Jhangmen Kinwai Furniture Decoration Co. v. Int'l Mkt. Ctrs., Inc.
| Decision Date | 18 February 2016 |
| Docket Number | Case No. 2:15-CV-1419 JCM (PAL) |
| Parties | JHANGMEN KINWAI FURNITURE DECORATION CO. LTD, KINWAI USA INC., Plaintiff(s), v. INTERNATIONAL MARKET CENTERS, INC., et al., Defendant(s). |
| Court | U.S. District Court — District of Nevada |
Presently before the court is defendants International Market Centers, LP; IMC Manage LLC; IMC OP, LP, International Market Center, Inc., and WMCV Phase 2 LLC's motion to dismiss the amended complaint or in the alternative motion to transfer venue. (Doc. # 33). Plaintiffs Jiangmen Kinwai Furniture Decoration Co. and Kinwai USA filed a response in opposition, (doc. # 36), and defendants filed a reply. (Doc. # 38).
Also before the court is defendants' first motion to dismiss. (Doc. # 21). Plaintiffs did not file a response but instead filed an amended complaint. (Doc. # 27).
In October 2012, plaintiff Jiangmen Kinwai Furniture Decoration Co. ("Jiangmen") and defendant IHFC Properties entered into a lease for showroom space in High Point, North Carolina (the "High Point lease"). (Doc. #33). Jiangmen manufactures and sells furniture and entered into the High Point lease to participate in the High Point Furniture Market, the largest furnishings trade show in the world. (Id.)
The only parties to the High Point lease are Jiangmen and IHFC Properties. In the instant action, plaintiffs claim the IHFC Properties breached its lease in August 2014 when it relocated Jiangmen to a different showroom prior to the fall 2014 furniture show. (Doc. #27). Plaintiffs also allege that defendants did not provide Jiangmen adequate time to refit the new showroom and that Jiangmen's furniture was damaged in the process of transporting the furniture to the new showroom location. Plaintiffs further allege that defendants' actions were motivated by a desire to benefit Jiangmen's competitor, Zuo Modern Contemporary, Inc. (Doc. #27).
The High Point lease is also currently under dispute and being litigated in the U.S. District Court for the Middle District of North Carolina. Jiangmen Kinwai Furniture v. IHFC Properties et al., Case No. 1:14-CV-00689 (M.D.N.C. Aug. 14, 2014). Plaintiff Jiangmen moved to amend its complaint in the North Carolina action to include additional facts and join International Market Centers, LP and International Market Centers, Inc. as defendants. (See Doc. #33, Exh. C). The court granted Jiangmen's request to add additional facts but denied the request to join affiliated entities of IHFC Properties as defendants because it found that Jiangmen failed to adequately state a claim for liability or show that the affiliates committed any of the alleged torts. (Doc. #33, Exh. E). Jiangmen ignored the court's orders and filed the amended complaint with additional defendants, which was then struck from the record. (Doc. #33, Exh. G).
Several of Jiangmen's litigation tactics have come under fire in the North Carolina proceedings. (Doc. #33). Jiangmen sought discovery regarding the IHFC Properties that plaintiffs are again suing in this case. During the discovery process, the North Carolina court found that Jiangmen was acting in bad faith with the purpose of harassing IHFC Properties. (Doc. #33, Exh. I). The North Carolina court granted summary judgment in favor of IHFC Properties finding that the IHFC Properties did not breach the terms of the High Point lease when it relocated Jiangmen to a different showroom. (Doc. # 38, Exh. L). Summary judgment was also entered in IHFC Properties favor on Jiangmen's claims for constructive eviction, breach of duty of good faith and fair dealing, violation of North Carolina's Unfair and Deceptive Trade Practices Act, and civil conspiracy. (Id.)
Independent of the High Point lease dispute, plaintiffs also assert two claims against World Market Center and its affiliates. Plaintiff Kinwai USA, Inc. ("Kinwai"), an affiliate of Jiangmen, entered into a lease for space in the World Market Center in Las Vegas, NV (the "Las Vegas lease"). The Las Vegas lease was between Kinwai and WMCV Phase 2, LLC ("WCMV"). (Doc. #27). Plaintiffs allege that WCMV refused to renew its lease with Kinwai because of the pending North Carolina litigation and thus engaged in unfair and deceptive trade practices and breached the covenant of good faith and fair dealing. (Id.).
Based on this procedural history, defendant has filed the instant motion to dismiss or, in the alternative, motion to transfer venue. (Doc. # 33).
The "first-to-file" rule is a doctrine of federal comity that 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) (citing Church of Scientology of Calif. v. U.S. Dep't of the Army, 611 F.2d 738, 749 (9th Cir. 1979)); see also Olin Corp. v. Cont'l Cas. Co., 2011 WL 1337407, *2 (D. Nev. April 6, 2011) ().
Generally, sound judicial administration would indicate that when two identical actions are filed in courts of concurrent jurisdiction, the court that first acquired jurisdiction should try the lawsuit and a second action would not serve any purpose. Id. However, the 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. Id. The purpose of the rule is to promote efficiency and to avoid duplicative litigation, and, thus, it should not be lightly disregarded. Alltrade, Inc. v. Uniweld Prod., Inc., 946 F.2d 622, 625 (9th Cir.1991).
When applying the first-to-file rule, courts look to three threshold factors: "(1) the chronology of the two actions; (2) the similarity of the parties, and (3) the similarity of the issues." Global Experience Specialists, Inc. v. Cunniffe, 2:14-cv-00421-JCM-NJK, 2014 WL 3748931, *4 (D. Nev. July 30, 2014) (quoting Nesbit v. Fornaro, 2011 WL 1869917, *2 (D. Nev. March 31, 2011)). "[T]he first-to-file rule does not require strict identity of the parties, but rather substantial similarity." Id. (quoting Nesbit, 2011 WL 1869917 at *3). Likewise, the sameness requirement does not mandate that the two actions be identical; it is satisfied if they are sufficiently similar. Id.
Even if the threshold factors of the first-to-file rule are satisfied, the district court retains discretion to disregard the rule in the interests of equity. Alltrade, 946 F.2d at 622, 625. The circumstances under which an exception to the first-to-file rule typically will be made include bad faith, anticipatory suit, and forum shopping. Id. at 628. A court may also relax the first-to-file rule if the balance of equities weighs in favor of the later-filed action. While the Alltrade court cautioned that the respective convenience of the two courts normally "should be addressed to the court in the first filed action" rather than to the court in the later-filed action, it observed that "[i]n appropriate cases it would be relevant for the court in the second-filed action to give consideration to the convenience of the parties and witnesses." Id. at 628.
A court may dismiss a plaintiff's complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide "[a] short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).
"Factual allegations must be enough to rise above the speculative level." Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 678 (citation omitted).
In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id.
Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678.
Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has "alleged - but it has not shown - that the pleader is entitled to relief." Id. at 679 (internal quotations omitted). When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.
The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court held:
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