Synthes, Inc. v. Knapp
2013 U.S. Dist. LEXIS 147239
E.D. Pa.2013Background
- Knapp, CA resident and former Depuy employee, is accused of breaching a Confidentiality/Non-Solicitation/Non-Competition Agreement and a Non-Disclosure Agreement.
- Depuy Synthes Sales, Inc. and Synthes, Inc. sue Knapp in PA federal court for breach and misappropriation related to conduct in California.
- Knapp filed a separate declaratory judgment action in the Eastern District of California on the same day he resigned, arguing unenforceability.
- Plaintiffs invoke a forum-selection clause in the Non-Compete Agreement and argue Knapp acted in bad faith/for forum shopping.
- Defendants move to dismiss, stay, or transfer under the first-filed rule and 28 U.S.C. § 1404(a); court must decide if the first-filed rule applies and whether transfer is appropriate.
- Court transfers the action to the Eastern District of California, applying the first-filed rule and weighing transfer factors, with the transfer ordered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum-selection clause overrides the first-filed rule | Plaintiffs: clause weighs heavily against transfer | Knapp: clause supports Pennsylvania forum | First-filed rule applied; transfer to CA warranted |
| Whether the first-filed rule exceptions apply | Knapp filed in bad faith/anticipatory | No clear bad faith or inequitable conduct by Knapp | No exceptional circumstances to depart from the rule; rule applied |
| Whether 1404(a) transfer is appropriate | Transfer would be inconvenient for plaintiffs | California is more convenient; related action pending there | Transfer granted; CA chosen as more convenient and just |
| Place where the claim arose and convenience of proof | Claims arose in PA due to PA contacts | Key conduct occurred in California; proof in CA | Arising in California; weighs in favor of transfer |
Key Cases Cited
- EEOC v. Univ. of Pennsylvania, 850 F.2d 969 (3d Cir. 1988) (first-filed rule and exceptions; comity and efficiency)
- Fischer & Porter Co. v. Moorco Int’l, Inc., 869 F.Supp. (E.D.Pa. 1994) (first-filed rule applied for declaratory suits)
- Koresko v. Nationwide Life Ins. Co., 403 F.Supp.2d 394 (E.D.Pa. 2005) (exceptional circumstances; inequitable conduct not shown)
- Peregrine Corp. v. Peregrine Indus., Inc., 769 F.Supp. 169 (E.D.Pa. 1991) (first-filed rule with related considerations)
- Shutte v. Armco Steel Corp., 431 F.2d 22 (3d Cir. 1970) (Jumara factors and transfer considerations)
- Moore Corp. Ltd. v. Wallace Computer Serv., Inc., 898 F.Supp.1089 (D. Del. 1995) (forum shopping considerations; discretionary departures)
- FMC Corp. v. AMVAC Chem. Corp., 379 F.Supp.2d 733 (E.D.Pa. 2005) (rare departures from first-filed rule)
- Grider v. Keystone Health Plan Ctr., Inc., 500 F.3d 322 (3d Cir. 2007) (discussed as dictum on scope of first-filed rule)
- Villari Brandes & Kline, P.C. v. Plainfield Specialty, 2009 WL 1845236 (E.D. Pa. 2009) (subject-matter overlap suffices for first-filed rule)