Kellen Co., Inc. v. Calphalon Corp.

Decision Date14 June 1999
Docket NumberNo. 98 Civ. 8081.,98 Civ. 8081.
Citation54 F.Supp.2d 218
PartiesKELLEN COMPANY, INC., Plaintiff, v. CALPHALON CORPORATION, Defendant.
CourtU.S. District Court — Southern District of New York

Ralph Perlberger, New York City, David Epstein, of counsel, Feith & Zell, Washington, DC, for plaintiffs.

Peter Schillinger, Schillinger & Finsterwald, LLP, New York City, Michael M. Briley, David, W. Wicklund, Jenifer A. Belt, Shumaker, Loop & Kendrick, LLP, Toledo, OH, for defendants.

MEMORANDUM DECISION AND ORDER

BARRINGTON D. PARKER, Jr., District Judge.

Plaintiff Kellen Company, Inc. ("Kellen"), brought this action against defendant Calphalon Corporation ("Calphalon"), seeking to recover unpaid commissions and other damages pursuant to the New York Sales Representative Act, New York Labor Law, §§ 191-a—191-c. Before the Court is defendant's motion pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss without prejudice due to a pending, previously filed suit in the United States District Court for the Northern District of Ohio involving the same parties and issues. In the alternative, defendant moves to stay further proceedings in this case pending the final resolution of the Ohio action. Finally, if this action is neither dismissed nor stayed, defendant moves to transfer the case to the Northern District of Ohio, Western Division, pursuant to 28 U.S.C. Section 1404(a). For the reasons set forth below, judgment is entered in favor of defendant Calphalon Corporation dismissing this case without prejudice, leaving the parties to resolve thier differences in the United States District Court for the Northern District of Ohio.

BACKGROUND

Kellen, a New York corporation, served as a sales representative for Calphalon, an Ohio corporation for twenty years. Over the years, Calphalon regularly paid Kellen commissions for the sale of its cookware products. On February 1, 1997, the two companies entered into a written Manufacturers' Representative Agreement ("MRA") under which Kellen continued as a Manufacturer's Representative for Calphalon and Calphalon continued to pay Kellen for its services. The parties signed an MRA for the period February 1, 1997 through January 31, 1998 with an option to renew. The MRA also provided that it was to be interpreted under the laws of the state of Ohio. On December 18, 1997, Calphalon notified Kellen and its other sales representatives that it would not renew their MRAs in 1998.

On May 6, 1998, Kellen and seven other former Calphalon sales representatives filed a lawsuit in the United States District Court for the Northern District of Ohio, seeking to recover unpaid commissions and other damages that allegedly resulted because Calphalon did not renew the MRAs. Plaintiffs asserted eight claims in that action: (1) breach of contract for termination of the MRAs; (2) breach of contract for failure to pay commissions earned; (3) promissory estoppel/breach of implied contract; (4) tortious interference with contract; (5) breach of the implied covenants of good faith and fair dealing; (6) negligent misrepresentation; (7) breach of fiduciary duty, and (8) a demand for an accounting.

Five months later, on October 5, 1998, Kellen filed this lawsuit in New York Supreme Court, County of Westchester, asserting claims under the New York Sales Representative Act, New York Labor Law, §§ 191-a—191-c, for failure to pay sales commissions and for late payment of sales commissions. Calphalon timely removed the action to this court,1 pursuant to 28 U.S.C. § 1441(a). Calphalon now moves alternatively to dismiss, stay or transfer this action.

DISCUSSION

Calphalon's principal argument in favor of dismissal without prejudice is that, because the Ohio lawsuit was filed first and involves the same parties and issues, it alone should proceed to avoid duplicative litigation. This Court agrees.

"As between federal district courts ... the general principle is to avoid duplicative litigation." Colorado River Water Conservation District v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 1246, 47 L.Ed.2d 483 (1976). "Courts already heavily burdened with litigation with which they must of necessity deal should ... not be called upon to duplicate each other's work in cases involving the same issues and the same parties." Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197, 1203 (2d Cir.1970).

1. First-Filed Rule

The Second Circuit has long adhered to the first-filed doctrine in deciding which case to dismiss where there are competing litigations. See Fort Howard Paper Co. v. William D. Witter, Inc., 787 F.2d 784, 790 (2d Cir.1986); Semmes Motors, 429 F.2d at 1202; William Gluckin & Co., Inc. v. International Playtex Corp., 407 F.2d 177, 178 (2d Cir.1969). "`[W]here there are two competing lawsuits, the first suit should have priority, absent the showing of balance of convenience ... or ... special circumstances ... giving priority to the second.'" Adam v. Jacobs, 950 F.2d 89, 91 (2d Cir.1991) (quoting First City Nat'l Bank and Trust Co. v. Simmons, 878 F.2d 76, 79 (2d Cir. 1989)). The first-filed rule seeks to advance judicial economy, protect the plaintiff's choice of forum and to avoid duplicative litigation. First City Nat'l Bank & Trust, 878 F.2d at 79-80; Comedy Partners v. Street Players Holding Corp., 34 F.Supp.2d 194, 196 (S.D.N.Y.1999). It also protects parties from the considerable expense and potential for inconsistent judgments that duplicate litigation entails. Comedy Partners, 34 F.Supp.2d at 196-97.

