United States District Court, D. Oregon
BENEFITELECT, INC., an Oregon corporation; COMMUNICATION PARTNERS, INC., an Oregon corporation, Plaintiffs,
STRATEGIC BENEFIT SOLUTIONS CORPORATION, a New Jersey corporation, Defendant.
OPINION AND ORDER
MICHAEL J. MCSHANE UNITED STATES DISTRICT JUDGE
2018, Plaintiffs BenefitElect, Inc.
(“BenefitElect”) and Communication Partners, Inc.
(“Communication Partners”) worked with Defendant
Strategic Benefit Solutions Corporation (“Strategic
Benefit”) to construct and install a computer program
in Pennsylvania that would assist state employees in
obtaining insurance. The relationship soured when the parties
disputed the amount owed for the work completed. Plaintiffs
filed the present action in Oregon alleging breach of
contract and other related claims, but Strategic Benefit had
already filed suit in New Jersey alleging tortious
interference and seeking declaratory relief on the alleged
contract between the parties.
Strategic Benefit now moves to dismiss Plaintiffs claims
pursuant to the “first-to-file” rule. However,
because of jurisdictional considerations, the Court will not
dismiss the claims but rather stay the case to allow
resolution of the New Jersey case. Thus, Defendant's
motion to dismiss, ECF No. 18, is DENIED, but the case is
STAYED until resolution of the pending New Jersey action.
AND FACTUAL BACKGROUND
Communication Partners, and Strategic Benefit are
corporations engaged in the insurance benefits industry. Le
Phan Decl. ¶ 4, ECF No. 20. In 2018, Strategic Benefit
contacted Plaintiffs to construct and operate a benefits
computer program. First Amend. Compl. ¶ 5, ECF No. 17.
Plaintiffs allege that they performed as required, but that
Strategic Benefit failed to pay $312, 000 on their
performance. Hansen Decl., Ex. 5 ¶¶ 12-13, ECF No.
1, 2019, Plaintiffs, through counsel, contacted Strategic
Benefit and demanded payment in full. Hansen Decl., Ex. 1.
Plaintiffs' counsel also threatened to file suit if
payment was not received within five business days.
Id. On May 3, 2019, Plaintiffs' counsel received
a response from Lorena E. Ahumada, who at the time
represented Strategic Benefit. Hansen Decl., Ex. 2. Ms.
Ahumada requested further documentation, which
Plaintiffs' counsel provided on May 6, 2019. Hansen
Decl., Ex. 3. Ms. Ahumada acknowledged receipt of the
requested information. Id. However, on May 10, 2019,
Ms. Ahumada emailed Plaintiffs' counsel to communicate
that she no longer represented Strategic Benefit and that
they had retained new counsel. Hansen Decl., Ex. 4.
13, 2019, twelve days after Plaintiffs originally contacted
Strategic Benefit, Strategic Benefit filed suit in the
Superior Court of New Jersey seeking declaratory relief and
tortious interference. Hansen Decl. ¶ 9. The New Jersey
action has been removed to the United States District Court
for the District of New Jersey, No. 1:19-cv-14277-JHR-KMW.
Spiegel Decl. ¶ 5, ECF No. 19. Nine days after Strategic
Benefit filed suit in New Jersey, Plaintiffs brought this
instant action in Oregon before the Court. Hansen Decl.
have moved to dismiss the New Jersey action for improper
venue or, in the alternative, to transfer venue to this
Court. Although fully briefed, the New Jersey court has not
yet decided the pending motion to dismiss.
to filing a responsive pleading, a party may assert the
defense of improper venue and move the Court to dismiss the
action. Fed.R.Civ.P. 12(b)(3). When considering the motion,
the “pleadings need not be accepted as true, and facts
outside the pleadings may be considered.” Doe 1 v.
AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009) (citing
Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324
(9th Cir. 1996)). The Court resolves any factual conflicts in
favor of the non-moving party while also drawing all
reasonable inferences in the non-moving party's favor.
See Murphy v. Schneider Nat'l, Inc., 362 F.3d
1133, 1138 (9th Cir. 2004).
Strategic Benefit, in reliance on the
“first-to-file” rule, contends that venue is
improper because the New Jersey action was initiated prior to
the pending case before the Court. In response, Plaintiffs
argue that the Court should apply an equitable interest
exception and deny Strategic Benefit's Motion to Dismiss.
“first-to-file” rule allows a district court to
transfer, stay, or dismiss an action after a similar suit has
been filed in another federal court. Alltrade, Inc. v.
Uniweld Prod.'s., 946 F.2d 622, 625 (9th Cir. 1991).
Application of the first-to-file rule “turns on three
factors: (1) the chronology of the actions; (2) the
similarity of the parties; and (3) the similarity of the
issues.” City Antiques, Inc. v. Planned Furniture
Promotions, Inc., No. 3:14-cv-00467-SI, 2014 WL 3955216,
at *3 (D. Or. Aug. 12, 2014) (citing Alltrade, 946
F.2d at 625). “[The] ‘first to file' rule is
not a rigid or inflexible rule to be mechanically applied,
but rather is to be applied with a view to the dictates of
sound judicial administration.” Pacesetter
Sys.'s, Inc. v. Medtronic, Inc., 678 F.2d 93, 95
(9th Cir. 1982).
concede that the three first-to-file rule factors are
present. However, they argue that equitable interests weigh
against the first-to-file rule's application. The Court
has the discretion disregard the first-to-file rule when
equitable interests advise otherwise. Alltrade, 946
F.2d at 628. The Ninth Circuit has recognized three equitable
considerations “under which an exception to the
first-to-file rule typically will be made”: (1)
anticipatory suits; (2) forum shopping; and (3) bad faith.
Id. (citations omitted). Because Plaintiffs argue
that “[Strategic Benefit's] New Jersey complaint
was an anticipatory ...