United States District Court, W.D. New York
October 21, 2004.
A&A JEWELLERS LIMITED and A&A JEWELERS, INC., Plaintiffs,
BOGARZ, INC., Defendant.
The opinion of the court was delivered by: JOHN T. ELFVIN, Senior District Judge
MEMORANDUM and ORDER*fn1
Plaintiffs A & A Jewellers Limited and A & A Jewelers, Inc.
(collectively plaintiffs) commenced this action on March 25, 2004
against defendant Bogarz, Inc. seeking a judgment declaring that
plaintiffs are not infringing any of defendant's copyright rights
by selling the fourteen allegedly infringing jewelry products.
Defendant subsequently filed an April 12, 2004 complaint in the
United States District Court for the Central District of
California ("the California action") against plaintiffs for
copyright and trade dress infringement and unfair competition on
those same fourteen allegedly infringing jewelry
products.*fn2 See Bogarz, Inc. v. A & A Jewellers Ltd.,
Case No. 04-CV-2554-PA(CWx). Defendant then on April 16, 2004
filed in this Court a Motion to Dismiss Anticipatory Declaratory
Judgment Action pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure ("FRCvP") on the ground that plaintiffs filed "an
anticipatory declaratory judgment action designed to deprive [defendant] of its right to
litigate its affirmative action in a forum of its choosing".
(Def.'s Mem. Supp. Mot. Dismiss at 5.) Plaintiffs moved for
Preliminary Injunction ("PI") on April 20, 2004 seeking to enjoin
defendant from prosecuting the California action. This Court's
May 14, 2004 Order granted plaintiffs' PI, holding that defendant
had not shown that plaintiffs had filed this action in order to
win a "race to the courthouse" and the balance of conveniences
weighed in favor of litigating this action in this forum. This
Court will now address defendant's Motion to Dismiss and, for the
reasons set forth below, defendant's Motion will be denied.
While familiarity with the facts is presumed, specific facts
will be discussed as needed.*fn3 Plaintiffs manufacture,
market and distribute jewelry items. Defendant is a designer and
manufacturer of jewelry. Defendant's counsel sent a letter on
March 12, 2004 to plaintiffs alleging that they had infringed
defendant's copyrights by manufacturing unauthorized
reproductions of fourteen jewelry items and by selling them
through Friedman's, Inc., a large retailer of jewelry. Defendant
requested that plaintiffs immediately cease and desist selling
the allegedly infringing jewelry and further stated that
defendants will initiate legal action if plaintiffs fail to
comply with such demands by March 18, 2004. Plaintiffs' counsel
responded with a March 18 letter requesting that defendant
provide plaintiffs with samples of the fourteen items at issue
and their respective copyright certificates. Plaintiffs allege
that they never received the requested samples and defendant claims said samples were sent. This Court's May 14, 2004 Order
found that defendant did not put forth evidence to discredit
plaintiffs' assertion that they never received the requested
samples. May 14, 2004 Memorandum & Order of this Court, at 6 n.
11. Following non-receipt of the requested samples and passage of
defendant's deadline via the demand letter, plaintiffs commenced
this action. Eighteen days later, defendant filed the California
action, after which plaintiffs moved for and the Court granted PI
enjoining defendant from prosecuting the California action.
Before this Court is defendant's Motion to Dismiss this action
pursuant to FRCvP 12(b)(6) on essentially the same grounds that
this Court granted plaintiffs' PI.*fn4 As such, on the same
rationale as the Order granting PI, this Court must deny
FRCvP 12(b)(6) entitles a defendant to a judgment of dismissal
where a complaint fails to state a claim upon which relief can be
granted. The standard of review on a motion to dismiss is heavily
weighted in favor of a plaintiff. The Court is required to read a
complaint generously, accepting the material facts alleged in the
complaint as true and drawing all reasonable inferences from the
complainant's allegations. California Motor Transp. Co. v.
Trucking Unlimited, 404 U.S. 508, 515 (1972); Frasier v.
Gen. Elec. Co., 930 F.2d 1004, 1007 (2d Cir. 1991). A defendant
is entitled to dismissal pursuant to FRCvP 12(b)(6) only when the
Court finds that "it appears beyond doubt that the plaintiff[s] can prove no set of facts in support of [their]
claim which would entitle [them] to relief." Conley v.
Gibson, 355 U.S. 41, 45-46 (1957).
The Declaratory Judgment Act ("DJA") provides that a court
"may declare the rights and other legal relations of any
interested party seeking such declaration, whether or not further
relief is or could be sought." 28 U.S.C. § 2201(a) (2004)
(emphasis added). The Supreme Court has held that the district
court is "under no compulsion to exercise" the jurisdiction it
has under the DJA. Brillhart v. Excess Ins. Co. of Am.,
316 U.S. 491, 494 (1942). "The Court must look at the litigation
situation as a whole in determining whether it is appropriate for
the Court to exercise its jurisdiction over the declaratory
judgment action before it." Great Am. Ins. Co. v. Houston Gen.
Ins. Co., 735 F. Supp. 581, 585 (S.D.N.Y. 1990). Considering the
litigation situation as a whole, in light of the Court's May 14,
2004 Order granting plaintiffs' PI and the principles of equity,
the Court concludes that it should exercise its discretion to
entertain plaintiffs' action for a declaratory judgment.
Accordingly, defendant's Motion to Dismiss will be denied.
Defendant, in support of its Motion to Dismiss, argues that
plaintiffs' misuse of the DJA to gain a procedural advantage and
to forum shop warrants dismissal. Defendant, in opposition to
plaintiffs' Motion for PI, argued that the "first-filed rule" did
not apply in this case because plaintiffs' present action, merely
designed to preemptively deprive defendant of its right to choose
its own forum, constitutes a misuse of the DJA.*fn5 In the
May 14 Order, this Court held that plaintiffs filed this declaratory action to
protect their rights and defendant had not shown that plaintiffs
intentionally deceived defendant so that plaintiffs could file
first in this district.*fn6 May 14, 2004 Memorandum & Order
of this Court, at 7.
Further, defendant contends in favor of its Motion to Dismiss,
just as it did in opposition to plaintiffs' Motion for PI, that
significant factors militate in favor of dismissal of this
case*fn7 viz, (1) Friedman is indispensable to the
resolution of this action and this Court has no jurisdiction over
Friedman while the California Court does, (2) most if not all of
the documents and witnesses relevant to this action are located
in California and (3) the principles of judicial economy and preservation of resources
favor dismissal. This Court, however, in granting plaintiffs' PI,
held against defendant on all three of those claims and found
that the balance of conveniences and the interests of justice
weigh in favor of the injunction and in favor of litigating in
Therefore, there is nothing further for this Court to
determine. Defendant's Motion to Dismiss makes the same arguments
as were rejected in the Court's May 14, 2004 Order enjoining
defendant from prosecuting the California action. As such, this
Court holds this is the correct forum for this action and
defendant's Motion to Dismiss plaintiffs' declaratory judgment
action pursuant to FRCvP 12(b)(6) will be denied.
Accordingly, it is hereby ORDERED that defendant's Motion to
Dismiss plaintiffs' declaratory judgment action is denied and
that this action will continue in this forum.