John S.Artz (Member, Troy) and Chelsea M. Smialek (Associate, Washington, D.C.), successfully defended against a motion to dismiss or transfer based on the first-to-file doctrine in a dispute between two suppliers of industrial equipment components. ITR America, LLC (“ITR”) filed suit against Dickinson Wright client Trek, Inc. (“Trek”) and one of its employees in Federal Court in Mississippi claiming misappropriation of trade secrets under state and federal law, violation of the Computer Fraud and Abuse Act, tortious interference, and civil conspiracy, which is currently awaiting its own ruling on a motion to dismiss (the “Mississippi matter”). ITR America, LLC v. Trek, Inc. et al., No. 3:16-cv-703-WHB-JCG (S.D. Miss.). Trek likewise filed its own lawsuit against ITR and two of its employees (collectively “Defendants”) in the Eastern District of Michigan asserting misappropriation of trade secrets under state and federal law, unfair competition, breach of contract, violation of the Fraud and Abuse Act, and tortious interference, among other things (the “Michigan matter”). Trek, Inc. v. ITR America, LLC, et al., No. 2: 16-cv-13767-SJM-RSW (E.D. Mich.).
The Defendants moved to dismiss or, in the alternative, transfer the Michigan matter to Mississippi based on the first-to-file doctrine, which provides that when two suits filed in different courts pertain to the same parties and issues, the first suit to be filed generally proceeds to the exclusion of the other in order to avoid duplicative litigation or inconsistent judgments. Trek opposed the Defendants’ motion and argued that even if the Michigan matter asserted the same or similar causes of action as the Mississippi matter, those claims were based on facts, actors, and issues different from those asserted in the Mississippi matter such that the first-to-file doctrine was inapplicable. The Court agreed.
Although the Court noted that the Michigan matter was filed a few weeks after the Mississippi matter and contained facially similar causes of action, the Court took note of the specific, individual facts of each case and concluded “the Mississippi and Michigan lawsuits present substantially different questions of fact.” Trek, Inc. v. ITR America, LLC, et al., No. 2: 16-cv-13767, Doc # 17, Pg ID 291. The Court expounded, stating “[e]ach suit alleges different actions, carried out by different people, in different locations. As a result, separate Mississippi and Michigan lawsuits present no risk of ‘duplicative litigation and conflicting judgments’ since the cases offer discrete questions of fact.” Id.
Additionally, because the Court found that venue was, in fact, proper in the Eastern District of Michigan, to transfer venue the Defendants had to demonstrate that transfer would promote the convenience of the parties and witnesses and would be in the interest of justice. Id. at Pg ID 289-90. In denying the Defendants’ request to transfer the Michigan matter to Mississippi, the Court determined that the Defendants failed to make a showing that “transfer from Michigan would offer any net convenience benefit to parties or witnesses. And the Court will not transfer venue when ‘the result is simply to shift the convenience from one party to another.’” Id. at Pg ID 291 (internal citation omitted).
In summary, the Defendants’ motion was denied and the Michigan matter remains pending. The Court’s Order can be found at the following link.
