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dismissing the declaratory action in favor of another pending action upon finding that convenience of the witnesses and parties favored neither forum, where witnesses were from both forums and several other parts of the country, and both parties would be inconvenienced by having to litigate in this district
Summary of this case from PENNSYLVANIA GENERAL INS. v. CAREMARKPCS F/K/A ADVANCEPCSOpinion
Civil Action No. 3:02-CV-0134-G
July 2, 2002
MEMORANDUM ORDER
Before the court is the motion of the defendant Peter Lanell ("Lanell") to dismiss the declaratory relief claim of the plaintiff i2 Technologies US, Inc. ("i2 US") for lack of personal jurisdiction and improper venue or, in the alternative, to transfer venue. For the reasons discussed below, Lanell's motion to dismiss is denied. Nonetheless., the court, in its discretion, declines to exercise jurisdiction over this declaratory relief claim and thus dismisses the action without prejudice.
I. BACKGROUND
Lanell is a citizen of Massachusetts and has maintained his permanent residence there "more or less exclusively since 1970." Motion of Defendant Peter Lanell to Dismiss for Lack of Personal Jurisdiction and Improper Venue or, Alternatively, to Transfer Venue and Brief in Support ("Motion") at 4. i2 US is a Nevada Corporation with its principal place of business in Dallas County, Texas. Notice of Removal ¶ 5. i2 US is an international company with 22 offices in the United States, including two in Massachusetts, and 28 offices abroad. Motion at 5- 6. On or about April 12, 2000, Lanell became an employee of i2 as a result of i2's acquisition of Lanell's former employer, Supplybase, Inc. Motion at 5. Lanell contends that, to his knowledge, "he has never been an employee of the plaintiff, i2 US." Motion at 5. According to Lanell, he negotiated his employment contract with i2, "a Delaware corporation." Id.; See also id. at 1, n. 1. On April 12, 2000 the parties executed an employment contract ("the agreement"). Id. at 5. The agreement provides for the calculation of certain payments to be made to Lanell and contains a choice of law clause which provides that Massachusetts law governs disputes arising under the agreement. Appendix In Support of Defendant Peter Lanell's Motion to Dismiss For Lack of Personal Jurisdiction and Improper Venue or, Alternatively, to Transfer Venue and Brief in Support ("Lanell's Appendix"), at 14, 21. The parties disagree about where the agreement was executed: i2 US contends it was executed in Texas, while Lanell claims he signed it in Massachusetts. Plaintiff's Response to Defendant's Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue or, Alternatively, to Transfer Venue, and Brief in Support ("Response") at 6-7; Motion at 5. On July 25, 2001, Lanell's employment was terminated. Motion at 7. Upon his termination, Lanell was told by his supervisor that he would be paid any compensation owed to him. Id.
The parties differ over the amount of severance, commission, and other payments that are due to Lanell pursuant to the agreement. Id. at 7-9. Shortly after his termination, Lanell contacted a representative of i2 US in Dallas to inquire as to the amount of commission he should be paid. Plaintiff's Original Petition for Declaratory Relief ("Petition") ¶ 10, attached to Notice of Removal at tab 1. The representative informed Lanell that he was entitled to over $2.8 million in commissions. Id. i2 US contends that the amount represented to Lanell was incorrect because of an erroneous calculation. Response at 3. Subsequent to Lanell's inquiry, the parties entered into negotiations to determine the amount owed to Lanell. Petition ¶ 11.
The parties do not dispute that i2 US owes Lanell some compensation. They do disagree, however, about how much compensation is owed to him.
According to Lanell, he made a "few" trips to Texas "at the direction of his employer". Motion at 7 ¶ 18. According to i2 US, the "few" trips Lanell made to Texas amounted to an average of three days a month. Response at 11. i2 US also claims that Lanell sold approximately $5 million worth of product to four Texas companies and that these sales were included in his commission base. Id. at 10. In his reply to i2 US' response, Lanell points out that these sales account for only four to eight percent of his total sales. Reply Brief of Defendant Peter Lanell to Plaintiff's Response to Defendant's Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue or, Alternatively, to Transfer Venue ("Reply") at 3, n. 5. Lanell further asserts that his direct supervisor was based in Atlanta and that he did not report to anyone in Texas. Motion at 7. i2 US disputes this claim and contends that Lanell's ultimate supervisor was located in Dallas, and that his paychecks and expense reimbursements were paid out of Dallas. Response at 7-8.
