GERALD LEBOVITS, Judge.
Plaintiff, MPEG LA, a patent pool licensing group, sued for monetary damages for breach of contract against Haier America Trading, LLC, Haier Deutschland GmbH, Haier Electrical Appliances Corp., Ltd., Haier Electronics Sales Co., Ltd., and Haier Europe Trading S.R.L. Plaintiff alleges that defendants, which all have license agreements administered by MPEG-LA, are liable for the following:
Defendants filed an answer on August 15, 2017, adding third-party defendants Samsung Electronics Co., Ltd., LG Electronics, Inc., Zenith Electronics, LLC., Koninklijke Philips N.V., Panasonic Corporation, and the Trustees of Columbia University in the City of New York. In their answer, defendants assert counterclaims against plaintiff and third-party defendants alleging violations of the New York Donnelly Act and for declaratory relief, breach of contract, promissory estoppel, and breach of the duty of good faith and fair dealing. (Answer, Affirmative Defenses, Counterclaim, and Third-Party Complaint, at 22.)
Six days later, defendants filed a similar action in federal court
The moving parties' motion to dismiss defendants' counter- and third-party claims is granted upon default because defendants failed to appear on the scheduled court date. (David D. Siegel, Practice Commentaries, McKinney's Cons Laws of NY, CPLR 3215:1.)
The moving parties' motion to dismiss defendants' counter- and third-party claims is also granted for reasons stated in the moving parties' papers. A court's authority with regard to dismissal is discretionary when "there is another action pending between the same parties for the same cause of action in a court of any state or the United States." (CPLR 3211[a][4].) New York courts usually apply the first-in-time rule to dismiss an action filed second. (See e.g. City Trade & Indus., Ltd. v New Cent. Jute Mills Co., 25 N.Y.2d 49, 58 [1969] ["[T]he court which has first taken jurisdiction is the one in which the matter should be determined."].) But this rule is discretionary when two actions are filed virtually simultaneously. "Virtually simultaneously" has been broadly interpreted. (See IRX Therapeutics, Inc. v Landry, 150 A.D.3d 446, 446 [1st Dept 2017] [finding that although "this action was filed first, chronology is not dispositive, particularly since both actions are at the earliest stages of litigation"].)
The federal and state actions were filed virtually simultaneously: defendants filed their answer in this court on August 15, 2017, and their complaint in the federal court on August 21, 2017. The state and federal actions appear to be progressing at the same pace, and no discovery has been requested as of the dates on the parties' papers in this motion.
When deciding whether to dismiss a duplicative action, there must be substantially similar parties and claims. (Syncora Guar. Inc. v J.P. Morgan Sec. LLC, 110 A.D.3d 87, 96 [1st Dept 2013].) The parties agree that the parties and claims are substantially the same in both actions.
The moving parties' motion in the alternative to stay defendants' counter- and third-party defendant claims is denied as academic because the counter- and third-party defendant claims are dismissed.
The moving parties' motion to stay defendants' 4th and 8th-14th affirmative defenses is granted upon default because defendants failed to appear on the scheduled court date.
This motion is also granted for reasons stated in the moving parties' papers. CPLR 2201 gives a court the authority to grant a stay "upon such terms as may be just." A court may grant a stay "when there is substantial identity between state and federal actions [and is] . . . justified upon due consideration of issues of comity, orderly procedure, and judicial economy." (Asher v Abbott Labs., 307 A.D.2d 211, 211 [1st Dept 2003] [internal quotation marks and citations omitted]; accord Goodridge v Fernandez, 121 A.D.2d 942, 945 [1st Dept 1986] ["The stay avoids the unnecessary risk of inconsistent adjudications as to the defenses asserted . . . in the Federal and State actions, the duplication of proof, and the consequent waste of judicial resources which would result from prosecution of the instant action."].) Defendants' 4th and 8th-14th affirmative defenses relate to their antitrust and patent claims, which defendants have also brought in federal court. The moving parties do not state how long a stay they seek. Because this court has the authority to grant a stay even without a motion by the parties, this court finds it reasonable to grant the stay until the federal court rules on the pending motion to dismiss. That will avoid waste of judicial resources. (See Halloran v Halloran, 161 A.D.2d 562, 564 [2d Dept 1990] ["A court, pursuant to CPLR 2201, may sua sponte grant a stay of proceedings in an action that is pending before it."]; Siegel, N.Y. Prac. § 255 [2018 ed.] [A stay "can be used to stop the prosecution of the action altogether, or to hold up only some phase of it"].)
In their opposition papers, defendants appear to make a cross-motion and request that if this court issues any stay, it should stay this action in its entirety, or at a minimum until the federal court rules on the moving parties' motion to dismiss. (Defendants' Memorandum of Law in Opposition, at 10.) This court may not grant defendants' request; defendants did not make a formal cross-motion for the relief they seek. (See e.g., Myung Chun v N. Am. Mtge. Co., 285 A.D.2d 42, 45 [1st Dept 2001] [holding that the court should not have overlooked "the absence of a notice of cross motion"]; Matter of Brigers Estate, 95 A.D.2d 887, 888 [3d Dept 1983] [holding that the court was justified in refusing to hear a supposed cross-motion when respondent's papers "failed to contain an explicit notice of cross motion as required by the 1980 amendment to CPLR 2215"].)
Defendants also did not appear in court to oppose the moving parties' motion to dismiss or defend the merits of their supposed cross-motion. Even if they had, the plaintiff commenced this action in state court, and the defendants will not be granted a stay to avoid plaintiff's suit here by filing their own action in federal court.
Accordingly, it is hereby
ORDERED that the moving parties' motion to dismiss defendants' counter- and third-party claims is granted on default and as duplicative of the federal action; and it is further
ORDERED that the moving parties' motion to stay defendants' counter- and third-party claims is denied as academic; and it is further
ORDERED that the moving parties' motion to stay defendants' 4th and 8th-14th affirmative defenses is granted pending a decision by the federal court on the defendants' motion to dismiss; and it is further
ORDERED that the moving parties are directed to serve a copy of this decision and order with notice of entry on all parties.