Hopeman Brothers, Inc. v. Continental Casualty Company et al, No. 4:2016cv00187 - Document 31 (E.D. Va. 2017)
Court Description: OPINION AND ORDER: re 12 Motion MOTION to Enjoin the Second-Filed Action; 14 Motion to Transfer Case; 17 Motion for Extension of Time to Answer. Defendants' Motion to Transfer Venue to the Southern District of New York is DENIED, ECF No. 14, and Hopeman's Motion to Enjoin Continental and Lexington from prosecuting the second-filed action in the Southern District of New York, is GRANTED, but Hopeman's Motion to Enjoin the Second-Filed Action with respect to the New York co-plaintiffs is DENIED, ECF No. 12. Having decided the Motion to Transfer and Motion to Enjoin, the Court GRANTS Defendants' Motion for Extension of Time to File Answer, and DIRECTS Defendants to file a responsive pleading or motion within fourteen days. ECF No. 17. Copy of Opinion and Order provided to counsel for Plaintiff and to counsel for Defendants. Signed by District Judge Mark S. Davis on 4/17/2017. (bgra)
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Hopeman Brothers, Inc. v. Continental Casualty Company et al Doc. 31 FILED UNITED STATES DISTRICT EASTERN DISTRICT OF COURT APR ! 7 2017 VIRGINIA Newport News Division U.S. U(STRICT COURT NORFOLK VA HOPEMAN BROTHERS/ INC., Plaintiff, V. Civil No. 4;16cvl87 CONTINENTAL CASUALTY COMPANY, and LEXINGTON INSURANCE COMPANY, Defendants. OPINION AND This matter is before Second-Filed Action, 12, the Court on a filed ("Hopeman"), EOF No. ECF 14, No. and a 17, Company forth Venue, (2) by filed by and Lexington" the Motion to Enjoin the Hopeman Brothers, Inc. as well as a Motion to Transfer Venue, Lexington below, Plaintiff Motion for Extension of both and "Continental set ECF No. ORDER Defendants Insurance or Court: Time DENIES File Answer, Continental Company "Defendants"). (1) to the Casualty (collectively For Motion the to reasons Transfer 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 i t relates to the New York co-plaintiffs, of Time to and (3) GRANTS Defendant's Motion for Extension File Answer. Dockets.Justia.com I. On Court FACTUAL AND PROCEDURAL BACKGROUND December 27, 2016, Hopeman (the "Virginia action"), ancillary Compl. relief H 1, and for ECF No. determination of 1. the filed nature for to pending, injury claims past, that have breach the complaint, and scope certain liability insurance policies respect complaint in this seeking "declaratory judgment and damages In a and or will of of contract." Hopeman its "seeks rights under issued by Defendants future be asbestos-related asserted against a with bodily Hopeman," together with "damages to recover the amounts it has paid as a result of Defendants' they issued." District Id. breach of the insurance contracts that Hopeman alleges that venue is proper in this "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. t 7; 28 U.S.C. § 1391. The complaint was served on Continental and Lexington on December 29, No. ECF 11. On January 4, 2017, several other insurers, the 2016. Supreme Court of Continental filed a the State and Lexington, along with declaratory judgment action in of New York (the "New York action") against Hopeman concerning the same policies that are at issue in the Virginia Federal Action. ECF No. January York 18, 2017, Plaintiffs amended complaint, 2; see also N.Y. 19, 2017, 8, the Am. Compl., Defendants filed the ECF No. a case to New York Co. al. V. ECF No. federal ("S.D.N.Y") et action to Ex. filed Id. A. On On January dismiss the Virginia ECF as an alternative request to 9. On January 30, court in the Brothers, 2017, Southern and filed its answer. Hopeman an at 1- Colorado River abstention doctrine, the motion to dismiss, the 10-1, motion and filed a motion to stay, removed New at 1. adding two additional plaintiffs. action based upon No. in 15, Hopeman District of Continental Casualty Inc., No. 1:17-cv-00688 (S.D.N.Y.). On February 1, enjoin the 2017, second-filed February 7, 2017, Virginia action filed a New York Defendants to the consolidated with the and Hopeman filed the pending motion to motion action. filed S.D.N.Y a so ECF motion that No. to this an extension case of On transfer second-filed New York action, requesting 12. could ECF No. time the to be 14, file responsive pleadings until after the Court has disposed of all motions parties affecting before the this Court's Court, ECF jurisdiction, No. 17. On venue, February and 10, the 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, and filed a reply in support of time, ECF No. 24. ECF No. 23, their motion for extension of 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 transfer on filed February 23, their ECF No. 2017, reply to 27, the motion and withdrew to 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, 12, Defendants' Defendants' 17. Motion to Transfer Venue, ECF ECF No. No. 14, Motion for Extension of Time to File Answer, Having been fully briefed, these matters are and ECF No. ripe for review. II. Title 28 establishes witnesses, transfer of that, in any the LEGAL STANDARD United "[f]or the the interest of civil action to States Code, convenience justice, any other a Section of 1404, parties district district court or and may division where it might have been brought or to any district or division to which Such all statute parties "is have intended consented." to place 28 U.S.C. discretion in § 1404(a). the district court to adjudicate motions for transfer of venue according to an 'individualized, case-by-case consideration of convenience and fairness.'" 