On October 15, 2001, while negotiating a settlement, Lanell received a private right of action letter from the Massachusetts Attorney General, and his counsel forwarded it to i2 US' counsel. Motion at 9. Later in the negotiation process, on December 4, 2001, Lanell's counsel drafted a complaint and informed i2 US' counsel that if there were no settlement in principle by December 7, 2001, Lanell would file the complaint pursuant to the private right of action letter. Id. at 10. Instead, on that date, i2 US filed this petition for declaratory relief in a county court in Dallas County, Texas. Id. On January 18, 2002, Lanell removed this action from the Dallas County court to this court on the basis of diversity of citizenship. Notice of Removal at 2. Shortly thereafter, on January 25, 2002, Lanell filed a complaint in Massachusetts Superior Court for the wages and commissions owed to him ("Lanell's action"). Motion at 12. On February 19, 2002, i2 US removed that case to the United States District Court for the District of Massachusetts. Response at 2. i2 US has since filed a motion to transfer that action to this court. Id.
On June 14, 2002, the court contacted the chambers of Judge Mark L. Wolf, to whom this case is assigned, and was informed that i2 US' motion to transfer is still under consideration.
II. ANALYSIS A. Factual Standard: Prima Facie Case
When a nonresident defendant moves to dismiss for lack of personal
jurisdiction, the plaintiff bears the burden of establishing the district court's jurisdiction over the nonresident. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.), cert. denied, 513 U.S. 930 (1994); Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). If the district court chooses to decide the matter without an evidentiary hearing, the plaintiff may meet its burden by presenting a prima facie case for personal jurisdiction. Wilson, 20 F.3d at 648; Thompson v. Chrysler Motors Corporation, 755 F.2d 1162, 1165 (5th Cir. 1985). The court will take the allegations of the complaint as true, except where they are controverted by opposing affidavits, and all conflicts in the facts are resolved in favor of the plaintiff. Wilson, 20 F.3d at 648. In making its determination, the court may consider affidavits, interrogatories, depositions, oral testimony, or any combination of recognized discovery methods. Thompson, 755 F.2d at 1165; Spademan, 772 F.2d at 1192.
B. Legal Standard
A court determines the existence of personal jurisdiction over a nonresident defendant by examining the "(1) assertion of jurisdiction by the law of the forum;" and "(2) conformity of the law with the Constitution." Pedelahore v. Astropark, Inc., 745 F.2d 346, 347 (5th Cir. 1984). A defendant is amenable to the personal jurisdiction of a federal court sitting in diversity to the same extent that it would be amenable to the jurisdiction of a state court in the same forum. Id. Applying state law, this court must first determine whether Texas, the forum state, could assert long-arm jurisdiction. Id. Because the Texas long-arm statute confers jurisdiction to the limits of the federal constitution, Hall v. Helicopteros Nacionales de Colombia, S.A., 638 S.W.2d 870, 872 (Tex. 1982), rev'd on other grounds, 466 U.S. 408 (1984), the court need only concern itself with the federal due process inquiry. Bullion v. Gillespie, 895 F.2d 213, 215-16 (5th Cir. 1990).
C. Due Process Requirements
Due process requires the satisfaction of two elements to exercise personal jurisdiction over a nonresident: (1) the nonresident must have some minimum contact with the forum which results from an affirmative act on his part; and (2) it must be fair and reasonable to require the nonresident to defend the suit in the forum state. Spademan, 772 F.2d at 1189. The due process clause ensures that persons have "fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign." Burger King Corporation v. Rudzewicz, 471 U.S. 462, 472 (1985).
