United States District Court, E.D. Virginia, Newport News Division
OPINION AND ORDER
S. DAVIS UNITED STATES DISTRICT JUDGE.
matter is before the Court on a Motion to Enjoin the
Second-Filed Action, filed by Plaintiff Hopeman Brothers,
Inc. ("Hopeman"), ECF No. 12, as well as a Motion
to Transfer Venue, ECF No. 14, and a Motion for Extension of
Time to File Answer, ECF No. 17, both filed by Defendants
Continental Casualty Company and Lexington Insurance Company
(collectively "Continental and Lexington" or
"Defendants"). For the reasons set forth below, the
Court: (1) DENIES the Motion to Transfer Venue, (2) GRANTS
the Motion to Enjoin Continental and Lexington from
prosecuting the second-filed action, but DENIES the Motion to
Enjoin the Second-Filed Action as it relates to the New York
co-plaintiffs, and (3) GRANTS Defendant's Motion for
Extension of Time to File Answer.
FACTUAL AND PROCEDURAL BACKGROUND
December 27, 2016, Hopeman filed a complaint in this Court
(the "Virginia action"), seeking "declaratory
judgment and ancillary relief and for damages for breach of
contract." Compl. ¶ 1, ECF No. 1. In the complaint,
Hopeman "seeks a determination of the nature and scope
of its rights under certain liability insurance policies
issued by Defendants with respect to pending, past, and
future asbestos-related bodily injury claims that have or
will be asserted against Hopeman, " together with
"damages to recover the amounts it has paid as a result
of Defendants' breach of the insurance contracts that
they issued." Id. Hopeman alleges that venue is
proper in this District "because both Defendants are
subject to personal jurisdiction in this District and because
a substantial part of the events or omissions giving rise to
the claims alleged herein occurred in this District,
including because a substantial portion of the underlying
asbestos-related bodily injury claims against Hopeman were
filed in the geographic area encompassed by this
District." Id. ¶ 7; 28 U.S.C. § 1391.
The complaint was served on Continental and Lexington on
December 29, 2016. ECF No. 11.
January 4, 2017, Continental and Lexington, along with
several other insurers, filed a declaratory judgment action
in the Supreme Court of the State of New York (the "New
York action") against Hopeman concerning the same
policies that are at issue in the Virginia Federal Action.
ECF No. 15, at 1. On January 18, 2017, Plaintiffs in the New
York action filed an amended complaint, adding two additional
plaintiffs. Id. at 1-2; see also N.Y. Am.
Compl., ECF No. 10-1, Ex. A. On January 19, 2017, Defendants
filed a motion to dismiss the Virginia action based upon the
Colorado River abstention doctrine, ECF No. 8, and filed a
motion to stay, as an alternative request to the motion to
dismiss, ECF No. 9. On January 30, 2017, Hopeman removed the
case to federal court in the Southern District of New York
("S.D.N.Y") and filed its answer. Continental
Casualty Co. et al. v. Hopeman Brothers, Inc., No.
February 1, 2017, Hopeman filed the pending motion to enjoin
the second-filed New York action. ECF No. 12. On February 7,
2017, Defendants filed a motion to transfer the Virginia
action to the S.D.N.Y so that this case could be consolidated
with the second-filed New York action, ECF No. 14, and filed
a motion requesting an extension of time to file responsive
pleadings until after the Court has disposed of all motions
affecting this Court's jurisdiction, venue, and the
parties before the Court, ECF No. 17. On February 10, 2017,
Hopeman opposed Defendant's request for an extension of
time to file. ECF No. 21. On February 15, 2017, Defendants
responded to Hopeman's motion to enjoin the New York
action, ECF No. 23, and filed a reply in support of their
motion for extension of time, ECF No. 24. Hopeman filed a
response opposing Defendant's motion to transfer on
February 17, 2017, ECF No. 25, and filed a reply in support
of their motion to enjoin on February 21, 2017, ECF No. 26.
Defendants filed their reply to the motion to transfer on
February 23, 2017, ECF No. 27, and withdrew their motion to
dismiss and the alternative motion to stay on February 28,
2017. ECF No. 28. Thus, currently pending before the Court is
Hopeman's Motion to Enjoin the Second-Filed Action, ECF
No. 12, Defendants' Motion to Transfer Venue, ECF No. 14,
and Defendants' Motion for Extension of Time to File
Answer, ECF No. 17. Having been fully briefed, these matters
are ripe for review.
28 of the United States Code, Section 1404, establishes that,
w[f]or 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). Such
statute "is intended to place discretion in the district
court to adjudicate motions for transfer of venue according
to an 'individualized, case-by-case consideration of
convenience and fairness.'" Stewart Org., Inc.
v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van
Dusen v. Barrack, 376 U.S. 612, 622 (1964)) .
order to determine whether a § 1404 transfer of venue is
appropriate, "a district court must make two inquires:
(1) whether the claims might have been brought in the
transferee forum, and (2) whether the interest of justice and
convenience of the parties and witnesses justify transfer to
that forum." Koh v. Microtek Int'l, Inc.,
250 F.Supp.2d 627, 630 (E.D. Va. 2003). The second prong of
§ 1404(a) requires a court to afford deference to the
plaintiff's chosen forum because under the
"first-filed" rule a plaintiff "is ordinarily
entitled to choose its forum." Ellicott Mach. Corp.
v. Modern Welding Co., 502 F.2d 178, 18 0 (4th Cir.
