Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-13-07151/USCOURTS-caDC-13-07151-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 9, 2014 Decided March 10, 2015

No. 13-7151

STONE & WEBSTER, INC. AND WESTINGHOUSE ELECTRIC

COMPANY, LLC,

APPELLANTS

v.

GEORGIA POWER COMPANY, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:12-cv-01783)

Brian G. Corgan argued the cause for appellants. With him

on the briefs were David C. Smith and Shelly L. Ewald. Michael

A. Branca and Timothy E. Heffernan entered appearances.

Gordon L. Garrett Jr. argued the cause for appellees. With

him on the brief were Joseph E. Finley, Melvin S. Blanton,

Andrew D. Ness, and Charles W. Whitney.

Before: WILKINS, Circuit Judge, and SENTELLE and

RANDOLPH, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge

RANDOLPH. 

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RANDOLPH, Senior Circuit Judge: This is an appeal from

the judgment of the district court, Judge Kollar-Kotelly,

dismissing a complaint filed in the United States District Court

for the District of Columbia in favor of a complaint filed in the

federal district court for the Southern District of Georgia. The

plaintiff in the D.C. action is the defendant in the Georgia

action, and vice versa. Each suit is, to a large extent, the mirror

image of the other. Jurisdiction rests on diversity of citizenship,

28 U.S.C. § 1332. There is no contention that both suits should

proceed. The question is which complaint—the one filed in

D.C. or the one filed in Georgia—should go forward. The

district judge, in a thorough and closely reasoned opinion,

determined that the D.C. action should be dismissed and that the

Georgia action should proceed. 

The dispute arises under a contract, signed in 2008, for the

design and construction of two nuclear electrical generating

units at a power plant in Georgia. Stone & Webster, Inc., and

another company agreed to build the units for Georgia Power

Company and others. The contract, which specifies that it is to

be governed by Georgia law, sets a fixed price for the work but

includes reimbursement for some additional costs. 

Regulatory requirements of the United States Nuclear

Regulatory Commission delayed the project and imposed

additional costs. Stone & Webster sought payment for the

added expenses. Georgia Power denied that the contract made

it responsible for the extra charges. 

The contract includes dispute resolution procedures. The

parties must first meet to seek a resolution. If this does not end

the dispute within thirty days, the parties are to engage in

mediation. For claims of more than $25 million (the claims here

are considerably larger), if the mediation does not conclude

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within sixty days, “either Party shall have the right to proceed to

litigation . . . in a court of competent jurisdiction.”

Under the heading “Venue,” the contract states that the

parties “agree to the non-exclusive jurisdiction of the United

States District Court for the District of Columbia for any legal

proceedings” arising out of the contract and “accept[], generally

and unconditionally, the jurisdiction” of that court. Each party

“waives” the right to challenge cases brought in the D.C. District

Court “on the basis of forum non-conveniens or improper

venue.” The contract adds, in the same “Venue” provision, that

the parties do not “waive any first-to-file challenges to venue.”

Stone & Webster and Georgia Power attempted to negotiate

a resolution of their dispute and, when that failed, entered into

mediation. They agreed that mediation, if unsuccessful, would

conclude on November 1, 2012, at 8:00 p.m., and that no lawsuit

could be filed before then.

When the designated hour arrived on November 1, Stone &

Webster filed its District of Columbia complaint against the

Georgia Power group. The complaint sought more than $900

million resulting from regulatory changes that had occurred and

would occur in the future. The law firm representing Stone &

Webster used the district court’s electronic filing system. 

Affidavits from the firm stated that one of its computers was

connected to the United States Naval Observatory Master

Clock. When the Navy’s clock registered 8:00:00 p.m., a

1

paralegal pressed the “submit” button on an adjacent computer,

thereby “filing” the complaint according to local rules. See

Rule 5.4(c)(3), Rules of the U.S. District Court for the District

of Columbia; U.S. DISTRICT COURT FOR THE DISTRICT OF

This is a network of atomic clocks guaranteed not to gain or lose 1

even one second in more than a million years—or your money back.

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COLUMBIA,ELECTRONICCASEFILINGSYSTEMUSER’SMANUEL

20 (Jan. 2010). The district court’s electronic filing log reported

“11/01/2012 20:00:01” as the filing date and time of Stone &

Webster’s complaint. 

In the meantime, or at the same time, Georgia Power

brought an action in the United States District Court for the

Southern District of Georgia. Georgia Power’s complaint

sought to recover more than $100 million paid under protest to

Stone & Webster pursuant to a contract provision requiring the

payment of 50 percent of disputed invoices until the dispute is

resolved. The complaint also sought a declaratory judgment that

the Georgia Power group was not contractually obligated to pay

for costs caused by regulatory changes. According to the

affidavit of a Georgia Power attorney, he handed the complaint

to the court’s deputy clerk exactly when the clock on the

attorney’s cell phone registered 8:00:00 p.m. The deputy clerk

noted, on the hard copy of the complaint, “November 1, 2012”

and “8:00 p.m.” as the date and time of the filing. 