To establish minimum contacts, a nonresident defendant must do some act or acts by which he "purposefully avails [him]self of the privilege of conducting activities within the forum State, thus invoking the benefits and protection of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). In determining whether the exercise of jurisdiction is appropriate, the Supreme Court has focused less on presence in the forum state as a means to establish jurisdiction and looked increasingly to whether a defendant's contacts with the forum make it reasonable to require the defendant to defend the particular suit in that forum. Shaffer v. Heitner, 433 U.S. 186, 203 (1977).
Two types of in personam jurisdiction may be exercised over a nonresident defendant: specific and general. Specific jurisdiction exists if the cause of action is related to, or arises out of, the defendant's contacts with the forum, and those contacts meet the due process standard. Holt Oil Gas Corporation v. Harvey, 801 F.2d 773, 777 (5th Cir. 1986), cert. denied, 481 U.S. 1015 (1987); Wilson, 20 F.3d at 647; Spademan, 772 F.2d at 1190. General jurisdiction, on the other hand, may be found when a claim is unrelated to the nonresident's contacts with the forum but where those contacts are "continuous and systematic." Helicopteros, 466 U.S. at 415; Wilson, 20 F.3d at 647.
Because Lanell's contacts with Texas relate to the agreement, and because i2 has not asserted that Lanell has continuous and systematic contacts with Texas, the court will not address the issue of general jurisdiction.
1. Minimum Contacts
Under either a specific or general jurisdiction analysis, however, "the constitutional touchstone remains whether the defendant purposefully established `minimum contacts' in the forum [s]tate." Burger King, 471 U.S. at 474 (citing International Shoe Company v. Washington, 326 U.S. 310, 316 (1945)). The "purposeful availment" requirement of the minimum contact inquiry "ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts . . . or of the `unilateral activity of another party or a third person.'" Id. at 475 (citations omitted). A plaintiff must establish a substantial connection between the nonresident defendant and the forum state. Jones v. Petty-Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1068 n. 9 (5th Cir.), cert. denied, 506 U.S. 867 (1992); Bearry v. Beech Aircraft Corporation, 818 F.2d 370, 374 (5th Cir. 1987) (citing Burger King, 471 U.S. at 475 n. 18); McGee v. International Life Insurance Company, 355 U.S. 220, 223 (1957)).
A court must consider all factors when making the purposeful availment inquiry — "no single factor, particularly the number of contacts, is determinative." Stuart, 772 F.2d at 1192. "[W]hether the minimum contacts are sufficient to justify subjection of the non-resident to suit in the forum is determined not on a mechanical and quantitative test, but rather under the particular facts upon the quality and nature of the activity with relation to the forum state." Mississippi Interstate Express, Inc. v. Transpo, Inc., 681 F.2d 1003, 1006 (5th Cir. 1982); see also D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d at 542, 547 (5th Cir. 1985) (citations omitted).
i2 US argues that Lanell is subject to jurisdiction in Texas because he purposefully availed himself of the benefits of doing business with a Texas resident. Response at 11. To support its argument, i2 US claims that Lanell (1) executed the agreement in Dallas, (2) made an average of three trips to Dallas per month while he was employed by i2 US, (3) received payment from i2 US through the Dallas office, and (4) made approximately $6 million in sales to Texas companies. Id. at 6-8, 11.
Lanell argues against a finding of personal jurisdiction, claiming that he did not purposely avail himself of the benefits of doing business in Texas and that he did not expect to be haled into a court in Texas. Motion at 15-17. In particular, Lanell claims that his contacts with Texas pursuant to the agreement were isolated and random and do not amount to minimum contacts. Id. at 18. He supports this argument by asserting that (1) the agreement was executed in Massachusetts, (2) his business was "global" and he primarily operated out of Massachusetts, (3) his direct supervisors were in Georgia and Massachusetts, and (4) the choice of law clause provides that Massachusetts law governs disputes over the agreement and Lanell therefore did not expect to be haled into court in Texas. Id. at 17-19.
