The opinion of the court was delivered by: William M. Skretny United States District Judge
Plaintiff Columbus McKinnon Corporation ("CMC") commenced this action pursuant to 28 U.S.C. § 2201, and seeks a declaration relative to certain contractual rights and obligations. (Docket No. 1.) Presently before this Court is Defendants' Motion to Dismiss the Complaint for lack of subject matter jurisdiction, or alternatively, to transfer the case to the Southern District of Ohio. (Docket No. 10.) Plaintiff opposes both requests. For the reasons discussed below, Defendants' Motion to Dismiss and its alternative Motion to Transfer are both denied.
Plaintiff CMC is a corporation organized under the laws of the State of New York, with its headquarters in Amherst, New York. (Docket No 1, Compl., ¶ 3.) CMC manufactures material handling products and has operating divisions and facilities located across the country. (Id.) Defendants SST Casting, Inc. and SST Bearing Corporation ("SST") manufacture and supply various industrial products and are headquartered in Loveland, Ohio. (Id., ¶ 4.) The parties executed separate Strategic Supplier Agreements in 2001, 2002, and 2006, pursuant to which SST was to supply CMC with certain casting and bearing products for specified time periods. (Compl., ¶¶ 8, 14, & 20.)
In 2005and 2006, Michael Hill, an SST employee, raised concerns that the volumes of CMC's orders for certain parts were well below the annual usage rates specified in the 2002 Supplier Agreement. (Docket No. 24, Wozniak Decl., ¶ 5.) In addition, he asked CMC to issue purchase orders or otherwise pay for some or all of the products that SST had in its possession. (Id.) Kurt Wozniak, CMC's Director of Corporate Development, informed Mr. Hill that, under the agreement, CMC was not required to order any set number of products. (Wozniak Decl., ¶ 7.)
On January 9, 2008, Deborah Lydon, legal counsel for SST, contacted CMC and David Shine. (Docket No. 10, Ex. 1, Lydon Aff., ¶ 2, March 20, 2008; Docket No. 23, Shine Aff., ¶ 9.) Lydon demanded payment for the goods CMC ordered from SST and also stated that she would like to hear from CMC by early the following week so as to avoid more formal proceedings. (Lydon Aff., ¶ 2; Shine Aff., ¶ 10.) But Lydon did not hear from CMC over the next two weeks, and so Lydon contacted Kurt Wozniak. (Lydon Aff., ¶ 2.) Wozniak suggested that Lydon prepare a "position statement," wherein SST outline its claims in more detail. (Lydon Aff., ¶ 3.) Pursuant to Wozniak's suggestion, Lydon prepared the statement, and emailed it to Wozniak on January 30, 2008. (Lydon Aff., ¶ 4.)
The position statement addresses concerns regarding the 2001, 2002, and 2006 agreements. (Docket No. 9, Ex. D.) To satisfy the terms of the 2001 and 2002 agreements, SST asks CMC to take and pay for all parts SST has in stock, and to compensate SST for the remaining sales that should have occurred. To satisfy the terms of the 2006 agreement, SST presents CMC with various options.*fn1
Lastly, the position statement states that "SST has incurred losses approaching $1,000,000;" that "valuable transactions" are "currently occurring ;" and that, "[w]e appreciate the opportunity to resolve this controversy amicably, if possible. Accordingly, we would appreciate efforts being conducted by CMC to bring about a resolution no later than February 14, 2008." (Id., p. 3.)
Plaintiff CMC took no official action and did not discuss the statement with SST prior to February 14, 2008. Lydon emailed Wozniak on February 15, 2008, and stated that she would appreciate a response to the statement by February 19, 2008 "before other remedies may be pursued." (Lydon Aff., ¶ 5; Wozniak Aff., ¶ 11.) On or about February 18, 2008, Timothy R. Harvey, CMC's in-house legal counsel, spoke with Lydon about the statement. (Docket No. 25, Harvey Decl., ¶ 8.) Harvey requested that Lydon give him until February 29, 2008 to respond to her statement. (Id.) Lydon accommodated Harvey's request for additional time.*fn2
During the same phone conversation, Lydon claims she informed Harvey that she "would have to file a lawsuit by the end of February if the parties had not reached a settlement or agreed to a tolling agreement." (Docket No. 26, Lydon Aff., ¶ 4, June 5, 2008) (emphasis added).*fn3 Lydon also claims that she asked Harvey to instruct CMC's various divisions "not to destroy any documents or other evidence that might be necessary for litigation." (Id., ¶ 6.) Harvey's version of events differ from those of Lydon. For example, Harvey claims Lydon indicated that "she 'may' be forced to bring an action against CMC if the parties could not resolve SST's purported issues, [and] she did not specifically say that she would be filing an action..." (Docket No. 25, Harvey Decl., ¶ 12) (emphasis added). Additionally, Harvey never mentioned Lydon's alleged instruction to preserve all litigation documents.
Harvey did not respond to Lydon as promised. Instead, on February 26, 2008, CMC filed the instant action. On February 28, 2008, SST, allegedly unaware of CMC's suit, filed its own lawsuit against CMC in the Hamilton County (Ohio) Court of Common Pleas, seeking over $350,000 in damages. On April 8, 2008, CMC removed the Ohio action to the United States District Court for the Southern District of Ohio (Docket No. 21, Ex. A), and CMC moved for a stay pending this Court's determination of SST's Motion to Dismiss and/or Transfer.
A. Defendants' Motion to Dismiss
1. Arguments of the Parties
The issue here is whether Plaintiff's Complaint was brought in anticipation of, and in response to, Defendants' purported notification of their intention to sue Plaintiff.
Because Plaintiff filed its Complaint less than one month after receiving Defendants' position statement, and only one week after Mr. Harvey's conversation with Ms. Lydon and 3 days prior to the deadline Harvey requested to respond to Lydon's position statement, Defendants argue that Plaintiff was aware of Defendants' intention to commence suit, and that this action amounts to a "preemptive strike." (Defs.' Mem., p. 8.)*fn4 As a result, Defendants argue that in light of Plaintiff's anticipatory actions, this Court should decline to exercise subject matter jurisdiction over this action, and therefore dismissal is appropriate. (Id.)
In response to Defendants' contention, Plaintiff argues that this Court has subject matter jurisdiction over the instant action because of the "first-filed rule." (Pl.'s Mem., p. 7.)*fn5 Furthermore, Plaintiff argues that Defendants' position statement never indicated an intention to sue Plaintiff because the statement is vague and inconclusive. (Id., p. 10.) As a result, Defendants argue that the instant action was not filed in response to a direct threat of litigation, and therefore dismissal is unwarranted.
The Declaratory Judgment Act ("DJA") holds that, "[i]n a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201. As the Second Circuit held in Dow Jones & Co., Inc. v. Harrods Ltd., the statutory use of the word "may" affords district courts "a broad grant of discretion," and allows courts "to refuse to ...