29 (1988) Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)) . In order to determine whether a appropriate, whether forum, of "a the and district claims (2) might court have must make two been brought inquires: in the (1) transferee whether the interest of justice and convenience the parties and witnesses Koh v. Microtek Int'l, 2003). § 1404 transfer of venue is Inc., justify transfer 250 F. Supp. to 2d 627, that 630 forum." (E.D. Va. 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." F.2d 178, factors 18 0 (4th Cir. weighs district exception court to convenience v. Ellicott Corp. 1974). otherwise, the the first-filed favors the (unpublished) v. Modern Therefore, case in which i t was Discovery Commc'ns, 2001) Mach. rule second action." Inc., (noting 11 P. that to filed." exists be tried Id. "when while 502 in an balance of the 301-02 plaintiff's the However, Learning Network, App'x 297, forum is an important consideration, Co., unless the balance of "ought first Welding Inc. (4th Cir. choice of 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)). In determining whether the convenience of the parties and witnesses, and the interest of justice, district court looks "(1) plaintiff's parties, (3) choice witness Supp. 2d 991, of show 994-95 Ultimately, "that forum, (E.D. Va. Supp. Fruehauf balance Corp., of weigh] more 2010) Supp. Nationwide 4:10CV00069, (emphasis 740, F. than 742 Finally, in 76, 77 among the parties the forum WL Ins. the Inc., 769 (W.D.N.C. and the v. Lee, 482 Corp. v. DMP 1985)). "[T]he witnesses which to 'shift Inc. (quoting to (E.D. Va. on the movant JTH Tax, Supp. of (4) 667 merely 2007) Mut. 2010 Facebook, is Va. favor the (quoting Heinz Kettler (E.D. convenience in LLC v. of and 750 F. Supp. 2d 660, does 736 617 strongly sought." CIV. 731, access, the factors; convenience the burden of proof transfer 2d (2) 2011) inconvenience to the other party.'" F. principal and Pragmatus AV, GmbH & Co. V. Razor USA, LLC, 2010) ) . four convenience interest of justice." F. to support transfer, [must transfer is Co. v. The Overlook, LLC, No. 2520973, at *3 (E.D. June 17, original) (quoting Nossen v. Va. Hoy, 750 P. (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 to allow the (applying first-filed rule first-filed action to proceed and enjoining the second action); Allied-Gen. Nuclear Servs. V. 1982) Commonwealth Edison Co., ("Ordinarily, 675 F.2d 610, is permitted subsequently filed." to proceed to Industrial Chemicals, Cir. accord. 1020, 1025 rule, the the the first or prior exclusion of another (citing Carbide & Carbon Chemicals Corp. v. United States 1944))); (4th Cir. when multiple suits are filed in different Federal courts upon the same factual issues, action 611 City (2d Cir. 1991) "first of court Inc., 140 F.2d 47, v. Exxon Corp., N.Y. (holding that, has under the jurisdiction 49 (4th 932 F.2d first-filed to enjoin the prosecution of the second action"). III. DISCUSSION Hopeman requests that the Court enjoin the New York action and allow the case to proceed in this Court, ECF No. Defendants this S.D.N.Y. requests so that that it may be New York case, ECF No. should the transfer comprehensive According the case to Defendants the argue Opening transfer would Br. (1) 4, court issues; Defs.' to and Reply enjoining the resolve (3) Br. New complex protect 1, York all ECF York New interested No. 27. action from the Court the "more is ECF (2) No. 15. piecemeal allow a New insurance parties' coverage interests. argues proceeding to this prevent Hopeman while second-filed it litigation and potentially inconsistent rulings; York case that S.D.N.Y because Defs.' Defendants, transfer consolidated with the 14. action." to Court 12, would that (1) prevent piecemeal should litigation and not make applicability of a inconsistent decision New York rulings, based law (2) upon because the the until Court potential 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. Pl.'s Resp. Br., ECF No. A. It filed 25. Motion to Transfer is undisputed that case and the New See generally the Virginia action was York action The S.D.N.Y generally applies a was the the first- second-filed "bright-line rule" case. to determine which court should resolve forum disputes such as this: "[t]he court before which the first-filed action was brought determines which V. forum will hear Congregation (S.D.N.Y. the case." Jeshuat 2014) Israel, (internal First-Filed Action, Hopeman Brothers, 2017). the