Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 1 of 18 Page ID#: 107
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE DISTRICT OF OREGON
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`PORTLAND DIVISION
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`
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`MARK HERER, personal representative of
`the ESTATE OF JACK HERER,
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`Case No. 3:12-cv-01451-SI
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`OPINION AND ORDER
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`Plaintiff,
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`v.
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`AH HA PUBLISHING, LLC, a Texas limited
`liability company, and MICHAEL
`KLEINMAN,
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`Defendant.
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`Leonard D. DuBoff, The DuBoff Law Group, LLC, 6665 S.W. Hampton Street, Suite 200,
`Portland, OR 97223-8357; Scott T. Cliff, The Law Office of Scott T. Cliff, 6665 S.W. Hampton
`Street, Suite 200, Portland, OR 97223-8357. Attorneys for Plaintiff.
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`Robert Swider, Swider Medeiros Haver, LLP, 621 S.W. Morrison, Suite 1420 Portland, OR
`97205-3897. Attorney for Defendants.
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`

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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 2 of 18 Page ID#: 108
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`SIMON, District Judge.
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`This copyright dispute concerns the printing of a book, The Emperor Wears No Clothes:
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`Cannabis and the Conspiracy Against Marijuana (the “Work”), written by the now deceased
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`Jack Herer. Plaintiff Mark Herer brings suit on behalf of the author’s estate, alleging Defendants
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`Ah Ha Publishing, LLC, (“Ah Ha”) and Michael Kleinman have produced and distributed and
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`continue to produce and distribute infringing copies of the Work. Jack Herer held the Work’s
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`copyright, registered with the United States Copyright Office on April 20, 1990, and it passed to
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`his estate on his death. Defendants have filed a motion to dismiss pursuant to Fed. R. Civ. P
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`12(b)(2), for lack of personal jurisdiction, and Fed. R. Civ. P 12(b)(3), for improper venue;
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`alternatively, Defendants argue that venue in this case should be transferred to the Unites States
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`District Court for the Western District of Texas where a previously-filed similar case is pending.
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`(Doc. 9.)
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`For the reasons stated below, this case is transferred to the United States District Court
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`for the Western District of Texas, Austin Division.
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`BACKGROUND
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`Mark Herer, personal representative of the estate of Jack Herer, brings suit against Ah Ha
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`Publishing, LLC, and Michael Kleinman (collectively “Defendants”), alleging a claim for
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`copyright infringement. Compl. ¶ 6–16. Defendants filed a motion to dismiss, arguing that the
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`Court cannot assert personal jurisdiction over them and that the District of Oregon is an improper
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`venue for this suit. Alternatively, Defendants seek to terminate the case pending before this
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`Court in favor of an earlier filed action pending in the United States District Court for the
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`Western District of Texas.
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`Page 2 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 3 of 18 Page ID#: 109
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`Mr. Kleinman asserts that he was business partners with Jack Herer from 1996 through
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`2010. Kleinman Decl., Ex.1, at 2. During this partnership, Mr. Kleinman and Jack Herer
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`published the eighth edition of Jack Herer’s book, The Emperor Wears No Clothes: Cannabis
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`and the Conspiracy Against Marijuana. Id. Mr. Kleinman further contends that he and Jack
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`Herer entered into an oral agreement that provided for Mr. Kleinman to advance funds to Jack
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`Herer as pre-paid royalties. Id. During this time, the book went through four printings, which
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`were paid for with funds advanced by Mr. Kleinman. Id. at 2–3. A formal agreement was never
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`executed. Id. at 3.
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`Mr. Kleinman operated under the name Ah Ha Publishing for many years, but only
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`recently established Ah Ha Publishing as a Texas limited liability company. Id. at 4.
