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Delaware or Texas? The First-Filed Rule Sends Case to the Lone Star State

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CIF Licensing brought a lawsuit for patent infringement in the Eastern District of Texas against various defendants. One defendant, Remy International, moved to dismiss for lack of personal jurisdiction arguing that it was only a corporate “shell” and that its subsidiaries were the proper defendants. Subsequently, the Remy subsidiaries filed a declaratory judgment action in this District. Following that complaint, CIF amended its original complaint in Texas to join the proper subsidiary defendants and the Texas court stayed the action pending resolution of the “first-filed” issue by the District of Delaware. Remy Inc. v. CIF Licensing, LLC, C.A. No. 06-785-GMS/MPT, Memo. Order, at 2 (D. Del. June 9, 2008). Of note is the fact that the Delaware action had named potential suppliers and indemnitors as third-party defendants or defendants (who were not named in the Texas action).

Magistrate Thynge found that the relation back doctrine allowed CIF to properly add the subsidiary defendants to its Texas complaint and the Texas case was in fact, the first-filed. The court was not persuaded to depart from the first-filed rule simply because the indemnity claims were only found in the Delaware lawsuit, particularly where in a district such as this, great weight is given to plaintiff’s choice of forum. Id. at 8-9.

For a copy of the opinion, see here.

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