A few days later, Stone & Webster filed a motion in the

District of Columbia action to enjoin Georgia Power from

prosecuting the Georgia suit. Georgia Power responded with a

motion to dismiss or stay the District of Columbia action. Each

party claimed that it had filed first and that its complaint should

therefore be given priority over the other. The district court did

not decide who filed first. After reviewing the law and the

equities, the court determined that the controversy should be

adjudicated in the Southern District of Georgia, regardless of

which party filed first. The court therefore dismissed Stone &

Webster’s complaint, but without prejudice. Stone & Webster,

Inc. v. Georgia Power Co., 965 F. Supp. 2d 56, 61-64, 66-67

(D.D.C. 2013).

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Stone & Webster claims the district court erred for two

reasons: the court “applied an improper legal standard in a first

to file analysis and incorrectly interpreted” the contract. 

Appellants’ Brief at 15. Stone & Webster does not take issue

with the district court’s findings regarding the comparative

advantage of trying the case in Georgia rather than D.C.

As to the legal standard, the general rule was set in Kerotest

Manufacturing Co. v. C-O-Two Fire Equipment Co., 342 U.S.

180, 183 (1952), a decision the parties here neglected to

mention. The Kerotest Court noticed that the Federal

Declaratory Judgments Act, 28 U.S.C. §§ 2201-2202, had given

rise to “the initiation of litigation by different parties to manysided transactions . . ..” Kerotest, 342 U.S. at 183. To

determine which of two pending suits should proceed, the

Supreme Court decided that the lower courts must be given “an

ample degree of discretion,” id. at 183-84; see UtahAmerican

Energy, Inc. v. Dep’t of Labor, 685 F.3d 1118, 1123 (D.C. Cir.

2012). “Wise judicial administration, giving regard to

conservation of judicial resources and comprehensive

disposition of litigation, does not counsel rigid mechanical

solution of such problems.” Kerotest, 342 U.S. at 183.

In Kerotest there were two lawsuits, one begun by the

patent holder in Illinois against an alleged infringer. The patent

holder later amended its complaint to add Kerotest as a

defendant. The amendment in the Illinois case came about two

weeks after Kerotest sued the patent holder in Delaware seeking

a declaration that its products did not infringe the patents. Id. at

181-83. The Supreme Court did not decide the case on the basis

of which suit was filed first, a basis the Court deemed a “rigid

mechanical solution.” Id. at 183. Instead the Court held that 2

More than a century earlier the Court had stated flatly that “In

2

all cases of concurrent jurisdiction, the Court which first has

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the “factors relevant to wise administration here are equitable in

nature” and that the lower court had properly weighed those

factors in holding that the Delaware action should be stayed. 

Id.; see Handy v. Shaw, Bransford, Veilleux & Roth, 325 F.3d

346, 350 (D.C. Cir. 2003); Columbia Plaza Corp. v. Sec. Nat’l

Bank, 525 F.2d 620, 627-28 (D.C. Cir. 1975); Semmes Motors,

Inc. v. Ford Motor Co., 429 F.2d 1197, 1202-04 (2d Cir. 1970)

(Friendly, J.).

Kerotest thus held that which of two actions came first was

not determinative although it could be relevant, particularly if

the earlier action had already progressed beyond the complaint

stage. In Kerotest itself, the patent holder did not bring Kerotest

into its Illinois case until two weeks after Kerotest sued in

Delaware. Nonetheless the Supreme Court agreed that the

Delaware action should be stayed in favor of the Illinois suit. 

From Kerotest our court has concluded that “an injunction

favoring” the action filed first is not “a mandatory step in all

instances because countervailing equitable considerations,where

present, cannot be ignored.” Columbia Plaza Corp., 525 F.2d

at 627. The district court in the case before us followed these

principles and added that “equitable considerations” are

particularly important if the competing complaints are filed

closely in time, as they were here. Stone & Webster, 965 F.

Supp. 2d at 61; see James P. George, Parallel Litigation, 51

BAYLOR L. REV. 769, 788 (1999). 

Citing Tempco Electric Heater Corp. v. Omega

Engineering, Inc., 819 F.2d 746, 749-50 (7th Cir. 1987), Stone

& Webster argues that Georgia Power’s action should be

disfavored because it was an “anticipatory declaratory judgment

possession of the subject must decide it.” Smith v. McIver, 22 U.S.

532, 535 (1824).

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action.” Appellants’ Brief at 28, 30. Whatever the validity of

the rule in Tempco, the decision has no application here. Both 3

lawsuits, the one in D.C. and the one in Georgia, were filed in

anticipation of each other. And as the district court determined,

both lawsuits sought not only coercive relief but also declaratory

relief. See Stone & Webster, 965 F. Supp. 2d at 64-65.

