District court holds that a motion to stay an action should begranted if the similarity of issues, interests injudicial economy, the order the actions were filed, the adequacy of the alternative forum and the convenience orprejudice to either party, weigh in favor of grantingthe stay.
Ole Media Mgmt., L.P. v. EMI April Music, Inc., No. 12 Civ. 7249 (S.D.N.Y. June 10, 2013) [click for opinion]
Plaintiff was a Canadian independent music publishing company and Defendants were a U.S.-based music management company. The parties entered into two agreements, one involving Defendants collecting royalties for Plaintiff's compositions, the other involving Defendants transferring musical compositions to Plaintiff.
Plaintiff filed a New York action against Defendants for violations of both agreements. Defendants filed a motion to dismiss or in the alternative, to stay the New York action in deference to a Canadian action regarding the same agreements. Specifically, Defendants argued that the issues being litigated in the Canadian court were foundational to the claims in the New York action.
The court denied Defendants' motion to dismiss the New York action, but held that a stay of the action was an appropriate intermediate measure. In determining whether exceptional circumstances existed that justified the court's surrender of jurisdiction, the court considered the following factors: (1) the similarity of the parties and issues; (2) the interests of judicial economy; (3) the order in which the actions were filed; (4) the adequacy of the alternative forum; and (5) the convenience of, and potential prejudice to, either party.
The first factor (similarity of the parties and issues) weighed in favor of staying the New York action because the parties and the issues in the two suits were substantially similar, even if they were not identical. The second factor (interest of judicial economy) weighed in favor of staying the action because it would avoid duplicative litigation given that the issue raised in the Canadian action was a key issue that would affect the New York action. The third factor (order the actions were filed) did not weigh in favor of or against staying the action because, although the Canadian litigation was filed first, it had not reached a "significantly advanced stage." The fourth factor (adequacy of the alternative forum) also weighed in favor of staying that action because full and adequate relief was available in the Canadian courts. Lastly, the fifth factor (convenience of and prejudice to either party) weighed in favor of staying the action because Defendants would be inconvenienced if both actions were allowed to proceed, given the duplication of issues between the cases.