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Jive Software, Inc. v. Parkview Health System, Inc.

United States District Court, D. Oregon

March 29, 2018

JIVE SOFTWARE, INC., a foreign business corporation, Plaintiff,
v.
PARKVIEW HEALTH SYSTEM, INC., a foreign nonprofit corporation, Defendant.

          Matthew D. Colley and Michael B. Merchant, BLACK HELTERLINE, LLP, Of Attorneys for Plaintiff.

          Pilar C. French and Brian T. Kiolbasa, LANE POWELL, Of Attorneys for Defendant.

          OPINION AND ORDER

          Michael H. Simon, United States District Judge.

         On October 20, 2017, Plaintiff Jive Software, Inc. (“Jive”) filed a complaint seeking declaratory judgment against Defendant Parkview Health System, Inc. (“Parkview”) in Multnomah County Circuit Court. On December 18, 2017, Jive formally served process on Parkview. Parkview timely removed the action to federal court on January 17, 2018. Before the Court is Parkview's motion to dismiss Jive's complaint. For the reasons discussed below, the motion is granted.

         BACKGROUND

         Parkview is an Indiana nonprofit corporation headquartered in Fort Wayne, Indiana. It provides healthcare services in northeast Indiana and northwest Ohio through 10, 000 employees located in those regions. Jive is a software service provider incorporated in Delaware and headquartered in Portland, Oregon. On June 29, 2015, the parties entered into an agreement under which Jive would provide a collaborative workflow platform that would allow Parkview employees and patients at Parkview's Indiana and Ohio facilities to share information and documents with each other in various formats. Parkview was to pay Jive for its product and support services in annual installments of $698, 000. Shortly after Parkview began using the Jive platform, however, problems arose with the platform's compatibility with Parkview's existing systems. After seeking support from Jive, upgrading the platform, and purchasing additional products in order to solve the platform's shortcomings, Parkview notified Jive in a letter dated July 7, 2017 that Parkview was terminating all contracts with Jive. Shortly thereafter, Parkview's accounts payable department inadvertently paid Jive's third-year installment payment of $698, 000, despite Parkview having cancelled the agreement after only two years.

         In a letter dated October 9, 2017, Parkview's legal counsel demanded that Jive return the $698, 000. That letter stated:

Parkview demands the return of $698, 000 immediately. * * * You must send Parkview a payment in the amount of $698, 000 within 21 days of your receipt of this letter to avoid litigation and additional damages for Jive's failure to perform its obligations to Parkview.If Parkview does not receive this amount within 21 days, Parkview has instructed us to pursue in court Parkview's full range of legal remedies.

         ECF 11-3 (emphasis in original). Rather than return the $698, 000, Jive filed the present action (the “Oregon Action”) in Multnomah County Circuit Court on October 20, 2017, seeking a declaratory judgment that it was entitled to keep the $698, 000 because Parkview had not provided Jive an opportunity to cure. Jive engaged in settlement negotiations with Parkview after filing the Oregon Action, but no resolution was reached. Although Parkview's legal counsel had actual notice of the Oregon Action shortly after it was filed, Jive did not formally serve process on Parkview's agent until December 18, 2017, after settlement negotiations had fallen through. Four days later, on December 14, 2017, Parkview filed an action against Jive in Indiana state court (the “Indiana Action”), asserting claims for breach of contract and unjust enrichment. Parkview now moves to dismiss the Oregon Action.

         DISCUSSION

         Parkview argues that this action should be dismissed for three alternative and independent reasons: (1) this Court lacks personal jurisdiction over Parkview; (2) this Court should abstain from hearing this action because it is an anticipatory suit and there are parallel proceedings pending in Indiana; and (3) Oregon is an improper venue under 28 U.S.C. § 1391. Because the Court finds that the Oregon Action is an anticipatory suit that should be dismissed in light of the pending Indiana Action, the Court finds it unnecessary to consider whether it has personal jurisdiction over Parkview or whether venue is proper in Oregon.

         A. Abstention

         “[D]istrict courts have substantial latitude in deciding whether to stay or to dismiss a declaratory judgment suit in light of pending state proceedings.” Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995); see also Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942). Among the factors that district courts consider when determining whether to exercise jurisdiction over a declaratory judgment action is whether a litigant has filed the declaratory action as a means of forum shopping. Chamberlain v. Allstate Ins. Co., 931 F.2d 1361, 1367 (9th Cir. 1991) (citing Brillhart, 316 U.S. at 495).

         In exercising this broad discretion, district courts typically begin with the “first-to-file” rule and generally choose to hear an action if it is the first filed of two substantially similar actions pending in different courts, but transfer, stay, or dismiss the action if it is the more recently filed. Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997). Application of the first-to-file rule focuses on three factors: (1) the chronology of the actions; (2) the similarity of the parties; and (3) the similarity of the issues. See, e.g., Alltrade v. Uniweld Prod. Co., 946 F.2d 622, 625 (1991). The parties do not dispute that all three factors favor application of the first-to-file rule. The rule is flexible, however, and will not apply if a court determines that equitable interests counsel otherwise. Typical exceptions to the rule include “bad faith, anticipatory suit, and forum ...


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