Therefore, first-filed 983 citations Related Inc., Congregation Shearith Israel F. omitted); Continental No. Supp. see Casualty 1:17-cv-00688 2d Co. (S.D.N.Y. 420, 422 Notice of et v. al» Feb. 9, as the second-filed court routinely defers to court to determine which court will hear the In order to determine whether transfer is appropriate, the case, this Court will move forward with such analysis. Court must determine "(1) whether brought in the transferee forum, and 8 the (2) claims might have been whether the interest of justice and convenience of the parties and witnesses justify transfer to that forum." threshold brought matter, its S.D.N.Y. the claim 250 F. Court against finds Supp. that Continental Similar to this Court, 2d at 630. Hopeman and could Lexington interest and costs, exceeds $75,000, and there diversity of citizenship between the parties. Hopeman does not contest proper in the S.D.N.Y. were issued business to in Hopeman New jurisdiction is § 302(a)(1) business New See continues to do it proper in Defs.' the during so. its is complete H 5. venue principal Opening Br. Lexington is Court of does personal N.Y. time the Nor that and relevant place 5. under Therefore, exclusive that S.D.N.Y. the Id. the insurance policies assertion Continental York in See Compl. assertion had Defendants' because in while York. challenge Defendants' because the relevant Hopeman have the S.D.N.Y possesses siibject matter jurisdiction because the amount in controversy, of As a C.P.L.R transacted periods finds and that Hopeman could properly have filed its claim in the S.D.N.Y. The Court next determines whether transfer of the case is in the "interest of justice and convenience of the parties and witnesses." have been decision court. to Koh, 250 F. brought in transfer One Beacon Ins. Supp. the transferee venue Co. 2d at 630. is v. within If the claims could court the initially, discretion of the the JNB Storage Trailer Rental Corp., 312 F. Supp. 2d 824, 828 (E.D. Va. 2004) Hunter Douglas, In exercising factors Inc., this 806 F. Supp. discretion, 582, the to determine whether to Court (2) parties and witnesses; (3) of availability of (4) the 591 (E.D. Va. considers transfer venue, ease of access to sources of proof; witnesses; (citing Verosol B.V. v. 1992)). multiple such as "MD the convenience of the the cost of obtaining the attendance compulsory process; (5) the interest in having local controversies decided at home; (6) in diversity cases, law; and (7) the the court's familiarity with the applicable interest of 312 F. Supp. 2d at 828 Exch., Inc., 105 F. Supp. the factors may to consider all of factors witness Info. Servs., and . LLC, 2d 493, be . . are interest 467 F. 498 (E.D. 994-95 choice Va. 2005)); (summarizing of forum, (2) see to of Supp. the also the sources justice." 2d convenience v. OnLine 2000)). While "[t]he choice of principal of proof, Byerson v. party Equifax Inc., 386 F. Supp. 2d 708, the 769 as (E.D. F. Va. Supp. 2006) 2d at "(1) plaintiff's parties, (3) the interest of justice"). 10 forum, 632 factors of Inc. Co., 627, Pragmatus, transfer convenience and access, and (4) Va. plaintiff's (quoting Samsung Elecs. Co v. Rambus, 716 (E.D. considered, access the One Beacon Ins. (quoting HHP Int' 1 Inv. , convenience, convenience, justice.'" witness 1. Plaintiff's Choice of Forum The Court first considers plaintiff's choice of forum. the plaintiff, District of Appeals rule, Hopeman chose to file Virginia. for the Fourth this case in the Eastern generally Circuit has Compl. adopted The the of balance action." Volvo Inc., F.3d 581, 386 F,2d at of Const. 180 convenience Equip. 594-95 n.2). N. in Am., {4th Cir. Thus, favor Inc. v. 2004) Plaintiff's Court of "first-filed" in which the "first suit should have priority, showing 502 See As of absent the the second CLM Equip. (quoting choice Co., Ellicott, of forum is given substantial weight in evaluating whether to transfer venue because "[i]t is well settled that a court should rarely disturb a plaintiff's clearly favor Ralsky, 203 F. Kettler GmbH, forum ... choice of forum transfer,..." Supp. 2d 601, 750 F. is Supp. unless Verizon 623-24 Online (E.D. Va. 2d at 667 typically the balance entitled of hardships Servs., Inc. 2002); v. Heinz {"[P] laintiff's choice of to 'substantial weight,' especially where the chosen forum is the plaintiff's home forum or bears a substantial relation to the 250 F. Supp. 2d at 623 those possible plaintiff."). plaintiff's under ("The initial choice of forum, the However, chosen the more weight a cause of action."); forum law, "the and is a greater the court will give 11 privilege the Koh, from among given to the connection between plaintiff's cause of to the plaintiff's a action, choice." Agilent Techs., 327 {E.D. Va. Inc. v. Micromuse, 2004); Inc., see GTE Wireless, its home Supp. 2d 322, Inc. v. 71 F. Supp. 2d 517, 519 (E.D. Va. 1999) of 316 F. Qualcomm, Inc., ("[A] plaintiff's choice forum is given more weight than its choice of a foreign