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`Mr. Kleinman alleges that all rights relating to the present cause of action were assigned to
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`Ah Ha at its formation. Id. Neither Mr. Kleinman nor Ah Ha maintain a website or have any
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`business contacts with Oregon. See Kleinman Decl. ¶ 3–19. Mr. Herer asserts that Defendants
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`provided copies of the Work to distributors in Washington and California, who “generally do not
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`limit their sales to [the] state of domicile.” Herer Decl. ¶¶ 3–5. Mr. Kleinman has traveled to
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`Oregon to work on specific voter initiatives, and he sent a gift to Mark Herer in Oregon at Mark
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`Herer’s request, consisting of $10,000 and 5,000 copies of the Work, to help with Jack Herer’s
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`funeral expenses. Kleinman Decl. ¶¶ 4, 24.
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`Jack Herer died in 2010, and his will was probated in Oregon. Kleinman Decl., Ex. 1,
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`at 4. In a letter dated November 17, 2011, the estate requested that Mr. Kleinman produce a
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`license agreement demonstrating Kleinman’s right to publish the Work. Id. at 4, 10. Mark Herer
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`was unsatisfied with the evidence presented by Mr. Kleinman. Id. at 4–5. On May 21, 2012,
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`Page 3 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 4 of 18 Page ID#: 110
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`Ah Ha filed a declaratory judgment action in Texas state court, located in Travis County, against
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`Mark Herer, as the representative of the estate. Kleinman Decl. ¶ 20.
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`The present action was filed in this Court by Mr. Herer against Mr. Kleinman and Ah Ha
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`on August 8, 2012. On September 12, 2012, Mr. Herer removed the earlier-filed suit in Texas
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`state court to the United States District Court for the Western District of Texas. Kleinman
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`Decl. ¶ 21. On January 7, 2013, the court in the Texas suit denied Mr. Herer’s motion to dismiss
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`for lack of personal jurisdiction and improper venue, and it denied his request to transfer venue
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`to this district. Order, Ah Ha Publishing, LLC, v. Herer ex rel. Estate of Herer, Case No. A-12-
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`CA-844-SS (W.D. Tex. Jan. 7, 2013) (ECF No. 26).
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`STANDARDS
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`On a motion to dismiss for lack of personal jurisdiction brought pursuant to Fed .R. Civ.
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`P. 12(b)(2), the plaintiff bears the burden of demonstrating that the court’s exercise of
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`jurisdiction is proper. See Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002)
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`(citing Myers v. Bennett Law Offices, 238 F.3d 1068, 1071 (9th Cir. 2001)). When the court’s
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`determination is based on written materials rather than an evidentiary hearing, “the plaintiff need
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`only make a prima facie showing of jurisdictional facts.” Id. (quotations omitted). In resolving
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`the motion, the court may look at pleadings and affidavits, taking uncontroverted allegations as
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`true and resolving all factual disputes in the plaintiff’s favor. Id. (citing AT&T v. Compagnie
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`Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996)).
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`On a motion to dismiss for improper venue brought pursuant to Fed. R. Civ. P. 12(b)(3),
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`the “pleadings need not be accepted as true, and facts outside the pleadings may be considered.”
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`Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009) (citing Argueta v. Banco Mexicano,
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`S.A., 87 F.3d 320, 324 (9th Cir. 1996)).
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`Page 4 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 5 of 18 Page ID#: 111
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`A.
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`Venue and Personal Jurisdiction
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`DISCUSSION
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`Defendants argue that the Court may not exercise personal jurisdiction over them and that
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`venue in the District of Oregon is improper. In single-district states, as is Oregon, personal
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`jurisdiction and venue in copyright cases are intertwined and can be analyzed together. “The
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`venue of suits for infringement of copyright is not determined by the general provision governing
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`suits in the federal district courts,” but instead by 28 U.S.C. § 1400(a). Lumiere v. Mae Edna
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`Wilder, Inc., 261 U.S. 174, 176 (1923); 28 U.S.C. § 1400(a). Proper venue is found “in the
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`district in which the defendant or his agent resides or may be found.” 28 U.S.C. § 1400(a). The
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`Ninth Circuit has interpreted the language of the statute “to allow venue ‘in any judicial district
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`in which the defendant would be amenable to personal jurisdiction if the district were a separate
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`state.’” Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010)
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`(quoting Columbia Pictures Television v. Krypton Broad. of Birmingham, Inc., 106 F.3d 284,
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`289 (9th Cir. 1997), rev'd on other grounds Feltner v. Columbia Pictures Television, Inc., 523
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`U.S. 340 (1998)). As such, venue is proper if this Court may exercise personal jurisdiction over
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`Defendants.
