Channel Clarity, Inc. v. Optima Tax Relief, LLC, 14 C 8945, Slip Op. (N.D. Ill. Feb. 18, 2015) (Durkin, J.).
Judge Durkin granted declaratory judgment defendant Optima’s Rule 12(b) motion to dismiss arguing that declaratory judgment plaintiff Channel Clarity did not have proper declaratory standing. Channel Clarity filed a declaratory judgment suit regarding Optima’s trade dress and copyright claims while the parties were in pre-suit discussions. After learning of Channel Clarity’s suit, Optima filed its own “coercive” action in the C.D. California. That Court denied Channel Clarity’s motion to dismiss the suit in favor of this earlier-filed suit.
This Court held that the Seventh Circuit favors dismissing a declaratory suit, even one filed first, when the declaratory defendant filed its own “coercive” action. The Seventh Circuit, however, had not ruled on the proper framework for analyzing the issue. The Court, therefore, analogized to a Rule 12(b)(3) motion to dismiss for improper venue. Because Optima’s “coercive” suit was a mirror-image of Channel Clarity’s and because Optima had not shown any delay in filing suit, the Court dismissed Channel Clarity’s suit.