forum."). Defendants argues Plaintiff's choice should not be given substantial weight because the instant action "has so few ties" to this Court. ^ Defs.' Opening Br. 11. However, Hopeman's complaint and in its response brief, that this relevant action regards insurance asbestos-related Defendants' policies lawsuits, of to which Hopeman explains obligation indemnify over ten in both under the Hopeman against thousand lawsuits have been filed within the geographic area encompassed by this District. Compl. K 5; PI.'s Resp. Br. 9 ("Virginia is also a major center of asbestos-related bodily injury lawsuits against Hopeman-11,565 only 627 cases cases in addition to relevant lawsuits, retains lawsuits. this local New in York District Hopeman counsel Pl.'s incorporation through Resp. in Br. Virginia, the end during being is the the January same location incorporated Virginia 9-10. (2) of in In the 2017, period."). of in many of In of the Virginia and connection light versus (1) significant with these Hopeman's number of ' Defendants do not argue that venue is improper in the Eastern District of Virginia. 12 asbestos-related cases filed against Hopeman in this geographic area, (3) Hopeman's retention of local counsel significant number of asbestos-related cases, cause of expenses finds action in related this to Hopeman's case these choice seeks to forum is and (4) indemnify asbestos-related of related to that the Hopeman claims, entitled the to the for Court substantial weight because the chosen forum is significantly related to the cause of action. Defendants also argue that the first-filed rule should not apply because Hopeman's complaint was an "improper anticipatory filing." Defs.' declined to Opening Br. accept 8. Defendants represent that they Hopeman's pending settlement offer on December 23, 2016, and the same day presented a counter-proposal to Hopeman. Id. Having been in settlement discussions since 2014, Hopeman represents Defendants rejected the Pl.'s Opening December 27, breach of Relief. down." 2016, At were Defs.' Hopeman's 5. after settlement offer on December 23, 2016. time "unaware decided result, to file Hopeman Defendants. that that Opening Br. of a against the filing anticipation suit As it filed suit on requesting declaratory judgment and alleging contract 8. Defendants Br. that settlement 8. Therefore, constituted Defendants Hopeman an filing 13 Compl. filed its discussions for complaint, had broken Defendants argue that anticipatory in Prayer the more filing "in appropriate jurisdiction, argues state in New York State." that, as forum shopping." The the for natural its Id. In response, plaintiff, damages its action is "choice not Court observes resolution by a cannot a improper that Hopeman, having home forura asserted court." {7th Cir. conclude action was an Hyatt 2002) . that Int'1 Corp. v. grievance for Coco, As the natural plaintiff, Hopeman's that is the "natural Plaintiff" because it is the party "who wishes to present a 718 of Pl.'s Resp. Br. 16. Defendants are in breach of contract, 707, Hopeman filing of "anticipatory filing." the It is F.3d the Court first true 302 cause that of courts look with "disfavor" upon actions filed merely as an "improper act of forum shopping, or a race to the courthouse." Network, 11 F. App'x at 301. Learning However, an "improper anticipatory filing" occurs when a party files a lawsuit "under the apparent threat of a suit in presumed adversary filing the mirror image of that another Holding Co., court." 97 F. Hopeman did not that file Defendants Defendants do Supp. not the were Id. 2d 549, that about represent they were broken down." Defs.' 557 Citigroup {S.D.N.Y. complaint under an litigation when Hopeman beat admits {quoting to file that they it to "unaware that Opening Br. 14 8. the Inc. v. City 2000)). Here, "apparent threat" litigation—in were about courthouse, to but fact. file rather settlement discussions had Thus, Hopeman's complaint cannot be considered an improper anticipatory filing because it was not "made under Learning Network, the 11 F. and litigation." Moreover, and perhaps Hopeman's complaint is not a requests declaratory Prayer for Relief, natural plaintiffs, Compl., Brothers, Inc., Hopeman's first-filed request Continental No. judgment and "mirror damages, but the New York plaintiffs, only generally filing, imminent of the New York suit because Hopeman alleges breach of contract Compl. of App'x at 301. more importantly to note, image" threat Casualty 1:17-cv-00688 action declaratory is Co. et (S.D.N.Y. not an not being judgment, al. v. 2017). improper VA see Hopeman Therefore, anticipatory and Hopeman's choice of forum is entitled to substantial weight. 