As indicated previously, Lanell argues that i2 US was not the company that he contracted with and thus i2 US is precluded from bringing this action against him. Reply at 1, n. 1. i2 US asserts that i2 Technologies, Inc., the company named in the agreement, transferred all of its assets and liabilities to i2 US. Response at 2. At this time, however, the court accepts i2 US' claims as true and resolves this conflict in its favor. See Wilson, 20 F.3d at 648 (the plaintiff may meet its burden of establishing personal jurisdiction over the nonresident defendant by presenting a prima facie case for personal jurisdiction and "conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor for purposes of determining whether a prima facie case for personal jurisdiction exists.") (internal citations and quotation omitted).
The parties dispute the location where the contract was executed. i2 US has provided an affidavit of an employee who negotiated with Lanell, which states that the agreement was executed in Dallas. Affidavit of Michael B. Martin, located in Appendix in Support of Plaintiff's Response to Defendant's Motion to Dismiss For Lack of Personal Jurisdiction and Improper Venue or, Alternatively, to Transfer Venue, and Brief in Support ("i2 US' Appendix"), at 50. Lanell's own affidavit provides that the contract was executed in Massachusetts. Affidavit of Peter Lanell ("Lanell's Affidavit"), located in Lanell's Appendix, at 2. As stated above, when a conflict arises as to the facts underlying the claim, the court is to construe the facts in favor of the plaintiff. Wilson, 20 F.32 at 648. Therefore, for purposes of this motion the court finds that the contract was executed in Texas.
The existence of a contract between the parties does not establish that sufficient minimum contacts exist. Dickson Marine Incorporated v. Panalpina, Inc., 179 F.3d 331, 337 (5th Cir. 1999). Rather, "[t]he factors of prior negotiations and contemplated future consequences, along with the terms of a contract and the parties' actual course of dealing, must be evaluated in determining whether the defendant purposefully established minimum contacts with the forum." Id. (citing Burger King, 471 U.S. at 478). Additionally, the Fifth Circuit has held that the mere fact that a contract was executed in Texas does not automatically give rise to specific jurisdiction. See Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1029 (5th Cir. 1983), cert. denied, 466 U.S. 962 (1984). Instead, the court looks "to the place of contractual performance to determine whether the making of a contract with a Texas resident is sufficiently purposeful to satisfy minimum contacts." Jones v. Petty-Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1068 (5th Cir.), cert. denied, 506 U.S. 867 (1992).
There is no controversy that Lanell's duty as an employee of i2 was to make sales nationally as well as internationally. Motion at 6; Response at 7. In other words, the contract was to be performed globally, not just in Texas or Massachusetts. The fact that the contract was to be performed globally does not establish personal jurisdiction over Lanell in every jurisdiction. On the other hand, the fact that the majority of Lanell's time was spent in Massachusetts does not preclude jurisdiction over him if he "purposefully directed" his activities at residents of Texas. Burger King, 471 U.S. at 476. Texas was included in Lanell's territory. Lanell made sales in Texas in excess of $5 million, for which he was to be paid commissions. In addition, Lanell made several visits to the state, on a monthly basis, for sales and other employment matters. Response at 9-10. Accordingly, it follows that, had one of Lanell's clients breached a sales contract which he negotiated, i2 US and Lanell would likely have relied on Texas courts to provide a remedy permitting them to collect the respective proceeds and commission they were due. Thus, in the course of performing the agreement, Lanell purposefully directed a portion of his business activities toward Texas residents.
Lanell next argues that personal jurisdiction in this court is improper because his direct supervisors were not located in Texas but in Georgia and Massachusetts. Motion at 17-18. However, i2 US alleges that his benefits, salary and commissions were paid out of the Dallas office and that there was some supervision of Lanell from the Dallas office. Response at 7-8. Also, any customers that Lanell sold to were invoiced out of Dallas and they made their payments to the Dallas office. Id. at 8. The court agrees with i2 US that with such activity occurring in Dallas, Lanell had significant contacts with the state.
