Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-01848/USCOURTS-casd-3_06-cv-01848-1/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

BRIGHTON COLLECTIBLES, INC.,

a California corporation,

Plaintiff,

CASE NO. 06-CV-1848-H

(JMA)

ORDER DENYING

DEFENDANT’S MOTION TO

DISMISS, STAY, OR

TRANSFER SUIT BASED ON

“FIRST TO FILE” RULE AND

DENYING WITHOUT

PREJUDICE DEFENDANT’S

MOTION TO TRANSFER SUIT

UNDER 28 U.S.C. 1404(a)

vs.

COLDWATER CREEK, INC., a

Delaware corporation; and DOES 1-

10, inclusive,

Defendants.

On September 12, 2006, Plaintiff Brighton Collectibles, Inc. (“Plaintiff”) filed

a complaint against Defendants Coldwater Creek, Inc. and Does 1-10, alleging

copyright infringement, trade dress infringement, false designation of origin, common

law unfair competition and statutory unfair competition arising from the manufacture

and sale of handbags, wallets, and other accessories. (Doc. No. 1.) On October 4,

2006, Defendant Coldwater Creek, Inc. (“Defendant”) filed a motion to dismiss, stay

or transfer this action in light of a prior pending action in the District of Idaho. (Doc.

No. 8.) On November 6, 2006, Plaintiff filed its opposition. (Doc. No. 12.) On

November 13, 2006, Defendant filed a reply. (Doc. No. 15.) The Court held a

telephonic hearing regarding the motion to dismiss, stay or transfer this action on

November 20, 2006. Attorneys Peter Ross and Steven Winton represented Plaintiff at

Case 3:06-cv-01848-H-POR Document 17 Filed 11/21/06 Page 1 of 7
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the hearing, and attorneys Alison Pivonka, Peter Brann and Stacy Stitham represented

Defendant. 

For the following reasons, the Court DENIES Defendant’s motion to dismiss,

stay, or transfer the suit based on the “first to file” rule, and DENIES WITHOUT

PREJUDICE Defendant’s motion to transfer the suit to the District of Idaho under 28

U.S.C. § 1404(a).

FACTUAL AND PROCEDURAL BACKGROUND

On August 23, 2006, Plaintiff sent Defendant a letter alleging that certain

identified products sold by Defendant infringed Plaintiff’s copyright and trade dress

rights, demanding that Defendant cease and desist from marketing those goods, and

demanding an accounting of all revenues Defendant had obtained from the sale of those

goods. The letter stated that “if we do not hear from you by the close of business next

Friday, August 18, 2006 that you will comply with our demands, we have been

instructed to file suit against [Defendant] for copyright infringement, trade dress

infringement, false designation of origin and unfair competition and to seek

compensatory and punitive damages, injunctive relief and all other remedies afforded

by law.” (Defendant’s Mem. P’s & A’s in Supp. of Mot., Exh. A, at 2.) On August 31,

2006, an attorney for Defendant called Plaintiff’s attorney to ask for more time to

respond, and the two agreed that Defendant would have until September 14, 2006 to

respond to the August 23 letter. (Ford Decl. ¶¶ 5, 6; Ross Decl., Exh. 2.) 

On September 7, 2006, Defendant filed a declaratory judgment action in the

District of Idaho, Coldwater Creek Inc. v. Brighton Collectibles, Inc., Case No. CV-06-

355 (“the Idaho suit”), seeking a declaration that Defendant has not infringed

Plaintiff’s copyrights or trade dress, has not engaged in unfair competition, and has not

falsely designated the origin of their products. On September 12, 2006, Plaintiff filed

the instant suit (“the California suit”). (Doc. No. 1.) 

On September 14, 2006, Defendant’s counsel sent counsel for Plaintiff a letter

denying that Defendant had infringed Plaintiff’s copyright or trade dress interests.

(Ross Decl., Exh. 4.) The letter stated that “the threat of imminent litigation contained

Case 3:06-cv-01848-H-POR Document 17 Filed 11/21/06 Page 2 of 7
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in your letter requires that [Defendant] respond proactively to protect its legitimate

business interests. Accordingly, [Defendant] has initiated a lawsuit seeking declaratory

relief in connection with the issues described in your letter. . . .” (Id.) 

