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.
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.
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'
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
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.
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. ...