B. Motion to Enjoin the Colorado Action
When two actions involving the same parties and embracing the same issues are brought in different federal district courts, the court in the first-filed action has the power to enjoin the parties from proceeding in the second action, and indeed, should do so absent a showing of special circumstances that would give priority to the second action. See City of New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir. 1991); Ontel Products, 899 F. Supp. at 1155. Special circumstances that would warrant giving priority to a second-filed suit have been found to be present where the first suit constitutes an "improper anticipatory filing", i.e., one made under a direct threat of imminent litigation, Ontel Products, 899 F. Supp. at 1150-51, or where the litigant's filing of the first action was motivated solely by forum-shopping. Riviera Trading Corp. v. Oakley, Inc., 944 F. Supp. 1150, 1158 (S.D.N.Y. 1996).
Here, I find that the Colorado action involves the same parties and embraces the same issues as the New York action. Both cases involve the sale of certain small hobby model flying rockets. Indeed, Centuri recognized this when it stated in its Memorandum of Law in Support of its Motion to Transfer that both actions "involve the same witnesses and parties and arise out of the manufacturing and distribution of Centuri's 'Goldstrike' model rockets and Toy Biz's Quest Aerospace model rockets." Centuri's Mem. of Law at 18. Moreover, the two causes of action Centuri brings in the Colorado action have been asserted by Centuri in its affirmative defenses and counterclaims in the New York action. Although the two suits are not identical, complete identity of parties and issues is not required for the first-filed rule to apply; the test is whether the second action embraces the issues in the first action. See Meeropol v. Nizer, 505 F.2d 232, 235-37 (2d Cir. 1974).
There has been no showing of special circumstances to warrant giving priority to the second suit. Contrary to Centuri's argument, I find that "forum shopping" is not a special circumstance that favors the Colorado action in this case. Forum shopping has been found to be present where a suit bears only a slight connection to the action. Riviera, 944 F. Supp. at 1158. However, this case has a significant connection to New York; Toy Biz's principal place of business is in New York and the allegedly infringing products are sold in New York. Moreover, Centuri's argument that Toy Biz's filing of the Pennsylvania action indicates that Toy Biz was engaging in forum shopping is not persuasive. Centuri's contention that Toy Biz was apparently concerned about prevailing in Pennsylvania and thus filed the New York suit is pure speculation.
Accordingly, the parties are enjoined from prosecuting the Colorado action.
For the reasons set forth above, defendant's motion to transfer this action is DENIED and plaintiff's motion to enjoin the Colorado action is GRANTED. The parties shall appear for a pre-trial conference in this matter to complete a pre-trial scheduling order on January 22, 1998 at 12:15 p.m.
New York, New York
January 13, 1998
Harold Baer, Jr.