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`Unless a federal statute governs personal jurisdiction, a district court applies the law of
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`the forum state. See Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008) (citing
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`Panavision Int'l L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998)). Oregon’s long-arm
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`statute is co-extensive with constitutional standards. See Or. R. Civ. Pro. 4(L). Thus, this Court
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`need only determine whether its exercise of personal jurisdiction over Defendants would offend
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`constitutional due process requirements. See State ex rel. Hydraulic Servocontrols Corp. v. Dale,
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`294 Or. 381, 384 (1982). “There are two forms of personal jurisdiction that a forum state may
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`Page 5 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 6 of 18 Page ID#: 112
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`exercise over a nonresident defendant—general jurisdiction and specific jurisdiction.” Boschetto,
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`539 F.3d at 1016. Here, there is no contention that the Court may exercise general jurisdiction
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`over Defendants.
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`To be subject to a court’s specific jurisdiction, a defendant must “have certain minimum
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`contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional
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`notions of fair play and substantial justice.’” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
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`(1945) (citations omitted). The Ninth Circuit uses a three-part test to determine if such minimum
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`contacts exist:
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`The non-resident defendant must purposefully direct his activities
`(1)
`or consummate some transaction with the forum or resident thereof; or
`perform some act by which he purposefully avails himself of the privilege
`of conducting activities in the forum, thereby invoking the benefits and
`protections of its laws;
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`the claim must be one which arises out of or relates to the
`(2)
`defendant's forum-related activities; and
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`the exercise of jurisdiction must comport with fair play and
`(3)
`substantial justice, i.e. it must be reasonable.
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`Brayton Purcell, 606 F.3d at 1128 (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d
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`797, 802 (9th Cir. 2004)). The plaintiff bears the burden as to the first two prongs, but if both are
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`established, then “the defendant must come forward with a ‘compelling case’ that the exercise of
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`jurisdiction would not be reasonable.” Boschetto, 539 F.3d at 1016 (quotations omitted).
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`The first prong embodies two distinct, although sometimes conflated, concepts:
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`purposeful availment and purposeful direction. See, e.g., Brayton Purcell, 606 F.3d at 1128
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`(citing Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006)); Washington Shoe Co.
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`v. A-Z Sporting Goods Inc., 704 F.3d 668, 672-73 (9th Cir. 2012). “A purposeful availment
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`analysis is most often used in suits sounding in contract. A purposeful direction analysis, on the
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`other hand, is most often used in suits sounding in tort.” Schwarzenegger, 374 F.3d at 802
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`Page 6 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 7 of 18 Page ID#: 113
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`(internal citations omitted). The Ninth Circuit recognizes copyright infringement as a tort,
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`mandating the purposeful direction analysis. See Brayton Purcell, 606 F.3d at 1128 (citing
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`Columbia Pictures, 106 F.3d at 289).1
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`Purposeful direction is analyzed using a three-part “effects” test taken from the Supreme
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`Court’s opinion in Calder v. Jones, 465 U.S. 783 (1984). See Schwarzenegger, 374 F.3d at 803.
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`To satisfy the effects test, “the defendant allegedly must have (1) committed an intentional act,
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`(2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be
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`suffered in the forum state.” Mavrix Photo, Inc. v. Brand Technologies, Inc., 647 F.3d
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`1218, 1228 (9th Cir. 2011), cert. denied, 132 S. Ct. 1101 (U.S. 2012). The test may be satisfied
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`even if the defendant had no physical contact with the forum. See Schwarzenegger, 374 F.3d
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`at 803.