1974). Therefore, unless the balance of factors weighs
otherwise, the case "ought to be tried in the district
court in which it was first filed." Id.
However, an exception to the first-filed rule exists
"when the balance of convenience favors the second
action." Learning Network, Inc. v. Discovery
Commc'ns, Inc., 11 F.App'x 297, 301-02 (4th Cir.
2001) (unpublished) (noting that while plaintiff's choice
of forum is an important consideration, courts also disfavor
races to the courthouse and forum shopping (citing Myles
Lumber Co. v. CNA Financial Corp., 233 F.3d 821, 824
(4th Cir. 2000)).
determining whether the convenience of the parties and
witnesses, and the interest of justice, support transfer, the
district court looks to four principal factors: "(1)
plaintiff's choice of forum, (2) convenience of the
parties, (3) witness convenience and access, and (4) the
interest of justice." Pragmatus AV, LLC v. Facebook,
Inc., 769 F.Supp.2d 991, 994-95 (E.D. Va. 2011) (quoting
Heinz Kettler GmbH & Co. v. Razor USA, LLC, 750
F.Supp.2d 660, 667 (E.D. Va. 2010)) . Ultimately, the burden
of proof is on the movant to show "that transfer does
more than merely 'shift the inconvenience to the other
party.'" JTH Tax, Inc. v. Lee, 482
F.Supp.2d 731, 736 (E.D. Va. 2007) (quoting DMP Corp. v.
Fruehauf Corp., 617 F.Supp. 76, 77 (W.D. N.C. 1985)).
"[T]he balance of convenience among the parties and
witnesses [must weigh] strongly in favor of the
forum to which transfer is sought." Nationwide Mut.
Ins. Co. v. The Overlook, LLC, No. CIV. 4:10CV00069,
2010 WL 2520973, at *3 (E.D. Va. June 17, 2010) (emphasis in
original) (quoting Nossen v. Hoy, 750 F.Supp. 740,
742 (E.D. Va. 1990)).
if the district court determines that transfer is not
appropriate, it may enjoin further prosecution of a
second-filed action in another court. Learning
Network, 11 F.App'x at 301 (applying first-filed
rule to allow the first-filed action to proceed and enjoining
the second action); Allied-Gen. Nuclear Servs.
v. Commonwealth Edison Co., 675 F.2d 610, 611 (4th Cir.
1982) ("Ordinarily, when multiple suits are filed in
different Federal courts upon the same factual issues, the
first or prior action is permitted to proceed to the
exclusion of another subsequently filed." (citing
Carbide & Carbon Chemicals Corp. v. United States
Industrial Chemicals, Inc., 140 F.2d 47, 49 (4th Cir.
1944))); accord. City of N.Y. v. Exxon Corp., 932
F.2d 1020, 1025 (2d Cir. 1991) (holding that, under the
first-filed rule, the "first court has jurisdiction to
enjoin the prosecution of the second action").
requests that the Court enjoin the New York action and allow
the case to proceed in this Court, ECF No. 12, while
Defendants requests that the Court transfer this case to the
S.D.N.Y. so that it may be consolidated with the second-filed
New York case, ECF No. 14. Defendants argue that this Court
should transfer the case to the S.D.N.Y because it is the
"more comprehensive action." Defs.' Opening Br.
4, ECF No. 15. According to Defendants, transfer would (1)
prevent piecemeal litigation and potentially inconsistent
rulings; (2) allow a New York court to resolve complex New
York insurance coverage issues; and (3) protect all
interested parties' interests. Defs.' Reply Br. 1,
ECF No. 27. Hopeman argues that (1) enjoining the New York
action from proceeding would prevent piecemeal litigation and
inconsistent rulings, (2) the Court should not make a
decision based upon the potential applicability of New York
law because until discovery is complete it is unclear whether
New York law or Virginia law will apply, and (3) the interest
of all parties' properly before the court may be
protected in the instant litigation. See generally
PL's Resp. Br., ECF No. 25.
Motion to Transfer
undisputed that the Virginia action was the first-filed case
and the New York action was the second-filed case. The
S.D.N.Y generally applies a "bright-line rule" to
determine which court should resolve forum disputes such as
this: "[t]he court before which the first-filed action
was brought determines which forum will hear the case."
Congregation Shearith Israel v. Congregation Jeshuat
Israel, 983 F.Supp.2d 420, 422 (S.D.N.Y. 2014) (internal
citations omitted); see Notice of Related
First-Filed Action, Continental Casualty Co. et al. v.
Hopeman Brothers, Inc., No. 1:17-cv-00688 (S.D.N.Y. Feb.
9, 2017). Therefore, as the ...