informed the RIAA that it had divested itself of all interest in
the Aimster system.
On Friday, April 27, 2001, the RIAA received a letter from
BuddyUSA stating that it had "ceased administering the Aimster
service," but nevertheless offering to meet with representatives
of the RIAA to "discuss this matter further." The RIAA did
contact BuddyUSA and scheduled a meeting for the following
Monday, April 30.
That meeting also did not occur, as on April 30, 2001,
Plaintiff filed a declaratory judgment action in this Court
against the RIAA, captioned AbovePeer, Inc. v. RIAA, et al.,
No. 01-CV-0632, seeking, among other things, a declaration that
they were not "violating the copyright of any member of
RIAA."*fn1 The complaints were later amended to add seventeen
recording company defendants.
On May 24, 2001, two new actions were filed in the Southern
District of New York asserting claims against AbovePeer,
BuddyUSA, and their principal John Deep for, among other things,
vicarious and contributory copyright infringement. The first,
captioned Zomba Recording Corp., et al. v. Abovepeer, Inc., et
al., No. 01-CV-4452, was brought by twenty-two record companies,
including, but not limited to, all but three of the seventeen
record companies named in the amended complaint in this action.
The second, captioned Atlantic Recording Corp., et al. v.
Abovepeer, Inc., et al., No. 01-CV-4460, was brought by twelve
companies, among them filmed entertainment companies and record
companies, including the remaining three record companies named
in the amended complaint.
That same day, Plaintiff sought, and was granted by this Court,
an injunction preventing the record company defendants named in
the amended complaints, and those "acting in concert with them,"
from prosecuting the actions in the Southern District or
elsewhere. On May 25, Plaintiff filed three new declaratory
judgment actions in this Court, captioned AbovePeer, Inc. v.
Zomba Recording Corp., et al., No. 01-CV-0809, AbovePeer, Inc.
v. Motion Picture Assoc. of Amer., et al., No. 01-CV-0810, and
AbovePeer, Inc. v. Acuff-Rose Music Publishing, Inc., et al.,
No. 01-CV-0811. The following business day, May 29, 2001, the
Court enjoined the Defendants in these actions from commencing or
participating in any other legal actions against Plaintiff.
In determining which of two competing actions should proceed,
the well-established rule in this Circuit is that the first suit
should have priority, absent special circumstances which justify
giving priority to the second-filed suit or the showing of a
balance of circumstances favoring the second suit. See, e.g.,
City of New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir.
1991) ("the first court has jurisdiction to enjoin the
prosecution of the second one"); First City Nat'l Bank & Trust
Co. v. Simmons, 878 F.2d 76, 79 (2d Cir. 1989); Factors Etc.,
Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978). A
"strong presumption" generally applies in favor of the forum of
the first-filed suit. 800-Flowers, Inc. v. Intercontinental
Florist, Inc., 860 F. Supp. 128, 131 (S.D.N.Y. 1994) (citing
Exxon, 932 F.2d at 1025).
A. Special Circumstances
One "special circumstance" justifying a departure from the
first-filed rule occurs when a party brings a declaratory
judgment action after receiving notice of a planned lawsuit by
the other party. See Factors, 579 F.2d at 219; Chicago Ins.
Co. v. Holzer, No. 00 Civ. 1062, 2000 WL 777907, at *3 (S.D.N Y
June 16, 2000); Mondo, Inc. v. Spitz, No. 97 Civ. 4822, 1998 WL
17744, at *2 (S.D.N.Y. Jan.16, 1998); J. Lyons & Co. Ltd. v.
Republic of Tea, Inc., 892 F. Supp. 486, 491 (S.D.N.Y. 1995). In
determining whether sufficient notice has been given, courts in
this Circuit have looked for mention of the intention to file a
law suit, a filing date, and/or a specific forum for the filing
of the suit. See, e.g., Holzer, 2000 WL 777907, at *2; Mondo,
1998 WL 17744, at *2; J. Lyons, 892 F. Supp. at 491; Employers
Insurance of Wausau v. Prudential Ins. Co. of Amer., 763 F. Supp. 46,
49 (S.D.N.Y. 1991).