2. Convenience of Parties and Witnesses Nevertheless, Hopeman's choice of forum is not controllingthe Court must evaluate whether an exception to the "first- filed" rule applies because a "balance of convenience favors the second action." Learning Network, 11 F. App'x at 301-02. Defendants do not argue that the "balance of convenience" favors transferring the case to New York, instead convenience of the parties and witnesses is a stating that the "neutral factor." Defs.' Opening Br. 12. In weighing the balance specifically considers whether the 15 of convenience, the Court "convenience of the parties" and "witness convenience and access" weigh in favor of transfer, Pragmatus, 769 F. Supp. 2d at 994-95. transfer, balance the burden of proof is on Defendants to show that the of convenience "strongly in favor of Nationwide Mut. Supp. As the parties requesting 2d at Ins., 736. among parties assess at convenience, the "ease of access to sources of proof, witnesses, Inc. V. state not Inc., Samsung, that weigh the 386 Supp. of Defs.' Opening New acknowledge York that Therefore, to show that the F. Supp. transfer," convenience other. F. convenience nor convenient a forum." that 499 against factor." "neither weighs *3; JTH Tax, courts must 482 factors 2d the costs of obtaining but Br. at 717 693 be deemed to a "does neutral Defendants, substantially favors forum is transfer, more and more Defendants convenient because Defendants have not met convenience of the parties, convenience and access, weigh against transfer. 16 than the their burden convenience weighs strongly in favor of of 2007) Defendants and witnesses According would Va. n.l3). "should be 12. (E.D. Lycos, Defendants bear the burden of showing strongly neither 685, the parties Virginia Id. 2d F. consider and the availability of compulsory process." TiVo, (quoting witnesses the forum to which transfer is sought." 2010 WL 2520973, To and and transfer, witness 3. Finally, the Court must evaluate whether transfer is in the "interest of justice." While the above convenience, the case. transfer 769 F. Supp. choice of 2d at 994-95. forum, parties' and witness convenience-weigh against transferring because and factors." Pragmatus, factors-plaintiff's Defendants appropriate Interest of Justice the the argue that "interest interest of transfer of is justice justice nevertheless strongly "outweighs favors" the other Defs.' Opening Br. 5. The interest of justice factor "encompasses public interest factors most aimed at prominent *systemic integrity and considerations being "judicial avoidance of inconsistent judgments." at 635 (quoting Samsung, fairness, having the local applicable law, duty, and Id. ; accord. Court assesses "docket decided and 467 F. Supp. Byerson, the the 2d In evaluating congestion, at "with economy 386 F. Supp. 2d at 721). controversies home, interest knowledge in of unfairness in burdening forum citizens with jury interest Conditioning, fairness,' in avoiding unnecessary conflicts Bd. Of Trustees 702 F. Supp. (considering as factors: v. 1253, Baylor 1260 Heating {E.D. Va. law." & Air 1988) "the pendency of a related action, court's familiarity with the applicable law, the possibility the ability to join other parties, 17 the docket conditions, access to premises that might have to be viewed, of an unfair trial, of and the possibility avoids of harassment"). duplicative invested LLC V. in where court litigation one 'substantial time and energy' Loopnet, Va. Aug. 30, Inc., 2012) No. Defendants 2:12C:V2, in a 938 in favor same has case." court already CIVIX-DDI, at *7 (E.D. Inc. v. Maersk Line, (E.D. Va. 2005)). essentially argue decisively the 2012 WL 3776688, {citing U.S. Ship Mgmt., Ltd., 357 F. Supp. 2d 924, weighs "Litigation of that the transfer interest as (1) of justice transfer would better protect the rights of all interested parties because the New York litigation litigation due issues, (2) and to is "more comprehensive" additional parties transfer would allow a than and the Virginia additional legal New York court to resolve complex issues of New York insurance and contract law.^ Defs.' Opening Br. 4; Defs.' Reply Br. 4-8, ECF No. 27. In evaluating whether rights of all the parties, transfer would best protect the the Court evaluates the ability to join other parties to the Virginia action, Bd. Of Trustees, 702 F. Supp. at 1260, and what effect a ruling in the Virginia case would have, Samsung, 386 F. Supp. 2d at 721. Here, neither party briefed whether the additional issues and parties from the ' Defendants' remaining arguments advocate that only one court should hear the claims between Continental, Lexington, and Hopeman in order to prevent duplicative litigation and inconsistent results. The parties agree that duplicative cases should not simultaneously proceed in different courts, though Hopeman requests that the New York case be enjoined pending the disposition of this case, while Continental and Lexington request that this case be transferred to the S.D.N.Y. to case. 18 be consolidated with the New York New York action could be joined in the Virginia action, and thus the Court makes no finding on this issue. However, in evaluating what effect a ruling in the Virginia case would have on the ultimate disposition of the New York case, resolution of the dispute