Plaintiff has filed a motion to dismiss or stay the Idaho suit, arguing that it is an

anticipatory declaratory judgment action and therefore subject to an equitable

exception to the first to file rule. Defendant’s opposition to the motion was due on

November 17, 2006, and Plaintiff’s reply is due ten days later. (Plaintiff’s Mem. P’s

& A’s in Opp. of Mot. 2:8-12 & n.1.) 

DISCUSSION

A. “First to File” Rule

Under the “first to file” rule, when cases involving the same parties and issues

have been filed in two different districts, the second district court has discretion to

transfer, stay, or dismiss the second case in the interest of efficiency and judicial

economy. See Cedars-Sinai Medical Center v. Shalala, 125 F.3d 765, 769 (9th Cir.

1997). As the Ninth Circuit has explained, “[t]he first-to-file rule was developed to

“serve[ ] the purpose of promoting efficiency well and should not be disregarded

lightly.” Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 625 (9th Cir. 1991).

“While no precise rule has evolved, the general principle is to avoid duplicative

litigation, and to promote judicial efficiency.” Barapind v. Reno, 225 F.3d 1100, 1109

(9th Cir. 2000) (internal quotations and citations omitted). The Alltrade court set forth

three prerequisites for application of the first to file rule: (1) chronology of the two

actions; (2) similarity of the parties; and (3) similarity of the issues. See Alltrade, 946

F.2d at 625. 

However, the first to file rule “is not a rigid or inflexible rule to be mechanically

applied, but rather is to be applied with a view to the dictates of sound judicial

administration.” Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir.

1982); see also Alltrade, 946 F.2d at 627-28. A court “can, in the exercise of [its]

discretion, dispense with the first-filed principle for reasons of equity.” See Alltrade,

946 F.2d at 628. “The circumstances under which an exception to the first-to-file rule

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1

 Plaintiff did name ten Doe defendants in the California case, but it plead that “each of the defendants was the agent, principal, employee, representative, or alter ego of the other defendants and/or acted with one or more of the other defendants’

knowledge, consent, and approval, and acted within the course and scope of his agency or representative capacity.” (Complaint ¶ 6.) Therefore, these Doe defendants do not prevent the parties from being “similar” in the Idaho suit and the California suit. 

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typically will be made include bad faith, anticipatory suit, and forum shopping.” Id.

(internal citations omitted). 

1. Applicability of the “First to File” Rule

The Alltrade Court set forth three prerequisites for application of the first

to file rule: (1) chronology of the two actions; (2) similarity of the parties; and

(3) similarity of the issues. See id. at 625. The parties agree that all three factors

indicate that the first to file rule is applicable to this case. Defendant filed the Idaho

suit on September 7, 2006, five days before Plaintiff filed the California suit. The

parties in both suits are Brighton Collectibles, Inc. and Coldwater Creek, Inc.1

 Finally,

as Plaintiff concedes, the issues in the California suit are the mirror images of the

declaratory disputes in the Idaho suit. 

2. Equitable Exception to the “First to File” Rule For Suits Brought In

Anticipation Of An Imminent Suit

 Plaintiff argues that an equitable exception warrants a departure from the first

to file rule based on the anticipatory nature of Defendant's Idaho action. Plaintiff

contends that the declaratory judgment action in Idaho was an attempt to preempt

Plaintiff's choice of forum, and thus the Court should exercise its discretion to decline

to evoke the first to file rule.

Other district courts in California have ruled that a suit is anticipatory for

purposes of allowing a court to treat it as an exception to the first to file rule if the

plaintiff in the first-filed action filed suit on receipt of specific, concrete indications

that a suit by the defendant was imminent. See Xoxide, Inc. v. Ford Motor Co., 448

F. Supp. 2d 1188, 1192-93 (C.D. Cal. 2006); Z-Line Designs, Inc. v. Bell'O Int'l LLC,

218 F.R.D. 663, 665 (N.D. Cal. 2003); Guthy-Renker Fitness, L.L.C. v. Icon Health

& Fitness, Inc., 179 F.R.D. 264, 271 (C.D. Cal. 1998); Ward v. Follett Corp., 158

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2

 Although the Federal Circuit has recently held that a district court may not deviate from the first-to-file presumption solely because the first-filed claim was anticipatory of the later-filed claim, the Federal Circuit made clear that it created the

rule based on its exclusive jurisdiction over patents, and therefore was ignoring the precedents of other circuits. See Electronics for Imaging, Inc. v. Coyle,, 394 F.3d 1341,

1345–1348 (Fed. Cir. 2005). Since this suit does not involve patents, the Ninth Circuit’s Alltrade decision, which provides courts the discretion to deviate from the first to file rule based on equitable considerations created by an anticipatory suit is the controlling precedent. See Alltrade, 946 F.2d at 628. 

