.2d 76, 79-80 (2d Cir.1989); Ontel Products, Inc. v. Project Strategies Corp., 899 F.Supp. 1144, 1150 (S.D.N.Y.1995). By invoking the doctrine, a party thus seeks not only to avoid an inconvenient venue but to protect its choice of forum and avoid the considerable expense and potential for inconsistent adjudication that duplicative litigation would entail.
Under the first-filed rule, when two district courts concurrently have before them actions involving the same parties and issues, there is "a strong presumption in favor of the forum of the first-filed suit." 800-Flowers, Inc. v. Intercontinental Florist, 860 F.Supp. 128, 131 (S.D.N.Y.1994); see also New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir.1991). Unless this presumption can be overcome, as by a showing that the balance of convenience clearly favors the second-filed action, or by other "special circumstances," the second suit should be stayed or dismissed in favor of the first. See 800-Flowers, 860 F.Supp. at 132.
Here, Street Players argues that the first-filed rule applies, and that the California court already decided as much when it rejected Comedy Partners' motion to transfer venue. Comedy Partners counters that the California court never decided the issue and that this action falls squarely within recognized exceptions to the first-filed rule.
The transcript of the hearing before Judge Paez makes clear that he treated the motion to transfer (however it may have been denominated) as simply a forum non conveniens motion under 28 U.S.C. Section 1404(a). See Cal. Tr. at 17-20. Accordingly, his denial of the motion to transfer cannot be considered conclusive on the issue of whether the first-filed rule applies. Nevertheless, Street Players' motion must be granted, for this Court independently concludes that Comedy Partners has not shown any sufficient reason to depart from the first-filed rule.
So far as convenience is concerned, the Court finds, for reasons already stated from the bench at oral argument, see Transcript, January 13, 1999, that the balance of convenience does not notably tip in favor of either forum. Judge Paez, employing essentially the same analysis,1 reached essentially the same conclusion. See Cal. Tr. at 20. Thus, the balance of convenience does not in this case justify departing from the usual rule that the first-filed action has priority, since transfer, rather than adding to the overall convenience, would merely shift some inconvenience from one party to the other. Cf. Van Dusen v. Barrack, 376 U.S. 612, 645-46, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964); Darby Drug Co., Inc. v. Zlotnick, 573 F.Supp. 661, 664 (E.D.N.Y.1983).
As for exceptional circumstances, there is little evidence to support Comedy Partners' assertion that Street Players engaged in improper anticipatory filing. On the contrary, even though Street Players threatened to sue as soon as it received word that Comedy Partners would not approve its shipment of "South Park" products, it waited until initial attempts at negotiation proved fruitless before suing. See Def. Mot. Ex I, Siegel Decl. ¶ 14-18. In so waiting, it ran the considerable risk that Comedy Partners would file first.2 Thus, the record does not support the conclusion that the California action is an improper, anticipatory filing.
Moreover, although it concerns many of the same transactions and occurrences as the suit before this Court, the California suit is not an action for a declaratory judgment on Comedy Partners' claims of infringement; rather, consistent with Street Players basic position, it states claims for fraud and breach of contract. Where a plaintiff is "genuinely concerned with obtaining a benefit beyond the scope of what the other party could be expected to bring suit for," there is little reason to assume that its sole motivation for filing...
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