between Lexington in New York was Virginia case, res Hopeman, assuming that Continental, enjoined pending disposition of judicata would prevent any 2002) the L.L.C. V. Mollicam, 287 F.3d {"Under res judicata principles, same matters parties can actually both ostensibly in have . the a 316, See Orca 318 (4th Cir. a prior judgment between subsequent necessarily Thus, actions determined'" preclude and adjudication."). to Inc., the inconsistent judgment on the same issues between the same parties. Yachts, and litigation resolved in on the those first if the "legal and factual issues common . . were Virginia preclusive 'actually and case, the Virginia effect on subsequent necessarily case would litigation over the same insurance policies between Continental, Lexington, and Hopeman in the New duplicative litigation. Next, the Court applicable law. Bd. Defendants argue that a interpret the New insurance York applicable and York case, and would thereby prevent Orca Yachts, 287 F.3d at 318. considers Of its Trustees, familiarity 702 F. with Supp. at the 1260. New York court will be better able to law, which Defendants contract 19 law. Defs.' assume will be Opening Br. 8. However, Hopeman points out that while "New York law may ultimately be applicable [, ] . . . it is by no means clear based solely on the addresses Hopeman's Complaint." listed in Pl.'s Resp. the Br. policies 14-15. the V. "last act" St. 2005) Paul Ins. Co., 407 F.3d Res. 631, Bankshares Corp. 635-36 {4th Cir. ("Under Virginia law, a contract is made when the last act to complete it is performed, policy, the insured." Co., such as the a court applies the law where of contracting occurred. Mercury to Under Virginia conflict of laws rules,^ in evaluating a contract, insurance policies at issue here, attached last (quoting 377 F.3d 408, act is Seabulk 419 and in the context of an insurance the delivery Offshore, (4th Cir. of the Ltd. 2004))). v. policy Am. to Home the Assur. According to Hopeman, ^ As the jurisdiction where the complaint was filed first, Virginia conflict of laws rules apply to the first-filed action regardless of which court ultimately hears the case. See Van Dusen, 376 U.S. at 639 ("[T]he transferee district court must be obligated to apply the state law that would have been applied if there had been no change of venue. A change of venue under §1404 (a) generally should be, with respect to state law, but a change of courtrooms."). However, as pointed out by Hopeman, Pl.'s Resp. Br. 15, in the second-filed action-under New York's conflict of interest laws-the S.D.N.Y. might be obligated to apply Virginia law to the case. New York applies the law of the state with the "most significant relationship to the transaction and the parties," and in the context of insurance contracts, the court looks to the "principal location of the insured risk." Certain Underwriters at (2006), aff'd, location of Lloyd's, London 876 N.E.2d 500 the insured v. (2007). risk' is Foster Wheeler Corp., 36 A.D.3d 17, 21 In situations in which the "'principal unclear because the insured risks are equally spread across many states, New York courts generally substitute the 'principal location of the insured risk' with the insured's domicile," which here would be Virginia, as Hopeman's state of incorporation. Wausau Bus. Ins. Co. V. Horizon Admin. Servs. LLC, 803 F. Supp. 2d 209, 214 (E.D.N.Y. 2011) (quoting Foster Wheeler, 36 A.D.3d at 21). Thus, in the second-filed action. New York's conflict of laws rule might require that the New York court apply Virginia law, thereby undermining Defendants' argument in favor of the overall case being resolved in New York in order for a New York court to evaluate New York law. 20 "[i]t is not certain on the current record that the 'last act' of contracting occurred in New York for New York law to apply in this Court," because identifying when and where the occurred an is issue Because it appears that for discovery. there Pl.'s "last act" Resp. Br. 15. is dispute about when and where the "last act" occurred in forming the contract, and because the Court is able to apply the law of New York should New York law be applicable, the Court does not find that familiarity with the applicable law weighs in favor of transfer to the S.D.N.Y. Finally, the Court observes that the interest of justice weighs in favor of transfer when one court has already invested substantial time 3776688, at *7 because and energy was the case, CIVIX-DDI, 2012 WL {citing U.S. Ship Mgmt., 357 F. Supp. 2d at 938), "priority should not complaint into filed first, be measured exclusively by which but rather in terms of how much progress has been made in the two actions," Moses H. Cone Mem'l Hosp. 21 v. Mercury Constr. Corp., 460 U.S. 1, (1983) (discussing priority of first-filed action in the context of the Colorado River abstention doctrine). were filed within days of one Here, another however, and neither both cases case has substantively progressed because in both cases the parties await resolution of the pending motion to transfer and pending motion to enjoin. 