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Flintkote Co. v. Aviva P.L.C.

United States District Court, D. Delaware

March 25, 2015



LEONARD P. STARK, District Judge.

Presently before the Court is Defendant Aviva's Renewed Motion to Dismiss or, in the Alternative, Transfer Venue (the "Motion") (D.I. 38), in response to Plaintiff Flintkote Company's Complaint (DJ. 1) for declaratory relief For the reasons discussed, the Court will grant the Motion in part and transfer this case.


On May 1, 2004, Flintkote and related entities (collectively "Flintkote") filed for chapter 11 bankruptcy relief in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). (Bankr. Case No. 04-11300, D.I. 1) On December 21, 2012, the Bankruptcy Court entered an Opinion and Order confirming Flintkote's Amended Joint Plan of Reorganization. ( Id. at D.I. 7253-54) This Plan provides for the creation of a statutory trust pursuant to 11 U.S.C. § 524(g), in which Flintkote will eventually channel all of its prior asbestos liabilities. (D.I. 42-1) Presently, the Bankruptcy Court has approved a Modified Plan for voting, with a confirmation hearing scheduled for April 10, 2015. (Bankr. Case No. 04-11300, D.I. 8768) This Modified Plan would supersede the existing Plan.

Defendant Aviva is a London-based insurance company that issued asbestos liability insurance policies to Flintkote. Flintkote has been litigating with Aviva for decades regarding the scope of coverage and the rights and obligations of the parties under settlement agreements reached in 1985 and 1989. (D.I. 39 at 4) From 2006 to 2012, Flintkote and Aviva mediated these coverage disputes. (D.I. 11 at ¶¶ 10-11) Following an impasse, on December 24, 2012, Aviva moved the Bankruptcy Court to lift the automatic stay imposed by 11 U.S.C. § 362(d), intending to file suit for declaratory relief in the Northern District of California. (D.I. 39-1; Bankr. Case No. 04-11300, D.I. 7256-2) One week before the scheduled hearing on Aviva's motion to lift the stay, [1] Flintkote preemptively filed for identical declaratory relief in this Court. (D.I. 1) Flintkote then filed a Motion to Compel Arbitration on February 18, 2013. (D.I. 9) Aviva filed a Motion to Dismiss or, in the Alternative, Transfer Venue on March 1, 2013. (D.I. 13) The parties briefed those matters and the Court heard oral arguments on July 31, 2013. (D.I. 10, 14, 15, 16, 18, 20) The Court entered an Order on September 30, 2013, granting Flintkote's Motion to Compel Arbitration and dismissing as moot Aviva's Motion for Summary Judgment and Motion to Dismiss or, in the Alternative, Transfer. (D.I. 29)

On October 31, 2014, the United States Court of Appeals for the Third Circuit reversed this Court's September 30, 2013 Order compelling arbitration and vacated the Order denying the motion to transfer as moot. (D.I. 37) Accordingly, Aviva filed its Renewed Motion to Dismiss or, in the Alternative, Transfer Venue on November 5, 2014. (D.I. 38) The parties fully briefed[2] the issues and the Court heard oral argument on March 18, 2015. (D.I. 39, 42, 43)


Aviva seeks to dismiss this case as an anticipatory filing, which is an exception to the first-filed rule. (D.I. 39 at 7; see E.E.O.C. v. Univ. of Pa., 850 F.2d 969, 971 (3d Cir. 1988), affd, 493 U.S. 182 (1990)) Aviva claims that Flintkote's filing was an attempt to forum shop, based on the fact that the motion to lift the stay provided Flintkote with clear knowledge of Aviva's intent to file suit in California. ( Id. ) In response, Flintkote maintains that the Court should give deference to its choice of forum in accordance with the equitable "first-filed" rule. (D.I. 42 at 7) Flintkote offers four arguments disputing Aviva's invocation of the anticipatory filing exception to the first-filed rule. First, Flintkote argues that it was misled by Aviva's ongoing participation in alternative dispute resolution. ( Id. at 8) Second, Flintkote contends that Aviva's initial California Suit was legally deficient, which negates the anticipatory filing exception. ( Id. at 9) Third, Flintkote reasons that Aviva's forum shopping allegation ignores the reality that Delaware is the most convenient forum for both litigants. ( Id. at 11) Finally, Flintkote argues that it properly used the Bankruptcy Code's automatic stay to protect assets. ( Id. at 13) Alternatively, Aviva moves to transfer this case under 28 U.S.C. § 1404(a). (D.I. 38) Each party claims that the totality of the applicable § 1404(a) factors weighs in its favor. (D.I. 39 at 14; D.I. 42 at 15)


A. "First-Filed" Doctrine

The first-filed rule provides that "[i]n all cases of concurrent jurisdiction, the court which first has possession of the subject must decide it." Crosley Corp. v. Hazeltine Corp., 122 F.2d 925, 929 (3d Cir. 1941). This rule "encourages sound judicial administration and promotes comity among federal courts of equal rank. It gives a court the power to enjoin the subsequent prosecution of proceedings involving the same parties and the same issues already before another district court." Univ. of Pa., 850 F.2d at 971. The Third Circuit in Univ. of Pa. recognized, however, that this rule may not apply if a litigant's behavior demonstrates "extraordinary circumstances, inequitable conduct, bad faith, or forum shopping." Id. at 972. The first-filed rule will not apply "when the first-filing party instituted suit in one forum in anticipation of the opposing party's imminent suit in another, less favorable, forum." Id. at 976.

B. Motion to Transfer

Pursuant to § 1404(a), "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). "While there is no definitive formula or list of the factors to consider... courts have considered many variants of the private and public interests protected by the language of § 1404(a)." Amara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). "The court engages in a two-step inquiry, asking first whether the action could have been brought originally in the proposed transferee forum and then whether transfer would best serve the convenience of the parties and witnesses as well as the interests of justice." Woodbolt Distribution, L.L.C. v. Natural Alternatives Intl, 2013 WL 247041, at *2 (D. Del. Jan. 23, 2013).

Relevant private interests include plaintiff's forum preference, defendant's forum preference, whether the claim arose elsewhere, the convenience of the parties as indicated by their relative physical and financial condition, the convenience of the witnesses, and the location of books and records. Jumara, 55 F.3d at 879. Public interests include the enforceability of the judgment, practical considerations, the relative administrative difficulty in the two fora resulting from court congestion, the local interest in deciding ...

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