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`The first question is whether Defendants committed an intentional act when they,
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`allegedly, produced and distributed copies of the Work. “Intentional act” has a specialized
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`meaning within the effects test; it is “an external manifestation of the actor's intent to perform an
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`actual, physical act in the real world, not including any of its actual or intended results.”
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`Washington Shoe, 704 F.3d at 674. In Washington Shoe, the court “had little difficulty finding
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`that by intentionally engaging in the actual, physical acts of purchasing and selling the allegedly
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`infringing boots, [the defendant] has clearly committed an ‘intentional act’ within the meaning of
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`the [effects] test.” Id. at 674.
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`1 Defendants argue this Court lacks specific personal jurisdiction under both frameworks:
`purposeful availment and purposeful direction. The purposeful direction test, however, is the test
`that is applicable to claims of copyright infringement. See generally Washington Shoe, 704 F.3d
`at 672-73. Thus, the Court need not address Defendants’ arguments regarding purposeful
`availment.
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`Page 7 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 8 of 18 Page ID#: 114
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`Similarly, Mr. Herer alleges that Defendants have published and distributed and continue
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`to “publish and distribute” the Work, violating Jack Herer’s copyright. Compl. ¶ 7–9, 16. Based
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`on the court’s holding in Washington Shoe, there is no doubt that Defendants’ conduct, as
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`alleged by Plaintiff, satisfies this prong of the test. See Washington Shoe, 704 F.3d at 674
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`(“intentionally engaging in the actual, physical acts of purchasing and selling the allegedly
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`infringing boots”). Indeed, there does not appear to be any dispute that Defendants have
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`published and distributed copies of the Work, even if those actions are ultimately found
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`non-infringing by virtue of a license. See Defs.’ Mem. at 3. Thus, the first prong is satisfied.
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`The more difficult question is whether Defendants’ conduct was “expressly aimed” at the
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`forum state, Oregon. See Brayton Purcell, 606 F.3d at 1129. “[T]he ‘express aiming’
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`requirement is satisfied, and specific jurisdiction exists, ‘when the defendant is alleged to have
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`engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of
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`the forum state.’” Washington Shoe, 2012 WL 6582345, at *5 (quoting Dole Food, 303 F.3d
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`at 1111). The analysis turns, “to a significant degree, on the specific type of tort or other
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`wrongful conduct at issue.” Schwarzenegger, 374 F.3d at 807. The Ninth Circuit recognizes
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`copyright infringement as a tort and willful copyright infringement as an intentional tort. See
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`Washington Shoe, 2012 WL 6582345, at *4 (citing Brayton Purcell, 606 F.3d at 1128; Columbia
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`Pictures, 106 F.3d at 289). As such, “in the case of a willful copyright infringement, the
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`intentional act constituting the violation may occur solely within one state while the known
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`impact of that copyright infringement is directed at another state.” Id. at *5.
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`The court in Washington Shoe concluded that the harm suffered by a victim of copyright
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`infringement is felt “at the place where the copyright is held[; thus,] . . . the impact of a willful
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`infringement is necessarily directed there as well.” Id. at *6–8. In that case, the defendant’s
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`Page 8 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 9 of 18 Page ID#: 115
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`infringing acts took place entirely within Arkansas, but the defendant’s receipt of two cease-and-
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`desist letters from the plaintiff’s Washington headquarters gave the defendant notice of the
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`location where the harm from its intentional acts would be felt. See id. at *8 (“Where [the
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`defendant] knew or should have known that [the plaintiff] is a Washington company, [the
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`defendant’s] intentional acts were expressly aimed at the state of Washington.”). The court
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`concluded that the “express aiming” requirement is satisfied if: (1) the plaintiff alleges the
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`defendant willfully infringed its copyright; (2) the defendant is aware of the existence of the
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`copyright; and (3) the defendant is aware of the copyright holder’s forum. See id.