21 As explained above, each factor is either neutral or weighs against transfer of this case to the S.D.N.Y. chose this Court as the forum to file decision is given substantial weight. F. Supp. 2d at 667. Absent Ins., 2010 WL 2520973, Defendants at justice justifies the transfer, this Court forum. declines The to Court *3, and Byerson, deny its to therefore case, and this Heinz Kettler GmbH, convenience of the parties strongly favors Mut. Plaintiff Hopeman the showing that transfer, that the 750 the Nationwide interest of 467 F. Supp. 2d at 635, plaintiff DENIES its Defendants' choice Motion of to Transfer Venue. B. Motion to Enjoin Second-Filed Action Having declined to transfer this case to the S.D.N.Y., Court now determines whether it is appropriate to enjoin second-filed action currently pending in the S.D.N.Y. requests the the the Hopeman that the Court enjoin the second-filed action because first-filed rule According to Hopeman, applies. Pl.'s Opening Br. 21-22. the parties agree that the New York action and Virginia action are "parallel," and as such only one should proceed to the Additionally, exclusion Hopeman of argues the that other. Pl.'s Defendants Reply are Br. 1. engaging in "various forms of procedural gamesmanship," such as arguing that the New action York action includes should additional be chosen to plaintiffs, 22 proceed but because that simultaneously arguing that additional their Id. the Court plaintiffs claims or must at 2. should actually instead Finally, not have take consider the their Hopeman states ability claims that whether to to the litigate arbitration. "there is no dispute that the first-filed rule applies even where the parties to the lawsuits are not identical," such as the situation here. Id. at 3. In response, some of the Defendants argue that while both cases involve same factual additional plaintiffs Companies") together Resp. Br. 1. issues, {the with According the "Certain related to New York London insurance Defendants, against Hopeman without the includes Market Insurance policies. allowing case to proceed will either force Defendants claims case Def.'s the Virginia to litigate their benefit of being co- Plaintiffs with the additional plaintiffs in the New York case— if that case proceeds without Continental and Lexington-or, the York Court enjoins the co-plaintiffs New York case to await the completely, adjudication force of the case before proceeding in their case against Hopeman. 5. Defendants interest of prejudice" impermissibly plaintiffs. argue justice" that because Defendants delay both the while justice to Id. 23 options are first option the the the second additional Id. at 4to the "severely option New New Virginia "contrary would if would York co- When a district appropriate, court determines that under the first-filed rule, further prosecution of a App'x at 301; Allied-Gen., United States, general the court may enjoin Learning Network, 11 F. 675 F.2d at 611; accord. U.S. . . . principle Generally, not Exxon Corp., see Colorado River Water Conservation Dist. 424 district courts, is second-filed action in another court in order to avoid duplicative litigation/ 932 F.2d at 1025; transfer 800, 817 (1976) ("As between federal though no precise rule has evolved, is to duplicative avoid duplicative litigation occurs v. the litigation."). when "the parties, issues and available relief do not significantly differ between the two." Cottle v. Bell, 229 (unpublished table decision). first-to-file identical if rule, there the is action is Nizer, brought action embracing ^ The traditional pursuant to in the one interest. Winter v. once courts of 235 issue test Civil for with Supp. brought issuing Natural Res. determine Procedure Def. that Council, the 65 a need 2000) the not respect be 1974) court to the 635-36; 2d at {2d Cir. district is Cir. see ("Where an and a later in another federal preliminary requires Inc., first-filed a injunction to establish that (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of the injunction, (3) the balance of the equities tips in its favor, and (4) an injunction is in the public However, Rule F. federal same assessed overlap 467 {4th "[f]or purposes of being F.2d 232, four-factor Federal actions Byerson, 505 1142 However, substantial issues and parties." Meeropol v. F.3d 555 U.S. rule plaintiff 7, 20 applies, (2008). "courts have not imposed the traditional four-factor standard when deciding whether a preliminary injunction should issue." Safety Nat. Gas. Corp. v. U.S. Dep't of 23, Homeland Sec., No. H-05-CV-2159, 2010 2010). 