Posted: May 2, 2016

No Stay Of EDNY Case Pending Resolution Of Related Foreign Country Action

Judge Brian Cogan denied a motion to stay plaintiff’s antitrust case pending resolution of an earlier filed, related action brought by defendants in the Netherlands, in Schenker A.G. v. Societe Air France, et al., No. 14-Civ.-4711 (E.D.N.Y. Apr. 14, 2016). The plaintiff was a freight forwarder and the defendants were air carriers. The complaint alleged that defendants participated in a conspiracy to fix surcharges imposed on airfreight services. The defendants filed the Netherlands action in April 2011, seeking a declaration that they were not liable to plaintiff for any violation of antitrust law, including U.S. and European law. Slip op. 2. After settlement negotiations trailed off, plaintiff filed the Eastern District action in early August 2014. Defendants resumed prosecution of the Netherlands action later that month.

Judge Cogan explained that a “district court should only surrender its jurisdiction in ‘exceptional circumstances,'” and that the mere existence of parallel litigation in a foreign jurisdiction “‘cannot reasonably be considered exceptional circumstances.'” Slip op. at 4 (quoting Royal & Sun All. Ins. Co. of Canada v. Century Int’l Arms, Inc., 466 F.3d 88, 93, 94 (2d Cir. 2006)). Rather, in evaluating whether to grant a stay, the court should consider various factors, “such as the similarity of the parties, the similarity of the issues, the order in which the actions were filed, the adequacy of the alternate forum, the potential prejudice to either party, the convenience of the parties, the connection between the litigation and the United States, and the connection between the litigation and the foreign jurisdiction.” Slip op. 4 (quoting Royal & Sun, 466 F.3d at 94).

The Court reasoned that “although some factors cut against” the case proceeding, “they are not exceptional.” Slip op. 6. Because the parties and the issues were not the same in the two cases, the conduct was closely tied to the United States, and because a first-filed action seeking declaratory relief “in response to a direct threat of litigation,” as was present in this case, negated the “general preference for deferring to the first-filed action,” id., Judge Cogan concluded that the motion for stay should be denied.

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