Source: http://va.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180109_0000213.EVA.htm/qx
Timestamp: 2019-04-19 12:40:09+00:00

Document:
NORFOLK TIDE BASEBALL CLUB, LLC, et al., Defendants.
Defendants Norfolk Tide Baseball Club, LLC (“Norfolk Tide”) and Tides Baseball Club L.P. (“Tides, ” and together with Norfolk Tide, the “Tides Defendants”) move to dismiss this action under Rule 12(b)(3) for improper venue, or alternatively, to transfer this action to the U.S. District Court for the Eastern District of Virginia. For the reasons that follow, the Tides Defendants' motion to dismiss for improper venue is denied and the motion to transfer this action to the Eastern District of Virginia is granted.
This Court briefly revisits the underlying facts relevant to the instant motions.On September 30, 2016, Power Play 1 LLC (“Power Play”) purchased Norfolk Tide's ownership interest in Admirals ECHL Hockey LLC (“Admirals ECHL”), an operating company that managed a Virginia-based minor league professional hockey team. Power Play's purchase of Admirals ECHL was effectuated by a Membership Interest Purchase Agreement (the “Agreement”) between Power Play and Norfolk Tide. According to Power Play, however, the Tides Defendants fraudulently induced it into entering the Agreement by failing to disclose certain Admirals ECHL contract obligations. The coup de grâce was that Norfolk Tide also purportedly concealed the fact that Norfolk Tide never existed, and as such, did not even own any transferable obligations or interest in Admirals ECHL. Finally, Power Play avers that the Tides Defendants converted Admirals ECHL monies as well as hockey team merchandise and memorabilia.
On May 23, 2017, the Tides Defendants commenced a declaratory judgment action against Power Play and Admirals ECHL in the Eastern District of Virginia (the “Virginia Action”). (Declaration of R. Johan Conrod, Jr., ECF No. 38 (“Conrod Decl.”), Ex. 1.) On June 14, 2017, Power Play sought and received an extension of time until June 28, 2017 to respond to the complaint in the Virginia Action. (Conrod Decl., Ex. 1.) Power Play and Admirals ECHL brought the instant action against the Tides Defendants for rescission, damages, and declaratory relief on June 27, 2017-one day before its deadline to respond in the Virginia Action.
As a threshold matter, the Tides Defendants do not appear to dispute that this action is properly venued in the Southern District of New York. This Court concludes the same. Whether venue is proper is determined solely by reference to the applicable federal statutory venue provisions, regardless of whether a forum selection clause exists. Atl. Marine Const. Co. v. U.S. Dist. Court for the W. Dist. of Tex., 134 S.Ct. 568, 577-78 (2013). In relevant part, venue may be proper under 28 U.S.C. § 1391(b) in the judicial district in which each defendant resides, if all defendants are residents of the State in which the district is located. An entity defendant is deemed to reside for venue purposes in “any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question.” 28 U.S.C. § 1391(c).
Here, venue is proper in the Southern District of New York based on the Agreement, under which each party “irrevocably submit[ted] to the exclusive jurisdiction” of the United States federal courts and the courts of the State of New York for actions arising out of or based upon the Agreement. (Compl., Ex. 1 (“Agreement”) § 7.12.) Because the Tides Defendants are subject to this Court's personal jurisdiction, see Coface v. Optique Du Monde, Ltd., 521 F.Supp. 500, 506 (S.D.N.Y. 1980), venue is proper in the Southern District of New York under § 1391(b). As such, the Tides Defendants' motion to dismiss this action for improper venue under Rule 12(b)(3) is denied. See Atl. Marine, 124 S.Ct. at 577 (explaining that Rule 12(b)(3) allows dismissal “only when venue is ‘wrong' or ‘improper'”).
Defendants also seek to dismiss this action in favor of the earlier-filed Virginia Action under the first-filed presumption, which provides that when lawsuits with the same parties and issues are pending in two federal districts, the first-filed suit generally has priority. Ontel Prods., Inc. v. Project Strategies Corp., 899 F.Supp. 1144, 1150 (S.D.N.Y. 1995); see N.Y. Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 112 (2d Cir. 2010). Although there is a “strong presumption” in favor of the first-filed suit, Reliance Ins. Co. v. Six Star, Inc., 155 F.Supp.2d 49, 55 (S.D.N.Y. 2001), this presumption is not to be applied rigidly or mechanically simply based on the dates the actions were filed, Liberty Mut. Ins. Co. v. Fairbanks Co., 17 F.Supp.3d 385, 392 (S.D.N.Y. 2014); see Emp'rs Ins. of Wausau v. Fox Entm't Grp., Inc., 522 F.3d 271, 275 (2d Cir. 2008) (explaining that the “first-filed rule” is not an “invariable mandate, ” but a rebuttable presumption). Accordingly, the Second Circuit has recognized that the first-filed presumption is inapplicable in only two scenarios: (1) if the balance of convenience weighs in favor of the second action, or (2) if special circumstances justify giving priority to the second action. N.Y. Marine & Gen. Ins. Co., 599 F.3d at 112.

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