24 WL 5419043, at *4 (S.D. Tex. Dec. court, the first court has jurisdiction prosecution of the second action. where the parties (internal 180 citations n.2 whether a the two omitted)); (observing Second Circuit's an in that see the also Fourth first-filed rule). determination discretionary basis," that involved, and 3) the Nutrition & Fitness, (W.D.N.C. are not identical." Ellicott, While 2) 502 has the F.2d adopted v. at the determination of second-filed action is made on a case-by-case, "1) the similarity of the parties similarity Inc. the is applicable even Circuit is enjoin courts have considered three factors; the chronology of the filings, 360 actions district court should enjoin a "equitable 357, This rule to of the Blue Stuff, issues Inc., 264 at stake." F. Supp. 2d 2003). As the Court explained above in evaluating whether transfer of the Virginia case to New York was appropriate, case was the first-filed action, any exception See supra Virginia justified Part case, III.A. the and the Court did not find that denying Hopeman Having Court now the Virginia retained decides its choice of jurisdiction whether to forum. over the enjoin the parties from prosecution of the second-filed action in New York. The Court may enjoin the New York action in its entirety if i t finds that "the parties, issues significantly differ between 1142, and available [both cases]," relief Cottle, do not 229 F.3d at or alternatively, may enjoin only the Virginia defendants, 25 Continental and Lexington,^ from prosecuting their case against Hoperaan, Fed. R. Civ. enjoin parties). both cases: P. Here, Hopeman, 65 (d) (2) three of (noting that the parties Continental, a are court the in However, and Lexington. same as has been repeatedly argued by Continental and Lexington, York action includes Insurance Companies legal issues the {the between additional Hopeman, Continental, declaratory judgment action for contrast, breach of contract in the Market Next, the Lexington and in both cases, in both cases, the New London "New York co-plaintiffs"). based upon the same alleged facts claim Certain may are and include a but only include Virginia action. a In based upon the limited documentation currently before the Court, the legal issues between Hopeman and the New York co- plaintiffs appear Hopeman and related to Claims" New the the to be New based York 1985 on insurance co-plaintiffs "Agreement York co-plaintiffs Continental Casualty Co. 1:17-CV-00688 judgment individual (S.D.N.Y. regarding insurance are et Feb. each policy and Concerning (the "Wellington Agreement"), v. 22, issues Asbestos-Related Pis.' Resp. 2017). Hopeman While a 2, Inc., Hopeman Brothers, co-plaintiff's with include between to which eight of the nine signatories. al. policies No. declaratory liability may on present its similar ® Subject to the applicable Federal Rules of Civil Procedure and Local Rules, the New York co-plaintiffs may choose to join the Virginia case. Civ. P. 19 & 20. 26 See Fed. R. legal and factual issues to the Virginia action, because the co- plaintiffs and underlying insurance policies are unique to the New York action, the parties have not issues "do not significantly differ." demonstrated Cottle, that the 229 F.3d at 1142 {finding that two cases were not duplicative when the complaints named different defendants even though the cases raised similar issues and sought similar remedies). In summary, Continental, it and appears Lexington, that the as parties between and Hopeman, legal contested are virtually identical between both cases. a second action to proceed between the the same legal and factual litigation, Enjoin and therefore Continental and same parties issues To allow litigating issues would constitute duplicative the Court GRANTS Hopeman's Motion to Lexington from prosecuting the second- filed action, pending disposition of the case before this Court. However, based upon the documentation before the Court, it appears that as between Hopeman and the New York co-plaintiffs the parties and are Virginia different York and based case. legal legal on issues Therefore, and factual co-plaintiffs, the involve insurance different contested policies because of the unique than unique parties in the parties and issues between Hopeman and the New Court DENIES the Motion to Enjoin the Second-Filed Action with respect to the New York co-plaintiffs, and leaves to the S.D.N.Y. the question of how to best proceed. 27 IV. For the reasons Transfer Venue ECF No. 14, Lexington to and from set the CONCLUSION forth Southern Hopeman's above, District Motion prosecuting Defendants' the Southern District of New York, to of New York Enjoin Motion is DENIED, Continental second-filed action to in and the is GRANTED, but Hopeman's Motion to Enjoin the Second-Filed Action with respect to the New York co-plaintiffs is DENIED, ECF No. 12. to Transfer and Motion to Enjoin, Motion Time for Defendants Extension to file fourteen days. The a to responsive the File SO Answer, pleading Clerk is REQUESTED to send a IS Court GRANTS or Defendants' and DIRECTS motion within ECF No. 17. Order to counsel IT of Having decided the Motion copy of for Plaintiff and to counsel this Opinion and for Defendants. ORDERED. /s/lfnir^ Mark S. UNITED Norfolk, Virginia April 2017 28 STATES Davis DISTRICT JUDGE
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