Lanell finally contends that the choice of law clause in the agreement, providing that Massachusetts law govern all disputes, evinces that Lanell was unaware that he could be haled into court in Texas. Motion at 19. Lanell relies mainly on the Fifth Circuit's decision in Hydrokinetics, Inc., 700 F.2d at 1028-1029, to support his claim that the choice of law clause shows his unawareness of being subject to an action in this forum. In Hydrokinetics, the Fifth Circuit affirmed the district court's decision dismissing for lack of personal jurisdiction a diversity suit brought by a Texas manufacturer against a foreign buyer based on several factors, including a choice of law clause specifying Alaskan law, the place of performance, and the type of contract. Id. Hydrokinetics is distinguishable from this case, however, because Lanell has performed in Texas, the agreement here was entered into with the intention of creating a long term relationship, and it is not a sales contract. The Fifth Circuit has additionally provided that a choice of law clause is only "one factor among others that may determine whether the forum state has jurisdiction over a nonresident defendant." Electrosource, Inc. v. Horizon Batter Technologies, Limited, 176 F.3d 867, 873 (5th Cir. 1999). In light of Lanell's substantial sales to Texas residents, commissions to be received from those sales, and negotiations and execution of the agreement in Texas, the court finds that the choice of law clause is not significant enough to outweigh the number of significant contacts that Lanell had with the state.
After considering all of the circumstances surrounding Lanell's activities relating to the agreement, the court concludes that, on the basis of this record, Lanell purposefully availed himself of the benefits and protection of Texas laws.
2. Fairness
Having concluded that Lanell purposefully established minimum contacts with Texas, the court must consider whether the assertion of jurisdiction over him comports with the principles of fair play and substantial justice. Burger King, 471 U.S. at 476. When minimum contacts have been established, often the interests of the plaintiff and the forum state justify burdens on the defendant. Kervin v. Red River Ski Area, Inc., 711 F. Supp. 1383, 1394 (E.D. Tex. 1989) (citing Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102, 114 (1987)). The defendant may defeat personal jurisdiction, however, by presenting a compelling case that the presence of some other considerations would render jurisdiction unreasonable. Burger King, 471 U.S. at 477. Lanell thus has the burden of showing that conducting litigation in this court would be so gravely difficult and inconvenient that he would be at a severe disadvantage in comparison to i2 US. Id. at 478 (citations omitted).
The State of Texas has an interest in providing its residents with a convenient forum for redressing injuries allegedly inflicted by out of the state actors. See id. at 473 (citations omitted). i2 US has the right to choose a convenient, readily accessible forum. i2 US is also entitled to maintain this action in the locale where its alleged injury was sustained rather than in a distant forum.
Lanell argues that subjecting him to proceedings in Texas would be unfair for economic reasons. Motion at 20. Specifically, he argues that he has recently begun a new job in Massachusetts and that it would be difficult for him to stop work and come to Dallas for the proceedings. Id. Additionally, Lanell states that he is currently going through a divorce and the Massachusetts Probate Court has frozen his assets. Id. Lanell contends that it would be difficult for him to get the requisite funds to travel back and forth to Dallas and that he is in an overall difficult financial situation. Id. The court finds these burdens do not outweigh the interests of Texas and i2 US in litigating this matter here. First, the inconvenience and expense to Lanell of litigating in Texas do not, standing alone, trump i2 US' interests in adjudicating this dispute in Texas. Second, i2 has already admitted to owing Lanell approximately $1.45 million. Affidavit of John J. Harvey ("Harvey Affidavit"), located in i2 US' Appendix, at 6-7.
For the above reasons, Lanell's motion to dismiss is denied.
D. Declaratory Judgment Act
Although Lanell is subject to jurisdiction in Texas, the court still has discretion whether or not to entertain i2 US' request for declaratory judgment. See Wilton v. Seven Falls Company, 515 U.S. 277, 282-83 (1995); Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 494 (1942). The Declaratory Judgment Act provides that a court "may declare the rights and other legal relations of any interested party seeking such declaration. . . ." 28 U.S.C. § 2201. The Fifth Circuit has held that this provision grants district courts broad discretion in choosing whether to exercise jurisdiction over such actions. See Rowan Companies, Inc. v. Griffin, 876 F.2d 26, 29 (5th Cir. 1989); Wilton, 41 F.2d at 935; see also Wilton, 515 U.S. at 287 (describing "the unique breadth of [the] discretion to decline to enter a declaratory judgment"). Thus, this court may choose to dismiss this case by not exercising jurisdiction over the matter.
