means to litigate the case, alleging that Gupta is "extraordinarily
wealthy" and that Defendants "may be freely exploiting the resources of
InfoUSA," a non-party corporate entity that Gupta heads. (Pl's Memo at
18.) Plaintiff also contends that defendant EF had $2.6 million in assets
under management recently. (Id.) An undated article attached to a
letter, dated April 6, 2001, from counsel for Plaintiff to counsel for
Defendants indicates that the EFM fund held between $2.5 and $3 million.
(Defts.' Not. of Mot., Ex. A.)
The Court declines to join Plaintiff in speculating about Defendants'
possible use of personal or third party resources. The Court notes that
the "assets under management" information provided by both sides is less
than helpful — this rubric refers to funds of others held for
management by the various investment entities and does not inform the
reader as to the income, capital or expenses of the parties.
Nonetheless, to the extent that a larger amount of assets under
management sttggests greater income by way of management fees, it appears
that Plaintiffs resources are significantly greater than those of
Defendants and that litigation in this District would likely pose a much
greater burden on Defendants, given the extensive travel likely to be
involved, than the burden posed on Plaintiff to litigate in Nebraska.
This factor therefore weighs in favor of Defendants.
Familiarity with the Governing Law
The forum"s familiarity with governing law favors neither party.
Although Everest Capital asserts state law claims such claims are
corollary to their federal trademark claims and do not present complex
questions of law. See Merkur v. Wyndham Int'l, No. 00 Civ. 5843, 2001 WL
477268, at *5 (S.D.N.Y. March 30, 2001) "Where an action does not involve
complex questions of another state"s laws, courts in this district accord
little weight to this factor on a motion to transfer venue" (citing
Vassallo v. Niedermeyer, 495 F. Supp. 757, 759 (S.D.N.Y.1980)).
Furthermore, the presence of a question of New York state law is not more
significant than the convenience to the parties and witnesses, factors
that weigh heavily in favor of transfer of this action. See id.
Weight Accorded Plaintiff's Choice of Forum
The weight accorded plaintiffs choice of forum favors Defendants.
Defendants are entitled to the benefit of choosing their own forum
because, although they are named as defendants in this action, for
purposes of this analysis they are the true plaintiffs in interest
because, as explained below, the suit commenced in Nebraska was not
initiated by an improper anticipatory filing. See Ontel Prods., Inc. v.
Project Strategies Corp., 899 F. Supp. 1144, 1153 (S.D.N.Y.1995) (where
there was no improper anticipatory filing, court should afford plaintiff
in the first-filed case the benefit of choice of forum). Furthermore,
even if Everest Capital were regarded as having the choice of forum
benefit by virtue of its role as plaintiff in this suit, where the
plaintiff is foreign, its choice of forum is entitled to less weight. See
Iragorri v. United Technologies Corp., 274 F.3d 65 (2d Cir.2001) (choice
of a United States forum by a foreign plaintiff is entitled to less
deference); SMT Shipmanagement & Transport Ltd. v. Maritima Ordaz,
No. 00 Civ. 5789, 00 Civ. 6352, 01 Civ. 0013, 2001 WL 930837, at *6
(S.D.N.Y. Aug.15, 2001). Plaintiffs choice of forum weighs, therefore, in
favor of transferring this action to Nebraska.
Trial Efficiency and Interests of Justice
This factor is based on the totality of the circumstances and may be
depending on the particulars of a given case. See TM Claims Service,
143 F. Supp.2d at 407. Here, the totality of the circumstances supports
transfer of this action to Nebraska. Nebraska is the only forum to which
any of the parties has a clear connection, and is also the forum of
choice of the plaintiff in the first-filed suit. Given Everest Capital's
conduct in connection with service of process in the Nebraska action and
this Court's conclusion that the Nebraska suit was not commenced with an
improper anticipatory filing,*fn5 Defendants are especially deserving of
the deference accorded their choice of forum.
In sum, the balance of convenience and interests of justice weigh in
favor of transfer of this action to Nebraska.
The final issue to be addressed in connection with the first-filed rule
is whether special circumstances justify deviation from the general
application of that rule. Special circumstances justifying an exception to
the rule exist where the first suit is prompted by an "improper
anticipatory filing" or was solely the result of forum shopping. Reliance
Ins. Co., 155 F. Supp. 9d at 54. Plaintiff has failed to show that the
improper anticipatory filing exception to the first-filed rule applies
here. See id. (party opposing application of the rule has burden to show
existence of special circumstance warranting departure).
