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 counter-claim.)
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)); see also Interoceanica Corp. v.
Sound Pilots, Inc., 107 F.3d 86, 90 (2d Cir. 1997) ("To
ascertain whether two actions spring from the same `transaction'
or `claim,' we look to whether the underlying facts are related
in time, space, origin, or motivation, whether they form a
convenient trial unit, and whether their treatment as a unit
conforms to the parties expectations or business understanding or
usage." (internal quotations omitted)). Under this test, Kellen's
claims are the same in both the Ohio and New York actions.
Next, Kellen proposes that if the claims are deemed the same,
it will file a motion to stay Count 2 of the amended complaint in
the Ohio action. Once this count is withdrawn, according to
plaintiff, the first-filed rule would not apply because the cases
"then would have no connection." Plaintiff's Memorandum in
Opposition at 16. This argument also is unconvincing. The cases
would remain connected in that they would still involve the same
parties and would still arise from the same set of facts.
Removing count 2 would not be sufficient to warrant deviation
from the first-filed rule. Calphalon still would be forced to
defend simultaneously two lawsuits arising from the same
transaction and requiring substantially the same witnesses and
other evidence. This Court would have to hear much of the same
evidence as the Ohio district court, a forum which is equally
competent to resolve this dispute and better positioned to do so
since it already has before it the claims of this and seven other
plaintiffs against the same defendant. Such a wasteful use of
this Court's resources is unwise and unnecessary.
Kellen next argues that even if the litigations are considered
parallel, involving the same parties and issues, the special
circumstances of this case require an exception
to the first-filed rule. However, these exceptions are an attempt
to insure that the rule is not applied in cases where the
circumstances reveal that the second forum is actually the more
appropriate one, and the first forum was chosen for improper
reasons. Most commonly, courts have recognized an exception to
the first-filed rule where the first-filed action was instituted
by the defendant in the second action, and the defendant won the
race to the courthouse under questionable circumstances. See,
e.g., Hanson PLC v. Metro-Goldwyn-Mayer, Inc., 932 F. Supp. 104,
107 (S.D.N.Y. 1996). Thus, one of the most common special
circumstances identified by this Circuit as warranting departure
from the first-filed rule "is where forum shopping alone
motivated the choice of the situs for the first suit." William
Gluckin, 407 F.2d at 178; see also Motion Picture Laboratory
Technicians Local 780, I.A.T.S.E. v. McGregor & Werner, Inc.,
804 F.2d 16, 19 (2d Cir. 1986) ("[T]he chief `special
circumstance' we have noted is our interest in discouraging forum
Plaintiff argues that special circumstances similar to those
found in Hanson exist here. In that case, the court found
special circumstances warranting departure from the first-filed
rule where (1) plaintiff filed a declaratory judgment action in
an attempt to preempt the filing of a lawsuit by the defendant;
(2) the defendant in the declaratory judgment action had waited
to file suit in reliance upon representations made by plaintiff's
lawyers; (3) and the two cases were filed only one business day
apart. Hanson, 932 F. Supp. at 107. Plaintiff has failed to
demonstrate that any special circumstances similar to those found
in Hanson exist here.
Furthermore, Semmes Motors, supra, suggests that a case such
as this, in which the plaintiff is the same in both actions,
should not be excepted from the first-filed rule because doing so
would encourage forum shopping. In Semmes Motors, a plaintiff
who sued a defendant in a New Jersey court, later filed a
parallel complaint in a New York court. Semmes Motors, 429 F.2d
at 1202. The plaintiff stipulated to discontinuing the first
action, allowing the second action to proceed, if the defendant
would consent. Id. at 1203. Nevertheless, the court held that
even though the defendant had no vested right to be proceeded
against in the district in which the first suit was brought, the
district court had abused its discretion in not applying the
first-filed rule. Id. at 1203-04. Holding otherwise,
would entail the danger that plaintiffs may engage in
forum shopping or . . . judge shopping. When they see
a storm brewing in the first court, they may try to
weigh anchor and set sail for the hopefully more
favorable waters of another district. . . . Hence,
even when the same party is plaintiff in both
actions, the instance where the second court should
go forward despite the protests of a party to the
first action where full justice can be done, should
be rare indeed.
Id. at 1203. As in Semmes Motors, Plaintiff's behavior here
smacks of forum shopping. Kellen chose the first forum and is now
attempting to proceed simultaneously in another forum which it
believes may offer greater relief on the same claim.
3. Choice of Law
The MRA at issue provides that it is governed by Ohio law.
Kellen argues that New York law applies under the Erie doctrine
and New York conflicts analysis, and that for this reason, this
action should remain in a New York court.
A federal court sitting in diversity is required to apply the
substantive law of the forum state, including the conflict of law
rules. See Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61
S.Ct. 1020, 85 L.Ed. 1477 (1941). In cases involving disputes
over choice of law clauses in contracts, Ohio and New York apply
the same conflicts of law analysis set forth in Restatement
(Second) Conflicts of Law § 187.
S. Leo Harmonay, Inc. v. Binks Mfg. Co., 597 F. Supp. 1014,
1024-25 (S.D.N.Y. 1984), aff'd. 762 F.2d 990 (2d Cir. 1985)
(adopting Restatement (Second) Conflicts of Law § 187); see also
Tele-Save Merchandising Co. v. Consumers Distributing Co.,
814 F.2d 1120, 1122 (6th Cir. 1987) (applying Restatement § 187 in
diversity case governed by Ohio law); Schulke Radio v.
Midwestern Broadcasting Co., 6 Ohio St.3d 436, 438-39,
453 N.E.2d 683 (1983) (adopting Restatement § 187 analysis). Thus, if
plaintiff is correct that New York rather than Ohio law governs
its claim, the Ohio federal court is equally equipped to
determine that question and the federal court will be required to
apply New York law to that claim.
The question of which state's law applies does not affect the
applicability of the first-filed rule in the instant action and
does not constitute a special circumstance warranting deviation
from that rule.
Defendant's motion to dismiss is granted. The case will be
dismissed without prejudice to plaintiff's proceeding in the
United States District Court for the Northern District of Ohio.
Defendant's alternative motions for a stay or transfer of this
action are denied as moot. The Clerk of the Court is directed to
dismiss the case without prejudice.