Flynn v. Love

MICHAEL J. FLYNN and PHILLIP H. HARTMAN, Plaintiffs, v. MICHAEL E. LOVE and DOES 1 through 10, inclusive, Defendants.

No. 21-CV-629 JLS (KSC)

United States District Court, S.D. California

July 7, 2021

ORDER (1) GRANTING

DEFENDANT'S REQUEST FOR JUDICIAL NOTICE AND (2) STAYING ACTION PURSUANT

TO THE FIRST-TO-FILE RULE (ECF NOS. 3, 4)

HON JANIS L. SAMMARTINO UNITED STATES DISTRICT JUDGE

Presently before the Court are Defendant Michael E. Love's (“Defendant”) Motion to Dismiss Under the First-to-File Rule and Under Rule 12(b)(6) (“Mot., ” ECF No. 3) and supporting Request for Judicial Notice (“RJN, ” ECF No. 4). Also before the Court is Plaintiffs Michael J. Flynn and Phillip H. Hartman's (collectively, “Plaintiffs”) Opposition to (“Opp'n, ” ECF No. 6) and Defendant's Reply in support of (“Reply, ” ECF No. 8) the Motion. The Court took these matters under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). Having carefully considered the Parties' arguments and the relevant law, the Court GRANTS Defendant's RJN and STAYS the action pursuant to the first-to-file rule.

BACKGROUND

Defendant is a founding member and lead singer of the Beach Boys. See ECF No. 1-2 (Compl.) ¶ 3. Plaintiffs are Defendant's former attorneys, who allege that they “miraculously obtained songwriting credit” for Defendant on thirty-five of his songs in prior litigation. Id. ¶ 7. The Parties' Contingency Fee Agreement (“Agreement”) arose from the prior litigation, whereby Defendant has been obligated to pay Plaintiffs thirty percent of the money he receives by virtue of the songwriting credits. Id. ¶ 8. However, in 2017, Defendant allegedly ceased paying Plaintiffs royalties pursuant to the Agreement. Id. ¶ 9.

On May 9, 2019, Plaintiffs filed suit in the District of Nevada (the “Nevada Action”). Mot. at 2. Plaintiffs initially alleged that Defendant's wife acted as Defendant's agent in breaching the Agreement. Id. Plaintiffs thereafter filed several amended complaints, adding Defendant and others as parties to the litigation. Id. at 3. Presently, and as relevant to the instant matter, the operative complaint in the Nevada Action asserts claims against Defendant for breach of contract, quantum meruit, and unjust enrichment. Id.

However, soon after Plaintiffs filed their initial complaint in the Nevada Action, the Parties entered into non-binding arbitration under the California Mandatory Fee Arbitration Act (“MFAA”), Cal. Bus. & Prof. Code §§ 6200 et seq. Id. The court in the Nevada Action stayed the litigation pending resolution of the arbitration. Id.^[1] The Arbitration Panel found the Agreement valid and found Plaintiffs were entitled to $2, 645, 340.20. Compl. ¶ 68. Following resolution of the arbitration, the court in the Nevada Action lifted the stay. Mot. at 3.

Given the non-binding nature of the MFAA arbitration, Defendant filed a Notice of Rejection in the Nevada Action and requested a trial de novo. Id. at 4.^[2] Defendant also filed a protective action for trial de novo in California Superior Court on March 3, 2021 (the “Protective Action”). See Declaration of Vincent H. Chieffo in Support of Motion (“Chieffo Decl., ” ECF No. 3-1) ¶ 11. Plaintiffs filed suit in California Superior Court on the same day. Mot. at 4.^[3] On April 12, 2021, Defendant removed the action to this Court. See ECF No. 1 (“Removal”).^[4] Plaintiffs claim to accept the Arbitration Panel's decision as to the validity of the Agreement but seek trial de novo on the issue of damages. Compl. ¶ 69. In their Complaint, Plaintiffs assert claims for breach of contract, services rendered, and unjust enrichment. Id. ¶¶ 73, 78, 82.

Defendant contends that this action should be dismissed pursuant to the first-to-file rule due to the ongoing litigation in the District of Nevada. Mot. at 6. Alternatively, Defendant argues this action should be dismissed under Federal Rule of Civil Procedure 12(b)(6) because (1) the MFAA does not grant Plaintiffs standing to litigate in this Court, and (2) the relief Plaintiffs seek under the MFAA is not cognizable. Mot. at 2.

DEFENDANT'S REQUEST FOR JUDICIAL NOTICE

As an initial matter, in support of his Motion, Defendant requests judicial notice of various public records filed on the dockets of the Nevada Action and the Protective Action. See generally RJN. “Judicial notice under Rule 201 permits a court to notice an adjudicative fact if it is ‘not subject to reasonable dispute.'” Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018) (quoting Fed.R.Evid. 201(b)), cert. denied, 139 S.Ct. 2615 (2019). “A fact is ‘not subject to reasonable dispute' if it is ‘generally known,' or ‘can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.'” Id. (quoting Fed.R.Evid. 201(b)(1)-(2)). “Accordingly, ‘[a] court may take judicial notice of matters of public record.'” Id. (alteration in original) (quoting Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001)). “But a court cannot take judicial notice of disputed facts contained in such public records.” Id. (quoting Lee, 250 F.3d at 689).

