958 F. Supp. 2d 428
S.D.N.Y.2013Background
- This dispute centers on an Alberta-governed Exclusivity Agreement granting the Stringams an exclusive, perpetual U.S. license for a private-label vitamin product.
- The Joint Venture Agreement, governing rights in the U.S., assigned the Exclusivity Agreement and is governed by New York law; MSI and Open Mind are involved.
- Truehope and Q Sciences entered into an agreement allowing Q Sciences to market branded products in the United States.
- On Jan 29, 2013, Truehope filed a Canadian action against the Stringams, Open Mind, MSI, and Ms. Tarazi alleging breach of the Exclusivity Agreement and related trademark misuse.
- The plaintiffs Tarazi and MSI filed this federal action on Feb 14, 2013 alleging breaches by Truehope, Open Mind, and the Stringams, and related fiduciary and tort claims.
- Defendants moved to stay this action pending the Canadian action; the court granted the stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Canadian action and this action are parallel | Tarazi/MSI say proceedings are sufficiently related. | Defendants contend parallelism exists due to overlapping parties and issues. | Yes, actions are parallel. |
| Whether Royal and Sun Alliance factors support a stay | Plaintiffs argue against deferential stay due to forum deference. | Defendants argue factors favor deferral to Canada for efficiency and comity. | Yes, factors favor a stay. |
| Impact of Canada’s jurisdiction and forum adequacy on stay | Canada forum is adequate and appropriate for construction of the Exclusivity Agreement. | Canadian court has proper jurisdiction for underlying issues. | Canada forum is adequate; stay appropriate. |
Key Cases Cited
- Royal and Sun Alliance Insurance Co. of Canada v. Century International Arms, Inc., 466 F.3d 88 (2d Cir. 2006) (comity factors; parallel proceedings analysis)
- Moses H. Cone Memorial Hospital v. Mercury Contraction Corp., 460 U.S. 1 (U.S. 1983) (exceptional circumstances for abstention; stay/dismissal balance)
- Colorado River Water Conservation District v. United States, 424 U.S. 800 (U.S. 1976) (judicial economy; concurrent federal-state proceedings)
- Finova Capital Corp. v. Ryan Helicopters U.S.A., Inc., 180 F.3d 896 (7th Cir. 1999) (balance of factors; parallel proceedings analysis)
- Kitaru Innovations Inc. v. Chandaria, 698 F. Supp. 2d 386 (S.D.N.Y. 2006) (similarity of parties/claims in abstention context)
- Goldhammer v. Dunkin’ Donuts, Inc., 59 F. Supp. 2d 248 (D. Mass. 1999) (prejudice and forum considerations in stay)