In J. Lyons, for example, declaratory judgment actions were
brought by the alleged infringers following the receipt of
cease-and-desist letters and prior to suit being filed by Lyons,
the trademark holder. The letters demanded that the various
alleged infringers cease-and-desist the alleged infringement and
indicated that if they failed to do so, Lyons would be
"constrained to pursue appropriate legal steps against" them and
its attorneys would then be "authorized to consider taking
suitable legal and equitable action."
The court held under those circumstances that the alleged
infringers did not have actual notice of litigation. See J.
Lyons, 892 F. Supp. at 491. Although the letters "mentioned the
possibility of legal actions, [they] did not specify any date or
forum." Id. The court found that rather than suggesting it was
about to file suit, Lyon's actions were suggestive of
negotiations. See id.
Likewise, in Employers Insurance, the court found that a
similar cease-and-desist letter "was at best an attempt to
initiate settlement negotiations and [could not] reasonably be
construed as a notice of suit." Employers Insurance, 763
F. Supp. at 49. The "notice" letter in that case stated that the
parties were "prepared and fully intend to pursue all remedies
available" to them. Id. at 47-48. The court held that, because
the notice letter did not explicitly mention a lawsuit, a
tentative filing date, or a forum, "subsequent litigation
commenced by the recipient would not reasonably suggest there had
been a race to the courthouse." Id. at 49.
Like the cease-and-desist letters in J. Lyons and Employers
Insurance, the RIAA's April 3, 2001 letter to BuddyUSA did not
give actual notice of litigation. The RIAA's letter indicated, in
very similar language, that if BuddyUSA did not comply with its
demands, it would have "little choice but to seek additional
legal remedies." It did not explicitly mention a lawsuit, much
less indicate a filing date or forum. Accordingly, after
considering the litigation situation as a whole, the Court
determines that Plaintiff did not bring this action in
anticipation of the filing of a lawsuit by Defendants. Instead,
Plaintiffs brought their action for the very reason the
Declaratory Judgment Act was created to:
"enable a party who is challenged, threatened, or
endangered in the enjoyment of what he claims to be
his rights, to initiate the proceedings against his
tormentor and remove the cloud by an authoritative
determination of plaintiff's legal right, privilege
and immunity and the defendant's absence of right,
United States v. Doherty, 786 F.2d 491, 498-99 (2d Cir. 1986)
(quoting Borchard, Declaratory Judgments 280 (2d ed. 1941)).
Plaintiff was under a "reasonable apprehension . . . that if it
[continued] an activity it [would] be sued" and was therefore
entitled to seek declaratory judgment. 800-Flowers, 860 F. Supp.
at 132. Plaintiff was not required to wait "until [its] adversary
should see fit to begin suit." Luckenbach Steamship Co. v.
United States, 312 F.2d 545, 548 (2d Cir. 1963).
B. Balance of Convenience
In analyzing the balance of convenience, courts consider the
same factors used in a motion for a change of venue pursuant to
28 U.S.C. § 1404(a).*fn2 See Comedy Partners v. Street Players
Holding Corp., 34 F. Supp.2d 194, 196 n. 1 (S.D.N.Y. 1999); J.
Lyons, 892 F. Supp. at 491-92; 800-Flowers 860 F. Supp. at 133.
The factors to be considered by the Court "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; and (9) trial efficiency and the
interests of justice, based on the totality of the
circumstances." J. Lyons, 892 F. Supp. at 492 (citing
800-Flowers, 860 F. Supp. at 133). "[T]he balancing of
conveniences is an equitable task and an `ample degree of
discretion is afforded the district courts in determining
suitable forum.'" 800-Flowers, 860 F. Supp. at 133 (quoting
Simmons, 878 F.2d at 80).
1. Location of Witnesses and Evidence
"[T]he convenience of both party and non-party witnesses may be
the single most important factor in the analysis of whether one
forum is more appropriate than a competing forum." 800-Flowers,
860 F. Supp. at 134; see Aerotel, Ltd. v. Sprint Corp.,
100 F. Supp.2d 189, 197 (S.D.N.Y. 2000). Rather than limit its
"investigation to a review of which party can produce the longer
witness list . . . [a court] should look to the nature and
quality of the witnesses' testimony with respect to the issues in
the case." Aquatic Amusement Assoc., Ltd. v. Walt Disney World
Co., 734 F. Supp. 54, 57 (N.D.N.Y. 1990).
