KATHERINE B. FORREST, District Judge.
Plaintiffs, a marketing agency, Havas Worldwide New York, Inc. ("Havas"), and the marketing arm of an investment company, TD Ameritrade Services Company, Inc. ("TD Ameritrade"), bring this action under the Declaratory Judgment Act ("DJA") against defendant Lionsgate Entertainment Inc. ("Lionsgate"), an entertainment company that owns the rights to the 1987 film Dirty Dancing. At issue is whether portions of an advertising campaign contained images and language that infringed defendant's rights under trademark law and the Lanham Act. Before this Court is defendant's motion to dismiss the amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) or in the alternative, to transfer venue to the Central District of California under 28 U.S.C. § 1404(a). For the following reasons, defendant's motion to transfer is GRANTED. The motion to dismiss on other substantive grounds is DENIED as moot.
In 2014, plaintiff Havas created an advertising campaign for defendant TD Ameritrade Services. It used phrases such as "Nobody puts your old 401k in a corner" and "Take that baby and roll it over to an IRA." (Amended Complaint at ¶ 10, 12, 14.) The advertising campaign also included images of a man lifting a piggy bank over his head. (
Defendant Lionsgate owns the 1987 motion picture Dirty Dancing. (
Defendant's two initial letters, one dated April 2, 2010 and the other April 15, 2015, requested present and future cessation of all reference to the phrase "Nobody puts baby in a corner," and a $1,000,000 fee for prior use. (Walters Decl. Exs. E, H.) The letters gave plaintiffs one week to respond, after which "we will advise Lionsgate to seek all remedies available to it for your unlawful acts." Plaintiffs formally rejected the licensing fee demand in an April 21, 2015 letter. (Walters Decl. Ex. I.)
On June 3, 2015, defendant Lionsgate responded to plaintiffs, outlining its rights under the Lanham Act and California unfair competition law. Lionsgate stated that it would "prefer to resolve these issues amicably. . . . To that end, we are prepared to negotiate a reasonable license fee." It stated that a "reasonable license fee" is a requirement of settlement, and that "[i]f pressed, we are prepared to resolve these issues through litigation, and we will pursue our claims before the U.S. District Court for the Central District of California, where Lionsgate maintains its principal place of business." (Walters Decl. Ex. J.)
On June 8, 2015, plaintiffs made a settlement offer. The parties agreed to refrain from filing lawsuits before the settlement was being considered. (Walters Decl. Ex. K.) On June 18, 2015, Lionsgate rejected plaintiffs' offer, and counteroffered. (Walters Decl. Ex. L.) In a June 26, 2015 email to defendant's counsel, plaintiffs formally rejected the June 18 settlement counteroffer and informed defendant that, "Since you have repeatedly threatened litigation if your demands were not met, we have this afternoon filed a complaint for declaratory judgment in U.S. District Court for the Southern District of New York." (Walters Decl. Ex. M.) On July 2, 2015, Lionsgate filed suit in the Central District of California, making Lanham Act, 15 U.S.C. § 1051 et seq. and state and common law unfair competition and dilution claims.
Defendant argues that the Court should dismiss this action because 1) the action qualifies under exceptions to the first-filed rule because it is improperly anticipatory and in violation of the parties' agreement during settlement discussions and 2) the DJA does not apply when an accused infringer has already ceased infringing activities. In the alternative, defendant argues that the Court should transfer the action to the Central District of California on the basis of
Generally, "[w]here there are two competing lawsuits, the first suit should have priority."
There is no question that plaintiffs filed this action in anticipation of Lionsgate filing a suit against them. "When a notice letter informs a defendant of the intention to file suit, a filing date, and/or a specific forum for the filing of the suit, the courts have found, in the exercise of discretion, in favor of the second-filed action."
While Lionsgate's counsel could have been more careful with the wording of their earlier notice letters to provide even stronger indication of its intent to file suit, there is no question that plaintiffs understood them to mean that a lawsuit by Lionsgate was imminent. In fact, in its June 26, 2015 email to Lionsgate, plaintiffs expressly stated that they were filing the instant action
"[T]he federal declaratory judgment is not a prize to the winner of a race to the courthouses."
Havas also argues that it is not subject to personal jurisdiction in California. Based on the current record, this argument is insufficient to defeat transfer. The Court assumes Havas will raise any personal jurisdiction defense in California if there remains a serious issue. This Court's determination is based on its determination that it is more likely than not that Havas is subject to jurisdiction in California.
Despite separate incorporation, it does appear that Havas Worldwide (New York) operates with a nationwide presence and may well be synergistically linked to the operations of the separate Californian offices. The materials before the Court indicate that Havas Worldwide has five North American offices, one in New York and two in California (San Francisco and San Diego). (Walters Supp. Decl., Ex. D.) Despite the separate offices, the Havas enterprise is self-described as "one of the world's largest communications groups" and "offers a single business model . . . and
It appears that Havas's business model indicates that its New York office's interactions with California are not "solely as a result of random, fortuitous, or attenuated contacts," but rather, it "established a continuing relationship" with Californian subsidiaries, business partners, and clients.
Moreover, the specific contacts at issue in this case likely constitute sufficient minimal contacts for jurisdiction in Californian courts. Havas (New York) created "over 100 different ads in various channels, including short online video, digital display, social media, television print, pages on the TD Ameritrade website and communications to TD Ameritrade clients." (Declaration of Nancy Wynne at ¶ 9.) The campaign was "designed to appeal to individual retail investors." (Amended Compl. at ¶ 10.) While there is no evidence to suggest that the campaign specifically targeted Californian customers, "it is easy to infer that . . . [this] national marketing campaign is intended to reach as large an audience as possible."
For the reasons stated above, defendant's motion to transfer venue is GRANTED. The Clerk of Court is directed to terminate the motion at ECF No. 26 and to transfer this action to the Central District of California.
SO ORDERED.