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`The paucity of evidence in the record presently before this Court distinguishes
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`Washington Shoe and Brayton Purcell. In those cases, the plaintiffs articulated cogent theories of
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`willful infringement, supported by affidavits and declarations, going beyond the bare allegations
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`found in their complaints. See id. at *5; Brayton Purcell, 606 F.3d at 1129–30. Here, however,
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`Mr. Herer put forth no evidence of willful infringement beyond the allegation contained in his
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`complaint that “[b]ased on information and belief, Defendants have willfully engaged in, and are
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`willfully infringing the copyright to the Work in conscious disregard of the right of Plainitff.”
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`Compl. ¶ 16.
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`Defendants’ evidentiary submissions, however, do not contravene Mr. Herer’s allegation
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`of willfulness. See, e.g. Kleinman Decl. ¶ 20–28 (describing lack of contracts with Oregon and
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`the two suits’ procedural postures). Moreover, the evidence attached to the complaint filed in
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`Texas state court goes only to the alleged existence of a license for the Work. See Kleinman
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`Decl., Ex. 1, at 2–4. The existence of a license may defeat a claim for copyright infringement,
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`but its existence is not necessarily antithetical to a finding of willfulness. See, e.g., Evergreen
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`Safety Council v. RSA Network Inc., 697 F.3d 1221, 1228 (9th Cir. 2012) (requiring a licensee to
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`Page 9 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 10 of 18 Page ID#: 116
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`have a “reasonable belief” as to the existence or scope of license to find non-willfulness as a
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`matter of law); Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990)
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`(finding willful infringement because of the defendant’s conduct after a license was revoked);
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`Coogan v. Avnet, Inc., CV-040621-PHX-SRB, 2005 WL 2789311, at *4 (D. Ariz. Oct. 24, 2005)
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`(“Defendants’ argument relies on a faulty premise-that copyright infringement cannot be willful
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`if it occurred as a result of a mistaken belief about the terms of a license, even if that mistaken
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`belief was held in good faith.”).
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`In Washington Shoe, the Ninth Circuit held that the “express aiming” prong of the effects
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`test was met where the plaintiff “alleged willful infringement of [its] copyright, and [the
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`defendant’s] knowledge of both the existence of the copyright and the forum of the copyright
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`holder.” Washington Shoe, 2012 WL 6582345, at *8. While the parties have provided evidence
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`framing their conflict, they have failed to provide evidence that goes to Defendants’ knowledge
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`or willfulness. As such, additional evidence is needed to determine whether Defendants are
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`subject to this Court’s personal jurisdiction based on Defendants’ allegedly infringing activities.
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`When, as here, however, “the jurisdictional facts are intertwined with the merits, a decision on
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`the jurisdictional issues is dependent on a decision of the merits.” Data Disk, Inc., 557 F.2d
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`at 1285 n.2. Indeed, the issue of willfulness must be resolved after infringement. See Peer, 909
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`F.2d at 1335 (defining willful as “knowledge that the defendants' conduct constituted an act of
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`infringement”).
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`“[W]here pertinent facts bearing on the question of jurisdiction are controverted or where
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`a more satisfactory showing of the facts is necessary,” a court may order jurisdictional discovery,
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`including an evidentiary hearing. Data Disc, Inc. v. Sys. Tech. Associates, Inc., 557 F.2d 1280,
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`1289 n.1 (9th Cir. 1977) (citing Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406,
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`Page 10 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 11 of 18 Page ID#: 117
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`430 n.24 (9th Cir. 1977)). The present record before the Court is so deficient. The Court,
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`however, declines to resolve the matter through jurisdictional discovery because the
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`jurisdictional question is inextricably intertwined with the merits of the case, and the case
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`currently pending in the Western District of Texas renders resolution on the merits in the federal
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`court in Oregon an inefficient and duplicative use of judicial resources.