Because “filings and orders in other court proceedings[] are judicially noticeable for certain purposes, such as to demonstrate the existence of other court proceedings, ” Missud v. Nevada, 861 F.Supp.2d 1044, 1054 (N.D. Cal. 2012) (citing Fed.R.Evid. 201), aff'd, 520 Fed.Appx. 534 (9th Cir. 2013), the Court finds it appropriate to judicially notice the existence of public records from the Nevada and Protective Actions, particularly given that Plaintiffs do not oppose Defendant's request.^[5] Accordingly, the Court GRANTS Defendant's Request for Judicial Notice.

DEFENDANT'S MOTION TO DISMISS UNDER THE FIRST-TO-FILE RULE

I. Legal Standard

“The first-to-file rule allows a district court to stay proceedings if a similar case with substantially similar issues and parties was previously filed in another district court.” Kohn Law Grp., Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237, 1239 (9th Cir. 2015). It “is intended to ‘serve[] the purpose of promoting efficiency well and should not be disregarded lightly.'” Id. (quoting Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir. 1991)). “The first-to-file rule may be applied ‘when a complaint involving the same parties and issues has already been filed in another district.'” Id. at 1240 (quoting Alltrade, 946 F.2d at 625). “Thus, a court analyzes three factors: chronology of the lawsuits, similarity of the parties, and similarity of the issues.” Id. (citing Alltrade, 946 F.2d at 625).

If the case meets the requirements of the first-to-file rule, the court has the discretion to transfer, stay, or dismiss the action. Alltrade, 946 F.2d at 628-29. Even when the rule would otherwise apply, however, the court has the discretion to “dispense” with its application “for reasons of equity.” Id. at 628.

II. Analysis

Defendant contends that, because the first-to-file rule applies, this case should be dismissed. Mot at 2. As noted, courts assess three factors in deciding whether the first-to-file rule applies: “[the] chronology of the lawsuits, similarity of the parties, and similarity of the issues.” Kohn, 787 F.3d at 1240 (citing Alltrade, 946 F.2d at 625). Thus, the Court analyzes each of these factors in turn.

A. Chronology of the Lawsuits

“The first-and most fundamental-requirement is that the [first-filed action] must have been filed prior to the second action.” Zimmer v. Dometic Corp., No. CV 2:17-cv-06913 ODW (MRWx), 2018 WL 1135634, at *3 (C.D. Cal. Feb. 22, 2018) (citing Wallerstein v. Dole Fresh Vegetables, Inc., 967 F.Supp.2d 1289, 1293-94 (N.D. Cal. 2013)). Plaintiffs filed their initial complaint in the Nevada Action on May 9, 2019. Mot. at 2; see also Chieffo Decl. Ex. 1. Plaintiffs filed the present action on March 3, 2021, see Mot. at 4, and Defendant removed it to this Court on April 12, 2021, see generally Removal. “[T]o properly apply the first-to-file rule [with regard to chronology], the district court need only find that . . . a pending case in another . . . court was previously filed.” Zimmer, 2018 WL 1135634, at *3 (quoting Luckett v. Peco Foods, Inc., No. 3:07cv86-KS-MTP, 2008 WL 534760, at *2 (S.D.Miss. Feb. 22, 2008)). That is the case here, and Plaintiffs do not meaningfully dispute this fact. Accordingly, this requirement for application of the first-to-file rule is met.

B. Similarity of the Parties

To meet the requirement of similarity of the parties, the parties in the two actions need not be identical. Kohn, 787 F.3d at 1240. Rather, “[t]he rule is satisfied if some of the parties in one matter are also in the other matter, regardless of whether there are additional, unmatched parties in one or both matters.” Location Servs., LLC v. Digital Recognition Network, Inc., No. 2:18-CV-00893-KJM-AC, 2018 WL 3869169, at *2 (E.D. Cal. Aug. 15, 2018) (quoting Peta, Inc. v. Beyond the Frame, Ltd., No. CV 10-07576 MMM SSX, 2011 WL 686158, at *1 (C.D. Cal. Feb. 16, 2011)). Plaintiffs are parties in both actions. See Mot. at 7; see also Chieffo Decl. Ex. 7. Defendant is a party in both actions as well. See Id. Again, Plaintiffs do not dispute these fundamental and self-evident facts. And, although the Nevada Action names additional parties other than Defendant, see id., that does not render the parties dissimilar. See Location Servs., 2018 WL 3669169, at *2 (“It does not matter that . . . the Texas Action includes an additional party not proceeding in this instant lawsuit.”). Accordingly, this requirement also is satisfied.

C. Similarity of the Issues

With regard to the third factor, the similarity of the issues, as with the second factor concerning similarity of the parties the issues in the two...