It is well-established that the balancing of convenience "should be left to the sound discretion of the district courts." William Gluckin, 407 F.2d at 178. The interests analysis under the first-filed rule requires consideration of the same factors relevant to stay a "second filed" action on a motion to transfer under 28 U.S.C. Section 1404(a). 800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F.Supp. 128, 133 (S.D.N.Y.1994); Ivy-Mar Co., Inc. v. Weber-Stephen Products Co., No. 93 Civ. 5973, 1993 WL 535166, at *2 (S.D.N.Y. Dec.22, 1993). These factors include (1) the convenience of witnesses, (2) the location of relevant documents and the relative ease of access to sources of proof, (3) the convenience of the parties, (4) the locus of the operative facts, (5) the availability of process to compel attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the governing law; (8) the weight accorded a plaintiff's choice of forum, (9) trial efficiency and the interests of justice based on the totality of the circumstances. 800-Flowers at 133; Ivy-Mar, 1993 WL 535166, at *4.

The first-filed rule is not to be applied mechanically, but is intended to aid judicial administration by acting "as a `presumption' that may be rebutted by proof of the desirability of proceeding in the forum of the second-filed action." Hanson, 932 F.Supp. at 106. The party opposing application of the first-filed doctrine has the burden to show that special circumstances exist to justify an exception. Id.; 800 Flowers, 860 F.Supp. at 132.

Most cases in which the first-filed rule is applicable present scenarios in which the plaintiff in the first action is the defendant in the second action. See, e.g., Isogon Corp. v. Amdahl Corp., No. 97 Civ. 6219, 1997 WL 759435 (S.D.N.Y. Dec.10, 1997); 800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F.Supp. 128 (S.D.N.Y.1994). By contrast in this case, the plaintiff is the same in both the New York and Ohio actions. However, as discussed further below, application of the first-filed rule is equally appropriate here.

Kellen first argues that the first-filed rule does not apply because the New York and Ohio actions involve different issues and "different subject matter." This is so, according to Kellen, because the New York suit seeks relief under a New York statute unavailable in Ohio. Plaintiff's Memorandum in Opposition to Defendant's Motion to Dismiss, at 11. Plaintiff states further that the available relief in the New York courts may be greater than that available in Ohio and they should therefor be allowed to proceed in both courts.

Plaintiff's arguments are unpersuasive. The Ohio and New York actions clearly involve the same issues, the same parties and the same subject matter. Both lawsuits arose out of the exact same set of facts — Calphalon's termination of the 1997 MRAs — and both seek damages which allegedly resulted from that termination. Although the Ohio action — involving eight plaintiffs and eight claims — is broader in scope than the New York action — involving one plaintiff and two claims — the interests of the parties in both proceedings are substantially the same. See Semmes Motors, 429 F.2d at 1202 (stating that New York and New Jersey actions are in effect duplicates even though the "scope of the New Jersey action had been enlarged" by defendant's counterclaim.)

Furthermore, this Court believes that the second claim in the Ohio action for breach of contract for failure to pay commissions earned, is virtually the same claim as the one plaintiff asserts in the New York action seeking relief under the New York Labor law for unpaid and untimely paid commissions. The test adopted by New York courts for res judicata, or claim preclusion purposes is instructive here. In evaluating whether two suits involve the same "claim" or "nucleus of operative fact" for purposes of res judicata, New York courts have adopted the transactional approach. United States v. Alfano, 34 F.Supp.2d 827, 833-34 (E.D.N.Y.1999). "[I]f claims arise out of the same factual grouping, transaction, or series of transactions, they are deemed to be part of the same cause of action and the later claim will be barred without regard to whether it is based upon different legal theories or seeks different or additional relief." Id. (citing Board of Managers of Windridge Condominiums One v. Horn, 234 A.D.2d 249, 250, 651 N.Y.S.2d 326, 327 (2d Dep't 1996) (internal quotations omitted)); ...

To continue reading

Request your trial
46 cases
  • Citigroup Inc. v. City Holding Co.
    • United States
    • U.S. District Court — Southern District of New York
    • May 31, 2000
    ...Picture Lab. Technicians Local 780 v. McGregor & Werner, Inc., 804 F.2d 16, 19 (2d Cir.1986); see also Kellen Co., Inc. v. Calphalon Corp., 54 F.Supp.2d 218, 223 (S.D.N.Y.1999) ("Most commonly, courts have recognized an exception to the first-filed rule where the first-filed action was inst......
  • London v. Nassau Cnty. Dist. Attorney's Office
    • United States
    • U.S. District Court — Eastern District of New York
    • December 28, 2020
    ...absent the showing of balance of convenience or special circumstances giving priority to the second." Kellen Co., Inc. v. Calphalon Corp., 54 F. Supp. 2d 218, 221 (S.D.N.Y. 1999) (internal quotation marks, alterations, and citations omitted); accord Adam v. Jacobs, 950 F.2d 89, 92 (2d Cir. ......
  • Jones v. Nassau Cnty. Corr. Inst.
    • United States
    • U.S. District Court — Eastern District of New York
    • March 26, 2014
    ...absent the showing of balance of convenience or special circumstances giving priority to the second." Kellen Co. v. Calphalon Corp., 54 F. Supp. 2d 218, 221 (S.D.N.Y. 1999) (internal quotation marks, alterations, and citations omitted); accord Adamv. Jacobs, 950 F.2d 89, 92 (2d Cir. 1991); ......
  • Ates v. Altiner
    • United States
    • U.S. District Court — Eastern District of New York
    • June 19, 2020
    ...absent the showing of balance of convenience or special circumstances giving priority to the second." Kellen Co. v. Calphalon Corp., 54 F. Supp. 2d 218, 221 (S.D.N.Y. 1999) (internal quotation marks, alterations, and citations omitted); accord Adamv. Jacobs, 950 F.2d 89, 92 (2d Cir. 1991); ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT