USDC W.D. Wisconsin, October 22, 2008

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In a copyright infringement suit involving songs used in the live action movie Snow White, the district court denied defendant MGM’s motion to dismiss the case pursuant to the first-to-file rule because a first-filed declaratory action brought by MGM against Rudich does not include all the parties that are involved in this action. The court did, however, grant MGM’s motion to transfer venue to the Central District of California relying, in part, on the pending first-filed action in that court.

Arik Rudich, an Israeli resident, claimed copyright interests in songs that were included in the 1987 motion picture Snow White. Rudich’s lawyer contacted MGM demanding payment and proposed a settlement agreement, which MGM rejected. Two days later, MGM, which has its principal place of business in California, filed a declaratory action in the Central District of California, seeking declarations that (1) plaintiff has no copyrights in the songs in the movie; (2) plaintiff has no right to publishing royalties for the movie; and (3) that any infringement claim that plaintiff may have against it is barred by the statute of limitations or laches. 

On the same day, Rudich’s lawyer allegedly mailed a complaint to the Western District of Wisconsin, asserting eight causes of action: six causes of action for infringement against MGM for their involvement in the reproduction and distribution of Snow White DVDs and synchronization of plaintiff's music to those DVDs; one cause of action for infringement against Cinram, Inc., for its manufacture of DVDs pursuant to MGM’s orders; and one cause of action contending illegal collection of royalties by MGM and Sony/ATV Music Publishing LLC for their involvement in collecting royalties he allegedly should have received in relation to the Snow White DVD sales. The complaint was not received by the Wisconsin court and filed until almost two weeks after MGM filed its declaratory relief action.

MGM moved to dismiss the Wisconsin suit under the first-to-file rule. Under the first-to-file rule, a court can dismiss a later-filed action if “claims, parties, and available relief do not significantly differ between the two actions.”

The court held that the claims, parties and available relief in the two actions do not sufficiently overlap because the Wisconsin action includes claims against Sony/ATV and Cinram, and the California action does not include them as parties. The court rejected MGM’s argument that Rudich could include Sony/ATV and Cinram as third-party defendants in the California action and noted that nothing requires Rudich to name third-party defendants in that lawsuit.

The court did, however, grant MGM’s motion to transfer venue to the Central District of California based on its findings that the Western District of Wisconsin is an inconvenient forum for all the parties, Rudich’s choice of forum should be given little deference, and that the Central District of California would likely consolidate the two cases and judicial economy favors facilitating such consolidation. In refusing to give deference to Rudich’s choice of forum, the court found that the rational behind the deference generally afforded a plaintiff’s choice is the assumption that a plaintiff chooses a home forum because it is convenient, an assumption that is much less reasonable when the plaintiff is foreign.