Although i2 US' claim for declaratory judgment was first brought in state court, the removal to federal court causes the claim to be viewed as brought under the Declaratory Judgment Act. Toops v. United States Fidelity and Guaranty Company, 871 F. Supp. 284, 287 n. 2 (S.D. Tex. 1995), rev'd on other grounds sub nom. Toops v. Gulf Coast Marine Inc., 72 F.3d 483 (5th Cir. 1996)); Golden Eagle Insurance Company v. Travelers Companies, 103 F.3d 750, 755 (9th Cir. 1996), overruled on other grounds, Government Employees Insurance Company v. Dizol, 133 F.3d 1220 (9th Cir. 1998)); Little Giant Manufacturing Company v. Chromalox Industrial Heating Products, No. 1:96-CV-44, 1996 WL 363026 at *3 (E.D. Tex. June 26, 1996); Board of County Commissioners of the County of Marshall v. Continental Western Insurance Company, 184 F. Supp.2d 1117, 1120 (D. Kan. 2001); Kolstad v. Trinity Universal Insurance Company of Kansas, 12 F. Supp.2d 1101, 1104 (D. Mont. 1998).
In determining whether to exercise jurisdiction over a declaratory judgment action, the court may consider a variety of factors, including but not limited to: (1) whether there is a pending action in another forum in which all of the matters in controversy may be fully litigated, (2) whether the suit before the court was filed in anticipation of a suit filed by the defendant in another forum, (3) whether the plaintiff engaged in forum shopping, (4) whether possible inequities exist in allowing the plaintiff to gain precedence in time or change in forums, (5) whether the court is a convenient forum for the parties and witnesses, and (6) whether retaining the suit in the court would serve the purposes of judicial economy. Vulcan Materials Company v. City of Tehuacana, 238 F.3d 382, 390 (5th Cir. 2001); St. Paul Insurance Company v. Trejo, 39 F.3d 585, 590-591 (5th Cir. 1994); Travelers Insurance Company v. Louisiana Farm Bureau Federation, Inc., 996 F.2d 774, 778 (5th Cir. 1993). The court must analyze and balance the facts and circumstances of the instant suit against these factors, or it will be deemed to have abused its discretion. Vulcan Materials Company, 238 F.3d at 390; Trejo, 39 F.3d at 591. Therefore, each of these factors will be considered in turn.
First, Lanell filed an action in a Massachusetts state court, which i2 removed to the United States District Court for the District of Massachusetts after this case was filed. Response at 2. Lanell's action asserts three bases for recovery: breach of contract, breach of the covenant of good faith and fair dealing, and violation of Massachusetts' "weekly wage law." Complaint, located in Lanell's Appendix, at 45- 53. The former two claims concern the same matter as the action before this court, while the latter claim has not been asserted in this action. Since i2 US' case is in a court of concurrent jurisdiction and Lanell's action contains, in addition to the statutory claim, all matters of controversy that exist in the action before this court, i2 US' suit could be fully litigated in the District Court in Massachusetts.
Generally, when an identical controversy arises in courts of concurrent jurisdiction, the court in which the action was first brought should hear the case. Fidelity Bank v. Mortgage Funding Corporation of America, 855 F. Supp. 901, 903 (N.D. Tex 1994), aff'd, 91 F.3d 138 (5th Cir. 1996) (table). The first-to-file rule, however, gives the court where the first case was filed the responsibility to determine which of the two cases should proceed. Mann Manufacturing, Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th Cir. 1971). In this instance, i2 US' action was first filed in Texas and Lanell subsequently filed his action in Massachusetts. Response at 2. In exercising its discretion, however, the court should determine if the first action was brought in anticipation of the second action being filed by Lanell. Vulcan Materials, 238 F.3d at 390. Generally, courts disfavor anticipatory suits because they are an aspect of forum shopping. Mission Insurance mpany v. Puritan Fashions Corporation, 706 F.2d 599, 602 n. 3 (5th Cir. 1983). Here, based on the record before the court, it appears that i2 US filed this action in anticipation of Lanell filing his action in Massachusetts. Lanell had informed i2 US that if negotiations did not resolve the dispute by December 7, he would promptly file his complaint in Massachusetts. In an apparent attempt to preempt Lanell's choice of forum, i2 US filed this action on December 7.
