Mentor Graphics Corp. v. Trimeter Technologies Corp.

739 F. Supp. 542, 1990 U.S. Dist. LEXIS 7276, 1990 WL 82706
CourtDistrict Court, D. Oregon
DecidedJune 12, 1990
DocketCiv. No. 90-347-FR
StatusPublished
Cited by3 cases

This text of 739 F. Supp. 542 (Mentor Graphics Corp. v. Trimeter Technologies Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mentor Graphics Corp. v. Trimeter Technologies Corp., 739 F. Supp. 542, 1990 U.S. Dist. LEXIS 7276, 1990 WL 82706 (D. Or. 1990).

Opinion

OPINION

FRYE, District Judge:

The matters before the court are:

1. the motion (# 5) of defendant, Trime-ter Technologies Corporation (Trimeter), to dismiss or stay this action pending the outcome of an action in the Western District of Pennsylvania; and

2. the motion (# 8) of plaintiff, Mentor Graphics Corporation (Mentor), to enjoin Trimeter from proceeding with the action filed in the Western District of Pennsylvania.

BACKGROUND

This is an action for a declaratory judgment regarding the obligations of the parties to an Asset Purchase Agreement (the Agreement), pursuant to which Mentor acquired certain computer software products from Trimeter. On the same day that this action was filed, April 13, 1990, Trimeter filed an action for breach of the Agreement in the United States District Court for the Western District of Pennsylvania. In the Pennsylvania action, Trimeter also seeks damages on the grounds that Mentor fraudulently induced Trimeter to enter into the Agreement, but does not state these allegations as a separate claim. No proceedings have taken place in the Pennsylvania action.

Mentor is a corporation organized under the laws of the State of Oregon, with its principal place of business in the State of Oregon. Mentor designs, manufactures, markets and services electronic, design automation software and systems. Trimeter is a corporation organized under the laws of the State of Nevada. When the Agreement was executed, on July 1, 1989, Trime-ter was incorporated under the laws of the Commonwealth of Pennsylvania, and was in the business of developing and marketing logic synthesis software. On December 29, 1989, Trimeter was merged into its wholly owned Nevada subsidiary, TTC, Inc. Trimeter, the surviving corporation, was thereafter a Nevada corporation.

Under the Agreement, Mentor bought certain assets of Trimeter, principally computer software products. The compensation under the Agreement includes royalty payments based on Mentor’s sales of the Trimeter technology for a period of four years, as well as an initial payment.

After the merger and the transfer of the bulk of Trimeter’s assets to Mentor under the Agreement, the predominant focus of Trimeter’s business activity became the monitoring of Mentor’s performance under the Agreement. This monitoring function is performed by legal counsel for Trimeter in offices located in Pittsburgh, Pennsylvania. All of Trimeter’s corporate records and Trimeter’s documents regarding the negotiations between Trimeter and Mentor are kept in the offices of legal counsel in Pittsburgh. Certain former employees of Trimeter are now employed by Mentor in the State of Oregon, including Dr. Jin Kim, the president of Trimeter, and Dr. Rostam Joobbani, the vice president of Trimeter.

ANALYSIS AND RULING

Trimeter asks the court to dismiss or to stay this action pending the outcome of the Pennsylvania action. Mentor asks the court to enjoin Trimeter from prosecution of the Pennsylvania action. The parties agree that the litigation should not be pursued in two courts at once. Thus, the task [544]*544before the court is to determine whether the District of Oregon or the Western District of Pennsylvania is the more appropriate forum for this dispute.

This court has the power to grant the relief requested by either party. A court may in its discretion dismiss a suit for declaratory judgment if the same issue is pending in litigation elsewhere. Bergh v. Washington, 535 F.2d 505, 507 (9th Cir. 1976). A federal court can also enjoin the prosecution of an action where the same issues are presented in another federal court. Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843-44 (9th Cir.1986).

Ordinarily, there is a presumption in favor of the plaintiffs choice of forum. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). However, where two parties file actions simultaneously, the party seeking declaratory judgment stands on equal footing with the party seeking the traditional remedy, unless the party seeking declaratory judgment unfairly took advantage of the other in a race to the courthouse. Ashe v. Pepsico, Inc., 443 F.Supp. 84, 85 (S.D.N.Y.1977).

The undisputed facts show that Trimeter and Mentor had been negotiating for several months prior to April 13, 1990 in an attempt to resolve Trimeter’s claims under the Agreement. On March 16, 1990, Trimeter sent a letter to Mentor which stated that Trimeter would continue to work with Mentor to reach a solution, and that thirty days should be adequate to agree or to finally disagree. On April 12, 1990, counsel for Trimeter called counsel for Mentor and advised that Trimeter was going to file suit the next day. Mentor filed this action at 9:57 a.m. PDT on April 13, 1990. Trimeter filed its action in the Western District of Pennsylvania less than an hour later, at 1:17 p.m. EDT.

Mentor submits the affidavit of its vice president, Frank S. Delia, who states that Mentor had decided in late 1989 that it would file an action for declaratory judgment in the District of Oregon if negotiations with Trimeter broke down. Delia states that Mentor was preparing a response to Trimeter’s letter of March 16, 1990 when it received the message that Trimeter intended to file suit, and that Mentor therefore proceeded to draft and to file the complaint for a declaratory judgment in this district.

These facts are very similar to the facts in Ashe v. Pepsico, supra, where the court declined to find that Ashe acted in bad faith in filing an action for declaratory judgment in the State of New York on the same day as Pepsico filed a complaint in the State of Illinois. The court in Ashe found it significant that Ashe had prepared the declaratory judgment complaint at a substantially earlier time, but refrained from filing the complaint while settlement negotiations were proceeding. 443 F.Supp. at 85.

The court declines to find that Mentor acted in bad faith or in anticipation of Trimeter’s filing of the Pennsylvania suit. Therefore, Trimeter’s choice of forum is not entitled to any greater weight than Mentor’s choice of forum. The court declines to accept Trimeter’s argument that it is the “real plaintiff” in this dispute, and that Mentor’s action is not a proper action under the Declaratory Judgment Act.

Where a declaratory action presents issues which would necessarily be settled by another pending state or federal action, the court should weigh the relative merits of each of the two actions as of the time of the hearing on the motion to dismiss. McGraw-Edison Co. v. Preformed Line Products Co., 362 F.2d 339, 343 (9th Cir.), cert. denied, 385 U.S. 919, 87 S.Ct. 229, 17 L.Ed.2d 143 (1966). The action filed in the District of Oregon and the action filed in the Western District of Pennsylvania concern the same parties and the same transaction.

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Bluebook (online)
739 F. Supp. 542, 1990 U.S. Dist. LEXIS 7276, 1990 WL 82706, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mentor-graphics-corp-v-trimeter-technologies-corp-ord-1990.