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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: November 3, 2016

Action Should Have Been Dismissed Under First-to-File Rule

On October 27, 2016, the First Department issued a decision in Wachtell, Lipton, Rosen & Katz v. CVR Energy, Inc., 2016 NY Slip Op. 07091, holding that an action should have been dismissed under the first-to-file rule, explaining:

The court improvidently exercised its discretion in declining to dismiss the claim for a declaratory judgment against defendant CVR Energy, Inc., since there is another action pending between the parties for the same cause of action. CVR’s choice of a federal forum for its earlier filed legal malpractice action against plaintiff (Wachtell) is entitled to comity. Wachtell’s use of a declaratory judgment action to determine the viability of its defense, or the existence of merit, to CVR’s legal malpractice claim is an unusual practice, strongly suggestive of forum shopping, and does not warrant a deviation from the first-to-file rule.

(Internal quotations and citations omitted).

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