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Venn Corp. v. Cox

United States District Court, E.D. Virginia, Alexandria Division

April 4, 2016

VENN CORPORATION, Plaintiff,
v.
BRENDAN COX AND TRAFFIC TECH, INC., Defendants.

MEMORANDUM OPINION

CLAUDE M. HILTON UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on the Motion to Stay filed by Defendants Traffic Tech, Inc. ("Traffic Tech US") and Brendan Cox ("Cox") (collectively, "Defendants").

I. INTRODUCTION

Defendants request a stay based on Colorado River abstention, Defendants fail to address a threshold issue-whether the Ontario and Virginia litigation are "parallel." They are not. The issues are distinct in theories and facts. The parties are also distinct, with only one common party between the two cases. The Ontario and Virginia proceedings are not "parallel" as that term is construed in the Fourth Circuit.

II. BACKROUND AND PROCEDURAL HISTORY

In the Ontario proceeding, Traffic Tech Inc. alleges that both Venn Corp. and Venn Corp. Canada violated a Services Agreement and a Sublease Agreement between the parties. These claims were asserted in a Statement of Claim filed on November 20, 2014, and notice of intent to amend was provided on October 2, 2015. During a November 2015 proceeding, Traffic Tech Inc.'s attorney admitted under oath that the claims alleged in the Amended Statement of Claim in Ontario are unrelated to the alleged Virginia claims.

On January 8, 2015, the Venn Entities filed a Statement of Defense and Counterclaim. Any factual allegation referenced in the Counterclaim necessarily occurred before January 8, 2015- nearly nine months before Venn employees Cox, Pantin, and Hollis resigned to join Traffic Tech. Pleadings remain open in Ontario.

The Virginia proceeding was filed before this Court on October 28, 2015. Venn U.S. filed its Complaint against Mr. Cox and Traffic Tech U.S. and all eight causes of action remain: violation of the Virginia Uniform Trade Secrets Act (Count I); violation of the Computer Fraud and Abuse Act (Count II); Breach of Fiduciary Duty (against Cox only) (Count III); Civil Conspiracy (Count IV); Tortious Interference with Contractual Relationship (Count V); Tortious Interference with Business Relationship (Count VI); Breach of Contract (against Cox only) (Count VII); and violation of the Virginia Business Conspiracy Act (Count VIII).

Defendants filed an unsuccessful Motion to Dismiss for Lack of Personal Jurisdiction, for Improper Venue, and for the First-to-File Rule; an unsuccessful Motion for Judgment on the Pleadings; and an unsuccessful Motion to Dismiss for Lack of Personal Jurisdiction.

III. STANDARD OP REVIEW

"The party seeking a stay must justify it by clear and convincing circumstances outweighing potential harm to the party against whom it is operative." Williford v. Armstrong World Indus., Inc., 715 2d 124, 127 (4th Cir. 1983). Thus, Defendants "must make out a clear case of hardship or inequity in being required to go forward.'' Id.

IV. DISCUSSION

The Fourth Circuit warns, "Mt]he Colorado River doctrine does not give federal courts carte blanche to decline to hear cases within their jurisdiction merely because issues or factual disputes in those cases may be addressed in past or pending proceedings before state tribunals.'" McLaughlin v. United Virginia Bank, 955 F.2d 930, 935 (4th Cir. 1992) (quoting United States v. SCM Corp., 615 F.Supp. 411, 417 (D.Md. 1985)). The same must surely be true of "past or pending proceedings" before foreign tribunals.

Defendants' Motion rehashes arguments this Court repeatedly considered and rejected. Arguments about the Virginia and Ontario lawsuits constituting "parallel litigation,, and Canada being the more appropriate venue were raised in Traffic Tech's Motion to Dismiss. Argument about an Ontario choice-of-law provision was raised in Traffic Tech's Motion to Dismiss and its Motion for Judgment on the Pleadings. Arguments that pertinent evidence is in Canada and that the "first-to-file" rule warrants the requested relief were raised in Traffic Tech's Motion to Dismiss. Argument that Cox possesses few contacts with Virginia was raised in his Motion to Dismiss. The declarations in support of the present Motion were previously submitted in support ...


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