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`The inefficiency of resolving this case in the District of Oregon becomes even more
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`apparent when the possible outcomes of a merits decision are considered. If Defendants are
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`found not to be infringing or not willfully infringing the copyright, then the Court renders a
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`decision on the merits without having jurisdiction.2 See Washington Shoe, 2012 WL 6582345, at
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`*8 (holding copyright infringement necessarily causes harm in the forum state, but it is willful
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`infringement that directs the harm at the forum state). Further, even if Defendants are judged to
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`be willful infringers, giving this Court jurisdiction, a decision on the merits simply duplicates the
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`concurrent efforts in Texas. In light of the Texas court’s denial of Mr. Herer’s challenge to venue
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`and personal jurisdiction, Texas is the proper venue for this action. In addition, the same result in
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`directed by application of the first-to-file rule.
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`B.
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`First-to-File Rule
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`Under the first-to-file rule, the interests of comity, efficiency, and judicial economy give
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`district courts discretion to “transfer, stay, or dismiss” the more recently filed of two
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`substantially similar actions pending in different courts. See Cedars-Sinai Med. Ctr. v. Shalala,
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`2 This is particularly troubling because if this Court reaches the merits before the Texas
`court, but determines that it lacks jurisdiction, then the merits decision is inoperative and cannot
`be used as res judicata. See Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002); Fed. R.
`Civ. Pro 41(b) (claims dismissed for want of jurisdiction are not adjudications “on the merits”);
`see also Doscher v. Swift Transp. Co., Inc., C10-5545RBL, 2010 WL 3655941, at *2 (W.D.
`Wash. Sept. 16, 2010) (“By definition, dismissal for lack of personal jurisdiction is not on the
`merits and cannot operate as a final judgment on the merits for res judicata purposes.”).
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`Page 11 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 12 of 18 Page ID#: 118
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`125 F.3d 765, 769 (9th Cir. 1997) (citing Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342
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`U.S. 180, 183-84 (1952)). If a subsequent complaint is filed in a second court involving the same
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`parties and issues as the first, then the rule “should not be disregarded lightly.” See Alltrade, Inc.
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`v. Uniweld Products, Inc., 946 F.2d 622, 625 (9th Cir. 1991) (quoting Church of Scientology v.
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`U, S. Dep't of the Army, 611 F.2d 738, 750 (9th Cir. 1979)). Generally, application of the rule
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`turns on three factors: (1) the chronology of the actions; (2) the similarity of the parties; and (3)
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`the similarity of the issues. See, e.g., id. at 625. The “rule is not a rigid or inflexible rule to be
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`mechanically applied, but rather is to be applied with a view to the dictates of sound judicial
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`administration.” Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). Thus,
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`the rule will not apply if a court determines that equitable interests counsel otherwise; typical
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`exceptions to the rule include bad faith, anticipatory suit, and forum shopping. See Alltrade, 946
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`F.2d at 628 (citations omitted). The Court addresses each factor in turn.
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`1.
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`Chronology
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`The first consideration in applying the first-to-file rule is the chronology of the actions.
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`On May 21, 2012, Ah Ha filed an action against Mark Herer, as personal representative, in Texas
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`state court in Travis County. Kleinman Decl. ¶ 20; Kleinman Ex. 1. On August 10, 2012,
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`Mr. Herer filed the action pending before this Court. On September 12, 2012, Mr. Herer removed
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`the Texas state court action to the United States District Court for the Western District of Texas.
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`Kleinman Decl. ¶ 21; Kleinman Ex. 2. As Mr. Herer concedes, the action pending before this
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`Court in Oregon is the second-filed action. Pl.’s Resp. at 6; see also Granny Goose Foods, Inc. v.
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`Page 12 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 13 of 18 Page ID#: 119
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`Bhd. of Teamsters & Auto Truck Drivers Local No. 70, 415 U.S. 423, 436 (1974) (quotations
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`omitted) (“After removal, the federal court takes the case up where the State court left it off.”).3
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`2.
