The opinion of the court was delivered by: Rakoff, District Judge.
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. § 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,*fn1 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.*fn2 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 suit is to preempt
litigation in an undesirable forum. Ontel Products, 899 F. Supp.
at 1151; see also Ivy-Mar Co. v. Weber-Stephen
Products Co., No. 93 Civ. 5973, 1993 WL 535166, *2
(S.D.N.Y. Dec.22, 1993).
Finally, Comedy Partners purports to find support for its
position in a clause in the alleged licensing agreement that
states in pertinent part:
Consent to Jurisdiction: Licensee hereby (i) agrees
that any litigation, action or proceeding arising out
of or relating to this Agreement may be instituted in
any state or federal court in the City of New York,
(ii) waives any objection which it might have now or
hereafter to the venue of any such litigation, action
or proceeding, (iii) irrevocably submits to the
jurisdiction of any such court in any such action or
proceeding, and (iv) waives any claim or defense of
Landsman Decl. Ex. 4, Merchandise Licensing Agreement ("Alleged
Agreement") ¶ 28. But since Comedy Partners' underlying position
is that it never entered into this agreement, it is in no
position to rely on the forum selection clause.
Moreover, the clause, by its plain terms, is permissive, not
mandatory. It does not provide that New York is the only forum
in which claims arising out of the agreement may be heard; it
merely establishes that if a claim is brought in New York,
neither party will object on the grounds of venue, jurisdiction,
or the inconvenience of the forum. See Alleged Agreement ¶ 28.
Here, it cannot fairly be said that Street Players' motion to
dismiss this action falls into one of these categories. In opting
for a permissive provision rather than a mandatory one, Comedy
Partners (the drafter of ...