Abstention Not Appropriate Because Foreign Action Does Not Address All US Issues

Posted on August 27, 2008 by R. David Donoghue

Heriot v. Byrne, No. 08 C 2272, Slip Op. (N.D. Ill., Jul. 21, 2008) (Conlon, J.).

Judge Conlon denied defendants’ motion to dismiss plaintiffs’ copyright and related state law claims based upon forum non conveniens, Colorado River abstention, and for lack of standing. Plaintiffs alleged that they were co-owners of defendants’ copyrights in the popular books and movies associated with The Secret, a self-help program. Defendants previously filed a suit in Australia seeking a declaratory judgment that defendants owned the copyright in The Secret.

 

Forum Non Conveniens

 

The Court held that the Australian Court would not be able to resolve US copyright ownership, and, therefore, was not an adequate forum. Furthermore, much of the evidence for plaintiffs’ unjust enrichment and equitable accounting claims was located in the US, as were the key witnesses. 

 

Colorado River Abstention

 

Although both suits focused on the same works, the Australian case did not include and would not resolve plaintiffs’ equitable claims for unjust enrichment and the equitable accounting. Because the Australian case would not resolve all issues in the US case, abstention was no appropriate.

 

Standing

 

The Court held that plaintiffs had standing to make its copyright claims because plaintiffs alleged copyright ownership in their complaint.

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Colorado River Abstention/Deference Requires Pending State Court Action

Posted on April 25, 2007 by R. David Donoghue

Metropolitan Life Ins. Co. v. Guardian Life Ins. Co. of Am., No. 06 C 5812, 2007 WL 1169704 (N.D. Ill. Apr. 17, 2007) (Norgle, J.).

Judge Norgle denied defendants' motion to stay based upon Colorado River abstention, which the Court noted was more properly referred to as Colorado River deference since it is not strictly abstention.  This case had a tortured procedural history: 

  • Plaintiff Metropolitan Life Insurance ("MetLife") initially filed an action against corporate defendant Guardian Life Insurance ("Guardian") and certain former MetLife employees that had taken positions with Guardian based upon claims that the former employees had breached covenants in their employment agreements and stolen certain MetLife information to start a competing office for Guardian.  The state court dismissed those claims, but on appeal the the Illinois appellate court held that MetLife had voluntarily dismissed the claims. 
  • MetLife also brought a related arbitration claim against Guardian and various former MetLife employees before the National Association of Security Dealers (the "NASD").  That action is still pending, but Guardian is no longer a party. 
  • MetLife also sued Guardian and defendant O'M Associates (the "corporate defendants") and various former MetLife employees twice in the Northern District.  The first case was dismissed based upon a common arbitration provision in MetLife's employment agreement.
  • The second case, which is the instant case, was brought only against the corporate defendants.

Defendants motion to stay argued that the Court should stay the case based upon the related, co-pending state court matter.  But the Court held that Colorado River deference was not applicable because the Illinois Supreme Court had already denied Guardian's petition for leave to appeal which was a final resolution of the state court case. 

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