Biolitec, Inc. v. Angiodynamics, Inc.
581 F. Supp. 2d 152, 2008 U.S. Dist. LEXIS 77826, 2008 WL 4446602 (2008)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under the 'first-filed rule,' when duplicative lawsuits involving the same parties and issues are filed in two different federal courts, the court in which the first action was filed is the presumptively proper venue, and the second-filed action should be transferred there absent special circumstances or a strong showing of inconvenience.
Facts:
- On April 1, 2002, Biolitec, Inc. and AngioDynamics, Inc. entered into a Supply and Distribution Agreement (SDA) for laser and fiber products.
- The SDA contained indemnification clauses requiring Biolitec to defend AngioDynamics against third-party patent infringement claims related to the products.
- In November 2003, a third company, Diomed, Inc., sued AngioDynamics for patent infringement based in part on products incorporating Biolitec's components.
- AngioDynamics demanded indemnification from Biolitec, which Biolitec refused.
- The parties subsequently entered into a Joint Defense Agreement, and Biolitec contributed $1.6 million towards AngioDynamics's defense while reserving its rights regarding its indemnity obligations.
- On September 27, 2007, Biolitec demanded reimbursement of the $1.6 million from AngioDynamics.
- AngioDynamics refused to reimburse the funds.
Procedural Posture:
- On January 2, 2008, AngioDynamics sued Biolitec in the U.S. District Court for the Northern District of New York.
- On January 11, 2008, Biolitec filed the instant action against AngioDynamics in the U.S. District Court for the District of Massachusetts.
- AngioDynamics filed a Motion to Dismiss for failure to state a claim or, in the alternative, to transfer the case to the Northern District of New York.
- The District Judge referred AngioDynamics's motion to a Chief Magistrate Judge for a report and recommendation.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the 'first-filed rule' require a federal court to transfer a case to another federal district where a substantially similar lawsuit involving the same parties was filed nine days earlier?
Opinions:
Majority - Neiman, Chief United States Magistrate Judge (Report and Recommendation adopted by Ponsor, District Judge)
Yes. Where two duplicative actions are proceeding concurrently in different federal courts, the first-filed action is generally preferred and the second action should be transferred to the forum of the first. The court reasoned that the New York action was filed on January 2, 2008, nine days before the instant action was filed in Massachusetts on January 11, 2008. Citing Cianbro Corp. v. Curran-Lavoie, Inc., the court emphasized that the rule promotes judicial efficiency and prevents a waste of resources. The determining event for the rule is the date of filing under Fed. R. Civ. P. 3, not the date of service. Because the lawsuits involve the same parties and substantially the same issues regarding the SDA and defense costs, and because Biolitec failed to show any special circumstances or that the balance of convenience favored the Massachusetts forum, transfer to the Northern District of New York was appropriate.
Analysis:
This decision reaffirms the strong judicial preference for the 'first-filed rule' as a clear and efficient mechanism for managing duplicative litigation in federal courts. It clarifies that the commencement of an action under Fed. R. Civ. P. 3 (filing the complaint) is the dispositive factor, not the subsequent service of process, thus removing ambiguity in the race to the courthouse. The ruling reinforces that the burden is squarely on the second-filing party to overcome the strong presumption favoring the first-filed forum. This precedent solidifies a predictable procedural tool that discourages forum shopping and encourages the consolidation of related disputes into a single action.