Plaintiff asserts that it pursued settlement discussions in an attempt
to avoid wasting judicial resources and that Defendants "lured Everest
Capital into believing settlement discussions were still ongoing in order
to exploit the First-Filed Principle." (Pl's Memo at 9.) Plaintiffs
assertion of concern for the conservation of judicial resources is belied
by the filing in this district of its suit, which mirrors the Nebraska
action, and Everest Capital's resistance to receipt of process of service
in the Nebraska action, which resistance appears itself to have wasted
limited judicial resources by requiring the intervention of the Nebraska
In determining whether there was an improper anticipatory filing,
courts look to the nature of the first filed action (whether it was a
declaratory judgment action), and whether it was filed after sufficient
notice of a planned lawsuit by the other party. See Abovepeer, Inc. v.
Recording Ind. Ass'n of America, Inc., 166 F. Supp.2d 655, 658
(N.D.N.Y.2001), aff'd sub nom. BuddyUSA, Inc. v. Recording Ind. Ass'n of
America, Inc., Nos. 01-7760, 01-7761, ___ F.3d ___, 2001 WL 1220548 (2d
The fact that an action is one seeking a declaratory judgment does
not, however necessarily mean that it is an improper anticipatory
filing. See id., 166 F. Supp.2d at 658 noting that plaintiff brought the
initial action for the reason the declaratory judgment 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 plaintiffs legal right, privilege and immunity and the
defendant's absence of right, and disability.'" citing United States v.
Doherty, 786 F.2d 491, 498-99 (2d Cir. 1986) (quoting Declaratory
Judgments 280 (2d ed.1941)). Here, the parties' correspondence and
communications regarding the trademark dispute went on for approximately
five months before the Nebraska action was commenced. Given the nature,
tone and duration of this correspondence,
Defendants were under a reasonable apprehension that if they continued
the activity in issue, they would be sued. Under these circumstances it
was not inappropriate for them to seek a declaratory judgment See
Abovepeer, 166 F. Supp.2d at 658. Defendants were not required to wait
"`until [their] adversary should see fit to begin suit'" to take steps to
protect their ability to use their name. See id. (quoting Luckenbach
Steamship Co. v. United States, 312 F.2d 545, 548 (2d Cir. 1963));
Ontel, 899 F. Supp. at 1151.
There is, furthermore, no indication that Defendants were engaging in
improper forum shopping when they initiated suit in Nebraska. "Forum
shopping occurs when a litigant selects a forum with only a slight
connection to the factual circumstances of his action, or where forum
shopping alone motivated the choice." Riviera Trading Corp. v. Oakley,
Inc., 944 F. Supp. 1150, 1158 (S.D.N.Y.1996) (internal quotation marks
and citation omitted). Given that the locus of Defendants' business is in
Nebraska, as are anticipated witnesses and documents relevant to the
issues raised by the litigation, their choice of a court in Nebraska is
not indicative of improper forum shopping. See Novo Nordiak v.
Genentech,, Inc., 874 F. Supp. 630, 633 (S.D.N.Y.1995) (finding that
defendant could not meet its burden of showing that the New York action
was motivated by forum shopping where the plaintiffs principal place of
business was in the Southern District of New York).
The Court finds, under the circumstances of the case, that EFM's
commencement of the Nebraska action did not constitute an improper
anticipatory filing or impermissible forum shopping.
The balance of convenience weighing in favor of allowing the Nebraska
action to proceed, and there being no other special circumstances to
overcome the presumption that the forum in which an action is first filed
is where such action should proceed, the litigation will be permitted to
go forward in Nebraska.
Dismissal or Transfer
Defendants' motion seeks dismissal of the instant action or, in the
alternative, transfer of this action to the Nebraska forum. In light of
the difficulties that EFM has encountered in effectuating service of
process in the Nebraska action and given that all parties have thus far
participates in litigation of the instant action, the Court will grant
Defendants' motion in so far as it seeks to transfer this case to the
United States District Court for the District of Nebraska. As explained
above, the factors relevant to the determination of whether to transfer
an action pursuant to 28 U.S.C. § 1404(a) favor the Nebraska forum.
The Nebraska court will be in a better position to determine whether this
action should be consolidated with the pending action or dismissed, and
to address any remaining personal jurisdiction issues.
For the reasons stated above, Defendants' pending motion is granted
insofar as it seeks transfer of this action to the United States District
Court for the District of Nebraska. The motion is denied insofar as it
seeks dismissal of the action or a stay of proceedings in this Court In
light of the Court"s determination that the parties" litigation should
proceed in Nebraska, Plaintiffs cross-motion to enjoin preliminarily the
Nebraska litigation is denied. SO ORDERED.