In all of this, the district court applied the correct legal

principles in making a comparative judgment between venue in

the District of Columbia and venue in the Southern District of

Georgia. For all practical purposes, the filings here were

simultaneous and the district court properly treated them as

such. As to what Kerotest called “equitable” factors, the court’s

evaluation pointed strongly in favor of allowing the Georgia

action to go forward. The Georgia district court is presumably

more familiar with the law governing the contract—that is,

Georgia state law. Id. at 62. Trying the case in the Southern

District of Georgia “would permit easier access to relevant

evidence”—the construction site is located there and “several

potential witnesses with knowledge of the claims” are located in

Georgia. Id. at 62-63. Other “ties between the parties’ dispute

Tempco was a trademark case in which the alleged infringer 3

brought a declaratory judgment action after the holder of a trademark

threatened to sue in another venue and later did so. Tempco held that

the first-filed declaratory judgment action should be dismissed

because it was “in anticipation of an infringement action,” 819 F.2d

at 749. The Federal Circuit hasrefused to follow Tempco. Genentech,

Inc. v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993), abrogated

on other grounds by Wilton v. Seven Falls Co., 515 U.S. 277, 282

(1995). Two district courts in the Seventh Circuit have since refused

to follow Tempco in patent suits, which are appealable only to the

Federal Circuit under 28 U.S.C. § 1295(a)(1). See K & F Mfg. Co. v.

Western Litho Plate & Supply Co., 831 F. Supp. 661, 663-64 (N.D.

Ind. 1993); Technical Concepts, L.P. v. Zurn Indus., Inc., No. 02-C2827, 2002 WL 31027962, at *6 (N.D. Ill. Sept. 10, 2002). 

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and the Southern District of Georgia are numerous and

undeniable.” Id. at 63. 

There is no reason to say anything more on this subject. As

we have mentioned, Stone & Webster does not argue that the

court committed any error in evaluating these factors. It claims

instead that the court should not have done the evaluation. We

have rejected Stone & Webster’s first argument that the district

court’s analysis of the governing law was in error. Stone &

Webster’s second argument is that the “Venue” provision of the

contract, which is set forth in the margin, barred the court from 4

considering equitable factors.

The “Venue” provision states that the parties consent to

venue in the District of Columbia and—to quote the contractual

language—“waive[] any right to stay or dismiss any action or

proceeding . . . [in that court] on the basis of forum nonconveniens or improper venue.” The provision also states: “For

the avoidance of doubt, the Parties do not by this Section . . .

waive any first-to-file challenges to venue.” It follows, Stone &

Webster contends, that the parties barred the district court from

deciding a first-to-file claim on the basis of any factors that

Article “34.3 Venue. The Parties agree to the non-exclusive 4

jurisdiction of the United States District Court for the District of

Columbia for any legal proceedings that may be brought by a Party

arising out of or in connection with this Agreement or for recognition

or enforcement of any judgment. Each Party accepts, generally and

unconditionally, the jurisdiction of the aforesaid court for legal

proceedings arising out of or in connection with this Agreement. Each

Party hereby waives any right to stay or dismiss any action or

proceeding under orin connection with this Agreement brought before

the foregoing court on the basis of forum non-conveniens or improper

venue. For the avoidance of doubt, the Parties do not, by this Section

34.3, waive any first-to-file challenges to venue.” 

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would also be relevant to forum non conveniens. The district

court rejected this interpretation and so do we.

The contractual language just quoted is a permissive forum

selection clause. The District of Columbia is deemed a proper

venue but it is not the only possible venue or even the preferred

one. The clause permitting first-to-file challenges to venue

contemplates what an adjacent clause makes explicit: “The

Parties agree to the non-exclusive jurisdiction of the United

States District Court for the District of Columbia . . ..” A firstto-file challenge compares one lawsuit with another. Under the

law of the Supreme Court, and of this and other federal courts,

some of the factors to be considered in making this comparison

overlap with those considered in forum non conveniens cases. 

But other factors are generally considered only in first-to-file

cases. Examples are the relative progress of the two cases and

the similarity of the cases. See, e.g., George, Parallel Litigation,

supra, 51 BAYLOR L. REV. at 787-88 (listing eleven factors in

addition to the convenience of the parties). To credit Stone &

Webster’s argument would be to treat the contractual “Venue”

provision as if it waived any first-to-file challenge resting on

considerations of equity. That would be to contradict the

contract, which states in the clearest possible terms that first-tofile challenges were permitted and that the “Venue” provision

did not waive “any” such challenges. We agree with the district

court that when the parties agreed to the first-to-file clause they

took the law as it has developed since the Supreme Court’s 1952

decision in Kerotest. 

The judgment of the district court is affirmed.

So ordered.

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