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LAMBART v. PEM-AMERICA

February 10, 2004.

NANCY LAMBERT, Plaintiff,
v.
PEM-AMERICA, INC. Defendant



The opinion of the court was delivered by: DAVID COAR, District Judge

MEMORANDUM OPINION AND ORDER

This case comes before the Court on Defendant Pem-America Inc.'s ("Pem-America" or "Defendant") motion to dismiss Plaintiff Nancy Lambert's ("Lambert" or "Plaintiff) Amended Complaint ("Complaint") as an improper anticipatory filing, or in the alternative, transfer this matter to the Southern District of New York. Further, if this Court does not dismiss or transfer Plaintiff's Complaint, Defendant moves to dismiss Count II of her Complaint. Additionally, Plaintiff requests that this Court enjoin the Defendant from proceeding with its cause of action filed in the Southern District of New York. For the reasons set forth below: (1) Defendant's motion to dismiss Lambert's Complaint as an improper anticipatory filing, or in the alternative, transfer venue is DENIED; (2) Plaintiff's motion to enjoin Defendant from proceeding in its cause of action filed in the Southern District of New York is GRANTED; however, Defendant is granted leave to file any claims it may have against the Plaintiff as counterclaims to her Complaint; and (3) Defendant's motion to dismiss Count II of Plaintiff's Amended Complaint is GRANTED. Page 2

FACTUAL AND PROCEDURAL HISTORY

  Lambert is a designer of quilts and other home products. Pem-America is a New York corporation in the business of designing home products for distribution and sale in the United States. From October 1, 1999 to February 15, 2003, Lambert designed more than 1,000 home decorating products, including quilts, throw pillows, window treatments, and bed skirts for Pem-America. On February 15, 2003, Plaintiff terminated her business relationship with the Defendants. One of the central disputes between the Parties is whether Lambert was an independent contractor (Plaintiff's position) when she designed home products for Pem-America, or whether she was an actual employee (Defendant's position). This dispute goes to the heart of the declaratory judgment relief Plaintiff is seeking, because designating Plaintiff as an independent contractor will mean she owns the copyrights to the home products she designed, while designating Lambert as an employee of Pem-America will mean that it owns the copyrights to Lambert's designs.

  On May 19, 2003, Lambert filed suit in this Court, requesting declaratory judgment relief and alleging breach of contract. On May 22, 2003, three days after Plaintiff filed her action in this Court, Pem-America filed suit against Lambert in the United States District Court for the Southern District of New York (captioned PEM-America v. Nancy Lambert, Civil No. 03 Cv 3706), requesting declaratory relief related to the home products Lambert designed, and compensation for furniture in Lambert's possession-essentially a mirror image of the cause of action Plaintiff filed in this Court. Page 3

 DISCUSSION

  Because Lambert's cause of action was filed in this Court prior to Pem-America filing its cause of action in the Southern District of New York, this Court must decide where these claims should be heard, and whether the Illinois Action or the New York Action should proceed. See Asset Allocation and Management Co. v. Western Employers Ins. Co., 892 F.2d 566, 572 (7th Cir. 1989); MSK Ins., Ltd, v. Employers Reinsurance Corp., 212 F. Supp.2d 266, 267 (S.D.N.Y. 2002). For the reasons set forth below, this Court determines that this Court should hear the Parties' dispute.

 I. Was Lambert's Suit an Improper Anticipatory Filing

  Defendant contends that Lambert's suit was filed in anticipation of its suit against her, and should be deemed an improper anticipatory filing. Pem-America contends that it is the "natural plaintiff in this suit, and should have the choice of forum. Defendants are correct when they assert that, "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 Elec. Heater Corp. v. Omega Engineering, Inc., 819 F.2d 746, 747 (7th Cir. 1987)). However, Pem-America does not provide sufficient evidence to demonstrate it was the "natural" plaintiff in this dispute, and that Lambert's decision to file suit at the moment she did was a race to the courthouse. Both parties have an interest in determining Lambert's relationship to Pem-America and who rightfully owns copyrights to the products she designed. If a declaratory judgment action, "will clarify and settle the disputed legal relationship and afford relief from the Page 4 uncertainty and controversy that created the issues, it is usually resolved rather than dismissed." Nuccor Corp. v. Aceros Y Marquilas de Occidente, S.A. de C.V., 28 F.3d 572, 578 (7th Cir. 1994) (citing Tempco, 819 F.2d at 749). Therefore, this Court will not dismiss Lambert's Complaint as an improper anticipatory filing.

 II. Motion to Transfer Venue

  Pem-America contends that even if Lambert's suit is not deemed an improper anticipatory filing, her suit should be transferred to the Southern District of New York, pursuant to 28 U.S.C. § 1404(a) (" § 1404(a)"). Under § 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 Dedicated Carriage Services. Inc., 976 F. Supp. 767, 768 (N.D. Ill. 1997). Whether a transfer is appropriate pursuant to § 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)). Pem-America, the moving party, has the burden of showing that, "the transferee forum is clearly more convenient." Coffey, 796 F.2d at 219-20. The parties do not dispute that venue is proper in both this Court (the transferor court) and the Southern District of New York (the transferee court). Therefore, this Court will address the second and third prongs of the test to determine whether transfer of this matter to the Southern District of New York is appropriate. Page 5

  A. Convenience of Parties and Witnesses

  The court considers three factors in order to determine if transfer is convenient for 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. ...


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