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F.R.D. 645, 648 (N.D. Cal. 1994). Some of those courts have added that when a

declaratory judgment action has been triggered by a cease and desist letter that both

seeks settlement and notifies the party of the possibility of litigation upon collapse of

negotiations, equity militates in favor of allowing the second-filed action to proceed

to judgment rather than the first. See Xoxide, Inc., 448 F. Supp. 2d at 1993; Z-Line

Designs, Inc., 218 F.R.D. at 667. Application of the first to file rule in such situations

would thwart settlement negotiations, but rather encourage intellectual property holders

to file suit rather than communicate with an alleged infringer. 

Plaintiff attempted to negotiate with Defendant when it sent the August 23,

2006 letter requesting that Defendant cease and desist from marketing certain allegedly

infringing products. Although Defendant argues that Plaintiff’s statement that “if we

do not hear from you by the close of business next Friday . . . we have been instructed

to file suit against [Defendant] for copyright infringement, trade dress infringement,

false designation of origin and unfair competition and to seek compensatory and

punitive damages, injunctive relief and all other remedies afforded by law,” did not

provide it with a specific, concrete indication that a suit was imminent, such a

conclusion is belied by Defendant’s own attorney’s statement that the threat of

imminent litigation contained in the August 23, 2006 letter caused Defendant to file

the Idaho suit. (Ross Decl., Exh. 4.) Therefore, the Court exercises its discretion to

decline to dismiss, stay or transfer this suit based on the previously filed Idaho suit.2

 

3. Convenience Factors Affecting The “First to File” Rule

Although a court may also consider the respective convenience of the two courts

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when deciding whether to implement the first to file rule, normally this argument is

addressed to the court in the first-filed action. See Alltrade, 946 F.2d at 628.

Therefore, this Court declines to address these factors. 

B. Convenience Transfer Under 28 U.S.C. § 1404(a)

As an alternative to dismissing, staying, or transferring this suit under the first

to file rule, Defendant asks this Court to transfer this suit to the District of Idaho under

its discretion to do so for “the convenience of parties and witnesses, [and] in the

interest of justice.” 28 U.S.C. § 1404(a). Given the early stage of the pleadings, and

the pending motion to dismiss in the Idaho suit, the Court believes it is premature to

decide whether to transfer this suit to Idaho or not. If the Court were to transfer this

suit to Idaho, and subsequently the Idaho suit was dismissed, the parties would have

to start the litigation over. If, on the other hand, the motion to dismiss is denied in the

Idaho suit, such that two suits regarding similar issues are pending in separate districts,

this Court will be receptive to reconsidering a motion to transfer this suit based on the

factors specified by section 1404(a). 

CONCLUSION

For the above stated reasons, the Court DENIES Defendant’s motion to dismiss,

stay, or transfer the suit based on the “first to file” rule, and DENIES WITHOUT

PREJUDICE Defendant’s motion to transfer the suit to the District of Idaho under 28

U.S.C. 1404(a).

IT IS SO ORDERED. 

DATED: November 21, 2006

MARILYN L. HUFF, District Judge

UNITED STATES DISTRICT COURT

Case 3:06-cv-01848-H-POR Document 17 Filed 11/21/06 Page 6 of 7
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COPIES TO:

Steven W. Winton 

Winton and Larson, LLP 

11770 Bernardo Plaza Court 

Suite 255 

San Diego, CA 92128 

Peter W. Ross

Browne Woods & George, LLP

450 North Roxbury Drive, Seventh Floor

Beverly Hills, CA 90210-4231

Gary Freedman

Law Offices of Gary Freedman

1149 Third Street, Suite 200

Santa Monica, CA 90403

Alison Lee Pivonka 

Solomon Ward Seidenwurm and Smith 

401 B Street 

Suite 1200 

San Diego, CA 92101 

Peter J. Brann 

Stacy O. Stitham

Brann and Isaacson 

184 Main Street 

PO Box 3070 

Lewiston, ME 04243-3070 

Case 3:06-cv-01848-H-POR Document 17 Filed 11/21/06 Page 7 of 7