Laddawn, Inc. v. Bolduc
4:17-cv-11044
| D. Mass. | Dec 27, 2018Background
- Marc Bolduc worked for Laddawn from 1999–2015; Laddawn alleges repeated performance issues, unprofessional communications, and workplace misconduct (including showing a gun).
- After termination, Bolduc refused to provide administrative passcodes for company backups; Laddawn cut his access and later sought transfer of domain names Bolduc registered using Laddawn marks.
- Bolduc publicly criticized Laddawn’s CEO (Lavallee) on Facebook and offered the domains for sale; Laddawn demanded transfer and sued for trademark infringement and libel.
- Bolduc filed a separate suit in Massachusetts Superior Court and later asserted a defamation counterclaim in the federal action against Laddawn and Lavallee.
- Plaintiffs moved to dismiss Bolduc’s federal counterclaim under the prior pending action doctrine, arguing the Superior Court suit has priority and the counterclaim should be abated.
- Magistrate Judge Hennessy recommends denying the motion, concluding the prior pending action doctrine does not require dismissal of the counterclaim and dismissal could prejudice Bolduc if the counterclaim is compulsory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of prior pending action doctrine to dismiss counterclaim | Bolduc’s counterclaim was filed after his Superior Court suit, so the state action has priority and the federal counterclaim should be dismissed/abated | A counterclaim is part of the same federal action (does not commence a separate action); prior state suit does not displace the federal action or require dismissal | Denied — doctrine does not compel dismissal of the counterclaim here |
| Meaning of "action" for prior pending action analysis | "Action" should refer to the later-filed counterclaim (making the state suit prior) | "Action" means the civil action commenced by complaint; counterclaims do not commence a separate action | Court adopts conventional meaning: complaint commences action; counterclaims do not start a new action |
| Judicial economy / risk of inconsistent judgments | Dismissing the counterclaim will reduce duplication and avoid conflicting outcomes | Dismissal would not achieve efficiency because the plaintiffs’ federal complaint remains pending; both courts would still address same disputes | Dismissal would not materially promote judicial efficiency or avoid inconsistency here |
| Prejudice and compulsory-counterclaim concern | (Implicit) dismissal acceptable because state forum can address claims | Dismissal risks waiving a potentially compulsory counterclaim under Rule 13(a) and the Iglesias tests | Court: dismissal could unfairly prejudice Bolduc; many compulsory-counterclaim factors are met |
Key Cases Cited
- O’Reilly v. Curtis Pub. Co., 31 F. Supp. 364 (D. Mass. 1940) (describes the prior pending action doctrine)
- Adam v. Jacobs, 950 F.2d 89 (2d Cir. 1991) (first-filed principle and balance-of-convenience rule)
- Qutab v. Kyani, Inc., 324 F. Supp. 3d 243 (D. Mass. 2018) (demand letter does not commence an action under Rule 3)
- Landis v. North American Co., 299 U.S. 248 (1936) (federal courts’ inherent docket-control/stay authority)
- Southern Construction Co. v. Pickard, 371 U.S. 57 (1962) (purpose of compulsory counterclaims to avoid multiplicity of actions)
- Iglesias v. Mutual Life Ins. Co., 156 F.3d 237 (1st Cir. 1998) (four-factor test for compulsory counterclaims)
- Eon Labs., Inc. v. SmithKline Beecham Corp., 298 F. Supp. 2d 175 (D. Mass. 2003) (application of compulsory counterclaim principles)