Therefore, the Court must determine, according to Eighth Circuit standards, whether a suit is
filed after service is perfected, although no Complaint was filed before that service.’
“In cases of concurrent jurisdiction, the first court in which jurisdiction attaches has

priority to consider the case as a matter of federal comity.” Keymer v. Management Recruiters.

Int’LInc., 169 F.3d 501, 503 n.2 (8th Cir. 1999) (citing Northwest Airlines, Inc, v. American

Airlines, Inc., 989 F.2d 1002, 1004-05 (8th Cir. 1993)). The “first filed rule” gives priority “to

the party who first establishes jurisdiction” in order to conserve judicial resources and avoid
conflicting rulings. Id.

There has been a dispute among the District Courts of the Eighth Circuits as to what
actions “establish jurisdiction” for purposes of the first filed rule. Though authority exists for
both positions, most courts consider the act of filing, rather than service, as determinative under

the first filed rule. Federal Cartridge Company v. Remington Arms Company, No. Civ. 03-6105,

2003 WL 23101805 at *2. (citing Hospah Coal Co. v. Chaco Energy Co., 673 F.2d 1161, 1163
(10th Cir. 1982) (use of date of filing of the complaint gives effect to Rule 3 of Federal Rules of

Civil Procedure); Slidell, Inc. v. Archer Daniels Midland Co., No. 02-4841, 2003 WL 22050776,

at * 5 (D. Minn. Sept. 2, 2003) (holding same). But see Red Wing Shoe Co. v. B-JAYS USA.

Inc., No. Civ. 02-257, 2002 WL 1398538 at *2 (using service date as priority criterion)., see also

RK. Dixon v. Dealer Marketing Services, 284 F.Supp.2d 1204, 1215 n.14 (S. D. lowa 2003)

(citing Med-Tec Iowa, Inc. vy. Nomos Corp., 76 F.Supp.2d 962, 968 n.3 (N.D. Iowa 1999) for the

? pursuant to Minn.R.Civ.P. 3.01, a civil action is commenced against a defendant
when the summons is served upon the defendant. Pursuant to Minn.R.Civ.P. 5 .04, the
summons and complaint are required to be filed within a reasonable time after service upon
defendant(s).

-4-



adjudicating the Parties’ disputes. Therefore, this Court will transfer this cause of action to
the District of Minnesota, and allow that court to consolidate IBI’s cause of action with

Deltak’s cause of action filed there.

IH. CONCLUSION
For the foregoing reasons, Deltak’s motion to transfer venue to the Minnesota District Court

is GRANTED.

Ent

David H. Coar
United States District Judge

Dated: April 6, 2004



§ 1404(a) mandate a transfer of this case to the District of Minnesota, even though IBI’ s
Complaint was “first filed.”

B. Motion To Transfer Venue

Pursuant to § 1404 (a), a court may transfer a civil action, “for the convenience of the
parties and witnesses, in the interest of justice.” Transfer under § 1404 (a) is appropriate if: (1)
venue is proper in both the transferor and transferee court; (2) transfer is for the convenience of

parties and witnesses; and (3) transfer is in the interests of justice. Barnes v. Rollins Carriage

Services, Inc., 976 F.Supp. 767, 768 (N.D. Ill. 1997). Whether a transfer is appropriate under
§ 1404(a) is left to the sound discretion of the trial court. Bryant v. ITT Corp., 48 F.Supp.2d 829,

832 (N.D. Ill. 1999) (citing Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th

Cir. 1989)); Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986)). Deltak, the
moving party, has the burden of showing that “the transferee forum is clearly more convenient.”
Coffey, 796 F.2d at 219-20. Deltak and IBI do not dispute that venue is proper in both this Court
and the District of Minnesota. Therefore, this Court will address whether transfer is for the
convenience of the parties and witnesses, and in the interests of justice.

