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Republic Technologies (NA), LLC v. BBK Tobacco & Foods, LLC

United States District Court, N.D. Illinois, Eastern Division

October 26, 2016

REPUBLIC TECHNOLOGIES (NA), LLC and REPUBLIC TOBACCO, L.P., Plaintiffs,
v.
BBK TOBACCO & FOODS, LLC d/b/a HBI INTERNATIONAL, Defendant.

          MEMORANDUM OPINION AND ORDER

          Elaine E. Bucklo, United States District Judge.

         Before me is a motion by defendant BBK Tobacco & Foods LLP, d/b/a HBI International (“HBI”) to transfer this action to the U.S. District Court for the District of Arizona. For the reasons below, the motion is denied.

         I.

         Plaintiffs Republic Technologies (NA), LLC and Republic Tobacco, L.P. (together, “Republic”) filed this suit against HBI in March 2016, seeking a declaratory judgment that HBI owns no protectable interest in its trade dress, or that Republic has not infringed HBI's trade dress rights. HBI moved to dismiss the complaint on the ground that there was no actual controversy between the parties. On July 7, 2016, I granted HBI's motion to dismiss, without prejudice to Republic's right to file an amended complaint containing additional factual allegations sufficient to demonstrate the existence of an actual controversy between the parties.

         On August 4, 2016, Republic filed an amended complaint. In addition to its claim for declaratory relief, the amended complaint asserts claims for unfair competition under the Lanham Act, 15 U.S.C. § 1125(a), common law unfair competition, and violation of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510. Meanwhile, on July 8, 2016 -- the day after I granted HBI's motion to dismiss -- HBI filed a separate suit against Republic in the District of Arizona. HBI's complaint alleges federal claims for trademark infringement, 15 U.S.C. § 1114, “Federal False Designation of Origin and Representation, ” 15 U.S.C. § 1125, and copyright infringement, as well as claims under Arizona law for trademark infringement and unfair competition. HBI did not inform Republic of the action until three weeks later, on July 28, 2016. According to HBI, this was because the parties' counsel had “re-commenced settlement communications immediately following this Court's dismissal of the initial complaint and after the filing of the Arizona complaint and before service of the Arizona complaint.” Reply Br. at 3.

         Republic filed a motion to stay in the Arizona action. BBK Tobacco & Foods LLP v. Republic Technologies (NA) LLC et al., No. 16 C 2263 (D. Ariz. filed Aug. 15, 2016), ECF No. 11. The motion has not yet been decided. HBI filed a motion to dismiss the amended complaint or to transfer this action to Arizona.[1]

         II.

         “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 or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). “Courts may transfer a case under Section 1404(a) when: (1) venue is proper in the transferor district; (2) venue is proper in the transferee district; (3) the transfer will serve the convenience of the parties and witnesses; and (4) the transfer will serve the interests of justice.” Hanover Ins. Co. v. N. Bldg, . Co., 891 F.Supp.2d 1019, 1025 (N.D. Ill. 2012). The movant bears the burden of establishing that the transferee forum is clearly more convenient. See, e.g., Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986).

         HBI's initial brief in support of its motion to dismiss or transfer presents no argument in support of its request for transfer. Although the brief recites the factors relevant to the inquiry under § 1404, it is only in its reply brief that HBI attempts to show why these factors support transfer of the litigation. This alone warrants denial of HBI's motion.[2] See, e.g., Baeco Plastics, Inc. v. Inacomp Fin. Servs., Inc., 51 F.3d 275 (7th Cir. 1995) (“A party's principal argument must appear in the opening brief, so that it may be answered. A litigant may not throw down a gauntlet in the opening brief and reserve its argument for the reply brief.”). Even on the merits, however, HBI's motion fails. Since the parties do not dispute the propriety of venue in either district, the only question here is whether transfer would be more convenient for the parties and witnesses and would promote the interests of justice. I conclude that it would not.

         A. Convenience of the Parties and Witnesses

         In evaluating the convenience of the parties and witnesses, courts weigh: “(1) the plaintiff's choice of forum; (2) the situs of the material events; (3) the relative ease of access to sources of proof; (4) the convenience of the witnesses; and (5) the convenience to the parties of litigating in the respective forums.” Hanover Ins., 891 F.Supp.2d at 1025.

         The first factor -- the plaintiff's choice of forum -- is typically accorded significant weight where, as here, the plaintiff resides in the chosen forum. See, e.g., Basile v. Prometheus Glob. Media, LLC, No. 15-CV-10138, 2016 WL 2987004, at *5 (N.D. Ill. May 24, 2016). However, as HBI correctly points out, where there are parallel cases “involv[ing] a declaratory judgment action and a mirror-image action seeking coercive relief[, courts] ordinarily give priority to the coercive action, regardless of which case was filed first, ” Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 980 (7th Cir. 2010). Since Republic's suit initially sought only declaratory relief and HBI's suit seeks coercive relief, HBI claims that the Arizona action should be given priority.

         This argument fails for at least two reasons. First, in light of the additional claims asserted in Republic's amended complaint, both parties' actions are “coercive.” While Republic's original complaint sought only declaratory relief, HBI cites no authority suggesting that this ought to make a difference in the transfer analysis.

         Second, the Seventh Circuit has never held that coercive actions automatically take precedence over declaratory judgment actions. On the contrary, Research Automation, on which HBI principally relies, emphasizes that “there is no precise rule for resolving the problem created by mirror-image lawsuits in two different federal courts, ” 626 F.3d at 982 (quotation marks omitted), and that the transfer statute permits a “flexible and individualized analysis and affords district courts the opportunity to look beyond a narrow or rigid set of considerations in their determinations, ” id. at 978. While the court noted that priority is “ordinarily” given to coercive actions, the circumstances of this case are not ordinary. Typically, parallel suits are filed within days of one another. See, e.g., Research Automation, 626 F.3d at 976 (coercive action filed seventeen days after declaratory judgment action); Tempco Elec. Heater Corp. v. Omega Eng'g, Inc., 819 F.2d 746, 749 (7th Cir. 1987) (infringement action filed four days after declaratory judgment action). Here, ...


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