United States District Court, S.D. New York
June 8, 2005.
AMERICAN EXPRESS COMPANY, Plaintiff,
STEPHEN G. GOETZ, et ano., Defendants.
The opinion of the court was delivered by: LEWIS KAPLAN, District Judge
This is an action for a declaration that plaintiff has not
infringed defendants' alleged trademark or otherwise
misappropriated any proprietary rights of defendants. Defendants
move to dismiss on the ground that the Court should exercise its
discretion to decline declaratory relief in order to permit
resolution of the controversy in a later-filed action for
coercive relief commenced by one of the defendants in the
Northern District of California. Judge Alsup in San Francisco
already has determined that the interest of justice and the
convenience of the parties and witnesses favors a transfer of the California action to this district,
assuming that this Court denies defendants' motion.
"It is a `well-settled principle in [the Second] Circuit that
where there are two competing lawsuits, the first suit should
have priority, absent the showing of a balance of convenience or
special circumstances giving priority to the second.'"*fn1
While defendants acknowledge this rule, they argue that the
discretionary nature of the declaratory judgment remedy, the
alleged fact that plaintiff filed this suit as part of a race to
the courthouse, and the alleged hardship to defendants, who are
based on the west coast, of litigation here warrant a departure
in this case.
Factors pertinent to determining whether to entertain an action
for declaratory relief were summarized recently by the Second
Circuit in Dow Jones & Co. v. Harrods Ltd.*fn2 Several
favor the defendants viz., the facts that (1) the Northern
District action for coercive relief offers a better or, at least,
more complete remedy, (2) plaintiff, despite its protestations to
the contrary, doubtless had in mind preempting the choice of
forum when it filed this action, and (3) a declaratory judgment
would be superfluous in view of the pendency of an action for
coercive relief. But these factors are not the only relevant
considerations, at least in this case. For one thing, defendants
delayed from November 8, 2004, when they first learned of
plaintiff's allegedly infringing use, until late January 2005 to
send a cease and desist letter and until February to file the San
Francisco action. Even more important, Judge Alsup already has determined correctly in my
view that litigation of this action in this district, despite
some inconvenience to the defendants, would serve the convenience
of the parties and witnesses and be in the interest of justice.
Accordingly, defendants' motion to dismiss the complaint is denied.