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`Similarity of Parties
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`The second consideration in applying the first-to-file rule is the similarity of the parties in
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`the two actions. In the case pending before this Court, Herer’s claim is asserted against both
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`Ah Ha and its principal, Mr. Kleinman. Compl. ¶ 7–10. Because Ah Ha alone commenced the
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`Texas action against Mr. Herer, Kleinman is not a party in that suit. Kleinman Decl. ¶¶ 20–21.
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`Mr. Herer argues that this incongruity between the parties in these two lawsuits renders
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`the first-to-file rule inapplicable. Pl.’s Resp. at 6. Although the Ninth Circuit has not yet
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`addressed this issue directly, several district courts within the circuit have concluded that “the
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`two actions need not be identical for the purposes of this analysis.” Diversified Metal, 2012
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`WL 2872772, at *3; Walker v. Progressive Cas. Ins. Co., C03-656R, 2003 WL 21056704, at *2
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`(W.D. Wash. May 9, 2003); see also Pacesetter, 678 F.2d at 95–96 (applying the first-to-file rule
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`where the actions differed as to the remedy sought). In considering a similar concept known as
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`Colorado River abstention,4 the Ninth Circuit held that exact parallelism “is not required. It is
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`enough if the two proceedings are ‘substantially similar.’” Nakash v. Marciano, 882 F.2d 1411,
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`3 The majority of courts reaching this issue consider the filing date in state court of a
`subsequently removed action to be the operative date for the purposes of the first-to-file rule. See
`Diversified Metal Prods., Inc. v. Odom Indus., Inc., 1:12-CV-00162-BLW, 2012 WL 2872772,
`at *2 (D. Idaho July 12, 2012), and the cases cited therein.
`
` 4
`
` Colorado River abstention applies to parallel proceedings between state and federal
`courts. See Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817–18
`(1976). Because federal courts have a “virtually unflagging obligation . . . to exercise the
`jurisdiction given them,” the doctrine is only applied in limited circumstances. See id.
`(examining four factors); see also Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460
`U.S. 1, 25–26 (1983) (adding two additional factors).
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`Page 13 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 14 of 18 Page ID#: 120
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`1416 (9th Cir. 1989). This is consistent with the Ninth Circuit’s pronouncement that the first-to-
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`file rule is not to be applied “mechanically.” See Pacesetter, 678 F.2d at 95.
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`Where the issues are substantially similar, the absence of a single party from the first-
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`filed suit will not necessarily defeat the first-to-file rule. Indeed, if parties were required to be
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`identical, then the rule and its benefits could be easily avoided simply by adding a party or a
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`claim to the later-filed action. See Interstate Material Corp. v. Chicago, 847 F.2d 1285, 1288
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`(7th Cir. 1988). Moreover, transferring the case, rather than dismissing it, preserves the parties to
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`the instant litigation, which negates any potential prejudice alleged by Mr. Herer. In sum, the
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`similarity of the parties in the two actions weighs in favor of applying the rule.
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`3.
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`Similarity of Issues
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`The final consideration in applying the first-to-file rule is the similarity of the issues
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`presented in the two suits. In the case pending before this Court, Mr. Herer asserts a single claim
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`of willful copyright infringement against both Ah Ha and Kleinman. Compl. ¶ 6–16. In the
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`Texas case, Ah Ha seeks a declaration of its rights and obligations under alleged agreements,
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`assigned to it, between Mr. Kleinman and Jack Herer. Kleinman Decl., Ex. 1, at 5. Specifically,
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`Ah Ha seeks a declaration that it has a right to “publish, distribute, and sell” the Work, and what,
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`if any, obligations exist between the parties. Id.
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`Although the issues in the two cases, as pled, are not identical, they are substantially
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`similar. Pursuant to the Copyright Act, the holder of a copyright has the exclusive right “to do
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`and to authorize” the reproduction and distribution of a protected work, among other things.