Courts consider four factors in determining whether transfer is convenient for the parties
and witnesses: (1) the plaintiff's choice of forum; (2) the site of material events; (3) the
availability of evidence in each forum; and (4) the convenience of the parties litigating in the
respective forums. Barnes, 976 F. Supp. at 768. The second, third and fourth factors are
relatively balanced between the parties, and weigh neither for nor against either [BI or Deltak.
However, the first factor is significant to IBI. IBI’s choice of forum is Illinois, which is also its

home forum. In general, a party’s choice of forum is given substantial deference, particularly if

-6-



proposition that “the first court in which jurisdiction attaches means the first court in which a
civil action is properly commenced.”). While the Eighth Circuit has not directly addressed the
issue of when jurisdiction first attaches, it has referenced filing dates, as opposed to dates of
service, when addressing the first-filed rule. Federal Cartridge Company, 2003 WL 2310180 at

*2 (citing Northwest, 989 F.2d at 1005 ; Anheuser-Busch, Inc. v. Supreme Int’| Corp., 167 F.3d

417, 418-19. (8th Cir. 1999). Though a close case, the majority of Eighth Circuit precedent
dictates that jurisdiction does not attach until a complaint is actually filed, even if service was
perfected prior to the filing of that complaint. Therefore, because IBI’s Complaint was filed prior
to Deltak’s Complaint, IBI’s was the first filed.

While the first-filed complaint is significant, the rule “is not intended to be rigid,
mechanical, or inflexible.” Orthmann v. Apple River Campground, 765 F.2d 119, 121 (8th Cir.
1985). In fact, the Seventh Circuit does not rigidly adhere to the first-filed rule. Trippe Mfg. Co.
y. American Power Conversion Corp., 46 F.3d 624, 629 (7th Cir. 1995). The Court may allow
second-filed actions to proceed where it is favored by the interests of justice. Tempco Elec.
Heater Corp. v. Omega Eng’g, Inc., 819 F.2d 746, 749-50 (7th Cir. 1987). Additionally, courts
disfavor a first-filed suit if that suit is an improper anticipatory filing. “A suit for declaratory
judgment aimed solely at wresting the choice of forum from the ‘natural’ plaintiff will normally

be dismissed and the case allowed to proceed in the usual way.” Allendale Mut. Ins. Co. v. Bull

Data Systems, Inc., 10 F.3d 425, 431 (7th Cir. 1993) (citing Tempco, 819 F.2d at 747)).
However, the Parties’ submissions indicate that both IBI and Deltak may potentially have
cognizable claims against the other; consequently, neither suit can be characterized as an

improper anticipatory filing. Therefore, the Court will determine if any of the considerations of

-5-



2. Relevance of Forum Selection Clause

A forum selection clause in a contract does not mandate a transfer of venue. Newell Co

yv. Lee, 950 F.Supp.864 (N.D. Ill. 1997) (citing Heller & Co. v, Godbe Co., 601 F.Supp. 319,

321, n. 2 (N.D. Ill. 1984)). A court should consider a forum selection clause as one of many
factors to consider in deciding a motion to transfer venue. Id. (citing G.H. Miller & Co. v.

Hanes, 566 F.Supp. 305, 307 (N.D. III. 1983)). However, § 1404(a) may not be used to

circumvent a valid forum selection clause. Id. (citing Northwestern Nat. Ins. Co. v. Donovan,
916 F.2d 372, 378 (7th Cir. 1990)). “The forum-selection clause...should receive neither
dispositive consideration...nor no consideration.” Stewart v. Rioch, 487 U.S, 22, 31 (1988). The
forum selection clause at issue in this case provides: [t]his Agreement shall be governed by the
laws of the State of Minnesota. Venue for any disputes arising hereunder, at Deltak’s option,
may be the Courts of the State of Minnesota.” (See Fan Repair Agreement). In this
particular circumstance, it is significant that the Fan Repair Agreement, which is at the heart
of the Parties’ dispute, elects Minnesota as the appropriate forum. Consequently, the fact that
the Parties’ forum selection clause elects Minnesota as the chosen forum for any disputes
weighs in favor of transfer.