In this case, the majority of the relevant testimony and
evidence will center around what part the Aimster system plays in
the alleged infringement of Defendants' copyrights. Accordingly,
the majority of the relevant evidence and witnesses will be found
here in the Northern District. Therefore, this factor weighs
significantly in favor of keeping the action in the Northern
2. Convenience of the Parties
Plaintiff's principal place of business is located in Albany,
New York, making this Court the more convenient forum for it.
Many of the Defendants, on the other hand, have offices
throughout the country. The RIAA, who oversees its members'
copyright infringement litigation, is located in Washington,
D.C., making neither forum more convenient. It is important to
note that, when attempting to justify a departure from the
first-filed rule, it is not enough to show that transfer, "rather
than adding to the overall convenience, would merely shift some
inconvenience from one party to the other." Comedy Partners, 34
F. Supp.2d at 196. Consequently, this factor does not weigh in
favor of allowing the second-filed action to go forward.
3. The Locus of Operative Facts
The locus of the operative facts "is traditionally an important
factor to be considered in deciding where a case should be
tried." 800-Flowers, 860 F. Supp. at 134; see Aerotel, 100
F. Supp.2d at 197. In this case, as discussed above, the operative
facts will focus primarily on the Aimster system, the operator of
which is located in the Northern District. Therefore, this factor
militates strongly in favor of keeping the action in this Court.
4. The Availability of Process to Compel Attendance of
This factor does not weigh in favor of either forum, as both
are located in New York. Therefore, "each district will be faced
with this dilemma and [neither] has a significant advantage over
the other." J. Lyons, 892 F. Supp. at 492.
5. The Relative Means of the Parties
This factor may be considered when "there is a disparity
between the relative means" of the parties. 800-Flowers, 860
F. Supp. at 134. Here, Defendants include some of the largest
corporations in the country while Plaintiff is a recently formed
computer software company, the very existence of which is
endangered by this lawsuit. Plaintiff would clearly bear a
"significant and disproportionate economic burden," J. Lyons,
892 F. Supp. at 492, and its "ability to effectively litigate
could potentially be impaired," 800-Flowers, 860 F. Supp. at
135, if it is forced to litigate in the Southern District.
Therefore, this factor supports keeping the action in the
6. A Forum's Familiarity with the Governing Law
Although the Southern District undoubtedly encounters more
copyright actions than the Northern District, the courts of the
Northern District are perfectly familiar with the intellectual
property matters presented in this action. Therefore, this factor
does not weigh in favor of either forum.
7. Plaintiff's Choice of Forum
A "plaintiff's choice of forum is given significant weight and
will not be disturbed, unless the balance of factors weigh
strongly in favor" of the Defendant. 800-Flowers, 860 F. Supp.
at 135 (citing Seagoing Uniform Corp. v. Texaco, Inc.,
705 F. Supp. 918, 936 (S.D.N.Y. 1989) (citing Gulf Oil Corp. v.
Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 91 L.Ed. 1055
(1947))); see Aerotel, 100 F. Supp.2d at 197. However, a
plaintiff's choice of forum will be accorded less weight "where
plaintiff has chosen a forum which is neither his home nor the
place where the cause of action arose." 800-Flowers, 860
F. Supp. at 135; see J. Lyons, 892 F. Supp. at 493. In this case,
Plaintiff has chosen the forum that is both its home and the
location of the operative facts of the case. Accordingly, this
factor weighs heavily in favor of keeping the action in this
8. Trial Efficiency and the Interests of Justice
Defendants argue that the presence of other parties in the
Southern District not originally included in Plaintiff's action
here require the Court to transfer this action so that, in the
interest of judicial efficiency, all of the related actions may
be tried in the same forum. It has long been the teaching of the
Second Circuit that
[t]here is a strong policy favoring the litigation of
related claims in the same tribunal in order that
pretrial discovery can be conducted more efficiently,
duplicitous litigation can be avoided, thereby saving
time and expense for both
parties and witnesses, and inconsistent results can
Wyndham Associates v. Bintliff,