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`See 17 U.S.C. § 106(1), (3). A copyright owner may grant to another a license, exclusive or not,
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`to undertake one or more of the exclusive rights enumerated in the Act, giving the licensee an
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`affirmative defense to a charge of infringement. See Worldwide Church of God v. Philadelphia
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`Page 14 – OPINION AND ORDER
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`Case 3:12-cv-01451-SI Document 27 Filed 02/25/13 Page 15 of 18 Page ID#: 121
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`Church of God, Inc., 227 F.3d 1110, 1114 (9th Cir. 2000) (citations omitted). As such, resolution
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`of both cases will turn on substantially the same legal issues and depend on substantially the
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`same evidence.
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`Mr. Herer argues that the different jurisdictional basis underlying the two complaints
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`defeats application of the first to file rule. Pl.’s Resp. at 6. Subject matter jurisdiction in the
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`litigation before this Court is based on the presence of a claim arising under an Act of Congress
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`related to copyrights, see 28 U.S.C. § 1338, and jurisdiction in the Texas litigation is based on
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`diversity of citizenship, see 28 U.S.C. § 1332. Compare Compl. ¶ 1, 6–16, with Kleinman Decl.,
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`Ex. 2, at ¶ 5. Jurisdictional differences, however, do not necessarily render claims sufficiently
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`different to defeat the first to file rule. See, e.g., Brighton Collectibles, Inc. v. Coldwater Creek,
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`Inc., 06-CV-1848-H (JMA), 2006 WL 4117032, at *2 (S.D. Cal. Nov. 21, 2006) (“[T]he issues
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`in the California suit are the mirror images of the declaratory disputes in the Idaho suit.”). The
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`source of the Texas court’s subject matter jurisdiction is irrelevant, assuming it has jurisdiction,
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`to a comparison of the subject of and relief sought in each suit.
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`A comparison of the complaints filed demonstrates that the central issue in each suit is
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`the scope of Ah Ha’s authorization to reproduce and distribute the Work. Compare Compl. ¶ 9
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`(Defendants have not “been authorized by the copyright owner to publish or distribute the
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`work.”) with Kleinman Decl., Ex. 1, at 5 (The parties “have an enforceable agreement under
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`which [Ah Ha] has the right to publish, distribute, and sell the [Work.]”). Indeed, there appears
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`to be no dispute that Ah Ha published and made the Work available for sale. See, e.g., Kleinman
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`Decl., Ex. 1, at 3–4. As conduct within the scope of a license is an affirmative defense to a claim
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`of copyright infringement, see Worldwide Church, 227 F.3d at 1114, Ah Ha’s success in the
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`Texas suit would preclude liability in the Oregon suit. Allowing the two actions to proceed
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`Page 15 – OPINION AND ORDER
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`simultaneously is inefficient and could result in “the embarrassment of conflicting judgments.”
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`Scientology, 611 F.2d at 750. Moreover, the bulk of the dispute will be governed by state
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`contract law—presumably Texas, where the alleged licenses were agreed upon—rather than
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`federal law, which makes Texas a more appropriate forum. See Foad Consulting Grp., Inc. v.
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`Azzalino, 270 F.3d 821, 827 (9th Cir. 2001) (“[S]o long as it does not conflict with the Copyright
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`Act, state law determines whether a copyright holder has granted such a license.”). Presumably, a
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`judge sitting the Western District of Texas would be more familiar with the state-specific
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`contract law governing the alleged license. Cf. Church of Scientology, 611 F.2d at 750 (“The
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`doctrine is designed to avoid placing an unnecessary burden on the federal judiciary, and to
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`avoid the embarrassment of conflicting judgments.”) (citing Great N. Ry. Co. v. Nat’l R.R.
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`Adjustment Bd., 422 F.2d 1187, 1193 (7th Cir. 1970)).
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`Because these each suit in