After a consideration of all factors, the balance tips in favor of transfer to the District
of Minnesota. Though IBI was technically the first to file its Complaint, the split in the Eighth
Circuit concerning when jurisdiction attaches makes this fact less significant. Further, IBI’s
selection of Illinois as the forum for suit has less significance in context of the Parties’ forum
selection clause. Additionally, the forum selection clause electing Minnesota, as well as the

fact that Minnesota law governs the Parties’ suits, makes it a more appropriate forum for

-8-



Minate Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge David H. Coar Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 04 C 0341 DATE 4/6/2004
CASE Illinois Blower, Inc. vs. Deltak, L.L.C.[6-1]
TITLE

[in the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.

qa)

MOTION:
Defendants’ Motion to Transfer Venue
DOCKET ENTRY:
qQ) Q Filed motion of [ use listing in “Motion” box above.]
(2) im Brief in support of motion due
(3) Q Answer brief to motion due___. Reply to answer briefdue____.
(4) im} Ruling/Hearing on___setfor_____at
(S) QO Status hearing(held/continued to] [set for/re-set for]on_—_eset for at
(6) Qo Pretrial conference[held/continued to] [set for/re-set for}on___—s set for at
(7) Oo Trial[set for/re-set for}on___— at
(8) o (Bench/Jury trial] [Hearing] held/continued to_____at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) OlLocal Rule 41.1 CFRCP41(a)(1) OO FRCP41(a)(2).
(0) of {Other docket entry} For the reasons set forth in the attached memorandum opinion and order,

Defendant’s motion to transfer venue to the District of Minnesota [6-1] is GRANTED.

“Dew

a [For further detail see order attached to the original minute order.]

Gee

wo

No notices required, advised in open court.

No notices required. number ef notices

Document
Number

Notices mailed by judge’s staff. APR - 7

Notified counsel by telephone. date docketcd

Mail AO 450 form. cating depuy inal

Docketing to mail notices. 1S \

Copy (0 judge/magistrate judge.

date mailed notice
courtroom

slt (le) deputy's
initials

Date/time received in

central Clerk’s Office mailing deputy initiais


that choice is also the plaintiff's home forum. Central States, Southeast and Southwest Area

Pension Fund v. Salasnek Fisheries, Inc., 977 F.Supp. 888, 890 (N.D. Ill. 1997). Therefore, IBI’s

choice of forum will be given substantial deference.
1. Does Transfer Serve the Interests of Justice?
Whether a transfer under § 1404(a) will serve the interests of justice “embraces traditional
notions of judicial economy rather than the private interests of the litigants and their witnesses.”

Bryant, 48 F.Supp. 2d at 834 (quoting TIG Ins, Co. v. Brightly Galvanized Prod., Inc., 911 F.

Supp. 344, 346 (N.D. Ill. 1996)). The court makes several considerations, including whether
litigants are more likely to receive a speedy trial in one district or the other, if the litigation is
related to other litigation in either forum, and in a diversity action, having a federal judge try the
case who is familiar with the applicable law. Coffey, 796 F.2d at 221. The interests of justice
“may be determinative in a particular case, even if the convenience of the parties and witnesses
might call for a different result.” Id. at 220. Most significant is the final factor, having a judge
try the case who is familiar with the applicable law. The contract between the Parties expressly
provides that all disputes are to be resolved according to Minnesota law. While this Court is able
to address disputes that arise under the laws of other states, the fact remains that a Minnesota
District Court, who must deal with Minnesota law with a significantly greater frequency than this
Court, has the opportunity to hear the Parties’ dispute. Therefore, this weighs in favor of transfer

to the District of Minnesota.

-7-



breach of warranty, and seeking a declaration of the Parties’ rights under the Agreement and
purchase orders issued by Deltak. (See Hall Aff.; Def. Exs. 3 and 4). On January 16, 2004, IBI
filed the action currently before this Court in the Northern District of Illinois. On January 24,
2004, IBI amended its Complaint in this Court pursuant to Fed.R.Civ.P.15(a). Subsequently,
Deltak’s summons and complaint were filed in Minnesota State Court, Hennepin County District,
on January 28, 2004. (See Hall Aff.; Def. Ex. 5). On February 11, 2004, IBI removed the case to
the United States District Court for the District of Minnesota. (See Hall Aff.; Ex. 7). IBI

answered Deltak’s complaint on February 17, 2004. (See Hall Aff.; Ex. 9).