In the exercise of its discretion under the Declaratory Judgment Act, this court has previously dismissed declaratory judgment actions when the action before this court was filed in anticipation of a subsequently filed action pending in another federal district court. Dallas Semiconductor Corporation v. Credit Suisse First Boston Corporation, No. 3:01-CV-0851-P, 2001 WL 1142643 (N.D. Tex. Sept. 26, 2001) (Solis, J.) at *2-*3 (dismissing action before the court under the Declaratory Judgment Act when an action was pending in the Northern District of California); PAJ, Inc. v. Yurman Design, Inc., No. 3:98-CV-2847-P, 1999 WL 68651 (N.D. Tex. Feb. 9, 1999) (Solis, J.) at *2-*3 (dismissing action before the court under the Declaratory Judgment Act when an action was pending in the Southern District of New York).
The fourth element requires the court to consider whether, by allowing the action to remain here, i2 US would gain an advantage over Lanell in time or forum. The agreement provides that Massachusetts law should govern the contract; however, i2 US sets forth a brief argument in its response that Massachusetts law does not govern the dispute. Response at 11, n. 7. Thus, it appears that i2 US will argue that Texas law should be followed and i2 US may therefore gain an advantage by asserting its claim in Texas.
The fifth element, convenience for the parties and witnesses in this court, has been addressed in the fairness discussion above. As previously stated, the possibility of subjecting Lanell to jurisdiction in Texas is not unfair with respect to his contacts with the state. Nevertheless, this does not mean it would be convenient for Lanell to participate in proceedings in Texas. The convenience of the parties and witnesses must be balanced to determine whether the court should exercise jurisdiction. As for the witnesses, it appears that there are several witnesses from both Texas and Massachusetts, as well as other parts of the country such as Georgia and Illinois. Motion at 26; Response at 20. Thus, it follows that there would be some witnesses for whom it would be more convenient to participate in Texas, some witnesses for whom it would be more convenient to participate in Massachusetts, and some witness who will be inconvenienced in either location. Additionally, when considering the convenience of the forum it appears that both parties would be inconvenienced equally by subjecting them to litigation in a forum in which they do not reside. Therefore, neither the convenience of the witnesses or the parties themselves favors either party.
Finally, the court finds that judicial economy, in this action, would be best served by allowing the United States District Court for the District of Massachusetts to adjudicate this dispute. Lanell's action there includes all of the claims in the action before this court, as well as the additional Massachusetts statutory claim filed by Lanell. Lanell's Appendix at 45-53. If sufficient overlap exists over issues of law and fact, the dispute should be resolved in the court which will further the avoidance of duplicative or piecemeal litigation. See Wilton, 41 F.3d at 935. In this instance, judicial economy would be better served if all the matters in dispute were tried in the same case. Moreover, in light of the choice of law clause in the agreement, comity favors the application of Massachusetts law by a court sitting in Massachusetts which is more familiar with the laws of that state.
Accordingly, this court chooses not to exercise jurisdiction over i2 US' declaratory judgment action, as the United States District Court of Massachusetts is better situated to adjudicate this dispute.
III. CONCLUSION
For the reasons stated above, Lanell's motion to dismiss is DENIED, and Lanell's motion to transfer venue is DENIED as moot. Additionally, i2 US' objection to Lanell's affidavit is DENIED as moot.
The court also denies as moot Lanell's objections to Magistrate Judge Jeff Kaplan's ruling denying Lanell's expedited motion to quash and for protective order. See Defendant Peter Lanell's Objection to Order from Magistrate Judge.
On its own motion, however, the court declines to entertain this declaratory judgment action. Hence, this case is DISMISSED without prejudice to adjudication of this dispute in the case pending in the United States District Court for the District of Massachusetts.