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James W. Miller v. Skf Usa

December 29, 2010

JAMES W. MILLER, PLAINTIFF,
v.
SKF USA, INC.,
DEFENDANT.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

On September 27, 2010, Plaintiff James Miller ("Miller") filed suit against Defendant SKF USA, Inc. ("SKF"). Miller's Amended Complaint alleges that SKF violated Miller's Employment Agreement and the Illinois Wage Payment and Collection Act. Miller seeks damages and a declaratory judgment that the Employment Agreement's non-competition provision is unenforceable.

SKF moves to dismiss or transfer the case under the "first-to-file" rule based on SKF's earlier-filed suit against Miller in the Eastern District of Pennsylvania.

I. BACKGROUND

A. Facts

Plaintiff James Miller was the owner and president of Preventive Maintenance Company, Inc. ("PMCI"). PMCI was incorporated and located in Illinois but provided maintenance services to industrial customers throughout the Midwest. Defendant SKF is incorporated in Delaware with its principal place of business in Lansdale, Pennsylvania.

SKF purchased PMCI on January 4, 2007 and executed the Employment Agreement (the "Agreement") with Miller. Per the Agreement, SKF employed Miller as a Vice President of Business Development in its Reliability Services Division. The Agreement set Miller's base salary and described the terms for future development bonuses for Miller. Both SKF and Miller were permitted to terminate employment at any time, but Miller's severance package varied depending on who terminated employment and whether the termination was for cause. Miller was subject to a "Non-Competition; Non-Solicitation of Customers" provision for a period of two (2) years after his separation from SKF. The Agreement also contained the following provision entitled "Choice of Law: Jurisdiction."

This Agreement shall be construed and enforced in accordance with the internal laws, and not the laws of conflicts, of the State of Illinois. Each of the parties hereto consents and submits to the jurisdiction of the courts of the State of Illinois and of the courts of the United States for a judicial district within the Territorial limits of the State of Illinois. For all purposes of this Agreement, and any ancillary document to which it is a party including, without limitation, any action or proceeding instituted for the enforcement of any right, remedy, obligation, or liability arising under or by reason hereof or thereof, each party consents and submits to the venue of such action or proceeding in any Circuit Court in Cook County, Illinois, and the United States District Court for the Northern District of Illinois.

Conflict eventually arose between Miller and SKF regarding Miller's job performance. This conflict came to a head when SKF suspended Miller for one month without pay. Miller, accompanied by his attorney, traveled to Pennsylvania on August 25, 2010 in an attempt to settle the dispute with SKF. The parties were unable to resolve the dispute and Miller returned to Illinois. Miller's suspension concluded on September 1 but Miller did not return to work after his suspension as he believed SKF had breached the Agreement. On September 7, SKF informed Miller that it would treat his failure to return to work as a voluntary termination of employment under the Agreement.

B. Procedure

On September 13, SKF filed suit against Miller in the United States District Court for the Eastern District of Pennsylvania. The Pennsylvania suit remains open and seeks a declaratory judgment that Miller terminated the Agreement, or that SKF had good cause to terminate the agreement, and that the non-competition provision is valid and enforceable.

On September 27, Miller filed the present suit against SKF. Miller seeks damages for SKF's breach of the Agreement and a declaratory judgment that the non-competition provision is unenforceable. Miller filed an amended complaint on October 8 which added a claim based on the Illinois Wage Payment and Collection Act (the "IWPCA Claim").

SKF now moves to dismiss this case or transfer it to Pennsylvania. SKF argues that this case is duplicative of the Pennsylvania suit but filed later, and so it should be dismissed or transferred under the first-to-file rule. Miller argues that the Pennsylvania suit is a preemptive declaratory judgment action which should be dismissed in favor a subsequently filed action for damages by the "natural plaintiff."

II. LEGAL STANDARD

A motion to transfer duplicative litigation is considered under the venue transfer framework. Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., No. 09-2232, 2010 U.S. App. LEXIS 24033 (7th Cir. Nov. 23, 2010). "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). This framework requires a district court to consider convenience and fairness on a case-by-case basis. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). The statute does not require the evaluation of a narrow or rigid set of considerations, but instead vests discretion in district courts to consider "all factors relevant to convenience and/or the interests of justice." Research ...


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