Ii. ANALYSIS

IBI and Deltak do not dispute that the claims, parties and relief sought in their respective
suits do not differ in any material respect. However, the Parties do dispute whether the
Minnesota action or the Illinois action should be considered “first filed”, which is a significant
factor in determining where this cause of action should proceed. Additionally, the Parties dispute
whether this cause of action should be transferred pursuant to § 1404(a). Therefore, this Court
will address: (1) which action was “first filed”; and (2) whether the Illinois action should be
transferred to the District of Minnesota pursuant to § 1404(a).

A. Which Action Was “First Filed” ?

It is undisputed that Deitak perfected service on Plaintiff in Minnesota State Court prior
to IBI filing its Complaint in the Northern District of Illinois. However, IBI filed its Complaint

in the Northern District of Illinois before Deltak filed its Complaint in Minnesota State Court.

-3-



In early 2000, Deltak requested that IBI provide specialized fans to be used at some of.
Deltak’s construction projects. (Pl. Comp. 6). Consequently, Deltak issued numerous
purchase orders, which were filled by IBI. Id. After designing and manufacturing the fans
according to Deltak’s specifications, IBI delivered them to the Deltak project sites. (PI. Comp. 4
7). Deltak contends it received complaints from its customers regarding work quality, and some
of those complaints related to the IBI fans. (P1. Comp. { 8). IBI agreed to assist Deltak in
resolving the problems that arose at its project sites. Id. To resolve those problems, IBI
negotiated a Fan Repair Agreement (“Agreement”) with Deltak. (PI. Comp. | 9). Under the
Agreement, Deltak agreed to pay and contends that it did pay IBI certain sums and agreed to be
responsible for the costs of certain replacement materials. (See Zack Aff.). Deltak contends that
IBI promised that it would design a complete and satisfactory solution to the fan problems, and
assume financial responsibility for work associated with the problem, (See Fan Repair
Agreement). ' JBI contends that it did provide Deltak with quality fans, parts and services, yet
never received compensation for theses services. (Pl. Comp. {J 10, 11). On December 15, 2003,
Deltak sent a letter to IBI regarding the invoices and IBI’s purported breach of the Agreement.
(Zack Aff.). On December 17, 2003, IBI responded to Deltak by letter, demanding immediate
payment of all allegedly outstanding invoices. (Zack Aff.; see also Hall Aff. ; Def. Ex. 2).

Each letter was responded to with subsequent legal action. On January 13, 2004, Deltak

served a summons and complaint upon IBI, claiming breach of the Fan Repair Agreement and

'The Fan Repair Agreement contains a choice of law and forum selection clause which
states that “[t]his Agreement shall be governed by the laws of the State of Minnesota. Venue
for any disputes arising hereunder, at Deltak’s option, may be the Courts of the State of
Minnesota.” (Seg Fan Repair Agreement).

-2-


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ILLINOIS BLOWER, INC. )
)
Plaintiff, )
) No. 04C 0341
vy. )
) WONORABLE DAVID H. COAR
DELTAK, L.L.C. )
)
)
Defendant. )

MEMORANDUM OPINION AND ORDER

Before this court is Deltak’s L.L.C.’s (“Deltak” or “Defendant’’) motion to transfer venue
to the District Court of Minnesota pursuant to 28 U.S.C. §1404 (“§ 1404(a)”) For the reasons set

forth below, Deltak’s motion to transfer venue is GRANTED,

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiff, Illinois Blower, Inc. (“IBI”) is an Illinois corporation with its principal place of
business in Cary, Illinois. (Pl. Comp. 4 2). [BI markets and sells industrial equipment, including
ventilation fans and exhaust blowers. Id, Deltak is a Delaware limited liability company with its
principal place of business in Plymouth, Minnesota. (Pl. Comp. 3). Deltak manufactures and
sells heat recovery steam generators (“HRSGs”), equipment that is used to make use of waste

heat generated by industrial activities, such as electric power generation. (See Deltak’s Memo. in

“le IY

Support of Motion to Transfer Venue, p. 1).